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METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡
(Incorporated in the Cayman Islands with limited liability)
Stock Code : 8637
METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡
Sole Sponsor, Sole Overall Coordinator, Sole Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Share Offer
METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
METASURFACE TECHNOLOGIES HOLDINGS LIMITED
元 續 科 技 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
L I S T I N GO NG E MO F
THE STOCK EXCHANGE OF HONG KONG LIMITED
BY WAY OF SHARE OFFER
Number of Offer Shares : 27,000,000 Shares
Number of Public Offer Shares : 2,700,000 Shares (subject to reallocation)
Number of Placing Shares : 24,300,000 Shares (subject to reallocation)
Offer Price : Not more than HK$3.00 per Offer Share and expected to
be not less than HK$2.38 per Offer Share, plus
brokerage of 1%, SFC transaction levy of 0.0027%,
the AFRC transaction levy of 0.00015% and Stock
Exchange trading fee of 0.00565% (payable in full on
application in Hong Kong dollars and subject to
refund)
Nominal value : HK$0.001 per Share
Stock code : 8637
Sole Sponsor, Sole Overall Coordinator, Sole Global C oordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners (in alphabetical order)
Joint Lead Managers (in alphabetical order)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of
this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever ar ising from or in reliance upon the whole
or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Appendix VI — Documents Delivered to the Registrar of Companies in Hong Kong and
Available on Display’’ in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies ( Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong K ong take no
responsibility as to the contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Sole Overall Coordinator (for itself and on behalf of the Underwriters) and us on t he Price Determination Date. The
Price Determination Date is expected to be on or before 12 : 00 noon on Thursday, 27 June 2024 (Hong Kong time). The Offer Price will be not more than HK$3.0 0 per Offer Share and is
currently expected to be not less than HK$2.38 per Offer Share unless otherwise announced. If we and the Sole Overall Coordinator (for itself and on beh alf of the Underwriters) are unable
to reach an agreement on the Offer Price by 12 : 00 noon on Thursday, 27 June 2024 (Hong Kong time), the Share Offer (including the Public Offer) will lapse and will not proceed. In such
case, a notice will be published on the Stock Exchange’s website at www.hkexnews.hk and our Company’s website at www.metatechnologies.com.sg .
The Sole Overall Coordinator may, with our consent, reduce the number of Offer Shares in the Share Offer and/or the indicative Offer Price range below t hat stated in this prospectus (which is
HK$2.38 to HK$3.00 per Offer Share) at any time on or prior to the morning of the last day for lodging applications under the Public Offer. In such a case, n otices of the reduction in the number
of Offer Shares in the Share Offer and/or the indicative Offer Price range will be published on the website of our Company at www.metatechnologies.com.sg and on the website of the Stock
Exchange at www.hkexnews.hk. Further details are set forth in the sections headed ‘‘Structure and Conditions of the Share Offer’’ and ‘‘How to Apply for Public Offer Shares’’ in thi s
prospectus.
Prior to making any investment decision, prospective investors should consider carefully all the information set out in this prospectus, including the risk factors set out in the section
headed ‘‘Risk Factors’’ in this prospectus.
The obligations of the Public Offer Underwriters under the Public Offer Und erwriting Agreement are subject to termination by the Sole Overall Coordi nator (for itself and on behalf of the
Public Offer Underwriters) if certain grounds arise prior to 8 : 00 a.m. on the Listing Date. Further details of the circumstances are set forth in the se ction headed ‘ ‘Underwriting —
Underwriting Arrangements and Expenses — Grounds for termination.’’
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and may not be off ered, sold, pledged or transferred
within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securiti es Act and in accordance with any
applicable securities law in the United States. The Offer Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S of the U.S.
Securities Act.
ATTENTION
We have adopted a fully electronic application process for the Public Offer. We will not provide printed copies of this prospectus to the public in rela tion to the Public Offer. This
prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.metatechnologies.com.sg . If you require a printed copy of this prospectus, you
may download and print from the website addresses above.
21 June 2024
IMPORTANT


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IMPORTANT NOTICE TO INVESTO RS OF PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Public Offer and below are
the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews> New Listings> New Listing Information’’ section, and our website
at
www.metatechnologies.com.sg.
To apply for Public Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White
Form service
You may apply online via the HK
eIPO White Form service in
the IPO App (which can be
downloaded by searching
‘‘IPO App ‘‘in App Store or
Google Play or downloaded at
www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp )
or the designated website at
www.hkeipo.hk .
Investors who would like to
receive a physical Share
certificate. Public Offer
Shares successfully applied
for will be allotted and issued
in your own name.
From 9 : 00 a.m. on Friday,
21 June 2024 to 11 : 30 a.m.
on Wednesday, 26 June 2024,
Hong Kong time.
The latest time for completing
full payment of application
monies will be 12 : 00 noon on
Wednesday, 26 June 2024,
Hong Kong time.
HKSCC EIPO
channel
Your broker or custodian who is
a HKSCC Participant will
submit an EIPO application
on your behalf through
H K S C C ’ sF I N Is y s t e mi n
accordance with your
instruction.
Investors who would
not like to
receive a physical Share
certificate. Public Offer
Shares successfully applied
for will be allotted and issued
i nt h en a m eo fH K S C C
Nominees, deposited directly
into CCASS and credited to
your designated HKSCC
Participant’s stock account.
Contact your broker or
custodian for the earliest and
latest time for giving such
i n s t r u c t i o n s ,a st h i sm a yv a r y
by broker or custodian.
We will not provide any physical channels to accept any application for the Public Offer
Shares by the public. The contents of this prospectus are identical to the prospectus as
registered with the Registrar of Companie si nH o n gK o n gp u r s u a n tt oS e c t i o n3 4 2 Co f
the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary, broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses
above.
Please refer to the section headed ‘‘How to Ap ply for Public Offer Shares’’ for further
details of the procedures through which you can apply for the Public Offer Shares
electronically.
Your application through the HK eIPO White Form service or the HKSCC EIPO channel
must be for a minimum of 1,000 Offer Shares and in one of the numbers set out in the
table. You are required to pay the amount next to the number you select.
IMPORTANT
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NUMBER OF OFFER SHARES THAT MAY BE APPLIED FOR AND PAYMENTS
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
(HK$) (HK$) (HK$) (HK$)
1,000 3,030.25 15,000 45,453.83 80,000 242,420.40 900,000 2,727,229.50
2,000 6,060.51 20,000 60,605.10 90,000 272,722.96 1,000,000 3,030,255.00
3,000 9,090.76 25,000 75,756.38 100,000 303,025.50 1,200,000 3,636,306.00
4,000 12,121.02 30,000 90,907.66 200,000 606,051.00 1,400,000 4,242,357.00
5,000 15,151.28 35,000 106,058.93 300,000 909,076.50 1,600,000 4,848,408.00
6,000 18,181.54 40,000 121,210.20 400,000 1,212,102.00 1,800,000 5,454,459.00
7,000 21,211.79 45,000 136,361.48 500,000 1,515,127.50 2,000,000 6,060,510.00
8,000 24,242.05 50,000 151,512.76 600,000 1,818,153.00 2,200,000 6,666,561.00
9,000 27,272.30 60,000 181,815.30 700,000 2,121,178.50 2,400,000 7,272,612.00
10,000 30,302.56 70,000 212,117.86 800,000 2,424,204.00 2,700,000
(1) 8,181,688.50
(1) Maximum number of Public Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC tr ansaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the GEM Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through t he application channel of the HK eIPO White Form Service Provider) while
the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to
the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of the P ublic Offer Shares will be considered and
any such application is liable to be rejected.
IMPORTANT
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GEM has been positioned as a market designed to accommodate small and mid-sized
companies to which a higher investment risk may be attached than other companies listed on
the Stock Exchange. Prospective investors should be aware of the potential risks of investing
in such companies and should make the decision to invest only after due and careful
consideration.
Given that companies listed on GEM are generally small and mid-sized companies,
there is a risk that securities traded on GEM may be more susceptible to high market
volatility than securities traded on the Main Board of the Stock Exchange and no assurance
is given that there will be a liquid market in the securities traded on GEM.
CHARACTERISTICS OF GEM
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If there is any change in the following expected timetable of the Share Offer, we will
issue an announcement on our website at www.metatechnologies.com.sg and the Stock
Exchange at www.hkexnews.hk . Details of the structure of the Share Offer, including the
conditions thereto, are set out in the section headed ‘‘Structure and Conditions of the Share
Offer’’ in this prospectus.
2024
P u b l i cO f f e rc o m m e n c e s ..................................... 9 : 0 0a . m .o n
Friday, 21 June
Latest time for completing electronic applications
under the HK eIPO White Form service through
one of the following ways:
(11)
(1) the IPO App , which can be downloaded by
searching ‘‘IPO App ’’ in App Store or Google Play
or downloaded at www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp
(2) the designated website www.hkeipo.hk ....................... 1 1 : 3 0a . m .o n
Wednesday, 26 June
Application lists open (2) ..................................... 1 1 : 4 5a . m .o n
Wednesday, 26 June
Latest time for (a) completing payment for HK eIPO
White Form applications by effecting internet
banking transfer(s) or PPS payment transfer(s) and
(b) submitting EIPO applications through
H K S C C ’ sF I N Is y s t e m
(3) .................................1 2 : 0 0n o o no n
Wednesday, 26 June
If you are instructing your broker or custodian who is a HKSCC Clearing Participant
or a HKSCC Custodian Participant to submit an EIPO application through HKSCC’s FINI
system to apply for the Public Offer Shares on your behalf, you are advised to contact your
broker or custodian for the latest time for giving such instructions which may be different
from the latest time as stated above.
Application lists close
(2) ...................................1 2 : 0 0n o o no n
Wednesday, 26 June
Expected Price Determination Date (4) ................. o no rb e f o r e1 2 : 0 0n o o no n
Thursday, 27 June
EXPECTED TIMETABLE (1)
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2024
Announcement of the final Offer Price,
the level of indication of interest in the Placing,
the level of applications in the Public Offer, the basis
of allocation to be published on the website of the
Stock Exchange at
www.hkexnews.hk and our
website at www.metatechnologies.com.sg (5) on or
before (7) .............................................. 1 1 : 0 0p . m .o n
Friday, 28 June
Results of allocations in the Public Offer (including
successful applicants’ identification document
numbers, where appropriate) to be available through
a variety of channels as described in the section
headed ‘‘How to Apply for Public Offer Shares —
B .P u b l i c a t i o no fR e s u l t s ’ ’i nt h i sp r o s p e c t u sf r o m ................ 1 1 : 0 0p . m .o n
Friday, 28 June
Results of allocations in the Public Offer will be
available from the ‘‘IPO Results’’ function in the
IPO App or at
www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult w i t ha‘ ‘ s e a r c hb yI D ’ ’
f u n c t i o nf r o m.......................................... 1 1 : 0 0p . m .o n
Friday, 28 June
Despatch of Share certificates of the Offer Shares or
deposit of Share certificates of the Offer Shares into
CCASS in respect of wholly or partially successful
applications pursuant to the Public Offer on or
before
(6), (8) & (9) ....................................... F r i d a y ,2 8J u n e
HK eIPO White Form e-Auto Refund payment
instructions/refund cheques in respect of wholly or
partially unsuccessful a pplications and wholly or
partially successful applications in case the final
Offer Price is less than the maximum Offer Price paid
for the applications pursuant to the Public Offer on
or before
(7)-(10) ........................................ T u e s d a y ,2J u l y
Dealings in the Shares on GEM expected to
c o m m e n c ea t ................................ 9 : 0 0a . m .o nT u e s d a y ,2J u l y
EXPECTED TIMETABLE (1)
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Notes:
1. All times and dates refer to Hong Kong local t imes and dates except as otherwise stated.
2. If there is a ‘‘black’’ rainstorm warning or a tropi cal cyclone warning signal number 8 or above and/or
Extreme Conditions in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday,
26 June 2024, the application lists will not open and close on that day. Please refer to the section headed
‘‘How to Apply for Public Offer Shares — E. Severe We ather Arrangements’’ in this prospectus. If the
application lists do not open and close on Wednesday, 26 June 2024, the dates mentioned in this section
may be affected. Announcement will be made by us in such event.
3. Applicants who apply for Offer Shares by submitti ng EIPO applications through HKSCC’s FINI system
should refer to the section headed ‘‘How to Apply f or Public Offer Shares — A. Application for Public
Offer Shares — 2. Application C hannels’’ in this prospectus.
4. The Price Determination Date is expected to be on or before 12 : 00 noon on Thursday, 27 June 2024 unless
otherwise announced. If, for any reason, the Offer Price is not agreed on or before 12 : 00 noon on
Thursday, 27 June 2024 between our Company and the Sol e Overall Coordinator (for itself and on behalf
of the Underwriters), the Share Offer wil l not proceed and will lapse accordingly.
5. None of the information contained on any website forms part of this prospectus.
6. Share certificates for the Offer Shares are expect ed to be issued on or before Friday, 28 June 2024 but will
only become valid evidence of title at 8 : 00 a.m. on Tue sday, 2 July 2024 provided that (a) the Share Offer
has become unconditional in all respects and (b) none of the Underwriting Agreements has been
terminated in accordance with its terms. Investors who trade Shares on the basis of publicly available
allocation details prior to the receipt of their Share cer tificates or prior to the Share certificates becoming
valid evidence of title do so entirely at their own risk.
7. HK eIPO White Form e-Auto Refund payment ins tructions/refund cheques will be issued in respect of
wholly or partially unsuccessful applications pursu ant to the Public Offer and also in respect of wholly or
partially successful applications in the event that th e final Offer Price is less than the price payable per
Offer Share on application. Part of the applicant’s ide ntification document number, or, if the application
is made by joint applicants, part of the identifica tion document number of the first-named applicant,
provided by the applicant(s) may be printed on the refund cheque, if any. Such data would also be
transferred to a third party for refund purposes. Ba nks may require verification of an applicant’s
identification document number before encashmen t of the refund cheque. Inaccurate completion of an
applicant’s identification docum ent number may invalidate or delay encashment of the refund cheque.
8. Applicants who have applied through the HK eIPO White Form service for 1,000,000 or more Public Offer
Shares may collect Share certificates in person fro m our Hong Kong Share Registrar, Tricor Investor
Services Limited, at 17/F, Far East Finance Cent re, 16 Harcourt Road, Hong Kong from 9 : 00 a.m. to
1 : 00 p.m. on Tuesday, 2 July 2024 or such other date as notified by us as the date of despatch/collection of
Share certificates/ HK eIPO White Form e-Auto Refund payment instructi ons/refund cheques. Applicants
being individuals who are eligible for personal coll ection may not authorise any other person to collect on
their behalf. If you are a corporate applicant which is eligible for personal collection, your authorised
representative must bear a letter of authorisation fro m your corporation stamped with your corporation’s
chop. Both individuals and authorised representative s must produce evidence of identity acceptable to our
Hong Kong Share Registrar at the time of collection. A pplicants who have applied for Public Offer Shares
through the HKSCC EIPO channel should refer to the s ection headed ‘‘How to Apply for Public Offer
Shares — D. Despatch/ Collection of Share Certific ates and Refund of Application Monies’’ in this
prospectus for details. Applicants who have applied through the HK eIPO White Form service and paid
their applications monies through single bank account s may have refund monies (if any) despatched to the
bank account in the form of HK eIPO White Form e-Auto Refund payment instructions. Applicants who
EXPECTED TIMETABLE (1)
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have applied through the HK eIPO White Form service and paid their application monies through multiple
bank accounts may have refund monies (if any) despatc hed to the address as specified in their application
instructions in the form of refund cheques in favour of the applicant (or, in the case of joint applications,
the first-named applicant) by ordinary post at their own risk. Share certificates and/or refund cheques for
applicants who have applied for less than 1,000,000 O ffer Shares and any uncollected Share certificates
will be despatched by ordinary post, at the applicants ’ risk, to the addresses specified in the relevant
applications. Further information is set out in ‘‘ How to Apply for Public Offer Shares — D. Despatch/
Collection of Share Certificates an d Refund of Application Monies’’.
9. Uncollected Share certificates and refund cheque s (if any) will be despatched by ordinary post at the
applicant’s own risk to the address specified in th e relevant application. For further information,
applicants should refer to the section headed ‘‘How to Apply for Public Offer Shares — D. Despatch/
Collection of Share Certificates and Refund of Application Monies’’ in this prospectus.
10. HK eIPO White Form e-Auto Refund payment instructions/ref und cheques will be despatched in respect
of wholly or partially unsuccessful applications and in r espect of successful applications if the final Offer
Price is less than the maximum Offer Price of HK$3. 00 per Offer Share (subject to application channels).
11. You will not be permitted to submit your application through the IPO App or the designated website at
www.hkeipo.hk after 11 : 30 a.m. on the last day for submitting applications. If you have already submitted
your application and obtained an appl ication reference number from the IPO App or the designated
website at or before 11 : 30 a.m., you will be permitte d to continue the application process (by completing
payment of application monies) until 12 : 00 noon on t he last day for submitting applications, when the
application lists close.
In the event of any change to the above expected timetable after the date of this
prospectus, an announcement will be made on the Stock Exchange’s website at
www.hkexnews.hk and our Company’s website at www.metatechnologies.com.sg
accordingly. All Share certificates will only become valid evidence of title of the Shares
to which they relate provided that the Share Offer has become unconditional in all respects
and the Underwriting Agreements have not been terminated in accordance with their
respective terms at or before 8 : 00 a.m. (Hong Kong time) on the Listing Date.
For further details of the str ucture and conditions of the Share Offer, you should refer
to the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus.
EXPECTED TIMETABLE (1)
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This prospectus is issued by our Company solely in connection with the Share Offer and
does not constitute an offer to sell or a solicit ation of an offer to buy any security other than
the Offer Shares offered by this prospectus pursuant to the Share Offer. This prospectus
may not be used for the purpose of, and does not constitute, an offer to sell or a solicitation
of an offer in any other jurisdiction or in any other circumstances. No action has been taken
to permit a public offer of the Offer Shares or the distribution of this prospectus in any
jurisdiction other than Hong Kong.
You should rely only on the information contained in this prospectus to make your
investment decision. Our Company and the Relevant Persons (Share Offer) have not
authorised anyone to provide you with information that is different from what is contained in
this prospectus. Any information or representation not made in this prospectus must not be
relied on by you as having been authorised by our Company or any of the Relevant Persons
(Share Offer).
Page
Characteristics of GEM ........................................................ i i i
Expected Timetable ............................................................. i v
Contents ........................................................................ v i i i
Summary ....................................................................... 1
Definitions ..................................................................... 2 3
Glossary of Technical Terms .................................................... 3 6
Forward-looking Statements .................................................... 3 8
Risk Factors .................................................................... 3 9
Waiver from Strict Compliance with the GEM Listing Rules .................... 6 6
Information about this Prospectus and the Share Offer .......................... 6 9
Directors and Parties Involved in the Share Offer ............................... 7 4
Corporate Information .......................................................... 7 9
Industry Overview .............................................................. 8 1
Regulatory Overview ............................................................ 9 8
CONTENTS
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Page
History and Development ....................................................... 1 2 0
Business ........................................................................ 1 6 5
Relationship with our Controlling Shareholders .................................. 2 5 2
Continuing Connected Transactions ............................................. 2 6 3
Directors and Senior Management .............................................. 2 6 7
Substantial Shareholders ........................................................ 2 8 0
Share Capital ................................................................... 2 8 2
Financial Information ........................................................... 2 8 4
Future Plans and Use of Proceeds ............................................... 3 4 2
Underwriting ................................................................... 3 5 5
Structure and Conditions of the Share Offer .................................... 3 6 7
How to Apply for Public Offer Shares .......................................... 3 7 4
Appendix I — Accountant’s Report ........................................... I - 1
Appendix II — Unaudited Pro Forma Financial Information ................... I I - 1
Appendix III — Property Valuation ............................................ III-1
Appendix IV — Summary of the Constitution of the Company and
Cayman Islands Company Law .............................. I V - 1
Appendix V — Statutory and General Information ............................ V - 1
Appendix VI — Documents Delivered to the Registrar of Companies in
Hong Kong and Available on Display ........................ V I - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus and should be read in conjunction with the full text of this prospectus. As it is a
summary, it does not contain all the information that may be important to you. You should
read the whole prospectus, including our financial statements and the accompanying notes,
before you decide to invest in the Offer Shares.
There are risks associated with any investment in the Offer Shares. Some of the
particular risks associated with an investment in the Offer Shares are set out in the section
headed ‘‘Risk Factors’’ in this prospectus. You should read that section carefully before you
decide to invest in the Offer Shares.
OVERVIEW
Established in 2000, we are a precision engin eering services provider headquartered in
Singapore, specialising in providing precisio n machining and precision welding services for
international companies in the semiconductor and other sectors. According to the CIC
Report, we ranked fifth in terms of reven ue from the semiconductor segment of the
precision component engineering industry in Singapore in 2023 with a market share of
approximately 3.3%.
We offer our customers precision engineerin g services including precision machining
services and precision welding services. Precision machining involves using Computer
Numerical Controls (‘‘ CNC’’) machines and other advanced machine tools to cut and shape
materials and to produce parts that meet extremely strict specifications in terms of size,
shape, surface finish and other geometric attr ibutes with micrometre -level of accuracy.
Precision welding involves using advanced welding methods and specialised processes such
as laser and electron beam to join materials together according to strict specifications and
tolerance. Leveraging our technical cap abilities and know-how and machinery and
equipment, we have established our market position in the precision component
engineering value chain by offering specialised services tailored to our customers’ specific
technical requirements and commercial needs.
Throughout the years, we have grown our bu siness to serve customers in various
sectors, including semiconductor, aerospace and data storage industries. Many of our
customers are well-recognised internationa l companies in these industries, including
Customer A, a U.S. based corporation which supplies equipment used for fabrication of
integrated circuits and displays of electronic products such as televisions, smartphones,
laptops, personal computers, etc.. Our major customers have selected us as a key long-term
partner as we possess essential industry-specific certifications and have passed and extended
the stringent in-house supplier qualification processes of these reputable customers. We
have established long-standing business relationships with our five largest customers during
the Track Record Period for an average of approximately 11 years and we will seek to
maintain sustainable and mutually beneficial relationships with our customers.
SUMMARY
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We have demonstrated a proven track record in providing quality and efficient
precision engineering services to our custome rs. We have a dedicated quality control team
to conduct stringent incoming, in-process and final quality assessment by conducting a wide
range of technical testing, such as leak checking using helium leak detectors, to ensure that
our components and parts are of the exact and precise measurements as specified by our
customers. We have obtained the SSQA certification, which qualifies us to conduct
precision machining work in the semiconductor industry. We have also been accredited with
ISO 9001 : 2015 quality management system certification in respect of fabrication of
precision machinery parts since 2019, and ISO 14001 : 2015 environmental management
system certification in respect of fabrication of machinery parts since 2018.
Our business is headquartered in Singapore w ith production facilit ies in Singapore (the
‘‘Singapore Factory ’’) and Malaysia (the ‘‘ Malaysia Factory ’’). We are equipped with
machinery with functions and specifications a nd technicians who have accumulated skills in
handling different production processes which enable us to offer services to cater for the
specific design and requirements of our customers. Most of our machinery and equipment
can be used to produce a range of products for diverse end-use industries with different
specifications.
OUR BUSINESS MODEL
As a precision engineering services provider, we offer precision machining services and
precision welding services to OEMs and contract manufacturers in various sectors. We have
started our business in providing precision machining services since 2000 and further
expanded our business to include precision welding services upon completion of our
acquisition of SPW in December 2021 (the ‘‘ Acquisition ’’). The Acquisition was driven by
SPW’s expertise in precision welding which is a crucial value-adding process in precision
component engineering for manufacturing complex products and the synergy brought by
the shared customer base between Metasurface Technologies and SPW. With the
acquisition of SPW, we are able to provide solutions for various manufacturing process
of precision component engineering, which has reinforced our presence in the value-chain.
For more information on the Acquisition, see ‘‘History and Development — Reorganisation
— 2. Acquisition of SPW’’. Going forward, in view of the growing demand for precision
components engineering services within the semiconductor industry and other sectors, our
Group will continue to develop the provision o f precision machining and precision welding
services in parallel to leverage the sy nergies between both service types.
SUMMARY
–2–


--- page 14 ---
OUR STRENGTHS
We believe that the following competitive strengths have contributed and may
contribute to our success and distinguish us from our competitors:
. long standing and strong business relationships with reputable international
customers;
. advanced production technologies and m anufacturing capabilities to produce
products that meet various specifications required by the customers;
. possession of industry-specific qualifications and certifications for precision
machining and precision welding services; and
. experienced management team supported b y high calibre engineers with advanced
technical capabilities.
OUR STRATEGIES
Our business objective is to provide best-in- class value in precision engineering which
is built on trust, knowledge, innovation and synergies as well as to forge mutually beneficial
partnership with our customers. To accomplish this objective, we plan to:
. maintain and strengthen our long-term partnership with reputable international
customers and expand and diversify our customer base;
. continue to seek business expansion and increase our scale of operation through
(a) enhancing our cashflow management and supply chain management; and (b)
enhancing our human resources management; and
. enhance our quality assurance capability and optimise our operational efficiency.
MAJOR CUSTOMERS AND SUPPLIERS
We have established strong and long-standing business relationships with our major
customers. In each year during the Track Record Period, revenue contributed from our five
largest customers was approximately S$29.8 million and S$31.0 million, respectively,
representing approximately 76.0% and 80.0%, respectively, of our total revenue. In each
year during the Track Record Period, revenue contributed from our largest customer, was
approximately S$12.4 million and S$9.0 million, re spectively, represen ting approximately
31.8% and 23.1%, respectively, of our total r evenue. We have established and maintained
business relationships with our five larges t customers during the Track Record Period for
approximately eleven years on average. For more information on Customer A and other
major customers, see ‘‘Business — Our Customers’’.
SUMMARY
–3–


--- page 15 ---
Customer A is currently listed on the NASDAQ and headquartered in the U.S. which is
principally engaged in the provision of manufacturing equipment, services and software to
the semiconductor, display and related industries globally. It supplies equipment used for
fabrication of integrated circuits and displ ays of electronic products such as televisions,
smartphones, laptops and personal computers, etc.
According to the CIC Report, Customer A is an industry leader in the global
semiconductor manufacturing equipment industry in terms of revenue in 2023 with a
market share of approximately 19.5% and it is not uncommon for market participants in
the semiconductor segment of precision component engineering industry to have a highly
concentrated customer base since the end-us e semiconductor manufacturing equipment
industry is concentrated and dominated b y a limited number of advanced semiconductor
equipment manufacturers with the top three market players accounting for more than 40%
of the global market share in terms of revenue in 2023.
In each year during the Track Record Period , purchases from our five largest suppliers
were approximately S$7.5 million and S $6.8 million, respectively, representing
approximately 47.4% and 52.2%, respectively, of our total purchases, and purchases
from our largest supplier were approximately S$2.4 million and S$1.9 million, respectively,
representing approximately 14.9% and 14.6%, respectively, of our total purchases in each
year during the Track Record Period.
DISPOSAL OF OUR CONTROL OVER METAOPTICS TECHNOLOGIES
Metaoptics Technologies was incorporate d in June 2021 as an insignificant subsidiary
of our Group that was held as to 90% by Metasurface Technologies and as to 10% by Mr.
Thng, an executive Director and a substantial Shareholder of our Company. Metaoptics
Technologies is principally engaged in the metal ens technology business. Since its inception,
it had always been our Directors’ intention that Metaoptics Technologies will be a
long-term investment in our Group with Mr. Thng (who has the relevant optics industry
experiences and connections) spearheading its entire business operations. It had also been
our Group’s and Mr. Thng’s understanding that Metaoptics Technologies, as a start-up in a
high-growth industry, will eventually require further fund raising opportunities which will
gradually dilute our equity interests.
Up until May 2023, as Metaoptics Technologies had been growing its business
operations and expanding its investor base to other independent third-party investors,
Metasurface Technologies agreed to transfer an approximately 33.32% equity interest in
Metaoptics Technology at a consideration of S$180,000 in aggregate. The consideration was
at a discount to the then fair value of Metaop tics Technologies. Immediately after the
transfer, we remained as an investor with approximately 20.19% equity interest in
Metaoptics Technologies, which ceased to be a subsidiary and instead became an associate
of our Group. After a series of share allotment and transfers between shareholders of
Metaoptics Technologies, our Group had an equity interest of approximately 17.10% in
Metaoptics Technologies as at the Latest Practicable Date.
SUMMARY
–4–


--- page 16 ---
The transfer of our approximately 33.32% equity interests in Metaoptics Technologies
to Mr. Thng resulted in the recognition in our consolidated statements of comprehensive
income for the year ended 31 December 2023 (a) gains on disposal of a subsidiary of
approximately S$2.5 million; and (b) share-ba sed payments of approximately S$2.1 million
because the transfer is perceived to be a form of compensation to remunerate Mr. Thng’s
past services and contribution to our Group as an employee. See ‘‘History and Development
— Corporate Development — Investment in an associate’’ in this prospectus for further
details.
PRODUCTION CAPACITY AND UTILISATION
The production capacity and output of our precision component engineering services
are measured by machine hours as products of our precision machining and precision
welding services are highly customised and have diverse shapes, sizes and weights subject to
our customer’s requirements and product specifications.
The following table sets out in details the des igned production capacity, actual output
and utilisation rate of the major production pr ocesses in our production facilities during the
Track Record Period based on information available on machine hours:
For the year ended 31 December
2022 2023
Designed
Production
Capacity
Actual
Output
Utilisation
Rate
Designed
Production
Capacity
Actual
Output
Utilisation
Rate
(Hour) (1) (Hour) (2) (%)(3) (Hour) (1) (Hour) (2) (%)(3)
Singapore Factory
Precision machining
— CNC machining
process 338,240 177,408 52.5 338,240 138,285 40.9
Precision welding 144,960 113,467 78.3 144,960 171,953 118.6
Malaysia Factory
Precision machining
— CNC machining
process 126,000 58,212 46.2 126,000 60,962 48.4
Notes:
(1) The designed production capaci ty for precision machining is calculated based on maximum machine
hours for CNC machining process. The designed p roduction capacity for precision welding is
calculated based on maximum machine hours for th e precision welding process. Maximum machine
hours are calculated based on 20 operating hours per working day (inclusive of the switching time of
production machinery and equipment for manufactu ring different parts and components and taking
into account factors such as machine set-up and r econfiguration time, etc) and total working days
per year (based on two shifts per day and six work ing days per week multiplied by 52 weeks minus
the number of statutory holidays in Singapor e or Malaysia for the respective year).
(2) The actual output is the total number of actual machine hours in operation.
(3) The utilisation rate is calculated by dividing a ctual output by designed production capacity for the
same financial year on the basis set out above.
SUMMARY
–5–


--- page 17 ---
For the years ended 31 December 2022 and 2023, the utilisation rates were
approximately 52.5% and 40.9% for precision machining and approximately 78.3% and
118.6% for precision welding, respectively, at our Singapore Factory and the utilisation
rates were approximately 46.2% and 48.4%, res pectively, for precision machining at our
Malaysia Factory. According t o the CIC Report, the industr y average utilisation rates of
the production facilities of precision machin ing and precision weldin g industry both ranged
from 40% to 80% during the Track Record Period. This wide range reflects varying
operational circumstances and industry demands. Companies focusing on the
semiconductor industry operate at lower ut ilisation rates of 40% to 60% as the parts and
components produced for the semiconductor industry are less standardised and more
c o m p l e x .T h e s ep a r t sr e q u i r et h eu s eo fdifferent types of CNC machines and other
machines and tools for each step of the production process. The machines required for
different products may also vary widely, leading to lower utilisation rates for the higher
varieties of machines. In contrast, compani es mainly serving the aerospace industry and
automobile industry operate at higher utilis ation rates of 60% to 80%. The parts produced
for these industries are relatively more stand ardised and more streamlined, requiring less
varieties of machines, and thus leading to high er utilisation rates. The increase in utilisation
rates in 2023 for precision welding at our Singapore Factory as compared to 2022 was
mainly due to the procurement of labour services from independent third party service
providers to increase manpower at our Singapore Factory to cope with the increase in sales
of precision welding services. Our production facilities for precision machining were not
fully utilised during the Track Record Period, whi ch was primarily due to limited resources
for procurement of raw materials and recru itment of skilled workers to maximise the
machine hours in operation. Besides, as products of our precision machining are highly
customised with diverse design specifications as requested by our customers and hence
require the use of different type of machines (e.g. CNC turning machines, CNC lathe
machines, CNC milling machines and other ad vanced tools) to complete the whole process,
it would be very ideal for different type of our machines to be operated simultaneously at all
production time to achieve full utilisation. For h ypothetical analysis only, with reference to
(i) our historical average machine hours, raw material costs and labour costs required to
perform a purchase order during the Track Record Period, and (ii) our average cash and
bank balances in 2022 and 202 3, we have a shortage of approximately S$6.5 million and
S$5.4 million of working capital for raw mater ial procurement and staff recruitment in
order to fully utilise our production capacity for precision machining at our Singapore
Factory during 2022 and 2023, respectively.
During the Track Record Period, we recei ved additional purchase orders from
customers from time to time while our availa ble human resources were still occupied with
fulfilling existing orders on hand. In order to maintain positive relationship with our
customers, we negotiated for longer delivery t imes instead of turning down purchase orders.
We will also procure labour services from independent third party service providers to
handle these additional or ad hoc orders if n ecessary. To determine whether to procure
external labour services when our existing h uman resources are tied up, we will consider
factors such as delivery schedules requested by customers, additional cost required, our
current production schedule, our then available working capital and our relationship with
SUMMARY
–6–


--- page 18 ---
the customer. This has resulted in our back log of unfulfilled orders. As at 31 December
2022 and 2023 and 30 April 2024, we had a backlog of unfulfilled purchase orders of
approximately S$36.1 million, S$24.9 mi llion and S$18.4 million, respectively.
COMPETITION
Precision component engineering is wid ely applied to produce components with
complex structures or certain special techni cal parts in many growing industries and the
downstream customers consists of OEMs and their contract manufacturers and service
providers in the diverse end-use industries, s uch as semiconductor, aerospace and oil & gas.
According to the CIC Report, revenue of global semiconductor industry is projected to
reach US$880.7 billion in 2028 with a CAGR of 10.6% between 2023 and 2028. Global sales
of semiconductor manufacturin g equipment also increased f rom US$61.7 billion in 2019 to
US$106.3 billion in 2023, registering a CAG R of 14.6% between 2019 and 2023 and is
expected to reach US$180.6 billion in 2028, registering a CAGR of 11.2% between 2023 and
2028. As our Group is a precision engineering s ervices provider, specialising in providing
precision machining and precision welding services for international companies mainly in
the semiconductor and other sectors, includ ing aerospace and data storage industries.
Therefore, the continual growth of the semiconductor industry in the world is expected to
drive up the demand and presents more opportunities for precision components, and
therefore supports the further development of Singapore’s precision component engineering
industry.
Our main competitors include both domestic and international companies providing
precision component engineering services in Singapore. We compete with them primarily in
product quality, technical level, production ca pacity, pricing terms, in-time delivery, span
of one-stop services offerings, ex perience and after-sales services.
Our strategic location in Singapore positions us above our competitors outside
Singapore, primarily due to macro-economic shifts affecting the regional semiconductor
industry, our geographical proximity with c ustomers and favourable domestic policies and
incentives in Singapore for the precision engi neering industry. Ther efore, we consider the
direct competition from international companies providing precision component
engineering services in the semiconductor industry without presence in Singapore is
relatively remote.
Due to factors such as macro-economic conditions and dynamic international
situations, certain global major semiconductor manufacturers and semiconductor
equipment manufacturers have been shifting their manufacturing base and operations
from China to Southeast Asia. Such changes have provided more opportunities for
Singapore as a leading regional hub for advanced manufacturing, and service providers in
Singapore and are expected to bring more demand for services and products of the Group.
For details, see ‘‘Business — Impact of The Covid-19 Outbreak and U.S.-China Trade
War’’.
In addition, among our five largest customers for the years ended 31 December 2022
and 2023, Customer A, Customer D and Intevac Asia Pte. Ltd. have production base in
Singapore and Customer B and Customer C have production base in Malaysia. Customer
SUMMARY
–7–


--- page 19 ---
A’s decision to invest S$600 million in a ne w Singapore facility and decisions of its
customers and their related companies, such as Vanguard (an affiliate of Taiwan
Semiconductor Manufacturing Company Limited (TSMC)) and United Microelectronics
Corporation (UMC), to further invest in pr oduction facilities in Singapore, further
highlight the strategic value seen in local ope rations in Singapore. Our Group’s strategic
location with production facilities based in Singapore and Malaysia allows us to benefit
from these developments with enhanced logistical efficiencies. This proximity and
alignment with industry trend give us an edge over our competitors in other regions.
In addition, various favourable policies and measures introduced by the Singapore
government such as Industry Transformation Maps (ITMs) and Precision Engineering
Industry Digital Plan (IDP) a lso promote the further development of the precision
engineering industry in Singapore, providing us further competitive edge over our
competitors outside Singapore. For detai ls, see ‘‘Industry Overview — Overview of
Singapore’s Precision Component Engineering Industry — Key growth drivers of
Singapore’s precision component engineering industry’’.
We seek to differentiate ourselves throug h our use of multi-axis CNC machines.
According to the CIC Report, our Group is em ploying more 5-axis CNC machines than the
industry peers in general. Multi-axis CNC ma chines, in particular, CNC machines with
more axes (directions of movements), allo w for machining in multiple directions
simultaneously. The 5-axis CNC machines we use in our production can move in five
different directions, being three linear areas (up and down, left and right, back and forth)
and two rotational axes. Compared to 3-axis or 4-axis CNC machines, which can only move
in three directions or four directions respectively, 5-axis CNC machines can reach more
angles and create more complex and detailed parts without the need to manually moving the
machined parts for multiple processes. With more machining steps to be completed in the
same timeframe, our use of multi-axis CNC ma chines can reduce machining cycles and
operational costs in terms of the labour hours spent on manually moving the machined
parts for multiple processes and the total lead time on production. According to the CIC
Report, subject to the complexity of the machining part, as compared to a 5-axis CNC
machine, a 2-axis, 3-axis and 4-axis CNC machine generally takes 4 to 20 times, 2 to 10
times and 2 to 5 times, respectively, longe r in operational time to complete a similar
machining task. Additionally, multi-axis s ystems facilitate more complex machining
operations such as simultaneous milling, drilling and cutting, thus enhancing both
production efficiency and ensuring machining accuracy. Our Directors believe that other
core aspects that set us apart from our competitors and foster our competitiveness are the
solid relationships with our customers through regular communication and our strong
technical know-how. For more information on the competitive landscape of the industry
and our competitive strengths, see ‘‘Indu stry Overview — Competitive Landscape of
Singapore’s Precision Component Engineering Industry in the Semiconductor Segment’’
and ‘‘— Competitive advantages of the Group’’.
According to the CIC Report, entry barriers faced by new competitors in the precision
component engineering industry are (i) large capital investment required to purchase
machinery and equipment to achieve high accura cy and versatility in production, (ii) intense
competition for recruitment of skilled work ers and difficult access to technological
SUMMARY
–8–


--- page 20 ---
know-how, (iii) long-term and steady relationship with downstream customers, which
creates difficulties for new players to establish mutual dependence and complimentary
business relationship with customers within a sh ort period of time, and (iv) industry specific
qualification and certification requirement s. For more information on these entry barriers,
see ‘‘Industry Overview — Competitive Land scape of Singapore’s Precision Component
Engineering Industry in the Semiconductor Segment — Entry barriers for the precision
component engineering industry’’.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Description of selected consolidated statements of comprehensive income line items
The following table sets out our selected c onsolidated statements of comprehensive
income for the periods indicated. Our historic al results presented below are not necessarily
indicative of the results that may be expected for any future period.
Years ended 31 December
2022 2023
S$’000 S$’000
Continuing operations
Revenue 39,116 38,769
Cost of sales (23,060) (24,354)
Gross profit 16,056 14,415
Other income 1,130 2,731
Other gains/(losses), net 177 (426)
Administrative expenses (10,489) (11,666)
Operating profit 6,874 5,054
Finance costs (1,579) (1,343)
Share of loss from an associate — (366)
Profit before tax 5,295 3,345
Income tax expense (1,495) (1,061)
Profit from continuing operations 3,800 2,284
Discontinued operation
(Loss)/profit from discontinued operation (1,095) 2,143
Profit for the year 2,705 4,427
SUMMARY
–9–


--- page 21 ---
Non-IFRS Measure
To supplement our consolidated financial statements which are presented in
accordance with the IFRS, we also use adjusted profit from continuing operations
(non-IFRS measure) as an additional financial measure, which is not required by, or
presented in accordance with, the IFRS. We define adjusted profit from continuing
operations (non-IFRS measure) as profit from continuing operations for the financial year
adjusted by adding back (i) share-based payments which arose from grant of shares and
exercise of anti-dilution rights granted to cer tain employees and shareholders of our Group,
w h i c ha r en o n - c a s hi nn a t u r e ;a n d( i i )L i s t i n ge x p e n s e si nr e l a t i o nt ot h eS h a r eO f f e r .W e
have made such adjustments consistently during the Track Record Period.
We believe that our presentation of the adjusted profit from continuing operations
(non-IFRS measure) when shown in conjunction with the corresponding IFRS measure
provides useful information to potential investors and management in facilitating a
comparison of our operating performance from period to period by eliminating the impacts
of the share-based payments and Listing expenses. However, our presentation of the
adjusted profit from continuing operations (non-IFRS measure) may not be comparable to
similarly titled measures presented by other companies. The use of the adjusted profit from
continuing operations (non-IFRS measure) has limitations as any other analytical tool, and
should not be considered in isolation from, or as a substitute for or superior to, the analysis
of our results of operations or financial condition as reported under the IFRS.
The following table reconciles our adjusted profit from continuing operations
(non-IFRS measure) with our profit from continuing operations for the financial year
and also sets out our adjusted profit margin (non-IFRS measure) for the periods indicated:
For the year ended
31 December
2022 2023
S$’000 S$’000
Profit from continuing operations 3,800 2,284
Add:
Share-based payments
(1) 815 3,151
Listing expenses in relation to the Share Offer 1,930 1,896
Adjusted profit from continuing operations
(non-IFRS measure) (2) 6,545 7,331
Adjusted profit margin (3)
(non-IFRS measure) 16.7% 18.9%
Notes:
(1) Share-based payments arose from grant of shares and exercise of anti-dilution rights granted to
certain employees and shareholders of our Group which were non-cash in nature.
SUMMARY
–1 0–


--- page 22 ---
(2) Adjusted profit from continuing operations (non- IFRS measure) refers to profit from continuing
operations for the financial year by adding back (i) share-based payments which are non-cash in
nature; and (ii) Listing expenses in relation to the Share Offer.
(3) Adjusted profit margin (non-IFRS measure) equa ls adjusted profit from continuing operations
(non-IFRS measure) as a percentage of revenue.
The following table sets out our revenue breakdown during the Track Record Period
by service type, customer sector and customer geographical location, respectively:
For the year ended 31 December
2022 2023
S$’000
%o ft o t a l
revenue S$’000
%o ft o t a l
revenue
By service type:
Precision machining 22,913 58.6 15,545 40.1
Precision welding 16,203 41.4 23,224 59.9
Total 39,116 100.0 38,769 100.0
By customer sector:
Semiconductor 35,729 91.3 34,077 87.9
Aerospace 101 0.3 1,646 4.3
Data storage 2,423 6.2 2,411 6.2
Others
(1) 8 6 32 . 2 6 3 51 . 6
Total 39,116 100.0 38,769 100.0
By customer geographical
location:
Singapore 20,741 53.0 14,807 38.2
Malaysia 12,627 32.3 16,072 41.5
U.S. 3,507 9.0 5,267 13.6
Others
(2) 2,241 5.7 2,623 6.7
Total 39,116 100.0 38,769 100.0
Notes:
1. Others mainly refer to solar industry and oil and gas industry.
2. Others mainly refer to Switzerland.
Revenue from precision machining servi ces decreased from approximately S$22.9
million for the year ended 31 December 2022 to a pproximately S$15.5 million for the year
ended 31 December 2023. The decrease was mainly attributable to the decrease in sales of
p r e c i s i o nm a c h i n i n gs e r v i c e st oC u s t o m e rAa n dac u s t o m e rb a s e di nM a l a y s i a( w h i c hi s
part of a group listed on Toronto Stock Exchange and the New York Stock Exchange and is
SUMMARY
–1 1–


--- page 23 ---
principally engaged in the provision of supp ly chain solutions to customers in advance
technology solutions and connectivity and cloud solutions industries) by approximately
S$4.6 million and S$0.9 million, respectively . Such decrease in purchase orders from
customers of our precision machining services was mainly due to postponed delivery of
certain precision machining parts and components, in particular during the second half of
2023 as requested by our customers, most of which were then expected to be delivered in the
second and third quarters of 2024. To the best knowledge of the Company, the postponed
delivery requests in the precision machining parts and components by our customers was
primarily due to their de-stocking of t he then existing inventories on hand.
Revenue from precision welding services i ncreased from approximately S$16.2 million
for the year ended 31 December 2022 to approx imately S$23.2 million for the year ended 31
December 2023. The increase was primarily attributable to the increase in purchase orders
for certain parts and components from Customer C and Customer B during the year for the
provision of precision welding services by ap proximately S$4.6 million and S$1.4 million,
respectively.
Revenue from customers in the semicondu ctor industry slightly decreased from
approximately S$35.7 million for the year end ed 31 December 2022 to approximately S$34.1
million for the year ended 31 December 2023. Th e proportion of our revenue contribution
from customers in the semiconductor industry decreased mainly due to our efforts to
diversify our customer sectors, for instance in the aerospace industry.
Revenue from customers in the aerospace industry increased from approximately S$0.1
million for the year ended 31 December 2022 t o approximately S$1.6 million for the year
ended 31 December 2023. The increase was mainly attributable to the increase in purchase
orders from Customer B for aerospace related parts and components for the year ended 31
December 2023. Customer B recorded an increase in its sales in relation to aerospace and
defence by approximately 4% from 2022 to 2023, by leveraging its market position in both
defence and commercial aerospace sectors to capture the increase in the global market size
of the aerospace and defence market in 2023, partly driven by increased air travel and
aviation activities.
Revenue from customers in the data storage industry remained stable at approximately
S$2.4 million and S$2.4 million for the y ears ended 31 Decemb er 2022 and 2023,
respectively.
Our cost of sales increased from approxi mately S$23.1 million for the year ended 31
December 2022 to approximately S$24.4 mil lion for the year ended 31 December 2023,
which was attributable to the (i) increase in direct labour cost by approximately S$1.0
million as a result of the increase in procureme nt of third party labour services to fulfil the
increased sales in respect to precision welding services; and (ii) increase in direct material
costs by approximately S$0.1 million due to incr ease in sales from our precision welding
services, which generally required more inputs of standard parts such as valve and fittings in
the production process.
SUMMARY
–1 2–


--- page 24 ---
Our gross profit was approximately S$16 .1 million and S$14.4 million for the years
ended 31 December 2022 and 202 3, respectively. Our overall gross profit margin was
approximately 41.0% and 37.2% for the years ended 31 December 2022 and 2023,
respectively, the decrease of which was mainly due to the decrease in the gross profit margin
for our precision machining services from approximately 43.2% for the year ended 31
December 2022 to approximately 31.4% for t he year ended 31 December 2023. The decrease
in the gross profit margin for our precision ma chining services was mainly attributable to
the decrease in sales for our precision machining services by approximately 32.2% while the
cost of sales for our precision machining ser vices decreased by approximately 18.2% only
during the year as the cost of sales of our precision machining services comprised a portion
of overhead costs such as staff costs and depreciation of property, plant and equipment and
right-of-use assets which were relatively static regardless of sales performance.
The following table sets forth the breakdown of our gross profit and gross profit
margin by service type for the periods indicated:
Year ended 31 December
2022 2023
Gross profit
Gross profit
margin Gross profit
Gross profit
margin
S$’000 % S$’000 %
Precision machining 9,887 43.2 4,887 31.4
Precision welding 6,169 38.1 9,528 41.0
Total/Overall 16,056 41.0 14,415 37.2
We recorded net profits of approximatel y S$2.7 million and S$4.4 million for the years
ended 31 December 2022 and 2023, respectively . The increase was primarily attributable to
(i) the recognition of gains on disposal of a subsidiary of approximately S$2.5 million
during the year ended 31 December 2023; and (ii) the increase in our other income by
approximately S$1.6 million mainly due to the i ncrease in our rental income generated from
our investment property in Singapore and part of our Tuas Property which was sublet to
independent third parties by approximately S$1.0 million.
SUMMARY
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--- page 25 ---
Description of selected consolidated statements of financial position line items
The following table sets out our consolidated statements of financial position as at the
dates indicated:
As at 31 December
2022 2023
S$’000 S$’000
ASSETS
Non-current assets 46,705 44,345
Current assets 22,701 25,515
Total assets 69,406 69,860
LIABILITIES
Current liabilities 18,603 15,615
Net current assets 4,098 9,900
Non-current liabilities 28,494 27,248
Net assets 22,309 26,997
Non-controlling interests 1,013 —
We recorded net current assets of appr oximately S$4.1 million, S$9.9 million and
S$10.4 million as at 31 December 2022, 31 December 2023 and 30 April 2024, respectively.
Our inventories decreased from approxima tely S$7.9 million as at 31 December 2022 to
approximately S$6.6 million as at 31 December 2023 mainly due to (i) the utilisation of our raw
materials to cope with our sales near the year end; and (ii) the provision for inventory
obsolescence of approximately S$0.4 millio n. Our current and non-current borrowings
decreased by approximately S$1.3 millio n from approximately S$5.5 million as at 31
December 2022 to approximately S$4.2 million as at 31 December 2023, which was
primarily attributable to settlement of our current bank loans during the year ended 31
December 2023. Our trade receivables decreased by approximately S$1.4 million from
approximately S$8.0 million as at 31 December 2022 to approximately S$6.6 million as at 31
December 2023 due to a larger settlement of trade receivables by our customers near year end
of 2023. Our trade payables decreased by appro ximately S$3.5 million from approximately
S $ 5 . 9m i l l i o na sa t3 1D e c e m b e r2 0 2 2t oa p p r o x i m a t e l yS $ 2 . 4m i l l i o na sa t3 1D e c e m b e r2 0 2 3
primarily due to our prompt repayment of trade payables near the year end. Our current
and non-current non-trade payables increased by approximately S$2.1 million from
approximately S$3.6 million as at 31 December 2022 to approximately S$5.7 million as at 31
December 2023 primarily due to (i) increase in amount due to a shareholder of
approximately S$1.0 million which represen ts amount payable to a pre-IPO investor for
SUMMARY
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non-Listing put option in relation to the 3rd Pre-IPO Investment; (ii) increase in other
payables to third party, which mainly consists of our rental payable to ESR-LOGOS
Property Management (S) Pte L td for our Tuas Property, by a pproximately S$0.4 million
and (iii) the increase in accrued expenses by a pproximately S$0.7 million as a result of the
increase in our accrued Listing expenses as at 31 December 2023.
Our net current assets remained relatively stable as at 30 April 2024.
Our net assets increased from approxima tely S$22.3 million as at 31 December 2022 to
approximately S$27.0 million as at 31 December 2 023, primarily due to the decrease in our
accumulated losses from approximate ly S$10.7 million as at 31 December 2022 to
approximately S$6.1 million as at 31 Decem ber 2023 as we have recognised profit
attributable to owners of the Company of a pproximately S$4.6 million for the year ended
31 December 2023.
Description of selected consolidated cash flow statements data
The following table sets forth our selected consolidated cash flow items for the periods
indicated:
Year ended 31 December
2022 2023
S$’000 S$’000
Operating cash flows before working capital changes 11,793 12,169
Changes in working capital (2,457) (691)
Income tax paid (301) (992)
Net cash generated from operating activities 9,035 10,486
Net cash used in investing activities (647) (407)
Net cash used in financing activities (6,275) (5,079)
Net increase in cash and cash equivalents 2,113 5,000
Effect of currency translation on cash and
cash equivalents (72) 21
Cash and cash equivalents as at beginning of the year 2,163 4,204
Cash and cash equivalents as at end of the year 4,204 9,225
For the years ended 31 December 2022 and 2023, our net cash generated from
operating activities was approximately S $9.0 million and S$10.5 million, respectively. The
net cash generated from operating activitie s increased to S$10.5 million for the year ended
31 December 2023 primarily due to the increase in our profit before tax by approximately
S$1.3 million, as adjusted for certain non-cash or non-operating items, offset by negative
c h a n g e si nw o r k i n gc a p i t a ls u c ha si n c r e a s ei nt r a d ea n do t h e rr e c e i v a b l e sa n di n c r e a s ei n
SUMMARY
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prepayments. Our net cash used in financing activities for the years ended 31 December
2022 and 2023 was approx imately S$6.3 million and S$5.1 m illion, respectively. The net
cash used in financing activities decreased t o approximately S$5.1 million for the year ended
31 December 2023 primarily due to (i) payment of principal portion of lease liabilities
mainly in relation to machineries under hire p urchase arrangement and rental payment for
our Tuas Property; (ii) repayment of borrowings; (iii) interest paid; (iv) Listing expenses
paid, partially offset by proceeds from issue of new shares of a subsidiary and proceeds
from new borrowings.
Key Financial Ratios
The following table sets out our key financial ratios for the periods and as at the dates
indicated:
As at/for the year ended
31 December
2022 2023
Gross Profit Margin (%) 41.0 37.2
Net Profit Margin (%) 6.9 11.4
Current Ratio 1.2 1.6
Quick Ratio 0.8 1.2
Return on Assets (%) 3.9 6.3
Return on Equity (%) 15.0 17.1
Gearing Ratio (%) 24.8 15.7
Our gross profit margin decreased from approximately 41.0% for the year ended 31
December 2022 to approximately 37.2% for the year ended 31 December 2023, which was
mainly attributable to the decrease in the gros s profit margin for our precision machining
services for the year ended 31 December 2023. As our cost of sales for precision machining
services comprised relatively large portion o f overhead costs which were relatively static
regardless of sales performance, our cost of sales for precision machining only decreased by
approximately 18.2% while our revenue for precision machining decreased by
approximately 32.2%, thus leading to the decrease in the gross profit margin for our
precision machining services during the year ended 31 December 2023.
Our net profit margin incr eased from approximately 6.9% for the year ended 31
December 2022 to approximately 11.4% for the year ended 31 December 2023, which was
due to (i) increase in our other income, mainl y attributable to the increase in our rental
income and service income, and (ii) recogn ition of gains on disposal of Metaoptics
Technologies.
Our return on assets increased from approximately 3.9% for the year ended 31
December 2022 to approximately 6.3% for the year ended 31 December 2023 due to
increase in our profit for the year as a result of the increase in our other income and the
recognition of gains on disposal of a subsidiary.
SUMMARY
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Our return on equity increased from approximately 15.0% for the year ended 31
December 2022 to approximately 17.1% for the year ended 31 December 2023 due to
increase in our profit for the year as a result of the increase in our other income and the
recognition of gains on disposal of a subsidiary.
Our gearing ratio decreased from approximately 24.8% as at 31 December 2022 to
approximately 15.7% as at 31 December 2023, primarily due to reduction of our total
borrowings of approximately S $1.3 million as at 31 December 2023.
OUR CONTROLLING SHAREHOLDERS
Upon completion of the Capitalisation Issu e and the Share Offer and without taking
into account any Shares which may be issued and allotted upon exercise of any options
which may be granted under the Post-IPO Share Option Scheme, (i) SGP BVI, which is
directly wholly-owned by Dato’ Sri Chua (the spouse of Mrs. Chua), will be interested in
approximately 39.10% of the issued share capital of the Company, and (ii) Baccini, which is
directly wholly-owned by Mrs. Chua (the spouse of Dato’ Sri Chua), will be interested in
approximately 16.50% of the issued share capi tal of the Company. As such, Dato’ Sri Chua
and Mrs. Chua, who are close associates under the GEM Listing Rules and jointly control
our Group, will be together interested in approximately 55.60% of the issued share capital
of the Company in aggregate. Accordingly, each of SGP BVI, Dato’ Sri Chua, Baccini and
Mrs. Chua will be regarded as our Controlling S hareholders immediately after the Listing.
For more information, see ‘‘Relationsh ip with Our Controlling Shareholders.’’
RISK FACTORS
Our business is subject to certain risks involved in our operations, including but not
limited to risks relating to our business and the industry in which we operate, risks relating
to the Share Offer and risks relating to statements made in this prospectus. We believe that
the following are some of the major risks that we face, (i) we derive a significant portion of
our revenue from our major customers and we cannot assure you that we will successfully
maintain business relationships with our majo r customers and there is no assurance that we
will be able to secure new orders from other customers of similar size, (ii) we may not be
able to diversify our customer portfolio and e xpand into new markets, (iii) we do not enter
into long-term agreements with most of our c ustomers, (iv) our cash flows and working
capital may deteriorate due to potential mis match in time between receipt of payments from
our customers, and payments to our third party suppliers and service providers and failure
of our customers to pay the amounts owed to us in a timely manner may adversely affect
our liquidity, financial condition and operating results, (v) share-based payments and
Listing expenses may have a material and adverse effect on our financial performance,
(vi) we recorded accumulated losses during the Track Record Period, which may adversely
affect our ability to declare and pay dividends , and (vii) our credit facilities contain certain
covenants that may limit our ability to operate our business and any material breach of the
undertakings and/or covenants in our credit fa cilities could adversely affect our business
and financial condition.
SUMMARY
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As different investors may have different interpretations and standards for determining
the materiality of a risk, you should carefully co nsider all of the information set forth in this
prospectus, including the risks and uncertainties described in ‘‘Risk Factors’’.
RECENT DEVELOPMENTS AND MATERIAL ADVERSE CHANGE
Subsequent to the Track Record Period and up to the Latest Practicable Date, we
continued to focus on the provision of precision machining and precision welding services.
Based on our Group’s unaudited management accounts, our total revenue for the four
months ended 30 April 2024 increased when compared to the same period in 2023, primarily
due to increase in precision machining and precision welding parts and components we sold
and delivered to our customers during the period. Our unaudited net profit margin for the
four months ended 30 April 2024 also slightly increased when compared to the same period
in 2023.
As at 30 April 2024, each of Metasurfac e Technologies and SPW had a backlog of
unfulfilled purchase orders of approximately S $10.7 million and S$7.7 million, respectively.
Save as disclosed in ‘‘Financial Informat ion — Listing Expenses’’, our Directors
confirm that, up to the date of this prospectus , there has been no material adverse change to
our financial, operational and/or trading position since 31 December 2023, being the date to
which our most recent audited consolidated financial statements were prepared, and there
has been no event since 31 December 2023 and up to the date of this prospectus that would
materially affect the information shown in our audited consolidated financial information
included in the Accountant’s Report set out in Appendix I to this prospectus.
IMPACT OF THE U.S.-CHINA TRADE WA R, INTERNATIONAL SANCTION AND
TRADE RESTRICTIONS
U.S.-China Trade War
With respect to the U.S.-China trade war, the U.S. imposed a series of sanctions or
restrictions, such as high tariffs on chips and parts imported from China, to hobble China’s
chip industry. The U.S.-China trade war, coupled with other external factors such as global
economic cycle and COVID-19 pandemic, has exacerbated the global semiconductor chip
supply shortage. As a result, due to factors such as macro-economic conditions and
dynamic international situations, certain global major semiconductor manufacturers and
semiconductor equipment manufacturers have been shifting their manufacturing bases and
operations from China to Southeast Asian countries, providing more business opportunities
for Singapore, as a leading regional hub for a dvanced manufacturing, and Singaporean
service providers. Such shifting trend and strengthening of production base by the
semiconductor manufacturing equipment suppliers and semiconductor manufacturers in
Singapore are expected to bring more demand for services and products of the Group.
Going forward, it is expected that the geographical source of upstream raw materials
suppliers and the geographical locations of the Group’s downstream customers will remain
largely unchanged as the Group mainly procured raw materials from domestic suppliers in
Singapore and from Malaysia, the U.S. and Europe and mainly sell its products to
SUMMARY
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customers based in the U.S., Singapore and Malaysia. See ‘‘Risk Factors — Changes in
international trade policies and the ongoing conflict and emergence of a trade war between
the U.S. and China may have an adverse effect on our business’’ and ‘‘Business — Impact of
the COVID-19 Outbreak and U.S.-China Trade War’’ for details.
International Sanction and Trade Restrictions
During the Track Record Period, we indirectly procured aluminium products from the
Relevant Region through one of our suppliers in Singapore, who sourced from a sanctioned
entity located in the Relevant Region. As the sanctioned entity is a Russia-based company
designated on the Entity List maintained by the BIS, provision of items subject to the EAR
to this sanctioned entity is prohibited pursuant to the sanctions designation. Our
transactions involving the Relevant Region w ere limited to the aforementioned indirect
procurements of Russian-origin aluminium products that were denominated in SGD and
took place in Singapore. Since 1 January 2023, the supplier involved in the aforementioned
indirect procurements has ceased to supply any Russian-origin aluminium products to us.
Based on our best understanding and as advi sed by our International Sanctions Legal
Advisers, we believe that we are not subject to sanctions risk that could have a material
adverse effect due to our historical indirect transactions involving the Relevant Region
during the Track Record Period. Please also see ‘‘Risk Factors — We could be adversely
affected as a result of any sales or purchase we make to or from certain countries that are,
or become subject to, sanctions administered by the United States, EU, UK, UN, Australia
and other relevant sanctions authorities.’’
While we have open orders and backlogs that require aluminium products, our
Directors are of the view that the cessation of indirect procurement from the Sanctioned
Person has no material impact on the Group’s business operations and financial
performance since our supplier involved in such indirect procurements has substituted
our orders and backlog orders with aluminium products from other markets with the same
specifications requested by our customers at comparable cost, including Europe, United
States and South Africa. Our Group could also procure aluminium products from other
suppliers which are non Russian-origin to fulfil the production needs from our backlog
orders.
Based on the advice of our International Sanctions Legal Advisers, we do not believe
that there are other international trade restrictions and/or export controls that would
restrict our Group’s access to the requisite raw materials during the Track Record Period
and up to the Latest Practicable Date. For details, see ‘‘Risk Factors — We could be
adversely affected as a result of any sales or purchase we make to or from certain countries
that are, or become subject to, sanctions administered by the United States, EU, UK, UN,
Australia and other relevant sanctions authorit ies’’ and ‘‘Business — Business Activities
with Supplier in relation to the Relevant Region’’.
SUMMARY
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DIVIDENDS
During the Track Record Period and up to the Latest Practicable Date, no dividend or
distribution had been declared, made or paid by our Company or any of the other
companies now comprising our Group. As at the Latest Practicable Date, our Company did
not have a dividend policy in place.
After completion of the Listing, our Share holders will be entitled to receive dividend
declared, made or paid by us. Any declaration of dividends, however, is subject to the
recommendation of our Directors at their discretion, and depending on, among other
things, our results of operations, working capital and cash position, future business and
earnings, capital requirements, contractual re s t r i c t i o n s ,i fa n y ,a sw e l la sa n yo t h e rf a c t o r s
which our Directors may consider relevant. I n addition, any declaration and payment as
well as the amount of the dividends will be subject to the provisions of (i) our Articles of
Association, which provides that divid ends may be declared in any currency to our
Shareholders in a general meeting out of the profits of the Company but no dividend shall
be declared in excess of the amount recommended by the Board; and (ii) the Cayman
Companies Act, which allows dividends to be paid out of sums standing to the credit of the
Company’s share premium account if immediate ly following the date on which the dividend
is proposed to be paid, the Company is able to pay its debts as they fall due in the ordinary
course of business. Our dividend distrib ution record in the past may not be used as a
reference or basis to determine the level of d ividends that may be declared or paid by us in
the future. Any future declarations and payments of dividends will be at the absolute
discretion of our Directors and may require the approval of our Shareholders.
SHARE OFFER STATISTICS
The statistics below are based on the assumpt ion that 150,000,000 Offer Shares in issue
under the Share Offer:
B a s e do nt h e
low end of the
indicative Offer
Price Range of
HK$2.38
per Share
B a s e do nt h e
high end of the
indicative Offer
Price Range of
HK$3.00
per Share
Market capitalisation of our Shares
(1) 357,000,000 450,000,000
Unaudited pro forma adjusted consolidated net
tangible assets per Share (2)
HK$1.08
(S$0.18)
HK$1.19
(S$0.20)
Notes:
1. The calculation of market capitalisation is ba sed on 150,000,000 Shares expected to be in issue
immediately following the completion of the Capitalisation Issue and the Share Offer but does not
take into account any Shares which may be issued a nd allotted upon the exercise of options which
may be granted under the Post-IPO Share Option Sc heme or which may be issued and allotted or
repurchased by us pursuant to the general mandate s granted to our Directors to issue or repurchase
Shares.
SUMMARY
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2. The unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to
owners of our Company per Share is calculated based on 150,000,000 Shares expected to be in issue
immediately following the completion of the Capitalisation Issue and the Share Offer but does not
take into account any Shares which may be issued a nd allotted upon the exercise of options which
may be granted under the Post-IPO Share Option Sc heme or which may be issued and allotted or
repurchased by us pursuant to the general mandate s granted to our Directors to issue or repurchase
Shares.
LISTING EXPENSES
The estimated total Listing expenses in connection with the Share Offer (based on the
mid-point of our indicative price range for the Share Offer) are approximately S$8.9
million, representing approximately 72.6% of the gross proceeds of the Share Offer (based
on the mid-point of our indicative price range for the Share Offer). Our Listing expenses are
categorised into underwriting-related ex penses of approximately S$1.0 million and
non-underwriting-related expenses of approximately S$7.9 million. The
non-underwriting-related expenses can be fur ther classified into fees and expenses of legal
advisers and accountants of a pproximately S$4.9 million and other fees and expenses of
approximately S$3.0 million.
Prior to the Track Record Period, we have incurred Listing Expenses of approximately
S$0.2 million, of which approximately S$0.1 million was charged to our consolidated
statement of comprehensive income and the remaining amount of approximately S$0.1
million was recorded as prepayment which is to b e deducted from equity after the Listing.
During the Track Record Period, we had incurred Listing expenses of approximately S$4.9
million, of which approximately S$3.8 million was charged to our consolidated statement of
comprehensive income and the remaining amount of app roximately S$1.1 million was
recorded as prepayment which is to be deducte d from equity after the Listing. We expect to
further incur Listing expenses (including underwriting commissions) of approximately
S$3.8 million (based on the mid-point of our ind icative price range for the Share Offer) by
the completion of the Share Offer, of which an estimated amount of approximately S$2.3
million will be charged to our consolidated stat ement of comprehensive income for the year
ending 31 December 20 24 and an estimated amount of approximately S$1.5 million which is
directly attributable to the issue of the Shar es to the public and to be deducted from equity.
The aforementioned Listing expenses are the latest practicable estimates by us and are
provided for reference only and the actual amounts may differ.
REASONS FOR LISTING
Our Directors believe that the Listing would be instrumental in enabling us to achieve
our business strategies and provide us with (i) broader access to capital for future growth,
(ii) opportunities to expand our customer base with wider industries coverage and increase
our competitiveness, (iii) stronger ability to attr act talent and retain existing staff, and (iv)
funding needs for implementing our business strategies. See ‘‘Future Plans and Use of
Proceeds — Reasons for the Listing’’ for a detailed description of our future plans.
SUMMARY
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USE OF PROCEEDS
We estimate that the net proceeds of the Share Offer, after deducting underwriting
commissions, and other estimated expenses in relation to the Share Offer, are
approximately HK$20.6 million (equivalent to approximately S$3.5 million), assuming an
Offer Price of HK$2.69 per Share, being the mid-point of the indicative Offer Price range of
HK$2.38 to HK$3.00 per Share. We intend to use such net proceeds for the following
purposes:
1. approximately HK$12.4 million (equivalent to approximately S$2.1 million)
(approximately 60.1% of our total est imated net proceeds) will be used for
expanding our scale of operation and e nhancing our produc tion capabilities,
among which: (i) procurement of raw materials and (ii) enhancing our human
resources management, including (a) recruitment of machinists and technicians
and implementing night shifts, (b) im proving the remuneration packages of
existing employees and (c) enhancin g our in-house logistic capability;
2. approximately HK$3.1 million (equivalent to approximately S$0.5 million)
(approximately 15.4% of our total est imated net proceeds) will be used for
strengthening our quality control capab ilities, which include (i) acquisition of a
new coordinate measuring machine and ( ii) enhancing our information system
upgrading the programming software of our CNC machines;
3. approximately HK$1.0 million (equivalent to approximately S$0.2 million)
(approximately 4.7% of our total estimated net proceeds) will be used for
enhancing our marketing efforts for the purpose of maintaining relationships with
existing customers and diversifying our customer base;
4. approximately HK$2.0 million (equivalent to approximately S$0.3 million)
(approximately 9.8% of our total estimated net proceeds) will be used for
repayment of certain bank borrowings w hich were used for general working
capital purpose; and
5. approximately HK$2.1 million (equivalent to approximately S$0.4 million)
(approximately 10.0% of our total est imated net proceeds) will be used for
working capital and general corporate purposes.
SUMMARY
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In this prospectus, unless the context otherwise requires, the following terms shall have
the meanings set out below. Technical terms in relation to our Group’s industry and business
operations are explained in ‘‘Glossary of Technical Terms’’ in this prospectus.
‘‘1st Pre-IPO
Investment’’
an investment in Metasurface Technologies by Zou Shuling,
Hong Haicheng, Soo Siew Har and Ho Gim Hai, Chua Lee Chai,
Tan Beng Kiat, Deborah Chua Wee Wei, Tan Kok Thye George
and Poh Seng Kah (who subsequently became our Shareholders
as part of the Reorganisation) on 28 December 2021 and the
transfer of shares in Metasurface Technologies to these
individuals from Mrs. Chua on 10 April 2023
‘‘2nd Pre-IPO
Investment’’
an investment in Metasurface Technologies by Accelerate (who
subsequently became our Shareholder as part of the
Reorganisation) on 14 October 2022
‘‘3rd Pre-IPO
Investment’’
an investment in Metasurface Technologies by MMI (who
subsequently became our Shareholder as part of the
Reorganisation) on 30 January 2023
‘‘Accelerate’’ Accelerate Technologies Pte. Ltd. (formerly known as Exploit
Technologies Pte Ltd and NSTB Holdings Pte Ltd), a private
company limited by shares incorporated on 8 May 1995 in
Singapore, a Pre-IPO Investor in our Company and an
independent third party of our Group
‘‘AFRC’’ the Accounting and Financial Reporting Council
‘‘Angelling’’ Angelling Capital Holdin gs Limited, a company incorporated on
3 December 2021 in the BVI with limited liability. Angelling is
directly wholly-owned by Mr. Thng
‘‘Articles’’ or ‘‘Articles
of Association’’
the amended and restated articles of association of our Company
conditionally adopted on 7 June 2 024 and effective on the Listing
Date, as amended, modified or otherwise supplemented from
time to time
‘‘Baccini’’ Baccini Capital Holdings Limited, a company incorporated on 3
December 2021 in the BVI with limited liability. Baccini is
directly wholly-owned by Mrs. Chua and is a Controlling
Shareholder
‘‘BIS’’ U.S. Department of Commerce, Bureau of Industry and Security
‘‘Board’’ or ‘‘Board of
Directors’’
the board of directors of our Company
DEFINITIONS
–2 3–


--- page 35 ---
‘‘business day’’ any day (other than a Saturday, Sunday or public holiday) on
which banks in Hong Kong are g enerally open for normal
banking business
‘‘BVI’’ the British Virgin Islands
‘‘CAGR’’ compound annual growth rate
‘‘Capitalisation Issue’’ the allotment and i ssue of Shares to be made upon capitalisation
of certain sums standing to the credit of the share premium
account of our Company as referred to in ‘‘History and
Development — Post-reorgan isation Corporate Actions —
Capitalisation Issue’’
‘‘Cayman Companies
Act’’ or ‘‘Companies
Act’’
the Companies Act, Cap. 22 (As Revised) of the Cayman Islands
‘‘CCASS’’ the Central Clearing and Settlement System established and
operated by HKSCC
‘‘CIC’’ China Insights Industry Consultancy Limited, a market data
research and consulting company and an independent third party
of our Group
‘‘CIC Report’’ a market research report commissioned by us and prepared by
CIC on the overview of the industry in which we operate, as
referred to in ‘‘Industry Overview’’ and elsewhere in this
prospectus
‘‘CMIs’’ or ‘‘Capital
Market
Intermediaries’’
UOB Kay Hian, Chiyu International Capital Limited, Cinda
International Capital Limited, Maxa Capital Limited and Tiger
Brokers (HK) Global Limited
‘‘Companies
Ordinance’’
the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, modified or otherwise supplemented from
time to time
‘‘Companies (Winding
Up and
Miscellaneous
Provisions)
Ordinance’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
modified or otherwise supplemented from time to time
‘‘Company’’ or ‘‘our
Company’’
Metasurface Technologies Holdings Limited ( 元續科技控股有限
公司), a company incorporated on 7 December 2021 in the
Cayman Islands with limited li ability, the holding company of
our Group and the vehicle of the Listing
DEFINITIONS
–2 4–


--- page 36 ---
‘‘Comprehensively
Sanctioned
Countries’’
any country or territory subject to a general and comprehensive
export, import, financial or investment embargo under sanctions
related law or regulation of a Relevant Jurisdiction (Sanctions),
currently Cuba, Iran, North Korea, Syria, the Crimea Region of
Russia/Ukraine, the self-proclai med Luhansk People’s Republic
(LPR) and Donetsk People’s Republic (DPR) regions and
Zaporizhzhia and Kherson regions
‘‘Controlling
Shareholder(s)’’
shall have the meaning given to it under the GEM Listing Rules
and unless the context otherwise requires, refers to Dato’ Sri
Chua, Mrs. Chua, SGP BVI and Baccini
‘‘Countries subject to
International
Sanctions’’
any country or territory subject either to a general and
comprehensive embargo or a more limited set of export,
import, financial or investment restrictions under sanctions
related laws or regulation of a Rele vant Jurisdiction (Sanctions)
‘‘Dato’ Sri Chua’’ Dato’ Sri Chua Chwee Lee (CAI Shuili) ( 蔡水理), a Controlling
Shareholder, an executive Direct or, our chief executive officer
and the chairman of the Board. Dato’ Sri Chua is the spouse of
Mrs. Chua and uncle of Mr. A Chua. Dato’ Sri Chua acts in
concert with Mrs. Chua and Mr. A Chua
‘‘Deed of AIC
Confirmation’’
the deed of confirmation dated 29 June 2023 executed by Dato’
Sri Chua, Mrs. Chua and Mr. A Chua whereby they confirmed
the existence of their acting in concert arrangements. A summary
of the Deed of AIC Confirmation is set out in ‘‘Relationship with
our Controlling Shareholders — Ba ckground of our Controlling
Shareholders — Controlling Shareholders and Mr. A Chua
Acting in Concert’’
‘‘Deed of Indemnity’’ a deed of indemnity dated 18 June 2024 entered into by our
Controlling Shareholders in fav our of our Company to provide
certain indemnities, particulars of which are set out in ‘‘E. Other
Information — 2. Tax indemnities’’ in Appendix V to this
prospectus
‘‘Deed of
Non-competition’’
a deed of non-competition dated 18 June 2024 entered into by
our Controlling Shareholders in favour of our Company,
particulars of which are set out in ‘‘Relationship with our
Controlling Shareholders — Deed of Non-competition’’
‘‘Designated Bank’’ a bank that has been registered as a designated bank with
HKSCC to perform HKSCC EIPO services
‘‘Director(s)’’ or ‘‘our
Director(s)’’
the director(s) of our Company
DEFINITIONS
–2 5–


--- page 37 ---
‘‘EAR’’ United States Export Administration Regulations, 15 C.F.R.
Parts 730–774
‘‘EIPO’’ Electronic Initial Public Offering, a service offered by HKSCC
for public offer share subscription
‘‘EU’’ the European Union
‘‘Extreme Conditions’’ the occurrence of ‘‘extreme conditions’’ as announced by any
government authority of Hong Kong due to serious disruption of
public transport services, extens ive flooding, major landslides,
large-scale power outage or any other adverse conditions before
Typhoon Signal No. 8 or above is replaced with Typhoon Signal
No. 3 or below
‘‘FINI’’ ‘‘Fast Interface for New Issuance’’, an online platform operated
by HKSCC that is mandatory for admission to trading and,
where applicable, the collectio n and processing of specified
i n f o r m a t i o no ns u b s c r i p t i o ni na n dsettlement for all new listings
of equity securities or intere sts issued by a new applicant,
irrespective of whether there is an offering of equity securities or
interests
‘‘GEM’’ GEM of the Stock Exchange
‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM of the
Stock Exchange, as amended, modified or otherwise
supplemented from time to time
‘‘Group’’, ‘‘we’’, ‘‘our’’
or ‘‘us’’
our Company and its subsidiaries at the relevant time or, where
the context otherwise requires, in respect of the period prior to
our Company becoming the holding company of its present
subsidiaries, such entities whi ch carried on the business of the
present Group at the relevant time
‘‘Guide for New Listing
Applicants’’
the Guide for New Listing Applicants issued by the Stock
Exchange, as amended, supplemented or otherwise modified
from time to time
‘‘HK eIPO White Form ’’ the application for the Public Offer Shares to be issued in the
applicant’s own name by submitting applications online through
the IPO App or the designated website at
www.hkeipo.hk
‘‘HK eIPO White Form
Service Provider’’
the HK eIPO White Form service provider designated by our
Company as specified in the IPO App or on the designated
website at www.hkeipo.hk
DEFINITIONS
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‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
‘‘HKSCC Clearing
Participant’’
a person admitted to participate in CCASS as a direct clearing
participant or general clearing participant
‘‘HKSCC Custodian
Participant’’
ap e r s o na d m i t t e dt op a r t i c i p a t ei nC C A S Sa sac u s t o d i a n
participant
‘‘HKSCC EIPO ’’ the application for the Public Offer Shares to be issued in the
name of HKSCC Nominees and deposited directly into CCASS
to be credited to your or a desig nated HKSCC Participant’s
stock account through causing HKSCC Nominees to apply on
your behalf, including by (i) instructing your broker or custodian
who is a HKSCC Clearing Participant or a HKSCC Custodian
Participant to submit EIPO applications through HKSCC’s
FINI system to apply for the Public Offer Shares on your
behalf, or (ii) if you are an existing HKSCC Investor Participant,
submitting EIPO applications through the CCASS Internet
System (
https://ip.ccass.com) or through the CCASS Phone
System (using the procedures in HKSCC’s ‘‘An Operating
Guide for Investor Participants’’ in effect from time to time).
HKSCC can also submit EIPO applications through HKSCC’s
FINI system for HKSCC Investor Participants through
HKSCC’s Customer Service Centre by completing an input
request
‘‘HKSCC Investor
Participant’’
a person admitted to participate in CCASS as an investor
participant who may be an individual or joint individuals or a
corporation
‘‘HKSCC Nominees’’ HKSCC Nominees Lim ited, a wholly-owned subsidiary of
HKSCC
‘‘HKSCC Participant’’ a HKSCC Clearing Participant, a HKSCC Custodian Participant
or a HKSCC Investor Participant
‘‘HK$’’, ‘‘HKD’’ or
‘‘HK dollars’’
Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong Share
Registrar’’
Tricor Investor Services Limited
DEFINITIONS
–2 7–


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‘‘IFRS’’ International Financial Reporting Standards, amendments and
the related interpretations issued by the International
Accounting Standards Board
‘‘independent third
party(ies)’’
an entity or person who, as far as our Directors are aware after
having made all reasonable enquiries, is not a connected person
of our Company or an associate of any such person within the
meanings ascribed thereto under the GEM Listing Rules
‘‘International
Sanctions’’
all applicable laws and regulatio n to economic sanctions, export
controls, trade embargoes and wider prohibitions and
restrictions on internationa l trade and investment related
activities, including those adopted, administered and enforced
by the U.S. Government, EU an d its member states, UK, UN or
Government of Australia
‘‘International
Sanctions Legal
Advisers’’
Hogan Lovells, our legal advisers as to International Sanctions
laws in connection with the Listing
‘‘IPO App ’’ the mobile application for the HK eIPO White Form service
which can be downloaded by searching ‘‘ IPO App ’’ in App Store
or Google Play or downloaded at
www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp
‘‘Issuing Mandate’’ the general unconditional mandate given to our Directors by our
Shareholders relating to the issue of Shares, as further described
in ‘‘Appendix V — Statutory and General Information — A.
Further Information about our Group — 5. Resolutions passed
in extraordinary general meeting of our Shareholders on 7 June
2024’’
‘‘Joint Bookrunners’’ UOB Kay Hian, Ci nda International Capital Limited, Maxa
Capital Limited and Tiger Br okers (HK) Global Limited
‘‘Joint Lead Managers’’ UOB Kay Hian, Chi yu International Capital Limited, Cinda
International Capital Limited, Maxa Capital Limited and Tiger
Brokers (HK) Global Limited
‘‘Latest Practicable
Date’’
11 June 2024, being the latest practicable date for the purpose of
ascertaining certain information contained in this prospectus
prior to its publication
‘‘Licence Agreement’’ the licence agreem ent dated 10 December 2021 between (i)
Accelerate (as licensor) and (ii)(A) Metasurface Technologies
and (B) Metaoptics Technologies (each as licensee)
‘‘Listing’’ the listing of the Shares on GEM
DEFINITIONS
–2 8–


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‘‘Listing Committee’’ the listing committee of the Stock Exchange
‘‘Listing Date’’ the date expected to be on or around Tuesday, 2 July 2024, on
which the Shares are first liste d and from which dealings in the
Shares are permitted to take place on GEM
‘‘Macau’’ the Macao Special Administrative Region of the PRC
‘‘Malaysia Legal
Advisers’’
Shearn Delamore & Co., the legal advisers to our Company as to
Malaysia law
‘‘Memorandum’’ or
‘‘Memorandum of
Association’’
the amended and restated memorandum of association of our
Company adopted on 7 June 2024, as amended, modified or
otherwise supplemented from time to time
‘‘Meson Technology’’ Meson Technology Pte. Ltd, an exempt private company limited
by shares incorporated on 4 November 2016 in Singapore and an
independent third party of our Group
‘‘Metaoptics
Technologies’’
Metaoptics Technologies Pte. Ltd. (formerly known as Q’Son
Advanced Optics Pte. Ltd.), a private company limited by shares
incorporated on 15 June 2021 in Singapore, indirectly held by
our Company as to approximately 17.10%
‘‘Metasurface
Technologies’’
Metasurface Technologies Pte. Ltd. (formerly known as Q’Son
Precision Engineering Pte Ltd), an exempt private company
limited by shares incorporated on 6 January 2000 in Singapore
and a directly wholly-owned subsidiary of our Company
‘‘MMI’’ MMI Holdings Limited (formerly known as Micro-machining
Industries Pte Ltd), a public company limited by shares
i n c o r p o r a t e do n7J u l y1 9 8 9i nS i n g a p o r e ,aP r e - I P OI n v e s t o r
in our Company, a shareholder in Metaoptics Technologies and
an independent third party of our Group
‘‘Mr. A Chua’’ Mr. Aloysius CHUA Hao Peng ( 蔡昊澎), nephew of Dato’ Sri
Chua and Mrs. Chua. Mr. A Chua acts in concert with Dato’ Sri
Chua and Mrs. Chua
‘‘Mr. Soh’’ Mr. SOH Cheng Joo ( 蘇振裕), a director of SGP Malaysia, the
spouse of Ms. Pang and a member of our senior management
‘‘Mr. Thng’’ Mr. THNG Chong Kim ( 程章金), an executive Director, a
substantial Shareholder and a shareholder in Metaoptics
Technologies
DEFINITIONS
–2 9–


--- page 41 ---
‘‘Mrs. Chua’’ Ms. JEE Wee Jene ( 余偉娟), a Controlling Shareholder and an
executive Director. Mrs. Chua is the spouse of Dato’ Sri Chua
and aunt of Mr. A Chua. Mrs. Chua acts in concert with Dato’
Sri Chua and Mr. A Chua
‘‘Ms. Pang’’ Ms. PANG Chen May ( 彭菁咪), a director of SPW, a
Shareholder and the spouse of Mr. Soh
‘‘OFAC’’ the U.S. Department of Treasury’s Office of Foreign Assets
Control
‘‘Offer Price’’ the final price per Offer Share in Hong Kong dollars (exclusive of
brokerage of 1.0%, SFC transaction levy of 0.0027%, the AFRC
transaction levy of 0.00015% and the Stock Exchange trading fee
of 0.00565%) of no more than HK$3.00 and expected to be not
less than HK$2.38, at which the Offer Shares are to be subscribed
for and issued pursuant to the Share Offer, to be determined in
the manner as further described in the section headed ‘‘Structure
and Conditions of the Share Offer — Pricing of the Share Offer’’
‘‘Offer Shares’’ the Public Offer Shares and the Placing Shares
‘‘Placing’’ the conditional placing of the Placing Shares by the Placing
Underwriters for and on behalf of our Company to institutional,
professional, corporate and other investors in Hong Kong and
elsewhere in the world outside the United States at the Offer
Price, on and subject to the terms and conditions under the
Placing Underwriting Agreement, as further described in
‘‘Structure and Conditions of the Share Offer’’
‘‘Placing Shares’’ the 24,300,000 Shares being initially offered by our Company
pursuant to the Placing, subject to adjustment as described in the
section headed ‘‘Structure and Conditions of the Share Offer’’
‘‘Placing
Underwriter(s)’’
the underwriters of the Placing
‘‘Placing Underwriting
Agreement’’
the underwriting agreement relating to the Placing, which is
expected to be entered into by, among others, our Company and
the Placing Underwriters, as further described in the section
headed ‘‘Underwriting — The Placing’’
‘‘Post-IPO Share
Option Scheme’’
the post-IPO share option scheme conditionally approved and
adopted by our Company on 7 June 2024, particulars of which
are set out in ‘‘D. Post-IPO Share Option Scheme’’ in Appendix
Vt ot h i sp r o s p e c t u s
DEFINITIONS
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‘‘Post-IPO Share
Options’’
options granted under the Post-IPO Share Option Scheme
‘‘PRC’’ or ‘‘China’’ the People’s Republic of China, excluding, for the purpose of this
prospectus only, Hong Kong, Macau and Taiwan
‘‘Pre-IPO Investments’’ the 1st Pre-IPO Inv estment, the 2nd Pre-IPO Investment and the
3rd Pre-IPO Investment
‘‘Pre-IPO Investor(s)’’ Accelerate, MMI, Zou Shuling, Hong Haicheng, Soo Siew Har
a n dH oG i mH a i ,C h u aL e eC h a i ,T a nB e n gK i a t ,D e b o r a hC h u a
W e eW e i ,T a nK o kT h y eG e o r g ea n dP o hS e n gK a h
‘‘Price Determination
Date’’
the date, expected to be on or before 12 : 00 noon on Thursday,
27 June 2024 unless otherwise announced, on which the Offer
P r i c ei st ob ed e t e r m i n e df o rt h ep u r p o s eo ft h eS h a r eO f f e r
‘‘Primary Sanctioned
Activity’’
any activities in a Comprehensiv ely Sanctioned Country or (i)
with; or (ii) directly or indirectly benefiting or involving the
property or interests in property of, a Sanctioned Target which
has a nexus with a Relevant Jurisdiction (Sanctions), such that it
is subject to the relevant sanctions law and regulation
‘‘Public Offer’’ the offer by us of the Public Offer Shares to the public in Hong
Kong for subscription at the Offer Price (plus brokerage of
1.0%, SFC transaction levy of 0.0027%, the AFRC transaction
levy of 0.00015% and the Stock Exchange trading fee of
0.00565%), on and subject to the terms and conditions set out
in this prospectus, as further described in the section headed
‘‘Structure and Conditions of the Share Offer’’
‘‘Public Offer Shares’’ the 2,700,000 Shares being initially offered by our Company for
subscription at the Offer Price pursuant to the Public Offer,
subject to adjustment as described in the section headed
‘‘Structure and Conditions of the Share Offer’’
‘‘Public Offer
Underwriter(s)’’
the underwriters of the Public Offer whose names are set forth in
the section headed ‘‘Underwriting — Public Offer Underwriters’’
‘‘Public Offer
Underwriting
Agreement’’
the underwriting agreement dated 20 June 2024 relating to the
Public Offer entered into by, among others, our Company and
the Public Offer Underwriters, as further described in
‘‘Underwriting’’
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
DEFINITIONS
–3 1–


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‘‘Relevant Jurisdiction
(Sanctions)’’
any jurisdiction that is relevant to the Company and has
sanctions related law or regulation restricting, among other
things, its nationals and/or entities which are incorporated or
located in that jurisdiction fro m directly or indirectly making
assets or services available to or otherwise dealing in assets of
certain countries, governments, persons or entities targeted by
such law or regulation
‘‘Relevant Persons
(Sanctions)’’
the Company, together with its investors and shareholders and
persons who might directly or indirectly, be involved in
permitting the listing, trading, clearing and settlement of the
Shares including the Stock Exchange and related group
companies
‘‘Relevant Persons
(Share Offer)’’
the Sole Sponsor, the Sole Overall Coordinator, the Sole Global
Coordinator, the Joint Bookrunners, the Joint Lead Managers,
the CMIs, the Underwriters, any of their or the Company’s
respective directors, officers, employees, partners, agents,
advisers and any other parties involved in the Share Offer
‘‘Relevant Region’’ Russia (excluding Crimea)
‘‘Reorganisation’’ the reorganisation of our Group in preparation for the Listing,
details of which are set out in ‘‘History and Development — The
Reorganisation’’
‘‘Repurchase Mandate’’ the general unconditional mandate given to our Directors by our
Shareholders relating to the repurchase of Shares, as further
described in ‘‘Appendix V — Statutory and General Information
— A. Further Information about our Group — 5. Resolutions
passed in extraordinary general meeting of our Shareholders on 7
June 2024’’
‘‘RM’’ or ‘‘Malaysian
ringgit’’
Malaysian ringgit, the lawful currency of Malaysia
‘‘Sanctioned Person’’ certain person(s) and identity(ies) listed on OFAC’s Specially
Designated Nationals and Blocked Persons List or other
restricted parties lists maintained by the U.S., EU, UK, UN or
Australia
‘‘Sanctioned Target’’ any person or entity that (i) is a Sanctioned Person; (ii) is owned
or controlled by, a government of a Comprehensively Sanctioned
Country; or (iii) is the target of sanctions under the law or
regulation of a Relevant Jurisdiction (Sanctions) because of a
relationship of ownership, control, or agency with a person or
entity described in (i) or (ii)
DEFINITIONS
–3 2–


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‘‘SDN’’ individuals and entities that are listed on the SDN List
‘‘SDN List’’ the list of Specially Designated Nationals and Blocked Persons
maintained by OFAC, which sets out individuals and entities
that are subject to its sanctions and restricted from dealings with
U.S. persons
‘‘Secondary
Sanctionable
Activity’’
certain activity by the Company that may result in the imposition
of sanctions against the Relevant Person(s) (Sanctions) by a
Relevant Jurisdiction (Sanctions) (including designation as a
Sanctioned Target or the imposition of penalties), even though
the Company is not incorporated or located in that Relevant
Jurisdiction (Sanctions) and does not otherwise have any nexus
sutra that Relevant Jurisdiction (Sanctions)
‘‘SFC’’ the Securities and Futures Commission of Hong Kong
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws
of Hong Kong), as amended, modified or otherwise
supplemented from time to time
‘‘SGP BVI’’ SGP Capital Holdings Limited, a company incorporated on 3
December 2021 in the BVI with limited liability. SGP BVI is
direct wholly-owned by Dato ’ Sri Chua and is a Controlling
Shareholder
‘‘SGP Malaysia’’ SGP 1st Engineering Sdn. Bhd., a private company limited by
shares incorporated on 6 August 2013 in Malaysia and is an
indirect wholly-owned subsidiary of our Company
‘‘SGX’’ the Singapore Exchange Securities Trading Limited
‘‘Share(s)’’ ordinary share(s) with a nominal value of HK$0.001 each in the
share capital of our Company
‘‘Share Offer’’ the Public Offer and the Placing
‘‘Shareholder(s)’’ holder(s) of our Shares
‘‘Singapore’’ the Republic of Singapore
‘‘Singapore Legal
Advisers’’
Drew & Napier LLC, the legal advisers to our Company as to
Singapore law
DEFINITIONS
–3 3–


--- page 45 ---
‘‘Singapore Special
Counsel’’
Sim Chong LLC, the special Singapore legal counsel our Group
engaged to advise on certain historical matters, as further
described in ‘‘History and Development — Corporate
Development — Names changes of our Group and our
connected persons’’ in this prospectus
‘‘Sole Overall
Coordinator’’, ‘‘Sole
Global Coordinator’’
and ‘‘Sole Sponsor’’
UOB Kay Hian
‘‘SPW’’ Singapore Precision Welding Pte. Ltd. (formerly known as Fluid
Science (S.E.A.) Precision Engineering Pte. Ltd.), an exempt
private company limited by shar es incorporated on 15 November
2006 in Singapore and an indirectly wholly-owned subsidiary of
our Company
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘S$’’, ‘‘SGD’’ or
‘‘SG dollars’’
Singapore dollars, the lawful currency of Singapore
‘‘Takeovers Code’’ the Hong Kong Code on Takeovers and Mergers issued by the
SFC, as amended or supplemented from time to time
‘‘Track Record Period’’ two years ended 31 December 2022 and 2023
‘‘treasury shares’’ has the meaning ascribed to it in the GEM Listing Rules
‘‘UK’’ the United Kingdom
‘‘UN’’ the United Nations
‘‘Underwriters’’ the Public Offer Under writers and the Placing Underwriters
‘‘Underwriting
Agreements’’
the Public Offer Underwritin g Agreement and the Placing
Underwriting Agreement
‘‘UOB Kay Hian’’ UOB Kay Hian (Hong Kong) Limited, a corporation licenced
under the SFO to conduct types 1 (dealing in securities), 4
(advising on securities) and 6 (advising on corporate finance)
regulated activities
‘‘U.S.’’ or ‘‘United
States’’
the United States of America, its territories, its possessions and
all areas subject to its jurisdiction
‘‘U.S. Securities Act’’ the United States Securities Act 1933, as amended or
supplemented from time to time
DEFINITIONS
–3 4–


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‘‘US$’’ or ‘‘USD’’ United States dollars, the lawful currency of the United States
‘‘%’’ per cent.
In this prospectus, unless the context otherwise requires, the terms ‘‘associate’’, ‘‘close
associate’’, ‘‘connected person’’, ‘‘connected transaction’’, ‘‘core connected person’’,
‘‘subsidiary’’ and ‘‘substantial shareholder’’ shall have the meanings given to such terms in
the GEM Listing Rules.
Unless otherwise specified, all references to any shareholdings in our Company do not
take into account any Shares which may be issued and allotted upon the exercise of any options
which may be granted under the Post-IPO Share Option Scheme.
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail.
DEFINITIONS
–3 5–


--- page 47 ---
To facilitate a better understanding of our bus iness, the following glossary provides
explanations of some of the technical terms and abbreviations commonly found in our
industry. The terms and their meanings may not correspond to standard industry or common
meanings, as the case may be, or usage of these terms:
‘‘build-to-print’’ a type of contract manufacturing that refers to the process of
building products to client work instructions. This is commonly
used to manufacture components or pieces of equipment
‘‘CAD-CAM software’’ CAD is a software used for computer-aided design and CAM is a
software used for computer-aided manufacturing. The
CAD-CAM software is used for tr anslating computer-aided
design to manufacturing workpieces with computer-aided
manufacturing on CNC machines
‘‘CNC’’ the abbreviation for ‘‘computer numerical controls’’, where the
functions and motions of a machine tool are controlled by means
of a prepared programme containing alphanumeric data. CNC
can control the motions of a workpiece or tool, the input
parameters such as feed, depth of cut, feed and the functions,
such as turning the spindle on/off or coolant on/off
‘‘CNC machine’’ automated machines operated by computers executing
pre-programmed sequences of controlled commands
‘‘CNC machining
centre’’
mechanical engineering manufacturing equipment operable
under CNC automation by making use of several axes and a
variety of tools and operations. They are capable of performing
multiple machining operations i n the same set up with a variety
of tools
‘‘components’’ machined parts, weldments and sub-assemblies
‘‘contract
manufacturers’’
third-party manufacturers which manufacture products, in whole
or in parts based on the specifications provided by their
customers. The products produced by the contract
manufacturers are then sold under the brand name of their
customers
‘‘coordinate measuring
machine’’
a coordinate measuring machine is a measuring device that
measures the geometry of objects by establishing discrete points
on a physical surface using a contact probe
‘‘ISO 9001 : 2015’’ an internationally recognised standard for quality management
systems
GLOSSARY OF TECHNICAL TERMS
–3 6–


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‘‘milling’’ the process of spinning a cutting tool against a stationary
workpiece using primarily square or rectangular bar stock to
produce components
‘‘OEM’’ original equipment manufacturers
‘‘orbital welding’’ automated welding of secured tubes or pipes with the electrode
rotating (or orbiting) around the tube
‘‘precision engineering’’ the machining process that removes material and creates
machined components with a narrow range of tolerance. Types
of precision machining include turning, milling, grinding,
drilling, etc.
‘‘precision welding’’ the process in which welds are applied to a workpiece in a very
precise and controlled fashion. Dimensional tolerances are tight
for both the position of the weld line as well as the depth of the
weld. Precision welding is typically used for small parts, parts
with tight dimensional tolerances, or parts requiring a barely
visible line weld
‘‘semiconductor(s)’’ a substance that has specific electrical properties that enable it to
serve as a foundation for computers and other electronic devices
‘‘SSQA’’ a certification for qua lity management system used in the
semiconductor industry by leading semiconductor original
equipment manufacturers when selecting suppliers
‘‘sub-assembly’’ a simple assembly of cable, wire, and other small parts, which be
joined to other sub-assembly processes and components to form
a complete product
‘‘surface treatment’’ an additional process applied to the surface of material for the
purpose of adding functions such as rust and wear resistance or
improving the decorative properties to enhance its appearance
‘‘TIG welding’’ Tungsten Inert Gas (TIG) welding produces the weld with a
non-consumable tungsten electr ode. In the TIG welding process,
an arc is formed between a pointed tungsten electrode and the
workpiece in an inert atmosphere of argon or helium
‘‘TIG welding
machines’’
arc welding machines that use a non-consumable tungsten
electrode to produce high-quality welds
‘‘turning’’ the process in which a work piece is rotated against a cutting
tool. The turning process is commonly used for machining
components
GLOSSARY OF TECHNICAL TERMS
–3 7–


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This prospectus includes forward-looking statements. All statements other than
statements of historical facts contained in this prospectus, including, without limitation,
those regarding our future financial position, our strategy, plans, objectives, goals, targets
and future developments in the markets where we participate or are seeking to participate,
and any statements preceded by, followed by or that include the words ‘‘believe’’, ‘‘expect’’,
‘‘estimate’’, ‘‘predict’’, ‘‘aim’’, ‘‘intend’’, ‘‘will’’, ‘‘may’’, ‘‘plan’’, ‘‘consider’’, ‘‘anticipate’’,
‘‘seek’’, ‘‘should’’, ‘‘could’’, ‘‘would’’, ‘‘continue’’ or similar expressions or the negative
thereof, are forward-looking statements. These forward-looking statements involve known
and unknown risks, uncertainties and other factors, some of which are beyond our control,
which may cause our actual results, performance or achievements, or industry results, to be
materially different from any future results, performance or achievements expressed or
implied by the forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding our present and future business strategies and the
environment in which we will operate in the future. Important factors that could cause our
actual performance or achievements to differ materially from those in the forward-looking
statements include, among o ther things, the following:
. our ability to successfully implement o ur business plans and strategies;
. future developments, trends and conditions in the industry and markets in which
we operate or into which we intend to expand;
. our business operations and prospects;
. our capital expenditure plans;
. the actions and developments of our competitors;
. our financial condition and performance;
. capital market developments;
. any changes in the laws, rules and regulations of the government in Singapore,
Malaysia and other relevant jurisdictions and the rules, regulations and policies of
the relevant governmental authorities relating to all aspects of our business and
our business plans; and
. various business opportunities that we may pursue.
Additional factors that could cause our actual performance or achievements to differ
materially include, but are not limited to, those discussed in ‘‘Risk Factors’’ and elsewhere
in this prospectus. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management’s view only as at the date of this prospectus. We
undertake no obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this prospectus might not occur.
All forward-looking statements contained in this prospectus are qualified by reference to
the cautionary statements set out in this section.
FORWARD-LOOKING STATEMENTS
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Prospective investors should consider carefully all of the information set forth in this
prospectus and, in particular, should consider the following risks and special considerations
in connection with an investment in our Company before making any investment decision in
relation to the Offer Shares. The occurrence of any of the following risks may have a
material adverse effect on the business, results of operations, financial conditions and future
prospects of our Group. This prospectus contains certain forward-looking statements
regarding our plans, objectives, expectations, and intentions which involve risks and
uncertainties. Our Group’s actual results could differ materially from those discussed in this
prospectus. Factors that could cause or contribute to such differences include those discussed
below as well as those discussed elsewhere in this prospectus. The trading price of the Offer
Shares could decline due to any of these risks and you may lose all or part of your
investment.
Our Directors believe that there are certain r isks involved in our business operations,
which can be classified into: (i) risks relat ing to our business and the industry in which we
operate, (ii) risks relating to the Share Offer, and (iii) risks relating to statements made in
this prospectus.
RISKS RELATING TO OUR BUSINESS AND THE INDUSTRY IN WHICH WE
OPERATE
We derive a significant portion of our revenue fr om our major customers and we cannot assure
you that we will successfully maintain business relationships with our major customers and
there is no assurance that we will be able to secure new orders from other customers of similar
size
During the Track Record Period, we derived a significant portion of our revenue from
our major customers. For the years ended 31 December 2022 and 2023, our five largest
customers for the corresponding year accounted for approximately 76.0% and 80.0% of our
total revenue, respectively. Furthermore, Customer A contributed to 31.8% and 21.7% of
our total revenue for the years ended 31 December 2022 and 2023, respectively. To the best
knowledge of our Directors, Customer B, Customer C and Customer D are contract
manufacturers and/or service providers of Customer A, and it is possible that certain
products we manufactured for these customers may be supplied, directly or indirectly, by
them to Customer A. See ‘‘Business — Our Cus tomers’’. According to the CIC Report, it is
not uncommon for market participants in the semiconductor segment of precision
component engineering industry to have a hig hly concentrated customer base since the
end-use semiconductor manufacturing equipment industry is concentrated and dominated
by a limited pool of advanced semiconductor equipment manufacturers with the top three
market players accounting for more than 40% of the global market share in terms of
revenue in 2023.
RISK FACTORS
–3 9–


--- page 51 ---
We expect revenue from our five largest customers, including Customer A, to continue
to account for a significant portion of our revenue. As we do not enter into a long term
contract or framework sales ag r e e m e n tw i t hs o m eo fo u rm a j o rc u s t o m e r s ,w ec a n n o ta s s u r e
you that we will be able to maintain business relationships with all our major customers and
there is no assurance that we will be able to secure new orders from other customers of
similar size. If any of our five largest customers, in particular Customer A, ceases business
relationships with us due to reasons including but not limited to us no longer being its
approved supplier, or its business and financial performance suffers a decline for any
reason, our business, financial condition and results of operations could be materially and
adversely affected.
We may not be able to diversify our customer portfolio and expand into new markets
We have strategically focused on the provision of precision component engineering
services for the semiconductor industry. For the years ended 31 December 2022 and 2023,
91.3% and 87.9% of our total revenue was generated from sales to the semiconductor
industry, respectively. The global semiconductor industry and the global semiconductor
manufacturing equipment indu stry are driven by fluctuation of inventory and worldwide
economic growth. Accordingly, our business may be adversely affected by the market
downturn in the global semiconductor industry. According to the CIC Report, the global
semiconductor manufacturing equipment market recorded a CAGR of 14.6% from
US$61.7 billion in 2019 to US$106.3 billion i n 2023. Even though the revenue of global
semiconductor industry and global semiconductor manufacturing equipment industry are
expected to grow further in the long term, the demand for semiconductor products may
experience brief periods of ups and downs in the short term. In particular, the global
semiconductor manufacturing equipment market is expected to witness a transition year in
2024 from the de-stocking of inventories a ccumulated starting in 2023 and have a strong
rebound in 2025 and further increase to U S$180.6 billion in 2028 driven by capacity
expansion, new fabrication projects, and demand for advanced equipment and solutions
across the front-end and back-end segments, in cluding wafer processing, testing, assembly,
packaging, etc., of the semiconductor industry, and supportive policies of the
semiconductor industry across the world, including Singapore Manufacturing 2030 vision
(the government’s 10 year plan to increase the manufacturing value-add of Singapore by
50% by 2030 and for Singapore t o become a global business, innovation and talent hub for
advanced manufacturing), CHIPS and Science A ct (a U.S. federal statute enacted in 2022
which provides support to develop domestic production of semiconductors with incentives
such as subsidies and investment tax credits in the U.S.), The European Chips Act (an act
came into force in 2023 to incentivise public and private investments in semiconductor
manufacturing facilities in Europe), etc. a ccording to the CIC Report. The volatility and
uncertainty within the global semiconductor industry and the global semiconductor
manufacturing equipment industry are driven b y systemic economic, political, or financial
crisis and impact of tariffs and/or other trade barriers. We cannot guarantee that the
favourable development of the global semiconductor industry and the global semiconductor
manufacturing equipment indu stry will sustain and grow as projected or at all. If the global
semiconductor industry and the global semiconductor manufacturing equipment industry
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cannot achieve the projected growth as disclosed in this prospectus, our Group’s business,
expansion plans, financial condition and re sults of operations will be materially and
adversely affected.
O u rm a j o rm a r k e t sa r el o c a t e di nS i n g a pore, Malaysia and the U.S. We intend to
diversify our customer portfolio, expand into other industries and enhance our market
presence in the aerospace and data storage industries, and expand geographically beyond
our major markets. However, we may not be able to successfully expand into new industries
or new markets or further expand our presence in the aerospace and data storage industries
as there are other established international and local precision component engineering
service providers operating in such markets which may possess more in depth experience,
more established customer relationships, higher level of expertise, technical know-how and
financial ability to capitalise on pricing stra tegies and to offer more comprehensive services
to gain an edge over us in competition. For f urther information on the competitive
landscape of the industry, see ‘‘Industry Overview’’.
Demand for our precision component engineering services depends on, among other things, the
trends and developments in the downstream industries, such as semiconductor, aerospace and
data storage, and the condition of the global economy
We primarily provide precision engineering services to downstream customers which
are involved in manufacturing of equipment for the semiconductor, aerospace and data
storage industries. As such, demand for our precision engineering services is closely
correlated to the market development of these industries, which in turn depends on the
respective demand for the products in these industries. Besides, we mainly manufacture
parts and components for integration and assembly into the manufacturing equipment of
our customers. The product lifecycle of the machinery and manufacturing equipment
produced by our customers will also have a corresponding effect on the demand for our
precision engineering services.
Factors affecting our end-markets are beyond our control. If any factor occurs in the
future which results in material slowdown of any or all of our major end-markets, or the
growth of our end-markets is not sustained, our business, financial condition, results of
operations and prospects may be materially and a dversely affected. In particular, if future
demands for semiconductors related products decrease for any reason, Customer A and
other customers in the semiconductor sector may experience a corresponding decrease in
demand for their manufacturing equipment, which in turn may materially reduce demand
for our precision component engineering servi ces and materially and adversely affect our
business, results of operations and financial condition.
We do not enter into long-term agreements with most of our customers
We do not enter into a long-term contract or framework sales agreement with most of
our customers, which is not uncommon in the precision engineering industry according to
the CIC Report. As our customers mainly place orders with us on an order-by-order basis,
there is no assurance that our customers will continue placing orders with us at a
comparable level as they did during the Track Record Period or at all.
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The volume of purchase orders from our customers may vary significantly from time to
time and we cannot guarantee that our business will grow or remain stable as it did during
the Track Record Period. If our customers reduce their orders or cease placing orders with
us, our business, financial condition and results of operations may be materially and
adversely affected.
We may be unable to effectively and efficiently manage the supply and quality of our raw
materials and we generally do not enter into long term supply agreements with our major
suppliers of raw materials
Our manufacturing process involves precision machining and precision welding of
components and parts using raw materials specified by our customers according to the
product specifications. We procure raw mater ials from third party suppliers, some of which
are designated by our customers, and we may outsource some of the production processes to
third party suppliers. Although w e have implemented stringent control over procurement,
inspection and acceptance of raw materials and outsourced processes, we may not be able to
ensure the adequacy of supply and quality of raw materials procured and processes
outsourced.
We generally do not maintain long term supply agreements with our major suppliers or
maintain excess inventories of raw materials . If, for whatever reason, any of our major
suppliers of raw materials and third party service providers ceases to supply us with
sufficient amount of raw materials and proces sing services, it would cause disruption in our
supplies and we may experience material produ ction delays. If any of these events occurs,
our business, financial condition, results of operations and prospects could be materially
and adversely affected.
Our business and results of operations may be materially and adversely affected if we fail to
retain or hire qualified engineering staff and production personnel
We consider knowledge, skills and experienc e of our technical staff as one of our most
valuable assets which differentiate us fr om our competitors and believe that one of the
major factors to our success is the continued service of our core team of experienced
employees. As our manufacturing processes mainly involve the operation of CNC machines
and welding technique by our technical staff, the skills of our labour to achieve the high
precision engineering standard demanded by o ur customers are critical to our quality of
services. Our production team generates internal production work instructions to set out
the manufacturing process for different orders. The expertise of our production team will
determine the quality of our products. Our future success requires the continued service of
our current skilled engineering staff and our abi lity to recruit additional skilled engineering
staff in the future. As at 31 December 2023, we had in total 106 production staff members in
our Singapore Factory and Malaysia Factory. According to the CIC Report, competition
for technicians for advanced manufacturing is i ntense in Singapore due to COVID-19 travel
restrictions and the number of foreign workers a manufacturer can employ is limited by the
applicable quota or the dependency ratio ceiling.
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Since the outbreak of COVID-19 pandemic, it is more difficult for us to hire high
quality engineering staff due to the immobi lity caused by travel restrictions, and the
government levy we have to pay in relation to e mployment of foreign workers. For details,
see ‘‘Regulatory Overview’’. If we fail to retain or recruit high-quality engineering staff, we
may experience difficulties in employing new production techniques, expanding our
production capacities or maintaining product quality, which may in turn materially and
adversely impact our business, results of operations and our reputation.
In addition, skilled and experienced engin eers who are accustomed to our complex
production process are not easily and quickly accessible. As a result, if a large number of
these engineers terminate employment with u si nas h o r tp e r i o do ft i m e ,w em a ye n c o u n t e r
interruption to our production, which would have a material adverse effect on our
operations.
Part of our workforce is made up of foreign workers and inabilit y to recruit foreign workers
could materially and adversely affect our operations and financial performance
Our business is dependent on the employment of foreign workers because local
manufacturing labour force is limited and relatively more costly. As advised by our
Singapore Legal Advisers and Malaysia Leg al Advisers, supply of foreign labour in
Singapore and Malaysia is subject to certain laws and regulations. For details of the
relevant laws and regulations, see ‘‘Regulatory Overview’’. Any shortage in the supply of
foreign workers or any further restriction on the number of foreign workers that we can
employ for our business will materially and adversely affect our operations and financial
performance. As at 31 December 2023, we had 62 and 4 foreign workers in our Singapore
Factory and Malaysia Factory, respectively. Consequently, our operations and financial
performance may be adversely affected by any shortage in the supply of foreign workers
and any increase in cost of foreign labour.
In particular, as advised by our Singapore Legal Advisers, the number of workers that
an employer in the manufacturing sector can employ in Singapore is subject to quota and
levy imposed by the Ministry of Manpower. For d etails, see ‘‘Regulatory Overview — Laws
and Regulations in Singapore — Employment of Foreign Manpower Act’’. The tightening
of such quota and any increase in the percentage of foreign workers we employ as part of
the total workforce could increase the amo unt of levy we need to pay, which may increase
our operating expenses and adversely affect our business and financial performance. In
Malaysia, as advised by our Malaysia Legal Advisers, a valid employment permit is
required for non-citizens to be employed in Malaysia. For details, see ‘‘Regulatory
Overview — Laws and Regulations in Malaysia — Employment and Labour Protection —
Employment (Restriction) Act 1968’’. Any change in policies regarding the employment of
foreign workers in Singapore and Malaysia may affect the supply of foreign labour and
cause disruptions to our operations, thus causing delays in our productions.
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Fluctuations in labour cost and prices of raw materials could negatively impact our operations
and adversely affect our profitability and we ma y not be able to pass on our increased costs of
labour and raw materials to our customers
For the years ended 31 December 2022 and 2023, our direct labour costs amounted to
approximately S$4.4 million and S$5.3 milli on, representing approximately 18.9% and
22.0% of our total cost of sales, respectively. Also, as advised by our Singapore Legal
Adviser, levy is imposed by the Ministry of Manpower of Singapore on employers for each
foreign worker hired. According to the CIC Report, with the continuous development of the
economy, the average monthly salaries in th e manufacturing industry in Singapore and
Malaysia have shown an increasing trend during 2019 to 2023. In particular, the average
monthly salaries in the manufacturing industry increased by 6.8% and 31.0% in Singapore
and Malaysia, respectively in 2022 due to economic recovery from COVID-19 pandemic in
both countries and the increase in minimum wage in Malaysia. In the event that there is any
significant increase in the staff costs due to rising government levy on foreign workers or
the minimum wage rate, our operating expenses and pressure on our operating cash flows
will increase, thereby materially and adversely affecting our business, results of operations,
financial position and prospects.
Also, during the Track Record Period, we ge nerally procured raw materials primarily
including aluminium for our production. According to the CIC Report, prices for iron and
steel and aluminium in Malaysia, the U.S., the EU and South Africa are forecasted to grow
at CAGRs ranging from 1.1% to 4.0% and 0.3% to 5.7% , respectively, from 2023 to 2028.
For the prices and price fluctuation for our major raw materials in the market during the
Track Record Period, see ‘‘Industry Overview — Cost analysis of the precision component
engineering industry in Singapore’’. If the price of our raw materials substantially increases,
we may incur additional costs to acquire sufficient quantity of these materials to meet our
production needs. Although we source certain raw materials from suppliers designated by
our customers, we may not be able to shift the increase in cost of raw materials to our
customers effectively. If we are unable to increase the prices of our products to set-off any
increase in our costs of raw materials in a tim ely manner, our profit margin and results of
operations may be materially and adversely affected.
In addition, if raw materials are not available with the suppliers designated by our
customers at acceptable prices or with the required quantity and quality or at all, we may
need to identify other alternative sources of raw materials. If we cannot identify alternative
sources of raw materials when needed, at accep table prices or with the required quantity
and quality, or at all, the resulting loss of pr oduction volume may materially and adversely
affect our ability to deliver products to our customers in a timely manner, or at all, and
therefore our business, financial condition , results of operations and prospects could be
materially and adversely affected.
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Our business could be adversely affected by long lead time for procurement of machinery and
equipment, the shortened useful life cycle of our machinery and equipment and our reliance on
our major machinery suppliers and we generally do not enter into long term agreements with
our machinery and equipment suppliers
The success of our business depends on our ability to acquire sufficient quantities of
quality machinery and equipment, such as CNC machines, welding machines, coordinate
measuring machine and helium leak detector , on commercially acceptable terms and in a
timely manner. We maintain a list of qualif ied suppliers from which to procure our
machinery and equipment and our different ma chinery and equipment used in the precision
component engineering process are mostly manu factured by overseas suppliers in Taiwan,
Germany and Japan.
In case of any machinery and equipment bre akdown, we have to procure spare parts
from our machinery suppliers for replacement or wait for our suppliers to provide
maintenance services on-site. If the lead time for sourcing the relevant machinery or
equipment or parts or provision of maintenan ce services is longer than expected, we may be
unable to deliver the precision engineering services to our customers in time or we may need
to source such machinery or equipment at a higher price than anticipated.
Also, the useful life of our machinery and equipment may be shorter than expected as
we continue to replace our existing machinery with more advanced versions before the end
of their originally expected useful life. We have invested and expect to continue to invest in
machinery and equipment for our production and we depreciate the cost of such machinery
and equipment over their expected useful life. However, manufacturing technology may
evolve rapidly, and we may decide to upgrade our manufacturing process with more
advanced equipment more quick ly than expected. The useful life of any equipment that
would be retired early as a result would then be s hortened, causing the depreciation on such
equipment to be accelerated. For the years ended 31 December 2022 and 2023, we incurred
depreciation expenses on property, plant and equipment in total of approximately S$1.1
million and S$1.3 million among our cost of sales an d administrative expenses, respectively.
To the extent we own our production machinery and equipment, our results of operations
could be negatively impacted by the fluctuations of our depreciation expenses.
Also, we mainly source our machinery a nd equipment from certain machinery
suppliers. However, we generally do not enter into long-term agreements with our major
machinery and equipment supp liers as we would like to reserve our flexibility to source our
machinery as well as various auxiliary tools i n different models or from different suppliers
in accordance with our customers’ requirements. The relationships between us and our
major suppliers for machinery and equipme nt and the willingness of such suppliers to
supply machinery and auxiliary tools to us will be critical to our business and operations. If
any of our major suppliers does not continue to supply us with the necessary machinery and
auxiliary tools and we fail to source from ne w suppliers in due course with competitive
prices or at all, our business, financial condition and results of operations could be
adversely affected.
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We may fail to maintain and renew our industry-specific certifications in relation to our
quality control and production technologies
Our production of precision engineering parts and components requires a high degree
of accuracy, repeatability and efficiency. As s uch, the effectiveness of our quality control
system is of utmost importance to our business. The quality assurance of our products
requires us to adopt a stringent quality control system which involves us placing a
significant amount of capital and human resources to ensure that every step of the
production processes is being strictly monitored. For details of our quality control, see
‘‘Business — Quality management’’. If we a re unable to maintain our effective quality
control system or to renew our quality control certifications, it may result in a decrease in
demand for our services which would diminish our competitiveness in the precision
engineering market. Furthermore, we may ris k delivering products or services that are
faulty, irregular or ineffective, which in tur n would cause us to become liable to various
product liability claims or other forms of litigation.
In addition, some of our existing or potential customers require us to source products
only from suppliers that are accredited with certain certifications in relation to
technological standards. They may also have specific internal procedures and standards
that potential suppliers need to meet before qualifying as their approved suppliers such as
obtaining SSQA certification and ASME BPV C Section IX: 2017 certification, passing
specific internal procedures such as copy exact training and assessment, acquiring
certifications such as ISO 9001 : 2015, ISO 14001 : 2015 and ISO 45001 : 2018
certifications and cleanroom licence. These industry-specific certifications are crucial to
the operation of our business and are generally subject to periodical review and renewal by
the relevant issuing authorities. However, we cannot assure you that we can successfully
renew these certifications or that these certifications are sufficient for us to conduct all of
our present or future business. Moreover, as we further develop and expand our operations,
we may need to obtain additional approvals, permits, licences and/or certifications. New
and more stringent laws and regulations may be adopted from time to time by different
authorities of jurisdictions where we operate. As such, we may be required to obtain
additional approvals, permits, licences and/o r certifications in order to comply with such
new and stricter laws and regulations. If we fail to obtain or maintain any of the required
licences or approvals, our operations may be inte rrupted or restricted, or we may be subject
to potential penalties. Any such interrupt ion or penalties may disrupt our business
operations and materially and adversely affect our business, financial condition and results
of operations.
Besides, our customers may also require us to source raw materials from the designated
suppliers approved by them. Accordingly, if we fail to effectively maintain our production
standards or renew any of our certifications, pass the specific internal procedures and
standards, or source from the designated suppliers, these customers may cease to place
orders with us or reduce orders to be placed with us, and we may be unable to maintain or
develop business relationships with these existing and potential customers.
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We may not be able to respond to change in technical requirements to meet the product
specifications by our customers in an efficient and timely manner and we may not be able to
maintain our expertise in engineering, technological and manufacturing process
The downstream industries of our customers, including semicondu ctors, aerospace and
data storage industries, are constantly evolving and the technical requirements for our
products utilised in such industries are eve r-changing. As a result, the technical
requirements and the product specifications in the precision engineering industry are
subject to continuous evolutions and changes. As we strategically focus on manufacturing
high-precision and highly complex machined components, our products may be required to
meet increasingly demanding requirements in light of product specifications and precision
parameters. Therefore, we are required to r espond adequately and promptly to these
evolutions and changes to remain competitive.
In the past, our endeavours to improve our manufacturing technologies and processes
placed us in a competitive position. We believe our continuous efforts in enhancing our
manufacturing technologies and processes will be critical to our ability to continuously
improve the quality and performance of our products and services to meet the expectations
of our customers. However, we cannot assure you that we could successfully adapt to the
changing product specifications and performance parameters in the future. If we fail to
adapt to the changing product specifications and precision parameters in an efficient and
timely manner or at all, or if our manufacturing technologies and processes are rendered
obsolete, we may not be able to manufacture products and provide services that meet our
customers’ evolving needs or adapt to the market trends or enable us to effectively compete
with our competitors, in which case our business, financial positions, results of operations
and prospects could be materia lly and adversely affected.
Any failure to adequately protect our accumulated expertise and technical know-how or any
potential infringement of third party intellectual property rights by us may adversely affect our
business and reputation
We rely substantially on our accumulated expertise and technical know-how to
conduct our business. The su ccess of our business depends on our ability to protect and
apply our technical know-how relevant to our production process without infringing the
proprietary rights of other third parties. However, we cannot ensure that we will be able to
continue applying our expertise to design and generate internal production work
instructions and to programme such instru ctions into the relevant machinery and
equipment successfully to meet our customers’ requirements, the failure of which could
reduce or eliminate our competitive advanta ges, which could in turn adversely affect our
business.
Also, there is also a risk that third parties may bring a claim against us for infringing
their intellectual property rights, thereby requiring us to defend or settle any related
intellectual property infringement allegati ons or disputes. We may be required to incur
substantial costs to develop non-infringing alternatives or to obtain the required licences.
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There is no assurance that we will succeed in deve loping such alternatives or in obtaining
such licences on reasonable terms, or at all, and any failure to do so may disrupt our
designing processes, damage our reputation and adversely aff ect our results of operations.
Leakage of confidential technical information could damage our reputation and substantially
harm our business and results of operations
During the course of our operations, we are routinely exposed to confidential
information such as the design in the customer production drawings which our customers
provide to us and require us to maintain stric t confidentiality on the highly sensitive
technical know-how. We rely on the security of our computer system, non-disclosure
agreements, anonymising product drawings, th e integrity of our staff and physical security
of our premises to preserve confidentiality of these information. Also, the technicians are
not given access to our email system to prevent the dissemination of confidential
information electronically. Despite the abov e measures, our servers may be vulnerable to
hacking, data theft and subsequent leakage of confidential information to unauthorised
third parties. It is our contractual obligatio ns to our customers to preserve confidentiality
of sensitive information. We may be exposed t o potential liabilities, such as complaints,
claims, legal actions initiated by our customers or potential termination of business
relationships arising from any leakage or loss of confidential data. Our reputation, business
and financial position may be materia lly and adversely affected as a result.
We rely substantially on our senior management and key personnel
In order to keep pace with the evolving technological advancements, we rely on our key
personnels to gather industry intelligence and i nsights to stay tuned with the highly dynamic
end-use industries. Also, we rely on our key personnel and senior management to provide
our Group with long term strategic planning and direction as well as to maintain
relationships with our customers. As such , our operation performance substantially
depends on the retention of our senior management and key personnel. For details of the
biographical information of our Directors and senior management team, see ‘‘Directors and
Senior Management’’. We cannot assure you that we will be able to retain members of our
senior management and key personnel in the future. In the event of their departure or
absence, we may not be able to recruit suitable candidates for replacement in a timely
manner and on acceptable terms or at all, whic h may materially and adversely affect our
business, financial condition and results of operations.
A material disruption of our operations could adversely affect our business
Our production facilities are subject to op eration risks, such as the breakdown or
failure of our major equipment, power supply shortage or maintenance, natural disasters,
industrial accidents and the need to comply with the requirements of relevant government
authorities, which could therefore lead to temporary, permanent, partial or complete
shut-downs in our operations.
The occurrence of any of these risks may result in a material adverse effect on our
results of operations and if continue, even on our business prospects. We may be required to
carry out planned shutdowns of our producti on facilities for maintenance, statutory
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inspections and testing. Our business, financial condition and results of operations may be
adversely affected by any disru ption of operations at our prod uction facilities, whether
caused by any of the factors mentioned above or otherwise.
We may not be able to renew our current leases or locate desirable alternatives for our
production facilities in Singapore
Our headquarter in Singapore, which is also one of our production facilities, is
presently located on a premise leased from an independent third party. Upon expiry of such
lease in Singapore, which is expected to be 30 January 2038, we may not be able to
successfully negotiate an extension of the lease and may therefore be forced to relocate our
production facility, or the rent we pay may incre ase significantly. Also, if we commit any
material breach on the provisions under the l ease agreement, the lease may be terminated
prior to the expiry date. This could disrupt our operations and adversely affect our
profitability. In addition, we may not be able to obtain new leases at desirable locations and
on acceptable terms to accommodate our futu re growth or at all, which could materially
and adversely affect our business, financial condition and results of operations.
We have limited insurance coverage which could expose us to significant costs and business
disruption
During the Track Record Period and up to the Latest Practicable Date, we maintained
various insurance policies such as business insurance (which covers property, business
interruption, public and production broad form liability), work injury compensation
insurance, hospital and surgical (for foreign workers) policy, industrial all risk insurance,
public liability insurance and c ombined general liability insur ance, in line with the industry
practice. However, we cannot give assurance that our current insurance policies are
sufficient to cover all the risks associated with our operations. Any business disruption,
litigation or natural disaster may consume our management resources, affect our reputation
and/or require us to spend significant sums on legal costs. There is no assurance that the
insurance policies we maintain are sufficient to prevent us from any loss or that we will be
able to successfully claim our losses under our current insurance policies for sufficient
compensations and on a timely manner, or at all. If we incur any loss that is not covered by
our insurance policies, or the compensated amount is significantly less than our actual loss,
our business, financial condition and results of operations could be materially and adversely
affected.
We are exposed to risk of inventories obsolescence
We had inventories of approximatel y S$7.9 million and S$6.6 million as at 31
December 2022 and 2023, respectively. Our inve ntories mainly consist of raw materials,
work in progress, finished goods and product consumables. During the Track Record
Period, we have entered into a consignment arrangement with Customer A, under which we,
as consignor are required to deliver specifie d items when the stock level of such item drops
below a minimum level up to the maximum level as determined by Customer A. For details,
see ‘‘Business — Our customers — Customer concentration and reliance on our five largest
customers — PACE Agreements’’. Demand f or our precision component engineering
services depends on, among other things, the trends and developments in the downstream
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industries. Any unexpected change in the economic condition or degree of economic
activities of our customers may render our inventories obsolete. We measure our inventories
at the lower of cost and net realisable value. A write down on cost is made for where the
cost is not recoverable or if the selling prices have declined. As such, failure to manage our
inventories effectively may adversely affect our financial condition and results of
operations. We have written off finished goods with cost of approximately S$130,000 and
nil for the years ended 31 December 2022 and 20 23 respectively. Besides, we have made
inventory provision of nil and approximatel y S$0.4 million for the years ended 31 December
2022 and 2023, respectively. The amount and proportion of our inventories written off or
provided may further increase, which may have an adverse impact on our financial position
and results of operations.
Our cash flows and working capital may deteriorate due to potential mismatch in time between
receipt of payments from our customers, and payments to our third party suppliers and service
providers and failure of our customers to pay the amounts owed to us in a timely manner may
adversely affect our liquidity, financial condition and operating results
To remain competitive, we need to retain a sufficient level of working capital to
guarantee smooth business operations and support the growth in demand for our products.
During the Track Record Period, we typically granted our customers a credit term of 30 to
60 days from the date of invoice, whereas the credit term typically offered by our suppliers
also ranged from 30 to 60 days. However, certa in overseas suppliers may require us to make
payment in advance either in full purchase amount or 50% partial down payment payable
upon placing order. With our revenue continuously growing, any cashflow mismatch due to
the lead time in our production may put us at liquidity risk. Further, any default or delay in
payment by our customers or our failure to co llect trade receivables from them in a timely
manner or at all may broaden our cashflow mismatch, which may result in potential
cashflow shortfalls in the future and adversely affect our liquidity, financial condition and
results of operations.
During the Track Record Period, we mainly satisfy our working capital needs from
cash generated from our operating activities, borrowings and funds from our shareholders
and investors. However, there can be no assurance that the cash flow generated from our
operations will be sufficient to fund our future development and expansion plans, nor can
we assure you that we may always be able to timely or fully obtain additional external
financing on satisfactory or commercially a cceptable terms, or at all. Our ability to obtain
adequate external financing on commercially acceptable terms will depend on a number of
factors, including our financial performance and results of operations, as well as other
factors beyond our control, including the globa l and regional economies, prevailing interest
rates, the applicable laws, regulations, rules and conditions in connection with our industry
and the underlying industries of our customers in the geographical regions where we
operate. As such, if we fail to obtain the desired financing in a timely manner or at
commercially acceptable terms or at all, our b usiness and operations may suffer and the
implementation of our business plans may be delayed.
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In addition, although our customers generally have good repayment record during the
Track Record Period, if any of our customers have insufficient liquidity or face any
financial difficulty, we may encounter significant delays or defaults in payments owed to us
by such customers, and we may need to exte n do u rp a y m e n tt e r m so rr e s t r u c t u r et h e
receivables owed to us, which could have a m aterial adverse effect on our financial
condition. Any deterioration in the financial condition of our customers could affect such
customers’ ability to settle our receivable s in a timely manner or at all or result in the
customers going into bankruptcy or reorganisation proceedings, which will increase the risk
of uncollectible receivables.
Share-based payments and Listing expenses may have a material and adverse effect on our
financial performance and share-based payments may dilute shareholding of the existing
Shareholders
During the Track Record Period, our share- based payments arose from grant of shares
and exercise of anti-dilution rights granted to certain employees and shareholders of our
Group. In particular, the anti-dilution rights were designed to reward our key management
members and employees for their continual contribution to us, including the development
and expansion of our business and introd uction of external investors. For more
information, see ‘‘History and Development — Corporate Development — Anti-dilution
Undertaking’’. For the years ended 31 Dece mber 2022 and 2023, we incurred share-based
payments for the shareholders and the employ ees of approximately S$1.2 million and S$3.3
million, respectively. Expenses incurred wit h respect to such share-based payments had
increased our operating expenses and therefore had a material and adverse effect on our
financial performance during the Track Record Period. The grant of shares and exercise of
anti-dilution rights granted to certain employees and shareholders of our Group, which led
to our share-based payments may dilute the shareholdings of our existing Shareholders. We
expect to further incur Listing expenses ( including underwriting commissions) of
approximately S$3.8 million (based on the mid- point of our indicative price range for the
Share Offer) by the completion of the Share Offer, of which an estimated amount of
approximately S$2.3 million will be charge d to our consolidated statement of
comprehensive income for the year endin g 31 December 2024. Such Listing expenses we
expect to further incur may have a material and adverse impact on our financial
performance for the year ending 31 December 2024.
Increase in the interest rates would increase our borrowing costs which could adversely affect
our business and financial condition
As at 31 December 2022 and 2023, we had total borrowings amounting to
approximately S$5.5 million and S$4.2 millio n, respectively. Some of the borrowings
carry a variable interest rate and hence our Group is subject to the interest rate risk.
We expect that some of our bank borrowings will continue to be subject to variable
interest rates in the future. Hence, the interest expense on borrowings incurred by us may
follow the trend of the prevailing interest rat es and the cost of funds of the lenders. We have
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not hedged against interest rate risks. If there is any substantial increase in interest rate, our
interest expenses, cash flows and financial performance may be adversely and materially
affected.
We may record impairment losses of goodwill and/or other intangible assets in the future
Goodwill on acquisitions of subsidiaries and businesses, represents the excess of (i) the
sum of the consideration transferred, the a mount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
over (ii) the fair value of the identifiable n et assets acquired. As at 31 December 2022 and
2023, the carrying amount of our goodwill was approximately S$4.4 million and S$4.4
million, respectively. Our intangible assets ma inly include (i) know-how transferred by Mr.
Thng to our Group in 2021 in exchange for his acquisition of certain shareholdings in
Metasurface Technologies and Metaoptics Tech nologies, (ii) customer relationship and
customer contracts recognised from the acq uisition of SPW, and (iii) licence granted by
Accelerate to our Group pursuant to the Licen ce Agreement for us to use its technologies
and intellectual property rights to develop en hancements and commercialise its technologies
and licenced products for a consideration of a pproximately S$2.9 m illion. Our intangible
assets amounted to S$6.7 million and S$2. 3 million as at 31 December 2022 and 2023,
respectively. There was no provision for impairment of goodwill nor impairment of
intangible assets made during the years ended 31 December 2022 and 2023, respectively. We
are required to test our goodwill and intan gible assets with infinite useful life for
impairment annually. We are also required to test the intangible assets with finite useful life
when there is an impairment indicator. We may record impairment of goodwill and/or
intangible assets if the carrying value of our goodwill and intangible assets are determined
to be lower than the recoverable amount. Any m aterial impairment losses could negatively
affect our financial condition and performance.
We are subject to credit risk for trade and other receivables arising from our customers and
other parties
Failure to collect our trade and other recei vables fully or timely may have material
adverse effect on our business operations and financial condition. We usually grant our
customers a credit period ranging from 30 to 60 days. As at 31 December 2022 and 2023, we
had trade and other receivables of appr oximately S$9.3 million and S$7.7 million,
respectively. As a result, we may be exposed to credit risk.
For the years ended 31 December 2022 and 2023, the average trade receivables
turnover days were approximately 65 days and 69 days, respectively. Based on the
impairment review conducted by our management, during the Track Record Period, we
expect the occurrence of losses from non-performance by the counterparties of our trade
and other receivables was remote and loss allowance provision for our trade and other
receivables was immaterial. As a result, the re was no bad debt or provision on our trade
receivables made during the Track Record Period . In the event that the actual recoverability
is lower than expected, we may need to make provision on our trade receivables, which may
in turn materially and adversely affect our business, financial condition, and results of
operations. Our customers may experience fina ncial difficulties, which could negatively
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impact our ability to collect the amount due to us. Such adverse financial condition may
negatively affect the length of time that it will take for us to collect the associated trade
receivables or impact the likelihood of ultimat e collection, which could result in an adverse
effect on our business, financial condition, and results of operations. For more details on
our trade and other receivables, see ‘‘Financial Information — Description of Selected
Consolidated Statements of Financial Position Line Items — Trade and other receivables’’.
We are subject to risk of currency fluctuations
During the Track Record Period, our sale s are mainly denominated in SGD and USD
while our purchases are mainly denominated in SGD, Malaysian ringgit and USD and our
reporting and functional currency is SGD. In add ition, we have production facilities and/or
offices in Singapore and Malaysia, of which overheads are settled in local currencies and
therefore expose us to foreign exchanges risks. Our net currency exchange gains or (losses)
for the years ended 31 December 2022 and 2023 amounted to approximately S$108,000 and
S$(489,000), respectively. For more information on our currency exchange gain or loss, see
‘‘Financial Information — Description of Selected Consolidated Statements of
Comprehensive Income Line Items — Other Gains’’.
Fluctuations in foreign exchange rates are subject to various unforeseen factors and
unpredictable. We cannot guarantee that we will not suffer losses on our foreign exchange
in the future. During the Track Record Period, we did not use forward contracts or other
derivative instruments to manage our foreign exchange risks as our foreign currency
exposure has been partially mitigated by the offsetting of our foreign currency cash and
bank balance as well as receivables against our foreign currency payables. Any fluctuation
in exchange rates may have an adverse effect on our results of operations. Foreign exchange
risks to each individual entity within our Group arises when future commercial transactions
or recognised assets or liabilities are denomi nated in a currency that is not the entity’s
functional currency. Any future exchange ra te volatility relating to the SGD, Malaysian
ringgit and USD may give rise to uncertainties in the value of our net assets, earnings and
dividends. Appreciation of the value of the SGD and Malaysian ringgit against USD may
subject us to increased competition from foreign competitors, and depreciation in the value
of the SGD and Malaysian ringgit against USD may adversely affect the value of our net
assets, earnings and dividends that can be distributed from our subsidiaries in Singapore
and Malaysia.
We may be subject to additional tax liabilities in connection with our transfer pricing
arrangements, which could have adverse impacts on our financial condition
During the Track Record Period, we carried out certain intra-group transactions, in
particular the sales and purchase of tangible goods between Metasurface Technologies and
SGP Malaysia relating to our transfer pricin g arrangements. Metasurface Technologies
developed business opportunities and secured transactions from customers. From time to
time, Metasurface Technologies assigned production orders which are simpler and involve
intensive labour activities and polishing procedures to SGP Malaysia and sold raw
materials to SGP Malaysia at original purchase cost for further processing; and SGP
Malaysia then manufactured the finished go ods based on Metasurface Technologies’s
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instructions and sold the finished goods back to Metasurface Technologies based on
standard costs incurred during production which include raw material costs, direct labour
cost and machine costs as well as production overhead cost. For details regarding our
transfer pricing arrangements, see ‘‘Business — Transfer pricing arran gements’’. Our profit
allocation and income tax positions in the jurisdictions in connection with such transfer
pricing arrangements are subject to the applic able rules and regulations with respect to
transfer pricing in these jurisdictions as well as interpretations by the relevant tax
authorities in these applicable jurisdictions. Significant judgement and the use of estimates
are required in determining the reasonableness of our profit allocation and income tax
positions in terms of our transfer pricing arrangements. Based on the assessment results of
the independent transfer pricing tax consultant, the sales and purchase of tangible goods
between Metasurface Technologies and SGP Malaysia during the Track Record Period
could be considered as reasonable and generally consistent with the arm’s length principle
from both Singapore and Malaysia transfer pr icing perspectives, and in compliance with the
relevant transfer pricing rules, guidance and regulations in Singapore and Malaysia.
However, there is no assurance that the respective tax authorities would not challenge the
appropriateness of our transfer pricing arra ngements or that the relevant regulations or
standards governing such arrangements will no t be subject to future changes. If a competent
tax authority of the relevant jurisdiction lat er determines that the transfer prices and the
transaction terms that we have adopted as well as our historical income tax provisions and
accruals are not appropriate, such authority may require the relevant subsidiaries to
re-assess the transfer prices and re-allocate t he income or adjust the taxable income. If we
are considered not to be in compliance with t he applicable transfer pricing rules and
regulations, the relevant tax authority may also have the power to order us to pay all
outstanding tax with statutory interest or fines.
We recorded accumulated losses during the Tr ack Record Period, which may adversely affect
our ability to declare and pay dividends
We recorded accumulated losses of appro ximately S$10.7 million and S$6.1 million as
at 31 December 2022 and 2023, respectively.
We have generated profits of approximat ely S$2.7 million and S$4.4 million for the
year ended 31 December 2022 and 2023, respective ly, which has partially offset and reduced
our accumulated losses position as at 31 December 2022 and 2023. However, we cannot
assure you that we will be able to continue to generate net profits in the future. We
incorporated Metaoptics Technologies on 15 June 2021 in Singapore as our insignificant
subsidiary with the intention of investing and venturing into metalens technology business.
Subsequent to various rounds of investments and share transfers, Metaoptics Technologies
became our associate upon completion of the reorganisation. Any loss arising from the
investments and share transfers may render our Group a net loss position during the
financial periods when such transactions occur and increase our accumulated losses. For
more information, see ‘‘Financial Inform ation — Overview’’. We may still continue to
record accumulated loss. Such accumulated l oss may adversely affect our distributable
reserves and hence our overall ability to decl are and pay dividends after the Listing.
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We may not be entitled to government grants in the future
From time to time, we may receive different kinds of wage support and government
grants for our operation in Singapore. For t he years ended 31 December 2022 and 2023, we
received government grants, mainly consisting of Wage Credit Scheme and Special
Employment Credit in Singapore, of approximately S$86,000 and S$87,000, respectively.
For more details in relation to the governmen t grants we received during the Track Record
Period, see ‘‘Financial information — Other Income’’. It is in the Singapore government’s
sole discretion to decide when, under what conditions and the amount of grants to be given
or whether the government grants should be given to us at all. We do not rely heavily on
government grants during the Track Record Period, but we cannot assure you that we will
continue to be entitled to any government grants or the Singapore government will not
impose new conditions for receiving the government grants in the future. If we are unable to
obtain or maintain the government grants or any other favourable government incentives in
the future, our business, financial condition and results of operations may be affected.
Our credit facilities contain covenants that may limit our ability to operate our business and
any material breach of the undertakings and/or covenants in our credit facilities could
adversely affect our business and financial condition
The agreements for our bank borrowings contain a number of undertakings and
covenants which include but not are limited to:
— Restriction on change of control and disposal of material assets
— Financial covenants restricting us from incurring additional indebtedness or
encumbrance over our assets
— Compliance with certain financial thresholds set out in the relevant facility
letter(s)/agreement(s), such as a certain level of minimum tangible net worth and
loan to equity ratio
— Obligation to notify the relevant lender(s) in the event that we plan for listing
These covenants and underta kings could restrict our ability to respond to changes in
business and economic conditions, to engage in potentially beneficial transactions and to
obtain other required financing.
Our current liabilities inclu ded borrowings by our Group w ith a total carrying amount
of approximately S$5.5 million, S$4.0 millio n and S$3.7 million as at 31 December 2022, 31
December 2023 and 30 Apri l 2024, respectively.
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Our Directors confirm that we have not received, during the Track Record Period and
up to the Latest Practicable Date, any noti ce of material breach of any covenant or
undertaking which may result in early terminat ion or modification of any credit facilities
c o n t r a c t so ra g r e e m e n t sw h i c ha r em a t e r i al to our business. Nevertheless, if we fail to
comply with any of such undertakings and coven ants in all material aspects in the future, it
may constitute a breach of the relevant contracts or agreements, and as a result may entitle
the lender(s) to accelerate the maturity of the cre dit facilities or terminate the relevant credit
facilities with us. In any of these events, our business, operating results, and financial
condition could be adversely and materially affected.
We may be unable to successfully develop or market commercially viable products and
technologies in relation to optical metalens in a timely manner, or at all to respond to changes
in market conditions
In 2021, we entered into the Licence Agreem ent with Accelerate, pursuant to which,
Accelerate grants our Group the rights to, amon g others, use Accelerate’s technologies and
intellectual property rights to develop enhancements on and to commercialise Accelerate’s
technologies and licenced products, and we intend to ride on the strategic cooperation to
capture market opportunities in the field of optical metalens. Development of meta optics
technology and products require substantial technical, financial and human resources.
However, we cannot assure you that such effor ts will allow us to successfully deliver the
intended results.
According to the CIC Report, the optical metalens industry is rapidly developing at its
early stage of commercialization with relatively low product awareness. Companies need to
have strong research and development capab ilities to demonstrate their technological
know-how to support product development and to successfully penetrate into the existing
and potential application fields. It is also impo rtant for companies to enter the field early to
gain the first-mover advantage and establish brand awareness and reputation before others
enter into the market. In addition, a large amount of capital is also required to cover the
cost of product design and development as well as product manufacturing and distribution.
We cannot guarantee that we will be able to develop and manufacture optical metalens that
successfully meet the needs of our customers. Also, we cannot assure you that we will be
able to develop and introduce new optical metalens products in a timely and effective
manner and our meta optics products may not be commercially successful or yield the
anticipated returns to cover our investment costs. Moreover, our competitors may launch
new and competing products earlier than us or market such products in a more effective
manner, or our end customers may prefer their products. If our development for optical
metalens is ultimately proven to be unsuccessful, our business, financial condition and
operating results may be adversely affected as a result.
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Personal injuries or fatal accidents may occur a t our production facilitie s, which may subject
us to administrative penalties and/or compensation claims, which could materially and
adversely affect our reputation, business and financial results
In the course of our operations, we rely on our employees to adhere to and follow all
safety measures and procedures we have stip ulated. However, there remains risks of
personal injuries or even fatal accidents in our production facilities, especially when our
employees fail to comply with our safety measures, or when our supervisors fail to provide
adequate trainings or guidance to implement proper safety policies and measures.
We have implemented stringent safety policies in our production at all times. For more
details, see ‘‘Business — Health, Safety, Environmental, Social and Governance matters —
Health and Safety, Social Responsibilities a nd Corporate Governance’’. However, we
cannot guarantee that material workplace injuries or fatal accidents will not occur in the
future. In any case of material workplace accidents, we may be subject to government
investigations and administrative penalties. Even if such accidents may not be caused by our
f a u l to rn e g l i g e n c e ,s u c ha c c i d e n t sm a ys t i l lr e n d e ru ss u b s t a n t i a lc o s t sa n dd a m a g e st oo u r
reputation, such as negative publicity, which may material ly and adversely affect our
business and financial results.
Our business operations and financial results may be adversely affected by the global outbreak
of COVID-19
The global widespread of COVID-19 and th e emergence of different variants have
posed a serious public health threat in Singapore, Malaysia and globally. Though our
Group and our suppliers had gradually resumed operation, the extent to which the
COVID-19 outbreak may impact our production and the supply chain of raw materials will
depend on future developments of the pandemic, which are highly uncertain and
unpredictable.
Furthermore, with COVID-19 and the differe nt variants spreading globally, there is no
assurance that our major customers located in c ountries with significant reported cases of
COVID-19 including the United States would be able to (a) maintain their normal business
operation without significant disruptions, and/or (b) engage us to manufacture their
components as usual in the event that restrictions on freight logistics or transportation bans
are imposed, and there is no guarantee that we would be able to secure purchase orders
from these customers with volume similar to that before. In consequence, we may suffer loss
or reduction of purchase orders from our customers and thus, our operations and financial
performance would be adversely affected.
Despite the continual administration and use of vaccines for preventing and
controlling COVID-19 infections , their efficacy may vary amo ng individuals and thus the
effect of the vaccines on the global economy still remains uncertain. Hence, the operation
and financial performance of our customers may be adversely affected by the development
of COVID-19 and thus our customers may default payments to us or take longer time to
settle our payments. In such event, we may incur significant impairment loss for the
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outstanding payments owed to us by our customers. These adverse impacts, if materialise
and persist for a substantial period, may significantly and adversely affect our business
operation and financial performance.
Our operations may be affected by adverse weather conditions, natural disasters, acts of God
or wars and terrorism
Our business operations are vulnerable to ad verse weather conditions. If the adverse
weather persists or natural disasters occur, we may be prohibited from performing work at
our production facilities, and as a result, we may not be able to meet the specified delivery
time schedule. If we have to stop our operations during adverse weather or natural disaster,
we may continue to incur operating expenses such as labour costs and other overheads and
our revenue and profitability would be adversely affected.
Besides, we are subject to other acts of God which are beyond our control. Acts of wars
and terrorism may also injure our employees, cause loss of lives, disrupt our operations and
destroy our works performed. Such incidents could adversely affect our revenue, costs,
financial conditions and growth potential. It is also difficult to predict the potential effect
of these incidents and their materiality to the business of our customers and suppliers and
us.
If our production is delayed and the terms and conditions do not accommodate for
such delays or our customers do not grant us a sufficient time extension for the completion,
we may be liable to pay for any liquidated damages to our customers according to the
relevant contract terms, which will adversely affect our financial position.
We rely on computer systems for operation of our machinery and any disruptions in our system
could materially and adversely affect our business
We rely on our computer systems to support o ur technological capabilities, including
the operation of our CNC machines, and other functions. As with any computer systems,
unforeseen issues may arise from time to time . In the event that our computer systems do
not work effectively, our ability to receive an d process adequate, accurate and timely data
could be adversely affected, which in turn could inhibit our operations. Furthermore, it is
possible that our computer systems could experience a complete or partial shutdown and we
have to wait for our suppliers to provide on-site maintenance services. If such a shutdown
occurs and we could not obtain the maintenance services to restore our operations in a
timely manner or at all, it could materially an d adversely affect our a bility to deliver our
products to our customers according to the required schedule, for which our business and
reputation could be adversely affected.
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There is no guarantee that regulatory requirements applicable to the industry in which we
operate will not change in the future
Our operations are subject to laws and regulations that relate to matters such as
employment of foreign workers, workplace health and safety, and environment. There is no
guarantee that regulatory requirements applicable to our operation and our industry will
not change in the future. Any change in the app licable laws and regulations may result in
time-consuming and costly adjustments to our risk management and internal control
systems and may increase our legal and other professional cost and burden to comply with
these new laws and regulations, thereby materi ally and adversely affecting our business and
financial position and prospect.
Changes in international trade policies and the ongoing conflict and emergence of a trade war
between the U.S. and China may have an adverse effect on our business
Adverse changes and developments in the glob al trade policies, such as the imposition
of new trade barriers, tariffs, sanctions, export controls, boycotts and other measures which
are beyond our control could negatively affect the financial and economic conditions in the
jurisdictions where we operate, as well as our overseas expansion plan, and thus our
financial condition and results of operations.
During the Track Record Period, the U.S. government imposed various restrictions on
international trade, especially with China, and in particular imp osed significant increases in
tariffs and restriction on trading on specifi c imported goods. These actions by the U.S.
government have resulted in retaliation from Ch ina which may further escalate the tensions
between the countries or even lead to a trade w ar. Any escalation in trade tensions, or the
perception that such escalation or a trade wa r could occur, may have negative impact on the
global economies. These trade tensions between China and the United States may continue
and could intensify in the future, and the U.S. government could adopt a more hostile trade
policy against China. Since October 2022, the U.S. government has implemented changes to
export control regulations which restricted the export of certain semiconductor
manufacturing equipment and related components and technologies to China.
Although our Directors believe that the tariffs and the changes in U.S. export control
regulations did not lead to material adverse impact on our business in Singapore as at the
Latest Practicable Date, these restrictions o rr e g u l a t i o n s ,a n ds i m i l a ro rm o r ee x t e n s i v e
restrictions or regulations that may be imposed by the U.S. or other jurisdictions in the
future, may materially and adversely affect our customers’ ability to export technologies,
systems, devices or components to China which ma y be critical to their service offerings and
business operations and indirectly affect their demand for our parts and components. In
particular, certain of our overseas custome rs’ international sales may depend on their
ability to obtain certain export licences. Inab ility to obtain the required licence may cause
such customers to be displaced by foreign bus inesses and competitors and adversely affect
their results of operation. In addition, government authorities may impose conditions that
require the use of local suppliers or partnerships with local companies, or engage in other
efforts to promote local businesses and their local competitors, which could have a
significant adverse impact on such customer s’ business. There can be no assurance that the
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current and/or future restrictions or regulations implemented by the U.S. government, or
authorities in other jurisdictions, and relat ed developments, will not have a negative impact
o no u rb u s i n e s so p e r a t i o n so rp r o s p e c t s .
We could be adversely affected as a result of any sales or purchase we make to or from certain
countries that are, or become subject to, sanctions administered by the United States, EU, UK,
UN, Australia and other relevant sanctions authorities
The United States and other jurisdictions or organisations, including EU, UK, UN and
Australia, have, through executive order, pa ssing of legislation or other governmental
means, implemented measures that impose economic sanctions against certain countries or
certain targeted industry sectors, groups of companies or persons, and/or organisations
within such countries.
During the Track Record Period, we indirectly procured aluminium products from the
Relevant Region through one of our suppliers in Singapore, who sourced from a sanctioned
entity located in the Relevant Region. Our tra nsactions involving the Relevant Region were
limited to the aforementioned indirect procurements of Russian-origin aluminium products
that were denominated in SGD and took place in Singapore. Our cost of sales attributable
to such indirect procurements from the Rel evant Region was approximately S$0.3 million,
n i la n dn i lf o rt h ey e a r se n d e d3 1D e c e m b e r2 0 2 2a n d2 0 2 3a n du pt ot h eL a t e s tP r a c t i c a b l e
Date, respectively, which represents approxi mately 1.2%, nil and nil of the Group’s total
cost of sales for the years ended 31 December 2022 and 2023 and up to the Latest
Practicable Date respectively, and approxima tely 8.1%, nil and nil of the total aluminium
products the Group procured for the years ended 31 December 2022 and 2023 and up to the
Latest Practicable Date, respectively. Since 1 January 2023, the supplier involved in the
aforementioned indirect procurements has ceased to supply any Russian-origin aluminium
products to us. As advised by our Internationa l Sanctions Legal Advisers, during the Track
Record Period, our indirect procurement of aluminium products from the Relevant Region
from our non-sanctioned supplier in Singapore, who procured from a Russia-based
Sanctioned Person designated on the Entity List maintained by the BIS, did not represent a
violation of the limited restrictions on the Sanctioned Person.
Sanctions laws and regulations are constantly evolving, and new persons and entities
are regularly added to the list of Sanctioned Persons. Further, new requirements or
restrictions could come into effect which might increase the scrutiny on our business or
result in one or more of our business activities being deemed to have violated sanctions. We
cannot provide any assurance that our future business will be free of sanctions risk or our
business will conform to the expectations and requirements of the authorities of the U.S. or
any other jurisdictions. Our business and re putation could be adversely affected if the
authorities of the U.S., EU, UK, UN, Australia or any other relevant sanctions authorities
were to determine that any of our future activit ies constitutes a viola tion of the sanctions
they impose or provides a basis for a sanctions designation of us. Our procurement of raw
materials may also be subject to new or revised international trade restrictions and/or
export controls, which may negatively impact the supply chain of raw materials in the
future. For details of our business operati ons in relation to the Relevant Region, see
‘‘Business — Business Activities with Suppl i e ri nr e l a t i o nt ot h eR e l e v a n tR e g i o n ’ ’ .
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Increasing emphasis on environmental, social and governance issues may impose additional
c o s t so nu so re x p o s eu st oa d d i t i o n a lr i s k s .F ailure to comply with the laws and regulations in
relation to environmental, social and governance matters may subject us to penalties and
adversely affect our business, financial condition and results of operations
Increasing emphasis on environmental, social and governance (‘‘ ESG’’) issues in recent
years has exposed our business to changes in regulatory policies and laws and regulations
associated with environmental protection and other ESG-related matters. Investor
advocacy groups, institutional investors, investment funds have also placed increasing
emphasis on the implications and social cost of their investments. Investors may decide to
reallocate capital or commit capital based on their assessment of a company’s ESG
practices. ESG concern or issue or potential changes in social trend and political policies
relating to ESG could increase our regulatory compliance costs or require us to alter our
practices in a way that could harm our business. If we do not adapt to or comply with the
evolving expectations and standards on ESG matters from investors and the regulatory
authorities or are perceived to have not respon ded appropriately to the growing concern for
ESG issues, we may suffer reputational damage and our business, financial condition, and
the price of our Shares may be materially and adversely affected. For more information
about our ESG policies and practices, see ‘‘B usiness — Health, Safety, Environmental,
Social And Governance Matters — Our ESG Governance.’’
Our business could be adversely affected due to the name changes of Metasurface
Technologies and Metaoptics Technologies
Metasurface Technologies, Metaoptics Technologies and the Group’s connected
persons, namely Metasurface & Co and Singapore Kitchen Equipment Limited (‘‘ SKE’’),
had used ‘‘Q’son’’ as part of their names in their business operations. On 22 May 2013,
Metasurface Technologies undertook to SKE to change the ‘‘Q’son’’ name within three
months from the date of the undertaking, cease using the ‘‘Q’son’’ name or brand and cease
stating that it is part of the ‘‘Q’son group of companies’’ (the ‘‘ Change of Name
Undertaking ’’). Despite the Change of Name Undertaking, Metasurface Technologies and
Metaoptics Technologies had continued to use the ‘‘Q’son’’ name until October 2021 and
September 2021, respectively. SKE has reserved its rights to pursue damages and losses in
the event that it had actually suffered losses and damages arising out of or in connection
with the breach of the Change of Name Undertaking by Metasurface Technologies. In the
event that SKE pursues damages and losses against us, our business and our reputation
could be adversely affected. Also, there is no assurance that the change of name will not
affect our business relationship with our customers.
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RISKS RELATING TO THE SHARE OFFER
There has been no prior public market for our Shares and an active trading market for our
Shares may not develop or be sustained
Prior to the Share Offer, no public market for our Shares existed. Following the
completion of the Share Offer, the Stock Exchange will be the only market on which the
Shares are publicly traded. There is no assurance that an active trading market for our
Shares will develop or be sustained after the Sh are Offer. In addition, there is no assurance
that our Shares will trade in the public market at or above the Offer Price subsequent to the
Share Offer. The Offer Price for the Shares is expected to be fixed by the Underwriter(s) and
us, and may not be indicative of the market price of the Shares following the completion of
the Share Offer. If an active trading market for our Shares does not develop or is not
sustained after the Share Offer, the market price and liquidity of our Shares may be
materially and adversely affected.
The trading price and volume of our Shares may be volatile, which may result in substantial
losses for our investors
The trading price of our Shares may be volatile and may fluctuate widely in response to
factors beyond our control, including variations in the level of liquidity of our Shares,
changes in securities analysts’ (if any) estimates of our financial performance, investors’
perceptions of us and the general investment environment, changes in laws, regulations and
taxation systems which affect our operations, and general market conditions of the
securities markets in Hong Kong. These broad market and industry factors may
significantly affect the market price and volatility of our Shares, regardless of our actual
operating performance.
In addition to market and industry factors, the price and trading volume for our Shares
may be highly volatile for specific business reasons. In particular, factors such as variations
in our revenue, net income and cash flow, success or failure of our efforts in implementing
business and growth strategies and involvemen t in material litigation as well as recruitment
or departure of our key personnel, may cause the trading price and volume of our Shares to
change drastically and unexpectedly.
Further, there will be a gap of several days between the price determination and
commencement of trading of the Offer Shares. T h eO f f e rP r i c eo fo u rS h a r e si se x p e c t e dt o
be determined on the Price Determination Date while our Shares will not commence trading
on the Stock Exchange until the Listing Date. As a result, investors may not be able to sell
or otherwise deal in our Shares during the period between the Price Determination Date and
the Listing Date and hence are subject to the risk that the price of our Offer Shares could
fall during the period before trading of our Offer Shares begins.
RISK FACTORS
–6 2–


--- page 74 ---
Future disposal or perceived disposal of a substantial number of our Shares by our major
Shareholders in the public market may materia lly and adversely affect the prevailing market
price of our Shares
Disposal of a substantial amount of our Shares in the public market after the
completion of the Share Offer, or the perception that such disposal may occur could
adversely affect the market price of our Share s and materially impair our future ability to
raise capital through offerings of our Shares. There is no assurance that our major
Shareholders will not dispose of their shareho ldings. Any significant disposal of our Shares
by any of the major Shareholders may materia lly affect the prevailin g market price of our
Shares. In addition, these disposals may mak ei tm o r ed i f f i c u l tf o ru st oi s s u en e wS h a r e si n
the future at a time and price we deem approp riate, thereby limiting our ability to raise
further capital. We cannot predict the effect of any significant future disposal on the market
price of our Shares.
Future sale of our Shares or issuance of new Shares by us in the public market may materially
and adversely affect the market price of our Shares and dilute the shareholdings of our
Shareholders
Our Company may issue additional Shares in the future. The increase in the number of
Shares outstanding after the issue would result in the reduction in the percentage ownership
of the Shareholders and may result in a dilution in the earnings per Share and net asset
value per Share.
In addition, we may need to raise additional funds in the future to finance our
operation or business expansion or new development. If additional funds are raised through
the issuance of new equity or equity-linked securities of our Company other than on a
pro-rata basis to the existing Shareholders, the shareholding of the existing Shareholders in
our Company may be reduced or such new securities may confer rights and privileges that
take priority over those conferred by the Offer Shares.
Investors may experience difficulties enforcing their shareholders’ rights because our
Company was incorporated in the Cayman Islands, and the protection of minority
shareholders under the Cayman Islands law may be different from that under the laws of
Hong Kong or other jurisdictions
Our Company was incorporated in the Cayman Islands and its affairs are governed by
the Articles of Association, the Companies Act and common law applicable in the Cayman
Islands. The laws of the Cayman Islands may differ from those of Hong Kong or other
jurisdictions where investors may be located. As a result, minority Shareholders may not
enjoy the same rights as pursuant to the laws of Hong Kong or such other jurisdictions. A
summary of the Cayman Islands company law on the protection of minority Shareholders is
set out in Appendix IV to this prospectus.
RISK FACTORS
–6 3–


--- page 75 ---
RISKS RELATING TO STATEMENTS MADE IN THIS PROSPECTUS
Investors should read the entire prospectus and should not rely on any information contained in
press articles or other media coverage regarding us and the Share Offer
We strongly caution our investors not to rely on any information contained in press
articles or other media regarding the Share Offer and us. Prior to the publication of this
prospectus, there may be press and other media coverage regarding the Share Offer and us.
Such press and other media coverage may include references to certain information that
does not appear in this prospectus, including certain operating and financial information
and projections, valuations and other information. We have not authorised the disclosure of
any such information to the p ress or media and do not accept any responsibility for such
press or media coverage or the accuracy or completeness of any such information or
publication. We make no representation as to the appropriateness, accuracy, completeness
or reliability of any such information or p ublication. To the extent that any such
information is inconsistent or conflicts with the information contained in this prospectus,
we disclaim responsibility for it and our inve stors should not rely on such information.
Certain facts, forecasts and other statistics in this prospectus from public official documents or
statements have not been independently verified and may not be reliable
Certain facts, statistics and data presented in the section headed ‘‘Industry Overview’’
and elsewhere in this prospectus relating to the industries in which we operate have been
derived from a market research report comm issioned by us and prepared by CIC as well as
various publications and industry-related sources prepared by government officials or
independent third parties. We believe that the sources of the information are appropriate
sources for such information, and have taken re asonable care in extracting and reproducing
such information. In addition, we have no reason to believe that such information is false or
misleading or that any material fact has been omitted which would render such information
false or misleading. The information from the public official documents or statements has
not been independently verified by us or any of the Relevant Persons (Share Offer) and no
representation is given as to its accuracy. Due to possibly flawed or ineffective collection
methods or discrepancies between publishe d information and market practice, such
statistics in this prospectus may be inaccurate or may not be comparable to statistics
produced with respect to other economies. Further, there is no assurance that they are
stated or compiled on the same basis or with the same degree of accuracy as the case may be
in other jurisdictions. In all cases, investors should give consideration as to how much
weight or importance they should attach to or place on such statistics.
RISK FACTORS
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--- page 76 ---
Forward-looking statements contained in this prospectus are subject to risks and uncertainties
This prospectus contains forward-looking statements with respect to our business
strategies, operating efficiencies, competitive positions, growth opportunities for existing
operations, plans and objectives of management, certain pro forma information and other
matters. The words ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘predict’’, ‘‘potential’’, ‘‘continue’’,
‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘seek’’, ‘‘will’’, ‘‘would’’, ‘‘should’’ and the negative of
these terms and other similar expressions are intended to identify a number of these
forward-looking statements. These forward lo oking statements, including, amongst others,
those relating to our future business prospects, capital expenditure, cash flows, working
capital, liquidity and capital resources are e stimates reflecting the best judgement of our
Directors and management and involve a number of risks and uncertainties that could cause
actual results to differ materially from those suggested by the forward-looking statements.
As a consequence, these forward-looking statements should be considered in light of
various important factors, including those set out in the section headed ‘‘Risk Factors’’ in
this prospectus. Accordingly, such statements are not a guarantee of future performance
and investors should not place undue reliance on any forward-looking information. All
forward-looking statements in this prospectus are qualified by reference to this cautionary
statement.
RISK FACTORS
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In preparation for the Listing, we have so ught the following waiver from strict
compliance with the relevant provi sions of the GEM Listing Rules:
JOINT COMPANY SECRETARIES
Pursuant to Rules 5.14 and 11.07(2) of the GEM Listing Rules, we are required to
appoint a company secretary who, by virtue of his or her academic or professional
qualifications or relevant exp erience, is, in the opinion of the Stock Exchange, capable of
discharging the functions of a company secretary.
N o t e1t oR u l e5 . 1 4o ft h eG E ML i s t i n gR u les further provides that the Stock
Exchange considers the following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance (Chapter
159 of the Laws of Hong Kong)); and
(c) a certified public accountant (as defined in the Professional Accountants
Ordinance (Chapter 50 of the Laws of Hong Kong)).
In addition, pursuant to Note 2 to Rule 5.14 of the GEM Listing Rules, in assessing
‘‘relevant experience’’, the Stock Exch ange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he or she
played;
(b) familiarity with the GEM Listing Rules and other relevant laws and regulations
including the SFO, the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum
requirement under Rule 5.15 o f the GEM Listing Rules; and
(d) professional qualifications in other jurisdictions.
Paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants published by
the Stock Exchange provides that the Stock Exchange has granted waivers to issuers
proposing to appoint a company secretary who does not have the qualification and
experience required under Rule 5.14 of the GEM Listing Rules for a specified period. In
considering waiver applications under Rule 5.1 4 of the GEM Listing Rules, it will consider,
among others, the following factors:
(a) whether the issuer has principal business activities primarily outside Hong Kong;
(b) whether the issuer is able to demonstrate the need to appoint a person who does
not have the acceptable qualification or ‘‘relevant experience’’ as a company
secretary; and
WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES
–6 6–


--- page 78 ---
(c) why the directors consider the proposed company secretary to be suitable to act as
the issuer’s company secretary.
The Stock Exchange stated that a waiver under Rule 5.14 of the GEM Listing Rules, if
granted, will be for a fixed period of time (the ‘‘ Waiver Period ’’) subject to the following
conditions:
(a) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required under Rule 5.14 of the GEM Listing Rules
and is appointed as a joint company secretary throughout the Waiver Period; and
(b) the waiver will be revoked if there are material breaches of the GEM Listing Rules
by the issuer.
Further, the length of the Waiver Period will depend on the following factors but in
any case, will not exceed three years as the proposed company secretary is expected to have
acquired the relevant experience required under Rule 5.14 of the GEM Listing Rules within
such period:
(a) the proposed company secretary’s experience in handling company secretarial
matters and his/her relevant professional qualifications and/or academic
background;
(b) the measures and systems in place to facilitate the proposed company secretary in
discharging his/her duties as a company secretary; and
(c) the issuer’s regulatory compliance and/ or material deficiencies/weaknesses in
internal controls.
Our principal business activities are prima rily conducted in Singapore. We believe that
our company secretary should, apart from being able to meet the professional qualifications
or the relevant experience requirements under the GEM Listing Rules, have sufficient
knowledge of (a) the day-to-day affairs, operations and the business of our Group; and (b)
the regulatory requirements in Singapore.
We have appointed Ms. Hou Jing (‘‘ Ms. Hou ’’), our chief financial officer, and Mr. Ng
Cheuk Kin (‘‘Mr. Ng ’’) as the joint company secretaries of our Company. For further details
about the qualifications and experience of M s. Hou and Mr. Ng, please see the section
headed ‘‘Directors and Senior Management — Joint Company Secretaries’’ in this
prospectus.
WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES
–6 7–


--- page 79 ---
Although Ms. Hou is not a member of The Hong Kong Chartered Governance
Institute, a solicitor or barrister (as defined in the Legal Practitioners Ordinance (Chapter
159 of the Laws of Hong Kong)) nor a certifi ed public accountant (as defined in the
Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong)), as required
under Rules 5.14 and 11.07(2) of the GEM Listing Rules, our Directors consider that Ms.
Hou, by virtue of her background and experience, is capable of discharging the functions of
a joint company secretary. Ms. Hou joine do u rG r o u pi nS e p t e m b e r2 0 2 2 .M s .H o u ,a
member of the Institute of Singapore Chartered Accountants since 2017 and a fellow of the
Association of Chartered Certified Accountants since 2019, currently acts as our chief
financial officer, being responsible for our overall financial management, accounting and
company secretarial affairs. Ms. Hou has been actively involved in the Listing of our
Company since the preparatory period, hence she is familiar with the legal and the GEM
Listing Rules’ requirements and has been assisting the Board on corporate governance
matters. Ms. Hou, as our chief financial officer, also attended the training seminar
regarding the responsibility of directors of listed companies delivered by our Company’s
legal advisers as to Hong Kong laws to the Directors and senior management of our
Company.
Accordingly, we have applied to the Stock Exchange for, and obtained, a waiver from
strict compliance with the requirements under Rules 5.14 and 11.07(2) of the GEM Listing
Rules. The waiver is valid for an initial peri od of three years from the Listing Date. The
waiver is granted on condition that (i) we en gage Mr. Ng, who possesses all the requisite
qualifications required under Note 1 to Rule 5.14 of the GEM Listing Rules, as a joint
company secretary for an initial period of thr ee years commencing from the Listing Date, to
work closely with and to assist Ms. Hou in discharging her duties as a company secretary
and in gaining the ‘‘relevant experience’’ a s required under Note 2 to Rule 5.14 of the GEM
Listing Rules, and (ii) the waiver will be revoked immediately if Mr. Ng ceases to provide
assistance to Ms. Hou during the three-year period, if Mr. Ng fails to meet the requisite
qualifications required under Note 1 to Rule 5.14 of the GEM Listing Rules or if there are
material breaches of the GEM Listing Rules by our Company. Before the end of the
three-year period, our Company must demonstrate and seek the Stock Exchange’s
confirmation that during the three-year period, Ms. Hou has attained the ‘‘relevant
experience’’ under Note 2 to Rule 5.14 of the GEM Listing Rules and is capable of
discharging the functions of company secretary so that a further waiver will not be
necessary.
WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors c ollectively and individually accept full
responsibility, includes particulars given in c ompliance with the Comp anies Ordinance, the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Securities and
Futures (Stock Market Listing) Rules (C hapter 571V of the Laws of Hong Kong) and the
GEM Listing Rules for the purpose of giving information to the public with regard to us.
Our Directors, having made all reasonable enquiries, confirm that to the best of their
knowledge and belief, the information contained in this prospectus is accurate and complete
in all material aspects and not misleading or deceptive, there are no other matters the
omission of which would make any statement herein or this prospectus misleading, and all
opinions expressed in this prospectus have been arrived at after due and careful
consideration and are founded on bases and assumptions that are fair and reasonable.
INFORMATION ON THE SHARE OFFER
This prospectus is published solely in connection with the Share Offer. Details of the
structure of the Share Offer, including its co nditions, are set out in the section headed
‘‘Structure and Conditions of the Share Offer’’ in this prospectus, and the procedures for
applying for the Public Offer Shares are set out in the section headed ‘‘How to Apply for
Public Offer Shares’’ in this prospectus.
The Public Offer Shares are offered for su bscription solely on the basis of the
information contained and the representations made in this prospectus and on the terms
and subject to the conditions set out herein and therein. No person is authorised to give any
information in connection with the Share Offer, or to make any representation, not
contained in this prospectus. Any information or representation not contained herein must
not be relied upon as having been authorised by us or any of the Relevant Persons (Share
Offer). Neither the delivery of this prospect us nor any subscription or acquisition made
under it shall, under any circumstances, create any implication that there has been no
change in our affairs since the date of this prospectus or that the information in this
prospectus is correct as at any subsequent time.
UNDERWRITING
The Share Offer comprises the Public Offer o f initially 2,700,000 Public Offer Shares
and the Placing of initially 24,300,000 Placing Shares.
The listing of, and permission to deal in, our Shares on GEM is sponsored by the Sole
Sponsor. The Share Offer is managed by the Sole Overall Coordinator. The Public Offer is
fully underwritten by the Public Offer Und erwriters pursuant to the Public Offer
Underwriting Agreement.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–6 9–


--- page 81 ---
The Placing is expected to be fully unde rwritten by the Placing Underwriter(s)
pursuant to the Placing Underwriting Agreement and is subject to our Company and the
Sole Overall Coordinator (for itself and on behalf of the Underwriters) agreeing on the
Offer Price. Further information about t he Underwriter(s) and the Underwriting
Agreements are set out in the section heade d ‘‘Underwriting’’ in this prospectus.
DETERMINATION OF THE OFFER PRICE
The Offer Shares are being offered at the Of fer Price which will be determined by the
Sole Overall Coordinator (for itself and on behalf of the Underwriters) and our Company
o nt h eP r i c eD e t e r m i n a t i o nD a t e ,w h i c hi se x p e c t e dt ob eo no rb e f o r e1 2 : 0 0n o o no n
Thursday, 27 June 2024. If, for any reason, the Offer Price is not agreed between the Sole
Overall Coordinator (for itself and on behalf of the Underwriters) and us by 12 : 00 noon on
Thursday, 27 June 2024, the Share Offer will not proceed and will lapse.
The Offer Price is currently expected to be no more than HK$3.00 per Offer Share and
no less than HK$2.38 per Offer Share. The So le Overall Coordinator (for itself and on
behalf of the Underwriters) may reduce the indicative Offer Price range stated in this
prospectus at any time prior to the morning of the last day for lodging applications under
the Public Offer. In such a case, a notice of the reduction of the indicative Offer Price range
will be published on the Stock Exchange’s website at
www.hkexnews.hk and our Company’s
website at www.metatechnologies.com.sg .
RESTRICTIONS ON OFFER AND SALE OF OFFER SHARES
Each person acquiring the Offer Shares und er the Public Offer will be required to, or
deemed by his acquisition of the Offer Shares to, confirm that he is aware of the restrictions
on offer and sale of the Offer Shares described in this prospectus.
No action has been taken in any jurisdiction other than in Hong Kong to permit the
offering of the Offer Shares or the distribution of this prospectus. Accordingly, this
prospectus may not be used for the purpose of, and does not constitute, an offer or
invitation in any jurisdiction other than Hong Kong or in any circumstance in which such
an offer or invitation is not authorised or to any person to whom it is unlawful to make such
an unauthorised offer or invitation.
The distribution of this prospectus and the offering and sale of the Offer Shares in
other jurisdictions are subject to restrictions and may not be made except as permitted
under the applicable securities laws or an y applicable rules and regulations of such
jurisdictions pursuant to any registration made with or authorisation by the relevant
securities regulatory authorit i e sa sa ne x e m p t i o nt h e r e f r o m .
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–7 0–


--- page 82 ---
APPLICATION FOR LISTING OF THE SHARES ON GEM
We have applied to the Listing Committe e for the granting of, listing of, and
permission to deal in, our Shares in issue prior to the Share Offer and to be issued pursuant
to the Capitalisation Issue, the Share Offer a nd the exercise of options that may be granted
under the Post-IPO Share Option Scheme.
No part of our Shares is listed on or dealt in any other stock exchange and no such
listing or permission to deal in is being or is proposed to be sought in the near future.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of an y application will be void if permission for
the listing of, and dealing in, the Shares on the Stock Exchange has been refused before the
expiration of three weeks from the date of closing of the application lists or such longer
period (not exceeding six weeks) as may, within the said three weeks, be notified to our
Company by or on behalf of the Stock Exchange.
Only securities registered on the branch register of members of our Company kept in
Hong Kong may be traded on GEM unless the Stock Exchange otherwise agrees.
Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of listing and at all
times thereafter, our Company must maintain the ‘‘minimum prescribed percentage’’ of
25% of the issued share capital of our Company in the hands of the public.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Share Offer are re commended to consult their professional
advisers if they are in any doubt as to the taxation implications of subscribing for,
purchasing, holding or disposal of, and dealing in our Shares (or exercising rights attached
to them). None of our Company, our Directors and the Relevant Persons (Share Offer)
accepts responsibility for any tax effects on, or liabilities of, any person resulting from the
subscription for, purchase, holding or disposal of, dealing in, or the exercise of any rights in
relation to, our Shares.
REGISTER OF MEMBERS AND STAMP DUTY
All issued Shares upon completion of the Share Offer are freely transferable. The
principal register of members of our Company will be maintained in the Cayman Islands by
Conyers Trust Company (Cayman) Limited, and a branch register of members of our
Company will be maintained by our Hong Kong Share Registrar in Hong Kong. Unless our
Directors otherwise agreed, all transfer an d other documents of title of Shares must be
lodged for registration with, and registered by Tricor Investor Services Limited, our Hong
Kong Share Registrar.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–7 1–


--- page 83 ---
All the Offer Shares will be registered on the branch register of members of the
Company in Hong Kong. Only Shares registered on our Company’s branch register of
members maintained in Hong Kong may be traded on GEM. Dealings in the Shares
registered on our Company’s branch register of members maintained in Hong Kong will be
subject to Hong Kong stamp duty. If you are unsure about the taxation implications of
subscribing for the Offer Shares, or about purchasing, holding or disposing of or dealing in
them, you should consult an expert.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, our Shares in issue
and to be issued as mentioned in this prospectus on GEM and compliance with the stock
admission requirements of HKSCC, our Shares will be accepted as eligible securities by
HKSCC for deposit, clearance and settlement in CCASS with effect from the date of
commencement of dealings in our Shares on GEM or on any other date as determined by
HKSCC.
Settlement of transactions between Exchange Participants (as defined in the GEM
Listing Rules) is required to take place in CCASS on the second settlement day after any
trading day. Investors should seek the advice of their stockbroker or other professional
adviser for details of the settlement arrangem ents as such arrangements may affect their
rights and interests. All activities under CC ASS are subject to the General Rules of HKSCC
and HKSCC Operational Procedures in effect from time to time. All necessary
arrangements have been made enabling our Shares to be admitted into CCASS.
COMMENCEMENT OF DEALING IN THE SHARES
Dealing in the Shares on GEM is expected to commence on Tuesday, 2 July 2024.
Shares will be traded in board lots of 1,000 Shares each.
EXCHANGE RATE CONVERSION
Unless otherwise specified and for th e purpose of illustration only, amounts
denominated in SGD have been converted into HKD, and vice versa, in this prospectus
at the following rate:
S$1 : HK$5.9193
No representation is made that any amounts in SGD or HKD can be or could have
been at the relevant dates converted at the above rates or any other rates or at all.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
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--- page 84 ---
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. If there is any inconsistency between the names of
any of the entities mentioned in this prospectus which are not in the English language and
their English translations, the names in their r espective original languages shall prevail.
ROUNDING
In this prospectus, where information is p resented in thousands or millions, amounts
of less than one thousand or one million, as the case may be, have been rounded to the
nearest hundred, or hundred thousand, resp ectively. Amounts presented as percentages
have, in certain cases, been rounded to the nearest tenth of a percent. Any discrepancies in
any table or chart between totals and sums of amounts listed therein are due to rounding.
Accordingly, the total of each column of figu res as presented may not be equal to the sum of
the individual items.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
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--- page 85 ---
For further information on our Directors, please see the section headed ‘‘Directors and
Senior Management’’ in this prospectus.
DIRECTORS
Name Address Nationality
Executive Directors
Dato’ Sri CHUA Chwee Lee
(CAI Shuili) ( 蔡水理)
(Chairman and CEO )
6 Parry Avenue
Singapore 547228
Singaporean
Ms. JEE Wee Jene ( 余偉娟) 6 Parry Avenue
Singapore 547228
Singaporean
Mr. THNG Chong Kim ( 程章金) 26 Bayshore Road
#04-06 The Bayshore
Singapore 469972
Singaporean
Independent non-executive
Directors
Mr. TAN Chek Kian ( 陳志強) 8 Fudu Walk
Singapore 789506
Singaporean
Mr. ANG Yong Sheng, Jonathan
(HONG Yongsheng) ( 洪勇勝)
33 Keppel Bay View
#07-98
Singapore 098419
Singaporean
Mr. CHAN Yang Kang ( 田揚康)F l a t A , 1 6 / F , B l o c k 3
Residence Bel-Air
28 Bel-Air Avenue
Cyberport, Hong Kong
Singaporean
PARTIES INVOLVED
Sole Sponsor UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
Sole Overall Coordinator and
Sole Global Coordinator
UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–7 4–


--- page 86 ---
Joint Bookrunners UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
(in alphabetical order)
Cinda International Capital Limited
45/F, COSCO Tower
183 Queen’s Road Central
Central
Hong Kong
Maxa Capital Limited
Unit 2602, 26/F, Golden Centre
188 Des Voeux Road Central
Sheung Wan
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des Voeux Road Central
Sheung Wan
Hong Kong
Joint Lead Managers UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
(in alphabetical order)
Chiyu International Capital Limited
1/F, 100QRC
100 Queen’s Road Central
Hong Kong
Cinda International Capital Limited
45/F, COSCO Tower
183 Queen’s Road Central
Central
Hong Kong
Maxa Capital Limited
Unit 2602, 26/F, Golden Centre
188 Des Voeux Road Central
Sheung Wan
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des Voeux Road Central
Sheung Wan
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–7 5–


--- page 87 ---
Capital Market Intermediaries UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
(in alphabetical order)
Chiyu International Capital Limited
1/F, 100QRC
100 Queen’s Road Central
Hong Kong
Cinda International Capital Limited
45/F, COSCO Tower
183 Queen’s Road Central
Central
Hong Kong
Maxa Capital Limited
Unit 2602, 26/F, Golden Centre
188 Des Voeux Road Central
Sheung Wan
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des Voeux Road Central
Sheung Wan
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–7 6–


--- page 88 ---
Legal advisers to our Company As to Hong Kong law
Deacons
5th Floor, Alexandra House
18 Chater Road
Central
Hong Kong
As to Singapore law
Drew & Napier LLC
10 Collyer Quay
#10-01 Ocean Financial Centre
Singapore 049315
As to Malaysia law
Shearn Delamore & Co.
7th Floor, Wisma Hamzah-Kwong Hing
No. 1 Leboh Ampang
50100 Kuala Lumpur
Malaysia
As to Cayman Islands law
Conyers Dill & Pearman
29th Floor, One Exchange Square
8 Connaught Place
Central
Hong Kong
As to International Sanctions law
Hogan Lovells
11th Floor, One Pacific Place
88 Queensway
Hong Kong
Singapore Special Counsel
Sim Chong LLC
1N o r t hB r i d g eR o a d
#14-06 High Street Centre
Singapore 179094
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
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--- page 89 ---
Legal adviser to the Sole Sponsor and
the Underwriters
As to Hong Kong law
Norton Rose Fulbright Hong Kong
38/F Jardine House
1 Connaught Place
Central
Hong Kong
Auditor and Reporting Accountant PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity Auditor
22/F, Prince’s Building
Central
Hong Kong
Industry Consultant China Insights Industry Consultancy Limited
66/F The Centre
99 Queen’s Road Central
Hong Kong
Property Valuer Jones Lang LaSalle Corporate Appraisal And
Advisory Limited
7/F, One Taikoo Place
979 King’s Road,
Quarry Bay
Hong Kong
Transfer Pricing Consultant PricewaterhouseCoopers Limited
21/F, Edinburgh Tower
15 Queen’s Road Central
Hong Kong
Compliance Adviser UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
Receiving Bank Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–7 8–


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Registered office Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1-1111
Cayman Islands
Headquarters and principal place
of business in Singapore
No. 43 Tuas View Circuit
Singapore 637360
Principal place of business
in Hong Kong
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Company’s website address
www.metatechnologies.com.sg
(information on this website does not form part of this
prospectus)
Company Secretaries Mr. NG Cheuk Kin
CPA
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Ms. HOU Jing
No. 43 Tuas View Circuit
Singapore 637360
Audit committee Mr. TAN Chek Kian (Chairman)
Mr. CHAN Yang Kang
Mr. ANG Yong Sheng, Jonathan
Remuneration committee Mr. CHAN Yang Kang (Chairman)
Mr. TAN Chek Kian
Mr. ANG Yong Sheng, Jonathan
Nomination committee Dato’ Sri CHUA Chwee Lee (Chairman)
Mr. TAN Chek Kian
Mr. CHAN Yang Kang
Authorised representatives Dato’ Sri CHUA Chwee Lee
6 Parry Avenue
Singapore 547228
Mr. NG Cheuk Kin
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
CORPORATE INFORMATION
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Principal bankers United Overseas Bank Limited
80 Raffles Place
UOB Plaza
Singapore 048624
DBS Bank Limited
12 Marina Boulevard
Level 3
Marina Bay Financial Centre Tower 3
Singapore 018982
Principal share registrar and transfer
office in Cayman Islands
Conyers Trust Company (Cayman) Limited
Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1-1111
Cayman Islands
Hong Kong Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
CORPORATE INFORMATION
–8 0–


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The information and statistics set out in this section and other sections of this
prospectus were extracted from the report prepared by CIC, which was commissioned by us,
and from various official government publications and other publicly available publications.
The information from public official documents or statements has not been independently
verified by us or any of the Relevant Persons (Share Offer) (other than CIC) and no
representation is given as to their accuracy or completeness.
S O U R C E SO FI N F O R M A T I O N
CIC was commissioned to conduct an analysis of, and to report on, the global and
Singapore’s precision engineering industry and optical metalens industry, at a fee of
approximately US$118,000. The commission ed report was prepare d by CIC independent
from the influence of the Company and other interested parties. CIC’s services include,
among others, industry consulting, commercial due diligen ce, and strategic consulting. Its
consulting team has been tracking the latest market trends in multiple business sectors,
including the internet, environment, industry, energy, chemicals, healthcare,
manufacturing, consumer goods, transportation, agriculture, and finance, and has the
relevant and insightful market inte lligence in the above industries.
During the preparation of the commission ed report, CIC conducted both primary and
secondary research using a variety of resources. Primary research involved interviewing key
industry experts and leading industry participants. Secondary research involved analysing
data from various publicly available data sources, such as Singapore Department of
Statistics, Department of Statistics Malaysia, Semiconductor Equipment and Materials
International (SEMI), etc. The information and data collected by CIC have been analysed,
assessed, and validated using CIC’s in -house analysis models and techniques.
The market projections in the commissioned report are based on the following key
assumptions: (i) the overall social, economic, and political environment in Singapore is
expected to remain stable during the forecast p eriod; (ii) the Singapore’s economy is likely
to maintain a steady growth trajectory during the forecast period; (iii) the relevant key
industry factors are likely to continue to drive the precision engineering market across the
world and Singapore, e.g. growing end-use industries including semiconductor, aerospace,
and oil & gas, and advancement of high-precisi on machine tools provides a higher level of
accuracy, repeatability, and efficiency; (iv) t here is no extreme force majeure or unforeseen
industry regulations under which the mark et may be affected in either a dramatic or
fundamental way; and (v) global economy will gradually recover from the negative effects
of the COVID-19 pandemic.
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OVERVIEW OF THE PRECISION ENGINEERING INDUSTRY
According to the CIC Report, the precision engineering industry comprises precision
component engineering and system integration. Precision component engineering refers to
metal components manufacturing primarily through precision machining and precision
welding, the main value-added processes, with ti ght tolerance. System integration refers to
full systems and subsystems that are assembled together with components and/or other
subsystems. The industry serves a wide range of end-use industries, such as the
semiconductor, aerospace, an d oil & gas industry. In particular, the industry also serves
various segments such as display, consumer electronics, and data storage. As such, the
growth of the industry is highly related to the growth and broad trend of the end-use
industries.
Customers in certain end-use industries often require their suppliers to obtain
industry-specific certifications. The len gthy certification process may take from six
months to two or three years. For instance, Standardized Supplier Quality Assessment
(SSQA), a certification for quality management system used in the semiconductor industry,
is a key pre-requisite for industry leading sem iconductor original equipment manufacturers
(OEMs) when selecting suppliers.
Value chain analysis of the precision engineering industry
The value chain of the precision engineering industry can be divided into upstream,
midstream, and downstream. Midstream players create substantial value through precision
component engineering and system integration.
Value chain of the precision engineering industry
Upstream
Raw materials
Midstream Downstream
Stainless
steel Aluminium
Precision machining
Semiconductor
Aerospace
Oil & gas
Others
OEMs
(Original equipment
manufacturers)
Precision welding
Others(1)
Alloy steel Others
Machinery
System integration
Service providers and contract manufacturers End-use industries
Precision component
engineering
CNC machines TIG welding
machines
Measurement
machines Others
The Group’s positioning
Note:
(1) Others include precision surface treatment, p recision metal fabrication, heat treatment, etc.
Source: CIC Report
INDUSTRY OVERVIEW
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The upstream of the precision engineering industry consists of raw materials and
machinery suppliers. Stainless steel, alumi nium, and alloy steel are commonly used raw
materials in the industry. There are many types of machinery used including Computer
Numerical Controls (CNC) machines and Tungs ten Inert Gas (TIG) welding machines, etc.
Currently, CNC machines are the domin ant tools for machining materials.
The midstream of the precision engineering industry involves precision engineering
service providers and contract manufacture rs. The differences between service providers
and contract manufacturers are that: (i) the main responsibility of the service providers is
provision of precision component engineering and related services, while that of the
contract manufacturers is to manufacture an d assemble precision engineering components
in accordance with the specifications provi ded by OEMs, and (ii) the service providers
receive orders from both contract manufacturers and OEMs, whereas the contract
manufacturers directly receive orders from OEMs and may subcontract part of the
production process to service providers. It i s common for service providers and contract
manufacturers to outsource part of the process to other service providers along the value
chain.
The downstream of the precision engineering industry consists of OEMs and diverse
end-use industries of their products, mainly in cluding the semiconductor, aerospace, and oil
& gas industry. OEMs outsource all or a portion of the engineering and manufacturing of
the final products to the specialised suppliers, including contract manufacturers and service
providers. OEMs may require contract manufacturers to source components from certain
certified service providers to ensure the quality of products.
Market size of the global precision engineering industry
The global output value of the precision engineering industry increased from S$403.4
billion in 2019 to S$525.7 billion in 2023 at a CAGR of 6.8%, and is expected to increase to
S$646.5 billion in 2028, indicating a C AGR of 4.2% between 2023 and 2028.
With a broad range of drivers including increasing demand for mobile devices driven
by evolving 5G technology, new CPU architectur es, and the development of cloud, artificial
intelligence, and machine lea rning applications, the glob al semiconductor market has
witnessed significant growth during 2021 and 2022. Despite experiencing a temporary
downturn in 2023 due to the de-stocking of inventories accumulated in the semiconductor
market, the semiconductor sector of the global precision engineering industry has witnessed
robust growth between 2019 and 2023, with a CAGR of 17.7%. Hence, the global
semiconductor manufacturing industry is ex pected to resume growth, starting from the
third quarter of 2024, fueled by the surge in de mand for artificial intelligence and sales of
electronics products and integrated circuits. Looking forward, the global output value of
semiconductor sector of the precision engin eering industry is expected to reach S$109.6
billion by 2028 with a CAGR of 14.2% between 2023 and 2028. The oil & gas sector of the
precision engineering industry is expected to register a CAGR of 9.9% between 2023 and
2028 considering the oil & gas industry is cur rently and will remain critical to the global
economic activity and prosperity.
INDUSTRY OVERVIEW
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Total output value of the precision engineering industry,
by industry sector, Global, 2019–2028E
S$ billion
700
500
600
400
300
200
100
0
CAGR 2019–2023 2023–2028E
Oil & gas
Others
Aerospace
Semiconductor
4.5% 3.7%
17.7% 14.2%
12.8% 9.9%
6.0% 1.7%
Total 6.8% 4.2%
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
249.2
29.4
110.9
403.4
13.9
230.3
35.8
116.3
398.2
15.8 285.7
52.7
121.6
477.9
17.9
299.2
56.9
127.0
503.3
20.2
314.4
56.4
132.4
525.7
22.5
326.5
59.3
137.8
548.6
25.0
331.8
69.4
143.2
572.0
27.6
336.7
80.8
148.5
596.1
30.1
340.0
94.1
153.9
620.9
32.9
341.7
109.6
159.1
646.5
36.0
Note: Others include medical devices and automotive, etc.
Source: SEMI, CIC Report
The U.S. represents the largest market in t he global precision engineering industry in
2023. Its output value increased from S$1 08.9 billion in 2019 to S$132.4 billion in 2023,
registering a CAGR of 5.0% during the period, and is expected to further increase to
S$153.9 billion in 2028, indica ting a CAGR of 3.1% between 2023 and 2028. Singapore and
Malaysia represent 2.0% and 2.3% of the global precision engineering industry in 2023,
respectively, and are expected to grow with a CAGR of 6.3% and 4.4%, respectively,
between 2023 and 2028. Other countries include China, Japan and Germany, etc.
Total output value of the precision engineering industry,
by geographic location, Global, 2019–2028E
S$ billion
700
500
600
400
300
200
100
0
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
275.3
9.4
108.9
403.4
9.8 9.8
273.5
9.4
105.5
398.2
332.4
10.4
124.3
477.9
10.8
351.5
128.8
503.3
11.811.2
370.4
132.4
525.7
12.310.6
388.4
136.0
548.6
12.911.3
407.0
139.5
572.0
13.512.0
426.2
143.1
596.1
14.012.8
444.2
148.4
620.9
14.713.6
462.9
153.9
646.5
15.314.4
CAGR 2019–2023 2023–2028E
5.0% 3.1%
6.0% 4.4%
3.0% 6.3%
7.7% 4.6%
Total 6.8% 4.2%
Singapore
Others
U.S.
Malaysia
Note: Others include China, Japan and Germany, etc.
Source: The World Bank, Singapore Department of Statistics, Department of Statistics Malaysia, CIC
Report
INDUSTRY OVERVIEW
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OVERVIEW OF SINGAPORE’S PRECISION COMPONENT ENGINEERING
INDUSTRY
The Singapore government values the importance of the precision engineering industry
and has introduced favourable policies and measures such as Industry Transformation
Maps (ITMs) and Precision Engineering Industry Digital Plan (IDP) to support the
development and growth of the industry. The precision engineering industry comprises
precision component engineering and system integration. The output value of precision
component engineering in Sin gapore increased from S$4,726.2 million in 2019 to S$5,352.9
million in 2023, registering a CAGR of 3.2% dur ing the period. It is expected to further
increase to S$7,306.7 million in 2028, indicating a CAGR of 6.4% between 2023 and 2028.
The output value of system integration in Sin gapore also increased from S$4,705.8 million
in 2019 to S$5,271.8 million in 2023, registering a CAGR of 2.9% during the period, and is
expected to increase to S$7,097.7 million i n 2028 with a CAGR of 6.1% between 2023 and
2028.
Total output value of the precision engineering industry, Singapore, 2019–2028E
S$ million
15,000
10,000
5,000
4,705.8
4,726.2
9,432.0
4,665.6
4,698.5
9,364.1
5,197.2
5,248.2
10,445.4
5,570.8
5,640.9
11,211.7
5,600.1
5,702.0
11,302.1
5,946.1
6,071.0
12,017.1
6,310.5
6,460.8
12,771.3
0
CAGR
Total
2019–2023
3.2%
2.9%
3.0%
2023–2028E
6.4%
6.1%
6.3%
System integration
Precision component engineering
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
6,694.1
6,872.4
13,566.5
7,097.7
7,306.7
14,404.4
5,271.8
5,352.9
10,624.7
Source: Economic Development Board, CIC Report
The downstream segments of the precision component engineering industry include
aerospace, semiconductor and oil & gas indust ry. The aerospace represents the largest
segment in the precision component engineering industry in Singapore as Singapore is the
leading aerospace hub within Asia, offering a comprehensive range of maintenance, repair
and overhaul (MRO) services and advanced man ufacturing capabilities. As a one-stop shop
for all aerospace needs, many of the world’s leading aerospace related OEMs and MRO
service providers have been consolidating their presence in Singapore as a regional hub in
Asia. In the semiconductor segment in Singapore, the output value increased from S$752.8
million in 2019 to S$1,241.6 million in 2022, an d slightly declined to S$1,031.4 million in
2023, with a CAGR of 8.2% between 2019 and 2023. The decline in output value in 2023
was due to the de-stocking of inventories accumulated in the global and Singapore’s
semiconductor industry. The global and Singapore’s semiconductor market is expected to
resume growth trend starting from the third quarter of 2024, fueled by a surge in demand
for artificial intelligence te chnologies and sales of electro nic products and integrated
circuits. The semiconductor sector of the precision component engineering industry in
INDUSTRY OVERVIEW
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Singapore is expected to further grow to S$ 1,955.8 million in 2028, indicating a CAGR of
13.7% between 2023 and 2028, due to the rapid development of downstream industries such
as 5G technology, consumer elec tronics, and cloud service.
Total output value of the precision component engineering industry,
by industry sector, Singapore, 2019–2028E
S$ million
7,000
7,500
6,000
6,500
5,500
5,000
4,500
4,000
3,500
3,000
2,500
0
CAGR 2019–2023 2023–2028E
Oil & gas
Others
Aerospace
Semiconductor
4.5% 4.5%
8.2% 13.7%
7.9% 10.9%
0.3% 3.5%
Total 3.2% 6.4%
2,472.8
232.7
1,616.0
1,031.4
5,352.9
2,598.3
259.3
1,660.3
1,184.1
5,702.0
2,729.4
288.2
1,701.6
1,351.8
6,071.0
2,802.1
319.6
1,803.5
1,535.6
6,460.8
2,873.2
353.7
1,736.5
1,909.0
6,872.4
2,942.3
390.7
1,955.8
2,017.9
7,306.7
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
2,447.7
1,353.9
752.8
4,726.2
171.8
2,357.5
1,341.3
804.4
4,698.5
195.3
2,516.2
1,492.9
1,031.9
5,248.2
207.2
2,572.3
1,593.1
1,241.6
5,640.9
233.9
Note: Others include medical devices and automotive, etc.
Source: Economic Development Board, CIC Report
Key growth drivers of Singapore’s preci sion component engineering industry
The rapid growth of downstream industries such as semiconductor, aerospace, and oil &
gas industry: Precision component engineering is w idely applied to produce components
with complex structures or certain special technical parts in many growing industries
including the semiconductor, aerospace, and oil & gas industry. Revenue of global
semiconductor industry is projected to re ach US$880.7 billion in 2028 with a CAGR of
10.6% between 2023 and 2028. Global sales of s emiconductor manufacturing equipment
increased from US$61.7 billion in 2019 to US $106.3 billion in 2023, registering a CAGR of
14.6% between 2019 and 2023. The COVID-19 pandemic has disrupted global supply
chains, leading to global chip shortage. The lingering effect of the global chip shortage and
the surge in demand for electronic products have consequently led to increase in demand in
the semiconductor industry in 2022. In 2022, with the eventual uplift of COVID-19
preventive and lock-down measures by governments in different countries, in order to
secure the production capacity of their supp liers in the post COVID-19 period to cope with
the expected growing demand for chips, semiconductor companies increased its capital
expenditure and investment in semiconductor manufacturing equipment. Therefore, the
surge in production and demand resulted in ac cumulation of inventories during 2022. This
then caused semiconductor companies and semiconductor equipment manufacturing
companies to slow down their purchases and undertake periodic de-stocking measures in
2023. The global semiconductor manufacturing equipment market is expected to witness a
transition year in 2024 from the de-stocking of inventories accumulated starting in 2023 and
have a strong rebound in 2025. Driven by capacity expansion, new fabrication projects, and
demand for advanced equipment and solutions across the front-end and back-end segments,
including wafer processing, testing, assembly, packaging, etc., of the semiconductor
INDUSTRY OVERVIEW
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industry, and supportive policies of the semiconductor industry across the world, including
(i) Singapore Manufacturing 2030 vision (the government’s 10 year plan to increase the
manufacturing value-add of Singapore by 50% by 2030 and for Singapore to become a
global business, innovation and talent hub for advanced manufacturing). In this regard,
Singapore has successfully attracted leading in ternational semiconductor companies, such
as Global Foundries, Siltronic and UMC to set up operations in Singapore. As a result, our
Group, which possesses ad vanced manufacturing capab ility to provide precision
engineering services for international companies in the semiconductor and other sectors,
is considered one of the advanced manufacturing players to benefit from the favourable
government policies; (ii) CHIPS and Science Act (a U.S. federal statute enacted in 2022
which provides support to develop domestic production of semiconductors with incentives
such as subsidies and investment tax credi ts in the U.S.). It was announced in April 2024
that a U.S. memory chip maker, Micron Techn ology, would receive US$6.1 billion in grants
under the act from the U.S. Commerce Department to support its plan for the domestic chip
factory projects in New York and Idaho; and (iii) The European Chips Act (an act came into
force in 2023 to incentivise public and private investments in semiconductor manufacturing
facilities in Europe). Under the chip act, additi onal public and private investments of more
than €15 billion will complement existing prog rammes and actions in research and
innovation in semiconductors such as Horizon Europe and Digital Europe Programme, the
global sale of semiconductor manufacturing equipment is expected to further increase to
US$180.6 billion in 2028, registering a CAGR o f 11.2% between 2023 an d 2028. The global
aerospace and defence market and the global energy investment (including investment in the
oil & gas industry) are expected to register a CAGR of 4.3% and 9.8% between 2023 and
2028, respectively. The continual growth of the semiconductor, aerospace, and oil & gas
industry in the world drives up the demand and presents more opportunities for precision
components and supports the further development of Singapore’s precision component
engineering industry.
The advancement of high-precision machine tools provides a higher level of accuracy,
repeatability, and efficiency: The scope of the precision component engineering industry is
expanding due to the advancement of high-pr ecision machine tools. Major advancements
include (i) multi-axis CNC machines; (ii) more automated operations; and (iii) more
integrated machining centres. These advancements provide a higher level of accuracy,
repeatability and efficiency du ring production. Currently, major downstream sectors of the
precision component engineering industry, such as automotive and semiconductor
industries, are showing a trend toward more p recise and miniaturised components which
poses the need for advanced high-precision ma chine tools. With the rising technological
capabilities, further develop ment of high-precision machine tools is expected and will
continue to fuel the industry in the long run.
The favourable business environment that supports the development of the precision
component engineering industry in Singapore: The favourable policies and incentives in
Singapore promises the precision component engineering industry a high potential future
and drives this industry towards a digital revolution and global expansion. The Singapore
government values the importance of the precision component engineering industry and has
introduced various encouraging policies and measures to help the industry prosper. Under
the Research, Innovation and Enterprise (RIE) 2025 Plan, the Singapore government
INDUSTRY OVERVIEW
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planned to invest S$25 billion in research, inno vation and enterprise activities between 2021
and 2025. One of the objectives is to leverage the national research and development efforts
to reinforce Singapore’s position as a global business and innovation hub for advanced
manufacturing and connectivity. RIE 2025 efforts will be organised along four strategic
domains, among which the Manufacturing, Trade and Connectivity (MTC) is the key focus
area. To support the manufacturing activitie s in Singapore, Agency for Science, Technology
and Research (A*STAR), Singapore’s lead public sector R&D agency, has established three
public-private partnership pl atforms to drive innovation, knowledge transfer and Industry
4.0 technology adoption, which aim to provide continuous support to companies, including
those in precision engineering industry, to gain access to research infrastructure and
expertise. RIE 2025 also pays great attentio n to strengthening the R&D capabilities in the
semiconductor industry in Singapore. Acco rding to the RIE 2025, innovation is and will
continue to be critical to the nextbound of Singapore’s industry transformation and
economic growth. To reinforce this initiativ e, ITM 2025 (Industry Transformation Maps
2025) also provides that ‘‘The Singapore Economic Development Board (EDB) will
continue to attract manufacturing investme nts to strengthen Singapore’s leadership
position in high-value components such as semiconductors’’ and ‘‘enable the precision
engineering industry to capit alise on digital manufacturin g technologies and platforms to
innovate and deliver competitive products and services for global markets’’. Such plans are
expected to bolster the development of the pr ecision engineering industry in Singapore and
hence our Group’s business and future prospects. Precision Engineering Industry Digital
Plan (IDP) was developed in 2021 to support small-to-medium companies in Singapore that
provide precision engineering services with digital solutions and training to enhance
employees digital skills. The favourable busine ss environment for the precision component
engineering industry in Singapore is expected to continue in the future, and therefore will
support the further development of the industry.
Future trends of Singapore’s precisi on component engineering industry
One-stop-shop manufacturing service: The production of precision engineering
equipment involves many manufacturing processes including metal fabrication, precision
machining, precision welding, surface treatment, cleaning & packaging, assembly, etc.
Service providers and contract manufacturers usually have different mix of in-house
manufacturing capabilities which consis t of one or more of such services. Major
downstream customers have been streamlining and consolidating their supply chains due
to convenience and cost-effectiveness considerations. They are looking for manufacturers
who can provide a one-stop-shop manufacturing service, covering an extensive range of
services. Manufacturers may also strengthe n their competitiveness by expanding their
service scopes through vertical integrat ion of different manufacturing processes.
One-stop-shop manufacturing service providers can reduce the lead time spent on
production and transportati on, reduce operational co sts, ensure stability of the
deliverables and increa se overall efficiency.
Increasing requirements for high-end equipment and skilled manpower: The end-use
industries of the precision component engineering industry are continuously evolving in
technology, applications and equipment. Also, in order to minimise massive capital
commitment in each manufacturing process, high-end precision manufacturers are dividing
INDUSTRY OVERVIEW
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the entire production processes into more parts and outsourcing to different midstream
contract manufacturers and service prov iders. Therefore, midstream contract
manufacturers and service providers in the precision component engineering industry are
expected to demand for more advanced capab ilities in high-end equipment and skilled
manpower to meet their customer’s requirements.
The continuous supportive regulatory environment in Singapore: Precision component
engineering has been identified as one of the key growth factors for Singapore’s
manufacturing sector, supporting the production of various complex components
required in end-use industries including semiconductors, oil & gas, aerospace, and
consumer electronics. More supportive policies, including the refreshed Industry
Transformation Maps (ITMs) which reflected Singapore’s 2025 ambition for building a
vibrant ecosystem of digitalised precision eng ineering enterprises with a global footprint,
are expected to be carried out to support the development of Singapore’s precision
component engineering industry, providing a supportive regulatory environment for future
growth.
COMPETITIVE LANDSCAPE OF SINGAPORE’S PRECISION COMPONENT
ENGINEERING INDUSTRY IN TH E SEMICONDUCTOR SEGMENT
Singapore has a world-class manufacturing ecosystem with a combination of advanced
technology, manufacturing excellence, and globalisation in operations management. It has
attracted many multinational advanced manufacturing companies, to establish their Asia
Pacific headquarters in Singapore. To estimate the market share and ranking of our Group
compared to other comparable companies in the semiconductor segment, where our Group
mainly operated in, the following metrics are c onsidered: (i) similar industry segment focus
(i.e. the semiconductor equipm ent industry); (ii) similar manufacturing capabilities (i.e.
manufacturing precision components mainly through precision machining and precision
welding); (iii) the interview result of estimate d ranking, revenue, and business segmentation
from verified industry experts; and (iv) the rese arch result from annual reports, articles, and
government database such as Sin gapore Department of Statistics.
The competitive landscape of Singapore’s precision component engineering industry in
the semiconductor segment is fragmented w ith at least 300 market participants and
dominated by the leading players. In 2023, the top ten market players, in terms of revenue,
accounted for approximately 48.5% of the market share of semiconductor segment of
precision component engineering industry in Singapore. Market participants include service
providers and contract manufacturers with in-house production capabilities, including
internationally renowned companies with adv anced manufacturing capabilities. It is not
uncommon for market participants in the semic onductor segment of precision component
engineering industry to have a highly concentrated customer base since the end-use
semiconductor manufacturing equipment industry is concentrated and dominated by a
limited pool of advanced semiconductor equipment manufacturers with the top three
market players accounting for more than 40% of the global market share in terms of
revenue in 2023, and precision components ar e often customised to meet the specific needs
of a particular customer, which leads to a strong mutual relationship between the supplier
and the customer. The semiconductor industry requires a high level of accuracy,
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repeatability and efficiency in the production process of preci sion component engineering
and is thus, characterised by significant barr iers to entry, including advanced technologies
and know-how, requisite licences and certi ficates, large capital investments, and
well-established customer relationships. Service providers, contract manufacturers and
OEMs build a mutual dependence and complementary business relationship, which poses
OEMs a high switching cost to assess and perform due diligence on new suppliers and to
ensure the quality of products supplied by new suppliers conforms with their requirements,
resulting in more and more market share gradu ally accumulated by top players over time.
In 2023, our Group ranked fifth in the semiconductor segment of the precision
component engineering industry in Singapore, with a market share of 3.3%, in terms of
revenue.
Top ten market participants in the semiconductor segment of
precision component engineering industry, in terms of revenue, Singapore, 2023
Rank Company Company background
Segmented
revenue (1) ,
2023,
S$ million
Market
share
1 Company A Established in 2000, Company A is a Singapore
Exchange-listed company headquartered in Singapore
specialising in manufacturing semiconductor
equipment components and (sub)systems
120.0 11.6%
2 Company B Established in 1999, Company B is a Nasdaq-listed
company headquartered in the United States
specialising in manufacturing fluid delivery
components and (sub)systems
102.7 10.0%
3 Company C Established in 2005, Company C is a non-listed
company headquartered in Singapore specialising
in manufacturing precision flow control
components and (sub)systems
96.9 9.4%
4 Company D Established in 1992, Company D is a non-listed
company headquartered in Singapore specialising
in manufacturing precision metal components and
(sub)systems for various end-use industries
including the aerospace, oil & gas, and
semiconductor industries
53.9 5.2%
5 Our Group Established in 2000, our Group is a precision
engineering services provider principally based in
Singapore, specialisin g in providing precision
machining and precision welding services for
international customers
34.1 3.3%
6 Company E Established in 1999, Company E is a Singapore
Exchange-listed company headquartered in
Singapore specialising in manufacturing metal and
plastic components and ( sub)systems for various
end-used industries including the automotive,
medical & healthcare, and semiconductor
industries
33.6 3.3%
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Rank Company Company background
Segmented
revenue (1) ,
2023,
S$ million
Market
share
7 Company F Established in 2000, Company F is a Singapore
Exchange-listed company headquartered in
Singapore specialising in manufacturing precision
metal components and (sub)systems for the
semiconductor and electronics test industries
28.4 2.7%
8 Company G Established in 1983, Company G is a Singapore
Exchange-listed company headquartered in
Singapore specialising in manufacturing high
precision components and tools for the
wafer-fabrication and assembly processes
13.1 1.3%
9 Company H Established in 1980, Company H is a Hong Kong
Exchange-listed company headquartered in
Singapore specialising in manufacturing precision
metal components for the semiconductor and
machinery industries
9.5 0.9%
10 Company I Established in 1989, Company I is a non-listed
company headquartered in Singapore specialising
in manufacturing precision metal components and
(sub)systems for the data s torage, automotive, and
semiconductor industries
8.3 0.8%
Subtotal 500.5 48.5%
Others 530.9 51.5%
Total 1,031.4 100.0%
Source: CIC Report
Note:
(1) Segmented revenue includes revenue of precis ion component engineering in the semiconductor
segment.
Competitive advantages of our Group
The competitive advantages of our Group include (i) established long-standing
business relationships with reputable international customers, (ii) seasoned and visionary
management team supported by technical talents, (iii) machinery and technological
know-how, and (iv) possession of necessary ce rtifications and qualifications. First,
through establishing a proven track record in providing quality and efficient services, our
Group has been selected by our customers as a strategic and long-term supplier.
Specifically, our Group has built and maintai ned strong relationships with world-class
OEMs and contract manufacturers customers for many years. Second, our Group has
accumulated an extensive operational and ma nagerial experience in the industry and has
built a dedicated and experienced workforce to cater for our customers’ product
requirements and support our continuous business growth. Third, our Group has
precision machinery, including large and mul ti-axis CNC machines for producing large
INDUSTRY OVERVIEW
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format vacuum chambers with an accuracy of +/– 10 mm while the industry average
accuracy is around +/–100 μm to +/–10 μm (the lower the mm, the higher the accuracy),
and accumulated technological know-how through years of operation. This has equipped
our Group with an advanced capability in the industry and allows our Group to produce
highly complex components efficiently when compared to industry peers. Fourth, our
Group has been accredited with industry-e ssential qualifications in the production
technologies and quality control systems and become an approved supplier of Customer
A. The processes of obtaining such certifications and becoming a qualified supplier take
time and are testimony of recognition in the industry.
The Singapore’s precision component engineering industry is highly fragmented and
dominated by small and medium enterprises, w hich normally focus on certain end-markets
and/or product segments. As a high value-added process in the precision engineering
industry, manufacturing know-how and proven record of success are important to the
end-customer which require a significant peri od of time to accumulate. Due to the necessity
to obtain components on a consistent and reliable basis, downstream customers generally
prefer to work with a limited number of reliable and reputable suppliers with proven
capability and product quality which allow t hem to purchase highly complex components
efficiently. The mutual dependence and complementary business relationship between
suppliers and customers is therefore establishe d based on trust and reliability. Therefore,
proven capability and establishe d long-standing business rela tionship with internationally
renowned customers have formed the core competitive advantages of the Group in the
highly fragmented market.
Entry barriers for the precision component engineering industry
Large capital investment in high-end machinery: Existing market participants have
continuously invested significantly over years. To compete with existing market
participants, new entrants need to invest a large amount of capital in purchasing
advanced equipment and building the relevant i nfrastructure to achieve high accuracy,
repeatability and efficiency. F or instance, a five-axis CNC cutting machine costs millions of
SGD. Also, the cost related to equipment maintenance and upgrading is substantial,
making it difficult for new entrants to compet e with existing players if they do not process
the ability to make such huge capital commitment.
Possession of skilled workers and technological know-how: The precision component
engineering industry serves highly technical sectors, such as the semiconductor industry.
Due to the high technical skills required by t he industry, there is only a limited number of
skilled workers available on the market. Technici ans for precision component engineering
are under intense competition in Singapore and Malaysia, making it hard for new entrants
to recruit a sizeable pool of qualified workers. Also, existing market participants have
accumulated considerable technological know- how, which is essential to the success of their
business, through years of operations. It requires new entrants a long period of time to
acquire sufficient knowledge and experience to compete with existing players.
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Proven capability and stable re lationships with customers: Downstream customers of the
precision component engineering industry are mostly leading companies in semiconductors,
aerospace, automobile, and oil & gas industry. Due to the necessity to obtain the required
components on a consistent and reliable basis, downstream customers generally prefer to
work with a limited number of reliable and reputable suppliers with proven capability and
product quality. The mutual dependence and complementary business relationships
between suppliers and customers in the industry is established based on trust and
reliability. It is hard for new entrants to compete with existing players because they lack the
relative experience and are unable to establish a stable relationship with downstream
customers within a short period of time.
Qualification and certification requirements: Market participants need to comply with
local regulations and are expected to obtain certa in qualifications and certifications, such as
ISO 9001 : 2015. Also, professional standard organisations, such as American Society of
Mechanical Engineering (ASME) and Americ an Welding Society (AWS), make rules and
classifications for welding positions, techniques and procedures. ASME provides ASME
Boiler and Pressure Vessel Code (BPVC) certification and AWS provides Certified Welder
(CW) certification and Certified Welding Inspector (CWI) certification. Welders must be
certified in each welding position to perform the respective type of welds. Leading
downstream customers also require their suppliers to obtain certain industry-specific
certifications, such as SSQA for the semiconductor industry. The whole process of
obtaining such certifications is time-cons uming and may last from six months to two or
three years, deterring new entrants from entering the market easily.
Key success factors for the precision component engineering industry
Ability to train and sustain skille d and experienced employees: The precision component
engineering industry is a highly technical industry. The success of a business depends on the
retention and/or recruitment of new skilled and experienced employees. Companies with
more competitive compensatio n packages and systematic training courses are more likely to
attract and recruit skilled and experienced e mployees, and thus, contributing to their
long-term development.
Reliable and cost-advantageous supply chain for sourcing raw materials and service
providers: Maintaining a reasonable level of raw mat erial stock and a list of reliable service
providers are important to the operation of the business. Therefore, it is important to have
a reliable supply chain to ensure stability of t he cost and transportation time in order to
avoid or minimise any delay or shortage in the supply of raw material or delay in delivery of
products, which may undermine the company’s reputation.
Continuously upgrading equipment and software to maintain competitiveness: The
technology keeps evolving and downstream customers are posing higher requirements for
precision components. To maintain competitiveness, companies may need to upgrade and
debottleneck the existing equipment and software in a timely manner.
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Consistent production of quality components: As the downstream customers are highly
concentrated and usually prefer to work with only a limited number of reliable suppliers,
companies that prove their abilit y to deliver high-quality products consistently are likely to
receive more orders and gain more market shares in the long term.
Strong and long-standing relationship with customers: It is important for service
providers and contract manufacturers to maintain strategic long-term relationships with the
OEMs for business opportunities. Therefore, the establishment of mutual dependence and
complementary business relationship with customers provides for more sustainable business
growth in the future.
Cost analysis of the precision component engineering industry in Singapore
The primary cost of precision component engineering service providers include raw
material costs and labour costs. Raw materials mainly include iron, steel and aluminium.
The prices of iron & steel and aluminium directly affect the cost of raw materials in the
precision component engineering industry in Singapore. Metal raw materials in Singapore
mainly rely on imports from certain major economies such as Malaysia, U.S., the European
Union (EU) and South Africa. Prices of iron & steel and aluminium in Malaysia, U.S., EU
and South Africa generally maintained an upward trend from 2019 to 2023 without much
material fluctuation, except for a drop in iron & steel prices from US$4.8/kg to US$3.2/kg
and a rise in aluminium prices from US$6.4/kg to US$10.1/kg in Malaysia from 2019 to
2020, which could affect the operation costs of the service providers in the precision
engineering industry in Singapore and Malaysia, including our Group. The drop in iron &
steel prices in Malaysia in 2020 was due to factors such as the lockdown measures during
COVID-19 pandemic which reduced demand and prices for steel in key end-use industries,
coupled with the excess steel production capa city in Malaysia, while the rise in aluminium
prices was due to a large amount of aluminium being demanded and exported to China from
Malaysia as China was then under pressure of environmental protection commitment and
limited the production of aluminium domest ically, which drove up demand and prices of
aluminium imported from Malaysia. The pri ces of iron & steel and aluminium are expected
to steadily grow further at CAGRs ranging from 1.1% to 4.0% and 0.3% to 5.7% in
Malaysia, U.S., EU and South Africa over the period from 2023 to 2028.
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Price of iron & steel (1) , Malaysia, U.S., EU
and South Africa, 2019–2028E
Price of aluminium (1) , Malaysia, U.S., EU
and South Africa, 2019–2028E
US$/kg
South Africa –2.0% 1.1%
European Union 2.7% 2.4%
U.S. 3.6% 1.5%
Malaysia –6.4% 4.0%
CAGR 2019–2023 2023–2028E
0.0
5.0
7.5
2.5
10.0
5.4
3.4
3.0
6.3
3.1
4.8
5.1
6.1
2.6
3.2
5.2
5.9
2.8
3.5
5.7
6.8
2.9
3.7
5.7
7.0
3.0
4.2
6.2
7.4
2.9
4.1
7.3
2.9
3.9
5.9
7.1
3.0
4.4
6.3
7.5
3.0
4.5
20202019 2021 2022 2025E 2024E2023 2026E 2027E 2028E
6.4
7.6
6.0
US$/kg
0.0
10.0
5.0
20.0
15.0
South Africa 1.7% 1.9%
European Union 3.3% 4.0%
U.S. 2.9% 0.3%
Malaysia 11.1% 5.7%
CAGR 2019–2023 2023–2028E
12.8
11.4
4.8
10.1
12.8
12.5
5.4
9.4
13.1
12.8
5.4
9.9
14.3
13.7
4.9
9.7
14.4
14.4
5.0
10.4
15.0
5.1
14.4
11.1
15.6
5.2
14.4
11.8
16.2
5.3
14.5
12.3
16.7
5.3
14.5
12.8
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
12.7
12.1
4.6
6.4
Source: The World Bank, CIC Report
Note:
(1) The prices are based on average import and expor t prices in Malaysia, the U.S., the EU and South
Africa.
With the continuous development of the economy, the average monthly salaries in the
manufacturing industry in Singapore and Malaysia have been continuously increasing
during 2019 to 2023 with the CAGR of 4.3% and 7.7%, respectively. In particular, the
average monthly salaries in the manufacturing industry increased by 6.8% and 31.0% in
Singapore and Malaysia, respectively in 2022 due to economic recovery from COVID-19
pandemic in both countries and the increase in minimum wage in Malaysia. With the
expected gradual recovery of the global economy (including Singapore and Malaysia) from
the COVID-19 pandemic, the average monthly salaries in the manufacturing industry in
Singapore and Malaysia are expected to maint ain steady growth over the next five years
with the CAGR of 3.1% and 5.7%, respectively from 2023 to 2028.
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Average monthly salaries in the
manufacturing industry, Singapore,
2019–2028E
Average monthly salaries in the
manufacturing industry, Malaysia,
2019–2028E
S$
4.3% 3.1%
CAGR 2019–2023 2023–2028E
3,000
5,000
5,490.0 5,569.2
5,770.0
6,160.8
6,959.2
6,727.8
6,485.3
7,177.6
20202019 2021 2022 2025E 2024E2023 2026E 2027E 2028E
7,381.4 7,568.9
4,000
6,000
7,000
8,000
RM
7.7% 5.7%
CAGR 2019–2023 2023–2028E
1,000
3,000
2,540.02,620.0
2,610.0
3,420.0
4,072.7
3,877.8
3,524.2
4,267.7
4,462.7
4,657.6
2,000
4,000
5,000
20202019 2021 2022 2025E 2024E2023 2026E 2027E 2028E
Source: Singapore Department of Statistics, Department of Statistics Malaysia, CIC Report
Future threats and challenges of the precision component manufacturing industry
Shortage of skilled and experienced manpower: The precision component engineering
industry in Singapore generally faces a sh ortage of skilled and experienced manpower,
attributable to factors, including the Singap ore government’s policy restricting foreign
manpower hiring and the ageing working population.
Regional competition: The precision component engineering industry is fragmented and
highly competitive. Singapore’s position in the precision component engineering industry is
threatened by the growth and entry of service providers and contract manufacturers from
overseas countries.
Digitalisation: The precision component engineerin g industry is becoming increasingly
digital, with the use of digital design tools and simulation software. This presents
opportunities to improve efficiency and qualit y, but also requires new skills and knowledge.
Influence by end-use industries: The major end-use industries of precision component
engineering industry, including semiconductor, aerospace and oil & gas, are highly
dependent on the factors such as global economic cycle, political environment and
demand-supply relationship, which can ultimately affect the development of the precision
component engineering industry.
OVERVIEW OF THE OPTICAL METALENS INDUSTRY
The optical metalens is defined as a flat lens technology that uses metasurfaces to focus
light. The technology can be used in optical ap plications that take advantage of the flat
surface, with higher focusing efficiency, tuna bility, etc. to reduce thickness and increase
optical performance, compared to classic c urved refractive lenses mainly used in
conventional optical devices.
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The current global optical metalens market is still at its early stage of
commercialisation with China and the U.S. le a d i n ga tt h ef o r e f r o n to ft h er e s e a r c ha n d
development. As the design and manufacturing technology gradually get mature and as the
technology awareness increases across the glo bal market, it is expected that more companies
will enter the field in the future.
Value chain of the optical metalens industry
Value chain of the optical metalens industry can be divided into upstream, midstream,
and downstream. The upstream of the optical metalens industry value chain is composed of
raw materials for substrate and metas urfaces such as silicon dioxide (SiO
2), silicon (Si),
germanium (Ge), etc. The midstream of the o ptical metalens industry value chain is the
manufacturing of optical metalenses. Based on metasurface materials, optical metalenses
are normally categorised into dielectric o ptical metalenses and plasmonic optical
metalenses. The downstream industries of optical metalenses include end-use industries
such as new energy vehicle (NEV), smartphone, AR/VR, IoT, biomedical, security
monitoring, aerospace, industrials, etc.
Key growth drivers of the optical metalens industry
Key growth drivers of the optical metalens in dustry include (i) the rapid growth of the
NEV industry, (ii) the contin uous development of the 5G sma rtphone industry, and (iii) the
advancement of global manufacturing technology. The NEV and 5G smartphone industries
around the world have been developing rapidly. As optical metalenses are potential
substitutes for conventional optical components in NEVs and 5G smartphones, the
continuously growing NEV and 5G smartphone industries are set to provide the optical
metalens market with strong growth momentum. Meanwhile, driven by progress constantly
made in information technology, advanced manu facturing technology is rapidly evolving
across the world. This is expected to provide the optical metalens industry with more
advanced manufacturing techniques and resources, and ultimately drive the market to
grow.
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LAWS AND REGULATIONS IN SINGAPORE
Workplace Safety and Health Act
The Workplace Safety and Health Act 2006 of Singapore (‘‘ WSHA ’’) provides, among
other things, that every employer has the duty to take, so far as is reasonably practicable,
such measures as are necessary to ensure the safety and health of the employer’s employees
at work.
These measures include, among other things, providing and maintaining a work
environment which is safe, without risk to heal th, and adequate as regards to the facilities
and arrangements for the employee’s welfare at work; ensuring that adequate safety
measures are taken in respect of any machinery or equipment used by the employees;
ensuring that the employees are not exposed to hazards in their workplace or near their
workplace; developing and implementing procedures for dealing with emergencies; and
ensuring that the employees have adequate instruction, information, training and
supervision.
More specific duties imposed by the relevant regulatory body, the Ministry of
Manpower (‘‘MOM’’), on employers are set out in the Workplace Safety and Health
(General Provisions) Regulations of Singapore (‘‘ WSHR ’’). Under the WSHR, it is the duty
of the occupier of a workspace to ensure that:
(a) every dangerous part (including any flywheel) of any electric generator, motor,
transmission machinery or other machinery in the workplace is securely fenced
unless the dangerous part of the generator, motor or machinery:
( i ) i si ns u c hap o s i t i o no ro fs u c hc o n s t r u c t i o na st ob es a f et oe v e r yp e r s o na t
work in the workplace as it would be if securely fenced; or
(ii) is made safe for persons at work in the workplace by other effective means
which will protect the persons from being injured by the dangerous part when
that part is in motion or in use;
(b) in any room or place in the workplace where transmission machinery is used, there
is provided and maintained efficient devices or appliances in that room or place by
which the power can promptly be cut off from the transmission machinery; and
(c) any part of a stock-bar used in a workplace which projects beyond the headstock
of a lathe is securely fenced or is otherwise made safe to every person at work in
the workplace.
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Under the WSHR, the fencing or other effective means which are used to render
machinery safe may be removed to such extent as is necessary when:
(a) a person is carrying out in the workp lace, while the part of machinery is in
motion:
(i) any examination of the machinery or part of the machinery; or
(ii) any lubrication or adjustment shown by such examination to be immediately
necessary,
being an examination, a lubrication or an adjustment which is necessary to be
carried out while the part of machinery is in motion; or
(b) a person is carrying out in the workplace any lubrication or any mounting or
shifting of belts in respect of any part of a transmission machinery and if:
(i) the Commissioner for Workplace Safety and Health (the ‘‘ CWSH ’’) has
determined that, owing to the conti nuous nature of such process, the
stopping of that part would seriously interfere with the carrying on of the
process in the workplace; and
(ii) the lubrication or mounting or shifting of belts is carried out by such
m e t h o d sa n di ns u c hc i r c u m s t a n c e sa nd subject to such conditions as the
CWSH may determine.
This shall only apply under certain conditions specified in the WSHR.
Any person who breaches his or her duty under the WSHA shall be guilty of an offence
and shall be liable on conviction, in the case of a body corporate, to a fine not exceeding
S$500,000 and, if the contravention continues after the conviction, the body corporate shall
be guilty of a further offence and shall be liable to a fine not exceeding S$5,000 for every
day or part thereof during which the offence continues after conviction. For repeat
offenders, where a person has on at least one previous occasion been convicted of an offence
under the WSHA that causes the death of any person and is subsequently convicted of the
same offence that causes the death of another person, the court may, punish the person, in
the case of a body corporate, with a fine not exceeding S$1 million and, in the case of a
continuing offence, with a further fine not exceeding S$5,000 for every day or part thereof
during which the offence continues after conviction.
Under the WSHA, the CWSH may serve a remedial order or a stop-work order in
respect of a workplace if the CWSH is satisfie d that (a) the workplace is in such condition,
or is so located, or any part of the machinery, eq uipment, plant or article in the workplace is
so used, that any work or process carried on in the workplace cannot be carried on with due
regard to the safety, health and welfare of the persons at work; (b) any person has
contravened any duty imposed by the WSHA; or (c) any person has done any act, or has
refrained from doing any act which, in the opinion of the CWSH, poses or is likely to pose a
risk to the safety, health and welfare of persons at work.
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Under the Workplace Safety and Health (Risk Management) Regulations of
Singapore, the employer in a workplace is supposed to, among other things, conduct a
risk assessment in relation to the safety and health risks posed to any person who may be
affected by his or her undertaking in the workplace, take all reasonably practicable steps to
eliminate any foreseeable risk to any person who may be affected by his or her undertaking
in the workplace, and where it is not reasonably practicable to eliminate the risk, implement
reasonably practicable measures to minimise the risk and safe work procedures to control
the risk, specify the roles and responsibilities o f persons involved in the implementation of
any measure or safe work procedure and inform workers of the same, maintain records of
such risk assessments, and measures or safe work procedure implemented for a period of
not less than three years, and submit such records to the CWSH when required by the
CWSH from time to time.
Work Injury Compensation Act
Work injury compensation is governed by the Work Injury Compensation Act 2019 of
Singapore (‘‘WICA ’’), and is administered by the MOM. The WICA applies to all employees
(except members of the Singapore Armed Forces , officers of the Singapore Police Force, the
Singapore Civil Defence Force, the Central Narcotics Bureau of Singapore and the
Singapore Prisons Service, and domestic workers, being an individual employed in or in
connection with the domestic services of any private premises) who have entered into or
works under a contract of service with an employer, in respect of injury suffered by them
arising out of and in the course of their employment and sets out, among other things, the
amount of compensation that they are entitled to and the method(s) of calculating such
compensation.
The WICA provides that if in any employment, personal injury by accident arising out
of and in the course of employment is caused to an employee, the employer of the employee
shall be liable to pay compensation in acco rdance with the provisions of the WICA. The
amount of compensation shall be computed in accordance with a fixed formula as set out in
the WICA, subject to maximum and minimum limits.
Further, the WICA provides, among other things, that, where any person (referred to
as the principal) in the course of or for the purpose of his or her trade or business contracts
with any other person (referred to as the emplo yer) for the execution by the employer of the
whole or any part of any work, or for the supply of labour to carry out any work,
undertaken by the principal, the Commissioner for Labour (‘‘ CL’’) appointed under Section
3 of the Employment Act 1968 of Singapore (‘‘ EA’’) may direct the principal to fulfil the
obligations of the employer under the WICA i n relation to any employee of the employer
employed in the execution of the work any compensation payable under the WICA as if that
employee had been immediately employed by the principal.
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Employers are required to maintain work injury compensation insurance for two
categories of employees engage d under contracts of service, unless exempted. The first
category includes all employees doing manual work. The second category includes all
non-manual employees earning S$2,600 or less a month. An employer who breaches the
above provisions shall be guilty of an offence and shall be liable on conviction to a fine not
exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both.
Employment Act
The EA is administered by the MOM and sets out the basic terms and conditions of
employment, and the rights and responsibilit ies of employers as well as employees who are
covered under the EA.
The term ‘‘employee’’ is defined in the EA to mean a person who has entered into or
works under a contract of service with an employer and includes, among other things, a
workman, but does not include certain specifie d categories of employees including, among
other things, any seafarer or domestic worker.
Part 2 of the EA sets out provisions in relation to contracts of service including, among
other things, illegal terms of contract of service, termin ation of contract, notice of
termination of contract, termination of contract without notice, contractual age, when
contract deemed to be broken by employer and employee, dismissal, termination by
employee threatened by danger, liability on b reach of contract, contract of service not to
restrict rights of employees to join, participate in or organise trade unions, change of
employer, and transfer of employment. Specifically, Section 10 of the EA provides, among
other things, that either party to a contract of service may at any time give to the other
party notice of the first-mentioned party’s inte ntion to terminate the contract of service,
and the length of such notice shall be the same for both employer and employee and shall be
determined by any provision made for the noti ce in the terms of the contract of service.
Part 4 of the EA sets out provisions in relation to rest days, hours of work and other
conditions of service, including, among other things, rest day, work on rest day, hours of
work, task work, shift workers, payment of ret renchment benefit, retirement benefit,
priority of retirement benefits, and payment of annual wage supplement or other variable
payment, and only applies to certain categories of employees covered under the EA,
namely, workmen who receive salaries not ex ceeding S$4,500 a month and employees (other
than workmen or a person employed in a managerial or an executive position) who receive
salaries not exceeding S$2,600 a month.
An employee who is covered under Part 4 of the EA is not allowed to work for more
than 12 hours in any one day except in specified circumstances, including, among other
things, where the work, the performance of wh ich is essential to the life of the community,
and where the work is essential for defence or security. In addition, Section 38(5) of the EA
provides that an employee is not permitted to work overtime for more than 72 hours a
month.
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Employers may seek the prior written approval of the CL for exemption if they require
an employee or class of employees who are covered under Part 4 of the EA to work for more
than 12 hours a day or perform overtime work for more than 72 hours a month. The CL
may by written order exempt the employee or class of employees from the daily and
overtime limits subject to such conditions as the CL thinks fit.
An employee who is covered under Part 4 of the EA must not be required under his or
her contract of service to work:
(a) more than six consecutive hours without a period of leisure;
(b) more than eight hours in one day or more than 44 hours in one week:
Provided that:
(c) an employee who is engaged in work whic h must be carried on continuously may
be required to work for eight consecutive hours inclusive of a period or periods of
not less than 45 minutes in the aggregate during which he or she must have the
opportunity to have a meal;
(d) where, by agreement under the contract of service between the employee and the
employer, the number of hours of work on one or more days of the week is less
than eight, the limit of eight hours in one day may be exceeded on the remaining
days of the week, but so that no employee is required to work for more than nine
hours in one day or 44 hours in one week;
(e) where, by agreement under the contract of service between the employee and the
employer, the number of days on which the employee is required to work in a
week is not more than five days, the limit of eight hours in one day may be
e x c e e d e db u ts ot h a tn oe m p l o y e ei sr e q u i r e dt ow o r km o r et h a nn i n eh o u r si no n e
day or 44 hours in one week; and
(f) where, by agreement under the contract of service between the employee and the
employer, the number of hours of work in every alternate week is less than 44, the
limit of 44 hours in one week may be exceeded in the other week, but so that no
employee is required to work for more than 48 hours in one week or for more than
88 hours in any continuous period of two weeks.
Despite the foregoing, an employee who is engaged under his or her contract of service
in regular shift work may be required to work more than six consecutive hours, more than
eight hours in any one day or more than 44 hours in any one week but the average number
of hours worked over any continuous period of three weeks must not exceed 44 hours per
week.
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Any employer who employs any person as an employee who is covered under Part 4 of
the EA and fails to comply with Part 4 of the EA shall be guilty of an offence and shall be
liable on conviction to a fine not exceeding S$5, 000, and for a second or subsequent offence
to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or
to both.
Under Section 95A of the EA, an employer must, among other things, give each
employee who enters into a contract of service with the employer on or after 1 April 2016
and who is employed under that contract for a period not shorter than the prescribed
minimum period of service, a written record of the key employment terms of the employee
not later than 14 days after the day that the employee starts employment with the employer.
An employer is taken to have failed to comply if no written record is given or if the written
record given is incomplete or inaccurate, whether or not the employer knew that the record
is incomplete or inaccurate.
Under Section 126A(a) of the EA, a failure by an employer to comply with, among
other things, Section 95A(2) of the EA is declared to be a civil contravention for the
purposes of the EA. Under Section 126B(1)(a) of the EA, an authorised officer may issue a
contravention notice to an employer requiring the employer to pay an administrative
penalty of the prescribed amount, for each occasion of an alleged failure by the employer to
comply with, among other things, Section 95A(2) of the EA with respect to any one
employee or former employee.
Under Paragraph 3 of the Schedule to the Employment (Administrative Penalties)
Regulations 2016, the administrative penalti es for failure under Section 95A(2) of the EA to
give an employee a written record of the key employment terms within the time specified in
Section 95A(2) of the EA are as follows:
(a) S$200 for the first occasion of failure with respect to any one employee or former
employee; and
(b) S$400 for each subsequent occasion of failure, whether or not with respect to the
same employee or former employee.
Under Section 126D of the EA, in lieu of o ri na d d i t i o nt og i v i n ga ne m p l o y e ra
contravention notice under Section 126B of the EA, an authorised officer may issue such
directions to the employer as the authorised officer thinks appropriate to bring the civil
contravention to an end; and where necessary, require the employer to take such action as is
specified in the direction to remedy, mitigate or eliminate any effects of the civil
contravention and to prevent the recurrence o f the civil contravention. An employer who,
without reasonable excuse, fails to comply wi th a direction given to the employer shall be
guilty of an offence and shall be liable on conviction to a fine not exceeding S$5,000 or to
imprisonment for a term not exceeding six months or to both.
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Employment of Foreign Manpower Act
The employment of foreign workers in Singapore is governed by the Employment of
Foreign Manpower Act 1990 of Singapore (‘‘ EFMA ’’), and is administered by the MOM.
U n d e rS e c t i o n5 ( 1 )o ft h eE F M A ,n op e r s o nshall employ a foreign employee unless he
has obtained in respect of the foreign employee a valid work pass from the MOM, which
allows the foreign employee to work for him or her. In addition, the employment of the
foreign employee must be in accordance with the conditions of the foreign employee’s work
pass.
Any person who fails to comply with or contravenes Section 5(1) of the EFMA shall be
guilty of an offence and shall:
(a) be liable on conviction to a fine of at least not less than S$5,000 and not more
than S$30,000 or to imprisonment for a term not exceeding 12 months or to both;
and
(b) on a second or subsequent conviction:
(i) in the case of an individual, be punished with a fine of not less than S$10,000
and not more than S$30,000 and with imprisonment for a term of not less
than one month and not more than 12 months; or
(ii) in any other case, be punished with a fine not less than S$20,000 and not
more than S$60,000.
In addition, under Section 25(1) of the EFMA, where any employer (a) makes, or
causes to be made to the Controller of Work Passes (the ‘‘ Controller ’’), an application for a
work pass on the basis of the employer’s forei gn employee entitlement; and (b) commits, or
causes or permits to be committed, any act or om ission which facilitates, or which results in,
the inflation of the employer’s foreign empl oyee entitlement, the Controller may impose on
the employer a financial penalty of an amoun t, not exceeding S$20,000, as the Controller
may determine.
An employer of foreign workers is also subject to, among other things, the provisions
set out in the EA, the EFMA, the Immigration Act 1959 of Singapore and the regulations
issued pursuant to these Acts.
To employ migrant workers for the manufacturing sector, an employer will have to
meet specific requirements for business activity, worker’s source country or region, quota
and levy.
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An employer can be considered to be under the manufacturing sector if it meets all of
these requirements:
(a) Has a valid factory notification or registration.
(b) Use machinery to manufacture or produce items from raw materials.
(c) Operates in a designated industrial setting area.
An employer can employ migrant workers from Malaysia, the PRC and North Asian
sources (‘‘NAS’’) comprising Hong Kong (holders of HKSAR passports), Macau, South
Korea and Taiwan. The minimum age for all non-domestic migrant workers is 18 years old.
When applying for a Work Permit, Malaysian workers must be below 58 years old; and
non-Malaysian workers must be below 50 years old.
For the manufacturing sector, the maximum number of years a worker can work in
Singapore on a Work Permit is as follows:
Source Country/Region Types of Workers
Maximum Period
of Employment
PRC Basic-skilled (R2) 14 years
PRC Higher-skilled (R1) 22 years
NAS, Malaysia All No maximum period
of employment.
The number of Work Permit holders that an employer can hire is limited by quota (or
dependency ratio ceiling) and subject to a levy. The levy rates are tiered so that those who
hire close to the maximum quota will pay a higher levy.
An employer pays less levy for higher-skille d migrant workers. An employer can apply
for the higher-skilled worker levy rate for work ers possessing specific certificates of certain
types of qualifications.
Before their Work Permits can be issued, f irst-time non-Malaysian Work Permit
holders in the manufacturing sector must attend the Settling-in Programme.
Migrant workers who handle metals and machinery in metalworking industry must
complete either the Metalworking Safety Orientation Course or Apply Workplace Safety
and Health in Metal Work Course before an employer can get their Work Permits issued.
Such migrant workers must complete the course within two weeks from arrival in Singapore
and pass the course within three months of ar rival, or their Work Permits may be revoked.
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Central Provident Fund Act
The Central Provident Fund Ac t 1953 of Singapore (the ‘‘ CPF Act ’’) governs the
contributions made by employers and emplo yees into the central provident fund (the
‘‘Fund ’’). The CPF Act is administered by the Central Provident Fund Board.
Section 7(1) of the CPF Act provides that subject to Section 69 of the CPF Act and any
regulations made under Section 77 of the CPF Act, every employer of an employee shall pay
to the Fund monthly in respect of each employe e contributions at the appropriate rates set
out in the First Schedule of the CPF Act.
Under Section 7(2) of the CPF Act, notwithstanding the provisions of any written law
or any contract to the contrary, an employer is allowed to recover from the monthly wages
of an employee the amount shown in the First Schedule of the CPF Act as so recoverable
from the employee.
Where the amount of the contributions which an employer is liable to pay under
Section 7 of the CPF Act in respect of any month is not paid within such period as may be
prescribed, the employer shall be liable to pay interest on the amount for every day the
amount remains unpaid commencing from the first day of the month succeeding the month
in respect of which the amount is payable and the interest is to be calculated at the rate of
1.5% per month or the sum of S$5, whichever is the greater.
Where any employer who has recovered any amount from the monthly wages of an
employee in accordance with the CPF Act and fails to pay the contributions to the Fund
within such time as may be prescribed, the employer shall be guilty of an offence and shall
be liable on conviction to a fine not exceeding S$10,000 or to imprisonment for a term not
exceeding seven years or to both.
Any person convicted of an offence under the CPF Act for which no penalty is
provided, subject to exceptions, shall be liable on conviction (a) to a fine not exceeding
S$5,000 or to imprisonment for a term not exceeding six months or to both; and (b) if that
person is a repeat offender in relation to the same offence, to a fine not exceeding S$10,000
or to imprisonment for a term not exceeding 12 months or to both.
Companies Act and Constitution
The Companies Act 1967 of Singapore generally governs, among other things, matters
relating to the status, power and capacity of a company, shares and share capital of a
company (including issuances of new ordinar y shares and preference shares), treasury
shares, share buybacks, redemption, share capital reduction, declaration of dividends,
financial assistance, directors and officers and shareholders of a company (including
meetings and proceedings of directors and shareholders, dealings between such persons and
the company), protection of minority shareholders’ rights, accounts, arrangements,
reconstructions and amalgamations, winding up and dissolution.
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In addition, members of a company are subject to, and bound by the provisions of the
Constitution. The Constitution contains, among other things, provisions relating to some of
the matters in the foregoing paragraph, transfers of shares as well as sets out the rights and
privileges attached to the different classe s of shares of the company (if applicable).
Singapore Taxation
The discussion in this section is not intend ed to be and does not constitute legal or tax
advice. It is based on the current tax laws and practice in Singapore and is subject to
changes in such laws, or in the interpretation thereof. Such changes may be retrospective.
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 and practice will not occur on a retrospective basis.
Corporate Tax
Corporate taxpayers (whether Singapore tax resident or non-Singapore tax resident)
are generally subject to Singapore income tax on income accruing in or derived from
Singapore, and on foreign-sourced income rece ived or deemed to be received in Singapore
(unless specified conditions for exemption are satisfied). Foreign income in the form of
dividends, branch profits and service fee income received or deemed to be received in
Singapore by a Singapore tax resident corp orate taxpayer may however be exempt from
Singapore tax if specified conditions are met.
Section 43(1) of the Income Tax Act 1947 of Singapore (‘‘ ITA’’) provides, among other
things, that the prevailing corporate income tax rate is 17%. Section 43(6B) of the ITA
provides, among other things, that there is partial tax exemption for normal chargeable
income of up to S$200,000 as follows:
(a) 75% exemption of up to the first S$10,000 of normal chargeable income; and
(b) a further 50% exemption on the next S$190,000 of normal chargeable income.
The chargeable income of a company in excess of the first S$200,000 (after the partial
tax exemption) will be fully taxable at the pr evailing corporate income tax rate of 17%.
Dividend Distributions and Withholding Tax
All Singapore tax resident companies are under the one-tier corporate taxation system
of Singapore (the ‘‘ One-Tier System ’’). Under the One-Tier System, the tax collected from
corporate profits is a final tax and the afte r-tax profits of the company resident in
Singapore can be distributed to the shareholders as tax-exempt (one-tier) dividends. Such
dividends are tax-exempt in the hands of th e shareholders, regardless of whether the
shareholder is a company or an individual and whether or not the shareholder is a
Singapore tax resident.
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Singapore currently does not impose withholding tax on dividends paid to resident or
non-resident shareholders. Foreign shareho lders are advised to consult their own tax
advisers to take into account the tax laws of their respective home countries or countries of
residence and the applicability of any double taxation agreement which the relevant tax
jurisdiction may have with Singapore.
Goods and Services Tax
The Goods and Services Tax Act 1993 of Singapore governs goods and services tax
(‘‘GST’’), which is a consumption tax that is levied on the import of goods into Singapore,
as well as nearly all supplies of goods and services in Singapore. GST on the import of
goods into Singapore is collected by the Singapore Customs while GST on local supplies of
goods and services is collected by GST-registered persons.
The prevailing rate of GST is 9%. Certain supplies are exempt from GST. Broadly,
these include the provision of certain financial services, and the sale and lease of residential
properties. The provision of international services and the export of goods are generally
zero-rated (i.e. subject to GST at a rate of 0%).
Stamp Duty
There is no stamp duty payable on the subscription and issuance of shares.
Where shares evidenced in certificate form are acquired in Singapore and where a
company maintains a share registry in Singapore, stamp duty is payable on the instrument
of transfer of such shares at the rate of 0.2% of the consideration for, or the net asset value
of, such shares, whichever is higher. The purchaser has an obligation to pay stamp duty,
unless there is an agreement to the contrary. No stamp duty is payable if no instrument of
transfer is executed or the instrument of transfer is executed outside Singapore. However,
stamp duty may be payable if the instrument of transfer which is executed outside
Singapore, is subsequently received in Singapore.
The Stamp Duties Act 1929 of Singapore was amended by the Stamp Duties
(Amendment) Act 2017 of Singapore with effect from 11 March 2017 to, among other
things, introduce the additional conveyance duty to be levied on acquisitions and disposals
of equity interests in property- holding entities that own primar ily residential properties in
Singapore, and imposed the obligation to pay stamp duty once the agreement for the sale
and purchase of shares was executed. However, pursuant to the Stamp Duties (Agreements
for Sale of Equity Interests) (Remission) Rules 2018 of Singapore which came into
operation on 11 April 2018, the position on stamp duty for the sale and purchase of shares
before the enactment of the Stamp Duties (Amendment) Act 2017 of Singapore was
reinstated. Stamp duties for agreements for the sale and purchase of shares were remitted
with effect from 11 April 2018 except where the shares to be transferred are in
property-holding entities. Accordingly, stamp duty in respect of the sale and purchase of
shares remains payable on th ei n s t r u m e n to ft r a n s f e r .
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Personal Data Protection Act
The Personal Data Protection Act 2012 of Singapore (the ‘‘ PDPA ’’) establishes the
Singapore regime for the protection of personal data (i.e. data, whether true or not, about
an individual who can be identified from that data or other information accessible to the
relevant organisation) and seeks to ensure that organisations comply with a baseline
standard of protection for personal data of individuals.
The PDPA currently imposes ten data protection obligations on organisations
collecting, using or disclosing personal dat a of individuals, namely, the accountability
obligation, the notification obligation, th e consent obligation, the purpose limitation
obligation, the accuracy obligation, the protection obligation, the retention limitation
obligation, the transfer limitation obligatio n, the access and correction obligation, and the
data breach notification obligation.
The Personal Data Protection (Amendmen t) Bill of Singapore has introduced a new
data portability obligation, which will take effe ct when the relevant regulations are issued.
Under the data portability obli gation, at the request of the ind ividual, organisations are
required to transmit the individual’s data that is in the organisation’s possession or under
its control, to another organisation in a commonly used machine-readable format.
LAWS AND REGULATIONS IN MALAYSIA
Business Operation
Local Government Act 1976 (‘‘LGA 1976’’)
For its business premise, SGP Malaysia requires a business licence from the local
authority. The LGA 1976 which provides for the powers of a local authority to grant certain
licence or permit also confers on the local authority powers to make, amend and revoke
by-laws such as the following by-laws:
(a) The Licensing of Trades, Businesses and Industries (Iskandar Puteri City Council)
By-Laws 2018 provides that no person shall use any place or premises, within the
area of the Iskandar Puteri City Council for any trade, business or industry
without a licence issued by the Iskandar Puteri City Council.
(b) The Advertisement (Johor Bahru Tengah District Council) By-Laws 1982
provides that no person shall exhibit or cause to be exhibited any advertisement
without a licence issued by the Iskandar Puteri City Council.
Any person who contravenes any of the provisions under these by-laws shall be liable
to a fine not exceeding RM2,000 or to imprisonment not exceeding one year or to both.
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Personal Data Protection Act 2010 (‘‘PDPA 2010’’)
The PDPA 2010 is an act to regulate the coll ection, processing, storage, transfer and
retention of individuals’ personal data. It applies to the processing of personal data in
commercial transactions including but not limited to employment relationships where a
data user is obliged to comply with the persona l data protection principles as set out in the
PDPA 2010.
The PDPA 2010 prohibits data users from co llecting and processing a data subject’s
personal data without his consent. Data users are prohibited from disclosing or making the
data available to any third party without the consent of data subjects and data users are to
inform data subjects on the purpose of its data collection, the class of third party who may
have access to the data and the choices that data subjects have on how the data is to be
used. In this regard, any processing of data by an employer related to its employees would
require consent from the employees. Pursuant to the PDPA 2010, data users are under a
duty to develop and implement a security polic y to prevent the loss, misuse, modification,
unauthorised or accidental access or disclosur e, alteration or destruction of data under their
care.
A data user who contravenes the foregoing commits an offence and shall, on
conviction, be liable to a fine not exceeding RM300,000 or to imprisonment not exceeding
two years or to both.
Property and Equipment
National Land Code (Revised 2020) (‘‘NLC’’)
The NLC is an act to amend and consolidat e the laws relating to land within the
Peninsular Malaysia and the Federal Territories.
Pursuant to the NLC, the title or interest of any person or body for the time being
registered as proprietor of any land shall be indefeasible unless the exceptions under the
NLC apply.
Under the NLC, land is alienated by a state authority either as freehold land (in
perpetuity) or as leasehold land (for a term not exceeding 99 years). Land may be subject to
one of 3 categories of land use, being ‘‘agricultu re’’, ‘‘building’’ and‘‘industry’’ which is
subject to the respective implied conditions in the NLC.
Under the NLC, the proprietor of any alienated land may grant leases of the whole or
any part thereof for a term exceeding 3 years or a tenancy for a term not exceeding 3 years.
The interest of any lessee or tenant shall, whether or not it takes effect in possession, vest in
the lessee on the registration of the lease or in the tenant on the grant of the tenancy.
For further details on the production fac ility in Malaysia owned by SGP Malaysia,
please refer to the section sub-headed ‘‘Business — Properties’’.
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Street, Drainage and Building Act 1974 (‘‘SDBA 1974’’)
The SDBA 1974 is an act to amend and consolidate the laws relating to street, drainage
and building in local authority areas in Peninsular Malaysia.
Under the SDBA 1974, any person who occupies or permits to be occupied any
building without a certificate of completion an d compliance shall be liable on conviction to
a fine not exceeding RM250,000 or to imprisonment not exceeding 10 years or to both. The
SDBA 1974 further provides that no certificate of completion and compliance shall be
issued except by a principal submitting person in accordance with the SDBA 1974.
For further details on the certificate issued in the name of SGP Malaysia under the
SDBA 1974, please refer to the section sub- headed ‘‘Business — Licences, Permits and
Approvals’’.
Fire Services Act 1988 (‘‘FSA 1988’’)
The FSA 1988 is an act to make necessary provisions for, amongst others, the
protection of persons and property from fire risks or emergencies.
Under the FSA 1988, every designated premise shall require a fire certificate to be
issued by the Fire and Rescue Department of Malaysia. Under the Fire Services
(Designated Premises) Order 1998, a designated premise includes, among others, a
factory which is 2,000 square metres and over in total floor areas with automatic
sprinklers systems.
Where there is no fire certificate in force i n respect of any designated premises, the
owner of the premises shall be guilty of an offence and shall, on conviction, be liable to a
fine not exceeding RM50,000 or to imprisonment not exceeding five years or to both.
For further details on the certificate issued in the name of SGP Malaysia under the
FSA 1988, please refer to the section sub-headed ‘‘Business — Licences, Permits and
Approvals’’.
Environment Protection
Environmental Quality Act 1974 (‘‘EQA 1974’’)
The EQA 1974 is an act relating to the prevention, abatement, control of pollution and
enhancement of t he environment.
The EQA 1974 provides that no person shall, among others, place, deposit or dispose
of, except at prescribed premises only, any scheduled wastes on land or into Malaysian
waters, without prior written approval of the Director General of Environmental Quality.
Any person who contravenes the foregoing shall be guilty of an offence and shall on
conviction be punished with imprisonment not exceeding five years and shall also be liable
to a fine not exceeding RM500,000. As at the Latest Practicable Date, the Environmental
Quality (Amendment) Act 2024 (‘‘ EQAA 2024 ’’) has been enacted but has not come into
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force. The EQAA 2024 will come into operation on a date to be appointed by the Ministry
of Natural Resources and Environmental Sustainability by notification in the gazette. Once
the EQAA 2024 comes into operation, the afore mentioned punishment will be increased to
imprisonment not exceeding five years and fine of not less than RM100,000 and not
exceeding RM1,000,000.
The Environmental Quality (Scheduled Wastes) Regulations 2005 further obliges any
person who generates scheduled wastes to, within 30 days from the date of generation of
scheduled wastes, notify the Director Ge neral of Environmental Quality of the new
categories and quantities of scheduled wastes which are generated and to ensure that such
person do not store scheduled waste more than 180 days after its generation. Any person
who generates scheduled wastes shall also ensure that scheduled wastes generated by him
are properly stored, treated on-site, recovered on-site for material or product from such
scheduled wastes or delivered to and received a t prescribed premises for treatment, disposal
or recovery of material or product from scheduled wastes.
Employment and Labour Protection
Employment Act 1955 (‘‘EA 1955’’)
The EA 1955 is an act which provides minimum terms and conditions of employment
to be adhered to including but not limited to overtime, sick leave, annual leave entitlement,
maternity protection and termination benefits.
The EA 1955 provides that any term or condition of a contract of service or of an
agreement which is less favourable to an empl oyee than that prescribed under the EA 1955
shall be void and have no effect. To this extent, the more favourable provisions of the EA
1955 will prevail. Conversely, an emplo yer and employee may agree to any terms or
conditions of employment which is more favourable to the employee than the provisions of
the EA 1955.
Any person who contravenes any provisions of the EA 1955, in respect of which no
penalty is provided, shall be liable, on conviction, to a fine not exceeding RM50,000.
Employment (Restriction) Act 1968 (‘‘ERA 1968’’)
The ERA 1968 is an act to provide for the rest riction of employment in certain business
activities in Malaysia of non-citizens and the registration of such non-citizens.
The ERA 1968 provides that no person shall employ in Malaysia, a non-citizen unless
there has been a valid employment permit issued for the non-citizen. It further provides that
any person who fails to comply with the for egoing commits an offence and shall, on
conviction, be liable to a fine not exceeding RM5,000 or to imprisonment not exceeding one
year or to both.
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Immigration Act 1959/63 (‘‘IA 1959/63’’)
The IA 1959/63 is an act relating to immigration laws. Pursuant to the IA 1959/63, no
person other than a citizen shall enter Malaysia unless the following, among others, applies:
(a) he is in possession of a valid entry permit;
(b) his name is endorsed upon a valid entr y permit and he is in the company of the
holder of such entry permit; or
(c) he is in possession of a valid pass.
The IA 1959/63 provides that any person who employs any person, other than a citizen
or a holder of an entry permit who is not in possession of a valid pass, shall be guilty of an
offence and shall, on conviction, be liable to a fine of not less than RM10,000 but not more
than RM50,000 or to imprisonment not exce eding 12 months or to both for each such
employee.
National Wages Consultative Council Act 2011 (‘‘NWCCA 2011’’)
The NWCCA 2011 is an act to establish a National Wages Consultative Council to
conduct studies on all matters concerning minimum wages and to make recommendations
to the government of Malaysia to make minimum wages orders.
The NWCCA 2011 provides that an employer who fails to pay the basic wages as
specified in the minimum wages order to his e mployees commits an offence and shall, on
conviction, be liable to a fine of not more than RM10,000 for each employee and in the case
of a continuing offence, in addition to any other penalty in respect of such offence, to a
daily fine not exceeding RM1,000 for each day the offence continues after conviction.
Employees Provident Fund Act 1991 (‘‘EPFA 1991’’)
The EPFA 1991 is an act governing the scheme of savings for employees’ retirement
and the management of the savings for the retirement purposes.
By virtue of the EPFA 1991, a fund called the ‘‘Employees Provident Fund’’ is
established into which shall be paid, among others, all contributions required to be made
thereunder. The EPFA 1991 provides that an employer shall be liable to pay both the
contributions payable by the employer and also, on behalf of and to the exclusion of its
employee, the contributions payable by that employee. The employee’s portion of
contributions is deducted from his salary. The amount of contribution payable is
calculated based on the amount of wages of the employees at the rate set out in the
EPFA 1991. It further provides that an employe r who fails, within such prescribed period,
to pay to the Employees Provident Fund the contributions shall be guilty of an offence and
shall, on conviction, be liable to imprisonment not exceeding three years or to a fine not
exceeding RM10,000 or to both.
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Employees’ Social Security Act 1969 (‘‘ESSA 1969’’)
The ESSA 1969 is an act to provide social security in certain contingencies and to make
provision for certain other matters in relation to it.
The ESSA 1969 provides that all employ ees in industries to which the ESSA 1969
applies, irrespective of the amount of wages, shall be insured in the manner provided by the
ESSA 1969. ESSA 1969 further provides that t he employer shall pay the contribution
payable by the employer and the contribut ion payable by the employee to the Social
Security Organization at the rates specified in the ESSA 1969. Similarly, the contributions
by the employee are deducted from the salary. It further provides that if any person, among
others, fails to pay any contribution or any part thereof which is payable by him under the
ESSA 1969 or fails to pay within the prescribed time any interest payable, or is guilty of any
contravention of or non-compliance with any of the requirements of the ESSA 1969 in
respect of which no special penalty is provided, he shall be punishable with imprisonment
up to two years, or with a fine not exceeding RM10,000, or to both.
Employment Insurance System Act 2017 (‘‘EISA 2017’’)
The EISA 2017 is an act to provide for the Employment Insurance System
administered by the Socia l Security Organization.
The EISA 2017 provides that all employees in the industries to which the EISA 2017
applies shall be registered and insured by the employers irrespective of the amount of wages.
It provides that the contributions payable under the EISA 2017 shall comprise a
contribution payable by the employer and a contribution payable by the employee to be
paid to the Social Security Organization at th e rates specified in the EISA 2017 based on the
amount of the monthly wages of the employee. If the amount of the monthly contribution
payable by the employer in respect of an employee is not paid within the relevant period, the
employer shall be liable to pay interest on such amount to the Social Security Organization
at the rate as prescribed by the Minister of Human Resources in respect of any period
during which such amount remains unpaid.
The Employment Insurance System (Regis tration And Contribution) Regulations 2017
provides that any employer who fails to comply with the requirement to pay the
contributions not later than the fifteenth day of the month immediately following the
month in respect of which such contribution becomes due, commits an offence and shall, on
conviction, be liable to a fine not exceeding RM10,000 or to imprisonment not exceeding
two years or to both.
Safety and Health of Employees
Occupational Safety and Health Act 1994 (‘‘OSHA 1994’’)
The OSHA 1994 is an act to make provisions for, amongst others, securing the safety,
health and welfare of persons at work and for protecting others against risks to safety or
health in connection with the activities of p ersons at work. By virtue of the OSHA 1994,
every employer is under an obligation to ensure, s of a ra si sp r a c t i c a b l e ,t h es a f e t y ,h e a l t h
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and welfare to work of all his employees excludi ng domestic employment, armed forces and
work on board ships. A principal has the duty to take necessary measures, so far as is
practicable, to ensure the safety of contracto rs and sub-contractors as well as to conduct
and implement risk assessment. Any person w ho contravenes the foregoing provisions
under the OSHA 1994 is guilty of an offence and is liable on conviction to a fine not
exceeding RM500,000 or to imprisonment not exceeding two years or to both.
Pursuant to the Factories and Machinery (Repeal) Act 2022 (‘‘ FMRA 2022 ’’), the
Factories and Machinery Act 1967 (‘‘ FMA 1967 ’’) was repealed effective from 1 June 2024
and the provisions of the FMA 1967 were integrated into the OSHA 1994. The FMA 1967
provided that no person shall install or caused to be installed any machinery in any factory
except with the written approval of the Inspector of Factories and Machinery. Any person
who contravenes the foregoing shall be guilty of an offence and shall, on conviction, be
liable to a fine not exceeding RM100,000 or to imprisonment not exceeding two years or to
both.
All approvals issued under the repealed FMA 1967 are now dealt with under the OSHA
1994. For further details on the approval issued in the name of SGP Malaysia for the
machinery under the repealed FMA 1967, please refer to the section sub-headed ‘‘Business
— Licences, Permits and Approvals’’.
Taxation
Income Tax Act 1967 (‘‘ITA 1967’’)
The ITA 1967 is an act for the imposition o f income tax. Pursuant to the ITA 1967,
income tax shall be charged for each year of assessment upon the income of any person
accruing in or derived from Malaysia or received in Malaysia from outside Malaysia.
Companies in Malaysia are generally taxed at 24% on its chargeable income.
The Director General of Inland Revenue may seek to impose penalties on a taxpayer
for failure to file a tax return under Sectio n 112 of the ITA 1967, for making an incorrect
return under Section 113 of the ITA 1967 and/or for wilful evasion of taxes under Section
114 of the ITA 1967. Under Section 112 of the ITA 1967, a maximum penalty of up to 300%
of the tax payable and a fine of up to RM20,000 may be imposed. Under Section 113 of the
ITA 1967, a maximum penalty of up to 200% of the tax undercharged and a fine of up to
RM10,000 may be imposed. Under Section 114 of the ITA 1967, any person who wilfully
and with the intent to evade, or assist any other person to evade, tax is guilty of an offence if
he omits income from his return, makes a false statement or entry in his return, or commits
fraud. A fine of RM1,000 to RM20,000 and/or imprisonment up to three years, and a
special penalty of treble the tax undercharged may be imposed.
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Sales Tax Act 2018 and Service Tax Act 2018
Pursuant to the Sales Tax Act 2018, sales tax is levied on taxable goods manufactured
in Malaysia by a registered manufacturer. Sales tax is also imposed upon taxable goods
imported into Malaysia by any person. The applicable sales tax rate depends on the type of
taxable goods manufactured or imported into Malaysia.
Pursuant to the Services Tax Act 2018, service tax is chargeable on the provision of
prescribed taxable services, as follows:
(a) taxable services provided in Malaysia by a registered person in carrying on his
business, if the relevant threshold is reached;
(b) taxable services acquired by any person in Malaysia from any person who is
outside Malaysia (recipient of the imported services is liable to account for service
tax, instead of the service provider, in this situation); and
(c) provision of ‘‘digital services’’ by forei gn service providers to any ‘‘consumer’’ in
Malaysia.
‘‘Taxable services’’ are as specified in th e Service Tax Regulations 2018 and include,
among others, consultancy services, dig ital services and man agement services.
Customs Duties
Customs Act 1967 (‘‘CA 1967’’)
The CA 1967 is an act relating to customs. The customs duties payable depends on the
type and nature of goods along with its tariff classification.
Pursuant to the CA 1967, the Director General of Customs and Excise of Malaysia
may grant a licence to any person to carry on any manufacturing process and other
operations in respect of goods liable to customs duties. Any such licence would also include
a licence for warehousing the goods liable t o customs duties. A licenced manufacturing
warehouse approved under the CA 1967 may be entitled to certain exemption from customs
duties in respect of raw materials, components, machinery or equipment used in the
manufacturing process subject to the terms and conditions thereof.
Under Section 138 of the CA 1967, every omission or neglect to comply with and every
act done or attempted to be done contrary to, the provisions of the of CA 1967, or any
breach of the conditions and restrictions subject to, or upon which, any licence or permit is
issued or any exemption is granted under of the CA 1967, shall be an offence against of the
CA 1967 and in respect of any such offence for which no penalty is expressly provided the
offender shall be liable to a fine of not ex ceeding RM50,000 or to a term of imprisonment
not exceeding five years, or both.
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Foreign Exchange Control
Financial Services Act 2013 (‘‘FSA 2013’’)
In exercise of the power conferred by the FSA 2013, the Central Bank of Malaysia
issued Foreign Exchange Policy Notices which, amongst others, regulate the remittance of
funds from and into Malaysia. Pursuant to the Foreign Exchange Policy Notices:
(a) non-residents are free to make or receive payment in Malaysian ringgit, in
Malaysia, to or from residents for, amon g others, the income earned or expense
incurred in Malaysia or the settlement of a trade in goods or services;
(b) residents are free to make or receive payment in foreign currency, to or from
non-residents for any purpose, excluding payment for certain derivative related
exceptions, in accordance with the Foreign Exchange Policy Notice; and
(c) non-residents are free to repatriate f rom Malaysia, funds including any income
earned or proceeds from divestment of Malaysian ringgit assets, provided that the
repatriation is made in foreign currency in accordance with the Foreign Exchange
Policy Notices.
Any person who fails to comply with the For eign Exchange Policy Notices is guilty of
an offence and is liable on conviction to imprisonment for 10 years or to a fine not
exceeding RM50,000,000 or to both.
S A N C T I O N SL A W SA N DR E G U L A T I O N S
Hogan Lovells, our International Sanctions Legal Advisers, have provided the
following summary of the sanctions regimes imposed by the U.S., EU, UK, UN and
Australia. This summary does not intend to set out the laws and regulations relating to the
U.S., EU, UK, UN and Australian sanctions in their entirety.
U.S.
OFAC is the primary agency responsible for administering U.S. sanctions programmes
against targeted countries, entities, and individuals. ‘‘Primary’’ U.S. sanctions apply to
‘‘U.S. persons’’ or activities involving a U.S. n exus (e.g., funds transfers in U.S. currency
even if performed by non-U.S. persons), and ‘‘secondary’’ U.S. sanctions apply
extraterritorially to the activities of non-U .S. persons even when the transaction has no
U.S. nexus. Generally, U.S. persons are defined as entities organised under U.S. law (such
as companies and their U.S. subsidiaries); any U .S. entity’s domestic and foreign branches
(sanctions against Iran and Cuba also apply to U.S. companies’ foreign subsidiaries or
other non-U.S. entities owned or controlled by U.S. persons); U.S. citizens or permanent
resident aliens (‘‘green card’’ holders), regar dless of their location in the world; individuals
physically present in the United States; and U.S. branches or U.S. subsidiaries of non-U.S.
companies.
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Depending on the sanctions programme and/or parties involved, U.S. law also may
require a U.S. company or a U.S. person to ‘‘block’’ (freeze) any assets/property interests
owned, controlled or held for the benefit of a sanctioned country, entity, or individual when
such assets/property interests are in the United States or within the possession or control of
a U.S. person. Upon such blocking, no transaction may be undertaken or effected with
respect to the asset/property interest — no payments, benefits, provision of services or other
dealings or other type of performance (in case o f contracts/agreements) — except pursuant
to an authorisation or licence from OFAC.
OFAC’s comprehensive sanctions programmes currently apply to Cuba, Iran, North
Korea, Syria, the Crimea region of Russia/ Ukraine, and the self-proclaimed Luhansk
People’s Republic (LPR) and Donetsk People’ s Republic (DPR) regions (the comprehensive
OFAC sanctions programme against Sudan was terminated on October 12, 2017). OFAC
also prohibits virtually all business dealings with persons and entities identified in the SDN
List. Entities that a party on the SDN List owns (defined as a direct or indirect ownership
interest of 50% or more, individually or in the aggregate) are also blocked, regardless of
whether that entity is expressly named on t he SDN List. Additionally, U.S. persons,
wherever located, are prohibited from approvi ng, financing, facilitating, or guaranteeing
any transaction by a non-U.S. person where the transaction by that non-U.S. person would
be prohibited if performed by a U.S. person or within the United States.
United Nations
The United Nations Security Council (the ‘‘ UNSC ’’) can take action to maintain or
restore international peace and security under Chapter VII of the United Nations Charter.
Sanctions measures encompass a broad range of enforcement options that do not involve
the use of armed force. Since 1966, the UNSC has established 30 sanctions regimes.
The UNSC sanctions have taken a number of different forms, in pursuit of a variety of
goals. The measures have ranged from compr ehensive economic and trade sanctions to
more targeted measures such as arms embargoes, travel bans, and financial or commodity
restrictions. The UNSC has applied sanctions to support peaceful transitions, deter
non-constitutional changes, constrain terrorism, protect human rights and promote
non-proliferation.
There are 14 ongoing sanctions regimes which focus on supporting political settlement
of conflicts, nuclear non-proliferation, and c ounter-terrorism. Each regime is administered
by a sanctions committee chaired by a non-permanent member of the UNSC. There are ten
monitoring groups, teams and panels that support the work of the sanctions committees.
UN sanctions are imposed by the UNSC, usually acting under Chapter VII of the
United Nations Charter. Decisions of the UNSC bind members of UN and override other
obligations of UN member states.
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European Union
Under EU sanction measures, there is no ‘‘b lanket’’ ban on doing business in or with a
jurisdiction targeted by sanctions measures. It is not generally prohibited or otherwise
restricted for a person or entity to do business ( involving non-controlled or unrestricted
items) with a counterparty in a country subject to EU sanctions where that counterparty is
not a Sanctioned Person and not engaged in prohibited activities, such as exporting, selling,
transferring or making certain controlled or restricted products available (either directly or
indirectly) to, or for use in a jurisdiction subject to sanctions measures, provided that no
funds and economic resources are made available to the Sanctioned Persons.
United Kingdom and United Kingdom overseas territories
As at 1 January 2021, UK is no longer an EU member state. EU law including EU
sanctions measures continued to apply to and in UK until 31 December 2020. EU sanctions
measures had also been extended by UK on a regime by regime basis to apply in UK
overseas territories, inclu ding the Cayman Islands. Starting from 1 January 2021, UK
applies its own sanctions programmes and has extended its autonomous sanctions regimes
to apply to and in UK overseas territories.
Australia
The Australian restrictions and prohibitions arising from the sanctions laws apply
broadly to any person in Australia, any Australian anywhere in the world, companies
incorporated overseas that are owned or cont rolled by Australians or persons in Australia,
and/or any person using an Australian flag vessel or aircraft to transport goods or transact
services subject to UN sanctions.
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HISTORY AND BACKGROUND
We are a precision engineering services provider headquartered in Singapore,
specialising in providing precision machining and precision welding services for
international companies in the semiconduct or and other sectors. Our history could be
traced back to January 2000 when Dato’ Sri Chua, an executive Director, our chief
executive officer, Chairman of our Board and a C ontrolling Shareholder, together with his
brother-in-law, Mr. Lee Chong Hoe, incorporated our first key operating subsidiary,
Metasurface Technologies, in Singapore.
We started our business by machining simple parts and focusing on machining
components for sputter machines, a system to manufacture hard disc drive components.
With more advanced capabilities to machine mo re complex components and parts, in 2009,
we started providing our precision machining services for the semiconductor industry.
Throughout the years, we continued to ramp up our technologies and production
capabilities to machine more complex par ts which has shaped our current business
offerings. In 2014, we acquired SGP Malaysia as a subsidiary of our Group and, by
expanding our production facility in J ohor, Malaysia, we further enhanced our
manufacturing capacity to cope with the increasing demand for our services. In 2021, we
acquired SPW (which, immediately prior to o ur acquisition, was held as to 50% by Dato’
Sri Chua and 50% by Ms. Pang) to consolidate SPW’s precision welding know-how,
capabilities and operations into our Group , in order to expand our Group’s precision
engineering services’ offerings to compris e precision welding services in addition to
precision machining services.
Key business milestones
The table below shows a summary of our key achievements and business milestones
since our establishment:
Year Milestone Event
2000 Our first key operating subsidiary, Metasurface Technologies, was
incorporated, mainly focusing on machining components for sputter
machines, a system to manufacture hard disc drive components
2009 Metasurface Technologies began to provide precision machining
services to our first customer in the semiconductor industry
2014 SGP Malaysia became a subsidiary of our Group
2015 Metasurface Technologies ex panded its customer base to the
aerospace industry
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Year Milestone Event
2016 Metasurface Technologies first became an approved supplier of
Customer A
To cope with the growing demands of our services, we expanded our
own production facility in Johor, M alaysia through SGP Malaysia
2021 We began to manufacture components for one of our key customers
which is engaged in the oil and gas business
We acquired SPW to consolidate i ts precision welding know-how,
capabilities and operations into our Group
We entered into the Licence Agreement with Accelerate, pursuant to
which, Accelerate grants our Group the rights to, among others, use
Accelerate’s technologies and intellectual property rights to develop
enhancements on, and to commercialise, Accelerate’s technologies
and licenced products
We secured investments in Metasurface Technologies for a total
amount of S$3,910,000 from nine investors. For details, see ‘‘—
Pre-IPO Investments — 1st Pre-IPO Investment by nine investors’’
2022 We entered into the 2nd Pre-IPO Investment with Accelerate in
connection with the Licence Agreement. For details, see ‘‘— Pre-IPO
Investments — 2nd Pre-IPO Investment by Accelerate’’
We entered into the 3rd Pre-IPO Investment with MMI and secured
an investment of S$1,000,000. For details, see ‘‘— Pre-IPO
Investments — 3rd Pre-IPO Investment by MMI’’
Founding of our Group
Our Group was established in January 2000 wh en our first key operating subsidiary,
Metasurface Technologies, was incorporated by Dato’ Sri Chua and his brother-in-law, Mr.
Lee Chong Hoe, who funded the initial contributions by their personal wealth from savings
and investments. For details of Dato’ Sri Chua’s biography, see ‘‘Directors and Senior
Management — Board of Directors — Executive Directors’’. Mr. Lee Chong Hoe had
divested his interests in our Group by 2003, as he intended to focus on his other business
ventures.
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CORPORATE DEVELOPMENT
Our Group comprises our Company and three subsidiaries which had each commenced
business after their respective incorporation dates. The information of our Group
companies, together with their corporate development history, are as follows:
Our Company
Our Company was incorporated on 7 December 2021 in the Cayman Islands as an
exempted company with limited liability. On incorporation, our authorised share capital
was HK$380,000, divided into 380,000,000 Shares of HK$0.001 each, of which one Share
was issued and allotted to our initial subscriber, who was an independent third party, and
subsequently transferred to SGP BVI on the same day.
Our Company is an investment holding company. As part of our Reorganisation, our
Company became the holding company of our Group and will be the vehicle of the Listing.
For details, see ‘‘— Reorganisation’’.
Our subsidiaries
Metasurface Technologies
Metasurface Technologies was incorporated under the name ‘‘Q’son Precision
Engineering Pte Ltd’’ on 6 January 2000 in Singapore as an exempt private company
limited by shares. Metasurface Technologies is the principal operating entity of our
precision machining services. On incorporation, Metasurface Technologies had two
ordinary shares, of which one ordinary share was issued and allotted to Dato’ Sri Chua
and one ordinary share was issued and allotted to Mr. Lee Chong Hoe, the brother-in-law
of Dato’ Sri Chua. Mr. Lee Chong Hoe ceased to be a shareholder of Metasurface
Technologies in 2003. Subsequent to a series o f share transfers among and share allotments
to the Chua family and independent investors over the years, as at 1 January 2021 and until
the commencement of the Reorganisation, Me tasurface Technologies was held by Dato’ Sri
Chua, Mrs. Chua, Mr. Ng Cheow Boo, Mr. Jee Wee Chek, Ms. Chong Siow Ming and Mr.
Lee Liang Seng as to approximately 65.98%, 28.17%, 5.41%, 0.26%, 0.13% and 0.05%,
respectively. Mr. Ng Cheow Boo, Ms. Chong Siow Ming and Mr. Lee Liang Seng are
personal friends of Dato’ Sri Chua and Mrs. Chua, and are independent third parties of our
Group. Mr. Jee Wee Chek is Dato’ Sri Chua’s brother-in-law and Mrs. Chua’s brother.
SPW
SPW was incorporated under the name ‘‘Fluid Science (S.E.A.) Precision Engineering
Pte. Ltd.’’ on 15 November 2006 in Singapore as a private company limited by shares. SPW
is the principal operating entity of our precis ion welding business. On incorporation, SPW
had 20,000 ordinary issued shares, of which 10,000 ordinary shares were issued to Mr. Chua
Hong Kim, the father of Dato’ Sri Chua, and 10,000 ordinary shares were issued to Ms. Lee
Heng Ngoh, the mother of Dato’ Sri Chua. On 17 March 2015, each of Mr. Chua Hong Kim
and Ms. Lee Heng Ngoh transferred all shares held by them to Dato’ Sri Chua and Ms.
Pang, a director of SPW and spouse of Mr. Soh (a director of SGP Malaysia), respectively,
HISTORY AND DEVELOPMENT
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at a nominal consideration of S$1 by each of them. The nominal consideration of S$1 was
arrived at among the parties based on the family arrangements for Dato’ Sri Chua to inherit
the business from his parents, and incentives for recruiting Mr. Soh to join the company.
Fluid Science (S.E.A.) Precision Engineerin g Pte. Ltd. was renamed to Singapore Precision
Welding Pte. Ltd. on 23 March 2015. On 21 November 2016, SPW issued and allotted
25,000 ordinary shares to each of Dato’ Sri Chua and Ms. Pang, respectively. Since then
and immediately prior to the implementation of the Reorganisation, SPW remained 50%
owned by each of Dato’ Sri Chua and Ms. Pang, respectively.
SGP Malaysia
SGP Malaysia was incorporated on 6 August 2013 in Malaysia as a private company
limited by shares. SGP Malaysia holds and oper ates our manufacturing plant in Malaysia.
On incorporation, SGP Malaysia had two ordinary issued shares, with one ordinary share
issued and allotted to each of the two former employees of SGP Malaysia. On 5 May 2014,
SGP Malaysia issued and allotted 1,360,830 ordinary shares to Metasurface Technologies.
On 22 January 2015, each of the two former employee shareholders transferred their one
share to Metasurface Technologies at a nomina l consideration of Malaysian ringgit 1. Since
then, SGP Malaysia became wholly-owned by Metasurface Technologies immediately prior
to the implementation of the Reorganisation.
Investment in an associate
Metaoptics Technologies
On 15 June 2021, Metaoptics Technologies was incorporated in Singapore as a private
company limited by shares. Upon incorporation, Metaoptics Technologies was held as to
90% by Metasurface Technologies and as to 10% by Mr. Thng, an executive Director and a
substantial Shareholder of our Company. At the relevant time, Metaoptics Technologies
was an insignificant subsidiary of our Group.
Metaoptics Technologies is principally engaged in the metalens technology business,
an industry our Group had no prior experi ence in which, our Directors believe, has
high-growth potentials. Since its inception, it had always been our Directors’ intention that
Metaoptics Technologies will be a long-term investment of our Group with Mr. Thng (who
has extensive experiences in the related tech nological, electronics, process and product
engineering fields, as elaborated in ‘‘— Mr. Thng’s role in our Group’’ below) spearheading
its entire business operations and strategic development. As in the case of other start-up
companies in new and high-growth industries , it had long been the mutual understanding
that Metaoptics Technologies will require additional funding from other independent third
party investors and thus the equity interests of both Metasurface Technologies and Mr.
Thng in Metaoptics Technologi es will eventually be diluted.
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Metaoptics Technologies is intended to be a source of long-term investment returns
with minimal cashflow injection from our Group. Since its incorporation, the support we
rendered to Metaoptics Technologies has la rgely been intangible in nature, such as the
sharing of our administrative resources for its initial development (as further elaborated in
‘‘Continuing Connected Transactions — Shared Administrative Services’’ in this
prospectus) and the provision of an established corporate platform (with our existing
reputation and industry position within the semiconductor sector) to launch its initial
shareholder and customer base. To the best of our Directors’ knowledge, the optical
metalens can be manufactured by the fabrication equipment from the semiconductor
industry and our Group’s major customers in the semiconductor sector are also expanding
or contemplating to expand their business involving metalens to diversify their product
portfolio. Therefore, the optics business of Metaoptics Technologies is also expected to
bring our Group synergised business development opportunities. In return for our support,
Mr. Thng has agreed to contribute his extensive industry experience and connections to, as
an executive Director, advise on the general corporate development (including fundraising
opportunities in the form of the Pre-IPO Investments), product offerings and customer base
of our Group as a whole.
During the course of Metaoptics Technologies’ initial development, our Group has
conducted the following additional corporate actions as a form of non-monetary support:
(a) Transfer of patents. From September 2021 to November 2021, Mr. Thng
transferred 12 patents registered u nder his name to Metaoptics Technologies.
From our Group’s perspective, the 12 patents provide an initial technical base for
Metaoptics Technologies’ business development (which our Directors believe will
eventually generate investment returns), serving as a strong technical portfolio to
demonstrate the combined capabilit ies of Metasurface Technologies and
Metaoptics Technologies to potential i nvestors and customers, and to pave for
other potential opportunities for third-party patent licencing arrangements in the
future. In view of these benefits and in consideration of the transfer of these
patents, Dato’ Sri Chua agreed to grant Mr. Thng shares and anti-dilution rights
under the Anti-dilution Undertaking and the Metaoptics Anti-dilution
Undertaking as described in ‘‘— Ant i-dilution Undertaking’’ and ‘‘—
Metaoptics Anti-dilution Undertaking’’ below.
(b) 2nd Pre-IPO Investment. On 14 October 2022, Accelerate subscribed to a 5%
equity interest in Metasurface Technologi es, the consideration of which was offset
by a S$2,880,000 upfront licencing fee payable by Metasurface Technologies for
certain technologies licenced under the Lic ense Agreement. These technologies are
mainly related to the optics business and used by Metaoptics Technologies for its
continual business development. Accelerate became a Shareholder of our
Company upon completion of the Reorganisation and has also become a
shareholder of Metaoptics Technologies on 22 March 2024. As a result of the
2nd Pre-IPO Investment, an amount due from an associate in the amount of
S$2,880,000 (equivalent to the upfront licencing fee payable under the Licence
Agreement) was recognised in our consolid ated statements of financial position
once Metaoptics Technologies ceased to be our subsidiary and became our
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associate. Such amount is payable by Metaoptics Technologies upon demand and
is expected to be settled by the on-going o perating cash generated by Metaoptics
Technologies and investment from its in vestors. For details of the 2nd Pre-IPO
Investment, see ‘‘— Pre-IPO Investments — 2nd Pre-IPO Investment by
Accelerate’’ and for details of the Lic ense Agreement, see ‘‘— Business —
Research and Development — Investment in associate — The Licence
Agreement’’.
Up until May 2023, Metaoptics Technologies has continually developed its initial
product offerings and successfully raised funds from different independent third-party
investors. In line with our Group’s original i ntention for Metaoptics Technologies to be a
form of investment for long-term growth and returns, we have reached an understanding
with Mr. Thng to dispose of our control in Metaoptics Technologies and transfer our
approximately 33.32% equity interests to Mr. Thng at a consideration of S$180,000 in
aggregate. In addition, this transfer was also prompted by our Directors’ understanding
that a number of potential investors of Metaoptics Technologies have indicated, as a matter
of investment philosophy and condition, that Mr. Thng, being the key personnel with
extensive experiences in the optics industry spearheading the development of Metaoptics
Technologies, shall be its largest shareholder and take more substantive control over the
company. Our Group remained as an investor with approximately 20.19% equity interests
in Metaoptics Technologies immediately after the transfer. Metaoptics Technologies then
ceased to be our subsidiary and instead became an associate of our Group.
The transfer of our approximately 33.32% equity interests in Metaoptics Technologies
to Mr. Thng resulted in the recognition in our consolidated statements of comprehensive
income for the year ended 31 December 2023 (a) gains on disposal of a subsidiary of
approximately S$2.5 million, and (b) share-ba sed payments of approximately S$2.1 million
because the transfer is perceived to be a form of compensation to remunerate Mr. Thng’s
past services and contribution to our Group as an employee. The consideration of this
transfer, being S$180,000, was at a discount to the then fair value of Metaoptics
Technologies. Our Directors, in agreeing to this discount, have taken into account that (i)
Mr. Thng has continued to be the only key personnel with meaningful experiences and
industry connections to spearhead the operations and business development of Metaoptics
Technologies, (ii) the continual contributions and advice of Mr. Thng, aside from his duties
in Metaoptics Technologies, to our Group, such as his technical knowledge on the product
and process engineering field and his succes sful introduction of Accelerate and MMI as
Pre-IPO Investors to our Company, as disclosed in ‘‘— Mr. Thng’s role in our Group’’
below, (iii) Metaoptics Technologies, after the initial ramp-up period, is expected to operate
independently without significant support from our Group, and (iv) our actual monetary
investment into Metaoptics Technologies has been minimal.
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Mr. Thng’s role in our Group
Dato’ Sri Chua first became acquainted with Mr. Thng in around 2011 when Mr. Thng
was employed at one of our Group’s customers at that time. Mr. Thng was then responsible
for directly liaising with Dato’ Sri Chua and our Group’s relevant employees on handling
the procurement from our Group.
Since joining our Group in July 2021, Mr. Thng has been contributing to the growth of
our Group’s business by providing technical knowledge and advice on our Group’s
operations by leveraging his familiarity with our Group’s customers based on his previous
work experience at Benchmark Electronics Manufacturing (S) Pte Ltd and knowledge on
the product and process engineering field in general. Mr. Thng has also been continuously
exploring new potential opportunities for our Group to expand its product offerings and
customer base.
Mr. Thng has also contributed to the fund-raising activities of our Group. Since 2021,
he has introduced several pre-IPO investors to our Group and negotiated terms of the
investments on behalf of our Company. In particular, he successfully brought in Accelerate
and MMI as two of our Company’s Pre-IPO Investors in 2021 and 2023, respectively, in
which he represented our Company in commercial negotiations for these Pre-IPO
Investments. For details on the Pre-IPO Investments by Accelerate and MMI, see ‘‘—
Pre-IPO Investments — 2nd Pre-IPO Investment by Accelerate’’ and ‘‘— Pre-IPO
Investments — 3rd Pre-IPO Invest ment by MMI’’, respectively.
Other than building relationships with external parties on behalf of our Company, Mr.
Thng has also been taking part in our Group’s internal affairs suc h as administration,
human resources and corporate governance. He as sisted in selecting suitable employees and
external advisers to facilitate our Group’s daily operations and improve corporate
governance.
Transfer of Mr. Thng’s patents
Mr. Thng transferred 12 patents to Metaoptics Technologies from September 2021 to
November 2021. The following table sets out details of the transferred patents:
No. Patent name
Type of
patent
Place of
registration Patent number
Application
date Expiry date
1. Optical Module and
Manufacturing Method
thereof and Method for
Soldering Optical Module
on Printed Circuit Board
(光學模組及其製造方法與
焊接光學模組於電路板的方
法)
Invention Taiwan I722528 8 August 2019 7 August 2039
2. Optical Module
(光學模組)
Utility
model
Taiwan M586360 11 November
2019
7 August 2029
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No. Patent name
Type of
patent
Place of
registration Patent number
Application
date Expiry date
3. Optical Module
(光學模組)
Invention PRC CN112394426A 13 August
2019
N/A. In the
process of
registration
Note
4. Optical Module
(光學模組)
Utility
model
PRC CN210572832 13 August
2019
13 August 2029
5. Laser Module and Laser
Die and Manufacturing
Method thereof ( 雷射模組
及其雷射晶粒與製造方法)
Invention Taiwan I752498 15 May 2020 14 May 2040
6. Laser modules and laser die
thereof ( 雷射模組及其雷射
晶粒)
Utility
model
Taiwan M605139 15 May 2020 14 May 2030
7. Laser Module and Laser
Die and Manufacturing
Method thereof ( 激光模組
及其激光晶粒與製造方法)
Invention PRC CN113745959A 15 May 2020 N/A. In the
process of
registration Note
8. Laser Module and Laser
Die thereof ( 雷射模組及其
雷射晶粒)
Utility
model
PRC CN212162325U 15 May 2020 15 May 2030
9. Active Alignment System
and Active Alignment
Method ( 主動式對準系統以
及主動式對準方法)
Invention Taiwan I734535 19 June 2020 18 June 2040
10. Active Alignment System
(主動式對準系統)
Utility
model
Taiwan M605138 19 June 2020 18 June 2030
11. Active Alignment System
(主動式對準系統)
Invention PRC CN113922200A 23 June 2020 N/A. In the
process of
registration
Note
12. Active Alignment System
(主動式對準系統)
Utility
model
PRC CN212571686U 23 June 2020 23 June 2030
Note: As at the Latest Practicable Date, (i) in respect of the application of patent number
CN112394426A, replies to questions raised by the relevant PRC authority had been submitted
and are currently under the relevant PRC authority’s review; and (ii) in respect of the application
of patent numbers CN113745959A and CN113922200A, these applications were under substantive
examination stage in which the relevant PRC aut hority may raise questi ons or objections against
the invention patent applications. To the best of the knowledge of our Directors, the prolonged
registration period is caused by the backlog in invention patent applications pending to be
reviewed and processed by the relevant authorities in the PRC.
As Metaoptics Technologies was only incorporated in June 2021, the 12 patents were
Metaoptics Technologies’ initial assets and served as a starting point for Metaoptics
Technologies’ further development in its know-how and technology. Metaoptics
Technologies, with its design and manufactu ring capabilities, leverages the patents to
HISTORY AND DEVELOPMENT
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make modules. The patents also enhanced Metaoptics Technologies’ portfolio and
valuation to attract collaboration with potential business partners and investors in
Metaoptics Technologies and Metasurface Technologies (being a shareholder of Metaoptics
Technologies).
To reward Mr. Thng’s contribution to our Group and the transfer of his 12 patents to
Metaoptics Technologies, (i) Dato’ Sri Chua granted Mr. Thng an anti-dilution right to his
shareholding in Metasurface Technologies p ursuant to the Anti-dilution Undertaking
(defined below), and (ii) Meta surface Technologies granted Mr. Thng an anti-dilution right
to his shareholding in Metaoptics Technologies pursuant to the Metaoptics Anti-Dilution
Undertaking (defined below), as detailed below. For details on his shareholding changes in
our Group and Metaoptics Technologies in ligh t of exercising the anti-dilution rights, see
‘‘— Mr. Thng’s shareholding changes in our Group and Metaoptics Technologies’’.
Anti-dilution Undertaking
On 13 December 2021, as a reward for Mr. T hng’s continual contribution to the
growth of Metasurface Technologies’ business and its fund-raising activities as well as
providing valuable know-how to our Group, Dato’ Sri Chua agreed to grant Mr. Thng an
anti-dilution right to maintain his 10.00% sha reholding in Metasurface Technologies and
undertook to transfer, or procure the transfer of, such number of shares in Metasurface
Technologies to Mr. Thng from time to time prior to the submission of the listing
application of Metasurface Technologies or a related corporation for the purpose of the
Listing to maintain Mr. Thng’s shareholding proportion of 10.00% in the event Mr. Thng’s
shareholding in Metasurface Technologies is diluted to below 10.00% (the ‘‘ Anti-dilution
Undertaking ’’).
The Anti-dilution Undertaking was termin ated on 25 April 2023 in preparation for the
Listing.
Metaoptics Anti-dilution Undertaking
On 28 April 2022, as a reward for Mr. Thng’s continual contribution in the growth of
Metaoptics Technologies’ business and its fund-raising activities as well as providing the
valuable know-how to Metaoptics Technologies including the grant of patents, Metasurface
Technologies agreed to grant Mr. Thng an an ti-dilution right to maintain his 20.00%
shareholding in Metaoptics Technologies and undertook to transfer, or procure the transfer
of, such number of shares in Metaoptics Technologies to Mr. Thng from time to time prior
to the submission of the listing application of Metasurface Technologies or a related
corporation for the purpose of the Listing to maintain Mr. Thng’s shareholding proportion
of 20.00% in the event Mr. Thng’s shareholding in Metaoptics Technologies is diluted to
below 20.00% (the ‘‘ Metaoptics Anti-dilution Undertaking ’’).
The Metaoptics Anti-dilution Undertaking was terminated on 25 April 2023 in
preparation for the Listing.
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Mr. Thng’s shareholding changes in our Group and Metaoptics Technologies
The following table sets out a chronology of Mr. Thng’s shareholding changes in our
Group, including circumstances where his anti-dilution rights were exercised:
Date
Shareholding changes and/or the events and circumstances
leading to such changes
Early 2021 to July 2021 In early 2021, Dato’ Sri Chua approached Mr. Thng and
sought for his advice on fund-raising and expanding our
Group’s business. In July 2021, Mr. Thng joined
Metasurface Technologies and began to introduce
potential projects and investors to the Group.
8 October 2021 To reward Mr. Thng for his contribution to the Group,
Dato’ Sri Chua transferred 391,164 ordinary shares in
Metasurface Technologies to Mr. Thng at a nominal
consideration of S$1 pursuant to agreed arrangements
later formally documented in the Anti-dilution
Undertaking.
Upon completion of this share transfer, Mr. Thng held
10.00% shares in Metasurface Technologies.
1 December 2021 Following the con solidation of SPW into our Group,
Metasurface Technologies issued and allotted 371,343
ordinary shares to each of Dato’ Sri Chua and Ms. Pang.
Upon completion of this share allotment, Mr. Thng held
approximately 8.40% shares in Metasurface Technologies.
28 December 2021 In conjunction with the 1st Pre-IPO Investment, Dato’ Sri
Chua and Mrs. Chua transferred 86,401 ordinary shares and
12,132 ordinary shares (in total 98,533 ordinary shares) in
Metasurface Technologies to Mr. Thng, respectively, at nil
consideration pursuant to the Anti-dilution Undertaking.
Upon completion of this share transfer, Mr. Thng held
10.00% shares in Metasurface Technologies.
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Date
Shareholding changes and/or the events and circumstances
leading to such changes
27 September 2022 An amount of S$4,285,301.09 owed by Metasurface
Technologies to Mrs. Chua wa s set-off against the issue
and allotment of 279,800 ordinary shares in Metasurface
Technologies to Mrs. Chua.
Pursuant to the Anti-dilution Undertaking, Dato’ Sri Chua
and Mrs. Chua transferred 13,990 ordinary shares and
13,990 ordinary shares in Metasurface Technologies,
respectively, to Mr. Thng at a nominal consideration of S$1.
Upon completion of this share transfer, Mr. Thng held
approximately 10.00% shares in Metasurface Technologies.
14 October 2022 In conjunction with th e 2nd Pre-IPO Investment, Dato’ Sri
Chua and Mrs. Chua transferred 13,623 ordinary shares and
13,623 ordinary shares in Metasurface Technologies,
respectively, to Mr. Thng at a nominal consideration of
S$1 pursuant to the Anti-dilution Undertaking.
Upon completion of this share transfer, Mr. Thng held
approximately 10.00% shares in Metasurface Technologies.
30 January 2023 In conjunction with the 3rd Pre-IPO Investment, Dato’ Sri
Chua and Mrs. Chua transferred 7,364 ordinary shares and
7,364 ordinary shares in Metasurface Technologies,
respectively, to Mr. Thng at a nominal consideration of
S$1 pursuant to the Anti-dilution Undertaking.
Upon completion of this share transfer, Mr. Thng held
approximately 10.00% shares in Metasurface Technologies.
26 April 2023 Pursuant to a restructuring deed, Mr. Thng transferred all
559,651 ordinary shares in Met asurface Technologies held
by him to our Company. In return, our Company issued
559,651 Shares to Angelling, an entity wholly owned by Mr.
Thng.
Upon completion of this step , Mr. Thng, through Angelling,
held approximately 10.00% Shares in our Company.
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The following table sets out a chronology of Mr. Thng’s shareholding changes in
Metaoptics Technologies before Metaoptics Technologies became our associate, including
circumstances where his anti-dilutions rights were exercised:
Date
Shareholding changes and/or the events and circumstances
leading to such changes
June 2021 On 15 June 2021, Metasurface Technologies, together with
Mr. Thng, incorporated Metaoptics Technologies with the
intention of investing and venturing into metalens
technology business. Mr. Thng was allotted 29,000 shares,
representing 10.00% of the total issued share capital of
Metaoptics Technologies.
30 September 2021 Pursuant to agreed arrangements later formally documented
in the Metaoptics Anti-Diluti on Undertaking, Metasurface
Technologies transferred 29,000 ordinary shares in
Metaoptics Technologies to Mr. Thng at a nominal
consideration of S$1.
Upon completion of this share transfer, Mr. Thng held
20.00% shares in Metaoptics Technologies.
11 March 2022 Following Metaoptics T echnologies’ issue and allotment of
31,865 ordinary shares to Origgin (defined below), pursuant
to the Metaoptics Anti-Diluti on Undertaking, Metasurface
Technologies transferred 6,373 ordinary shares in
Metaoptics Technologies to Mr. Thng at a nominal
consideration of S$1.
Upon completion of this share transfer, Mr. Thng held
approximately 20.00% shares in Metaoptics Technologies.
12 April 2022 Following Metaoptics T echnologies’ issue and allotment of
16,093 ordinary shares to Autec (defined below), pursuant
to the Metaoptics Anti-Dilution Undertaking, Mr. A Chua,
who acted in accordance of the instructions of Dato’ Sri
Chua, transferred 3,219 ordinary shares in Metaoptics
Technologies to Mr. Thng at a nominal consideration of
S$1.
Upon completion of this share transfer, Mr. Thng held
approximately 20.00% shares in Metaoptics Technologies.
HISTORY AND DEVELOPMENT
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Date
Shareholding changes and/or the events and circumstances
leading to such changes
25 August 2022 Following Metaoptics Technologies’ issue and allotment of
35,574 ordinary shares to MMI (defined below), pursuant to
the Metaoptics Anti-Dilution Undertaking, Metasurface
Technologies transferred 7,896 ordinary shares in
Metaoptics Technologies to Mr. Thng at a nominal
consideration of S$1.
Upon completion of this share transfer, Mr. Thng held
approximately 19.99% shares in Metaoptics Technologies.
31 March 2023 Mr. Thng transferred 37,744 ordinary shares in Metaoptics
Technologies, representing approximately 9.99% of the
entire issued share capital of Metaoptics Technologies, to
Aquaspring (defined below) at a consideration of
S$800,000
(Note) .
Upon completion of this share transfer, Mr. Thng held
approximately 9.99% shares in Metaoptics Technologies.
16 May 2023 Metasurface Technologies transferred 125,767 ordinary
shares in Metaoptics Technologies, representing
approximately 33.32% of the entire issued share capital of
Metaoptics Technologies, to Mr. Thng at a consideration of
S$180,000.
Upon completion of this share transfer, Mr. Thng held
approximately 43.32% shares in Metaoptics Technologies.
Note:
Aquaspring Group Limited (‘‘ Aquaspring ’’), an independent third party of our Group and Mr. Thng, is
legally and beneficially wholly -owned by Mr. Lin Shui Ching (‘‘ Mr. Lin ’’), who operates a specialty
chemical business based in Taiwan of fering plastic pigments, dyes and fine chemical raw materials. Mr.
Lin’s investment in Metaoptics Technologies is e xpected to be the first step of the anticipated
collaborations for Aquaspring to become a potenti al business partner of Metaoptics Technologies in
the future. Mr. Lin’s investment in Metaoptics Technologies was in the form of share transfer from Mr.
Thng because, according to Mr. Thng and our Direct ors’ understanding, Mr. Thng intended to partially
realise his personal financial investment in Metaoptics Technologies, which had yet to declare any
dividend or distribution otherwi se commensurate to Mr. Thng’s efforts, experiences and expertise.
The consideration of this transfer was determined based on arm’s length commercial negotiations between
Mr. Thng and Aquaspring with reference to a valua tion report prepared by an independent valuer.
Aquaspring, other than being a shareholder of Meta optics Technologies as described above, has no other
past or present relationship (includi ng family, employment, business, financing, trust or otherwise) with
our Company, its subsidiaries, its shareholders, direct ors or senior management, or any of their respective
associates.
HISTORY AND DEVELOPMENT
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Save as Mr. Thng’s directorship in our Comp any as disclosed in the section headed
‘‘Directors and Senior Management’’ in this prospectus, his shareholding in our Group, the
agreements and arrangements he entered into with our Group and/or our Shareholders as
described in this section, his previous employment at one of our Group’s customers as
described in ‘‘— Mr. Thng’s role in the Group’’ above and being a common member of a
charity foundation in Singapore with Dato’ Sri Chua from January 2023 to March 2023,
Mr. Thng has no other past or present relationship (including family, employment,
business, financing, trust or otherwise) with our Company, its subsidiaries, its shareholders,
directors or senior management, or any of their respective associates.
Name changes of our Group and our connected persons
Background
Metasurface Technologies (formerly known as Q’son Precision Engineering Pte Ltd)
and Metaoptics Technologies (formerly known as Q’son Advanced Optics Pte. Ltd. and was
initially incorporated as an insignificant s ubsidiary of Metasurface Technologies) had
historically adopted the ‘‘Q’son’’ name which was originally intended as a common name for
the Chua family’s various (but separate) business ventures. The ‘‘Q’son’’ name is or was, for
example, also used by certain connected persons of our Group such as Metasurface & Co
(formerly known as Q’son Corp) and Singapore Kitchen Equipment Limited (‘‘ SKE’’ and,
together with its subsidiaries, the ‘‘ SKE Group ’’), the shares of which are listed on the SGX
(SGX: 5WG). The ‘‘Q’son’’ name was used by (i) Metasurface Technologies from
incorporation (January 2000) until Octobe r 2021, (ii) Metaoptics Technologies from
incorporation (June 2021) until September 2021, and (iii) Metasurface & Co from
incorporation (September 2015) until June 2022. The SKE Group has been using the
‘‘Q’son’’ name since the founding of its business in September 1996. Other than the SKE
Group which is still using the ‘‘Q’son’’ name as at the Latest Practicable Date, Metasurface
Technologies, Metaoptics Technologies and Metasurface & Co had changed their names in
October 2021, September 2021 and June 2022, respectively, as elaborated below.
Metasurface & Co was incorporated under the name ‘‘Q’SON CORP’’ by Mr. Jee Wee
Liang (‘‘Mr. Jee ’’), brother of Mrs. Chua and brother-in-law of Dato’ Sri Chua, on 22
September 2015. The company was named after ‘ ‘Q’son’’ at incorporation because its
establishment was primarily intended to procure components, parts and materials from
U.S. based suppliers for Q’son Precision E ngineering Pte Ltd. During the Track Record
Period, Metasurface & Co procured and supplied certain raw materials, including stainless
screw heads, corrosion resistant ball screws, pull handles and helicoils to our Group.
Notwithstanding the family relationship among Mr. Jee, Dato’ Sri Chua and Mrs. Chua,
Metasurface & Co has always been ultimat ely owned and controlled by Mr. Jee since its
incorporation, and was not, and currently is no t, a subsidiary of our Company. Metasurface
& Co had used ‘‘Q’son’’ as part of its name in its business operations since incorporation
until its name change in June 2022 as elaborated below.
Dato’ Sri Chua’s sister, Ms. Chua Chwee Choo Sally (‘‘ Ms. Sally Chua ’’), is a
controlling shareholder, executive director an d chief executive officer of SKE, the shares of
which are listed on the SGX (SGX: 5WG). Since the incorporation of SKE, SKE has been
HISTORY AND DEVELOPMENT
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principally engaged in the business of designing, fabricating, installation, repair,
maintenance and supplying kitchen equipment in Singapore and other Southeast Asian
regions. The SKE Group includes Q’son Kitchen Equipment Pte Ltd (a company
incorporated in Singapore on 30 September 1996), with ‘‘Q’son’’ being one of the SKE
Group’s kitchen equipment brands, in line with the family consensus as elaborated below.
Despite the common use of the ‘‘Q’son’’ name, it had always been a consensus among
Dato’ Sri Chua, Ms. Sally Chua and their family members since founding their separate
businesses for Metasurface Technologies, Met aoptics Technologies and Metasurface & Co
(on one hand), and the SKE Group (on the other) to be separate and independent business
ventures. Besides, during the Track Record Period, there had been no instances of
cross-shareholding among Metasurface Technologies, Metaoptics Technologies and
Metasurface & Co (on one hand), and the SKE Group (on the other). To the best of our
Directors’ knowledge and based on publicly available information, SKE and our Group do
not have overlapping customers during the Track Record Period.
In 2013, as part of its listing process on the SGX, SKE issued an offer document which
disclosed that Metasurface Technologies ( which was then known as ‘‘Q’son Precision
Engineering Pte Ltd’’) had undertaken on 22 May 2013 ‘‘to change its ‘‘Q’son’’ name within
three months from the date of the undertaking and to no longer utilise the ‘‘Q’son’’ name or
brand as well as to no longer state that it is part of the ‘‘Q’son group of companies’’ (the
‘‘Change of Name Undertaking ’’). However, Metasurface Tec hnologies had carried on using
the ‘‘Q’son’’ name despite the Change of Name Undertaking due to Dato’ Sri Chua’s
inadvertent oversight. Besides, subsequent to the Change of Name Undertaking, the SKE
Group or their directors, shareholders and management did not approach the Group on
execution of the name change, did not explic itly or implicitly object to Metasurface
Technologies using the ‘‘Q’son’’ name thereafter and even continued its business
relationship with Metasurface Technologies (while it was still using the ‘‘Q’son’’ name).
Change of names
Since late 2021, (i) Metasurface Technologies changed its name from ‘‘Q’son Precision
Engineering Pte Ltd’’ to ‘‘Metasurface Tech nologies Pte. Ltd.’’ on 22 October 2021, (ii)
Metaoptics Technologies changed its name from ‘‘Q’son Advanced Optics Pte. Ltd.’’ to
‘‘Metaoptics Technologies Pte. Ltd.’’ on 3 0 September 2021, and (iii) Metasurface & Co
changed its name from ‘‘Q’SON CORP’’ to ‘‘Metasurface & Co’’ on 27 June 2022
(collectively, the ‘‘ Change of Names ’’).
HISTORY AND DEVELOPMENT
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Assurances
During 2021 to 2023, as part of the preparation works of our Company’s listing
application, Metasurface Technologies, Metaoptics Technologies and Metasurface & Co
(although both Metaoptics Technologies an d Metasurface & Co were not a party to the
Change of Name Undertaking) undertook to SKE that, among other things (the
‘‘Assurances ’’):
(i) following the Change of Names, each of them will not use the ‘‘Q’son’’ name any
further, and
(ii) at all material times, including after the Change of Name Undertaking was given,
each of Metasurface Technologies, Metaoptics Technologies and Metasurface &
Co had not represented to third parties that they were part of the SKE Group
before and after the date of the Change of Name Undertaking, and there was no
potential conflict of interest in using the ‘ ‘Q’son’’ name, given that, among others,
each of them is engaged in fundamentally different industries and businesses as
the SKE Group and has a different customer base from that of the SKE Group.
SKE’s waiver, release and discharge
During 2021 to 2023, in response to the Assurances, SKE:
(i) confirmed that the SKE Group has retrospectively acquiesced to such use of the
‘‘Q’son’’ name for such time period prior to the respective Change of Names,
provided that Metasurface Technologies, Metaoptics Technologies and
Metasurface & Co had at no point in time re presented to third parties that they
were part of the SKE Group; and
(ii) unconditionally and irrevocably waived , released and discharged Metasurface
Technologies, Metaoptics Technologies and Metasurface & Co from any claims or
liabilities (including but not limited to intellectual property rights) (the ‘‘ Claims ’’)
from the date of the Change of Name Undertaking or from their respective dates
of incorporation (as the case may be) arising out of or in connection with the
Change of Name Undertaking and the use of the ‘‘Q’son’’ name on the condition
that, among others, the Assurances confirming that Metasurface Technologies,
Metaoptics Technologies and Metasurface & Co will not use the ‘‘Q’son’’ name
any further and that they had at no point in time represented to third parties that
they were part of the SKE Group, were accurate as at the date of granting the
release, waiver and discharge (the ‘‘ SKE Waiver, Release and Discharge ’’).
HISTORY AND DEVELOPMENT
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Singapore Special Counsel’s views
Remote possibility of successful claim by SKE
SKE has unconditionally and irrevocably wai ved, released and discharged Metasurface
Technologies, Metaoptics Technologies and Metasurface & Co from the Claims pursuant to
the SKE Waiver, Release and Discharge which is subject to, inter alia , there being no actual
loss and damage suffered by SKE and/or no breach of the Assurances (the ‘‘ Conditions ’’).
Further, SKE confirmed (on the basis of t he Assurances) that the SKE Group has
retrospectively acquiesced to the use of the ‘‘Q’son’’ name for such period of time prior to
the Change of Names. As advised by our Singapore Special Counsel, the risk of SKE
suffering any actual loss and damage is extremely low and given that SKE has
unequivocally communicated to Metasurface T echnologies, Metaoptics Technologies and
Metasurface & Co that it has elected to voluntarily abandon the right to pursue the Claims
against them, it will not be open to SKE to revive its right to pursue such Claims save only
in case of breach of a Condition.
The Singapore Special Counsel, on the basis that:
(i) as at the Latest Practicable Date, SKE has not notified Metasurface Technologies,
Metaoptics Technologies or Metasurface & Co that it has suffered any actual loss
or damage which it confirmed it will otherwise endeavour to do so, and
(ii) none of Metasurface Technologies, Metaoptics Technologies or Metasurface &
Co was (or is) in breach of the Assurances,
is of the view that the risks of SKE commencing any subsequent claim against Metasurface
Technologies, Metaoptics Technologies or Metasurface & Co, with such claim (if
commenced) succeeding, are remote.
Remote possibility of SGX commencing action aga inst Metasurface Technologies, Metaoptics
Technologies or Metasurface & Co
As none of Metasurface Technologies, Metaoptics Technologies or Metasurface & Co
is listed on (and therefore not regulated by) SGX, and assuming the Change of Name
Undertaking was given in favour of SKE (rather than SGX), the Singapore Special Counsel
advises that, it is unlikely that Metasurface Technologies, Metaoptics Technologies or
Metasurface & Co owes any duties or obligations to SGX as SGX has no standing to sue or
bring an action under the Change of Nam e Undertaking and the possibility of SGX
commencing any action against Metasurface T echnologies, Metaoptics Technologies and/or
Metasurface & Co for the Change of Name Undertaking is remote.
HISTORY AND DEVELOPMENT
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Unlikely that a Singapore court will determine that the delay in Change of Names will impact
upon the integrity of the relevant directors
To the best of the Singapore Special Counsel’s understanding, Metasurface
Technologies’ delay in performing its o bligations pursuant to the Change of Name
Undertaking was neither deliberate nor calculated. The Singapore Special Counsel is of the
view that a Singapore court is unlikely to f ind that the delay in effecting the Change of
Names will impact upon the integrity of the directors of Metasurface Technologies,
Metaoptics Technologies and Metasurface & Co, given that Metasurface Technologies,
Metaoptics Technologies and Metasurfa ce & Co did not seek to gain any upside or
advantage by the said delay, as evidenced by the following factors:
(i) they had not represented to third parties that they were part of the SKE Group
before and after the date of the Change of Name Undertaking,
(ii) there was no potential conflict of interest in using the ‘‘Q’son’’ name and to the
best of the Directors’ knowledge and based on publicly available information,
there was no overlap in the customer base between any of them and the SKE
Group. Metasurface Technologies and SKE served a vastly different clientele.
SKE’s major clientele is service providers who operate primarily in the food and
beverage and hospitality services industries, such as central kitchens, restaurants
and hotels, whilst Metasurface Techno logies’ top customers include global
original equipment manufacturers (OEMs) in various sectors, including
semiconductor, aerospace and data stor a g ei n d u s t r i e sa sw e l la st h e i rc o n t r a c t
manufactures and service providers,
(iii) Metasurface Technologies’ customers a re highly selective and have stringent
certification requirements and internal procedures in selecting suppliers. The
evaluation and selection process takes into account objective criteria such as
qualifications and certifications in r elation to production technologies.
Metasurface Technologies has been officially selected by Customer A as its
approved supplier since 2016 and has als o passed the routine qualification
assessment process of Customer A from time to time on the condition that, to the
best of the Directors’ knowledge, it possesses the requisite industry-specific
qualifications and certifications but not due to the use of ‘‘Q’son’’ name, and
(iv) after the Change of Name Undertaking was given: (a) the businesses of
Metasurface Technologies and the SKE Group co-existed for many years, (b)
the SKE Group continued to engage Metasurface Technologies to supply
component parts despite being aware that Metasurface Technologies had yet to
change its name, and (c) there were no notices or demands made by the SKE
Group for Metasurface Technologies to change its name.
HISTORY AND DEVELOPMENT
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Directors’ and Sole Sponsor’s views
Our Directors are of the view that the Change of Names did not and will not have a
material adverse impact on our Group’s business operation and financial performance (in
particular, the business relationship with our Group’s customers and suppliers), given that
(i) after the Change of Names, our Group has, as soon as practicable, communicated with
our customers and suppliers regarding the Ch ange of Names and assisted them to ensure a
smooth transition (for instance, reminding them to update invoices and other business
correspondence), (ii) our Directors believe that our Group has an established reputation
and proven track record with our customers an d suppliers, which were developed based on
successful business collaborations and our Gr oup’s continued quality services delivered to
our customers and consistent support give n to our suppliers, and the Change of Names will
not affect these established relationships. In particular, our Group produces parts which
may undergo further processing by contract ma nufacturers and/or other service providers
for the OEMs and thus the parts produced by our Group do not carry any of our own brand
name (neither under ‘‘Q’son’’ nor ‘‘Metasurface’’). Therefore, our customers mainly
consider our production cap abilities instead of our company name when engaging us for
business, (iii) based on our Gr oup’s financial performance for the year ended 31 December
2022, our Group’s revenue increased when compared to the year ended 31 December 2021
following the Change of Names, and (iv) our Group took this opportunity to rebrand our
business such as updating the signage at our premises, our business correspondence and
product packaging, which our Directors believe can help modernise our Group’s corporate
image for marketing purposes.
Our Directors are also of the view that the former use of the ‘‘Q’son’’ name would not
affect our Directors’ suitability, given that ( i) the delay in the Change of Names was neither
deliberate or calculated, (ii) Metasurface Technologies and Metaoptics Technologies did
not seek to gain any upside or advantage by using the ‘‘Q’son’’ name as described above,
and (iii) as advised by the Singapore Special Counsel, a Singapore court is unlikely to find
that the delay in effecting the Change of Na mes will impact upon the integrity of the
directors of Metasurface Technologies.
Based on the above, the Sole Sponsor is not aware of any material finding which would
cause it to disagree with the views expressed by our Directors.
REASONS FOR THE LISTING
For reasons for the Listing and details of our future plans, see ‘‘Future Plans and Use
of Proceeds’’.
HISTORY AND DEVELOPMENT
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REORGANISATION
The table below shows the shareholding of Metasurface Technologies immediately
prior to the implementation of our Reorganisation:
Shareholders of Metasurface Technologies
No. of ordinary
shares
Approximate
shareholding
percentage
Dato’ Sri Chua 2,581,077 65.98%
Mrs. Chua 1,101,982 28.17%
Ng Cheow Boo
(Note) 211,581 5.41%
Jee Wee Chek (Note) 10,000 0.26%
Chong Siow Ming (Note) 5,000 0.13%
Lee Liang Seng (Note) 2,000 0.05%
Total 3,911,640 100%
Note: Mr. Ng Cheow Boo, Ms. Chong Siow Ming and Mr. Lee Liang Seng are personal friends of Dato’
Sri Chua and Mrs. Chua and are independent third parties of our Group. Mr. Jee Wee Chek is
Dato’ Sri Chua’s brother-in-law and Mrs. Chua’s brother.
The chart below shows the shareholding and corporate structure of our Group
immediately prior to the implementation of our Reorganisation:
Metasurface
Technologies
(Singapore)
Dato’ Sri Chua
65.98% 28.17% 5.41% 0.26% 0.13%
100% 90.00%
10.00%
0.05%
Mrs. Chua Ng Cheow Boo Jee Wee Chek Chong Siow Ming Lee Liang Seng Mr. Thng
SGP
Malaysia
(Malaysia)
Metaoptics
TechnologiesNote
(Singapore)
Note: We incorporated Metaoptics Technologies in J une 2021 with the intention of investing and
venturing into metalens technology business . Subsequent to various rounds of investments and
share transfers, Metaoptics Technologies beca me an associate of our Group with Metasurface
Technologies directly holding approximat ely 20.19% interests upon completion of the
Reorganisation. Metaoptics Technologies was prev iously our insignificant subsidiary prior to
becoming our associate. For details on the sha reholding in Metaoptics Technologies as at the
Latest Practicable Date, see ‘‘— Corporate and Shareholding Structure upon Completion of the
Reorganisation and the Pre-IPO Investments’’.
HISTORY AND DEVELOPMENT
–1 3 9–


--- page 151 ---
We implemented our Reorganisation in prep aration for the Listing to incorporate our
Company as the holding company of our Group and the vehicle of the Listing, and to
consolidate our business operations under our Company. Our Reorganisation had the
following steps:
1. Transfers of shares in Metasurface Technologies
To consolidate the shareholding structure in preparation for the Listing, on 8
October 2021, as a private arrangement among shareholders of Metasurface
Technologies, each of Mr. Jee Wee Chek, Mr. Lee Liang Seng, Mr. Ng Cheow Boo
and Ms. Chong Siow Ming transferred 10,000 ordinary shares, 2,000 ordinary shares,
211,581 ordinary shares and 5,000 ordina ry shares in Metasurface Technologies,
respectively, to Dato’ Sri Chua, at a nominal consideration of S$1 in aggregate. The
consideration was determined with refere nce to the financial position shown on the
then latest available management accounts of the previous financial year. On the same
day, Dato’ Sri Chua transferred 391,164 or dinary shares in Metasurface Technologies
to Mr. Thng at a nominal consideration of S$1 pursuant to agreed arrangements later
formally documented in the Anti-dilution Un dertaking. For more information, see ‘‘—
Corporate Development — Anti-dilution Undertaking’’. Upon completion of this step,
Metasurface Technologies became directly owned by each of Dato’ Sri Chua, Mrs.
Chua and Mr. Thng as to approximately 61.83%, 28.17% and 10.00%, respectively.
2. Acquisition of SPW
As part of our Controlling Sha reholders’ plan to conso lidate their precision
engineering related businesses, includin g SPW in which Dato’ Sri Chua already held
50% interest prior to this step, on 1 December 2021, pursuant to share purchase
agreements dated 16 November 2021, Dato’ Sri Chua and Ms. Pang transferred 35,000
ordinary shares and 35,000 ordinary shares in SPW, respectively, to Metasurface
Technologies, at a consideration of S$5,474,550 and S$5,474,550, respectively. The
consideration was satisfied by the issue and allotment of 371,343 ordinary shares in
Metasurface Technologies to each of Dato’ Sri Chua and Ms. Pang. The consideration
of this transaction was determined ba s e do nt h ef a i rv a l u a t i o no fe a c ho fS P W
conducted by an independent valuer. Immediately upon completion of this step, SPW
became directly wholly-owned by Metasurface Technologies, and Metasurface
Technologies became directly owned by Dato’ Sri Chua, Mrs. Chua, Mr. Thng and
Ms. Pang as to approximately 59.94%, 23.68%, 8.40% and 7.98%, respectively. The
acquisition was properly and legally se t t l e di nf u l lo n1D e c e m b e r2 0 2 1a n dn o
regulatory approval was required. SPW was consolidated into our Company’s financial
statements by way of the acquisition method of accounting.
HISTORY AND DEVELOPMENT
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3. Incorporation of BVI holding entities and our Company
On 3 December 2021, SGP BVI was incorp orated in the BVI as a company with
limited liability. On incorporation, 100 ord inary shares were issued and allotted to
Dato’ Sri Chua at an aggregate consideration of US$100. SGP BVI is the intermediate
holding company of Dato’ Sri Chua’s interests in our Company.
On 3 December 2021, Baccini was incorporated in the BVI as a company with
limited liability. On incorporation, 100 ord inary shares were issued and allotted to
Mrs. Chua at an aggregate consideration of US$100. Baccini is the intermediate
holding company of Mrs. Chua’s interests in our Company.
On 3 December 2021, Angelling was inco rporated in the BVI as a company with
limited liability. On incorporation, 100 ord inary shares were issued and allotted to Mr.
Thng at an aggregate consideration of US$10 0. Angelling is the intermediate holding
company of Mr. Thng’s interests in our Company.
On 7 December 2021, our Company was inco rporated in the Cayman Islands as an
exempted company with limited liability. On incorporation, the authorised share
capital was HK$380,000 divided into 380,000,000 Shares of a nominal value of
HK$0.001 each, of which one Share was issued and allotted to the initial subscriber,
who was an independent third party, and subsequently transferred to SGP BVI on the
same day.
4. 1st Pre-IPO Investment by nine investors
On 28 December 2021, nine investors each entered into a subscription agreement
with Metasurface Technologies to subscribe for ordinary shares in Metasurface
Technologies. For details, see ‘‘— Pre-IPO Investments — 1st Pre-IPO Investment by
nine investors’’.
On the same day, in conjunction with the 1 st Pre-IPO Investment, Dato’ Sri Chua
and Mrs. Chua transferred 86,401 ordinary shares and 12,132 ordinary shares (in total
98,533 ordinary shares) in Metasurface Technologies to Mr. Thng, respectively, at nil
consideration pursuant to the Anti-dilution Undertaking.
HISTORY AND DEVELOPMENT
–1 4 1–


--- page 153 ---
The following table shows the shareholding of Metasurface Technologies upon
completion of this step:
Shareholders of Metasurface Technologies
No. of ordinary
shares held
Approximate
shareholding
(%)
Dato’ Sri Chua 2,703,436 55.21
Mrs. Chua 1,089,850 22.26
Mr. Thng 489,697 10.00
Ms. Pang 371,343 7.58
Zou Shuling 43,440 0.89
Hong Haicheng 40,958 0.84
Soo Siew Har and Ho Gim Hai 37,235 0.76
Chua Lee Chai 31,029 0.63
Tan Beng Kiat 31,029 0.63
Deborah Chua Wee Wei 31,029 0.63
Tan Kok Thye George 15,514 0.32
Poh Seng Kah 12,412 0.25
Total 4,896,972 100
5. Loan capitalisation in Metasurface Technologies
Pursuant to a deed entered into by Metasurface Technologies and Mrs. Chua
dated 27 September 2022, on the same day, the amount of approximately S$4,285,000
owed by Metasurface Technologies to Mrs. Chua was set-off against the issue and
allotment of 279,800 ordinary shares in Me tasurface Technologies to Mrs. Chua. The
valuation of the capitalisation loan was de termined with reference to a valuation
report of Metasurface Technologies prepared by an independent valuer, together with
the expected enhanced valuation and business prospects brought about by the then
Pre-IPO Investors and the consolidated businesses of our Group.
O nt h es a m ed a y ,p u r s u a n tt ot h eA n t i - d i l ution Undertaking, Dato’ Sri Chua and
Mrs. Chua transferred 13,990 ordinary shares and 13,990 ordinary shares in
Metasurface Technologies, respectively, to Mr. Thng at a nominal consideration of
S$1.
HISTORY AND DEVELOPMENT
–1 4 2–


--- page 154 ---
The following table shows the shareholding of Metasurface Technologies upon
completion of this step:
Shareholders of Metasurface Technologies
No. of ordinary
shares held
Approximate
shareholding
(%)
Dato’ Sri Chua 2,689,446 51.95
Mrs. Chua 1,355,660 26.19
Mr. Thng 517,677 10.00
Ms. Pang 371,343 7.17
Zou Shuling 43,440 0.84
Hong Haicheng 40,958 0.79
Soo Siew Har and Ho Gim Hai 37,235 0.72
Chua Lee Chai 31,029 0.60
Tan Beng Kiat 31,029 0.60
Deborah Chua Wee Wei 31,029 0.60
Tan Kok Thye George 15,514 0.30
Poh Seng Kah 12,412 0.24
Total 5,176,772 100
6. 2nd Pre-IPO Investment by Accelerate
On 14 October 2022, Accelerate entered into a subscription agreement with
Metasurface Technologies to subscribe for ordinary shares in Metasurface
Technologies. For details, see ‘‘— Pre-IPO Investments — 2nd Pre-IPO Investment
by Accelerate’’.
On the same day, in conjunction with the 2nd Pre-IPO Investment, Dato’ Sri Chua
and Mrs. Chua transferred 13,623 ordinary shares and 13,623 ordinary shares in
Metasurface Technologies, respectively, to Mr. Thng at a nominal consideration of S$1
pursuant to the Anti-dilution Undertaking.
HISTORY AND DEVELOPMENT
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--- page 155 ---
The following table shows the shareholding of Metasurface Technologies upon
completion of this step:
Shareholders of Metasurface Technologies
No. of ordinary
shares held
Approximate
shareholding
(%)
Dato’ Sri Chua 2,675,823 49.10
Mrs. Chua 1,342,037 24.63
Mr. Thng 544,923 10.00
Ms. Pang 371,343 6.81
Accelerate 272,462 5.00
Zou Shuling 43,440 0.80
Hong Haicheng 40,958 0.75
Soo Siew Har and Ho Gim Hai 37,235 0.68
Chua Lee Chai 31,029 0.57
Tan Beng Kiat 31,029 0.57
Deborah Chua Wee Wei 31,029 0.57
Tan Kok Thye George 15,514 0.29
Poh Seng Kah 12,412 0.23
Total 5,449,234 100
7. 3rd Pre-IPO Investment by MMI
On 30 January 2023, MMI entered into a subscription agreement with
Metasurface Technologies to subscribe for ordinary shares in Metasurface
Technologies. For details, see ‘‘— Pre-IPO Investments — 3rd Pre-IPO Investment
by MMI’’.
On the same day, in conjunction with the 3 rd Pre-IPO Investment, Dato’ Sri Chua
and Mrs. Chua transferred 7,364 ordinary shares and 7,364 ordinary shares in
Metasurface Technologies, respectively, to Mr. Thng at a nominal consideration of S$1
pursuant to the Anti-dilution Undertaking. On the same day, pursuant to Accelerate’s
anti-dilution right (granted as part of the 2nd Pre-IPO Investment) in the
Shareholders’ Agreement (as defined bel ow), Accelerate subscribed for, and
Metasurface Technologies issued and allotted to Accelerate, 7,364 ordinary shares in
Metasurface Technologies at a n ominal consideration of S$1.
HISTORY AND DEVELOPMENT
–1 4 4–


--- page 156 ---
The following table shows the shareholding of Metasurface Technologies upon
completion of this step:
Shareholders of Metasurface Technologies
No. of ordinary
shares held
Approximate
shareholding
(%)
Dato’ Sri Chua 2,668,459 47.68
Mrs. Chua 1,334,673 23.85
Mr. Thng 559,651 10.00
Ms. Pang 371,343 6.64
Accelerate 279,826 5.00
MMI 139,913 2.50
Zou Shuling 43,440 0.78
Hong Haicheng 40,958 0.73
Soo Siew Har and Ho Gim Hai 37,235 0.67
Chua Lee Chai 31,029 0.55
Tan Beng Kiat 31,029 0.55
Deborah Chua Wee Wei 31,029 0.55
Tan Kok Thye George 15,514 0.28
Poh Seng Kah 12,412 0.22
Total 5,596,511 100
8. Transfer of shares in Metasurface Technologies by Mrs. Chua to the nine investors
of the 1st Pre-IPO Investment
On 10 April 2023, Mrs. Chua transferred an aggregate of 208,615 ordinary shares
in Metasurface Technologies to the nine inv estors of the 1st Pre-IPO Investment at a
nominal consideration of S$1 to align their investment cost with the then valuation of
Metasurface Technologies conducted by the management with reference to the then
latest available information on financial p erformance in the previous year, as well as
the enhanced value of our Shares in contempl ation of the Listing. For details, see ‘‘—
Pre-IPO Investments — 1st Pre-IPO Investment by nine investors’’.
HISTORY AND DEVELOPMENT
–1 4 5–


--- page 157 ---
9. Consolidation of our Group under our Company
Pursuant to a restructuring deed dated 26 April 2023, each shareholder in
Metasurface Technologies transferred all shares held by him/her/it to our Company, in
consideration for our Company issuing and allotting such number of Shares to
him/her/it (or an entity designated by him/her/it) (the ‘‘ Restructuring ’’) as set out in the
table below:
Shareholders of Metasurface
Technologies
No. of ordinary
shares held in
Metasurface
Technologies
transferred to
our Company
Name of allottee of the
consideration Shares
No. of
consideration
Shares issued
and allotted by
our Company
Dato’ Sri Chua 2,668,459 SGP BVI 2,668,458 (Note)
Mrs. Chua 1,126,058 Baccini 1,126,058
Mr. Thng 559,651 Angelling 559,651
Ms. Pang 371,343 Ms. Pang 371,343
1st Pre-IPO Investment
Zou Shuling 80,789 Zou Shuling 80,789
Hong Haicheng 76,172 Hong Haicheng 76,172
Soo Siew Har and Ho Gim Hai 69,247 Soo Siew Har and Ho Gim Hai 69,247
Chua Lee Chai 57,706 Chua Lee Chai 57,706
Tan Beng Kiat 57,706 Tan Beng Kiat 57,706
Deborah Chua Wee Wei 57,706 Deborah Chua Wee Wei 57,706
Tan Kok Thye George 28,853 Tan Kok Thye George 28,853
Poh Seng Kah 23,082 Poh Seng Kah 23,082
2nd Pre-IPO Investment
Accelerate 279,826 Accelerate 279,826
3rd Pre-IPO Investment
MMI 139,913 MMI 139,913
Total 5,596,511 5,596,510
Note:
Prior to completion of the Restructuring, SGP BVI already held one fully paid Share.
Upon completion of the Restructuring, our Group was consolidated under our
Company.
10. Disposal of Metaoptics Technologies
On 16 May 2023, Metasurface Technologies transferred 125,767 ordinary shares
in Metaoptics Technologies (representing approximately 33.32% of the entire issued
share capital therein) to Mr. Thng at a consideration of S$180,000. For details on the
reasons of the disposal of our control over Metaoptics Technologies and the basis of
determining the consideration, see ‘‘— Corporate Development — Investment in an
HISTORY AND DEVELOPMENT
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associate — Metaoptics Technologies’’. Accordingly, gains on disposal of a subsidiary
of approximately S$2.5 million were recognised during the year ended 31 December
2023. The disposal was properly and legally settled in full on 16 May 2023 and no
regulatory approval was required. See note 38 to the Accountant’s Report included in
Appendix I to this prospectus.
Immediately upon completion of the share transfer, Metaoptics Technologies
became our associate and was held by Metasurface Technologies as to approximately
20.19%. Subsequent to a series of share transfers among shareholders as well as
issuance of new ordinary shares to exist ing shareholders and new investors of
Metaoptics Technologies, as at the Latest Practicable Date, Metaoptics Technologies
was held by Metasurface Technologies as to approximately 17.10%.
The table below shows the shareholding of our Company immediately upon
completion of our Reorganisation and the Pre-IPO Investments and immediately prior
to the Capitalisation Issue and the Share Offer:
Shareholders of our Company No. of Shares
Approximate
shareholding
(%)
SGP BVI 2,668,459 47.68
Baccini 1,126,058 20.12
Angelling 559,651 10.00
Ms. Pang 371,343 6.64
1st Pre-IPO Investment
Zou Shuling 80,789 1.44
Hong Haicheng 76,172 1.36
Soo Siew Har and Ho Gim Hai 69,247 1.24
Chua Lee Chai 57,706 1.03
Tan Beng Kiat 57,706 1.03
Deborah Chua Wee Wei 57,706 1.03
Tan Kok Thye George 28,853 0.52
Poh Seng Kah 23,082 0.41
2nd Pre-IPO Investment
Accelerate 279,826 5.00
3rd Pre-IPO Investment
MMI 139,913 2.50
Total 5,596,511 100
HISTORY AND DEVELOPMENT
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Our Reorganisation was legally and pro perly completed and settled on 16 May
2023 after Metaoptics Technologies became our associate and no regulatory approval
was required.
PRE-IPO INVESTMENTS
We underwent three rounds of Pre-IPO Investments. Details of the Pre-IPO
Investments are set out below.
1st Pre-IPO Investment by nine investors
On 28 December 2021, nine individual investors each entered into a subscription
agreement with Metasurface Technologies to su bscribe for an aggregate of 242,646 ordinary
shares in Metasurface Technologies, totallin g an investment of S$3,910,000. Each of the
nine individual investors is a long-time pe rsonal friend of our Controlling Shareholders,
Dato’ Sri Chua and Mrs. Chua, known through mutual friends. They are not professional
or sophisticated investors and their role in our Group has always been limited to passive
investors. In 2021, when Metasurface Technologies had capital and funding needs, Dato’
Sri Chua and Mrs. Chua sought financial support from each of them. Out of mutual trust
and long-term friendship, they provided support in the form of injecting working capital in
their personal capacities. As they subsequently agreed to become Pre-IPO Investors, Dato’
Sri Chua and Mrs. Chua negotiated with each of them to formalise their investments in
writing, to standardise all terms of investment across the nine individual investors and to
reach a consensus on the valuation of our Group. As such, Metasurface Technologies
formally entered into subscription agreem ents with each of them on 28 December 2021,
which was after the investment amounts were settled.
The following table sets out details of the 1st Pre-IPO Investment:
Name of the Pre-IPO Investor
Number of
shares
subscribed in
Metasurface
Technologies
Total
consideration
paid
Date of settlement
of consideration
(S$)
Zou Shuling 43,440 700,000 23 September 2021
Hong Haicheng 40,958 660,000 30 October 2021
Soo Siew Har and Ho Gim Hai 37,235 600,000 21 October 2021
Chua Lee Chai 31,029 500,000 30 August 2021
Tan Beng Kiat 31,029 500,000 30 October 2021
Deborah Chua Wee Wei 31,029 500,000 18 March 2021
Tan Kok Thye George 15,514 250,000 30 October 2021
Poh Seng Kah 12,412 200,000 30 October 2021
Total 242,646 3,910,000
HISTORY AND DEVELOPMENT
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Subsequently, during the course of preparing for our Listing, Dato’ Sri Chua and Mrs.
Chua noted that the then investment cost per Share (taking into account the Capitalisation
Issue) of the 1st Pre-IPO Investment was app roximately HK$4.34, which represented a
premium of approximately 61.3% to the mid-po int of the Offer Price (i.e. HK$2.69). Dato’
Sri Chua and Mrs. Chua were of the view that such investment cost per Share did not reflect
a more updated valuation of our Group based on the latest market conditions. To show the
appreciation for the 1st Pre-IPO Investors’ support during the time when Metasurface
Technologies had capital and funding needs, on 10 April 2023, Mrs. Chua transferred an
aggregate of 208,615 ordinary shares in Metasurface Technologies to the nine investors of
the 1st Pre-IPO Investment at a nominal consideration of S$1 to align their investment cost
per Share (taking into account the Capitalis ation Issue) with the Offer Price range of
HK$2.38 to HK$3.00. In determining the new valuation of our Group, Dato’ Sri Chua and
Mrs. Chua made reference to the then latest business, financial and operational
performance of our Group, the prevailin g market conditions such as the market
valuation of similar companies listed on t he Stock Exchange, as well as the enhanced
value of our Shares in contemplation of the Listing. Since the share transfer was conducted
among existing shareholders and for the purp ose other than payment for goods or services
supplied to our Group, together with the consideration of the average subscription price for
the 1st Pre-IPO Investment made on 28 Decem ber 2021 and 10 April 2023, there was no
impact on our Group’s financial statement as a result of the share transfers.
The following table sets out details of the share transfers:
Name
Number of
ordinary shares
in Metasurface
Technologies
transferred from
Mrs. Chua
Total number of
ordinary shares
in Metasurface
Technologies
held after the
share transfer
Zou Shuling 37,349 80,789
Hong Haicheng 35,214 76,172
Soo Siew Har and Ho Gim Hai 32,012 69,247
Chua Lee Chai 26,677 57,706
Tan Beng Kiat 26,677 57,706
Deborah Chua Wee Wei 26,677 57,706
Tan Kok Thye George 13,339 28,853
Poh Seng Kah 10,670 23,082
Total 208,615 451,261
HISTORY AND DEVELOPMENT
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2nd Pre-IPO Invest ment by Accelerate
On 14 October 2022, Metasurface Technologies and Accelerate entered into a
subscription agreement pursuant to which, Accelerate subscribed for, and Metasurface
Technologies issued and allotted to Accelerate, 272,462 ordinary shares in Metasurface
Technologies at an aggregate consideration o f S$2,880,000. The consideration payable by
Accelerate to Metasurface Technologies for the share subscription was settled in full by
offsetting the upfront fee of S$2,880,000 payable by Metasurface Technologies to
Accelerate pursuant to the Licence Agreement.
Our Group became acquainted with Accelerate through introduction by Mr. Thng. We
have entered into the Licence Agreement with A ccelerate in which Accelerate contributes to
Metaoptics Technologies’ technological devel opment by licencing to it technologies and
intellectual property rights. The licence d technology is mainly related to optics and
therefore is utilised by Metaoptics Technologie s to develop and commercialise Accelerate’s
technologies and licenced products. Accelerat e also continues to intr oduce new technologies
that could enhance the value of our investment in associate through R&D collaborations
with Metaoptics Technologies in the optical metalens technology business. For details on
the Licence Agreement, see ‘‘Business — Research and Development — Investment in
associate’’.
3rd Pre-IPO Investment by MMI
On 30 January 2023, Metasurface Technologies and MMI entered into a subscription
agreement pursuant to which, MMI subscribed for, and Metasurface Technologies issued
and allotted to MMI, 139,913 ordinary shares in Metasurface Technologies at an aggregate
consideration of S$1,000,000. The consideration was settled in full by MMI on 26 January
2023. Our Group became acquainted with MMI through introduction by Mr. Thng. MMI’s
role in our Group is to provide support, as a strategic partner, on expanding our business
and product coverage for standard machining parts and sub-assemblies such as cables,
connectors and metal cabinet modules used in the semiconductor manufacturing
equipment. As a strategic partner, the m anagement of MMI may also offer us strategic
advice beneficial to the overall growth and development of our Group.
Share swap
Pursuant to a restructuring deed dated 26 Apr il 2023, each shareholder in Metasurface
Technologies transferred all shares held by him/her/it to our Company in return for Shares
issued and allotted by our Company. For more information, see ‘‘— Reorganisation — 9.
Consolidation of our Group under our Company’’.
HISTORY AND DEVELOPMENT
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Principal terms of the Pre-IPO Investments
The below table summarises the principal terms of the Pre-IPO Investments by the
Pre-IPO Investors.
1st Pre-IPO
Investment
2nd Pre-IPO
Investment
3rd Pre-IPO
Investment
Total no. of Shares 451,261 (1) 272,462 (2) 139,913 (3)
Total consideration (S$) 3,910,000 2,880,000 1,000,000
Implied valuation (S$) (4) 48,491,578 57,600,000 40,000,000
Approximate investment
cost per Share (taking
into account
Capitalisation Issue)
(HK$)
2.33 2.77 1.92
Approximate (discount)/
premium to the Offer
Price
(5) (%)
(13.38) 2.97 (28.62)
HISTORY AND DEVELOPMENT
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--- page 163 ---
1st Pre-IPO
Investment
2nd Pre-IPO
Investment
3rd Pre-IPO
Investment
Basis of determination of
the consideration
The consideration was
determined by
commercial
negotiations based on
the valuation of
Metasurface
Technologies
conducted by the
management with
reference to the then
latest available
financial information.
The consideration was
determined by
commercial
negotiations based on
the then indicative
pre-money valuation of
Metasurface
Technologies with
reference to a valuation
report prepared by an
independent valuer and
the shareholders’ rights
granted to Accelerate
as detailed in ‘‘—
Special rights’’ below,
among which, the put
option right, call
option right and
anti-dilution right were
exclusively granted to
Accelerate and MMI.
The investment of
Accelerate was at a
slight premium to the
mid-point of the
indicative Offer Price,
given that Metaoptics
Technologies is
contractually obligated
to commercialise
Accelerate’s
technology (i.e.
know-how and patents
licenced to our Group
pursuant to the Licence
Agreement) in
accordance with the
Licence Agreement
and, after the
technology is
commercialised, sell
products which
incorporate
Accelerate’s licenced
technology and pay
Accelerate annual
royalties on the gross
revenue attributable to
the commercialised
products.
The consideration was
determined by
commercial
negotiations with
reference to the
valuation of prior
rounds of Pre-IPO
Investments, the then
latest available
financial information
of Metasurface
Technologies and the
strategic benefits
expected to be brought
about by MMI. Our
Directors believe that,
as our Group is
primarily supplying
specific
custom-designed
machining parts for
semiconductor
manufacturing
equipment, the
industry expertise in
standard machining
parts and
sub-assemblies of MMI
may allow us to
leverage our
manufacturing
capabilities to diversify
and expand our
business and product
coverage in the
semiconductor
manufacturing
equipment industry.
O u rD i r e c t o r sa l s o
believe that MMI’s
management, with its
wealth of experience in
managing a wide range
of portfolio of assets
and businesses, will be
able to offer strategic
advice beneficial to the
overall growth and
development of our
Group.
HISTORY AND DEVELOPMENT
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1st Pre-IPO
Investment
2nd Pre-IPO
Investment
3rd Pre-IPO
Investment
Use of proceeds from the
Pre-IPO Investments
The proceeds were fully
utilised on labour
costs, raw material
procurement, utilities,
administrative fees,
settlement of principal
loan amount and
finance cost.
Consideration for the
share subscription
payable by Accelerate
to our Group was fully
utilised and offset by
the upfront fee of the
same amount payable
by us to Accelerate
pursuant to the Licence
Agreement.
Under the Licence
Agreement, Accelerate
grants our Group the
rights to, among
others, (i) use
Accelerate’s
technologies to develop
enhancements on and
(ii) use, manufacture,
distribute, market and
sell Accelerate’s
licenced products. Our
Group agrees to
commercialise such
technologies and
licenced products
within a specified
timeline.
The proceeds were fully
utilised on labour
costs, raw material
procurement, utilities,
administrative fees,
settlement of principal
loan amount and
finance cost.
As at the Latest Practicable Date, the aggregate proceeds from the 1st
Pre-IPO Investment and 3rd Pre-IPO Investment had been fully utilised.
The consideration for the 2nd Pre-IPO Investment was not in the form
of cash.
HISTORY AND DEVELOPMENT
–1 5 3–


--- page 165 ---
1st Pre-IPO
Investment
2nd Pre-IPO
Investment
3rd Pre-IPO
Investment
Strategic benefits from the
Pre-IPO Investments to
our Group
At the time of entering
into the 1st Pre-IPO
Investment, our
Directors were of the
view that our Group
could benefit from the
additional funds and
working capital
provided by the
Pre-IPO Investors’
investments in our
Group.
A tt h et i m eo fe n t e r i n g
into the Licence
Agreement and the 2nd
Pre-IPO Investment,
our Directors were of
the view that the
agreements were a
strategic collaboration
with Accelerate.
Accelerate’s licenced
technologies mainly
relate to optics and are
therefore utilised by
Metaoptics
Technologies to
commercialise
Accelerate’s products
which can in turn
generate new sources of
income (in form of
investment returns) for
our Group.
A tt h et i m eo fe n t e r i n g
into the 3rd Pre-IPO
Investment, our
Directors were of the
view that our Group
and MMI could
collaborate on our
manufacturing
capabilities and
capacity.
Lock-up There is no lock-up provision in the agreements in respect of the Pre-IPO
Investments. Each of the Pre-IPO Investors had separately entered into a
lock-up deed on 18 June 2024, pursuant to which, they are subject to lock-up
undertakings for a period of the first si x months following the Listing Date.
Notes:
1. The aggregate number of Shares to be held by t he nine Pre-IPO Investors of the 1st Pre-IPO
Investment upon completion of the Capitalisation Issue and the Share Offer is 9,917,804.
2. In conjunction with the 3rd Pr e-IPO Investment, on 30 January 2023, 7,364 ordinary shares in
Metasurface Technologies were issued and allo tted to Accelerate pur suant to Accelerate’s
anti-dilution right in the Shareholders’ Agreem ent. Since then, Accelerate held a total of 279,826
ordinary shares in Metasurface Technologies. The number of Shares to be held by Accelerate upon
completion of the Capitalisation Issue and the Share Offer is 6,150,010.
3. The number of Shares to be held by MMI upon completion of the Capitalisation Issue and the Share
Offer is 3,075,005.
4. The implied valuation is calculated by dividing the total investment amount from the relevant
Pre-IPO Investment by the percentage of sharehol ding of the relevant Pre-IPO Investor(s) on fully
diluted basis immediately after completion of th e relevant Pre-IPO Investment on 10 April 2023, 14
October 2022 and 30 January 2023, respectively.
HISTORY AND DEVELOPMENT
–1 5 4–


--- page 166 ---
The higher implied valuation of the 2nd Pre-IPO I nvestment as compared to that of the 1st Pre-IPO
Investment is mainly due to the expectation that M etaoptics Technologies shall devote its manpower
and resources to commercialise Accelerate’s technology and pay Accelerate annual royalties on the
gross revenue attributable to the commerciali sed products. The Group and Accelerate reached a
consensus on the terms of the 2nd Pre-IPO Investme nt (including the implied valuation) in late 2021
but the share subscription agreement was only e ntered into in October 2022 to minimise the
administrative costs (such as costs relating to the preparation of legal and corporate secretarial
documentations and procedures in obtaining financial and legal advisory services as well as internal
corporate authorisations and approvals) incu rred by Accelerate and us each time Accelerate
exercises its anti-dilution right in connectio n with a new round of pre-IPO investment in our
Company before the first submission of the Listing application.
The lower implied valuation of the 3rd Pre-IPO I nvestment as compared to that of the 2nd Pre-IPO
Investment is mainly due to our management’s comm ercial decision to offer MMI favourable terms
of investment in order to attract MMI to become one of our Pre-IPO Investors and our strategic
partner, considering MMI’s background, reputati on, shareholder profile and potential business
opportunities it can bring to our Group.
5. The discount to the Offer Price is calculated b ased on the assumption that the Offer Price is
HK$2.69 per Share, being the mid-point of the indi cative Offer Price range of HK$2.38 to HK$3.00.
Special rights
In addition to the terms described above, a shareholders’ agreement (the
‘‘Shareholders’ Agreement ’’) was entered into among the Pre-IPO Investors and the then
shareholders of Metasurface Technologies (the ‘‘ MST Shareholders ’’) on 30 January 2023,
pursuant to which certain shareholder rights were agreed among the parties, as summarised
below:
. R i g h to ff i r s tr e f u s a l .If any MST Shareholder proposes to transfer any shares held
by him/her/it in Metasurface Technologies to any third party, he/she/it shall first
offer to transfer such shares in Metasurface Technologies to other MST
Shareholders.
. Drag along right. All MST Shareholders shall participate in the disposal of shares
in Metasurface Technologies in the event that any one or more of the MST
Shareholders holding more than 50% of shares in Metasurface Technologies
decide to sell their interests in Metasurface Technologies to a third party.
. Put option right. Each of Accelerate and MMI is granted an option (but not the
obligation) to require the other MST Shareholders to purchase all (and not part
only) of the shares in Metasurface Technologies held by it if any of the following
events occur: (i) a sale of all or substant ially all of the assets of Metasurface
Technologies, (ii) a transaction in which shares in Metasurface Technologies
carrying more than 30% of all the voting rights exercisable at general meetings of
Metasurface Technologies at the time of th e transaction are transferred to any
number of persons, or (iii) a reorganis ation, reconstruction, merger or
amalgamation which results in a change in the holders of the voting rights of
more than 50% of all the voting rights exercisable at general meetings of
HISTORY AND DEVELOPMENT
–1 5 5–


--- page 167 ---
Metasurface Technologies at the tim e. Each of Accelerate and MMI is also
granted an option (but not the obligation) to require the other MST Shareholders
to purchase all (and not part only) of the shares in Metasurface Technologies held
by it in the event that the submission of an application for Listing does not take
place within five years from the date of the Shareholders’ Agreement.
. Call option right. Each of Accelerate and MMI grants the other MST
Shareholders an option (but not the obligation) to, either individually or
jointly, purchase all of the shares in Metasurface Technologies held by it,
provided that at least 50% of such shares in Metasurface Technologies must be
purchased by the other MST Shareholders if the option is exercised.
. Tag along right. In the event Dato’ Sri Chua and Mrs. Chua desire to transfer, in a
single transaction or a series of related transactions, all but not some of their
shares in Metasurface Technologies in a bona fide sale to a third party before the
Listing, Dato’ Sri Chua and Mrs. Chua grant the remaining MST Shareholders a
right to participate in the transfer of shares in Metasurface Technologies on the
same terms and conditions, and the remai ning MST Shareholders shall elect the
number of shares in Metasurface Technologies they wish to transfer.
. Anti-dilution right. For so long as Accelerate holds at least 5% of the shares in
Metasurface Technologies, Accelerate’s shareholding interest in Metasurface
Technologies shall be non-dilutable, until (i) Metasurface Technologies has an
implied equity valuation based on an indicative fair market valuation of S$60.0
million and (ii) Metasurface Technologies receives an amount of at least an
additional S$7.0 million in equity financin g. Prior to (i) and (ii) being satisfied,
Metasurface Technologies shall in the event of an equity financing round make a
bonus issue of such number of shares in Metasurface Technologies to Accelerate
for no additional consideration such that Accelerate’s shareholding interest in
Metasurface Technologies shall on a fully-diluted basis remain the same
immediately after any equity financing round. For so long as MMI holds at
least 2.5% of the shares in Metasurface T echnologies, Metasurface Technologies
shall in the event of an equity financing round where Metasurface Technologies
has an implied equity valuation based on an indicative fair market valuation of
less than S$40.0 million, make a bonus issue of such number of shares in
Metasurface Technologies to MMI for no a dditional consideration such that
MMI’s shareholding interest in Metasurfa ce Technologies shall on a fully-diluted
basis remain the same immediately after any equity financing round.
. Reserved matters. The affirmative vote of MST Shareholders holding at least 50%
of the Shares (other than Dato’ Sri Chua and Mrs. Chua) shall be required to pass
resolutions relating to the appointment of and changes in the auditors of
Metasurface Technologies, material change in Metasurface Technologies’s
accounting policies, amendment to the constitutional documents of Metasurface
Technologies, winding up, judicial management, receivership and/or dissolution
of Metasurface Technologies, or the entry into a compromise or arrangement by
Metasurface Technologies with its creditors.
HISTORY AND DEVELOPMENT
–1 5 6–


--- page 168 ---
. Non-Listing put option. In the event the Listing fails to materialise by a date falling
12 months after the first submission of our Listing application (which shall
automatically be extended until, whichever is earlier, (i) the date of our successful
Listing, or (ii) the date upon the earliest occurrence of any one of the following
events (the ‘‘Event of Reinstatement ’’): (a) our Company formally withdraws the
Listing application or (b) the Listing application lapses and our Company does
not submit a renewed Listing application within six months after the lapse), MMI
has the option (but not the obligation) to require our Company to purchase all
(and not part only) of its shares held on the date it issues a put option notice, at a
price equivalent to the subscription consideration paid by MMI, plus interest on
the subscription consideration commenci ng on the date immediately following the
date falling 12 months after the first submission of our Listing application and
continue until the date of MMI’s put option notice. The interest shall be fixed at a
simple interest rate of 6% per annum and be prorated by the number of days
where the period of time is not a full calendar year.
. Information right. Metasurface Technologies shall provide MST Shareholders
with access to all other information that the MST Shareholders are entitled to
access under relevant laws and regulations, including but not limited to, minutes
of general meetings, financial statements, and consolidated financial statements.
All such special shareholder rights were terminated and were of no further force or
effect on 26 April 2023 when the Pre-IPO Investors ceased to be a shareholder of
Metasurface Technologies (and became a Shareholder of our Company instead).
A ss u c h ,n os u c hs p e c i a lr i g h t sg r a n t e dt ot h eP r e - I P OI n v e s t o r sw i l ls u r v i v eo na n d
after the Listing Date. In the event the Listing fails to materialise by a date falling 24
months after the first submission of our Listing application (which shall be automatically
extended until, whichever is earlier, (i) the date of our successful Listing on the Stock
Exchange, or (ii) the date of Event of Reinstatement), the special rights shall then be
automatically reinstated.
Information about the Pre-IPO Investors
Accelerate
Accelerate is the commercialisation arm of the Agency for Science, Technology and
Research (‘‘ A*STAR ’’), Singapore’s lead public sector R&D agency that drives
mission-oriented research that advances scientific discovery and technological innovation.
Accelerate is an independent third party of our Group.
MMI
MMI is a public company limited by shares incorporated in Singapore in 1989. MMI
was previously listed on the SGX and was subsequently delisted in July 2007. As at the
Latest Practicable Date, MMI is indirectly owned and controlled by Precision Capital
HISTORY AND DEVELOPMENT
–1 5 7–


--- page 169 ---
Holdings Limited which is directly owned as to approximately 80.30%, 13.88% and 5.82%
by KKR Asian Fund L.P., KKR Partners II (International) L.P. and KKR 2006 Fund
(Overseas), Limited Partnership, respectively.
KKR Asian Fund L.P. is an exempted limited partnership established in the Cayman
Islands, and its general partner is KKR As sociates Asia L.P., an exempted limited
partnership also established in the Cayman Islands. KKR Asia Limited, a company
incorporated in the Cayman Islands, is the g eneral partner of KKR Associates Asia L.P.
Kohlberg Kravis Roberts & Co. L.P. acts as the investment manager of KKR Asian Fund
L.P. Kohlberg Kravis Roberts & Co. L.P. and KKR Asia Limited are ultimately controlled
by KKR & Co. Inc. (NYSE: KKR), which is a Delaware corporation listed on the New
York Stock Exchange.
MMI is a global supplier of high precision components and integrated automation
solutions for multiple industries. MMI poss esses advanced technological capabilities and
manufacturing expertise in precision machining and assembly of electro-mechanical
components in cleanrooms as well as design and assembly of automation equipment.
MMI is an independent third party of our Group.
Mr. Chua Lee Chai
Mr. Chua Lee Chai is the father of Ms. Deborah Chua Wee Wei (one of our Pre-IPO
Investors) and has retired. He was a director and managing director of a company based in
Singapore engaged in wholesale of furniture. Mr. Chua Lee Chai is an independent third
party of our Group.
Ms. Deborah Chua Wee Wei
Ms. Deborah Chua Wee Wei is a vice president of DBS Bank in Singapore. Ms.
Deborah Chua Wee Wei is the daughter of Mr. Chua Lee Chai (one of our Pre-IPO
Investors) and is an independe nt third party of our Group.
M r .H oG i mH a ia n dM s .S o oS i e wH a r
Mr. Ho Gim Hai is a director and an indirect shareholder of Tat Lee Engineering
Private Limited. Founded in 1973 in Singapore, Tat Lee Engineering Private Limited
provides sealing technology to the shipbuilding industry, mobility and transportation
industry, manufacturing industry, petrochem ical industry, water industry and power energy
plants. Mr. Ho Gim Hai is the spouse of Ms. Soo Siew Har and each of Mr. Ho Gim Hai
and Ms. Soo Siew Har is an independent third party of our Group.
Ms. Hong Haicheng
Ms. Hong Haicheng is a director and shareholder of Ho Heng Food & Enterprise Pte.
Ltd., a food and beverage company established in 2015 that operates a central kitchen
supplying food products to its own food and beverage restaurant brands across Singapore.
Ms. Hong Haicheng is an independent third party of our Group.
HISTORY AND DEVELOPMENT
–1 5 8–


--- page 170 ---
Mr. Poh Seng Kah
Mr. Poh Seng Kah was a director and shareholder of Hock Chuan Hong Corporation
Pte. Ltd. (‘‘Hock Chuan Hong ’’) (which is currently known as Greentec Energy Pte. Ltd.)
until August 2023. Founded in 2009, Hock Chuan Hong provided waste collection, process
and industrial plant engineering design and consultancy services. Our Group entered into
business transactions with Hock Chuan Hong during the Track Record Period. We incurred
approximately S$1,000 and S$1,200 in rela tion to procurement of services from Hock
Chuan Hong for the collection of waste cool ant services for the years ended 31 December
2022 and 2023, respectively. Save as the aforementioned business relationship, each of Mr.
Poh Seng Kah and Hock Chuan Hong is an independent third party of our Group.
Mr. Tan Beng Kiat
Mr. Tan Beng Kiat is a director and shareholder of MJ Food Industry Pte. Ltd., a
company incorporated in 2016 in Singapore that operates two central kitchens in Singapore,
specialising in supplying Chinese food products and Malay sauces. Mr. Tan Beng Kiat is an
independent third party of our Group.
Mr. Tan Kok Thye George
Mr. Tan Kok Thye George has retired and, in 2006, was awarded the BBM ‘‘Bintang
Bakti Masyarakat’’ Public Service Star by Singapore. He was an owner of a partnership
based in Singapore engaged in retail sale of flowers. Mr. Tan Kok Thye George is an
independent third party of our Group.
Ms. Zou Shuling
Ms. Zou Shuling is a director and shareholder of Refined Manpower Pte. Ltd., an
employment agency established in Singapore in 2016 that supplies labour workers. Ms. Zou
Shuling is an independent third party of our Group.
Compliance with the Guide for New Listing Applicants
On the basis that (i) the considerations for the Pre-IPO Investments had been
irrevocably settled more than 28 clear days be fore the date of the first submission of the
application form for the Listing and (ii) no special rights granted to the Pre-IPO Investors
referred to in ‘‘— Pre-IPO Investments — Special rights’’ will survive after the Listing, the
Sole Sponsor is of the view that the Pre-IPO In vestments are in compliance with Chapter 4.2
of the Guide for New Listing Applicants.
Public float
To the best of our Directors’ knowledge, each of our Pre-IPO Investors (i) is not a core
connected person of our Company, (ii) has not been financed directly or indirectly by a core
connected person of the Group for the subscription of Shares, and (iii) is not accustomed to
taking instructions from a core connected person of our Group in relation to the
HISTORY AND DEVELOPMENT
–1 5 9–


--- page 171 ---
acquisition, disposal, voting or other disposition of the Shares registered in his/her/its name
or otherwise held by him/her/it, and such Shares held by them will constitute part of the
public float for the purposes of Rule 11.23 of the GEM Listing Rules.
Ms. Pang and acquisition of SPW
On 1 December 2021, immediately upon compl etion of the acquisition of SPW which is
part of the Reorganisation, Ms. Pang became a shareholder of Metasurface Technologies as
to approximately 7.98%. For details, see ‘‘— Reorganisation — 2. Acquisition of SPW’’.
CORPORATE AND SHAREHOLDING STRUCTURE UPON COMPLETION OF THE
REORGANISATION AND THE PRE-IPO INVESTMENTS
The following diagram illustrates the cor porate and shareholding structure of our
Group as at the Latest Practicable Date after t he completion of the Reorganisation and the
Pre-IPO Investments and immediately prior t o the Capitalisation Issu e and the Share Offer:
Baccini
(BVI)
Angelling
(BVI)
SGP BVI
(BVI)
Company
(Cayman Islands)
Metasurface
Technologies
(Singapore)
SPW
(Singapore)
SGP Malaysia
(Malaysia)
Metaoptics
Technologies3
(Singapore)
30.95%
100%
100% 100%17.10%
100% 100% 100%
47.68% 20.12% 10.00% 6.64% 15.56%
Dato’ Sri Chua Mrs. Chua Mr. Thng Ms. Pang Pre-IPO
Investors 1
Other
Shareholders 2
51.95%
Notes:
1. The Pre-IPO Investors comprise Accelerate, MMI, Zou Shuling, Hong Haicheng, Soo Siew Har and
Ho Gim Hai, Chua Lee Chai, Tan Beng Kiat, Deborah Chua Wee Wei, Tan Kok Thye George and
P o hS e n gK a h .T h e yd on o ta c ti nc o n c e r tw i t he a c ho t h e r .
2. Other shareholders of Metaoptics Technologie s comprise MMI (13.70%), Aquaspring (11.32%),
Origgin (8.38%), Accelerate (5.93%), Autec ( 4.92%), Haur-Jye Technology Co., Ltd. (‘‘ Haur-Jye ’’)
(2.22%), Dong & Geng Capital Pte. Ltd. (‘‘ Dong & Geng ’’) (1.82%), Dr. Arseniy Kuznetsov (‘‘ Dr.
Kuznetsov ’’) (1.69%), Z&H Brothers Oversea Investment Pte. Ltd. (‘‘ Z&H’’) (1.21%) and Mr. A
Chua (0.76%). They do not act in concert with each other.
For details on MMI, see ‘‘— Pre-IPO Investment s — Information about the Pre-IPO Investors —
MMI’’ above.
HISTORY AND DEVELOPMENT
–1 6 0–


--- page 172 ---
Aquaspring is an investment holding company inc orporated in the BVI in 2019. It is beneficially and
wholly owned by Mr. Lin Shui Ching, who operates a specialty chemicals bus iness based in Taiwan
providing plastic pigments, dyes and fine chem ical raw materials. Each of Mr. Lin Shui Ching and
Aquaspring is an independent third party of our Group.
Origgin is a pre-seed investment and deep technol ogy venture capital firm based in Singapore and
established in 2019, which provides capital funding to technology start-ups and, through working
with industry partners and leading research insti tutes, provides entrepreneurial, commercial and
management expertise to support such start-ups . Its investment portfolio of deep technology
innovative start-ups spans across industries such a s agri-food, advanced engineering, healthcare,
information and communications technology. Or iggin is an independent third party of our Group.
For details on Accelerate, see ‘‘— Pre-IPO Invest ments — Information about the Pre-IPO Investors
— Accelerate’’.
Autec is a private company limited by shares incor porated in Singapore in 2010 which is specialised
in providing design and total solutions for hig h precision components made with polymeric and
elastomeric materials. Applications of Autec’s sol utions cover various indus tries including medical,
automotive, electronics and lifestyle. A utec is an independent third party of our Group.
Haur-Jye is a limited company incorporated in Taiwan in 2004 which is principally engaged in
electronics components manufacturing and wholesal e of hardware and industrial catalyst. Haur-Jye
is an independent third party of our Group.
Dong & Geng is an exempt private company limited by shares incorporated in Singapore in 2021. It
is an investment holding company. Dong & Geng is an independent third party of our Group.
Dr. Kuznetsov is currently a principal scientist at A*STAR and an independent third party of our
Group.
Z&H is an exempt private company limited by shares incorporated in Singapore in 2023. It is
principally engaged in management consultancy services. Z&H is an independent third party of our
Group.
For details on Mr. A Chua, see ‘‘Relationship wit h our Controlling Shareholders — Background of
our Controlling Shareholders — Controlling Shareholders and Mr. A Chua acting in concert’’.
3. Metaoptics Technologies is an associate of our Group.
POST-REORGANISATIO N CORPORATE ACTIONS
Increase of authorised share capital
On 7 June 2024, our Shareholders resolved that the authorised share capital of our
Company be increased to HK$1,000,000 divided into 1,000,000,000 Shares of HK$0.001
each.
Capitalisation Issue
Conditional on the share premium account of our Company being credited as a result
of the Share Offer, our Directors were au thorised to capitalise approximately
HK$117,403.49 standing to the credit of the share premium account of our Company by
applying such sum in paying up in full at par 117,403,489 Shares, such Shares to be issued
HISTORY AND DEVELOPMENT
–1 6 1–


--- page 173 ---
and allotted on the Listing Date, credited as fully-paid at par to our Shareholder(s) whose
name(s) appear on the register of members of our Company at the close of business on 28
June 2024 in proportion (as near as possible without involving fractions so that no fraction
of a share shall be issued and allotted) to their then shareholding in our Company and the
Shares to be issued and allotted pursuant to t he Capitalisation Issue shall carry the same
rights in all respects with the then existing is sued Shares. Details of the resolutions passed
by our Shareholders in extraordinary gene ral meeting on 7 June 2024 are set out in ‘‘A.
Further Information about Our Group — 5. Resolutions passed in extraordinary general
meeting of our Shareholders on 7 June 2024’’ in Appendix V to this prospectus.
The following table sets out our shareholding structure as at the Latest Practicable
Date and upon completion of the Capitalisatio n Issue and the Share Offer (without taking
into account the Shares which may be issued an d allotted upon exercise of options which
may be granted under the Post-IPO Share Option Scheme):
Shareholders
Number of
Shares as at
the Latest
Practicable
Date
Approximate
shareholding
percentage as
at the Latest
Practicable
Date
Number of
Shares upon
completion
of the
Capitalisation
Issue and the
Share Offer
Approximate
shareholding
percentage
upon
completion
of the
Capitalisation
Issue and the
Share Offer
(%) (%)
SGP BVI 2,668,459 47.68 58,647,335 39.10%
Baccini 1,126,058 20.12 24,748,479 16.50%
Angelling 559,651 10.00 12,299,998 8.20%
Ms. Pang 371,343 6.64 8,161,369 5.44%
Pre-IPO Investors
Accelerate 279,826 5.00 6,150,010 4.10%
MMI 139,913 2.50 3,075,005 2.05%
Zou Shuling 80,789 1.44 1,775,579 1.18%
Hong Haicheng 76,172 1.36 1,674,107 1.11%
Soo Siew Har and Ho Gim Hai 69,247 1.24 1,521,909 1.01%
Chua Lee Chai 57,706 1.03 1,268,261 0.85%
Tan Beng Kiat 57,706 1.03 1,268,261 0.85%
Deborah Chua Wee Wei 57,706 1.03 1,268,261 0.85%
Tan Kok Thye George 28,853 0.52 634,130 0.42%
Poh Seng Kah 23,082 0.41 507,296 0.34%
Participants of the Share Offer — — 27,000,000 18.00%
Total: 5,596,511 100 150,000,000 100%
HISTORY AND DEVELOPMENT
–1 6 2–


--- page 174 ---
CORPORATE AND SHAREHOLDING STRUCTURE UPON COMPLETION OF THE
CAPITALISATION ISSUE AND THE SHARE OFFER
The chart below shows our shareholding and corporate structure immediately upon
completion of the Capitalisation Issue and th e Share Offer (without taking into account the
Shares which may be issued and allotted upon exercise of options which may be granted
under the Post-IPO Share Option Scheme):
Baccini
(BVI)
Angelling
(BVI)
SGP BVI
(BVI)
Company
(Cayman Islands)
Metasurface
Technologies
(Singapore)
SPW
(Singapore)
SGP Malaysia
(Malaysia)
Metaoptics
Technologies3
(Singapore)
30.95%
100%
100% 100%17.10%
100% 100% 100%
39.10% 16.50% 8.20% 5.44% 12.76%
Dato’ Sri Chua Mrs. Chua Mr. Thng Ms. Pang Pre-IPO
Investors 1
18.00%
Participants of
the Share Offer
Public shareholders
Other
Shareholders 2
51.95%
Notes:
1. The table below sets out the names of the Pre-IPO Investors who will be counted as public float
immediately following the completion of the Ca pitalisation Issue and t he Share Offer (without
taking into account the Shares which may be issue d and allotted upon exercise of options which may
be granted under the Post-IPO Share Option Scheme) for the purposes of Rule 11.23 of the GEM
Listing Rules and their respective shareholdings:
Name of the Pre-IPO Investors
Approximate shareholding in our Company
immediately following the completion of the
Capitalisation Issue and the Share Offer
(%)
1. Accelerate 4.10
2. MMI 2.05
3. Zou Shuling 1.18
4. Hong Haicheng 1.11
5. Soo Siew Har and Ho Gim Hai 1.01
6. Chua Lee Chai 0.85
7. Tan Beng Kiat 0.85
8. Deborah Chua Wee Wei 0.85
9. Tan Kok Thye George 0.42
10. Poh Seng Kah 0.34
HISTORY AND DEVELOPMENT
–1 6 3–


--- page 175 ---
Immediately upon the Capitalis ation Issue and the Share Offer, an aggregate of approximately
30.76% of the issued Shares will be counted as part of the public float for the purposes of Rule 11.23
of the GEM Listing Rules.
2. Other shareholders of Metaoptics Technologie s comprise MMI (13.70%), Aquaspring (11.32%),
Origgin (8.38%), Accelerate (5.93%), Autec (4.92% ), Haur-Jye (2.22%), Dong & Geng (1.82%), Dr.
Kuznetsov (1.69%), Z&H (1.21%) and Mr. A Chua (0.76%). They do not act in concert with each
other. For details on the other Shareholders of Me taoptics Technologies, see Note 2 to the diagram
in ‘‘— Corporate and Shareholding Structure upon Completion of the Reorganisation and the
Pre-IPO Investments’’.
3. Metaoptics Technologies is an associate of our Group.
HISTORY AND DEVELOPMENT
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OVERVIEW
We are a precision engineering services p rovider headquartered in Singapore. We
provide (i) precision machining services which are machining processes for removing
materials from a workpiece with high accura cy to create parts and components with tight
tolerance with accuracy in the range of hundr eds of micrometre, and (ii) precision welding
services which involve the application of weldment equipment and specialised welding
technique on a workpiece in a very precise and controlled fashion and which are typically
used for small parts, parts with tight dimensional tolerances, or parts requiring a barely
visible line weld. Leveraging our technical capabilities, know-how and machinery and
equipment, we have established our market position by providing build-to-print precision
engineering services covering the precision co mponent engineering value chain tailored to
our customers’ specific technical requiremen ts and commercial needs. According to the CIC
Report, we ranked fifth in terms of reven ue from the semiconductor segment of the
precision component engineering industry in Singapore in 2023, with a market share of
approximately 3.3%.
Throughout the years, we have grown our bu siness to serve customers in various
sectors, including semiconductor, aerospace and data storage industries. Many of our
customers are well-recognised internationa l companies in these industries, including
Customer A, a U.S. based corporation which supplies equipment used for fabrication of
integrated circuits and displays of electronic products such as televisions, smartphones,
laptops, personal computers, etc.. Our major customers have selected us as a key long-term
partner as we possess essential i ndustry-specific certifications and have passed the stringent
and extended in-house supplier qualification processes of these reputable customers. We
have established long-standing business relationships with our five largest customers during
the Track Record Period for an average of approximately 11 years and we will seek to
maintain sustainable and mutually beneficial relationships with our customers.
We have demonstrated a proven track record in providing quality and efficient
precision engineering services to our custome rs. We have a dedicated quality control team
to conduct stringent incoming, in-process and final quality assessment by conducting a wide
range of technical testing, such as leak checking using helium leak detectors, to ensure that
our components and parts are of the exact and precise measurements as specified by our
customers. We have obtained the SSQA certification, which qualifies us to conduct
precision machining work in the semiconductor industry. We have also been accredited with
ISO 9001 : 2015 quality management system certification in respect of fabrication of
precision machinery parts since 2019, and ISO 14001 : 2015 environmental management
system certification in respect of fabrication of machinery parts since 2018.
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Our business is headquartered in Singapore with production facilities situated in
Singapore and Malaysia. We are equipped with machinery with functions and specifications
and technicians who have accumulated skills in handling different pr oduction processes
which enable us to offer services to cater for th e specific design and requirements of our
customers. Most of our machinery and equipment can be used to produce a wide range of
products for diverse end-use industries with different specifications.
The following table sets out our revenue breakdown during the Track Record Period
by service type, customer sector and customer geographical location, respectively:
For the year ended 31 December
2022 2023
S$’000
%o ft o t a l
revenue S$’000
%o ft o t a l
revenue
By service type:
Precision machining 22,913 58.6 15,545 40.1
Precision welding 16,203 41.4 23,224 59.9
Total 39,116 100.0 38,769 100.0
By customer sector:
Semiconductor
(1) 35,729 91.3 34,077 87.9
Aerospace (2) 101 0.3 1,646 4.3
Data storage (3) 2,423 6.2 2,411 6.2
Others (4) 863 2.2 635 1.6
Total 39,116 100.0 38,769 100.0
By customer geographical
location:
Singapore 20,741 53.0 14,807 38.2
Malaysia 12,627 32.3 16,072 41.5
U.S. 3,507 9.0 5,267 13.6
Others
(5) 2,241 5.7 2,623 6.7
Total 39,116 100.0 38,769 100.0
Notes:
1. To the best knowledge of our Directors, our products supplied to customers in the semiconductor
sector are mainly parts and components used in bui lding manufacturing equipment for producing
semiconductor chips, such as etching systems, de position systems and lithography systems, and the
end-use applications of the semiconductor chips ma nufactured include consumer electronic products
such as smartphones and other mobile devices, serve rs, personal computers, automotive electronics,
etc.
2. To the best knowledge of our Directors, applicat ions of our products supplied to customers in the
aerospace sector mainly include engineering parts for commercial aircraft.
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3. To the best knowledge of our Directors, applicat ions of our products supplied to customers in the
data storage sector mainly include parts and com ponents used in building machinery and equipment
for manufacturing of hard disc.
4. Others mainly refer to (i) solar industry with a pplications of our products mainly include parts and
components used in building machinery and equipment for producing solar panels; and (ii) oil and
gas industry with applications of our products main ly include jackup rig and oil tools, to the best
knowledge of our Directors.
5. Others mainly refer to Switzerland.
Investment in associate
We have invested in and ventured into the innovation and manufacturing of meta
optics components through our investment in Metaoptics Technologies, an insignificant
subsidiary of our Group since its incorporation in June 2021 and until completion of
various rounds of investments and share transfers and currently our associate. Meta optics
technology is a new technology which enables the production of flat surface lens of smaller
size, lighter weight, lower power consump tion and wider light as compared to existing
conventional 3D Lens. Metaoptics Technologies is currently in collaboration with a
r e n o w n e dr e s e a r c hi n s t i t u t ei nS i n g a p o r ea n ds e e k i n gt oe x p a n di n t oi n n o v a t i n gt h e
technology of developing and conducting mass production of meta optics components,
which could be used by customers to install on the optical sensors, camera and flash lens,
autonomous vehicles and augmented reality/mixed reality displays.
The global market of optical metalens industry is relatively fragmented and there are
only a few market players in the field given the h igh technological barrier and the challenges
in achieving mass production. The rapid growth of the new energy vehicle (NEV) industry,
development of 5G smartphone industry, the continual expansion of other downstream
industries such as artificial reality and virt ual reality as well as future breakthrough of
advanced manufacturing technology such as robotics, internet of things, etc. are expected to
drive the growth of the optical metalens market.
According to the CIC Report, the global market size of metamaterials, including
metalens, is forecast to reach US$6.0 billion b y 2028. In particular, driven by the growing
average number of optical components applied in each 5G smartphone and the rising 5G
smartphone penetration rate, the global consumption volume of 5G smartphone optical
components is expected to increase from 2.6 billion units in 2023 to 4.6 billion units by 2028
at a CAGR of 12.4% from 2023 to 2028. Also, with the continuous growth of both the
average number of optical components applied in each NEV and NEV sales volume, the
global consumption volume of NEV optical components is expected to grow from 235.8
million units in 2023 to 613.1 million units by 2028 at a CAGR of 21.1% from 2023 to 2028.
The current global optical metalens market is s till at its early stage of commercialisation
with China and the U.S. leading at the forefront of the research and development. As the
design and manufacturing technologies gradually get mature and as the technology
application awareness increases across the global market, it is expected that more
companies will enter the field in the future.
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To the best of the Directors’ knowledge, the optical metalens can be manufactured by
the fabrication equipment from the semiconductor industry and our Group’s major
customers in the semiconductor sector are also expanding or contemplating to expand their
business involving metalens to diversify their product portfolio. For instance, one of the
portfolio companies of the venture capital arm of Customer A is creating augmented reality
headsets, in which to incorporate advancements in optical technology to enhance the
application. When the opportunity arises, the Group intends to leverage the current
business relationship with its major customers in the semiconductor sector to provide other
value-added services which involves optical metalens to its customers so as to diversify the
product and service offering and increase the income streams of the Group.
For more information on the shareholding changes in Metaoptics Technologies, see
‘‘History and Development — Reorganisation’’.
OUR STRENGTHS
We believe the following competitive strengths have contributed, and will continue to
contribute to our success and distinguish us from our competitors:
Long standing and strong business relationships with reputable international customers
Over the years, we have established a solid customer base. Our customers include
reputable international companies spanning across the semiconductor, aerospace and data
storage industries which have manufacturing bases across Singapore, Malaysia, Japan and
the U.S. We are able to secure and maintain long-term and stable business relationships
with our major customers. In particular, we have maintained business collaborations with
our five largest customers for the Track R ecord Period for approximately 11 years on
average. We have successfully retained and attracted customers due to (i) our consistently
high quality, stable, versatile and efficient build-to-print services, (ii) our commitment to
customer service and our timely response to o ur customers’ varying demands which reduced
their time-to-volume, (iii) the high entry barr ier of the precision component engineering
industry, (iv) our advanced production techno logies and manufacturing capability, and (v)
the mutual reliance with our customers. For more information on the mutual reliance with
our customers and the high entry barrier of the p recision component engineering industry,
see ‘‘— Our Customers — Customer concentration and reliance on our five largest
customers — Mutual and complementary reliance’’ and ‘‘— Competition’’, respectively. We
believe our ability to establish long-term and su stainable business relationships with our
major customers, such as Customer A, will continue to provide a key growth momentum of
our Group. We have successfully capitalised on our industry reputation and stable
relationships with leading industry participants to capture new business opportunities and
expand our customer base. Also, by strengthening our marketing efforts including engaging
more in-depth communication with our existi ng and prospective customers regarding their
future business and development plans, we believe we are able to enhance our market
presence among the existing and potential cust omers and further penetrate into sectors such
as aerospace and data storage within the precision component engineering industry to
diversify our customer base.
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Advanced production technologies and manufacturing capabilities to produce products that
meet various specifications required by the customers
We believe our advanced production technolo gies and manufacturing capabilities have
been our competitive edge. Precision machining and precision welding services require
expertise in planning, procurement, management and operation of machinery and
equipment. We differentiate ourselves fr om our competitors with our technical
knowledge and know-how in the diverse specifications and functionalities of precision
machinery and equipment including CNC machines, coordinate measuring machines,
welding machines and helium leak detectors, etc.
We are able to provide build-to-print services and manufacture products according to
our customers’ specifications, maximise cost e ffectiveness and minimise turnaround time. In
order to cater to the unique and specific design of each product, our production team tailors
the production flow for each individual production process by selecting the optimal
combinations of machinery and equipment according to operational needs, preparing the
internal production work instructions and pro gramming such instruct ions into the relevant
machinery and equipment. Our large fleet of machinery and equipment of various
functionality allows for efficient executio n of production process to accommodate the need
for different programme configuration.
We leverage on our machinery and equipment in our Singapore Factory and Malaysia
Factory to manufacture complex products with high efficiency and accuracy. Our
machinery and equipment are highly versat ile and adaptable which can accommodate
various types of raw materials including alu minium and stainless steel to manufacture
products of various dimensions. Throughout the years, we have continuously acquired
cutting edge machinery to enhance the level of complexity of products we manufacture and
improve our overall production capability. Du ring the Track Record Period, we acquired
machines such as multi-axis CNC machines, and milling machine, etc. In particular, we
installed a 5-axis CNC milling machine duri ng the Track Record Period which allows
multi-dimensional movement of the milling too ls. It has simplified our efforts in system
configuration to manufacture complex products in one set-up. Our machinery can produce
large format parts with size of more than one metre and of two feet thick. According to the
CIC Report, the industry average accuracy for large format vacuum chambers is around
+/–100 μm to +/–10 μm. We are able to achieve an accuracy of +/–10 μm, which is
considered to be an advanced capability in the in dustry. This provides us with flexibility to
produce a wide range of parts and components of various sizes and specifications. We are
also equipped with helium leak detectors for quality management purpose.
Possession of industry-specific qualifications and certifications for precision machining and
precision welding services
We place great emphasis on our production process as well as quality control and we
have been accredited with the relevant industr y-specific qualificatio ns and certifications.
We also have a quality control team with experienced staff equipped with sound knowledge
of our machinery and equipment to conduct stringent incoming, in-process and final quality
control by implementing a wide range of tec hnical testing, such as leak checking using
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helium leak detectors, a specialised device wh ich could locate and detect leaks with high
accuracy and sensitivity, and dimensional inspections using coordinate measuring machines
and visual inspection to ensure that all components are of the exact and precise
measurements as specified by our customers. In light of our proven track record in
stringent production process and quality control, we have been awarded ISO 9001 : 2015
quality management system certification in re spect of fabrication of precision machinery
parts since 2019 and ISO 14001 : 2015 environmental management system certification in
respect of fabrication of machinery parts since 2018.
We have also been accredited with qualificat ions and certifications in relation to our
production technologies. According to the CIC Report, the provision of certain precision
welding services requires qualifications issu ed by professional organisations such as the
American Society of Mechanical Engineers ( ASME), American Welding Society (AWS) and
Semiconductor Equipment and Materials International (SEMI). We have welders
accredited with ASME BPVC Section IX: 2017 and are qualified to perform the relevant
welding to the required standards. We also po ssess AWS and SEMI welding qualifications.
For provision of precision machining servic es in the semiconductor industry, we have
obtained the SSQA certification, a common quality assessment parameter for suppliers of
the industry.
As reputable global leaders in their respective industries, our customers are highly
selective and have stringent certification requ irements and internal procedures in selecting
suppliers. As part of the assessment and evalua tion process, we may need to possess certain
industry specific qualificat ions such as SSQA and ISO. We have been officially selected by
Customer A as its approved supplier since 2016. From time to time, we have also passed the
routine qualification assessment process of Cu stomer A, such as their copy exact training,
which strengthens our mutual relationship and gives us an edge over new entrants in the
industry.
Experienced management team supported by high calibre engineers with advanced technical
capabilities
Our experienced and visionary manage ment team is led by Dato’ Sri Chua, our
Controlling Shareholder, executive Director, c hairman of the Board, and chief executive
officer, who is profoundly experienced in high precision manufacturing and has extensive
knowledge in precision machining and tooling design. Mr. Soh, one of our senior
management executives, has extensive experie nce in various welding processes including E
beam welding, TIG and orbital welding. Mr. Thng, executive Director and Vice President
(Special Projects) of Metasurface Technologies, has considerable experience in product and
process engineering. For more information on our Directors’ and senior management
team’s biographies, see ‘‘Directors and S enior Management’’. We believe that our
experienced and high calibre management team has played a key role in managing and
leading our business operation, which has been and will continue to be the key to our
success in our future operations and business growth.
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Our team of engineers with diverse areas of co mpetency, combined with their technical
knowledge, mastery and capab ility, has enabled us to create ad ditional value and excellent
service for our customers. We recruit high calib re engineers from various backgrounds with
an aim to gather insights and expertise to enhance our business operational efficiency, tailor
our services to customers to meet their dynamic needs and sustain our business growth. Our
management and production teams consist of trained and qualified professionals who have
experience in the precision engineering industry for over 10 years.
OUR STRATEGIES
Our business objective is to provide best-in- class value in precision engineering which
is built on trust, knowledge, experience and synergies as well as to forge mutually beneficial
partnership with our customers. To accomplish this objective, we plan to:
Maintain and strengthen our long-term partnership with reputable international customers as
well as expand and diversify our customer base
We value our customers and will seek to further deepen our relationships with our
existing customers. Our customers are mainly reputable international companies, spanning
across the semiconductor, aerospace and data storage industries. We intend to conduct
more in-depth communication with our existing customers through client visits to keep
abreast with their latest future business plans and development to ensure that we
understand and timely anticipate their need s and requirements. We aim to consistently
provide high quality and reliable services to foster customer reliance on us and to create
word-of-mouth that enables us to further attrac t other reputable international customers.
During the Track Record Period, our customers were predominately engaged in the
semiconductor industry which accounted for 91.3% and 87.9% of our total revenue for the
years ended 31 December 2022 and 2023, respectively. Our Directors believe that we have
developed our reputation among customers in the semiconductor industry. We intend to
build on our success in the semiconductor industry and reputation from the cooperation
with our major customers to further expand our customer base.
We intend to strategically enhance our presence in other industries, such as data
storage and aerospace. Specifically, we intend to expand our business through further
cooperation with our existing customers in such other industries and exploring new
customers. We believe that diversifying our c u s t o m e rb a s ew i t haw i d e rs p r e a do fc u s t o m e r s
from diverse industries will be critical for our future development and healthy growth.
Continue to seek business expansion and increase our scale of operation
We plan to expand our scale of operation and increase the utilisation of our production
capacity by enhancing our cashflow management, supply chain management and human
resources management to capitalise on the growing demand for precision engineering
s e r v i c e sa n dt or e s p o n dt oc h a n g e si nm a rket trends and customer requirements.
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According to the CIC Report, the globa l demand for precision engineering
components, driven by the advancement and ever-evolving technological developments in
sectors such as semiconductor, aerospace, oil and gas, medical devices and automotive
ensures a steady stream of opportunities and recurring demand for our products and
services. Semiconductor manufacturing equipment industry is one of the main downstream
sectors, of which the global sales increased from US$61.7 billion in 2019 to US$106.3 billion
in 2023, registering a CAGR of 14.6% during the period. It is expected to further increase
to US$180.6 billion in 2028 driven by capacity expansion, new fabrication projects, and
high demand for advanced technologies and solutions across the front-end and back-end
segments of the semiconductor industry.
Additionally, due to factors such as macro-economic conditions and dynamic
international situations, certain global major semiconductor manufacturers and
semiconductor equipment manufacturers have been shifting their manufacturing bases
and operations from China to Southeast Asian countries, providing more business
opportunities for Singapore, as a leading regional hub for advanced manufacturing, and
Singaporean service providers. Within the waf er manufacturing sector in the semiconductor
industry, integrated device manufacturers (IDM) companies such as Micron Technology,
Infineon Technologies, NXP Semiconductors, STMicroelectronics, and along with foundry
companies such as Global Foundries, United Microelectronics Corporation (UMC) and
Vanguard International Semiconductor Corporation (Vanguard) had been expanding their
manufacturing facilities in Singapore. In par ticular, Customer A announced ‘‘Singapore
2030’’ in December 2022. As part of the plan, C ustomer A planned to invest S$600 million
in a new facility at Tampines Industrial Cresc ent in Singapore by 2024, which is expected to
be a 700,000 square feet plant and include more than 200,000 square feet of equipment
manufacturing clean room space, to expand its chip-making operations in the next eight
years and strengthen its manufacturing capacity, R&D, ecosystem partnerships and
workforce development in Singapore. Acco rding to the CIC Report, the two largest
customers of Customer A are Taiwan Semicon ductor Manufacturing Company Limited
(TSMC) and Samsung Electronics Co. Ltd, which together accounted for more than 30% of
Customer A’s total net sales for each of its financial years ended 31 October 2021, 2022 and
2023. As an affiliate of TSMC, Vanguard announced in October 2023 its plan to further
build a 12-inch chip plant in Singapore following its acquisition of an 8-inch chip plant in
Singapore from GlobalFoundries in 2019 . Another customer of Customer A, UMC
announced in 2022 its plan to invest US$5 billio n in a chip-making factory in Singapore, to
manufacture 22 and 28 nanometer chips for cars, IoT devices and computers. The UMC’s
new facility in Singapore is expected to be comp leted by mid-2024, with initial production
to commence in early 2025. Such shifting trend and strengthening of production base by the
global semiconductor manufacturers and semiconductor equipment manufacturers in
Singapore are expected to bring more demand for services and products of our Group.
Furthermore, apart from that the vast end-use market is expected to bring adequate
and recurring demand for our services, the precision components engineering industry has
relatively high entry barriers including (i) large capital investment in high-end machinery,
(ii) the requirement for skilled workers and tec hnological know-how, (iii) proven capability
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a n ds t a b l er e l a t i o n s h i pw i t hc u s t o m e r s ,and (iv) qualificatio n and certification
requirements, making it challenging for new entrants to enter and therefore reinforcing
our Group’s role in capturing the emerging demands.
Going forward, in view of the growing demand for precision components engineering
services within the semiconductor indust ry, our Group will continue to develop the
provision of precision machining and precisio n welding services in parallel to leverage the
synergies between both service types.
Enhance our cashflow management and supply chain management
We intend to enhance our cashflow management and allocate our working capital
strategically to manage our payables and receivables effectively. Our Directors believe that
direct material cost will continue to be the largest component of our cost of sales in the
future and it is essential to enhance our liquidity position in order to undertake more
customer orders. We aim to closely monitor our working capital needs and increase our
liquidity to meet the expected increase in cash flow demands during periods of high level of
customer orders. Our Directors believe that by maintaining a sufficient level of working
capital, we will be able to optimise our production capacity and ensure a smooth cash flow
cycle.
We also intend to enhance our supply chain management and expand our upstream
resources portfolio to foster our flexibility in production planning. We seek to maintain
effective inventory management by managing our inventory levels to align with customer
demand. To optimise our inventory control and avoid excessive inventory levels, and in
order to enhance our profitability given the pot ential increase in raw material costs, we
intend to purchase the required raw materials in appropriate quantities according to
customer orders and adjust our inventory levels from time to time to accommodate any
higher volume of customer orders. We did not adopt any hedging policy on raw material
costs, during the Track Record Period and as a t the Latest Practicable Date, as we provided
our quotation to customers after obtaining the relevant quotations from suppliers.
Therefore, we are able to mitigate raw material prices fluctuations by passing on the raw
material costs to our customers by reflecting such costs into the respective quotation. As
such, our Group did not experience any material adverse impact on our gross profit margin
due to raw material prices fluctuations during the Track Record Period and up to the Latest
Practicable Date and we will continue this practice going forward. We also endeavour to
make timely payment to our suppliers to minimi se the risk of disruption in the supply chain.
Enhance human resources management
We believe that our high calibre production team has contributed to our success and
we endeavour to maintain effective human resources management system and incentive
mechanism to identify, select, cultivate and r etain teams of competent employees at various
levels. The competition for recruitment of technically competent personnel is intense.
According to the CIC Report, recruitment for technicians for precision engineering is under
intense competition in Singapore. Therefore, re taining our existing technical workforce and
recruitment of additional personnel are critical to expanding our operation.
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In order to expand our workforce to facilitate the expansion of our scale of operation
and to maximise the machine hours in operation and our production facilities utilisation
rates thereof, we will continue to attract and r ecruit technicians with the required skills and
technical know-how to improve our service capacity and competitiveness. We plan to
recruit approximately five machinists, two t echnicians for precision welding services, one
CNC programmer and one production planner with the required industry experience,
technical expertise and relevant qualifications in operating precision machining, and
conducting welding to cater for the increas ing demand from our customers. The expected
average annual salaries of machinists, technicians for precision welding services, production
planner and CNC programmer to be recruited are approximately S$42,000, S$42,000,
S$66,000 and S$54,000, respectively. Despite the potential increase in labour costs due to
the planned recruitment of additional technicians and workers going forward as set out in
the section headed ‘‘Future Plans and Use of P roceeds’’ in this prospectus, our Directors
believe that we are able to maintain our profit ability. Employing full-time workers for our
production facilities is a more cost-effective solution compared to procuring external labour
services as the third-party service providers generally charge a higher average hourly rate
for their labour services than the remuneration we paid for our full-time workers by
approximately 94.0%. Furthermore, full-time workers ensures consistent availability of
labour force for our resource allocation, stab ility of our service quality and their familiarity
with the factory’s operations, thus promoting production efficiency.
In addition, our Group’s production faci lities for precision machining have recorded
low historical utilisation rates during the T rack Record Period primarily due to the limited
resources for procurement of raw materials an d recruitment of skilled workers to maximise
the machine hours in operation. For more information, see ‘‘— Production capacity and
utilisation’’. In view of the expected increase i n demand in precision engineering services in
Singapore and considering the low historical u tilisation rates of our production facilities,
we intend to maximise our production capacity by extending our operating hours on night
shifts and by introducing and offering attrac tive remuneration to our existing or newly
recruited employees who are willing to work on night shifts. We also intend to motivate and
retain our existing high calibre employees thro ugh improving remuneration packages, other
welfare and benefits to further improve thei r efficiency and standard of performance. We
will endeavour to continue to provide syste mic on-the-job trainings and development
programmes to improve the t echnical skills of our employees . For more information, see
‘‘Future Plans and Use of Proceeds.’’ With these initiatives, we believe we will be able to
enhance the quality of our services, increase labour productivity, cultivate a sense of
belongings among our staff to support our long-term and sustainable growth.
Enhance our quality assuranc e capability and optimise our operational efficiency
As we continue to expand our business scale, our Directors believe that it is crucial for
us to improve and enhance our quality assuranc e capability. Accordin g to the CIC report,
as customers in the downstream industries are highly concentrated and usually prefer to
work with only a limited number of reliable supp liers, companies that prove their ability to
deliver high-quality products consistently ar e likely to receive more orders and gain more
market shares in the long term. We believe that our past success is attributable to our
stringent quality control which enables us to provide high quality precision engineering
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services to our customers. We intend to furthe r strengthen our quality control capability by
upgrading our coordinate measuring machine and hence increasing the efficiency of our
quality control procedures and enhancing the quality and accuracy of components we
produced.
We are currently using a production management system for managing our
manufacturing process and production f low in our Singapore Factory and Malaysia
Factory. We intend to purchase a new production planning system and machine monitoring
system for more comprehensive coverage of the production process and enable better
coordination. It is expected that the new production planning system and machine
monitoring system can allow us to conduct real-time data monitoring and analysis and
produce daily report regarding our machine operations. As our business continues to grow
and to meet the increasing requirement on i nformation system management, improve
operational efficiency and ensure effective coordination among various functions of our
business, we plan to introduce a more advanced integrated ERP system to our precision
machining process at our Singapore Factory to achieve better control of sales and
production information, and to enhance our data analytic capabilities on production
planning and quality control on a real time basis. We expect that an advanced integrated
ERP system can track and monitor our production information, such as the number of our
purchase orders received and/or fulfilled, our daily production volume, raw material
schedule, delivery schedules and quality control information.
In addition, as we have not updated our CNC programming software since purchase in
2018, we intend to upgrade the programming software of our CNC machines to enhance the
flexibility and capability of our CNC machine s to reconfigure for different production
scenarios. New features that we intend to acquire with the upgrade include enhanced ease
and speed of development and built-in computed calculation formula. An updated
programming software with improved algor ithm can also improve accuracy and enhance
overall performance of our CNC machines. It is also expected that an updated
programming software will lower the idle time of the CNC machines and increase our
production efficiency.
We also intend to purchase a new coordinate m easuring machine to replace an existing
coordinate measuring machine for the purpose of improving the accuracy of measuring
parts against the design specifications in view of the increasing demand for our precision
machining services. As at 31 December 2023, we h ave three coordinate measuring machines.
One of the coordinate measuring machines had remaining useful life of approximately 12
years. The remaining coordinate measuring machines have been fully depreciated.
Coordinate measuring machine is crucial in ensuring the quality of the parts we produce,
especially as precision machining requires h igh precision in terms of dimensions. The new
coordinate measuring machine we intend to purchase is equipped with features such as
contactless probe and extra large parts measuring capability. The new coordinate measuring
machine with an expected useful life of appro ximately 12 years is expected to replace the
existing coordinate measuring machines which have been fully depreciated. With the
increasing demand for our precision machining services, we expect the new coordinate
measuring machine with new features and ne w programming software can improve the
accuracy and efficiency of our quality check process.
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To provide flexibility for transporting parts between our Singapore Factory and
Malaysia Factory for urgent orders or deliv ery of parts to our customers’ warehouse in
Singapore upon request, we plan to expand our logistic team by purchasing an additional
truck and recruiting an additional truck driver. Our existing trucks have become inadequate
to meet delivery demands. As a result, our cu stomers have had to arrange their own pickup
for purchased parts and components, disrupting customer service and potentially harming
customer relationships. It is ex pected that the new truck will have useful life of 10 years and
expanding our logistic team will support the increase in demand from our customers.
For more information, see ‘‘Future Plans and Use of Proceeds’’.
OUR BUSINESS MODEL
We generally offer our customers build-to -print precision engineering services
including (i) precision machining services which are machining processes for removing
materials from a workpiece with high accura cy to create parts and components with tight
tolerance with accuracy in the range of hundr eds of micrometre, and (ii) precision welding
services which involve the application of weldment equipment and specialised welding
technique on a workpiece in a very precise and controlled fashion. Precision welding is
typically used for small parts, parts with tight dimensional tolerance, or parts requiring a
barely visible line weld.
We have started our business providing precision machining services since 2000 and
further expanded our business to precision welding services following our acquisition of
SPW in December 2021. The acquisition was driven by SPW’s expertise in precision welding
which is a crucial value-added process in preci sion engineering and the synergy brought by
the shared customer base between Metasurface Technologies and SPW. In particular, both
precision machining and precision welding are in tegral to the precision engineering process.
Certain ultimate products manufactured by o ur customers require parts produced using
both precision machining and precision welding processes. With the acquisition of SPW, we
are able to provide solutions for various manufacturing process of precision engineering,
which has reinforced our presence in the precision component engineering value-chain.
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Our business flow
The key stages in our business flow for prec ision machining and precision welding are
set out in the diagram below:
Provision of quotation and first article inspection
Receipt of purchase order
Generation of internal production working instruction
Material procurement and inspection
1 – 2  days
1 – 3  days
Precision machining
4 – 17 weeks
Precision welding
9 – 22 weeks
Precision machining
Packaging
Delivery
Precision welding
Packaging
(inside cleanroom)
Delivery
Receipt of request for quotation and drawings and preliminary assessment
of capacity
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The project lead time for precision mach ining from receipt of purchase orders to
delivery is typically ranging from 4 to 17 weeks. The project lead time for precision welding
from receipt of purchase orders to deliver y is typically ranging from 9 to 22 weeks.
Receipt of request for quotation and drawin g and preliminary assessment of capacity
From time to time, our customers provide us with request for quotation and the
relevant product drawings (the ‘‘ Customer Production Drawings ’’). Upon receipt of the
request for quotation and the Customer Production Drawings, we will liaise with the
customer regarding the estimated delivery schedule.
Provision of quotation and first article inspection
If, upon our assessment, w e consider that we have the capability and capacity to
deliver the parts and components required by our customers according to the product
specifications outlined in the Customer Production Drawings, we will prepare and provide
quotation(s) to our customers. The sales and/or programme managers shall prepare the
official quotation/contract. The quotation(s) is determined mainly based on our preliminary
estimate on the raw materials, labour hours and machine hours required to manufacture the
product. For production of new parts and components, we are required to produce a first
article for our customers’ approval. Our quality control inspector shall inspect the first
article and submit the inspection report together with the first article for our customers’
approval.
Receipt of purchase order
If our customers are satisfied with our quotation(s) and the first article (in case for new
parts and components, they will issue and provide us a purchase order within one to three
days.
The sales and/or programme managers will handle purchase orders from customers,
understanding customer requirements and submitting revised quotations when required.
Generation of internal production working instructions
Based on the Customer Production Drawings, our production team will generate the
internal production working instructions, wh ich outline in details the production flow as
well as the raw materials, labour, machinery and equipment, procedures, standards and
dimensions, etc. required to meet the specifications under the Customer Production
Drawings for manufacturing the product.
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Material procurement and inspection
Our procurement team undertakes the res ponsibility for material procurement and
management for the entire production proce ss from the receipt of the customers’ purchase
orders until the final delivery of our products.
We may be required to source certain raw materials from approved suppliers
designated by our customers. In such case, we will request quotations from such
approved suppliers. We liaise with our suppliers on the pricing terms, minimum order
quantity, standard pack quantity and lead time.
Precision machining and precision welding
For more information on the manufacturing process of each of our precision
machining and precision welding divisio n, see ‘‘— Our manufacturing process’’.
Packaging and delivery
After the finished products pass our final quality inspection and checks, we will
arrange for packaging of the finished products. In particular, finished products which are
required to be welded inside a cleanroom will be packaged inside the cleanroom after the
precision welding process.
For delivery to destinations within Sin gapore, our in-house logistics team is
responsible for the delivery to the designated locations. For destinations outside
Singapore, subject to the requirements set out in the purchase orders, external courier is
arranged in accordance with our customers’ instructions for their pickup from our
warehouse.
Our manufacturing process
Precision machining
Precision machining is a machining process of removing materials from a workpiece
with high accuracy to create parts and compone nts with tight tolerance with accuracy in the
range of hundreds of micrometre. Types of pre cision machining include turning, milling,
grinding and drilling, etc. The precision mach ining process is generally controlled using
Computer Numerical Controls (CNC) system and supported by CAD-CAM software such
as Solidworks, Mastercam, Hypermill.
We manufacture parts and components by machining raw materials using high
precision CNC machines according to the Customer Production Drawings, such as for our
customers in the semiconductor manufacturing equipment industry.
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The flow chart below illustrates the pro duction process for precision machining:
Machining (Milling/turning)
Polishing
Surface treatment (third party service provider)
Hardware assembly
Final quality control
In-process quality control
Packaging and delivery
Depending on the complexity of the product specification, the project lead time for
precision machining from receipt of purchase orders to delivery normally takes around 4 to
17 weeks. The production process consists of the following steps:
Machining
Machining (such as milling and turning) is a p rocess where aluminium and other metals
are processed to meet the product specificat ions using CNC machines. CNC machinery has
a high precision automated vertical and horizontal machining centre that enables motions
to be commanded through built-in programmes interpreting mathematical or numerical
data inputs to conduct automatic, precise and consistent motion control in the
manufacturing process.
For the manufacture of new products where new Customer Production Drawings are
provided and CNC machinery is required for the production process, our programmers will
create new programming instructions and generate machining codes using software such as
Mastercam and Hypermill and import such inst ructions into the CNC machines to drive the
operation. For existing products of which the production instructions have already been
programmed into machining codes, the machinists will import the existing machining codes
directly into the CNC machines for operation.
Milling and turning are involved in our machi ning process. Milling is a process which
spins a cutting tool against a stationary workpiece using primarily square or rectangular bar
stocks to machine components. Our mach inists conduct milling using CNC milling
machines (with vertical or horizontal machining centre). Turning rotates a workpiece
against a cutting tool using primarily round bar stocks to machine components. Our
machinists conduct the turning process usi ng CNC turning machines (with vertical or
horizontal machining centre).
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Polishing
After the machining process, some of the parts and components may have irregular
surface and burr. In order to meet the specific ations of our customers, motorised tools are
used to polish the surface of the components. As this is a relatively simpler and manual
process, we may assign the polishing process to SGP Malaysia for cost efficiency provided
that the production cost in Malaysia is generally lower than that in Singapore.
Surface treatment
After polishing, we will send the parts and components to third party service providers
designated by our customers for surface treatment. Surface treatment involves treating the
surface of parts by a variety of processes (such as electroplating and chemical plating) to
enhance the corrosion protection and water r esistance (as applicable). In particular,
electroplating is a process of depositing coating on the surface of parts and components
with a layer of chemical.
Subject to the requirements by our customers, we may outsource the surface treatment
process to designated third party service providers who (i) possess the requisite licence that
is required for handling chemical used in the surface treatment process, (ii) have the
expertise and know-how relevant to the surface treatm ent process, and (iii) are equipped
with the special measurement tools that are req uired for performing the surface treatment
work.
Hardware assembly
Before packaging the finished products f or delivery, we will install helicoil, a
coiled-wire type of thread repair insert, to the helical ridge formed on the inside or
outside of the parts and components to protect them from wear and tear.
Quality control
The production team has to submit the first piece or first set-up pieces of products in
the production process for quality inspection. The production team will also have to submit
the final product to the quality inspector for final inspection prior to packaging and
delivery. The quality inspector will carry out measurement and other tests with reference to
the internal production work instructions using coordinate measuring machines. For more
information on our quality assurance measures, see ‘‘— Quality Management’’.
Precision welding
We provide welding and mechanical asse mbly services of gas line, mainly for
semiconductor industry. Precision welding is a process which involves the use of
weldment equipment and specialised welding technique on a workpiece in a very precise
and controlled fashion. Dimensional tolerances are tight for both the position of the weld
line as well as the depth of the weld. Precision welding is typically used for small parts, parts
with tight dimensional tolerance, or parts requiring a barely visible line weld. During the
precision welding process, stainless steel pipes of various diameters are cut and bended into
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various shapes according to the internal production work instructions by using welding
methods such as TIG or orbital welding. The final products are leak checked using helium
leak detectors.
The flow chart below illustrates the pro duction process for precision welding:
Inside cleanroomnote
Milling
Facing
Bending
Cutting
Ball pulling
TIG WeldingUltra-sonic cleaning
Tack welding / Orbital Welding
Inside cleanroomnote
Outside cleanroomnote
Mechanical polishing
Chemical cleaning
(third party service provider)
Mechanical assembly
Quality control and final visual inspection
Quality control
Helium leak test
Ultra-sonic cleaning
Mechanical assembly
Quality control and final visual inspection
Packaging
Quality control
Helium leak test
Electropolishing
(third party service provider)
Chemical cleaning
(third party service provider)
Electropolishing
(third party service provider)
Note: Depending on the type of products for precision welding and customers’ requirements, certain
products which require high purity welds such as gas lines are processed in a cleanroom. For other
products, all steps are conducted outside the cleanroom except for packaging.
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Depending on the complexity of the product specifications, the project lead time for
precision welding from receipt of purchase orders to delivery normally takes around 9 to 22
weeks. Our precision welding process generally consists of the following steps:
Cutting
Stainless steel tubes and pipes are cut into the required length according to the
Customer Production Drawings and our internal production working instructions using
CNC machines or manually using cold saw.
Bending
Stainless steel tubes and pipes are bent into the required shapes according to the
Customer Production Drawings and our internal production working instructions manually
or using CNC bending machines.
Facing
We perform facing works to remove the sharp edges at the cutting point of the stainless
steel tubes and pipes after cutting and bending.
Milling
We perform milling work according to the C ustomer Production Drawings and our
internal production working instructions. For parts that have been bent into shapes that
cannot fit into CNC machines, we conduct the milling process manually in-house. For parts
that can fit into CNC machines for the millin g process, we may outsource the process to
third parties for efficiency purposes.
For more information on our processing service providers, see ‘‘— Procurement —
Procurement of processing services’’.
Ball pulling
Subject to the customers’ requirements o f specific parts, we conduct ball pulling
process to form an extension to the holes on tubes.
Welding
. Cleanroom — Tack welding and orbital welding
Processes such as tack welding and orbital welding which involve the application of
high-purity precision welds are required to be conducted in the cleanroom.
Tack welding is a temporary welding process used to hold parts together in preparation
for final welding and to maintain the desired alignment and gap between the pieces being
joint.
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Orbital welding is an automated welding process used to weld tubes or pipes. This
process is fully programmable. During the orbital welding process, an orbital weld head
rotates an electrode around the welding joint to make the required weld.
. Non-clean room — TIG welding
Processes which do not involve the application of high-purity precision welds can
generally be produced outside the cleanroom.
Tungsten Inert Gas (TIG) welding, also known as Gas Tungsten Arc Welding (GTAW)
is a welding process that welds together materials such as stainless steel using a
non-consumable tungsten electrode together with gas purge such as argon or helium. Our
TIG welding process is performed semi-automatically using TIG welding machines and/or
manually.
Polishing
. Electropolishing
Electropolishing is an electrochemical polishing process that improves material
surfaces by removing a thin layer from stainless steel or other metals. This process does
n o tn e e dt ob ec o n d u c t e di n s i d eac l e a n r o o ma n di so u t s o u r c e dt ot h i r dp a r t ys e r v i c e
providers due to licencing requirements and r equirement of specific equipment to perform
the work.
. Mechanical polishing
Mechanical polishing is a process of smoothing surfaces with mechanical forces to
remove scratches and discoloration on the tubes after TIG welding.
Cleaning
Cleaning is conducted after the welding process to filter out contaminants and to
remove weld scale.
. Cleanroom products — Ultra-sonic cleaning
For products that are required to be welded and hence cleaned inside the cleanroom,
we use high-frequency and high intensity sound waves (usually 50 kHz) in high purity water
and chemicals to filter out cont aminants and to remove stains.
. Non-cleanroom products — chemical cleaning
For parts which are not required to be welded and cleaned inside a cleanroom, we
engaged third party service providers to perf orm the chemical cleaning process. Chemical
cleaning is a process to remove contaminants a n dw e l ds c a l eu s i n gc h e m i c a ls u c ha sn i t r i c
acid and hydrochloric acid. For more information on our processing service providers, see
‘‘— Procurement — Procurement of processing services’’.
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In-process quality control
We perform dimension inspection as part of the quality control process. For products
that are required to be welded inside a cleanroom, this process will be conducted inside the
cleanroom accordingly.
Helium leak test
After the welding process, we perform leak test by helium leak detectors which use high
purity helium gas to detect leakage in ultra-h igh vacuum condition to ensure there is no
leakage in the welds. For products that are re quired to be welded inside a cleanroom, this
process will be conducted inside the cleanroom accordingly.
Mechanical assembly and final quality check
For large and complex products, we may co nduct mechanical assembly in accordance
with the Customer Production Drawings and our internal production working instructions.
The final products will undergo a series of tests and adjustments to check whether the
positioning of the parts meets our customers’ specifications.
Production facilities
Overview
Our production facilities are located in Singapore and Mala ysia. Allocation of orders
for production between the two facilities is d etermined according to the capacity of each
facility and the technical requi rements of the orders. Our Sin gapore Factory mainly focuses
on provision of higher value-adding machining services and more complex precision
machining processes. Our Malaysia Facto ry mainly focuses on provision of lower
value-adding machining services such as polishing and some basic roughing processes. All
precision welding processes are performed in our Singapore Factory.
Our production facility in Singapore
Our Singapore Factory is located in Tuas, Singapore. For more information on the
property for our Singapore Factory, see ‘‘— Properties’’. We lease the property from an
independent third party and we have performed some alteration and additional work to the
property necessary for the installation of our machinery and equipment.
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We generally use our Singapore Factory for manufacturing larger parts and
components with more complex structures which require relatively more advanced
technologies and machinery as well as skilled technicians. In particular, we maintain our
machinery such as 5-axis CNC machines an d coordinate measuring machine in the
Singapore Factory for performing the complex machining processes. As a result, we
conduct all production processes which require the use of 5-axis CNC machines in our
Singapore Factory.
Our production facility in Malaysia
Our Malaysia Factory is located in Johor, Malaysia, which is situated near the border
of Singapore. For more information on the property for our Malaysia Factory, see ‘‘—
Properties’’ in this section. We generally use our Malaysia Factory for lower value-added
machining services which are more labour-intensive in nature, such as polishing and some
basic roughing processes to enhance cost efficiency. It is more cost effective to carry out
these labour-intensive production processes in our Malaysia Factory due to the relatively
lower labour costs and utilities expenses. We as sign the relevant production processes to our
Malaysia Factory, and subsequently transport and deliver the components and parts back
to our Singapore Factory for performing the final machining and finishing processes.
Production machinery and equipment
Our production facilities are equipped with machinery and equipment. Our machinery
and equipment provide comprehensive functions for the production of various types of
components. We may use the same machine to manufacture specific products for different
customers in different end-use industries. It enables us to produce customised
high-precision components from different r aw metallic materials. The estimated useful
life of our plant and machinery is three to 15 years.
A CNC machine is a computer-controlled device that moves along linear or rotating
axes to perform various tasks, such as cutti ng or drilling. Our CNC machines provide high
accuracy and repeatability t hrough automation in the ma nufacturing process, which
improves production efficiency and enhances ou r manufacturing flex ibility. CNC machines
are categorised into 3-axis, 4-axis or 5-axis machines in accordance with the number of
directions the tool within the machine can move. 4-axis and 5-axis CNC machines generally
enable the manufacture of products with mo re complex shapes and with higher accuracy
due to the capability to handle additional mov ement and directions of the tool within the
machine.
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The main machinery and equipment utilised in our production processes are set out
below:
Main machinery and
equipment Function
Precision machining
CNC machines
—C N Ct u r n i n gm a c h i n e s
and CNC lathe
machines
To remove material from a workpiece by using
stationary and rotating tools.
— CNC milling machines To operate cutting tool programmed and managed by
Computer Numerical Controls (CNC) systems to
progressively remove material from a workpiece and
produce a custom-designed part or component.
Coordinate measuring
machines
To measure the geometry of objects by establishing
discrete points on a physical surface using a contact
probe.
Wire cut machines Very high precision removal of material from
workpiece using electrified wires. Accuracy is tighter
than milling.
Precision welding
Bending machines To bend metal tubes and sheet metal at a specific angle
and shape.
TIG welding machines To produce welds with a non-consumable tungsten
electrode.
Helium leak detectors To locate and measure the size of leakage into or out of
our final products with accu racy, reliability and high
measurement sensitivity.
As at the Latest Practicable Date, all of the machinery and equipment were owned by
us and certain machinery owned by us was acq uired under hire purchase arrangements.
Most of our machinery and equipment were purchased from Taiwan, Germany and Japan.
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We typically maintain a list of suppliers for our production machinery and equipment.
During the Track Record Period, we mainly so urced our machinery and equipment from
our major machinery suppliers. We have established stable and long-term business
relationships with our major machinery and e quipment suppliers to ensure availability
and timely supply of machinery and equipment, when required. However, we generally do
not enter into long-term agreements with our m ajor machinery and equipment suppliers.
For details of the risks relating to our reliance on our major machinery suppliers and that
we generally do not enter into long term agreements with our machinery and equipment
suppliers, see ‘‘Risk Factors — Risks Relating to our business and the industry in which we
operate — Our business could be adversely affected by long lead time for procurement of
machinery and equipment, the shortened useful life cycle of our machinery and equipment
and our reliance on our major machinery suppliers and we generally do not enter into long
term agreements with our machinery and equipment suppliers’’.
Production capacity and utilisation
The production capacity and output of our precision component engineering services
are measured by machine hours as products of our precision machining and precision
welding services are highly customised and have diverse shapes, sizes and weights subject to
our customer’s requirements and product specifications. As a result, our Directors consider
that it is difficult to estimate our production capacity and utilisation in the same way as
compared to manufacturers of standard products and it is not meaningful to measure our
production capacity by volume or by weight. A ccording to CIC, our calculation basis of the
production capacity and the mea surement of the utilisation of o ur production facilities are
in line with the industry norm.
The following table sets out in details the des igned production capacity, actual output
and utilisation rate of the major production pr ocesses in our production facilities during the
Track Record Period based on information available on machine hours:
For the year ended 31 December
2022 2023
Designed
Production
Capacity
Actual
Output
Utilisation
Rate
Designed
Production
Capacity
Actual
Output
Utilisation
Rate
(Hour) (1) (Hour) (2) (%)(3) (Hour) (1) (Hour) (2) (%)(3)
Singapore Factory
Precision machining
— CNC machining
process 338,240 177,408 52.5 338,240 138,285 40.9
Precision welding 144,960 113,467 78.3 144,960 171,953 118.6
Malaysia Factory
Precision machining
— CNC machining
process 126,000 58,212 46.2 126,000 60,962 48.4
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Notes:
(1) The designed production capaci ty for precision machining is calculated based on maximum machine
hours for CNC machining process. The designed p roduction capacity for precision welding is
calculated based on maximum machine hours for th e precision welding process. Maximum machine
hours are calculated based on 20 operating hours per working day (inclusive of the switching time of
production machinery and equipment for manufactu ring different parts and components and taking
into account factors such as machine set-up and r econfiguration time, etc) and total working days
per year (based on two shifts per day and six work ing days per week multiplied by 52 weeks minus
the number of statutory holidays in Singapor e or Malaysia for the respective year).
(2) The actual output is the total number of actual machine hours in operation.
(3) The utilisation rate is calculated by dividing a ctual output by designed production capacity for the
same financial year on the basis set out above.
For the years ended 31 December 2022 and 2023, the utilisation rates were
approximately 52.5% and 40.9% for precision machining and approximately 78.3% and
118.6% for precision welding, respectively, at our Singapore Factory and the utilisation
rates were approximately 46.2% and 48.4%, res pectively, for precision machining at our
Malaysia Factory. According t o the CIC Report, the industr y average utilisation rates of
the production facilities of precision machin ing and precision weldin g industry both ranged
from 40% to 80% during the Track Record Period. This wide range reflects varying
operational circumstances and industry demands. Companies focusing on the
semiconductor industry operate at lower ut ilisation rates of 40% to 60% as the parts and
components produced for the semiconductor industry are less standardised and more
c o m p l e x .T h e s ep a r t sr e q u i r et h eu s eo fdifferent types of CNC machines and other
machines and tools for each step of the production process. The machines required for
different products may also vary widely, leading to lower utilisation rates for the higher
varieties of machines. In contrast, compani es mainly serving the aerospace industry and
automobile industry operate at higher utilis ation rates of 60% to 80%. The parts produced
for these industries are relatively more stand ardised and more streamlined, requiring less
varieties of machines, and thus leading to high er utilisation rates. The increase in utilisation
rates in 2023 for precision welding at our Singapore Factory as compared to 2022 was
mainly due to the procurement of labour services from independent third party service
providers to increase manpower at our Singapore Factory to cope with the increase in sales
of precision welding services. Our production facilities for precision machining were not
fully utilised during the Track Record Period, whi ch was primarily due to limited resources
for procurement of raw materials and recru itment of skilled workers to maximise the
machine hours in operation. Besides, as products of our precision machining are highly
customised with diverse design specifications as requested by our customers and hence
require the use of different type of machines (e.g. CNC turning machines, CNC lathe
machines, CNC milling machines and other ad vanced tools) to complete the whole process,
it would be very ideal for different type of our machines to be operated simultaneously at all
production time to achieve full utilisation. For h ypothetical analysis only, with reference to
(i) our historical average machine hours, raw material costs and labour costs required to
perform a purchase order during the Track Record Period, and (ii) our average cash and
bank balances in 2022 and 202 3, we have a shortage of approximately S$6.5 million and
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S$5.4 million of working capital for raw mater ial procurement and staff recruitment in
order to fully utilise our production capacity for precision machining at our Singapore
Factory during 2022 and 2023, respectively.
During the Track Record Period, we recei ved additional purchase orders from
customers from time to time while our availa ble human resources were still occupied with
fulfilling existing orders on hand. In order to maintain positive relationship with our
customers, we negotiated for longer delivery t imes instead of turning down purchase orders.
We will also procure labour services from independent third party service providers to
handle these additional or ad hoc orders if n ecessary. To determine whether to procure
external labour service when our existing h uman resources are tied up, we will consider
factors such as delivery schedules requested by customers, additional cost required, our
current production schedule, our then available working capital and our relationship with
the customer. This has resulted in our back log of unfulfilled orders. As at 31 December
2022 and 2023 and 30 April 2024, we had a backlog of unfulfilled purchase orders of
approximately S$36.1 million and S$24.9 m illion and S$18.4 million, respectively.
We intend to recruit additional manpower as set out in the section headed ‘‘Future
Plans and Use of Proceeds’’ in this prospectus and/or procure labour services from third
party service providers as set out in’’ — Deployment of labour services’’ in accordance with
our specific business needs. For the year e nded 31 December 2023, the utilisation rate for
precision machining at our Singapore Factory was approximately 40.9%. If the
assumptions adopted to calculate our utilis ation rate remain unchanged and assuming
that we have sufficient resources to employ a dditional staff for the year ended 31 December
2023, there would be a shortage of 43 staff to f ully utilise our production capacity for
precision machining at our Singapore Factory as at 31 December 2023. With the
recruitment of additional manpower upon ut ilisation of the relevant use of proceeds, it is
expected that the utilisation rates of our Singa pore Factory will increase to approximately
64.1% and exceeding 100% (the utilisation rat e of the Singapore Factory for precision
welding already exceeded 100% for the year ended 31 December 2023) for precision
machining and precision welding, respectively.
OUR CUSTOMERS
We have established a reputable customer base and our precision engineering
capabilities coupled with our highly specia lised know-how allow us to stand out among
our competitors. For the years ended 31 December 2022 and 2023, we recognised revenue
from a total of 36 and 36 customers, respectively.
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The following table sets out our revenue breakdown by service type, customer sector
and customer geographical location, respectively, for the periods indicated:
For the year ended 31 December
2022 2023
S$’000
%o ft o t a l
revenue S$’000
%o ft o t a l
revenue
By service type:
Precision machining 22,913 58.6 15,545 40.1
Precision welding 16,203 41.4 23,224 59.9
Total 39,116 100.0 38,769 100.0
By customer sector:
Semiconductor 35,729 91.3 34,077 87.9
Aerospace 101 0.3 1,646 4.3
Data storage 2,423 6.2 2,411 6.2
Others
(1) 863 2.2 635 1.6
Total 39,116 100.0 38,769 100.0
By customer geographical
location:
Singapore 20,741 53.0 14,807 38.2
Malaysia 12,627 32.3 16,072 41.5
U.S. 3,507 9.0 5,267 13.6
Others
(2) 2,241 5.7 2,623 6.7
Total 39,116 100.0 38,769 100.0
Notes:
1. Others mainly refer to solar industry and oil and gas industry.
2. Others mainly refer to Switzerland.
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Major customers
We have established strong and long-standing business relationships with our major
customers. In each year during the Track Record Period, revenue contributed from our five
largest customers was approximately S$29.8 million and S$31.0 million, respectively,
representing approximately 76.0% and 80.0%, respectively, of our total revenue. In each
year during the Track Record Period, revenue contributed from our largest customer was
approximately S$12.4 million and S$9.0 million, re spectively, represen ting approximately
31.8% and 23.1%, respectively, of our total r evenue. We have established and maintained
business relationships with our five larges t customers during the Track Record Period for
approximately 11 years on average.
To the best knowledge of our Directors, Customer B, Customer C and Customer D are
the contract manufacturers and/or service providers of Customer A, and it is possible that
certain products we manufactured for these customers may be supplied, directly or
indirectly, by them to Customer A. These cont ract manufacturers and service providers
build equipment and/or produce parts and components for their OEM customers. Customer
A, for instance, maintains a list of approved s uppliers and its contract manufacturers and
service providers may also be required to s ource from its specified list of suppliers.
Our five largest customers during the Track Record Period are independent third
parties. To the best knowledge of our Directors, none of our Directors or any person who,
to the best knowledge of our Directors, owns more than 5% of the issued share capital of
any of our subsidiaries (or any of their respect ive associates) had any interest in any of our
five largest customers during the Track Record Period.
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Further information on our five largest customers for each of the periods during the
Track Record Period is set out as follows:
For the year ended 31 December 2022
Rank
Name of
customer (1)
Services provided
by us Background and principal business
Year commencing
relationship
Typical credit terms
and payment method
Transaction amount and
percentage of
our total revenue
S$’000 %
1. Customer A Precision machining
and precision
welding
A group listed on the NASDAQ and
headquartered in the U.S. (including
customer entities in the U.S. and
Singapore) which is principally
engaged in provision of manufacturing
equipment, services and software to the
semiconductor, display and related
industries globally. Customer A
recorded net sales of approximately
US$25,785 million for the year ended
30 October 2022.
2009 60 days by bank
transfer
12,449 31.8
2. Customer B Precision machining
and precision
welding
A group listed on the New York Stock
Exchange and headquartered in the
U.S. (including customer entities in the
U.S. and Malaysia) which is principally
engaged in provision of advanced
manufacturing services, which include
design and engineering services and
technology solutions. Customer B
recorded sales of approximately
US$2,886 million for the year ended 31
December 2022.
2011 30/60 days by bank
transfer
6,317 16.1
3. Customer C Precision welding A group listed on the Main Market of
Bursa Malaysia and based in Malaysia
which is principally engaged in the
provision of services such as precision
machining, sheet-metal fabrication,
surface treatment, equipment
integration and automation solutions.
Customer C recorded revenue of
approximately RM1,148 million for the
year ended 31 December 2022.
2019 30 days by bank
transfer
4,418 11.3
4. Customer D Precision machining
and precision
welding
A private company based in Singapore
which is principally engaged in system
integration of mechatronic (sub)
systems and modules for original
equipment manufacturers in the
high-tech capital equipment industry.
2015 60 days by bank
transfer
4,236 10.8
5. Intevac Asia
Pte. Ltd.
Precision machining
and precision
welding
A private company based in Singapore
which is principally engaged in
wholesale distribution of industrial
machinery and equipment.
2010 30 days by bank
transfer
2,361 6.0
Sub-total 29,781 76.0
All other customers 9,335 24.0
Total 39,116 100.0
Notes:
1. To the best knowledge of our Directors, differ ent entities of customers under the same ultimate
common control are consolidated as one single custom er to illustrate the level of concentration of
such customer group for purposes of the above table of our five largest customers for the Track
Record Period.
2. Customer A and Customer B were also our supplie rs for a small amount of parts during the Track
Record Period. For more information, see ‘ ‘— Overlapping Customer and Supplier’’.
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For the year ended 31 December 2023
Rank
Name of
customer (1)
Services provided
by us Background and principal business
Year commencing
relationship
Typical credit terms
and payment method
Transaction amount and
percentage of our total
revenue
S$’000 %
1. Customer C Precision welding A group listed on the Main Market of
Bursa Malaysia and based in Malaysia
which is principally engaged in the
provision of services such as precision
machining, sheet-metal fabrication,
surface treatment, equipment
integration and automation solutions.
Customer C recorded sales of
approximately RM1,445 million for the
year ended 31 December 2023.
2019 30 days by bank
transfer
8,960 23.1
2. Customer A Precision machining
and precision
welding
A group listed on the NASDAQ and
headquartered in the U.S. (including
customer entities in the U.S. and
Singapore) which is principally
engaged in provision of manufacturing
equipment, services and software to the
semiconductor, display and related
industries globally. Customer A
recorded net sales of approximately
US$26,517 million for the year ended
29 October 2023.
2009 60 days by bank
transfer
8,400 21.7
3. Customer B Precision machining
and precision
welding
A group listed on the New York Stock
Exchange and headquartered in the
U.S. (including customer entities in the
U.S. and Malaysia) which is principally
engaged in provision of advanced
manufacturing services, which include
design and engineering services and
technology solutions. Customer B
recorded sales of approximately
US$2,839 million for the year ended
31 December 2023.
2011 30/60 days by bank
transfer
7,804 20.1
4. Customer D Precision machining
and precision
welding
A private company based in Singapore
which is principally engaged in system
integration of mechatronic (sub)
systems and modules for original
equipment manufacturers in the
high-tech capital equipment industry.
2015 60 days by bank
transfer
3,525 9.1
5. Intevac Asia
Pte. Ltd.
Precision machining
and precision
welding
A private company based in Singapore
which is principally engaged in
wholesale distribution of industrial
machinery and equipment.
2010 30 days by bank
transfer
2,327 6.0
Sub-total 31,016 80.0
All other customers 7,753 20.0
Total 38,769 100.0
Notes:
1. To the best knowledge of our Directors, differ ent entities of customers under the same ultimate
common control are consolidated as one single custom er to illustrate the level of concentration of
such customer group for purposes of the above table of our five largest customers for the Track
Record Period.
2. Customer A and Customer B were also our supplie rs for a small amount of parts during the Track
Record Period. For more information, see ‘ ‘— Overlapping Customer and Supplier’’.
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Customer concentration and reliance on our five largest customers
For the years ended 31 December 2022 and 2023 , we derived approximately 76.0% and
80.0% of our total revenue from our five largest customers, respectively. Revenue
contributed from our largest c ustomer amounted to approxim ately S$12.4 million and S$9.0
million, representing approximately 31.8% and 23.1% of our total revenue for the years
ended 31 December 2022 and 2023, respectively. To the best knowledge of our Directors,
Customer B, Customer C and Customer D are contract manufacturers and/or service
providers of Customer A and certain products we manufactured for these customers may be
supplied, directly or indirectly, by them to Customer A. To the best knowledge of our
Directors, Customer A did not purchase suc h products directly from our Group as our
other five largest customers whose products were subsequently supplied to Customer A may
use the parts supplied by us for further processing and/or assembly before supplying to
Customer A. As a result, a significant portion of our revenue during the Track Record
Period was derived directly and indirectly from Customer A.
For more information of our customer concentration risk, see ‘‘Risk Factors — Risks
relating to our business and the industry in which we operate — We derive a significant
portion of our revenue from our major customers and we cannot assure you that we will
successfully maintain business relationsh ips with our major customers and there is no
assurance that we will be able to secure new ord ers from other customers of similar size’’.
Background of Customer A
Customer A is currently listed on the NASDAQ and principally engaged in the
provision of manufacturing equipment, services and software to the semiconductor, display
and related industries globally. It supplies e quipment used for fabrication of integrated
circuits and displays of electronic products such as televisions, smartphones, laptops and
personal computers, etc.
According to the CIC Report, Customer A is an industry leader in the global
semiconductor manufacturing equipment industry in terms of revenue in 2023 with a
market share of approximately 19.5% and it is not uncommon for market participants in
the semiconductor segment of precision component engineering industry to have a highly
concentrated customer base since the end-us e semiconductor manufacturing equipment
industry is concentrated and dominated b y a limited number of advanced semiconductor
equipment manufacturers with the top three market players accounting for more than 40%
of the global market share in terms of revenue in 2023.
Our business relationship with Customer A
Customer A is our largest customer (through direct sales and based on the
understanding of our Directors, through indirect sales to contract manufacturers and/or
service providers of Customer A) during the Track Record Period. We have obtained the
Standardised Supplier Quality Assessment (‘‘ SSQA ’’) certification, which qualifies us to
conduct precision machining work in the semiconductor industry, and also became the
approved supplier of Customer A. Metasurface Technologies started its business
relationship with Customer A since 2009 and SPW started its business relationship with
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Customer A since 2019. Save as disclosed, there is no any other past or present relationship
(including financing, trust, fund flow or otherwise) between Customer A with our
Company, our subsidiaries, shareholders, directors or senior management, or any of their
respective associates.
General Sales Agreement
Customer A entered into two global supply agreements with us, one with Metasurface
Technologies dated 14 May 2018 and another with SPW dated 1 February 2021
(collectively, the ‘‘ Global Supply Agreements ’’).
Term and renewal: In respect of the Global Supply Agreement entered into by
Metasurface Technologies, the agreement shall remain in
force for a minimum of 36 months and automatically
continue in perpetuity until either party provides 12 months
of prior written notice to the other party to terminate the
agreement.
In respect of the Global Supply Agreement entered into by
SPW, the agreement shall remain in force for a minimum of
60 months and automatically continue in perpetuity until
either party provides 18 months of prior written notice to
the other party to terminate the agreement.
As at the Latest Practicable Date, neither Metasurface
Technologies nor SPW had received any written notice from
Customer A to terminate their respective Global Supply
Agreement.
Terms of payment: 60 days from the later of (i) the date of Customer A’s receipt
of an invoice for the product, and (ii) Customer A’s
acceptance of the product. If such payment is made within
15 days of the later of (i) or (ii) above, Customer A may
deduct 2% from the purchase amount as a prompt payment
discount.
Pricing: The purchase price (if not specified in the Global Supply
Agreements) shall be specified in the purchase orders. The
purchase price shall include manufacturing, testing,
inspection and packaging fees, applicable royalties and
taxes.
Quantity: Customer A may increase the quantity of purchase items in
its purchase order from time to time, which the Group shall
not reject so long as it is within the scope specified in the
Global Supply Agreements. Customer A is not subject to
any specific or minimum purchasing volume of any items
from the Group except as specified in the purchase orders.
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In the event that the Group fails to deliver any items agreed
by both parties in the purchase orders from Customer A,
Customer A may, among others, (i) purchase products (in
the same quantity that the Group fails to deliver)
comparable to the relevant items in the open market or
from other suppliers and claim against the Group for the
difference between the contract price and the price paid in
the open market or to other suppliers; and (ii) claim against
the Group other costs and expenses incurred as a result of
the Group’s failure to deliver the relevant items. The Group
did not experience any mater ial failure in delivering any
items as agreed by both parties in a purchase order nor
receive any material claim from Customer A during the
Track Record Period and up to the Latest Practicable Date.
Delivery and
transportation fees:
Products shall be delivered according to the time, date,
location and other requirem ents specified in the Global
Supply Agreements or the purchase order. Logistics or
external courier is arranged in accordance with the
requirements set out in the purchase order. If needed, we
will use expedited delivery methods.
Titles are transferred to Cus tomer A upon acceptance of the
item. Risk of loss shall be determined based on free carrier
shipping terms.
Customer A shall pay transportation charges directly to its
designated external courier. Otherwise, it shall be included
in the purchase price.
Return and refund: Title to an item only transfers to Customer A upon
acceptance of the item. At any point prior to acceptance,
Customer A may reject or return any item that does not
conform to the specifications. Customer A may reject and
return the item and recover, offset or adjust payments in
respect of such item, including any costs or fees related to
shipping and insuring such item. There has been no material
claims from Customer A during the Track Record Period
a n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
Manufacturing
requirements:
Customer A and our Group shall conduct first article
inspection (i.e. inspect the first item produced).
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Termination: Customer A may serve a notice of default to us if we
materially breach the Global Supply Agreements. We may
also serve a notice of default to Customer A if it materially
breaches certain clause of the Global Supply Agreement.
The Global Supply Agreement shall terminate immediately
upon the service of a notice of default.
PACE Agreements
Each of Metasurface Technologies and SPW entered into with Customer A an
addendum to the respective Global Supply Agreement dated 1 August 2018 and 1 February
2021, respectively (collectively, the ‘‘ PACE Agreements ’’). Pursuant to the PACE
Agreements, we, as consignor are required to deliver items specified in the Global Supply
Agreements (the ‘‘Consignment Items ’’) to Customer A when the stock level of such items in
Customer A’s inventories drops below a minimum level. In such cases, we shall assist
Customer A to replenish the relevant Consign ment Items up to a maximum stock level. The
Consignment Items shall be delivered to manufacturing sites of Customer A. Ownership of
such Consignment Items does not transfer to Customer A until Customer A accepts and
releases such item from its inventory for the purpose of using such Consignment Items.
We as seller entered into the PACE Agreements with Customer A as buyer in order to
support its inventory control policy and to fo ster our relationship with Customer A. The
relationship between us and Customer A pursu ant to the PACE Agreements is that of seller
and buyer. Our Directors believe that our en gagements in consignment arrangements with
Customer A do not result in any substanti al changes to our business models and are
generally in line with industry practice. The material terms of the PACE Agreements are as
follows:
Details of Consignment
Items:
Subject to specifications in the agreement, Consignment
I t e m su s u a l l yh a v ear e a s o n a b l ys t e a d yr a t eo fu s a g e .
Regular communication is maintained between us and
Customer A on (i) the average weekly usage of the
Consignment Items, (ii) Customer A’s forecast of demand
for Consignment Items in th e next 13 weeks, (iii) the
minimum stock level and maximum stock level as well as the
replenishment order, and (iv) the notice in respect of the
time and amount of Consignment Items Customer A
releases from its inventories.
Term of consignment: The PACE Agreements expire upon the respective
contractual expiration date or termination of the Global
Supply Agreements.
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Consignment prices: The selling price for any item identified as a Consignment
Item (the ‘‘ Consignment Price ’’) is determined through
mutual agreement between the Group and Customer A
when such item is designated as a Consignment Item. The
Consignment Price may be changed pursuant to written
agreement between the Group and Customer A. Usually, an
item is identified as a Consignment Item when Customer A
has a reasonably steady usage rate for that item. Customer
A is not required to make any prepayments for any
Consignment Item.
Delivery of consignment
products:
The Consignment Items shall be delivered to Customer A
upon receipt of replenishment order from Customer A.
Delivery of a Consignment Item to Customer A’s
manufacturing site(s) in response to a replenishment order
will not immediately constitute a transfer of title nor trigger
any payment obligations, until Customer A accepts and
releases such item for use. Such delivered Consignment Item
remains our inventory but Customer A will bear the relevant
risk of loss for each of the Consignment Items prior to
acceptance and release of such items. Title of the
Consignment Items will transfer to Customer A only when
it accepts and releases a Consignment Item, which then also
triggers its payment obligat ion according to the Global
Supply Agreements.
Acceptance and release
of consignment items:
Customer A shall examine the quantity of Consignment
Items at its manufacturing sites. Consignment Items
delivered to Customer A shall be accepted and released no
later than 180 days after issuance of replenishment orders.
If Customer A does not accept and release the Consignment
Items for 180 consecutive days from delivery of such items
to Customer A’s manufactu ring sites, we may submit a
claim to Customer A within 30 days from the end of such
180-day period. Upon Customer A’s review of the claim,
Customer A may purchase the Consignment Items based on
the Consignment Price. Duri ng the Track Record Period
and up to the Latest Practicable Date, there had been no
material claims issued by us to Customer A.
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Termination: Either party may terminate the respective PACE Agreement
(without affecting the Global Supply Agreement) if the
other party materially defaults in performing its obligations
under the PACE Agreement and such default is not cured
within a specified period. Customer A may also terminate
the PACE Agreement if it term inates our participation in
the programme in respect of the Global Supply Agreement
with 90 days’ prior notice to us.
Under the consignment arrangement, we recognise revenue when Customer A accepts
and releases the Consignment Items from its manufacturing sites. As at 31 December 2022
and 2023, the amount of Consignment Items maintained at Customer A’s manufacturing
sites amounted to approximately S$0.3 millio n and S$0.3 million, respectively. We monitor
and control the movement in inventories of Consignment Items at Customer A’s
manufacturing sites through our timely information sharing with Customer A and
conducting on-site inventory count together with Customer A semi-annually. Customer A
regularly makes available information to us regarding the outstanding amount of
Consignment Items in their manufacturing site(s), the average amount of Consignment
Items released for the week and its forecast of demand. We also provide to Customer A, on
a weekly basis, quantity of Consignment Items manufactured and stored at our sites but yet
to be delivered to Customer A’s manufacturing sites. In addition, our sales department
monitors the Consignment Items stored with Customer A on a weekly basis.
The Directors are of the view that there is no channel stuffing issue of the Consignment
Items during the Track Record Period and up to the Latest Practicable Date. In particular,
delivery of a Consignment Item to Customer A ’s manufacturing site(s) in response to a
replenishment order will not immediately constitute a transfer of title to nor trigger any
payment obligation on Customer A, until Customer A accepts and releases such item for
use. Such delivered Consignment Item remains our inventory but Customer A will bear the
relevant risk of loss of each of the Consignment Items prior to acceptance and release of
such items. Title of the Consignment Items will be transferred to Customer A when it
accepts and releases the Consignment Items, which also triggers its payment obligation
according to the Global Supply Agreements. As such, we would only recognise revenue
related to the Consignment Items when Customer A accepts and releases the Consignment
Items pursuant to the PACE Agreements. Pu rsuant to the PACE Agreements, if Customer
A does not accept and release the Consignment Items for 180 consecutive days from
delivery of such items to Customer A’s manuf acturing sites, we may submit a claim to
Customer A within 30 days from the end of such 180-day period. Upon Customer A’s
review of the claim, Customer A will issue a settlement purchase order to us and accept the
Consignment Items based on the Consignmen t Price. Upon the issuance of a settlement
purchase order and until the expiry of six months after the issuance of a settlement purchase
order, if the Consignment Items remain at our warehouse (those items which Customer A
did not issue replenishment order to us), Customer A may direct us to ship the Consignment
Items to their designated location, hold those Consignment items on bailment or destroy the
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Consignment Items. Also, pursuant to the PACE Agreements, Customer A will make
available its forecast on product demand throu gh a designated online portal to facilitate our
production planning.
The Company has implemented a written policy addressing inventory management and
sales return. Under the relevant policy, the a ccounting department of our Group has access
to Customer A’s inventory system which recor ds the inventory of Consignment Items. The
accounting department of our Group will then monitor the inventory level via such system
regularly and when there is a shortfall on th e inventory level, we may submit a claim to
Customer A within 30 days from the end of the 180-day period as mentioned above. Upon
Customer A’s review of the claim, we will send invoice to Customer A on the inventory used
and proceed to replace the shortfall of inventory. In addition, the accounting department of
our Group conducts onsite stocktaking tog ether with Customer A in June and December
every year at the warehouse of Customer A. The accounting department of our Group
reconciles the inventory record with the physical stock amount following the stocktaking
exercise. The sales manager will also monitor t he fluctuation of pricing of components and
finished goods regularly. During the Track Record Period and up to the Latest Practicable
Date, the period from the date of delivery of a Consignment Item to Customer A’s
manufacturing site(s) to the date when Customer A accepts and releases a Consignment
Item ranged from approximately 10 days to 176 d ays. The Directors consider such measures
have been effective in managing our Group’s inventory and production planning during the
Track Record Period and up to the Latest Practicable Date.
Taking into account the aforementioned policy, review of the PACE Agreements,
discussions with the internal control consultant, the other due diligence documents and our
Directors’ confirmation, the Sole Sponsor concurs with the views of the Directors.
Our Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, we had not experienced any material dispute or complaint arising from or
in connection with the PACE Agreements entered in with Customer A which had caused a
material adverse impact on our bus iness or financial condition.
To the best knowledge of our Directors, Customer B, Customer C and Customer D are
contract manufacturers and/or service providers of Customer A, which also produce parts
and components for Customer A. Customer A maintains a list of approved suppliers and its
contract manufacturers and/or service provid ers are also required to source from among its
specified list of suppliers. As a result, it is p ossible that certain products we supplied to
those customers may also be supplied, directly and indirectly, by them to Customer A.
Nonetheless, as the sales of Customer B, Customer C and Customer D to Customer A are
confidential and sensitive information t o the respective customers, we are not able to
ascertain the exact amount of revenue derived from sales of products to these customers
which were subsequently supplied to Customer A. To the best knowledge of our Directors,
Customer B, Customer C and Customer D are contract manufacturers and/or service
providers of other manufacturers and certain products we manufactured for these
customers during the Track Record Period might be supplied to such other
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manufacturers. Hence, in the event Customer A discontinues operations with us, our
Directors believe that Customer B, Customer C and Customer D will still purchase products
manufactured by us.
According to the CIC Report, it is not unc ommon for market participants in the
semiconductor segment of the precision component engineering industry, including service
providers and contract manufacturers, to have a highly concentrated customer base since
the end-use semiconductor manufacturing equipment industry is concentrated and
dominated by a limited pool of advanced semiconductor equipment manufactures with
the top three market players accounting for more than 40% of the global market share in
terms of revenue in 2023. Our Directors consider that the business model of our Group is
sustainable despite the customer concentration during the Track Record Period due to the
following factors:
(i) Mutual and complementary reliance
We are a long-term business partner with Customer A
We have established a long-term and growi ng business relationship with Customer
A for approximately 15 years as at the Latest Practicable Date. We are one of
Customer A’s approved suppliers. We work closely with Customer A to support the
production of its new products and regularly communicate with their sales
representatives. Through such frequent contacts, our Directors believe that we have
a sound understanding of its needs and preference which helps foster our relationship
with Customer A.
We have been able to continuously enhance the production and cost efficiency on
our products offered to Customer A, mainly a ttributable to (i) our machinery and our
skilled labour, which enable us to plan and adopt more effective and cost-efficient
production techniques; (ii) our in-depth understanding of Customer A’s requirements
through long-term partnership, which enables us to continuously optimise our
production flow and price competitivenes s; and (iii) the increasing purchase volume
from Customer A, which enables us to achieve economies of scale in lowering the
average costs of production as our techni cal staff become more familiar with the
production flow. This in turn also benefits Customer A by allowing it to offer more
competitive pricing to its customers. As such, our Directors believe that changing
suppliers may potentially lead to an incr ease in production costs for Customer A,
which may adversely affect its competiti veness. For more information, see ‘‘— Our
customers — Mutual and complementary reliance — It is unduly burdensome and
difficult for Customer A to seek alternative suppliers and the cost of switching
suppliers for Customer A is relatively high’’.
In view of the long-term and growing business relationship and our track record
of providing high quality parts and components to Customer A, our Directors believe
that we will continue to be one of Customer A’s key partners in the future. Also, any
cessation of our supply of parts and components to Customer A may have an adverse
impact on its business as Customer A may n ot be able to easily find alternative
suppliers at comparable standards and cost requirement.
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It is unduly burdensome and difficult for Customer A to seek alternative suppliers and the
cost of switching suppliers for Customer A is relatively high
Notwithstanding the relatively strong bargaining power of Customer A as a
reputable international semiconductor manufacturing equipment provider when
sourcing from its suppliers including us, our Directors take the view that it may also
be unduly burdensome and difficult for it to seek alternative suitable suppliers who are
able to deliver comparable products and services like us within a short period of time.
As such, it is more productive and reliabl e for them to continue working with us to
maintain quality of its products and ser vices as well as to minimise costs for the
following reasons:
Manufacturing equipment used to fabricate integrated circuits (ICs) and displays
are sophisticated and require stringent technical specifications and high quality
standard. As a result, the parts and components we produce for Customer A are highly
customised with stringent quality control requirements. The process for Customer A to
identify and approve a new supplier is very costly and time consuming due to the
numerous criteria and the selection process involves multiple procedures, including
submission of request for assessment, pre-ev aluation on the potential supplier history,
supplier self-assessment, on-site inspect ion and post assessment process. The time
required for a new supplier to obtain SSQA certification and become an approved
supplier for Customer A can vary. According to the CIC Report, it may take up to
three years for a new supplier to successfully complete the assessment process and
obtain approval to supply to Customer A. Afte r admitting us to the approved supplier
list, Customer A has also conducted regular supplier performance management by
inspection of the first article of the manufacture of new parts and components,
assessments for new production processes and evaluation on our business process,
training, facility and maintenance, quality, calibration, safety and packaging during
the Track Record Period.
Also, in view of the surging demand for products of Customer A driven by the
worldwide demand for electronic product s, Customer A places strong emphasis on
timely supply of parts, materials and services, including components and
sub-assemblies to meet the changing technical and volume requirements of its
customers. Any significant or sudden increase of volume, together with
unpredictability of transportation lead t ime for delivery may adversely affect the
ability of Customer A to meet the demand of its customers. In order to meet the
volatile demand of Customer A for different parts and components, during the Track
R e c o r dP e r i o da n du pt ot h eL a t e s tP r a c t i c able Date, we had in place an arrangement
with Customer A under which we will send certain specified items to the manufacturing
sites of Customer A when the stock level o f such item drops below a minimum stock
level so that Customer A can pull directly from its warehouse for just-in-time inventory
arrangement. For more information, see ‘‘— Customer concentration and reliance on
our five largest customers — PACE Agreements’’.
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As a result, it is our understanding that Customer A is satisfied with the long-term
cooperation relationship with us with pro ven track record and we could accommodate
to their just-in-time inventory policy to avoid the risks of product shortage or delay in
delivery of products.
It is also unduly burdensome and difficult for our other customers which are contract
manufacturers of Customer A to find alternative suppliers
As aforementioned, Customer A mainta ins a list of approved suppliers from
whom its contract manufacturers and service providers could only source its parts. As
a result, it is also difficult for our other customers which are contract manufacturers of
Customer A to resort to alternative suppliers.
(ii) Increasing diversification of our customer base
Our Directors consider that our production f acilities and skills of our employees are
not specifically designed or trained to ser ve solely Customer A or the semiconductor
industry but are readily transferable to cater f or the needs of other end-use industries as: (i)
our machinery and equipment can be efficiently re-configured so that we are able to quickly
switch the production setup for manufacturing different products, (ii) the underlying skills
of welding and expertise of precision engineer ing required are universally applicable for
handling orders from different customers, and hence have wide applications in different
industries, and (iii) our production flow can be adapted to meet the need of different orders
from different customers. According to the CIC report, Singapore is known for its robust
manufacturing and technology sectors and provides a fertile ground for precision
engineering services providers such as ou r Group to cater to customers from a diverse
range of end-use sectors locally and globally. In the semiconductor sector alone, there are
more than 300 companies involved in manufacturing and repairing of semiconductor
related equipment in Singapore, including loc al companies and multinational corporations.
In Malaysia, there are approximately 200 companies involved in the production of
semiconductor machinery and equipment. These companies are readily available alternative
customers for the Group. We have solicited nine new customers during the year ended 31
December 2022 and three new customers durin g the year ended 31 December 2023. Further,
our revenue contribution from direct sale to Customer A decreased from approximately
31.8% for the year ended 31 December 2022 to approximately 21.7% for the year ended 31
December 2023.
For the years ended 31 December 2022 and 2023, the utilisation rates were
approximately 52.5% and 40.9% for our preci sion machining and approximately 78.3%
and 118.6% for our precision welding, respectively at our Singapore Factory and the
utilisation rates were approximately 46.2% and 48.4%, respectively for our precision
machining at our Malaysia Factory. Our produ ction facilities for precision machining were
not fully utilised during the Track Record Peri od, primarily due to limited resources for
procurement of raw materials and recruitmen t of skilled workers to maximise the machine
hours in operation. Therefore, our Directors believe that we have spare capacity to serve
other existing customers or new customers subject to the availability of working capital and
skilled workers.
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We have been endeavouring to expand into the oil and gas sector. According to the Oil
2023 medium-term market report forecasts published by the International Energy Agency
(IEA), based on current government policies and market trends, global oil demand will rise
by 6% between 2022 and 2028 and reach 105.7 m illion barrels per day, supported by robust
demand from the petrochemical and aviation sectors.
We commenced our expansion into the oil and gas sector in 2021 by supplying parts
and components such as connecting plates and rotating plates to a customer which is
principally engaged in jackup rig and oil tool manufacturing. We have also entered into an
agreement dated 1 October 2022 with an inde pendent third party, which is principally
engaged in trading of steel tubulars and provision of related services, pursuant to which we
provided services, such as tubular thread inspection, tubular body inspection, tubular
inventory management and storage and other logistic services related to tubular
management during the Track Record Period (the ‘‘ TTM Agreement ’’). For the year
ended 31 December 2022, we also provided to the independent third party precision
machining services in relation to connectors for oil and gas pipes.
In the oil and gas industry, tubulars are pip es and tubing used in exploration, drilling,
and transportation of oil and natural gas. These components are required to be sufficiently
robust and reliable to withstand demanding environment encountered during oil and gas
operations. Pipe inspections are critical to e nsuring the quality and integrity of pipes, by
detecting defects such as cracks, scratches, corrosions or other structural defects in pipes.
Our expertise in tubular inspection and management services has been developed through
collaboration with external specialists an d by continuously enhancing our internal
capabilities. During the Track Record Period , we procured specialised labour services
from Meson Technology, which enhanced our sect or-specific skills relating to oil and gas.
To strengthen our in-house capabilities in provision of oil and gas related services, we have
enhanced training to our own staff, reducing dependency on external services and
maintaining a sustainable skill set in-h ouse. We have strengthened our expertise by
bringing on board an experienced consultant to assist our oil and gas clients. In this regard,
we have appointed Mr. Seng Chong How who h as the relevant skills, knowledge and
experience in the oil and gas industry to assist our expansion in the industry.
Our expertise and competitive strength in producing parts and components for the
semiconductor industry and our ISO 9001 : 2015 procedures translate into our ability to
meet the specific needs of oil and gas oper ations, where precision and durability are
paramount. In particular, although tubular management services per se does not involve
precision machining or precision welding pro cesses, we intend to leverage the provision of
tubular management services under the TTM Agreement as a springboard and our
advanced CNC machining capabilities to e xplore further opportunities with the
independent third party and other customers in the oil and gas industry for provision of
services relating to precision machining an d precision welding. Parts that we intend to
produce for our oil and gas customers require high tolerance levels and resistance to
extreme environments to be used in the oil and gas exploration, production and refining
processes. Our Directors believe that we are equipped with the advanced production
technologies and manufacturing capab ilities to deliver products that meet various
specifications required by custo mers in the oil and gas industry.
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According to the CIC Report, the aerospace industry represents the largest segment in
the precision component engineering industry in Singapore as Singapore is the leading
aerospace hub within Asia, offering a comprehensive range of maintenance, repair and
overhaul (MRO) services and advanced manufa cturing capabilities. As a one-stop shop for
all aerospace needs, many of the world’s leading aerospace related OEMs and MRO service
providers have been consolidating their presence in Singapore as a regional hub in Asia.
Likewise, we intend to leverage our current product offering to Customer B in providing
parts for commercial aircraft to solicit purchase orders from other potential new customers
in the aerospace industry.
Given our long-term business relationship with Customer A, the high switching cost
for Customer A towards alternative suppliers and the difficulty for our other customers
which are contract manufacturers of Customer A to find alternative suppliers, our Directors
believe that our existing relationship with Customer A will not materially and adversely
change or terminate. Based on the review of the Global Supply Agreements, results from the
due diligence interviews cond ucted with Customer A and oth er due diligence documents and
Directors’ confirmation, the Sole Sponsor concurs with the views of our Directors.
Pricing policy
Our pricing policy is based on a cost-plus pricing model.
In determining the selling prices of our pr oducts/services, we generally take into
account factors including the cost of procurement (i.e. material costs and processing costs)
and production variables and overheads which depend on the type of machines used, its
complexity and machine hours and labour costs required. We normally charge higher price
for more complex components and parts.
We regularly review and adjust our pricin g policy based on these factors and other
market conditions.
Credit policy
We generally grant our customers a credit period ranging from 30 to 60 days from the
date of invoice. The length of the credit period varies on a case-by-case basis depending on:
(i) the customer’s business relationship with us, (ii) the expected lead time from order
acceptance to delivery, (iii) th e customer’s reputation and credibility, (iv) the customer’s
specific product/service requirements, and (iv) the customer’s payment history.
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we did not experience any material difficulty in collecting payments from
our major customers.
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General Sales Agreement
We enter into general sales agreement with some of our customers. The principal terms
of our general sales agreement are summarised as below:
Principal terms Summary
General rights and
obligations
: The general sales agreement typically sets out
the rights and obligations of the supplier and
the purchaser.
Term and renewal : The general sales agreement has a typical term
ranging from one year to three years which are
automatically renewable for successive one-year
period on each anniversary date thereof.
Pricing : The pricing terms are generally specified in
quotations, which include but not are limited to
the manufacturing, testing, inspection and
packaging fees, applicab le royalties and taxes.
Delivery : We generally deliver the products to our
customers via our in house logistics team for
local destinations in Singapore. For delivery to
locations outside Singapore, external courier
would be arranged for pickup from our
warehouse.
Terms of payment : In general, we grant our customers a credit term
ranging from 30 to 60 days from the date of
invoice and they settle the payment generally by
bank transfer or cheque.
Termination : The general sale s agreement may be terminated
by either party’s prior written notice of 60 to 90
days. Either party may also terminate the
general sales agreement for cause if the other
party fails to cure any material breach of the
agreement within 30 days after receipt of
written notice.
We are generally obliged to keep confidential the commercial and technical
information that we receive from our cus tomers and may only use the intellectual
property belonging to our customers for purposes of performing the obligations under the
respective general sales agreement.
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Some of the general sales agreements also contain express provisions that the
customers will retain exclusive ownership of a ll intellectual property rights relating to the
products and we are liable to indemnify the customers for breach of such obligations or
third party intellectual property infringem ent claims against our customers. Some of our
customers grant us a non-exclusive, revocable and royalty-free licence to use their
intellectual property for the purpose of producing the required parts and components.
For more information on the arrangements with our customers under the general sales
agreements, see ‘‘— Pricing policy’’ and ‘‘ — Product warranty, replacement and return
policy’’.
Product warranty, replacement and return policy
We provide instructions to our production team to repair or reproduce the defective
product. It generally takes approximately one week to repair or reproduce simple defective
parts, and for complex parts, it generally takes approximately one to three months to repair
or reproduce. In case any product defect is identified, our customers shall issue quality
notification indicating the defect(s) found in the parts and return the products to us. Once
our customers return the defective produc t to us, our quality assurance manager or
representative shall review and handle their request promptly.
Upon review and approval by our quality assurance manager, our sales team would
provide a return material authorisation number to the customer. Our production team
would then coordinate with the quality assura nce manager to investigate the cause of the
defect and corrective actions will be taken accordingly.
For products that cannot be repaired or reproduced, the quality assurance manager
w o u l do b t a i na p p r o v a lt os c r a pt h ed e f e c t i ve products. Upon completion of the repair
and/or reproduction, the relevant repaired or reproduced product would then be reviewed
and inspected by our quality assurance manager, prior to delivery to the customer.
If the cause of defect is due to our mishandling, we may not charge the customer for the
repair or reproduction cost or may refund the customer. However, if the cause of defect is
due to the customer’s mishandling, we may charge the customer for the cost of repair or
reproduction.
Our Directors confirm, during the Track Record Period and up to the Latest
Practicable Date, that we had not experienced any material dispute or complaint arising
from or in connection with the quality of our products which had caused a material adverse
impact on our business or financial condition.
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Sale and marketing strategy
During the Track Record Period, we generally captured our business opportunities by
obtaining purchase orders from our existing customers and invitations for quotations from
new customers.
Prior to commencing business with new customers, we may be required to go through
their internal assessment process based on our track record performance, financial strength,
internal controls, the first article inspect ion and production capabilities. After we are
admitted to the approved supplier list of the new customers (if applicable), they will proceed
with placing purchase orders with us directly.
As at 31 December 2023, our sales team are primarily responsible for handling
purchase orders from customers, understanding customer requirements, reviewing the
orders for acceptance and submitting quotations when required. Our sales team is also
responsible for maintaining regular communication with our customers and diverting the
feedback from customers to our production department for further action.
Seasonality
During the Track Record Period, we did not experience material seasonality. However,
as far as we are aware, there is stronger demand for products in the end-use industries (such
as electronic products) during festive seasons such as Thanksgiving Day and Christmas,
which also drives the procurement of parts and components for manufacturing equipment
of semiconductor during the second half of the year.
TRANSFER PRICING ARRANGEMENTS
Overview
During the Track Record Period, larger parts and components with more complex
structures which require relatively more advanced technologies and machinery were
manufactured in our Singapore Factory. To enhance cost efficiency, we assigned
production orders which are simpler and invol ve intensive labour activities and polishing
procedures to SGP Malaysia, our Malaysia Factory. SGP Malaysia purchased raw
materials from Metasurface Technologies at Metasurface Technologies’s original
purchase cost and sold machined finished goods to Metasurface Technologies based on
standard costs incurred during production which include raw material costs, direct labour
a n dm a c h i n ec o s t sa sw e l la sp r o d u c t i o no v e r h e a dc o s t s .
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The diagram below illustrates the business fl ow between Metasurface Technologies and
SGP Malaysia during the Track Record Period:
SGP Malaysia
Machined and polished
aluminium partsAluminium blocks
Malaysia
Metasurface
Technologies
Singapore
During the Track Record Period, Metasur face Technologies developed business
opportunities and secured transactions from customers. Based on the production capacity
of SGP Malaysia, Metasurface Technologies assigned production orders which are simpler
and involve intensive labour activities and polishing procedures to SGP Malaysia and sold
raw materials to SGP Malaysia for further processing; and SGP Malaysia manufactured the
finished goods based on Metasurface Technologies’s instructions and sold the finished
goods back to Metasurface Technologies.
Potential tax exposure
We have engaged an independent transfer pricing tax consultant,
PricewaterhouseCoopers Limited, (the ‘‘ Transfer Pricing Consultant ’’) to review and
evaluate our Group’s transfer pricing arr angements in relation to our intra-group
transactions described above du ring the Track Record Period.
Since SGP Malaysia can be considered as a contract manufacturer to Metasurface
Technologies, it should be compensated with a reasonable level of manufacturing profits
that could commensurate with their manufact uring activities performed. To assess the
intra-group transactions between Metasurface Technologies and SGP Malaysia, the
Transfer Pricing Consultant conducted bench marking analysis to search for comparable
companies performing similar manufacturing functions and producing similar products as
SGP Malaysia. The Transfer Pricing Consultant has used the transactional net margin
method to identify arm’s length range of full cost mark up (‘‘ FCMU ’’) ratios for the
comparable companies durin g the Track Record Period.
A total of 36 companies are identified as performing similar functions and producing
similar products as SGP Malaysia and a five-year weighted average FCMU interquartile
range of 3.36% to 7.61%, with a median of 5. 16% were recorded. For the years ended 31
December 2022 and 2023, SGP Malaysia achieved a FCMU of 7.51% and 9.87%,
respectively. The FCMU for the year ended 31 December 2022 falls within the arm’s length
FCMU interquartile range of the 36 comparab le companies. The FCMU for the year ended
31 December 2023 falls above the arm’s length interquartile range due to that certain
production orders assigned to SGP Malaysia during the year involved processes requiring
higher labour hours, which was reflected in the price charged to Metasurface Technologies
according to the pricing policy as mentioned above (based on standard costs incurred
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during production which include, among others, direct labour costs). As a result, SGP
Malaysia recorded a higher profit margin giv en the actual monthly salaries payable to the
production staff are relatively fixed. D espite that the FCMU for the year ended 31
December 2023 falls above the arm’s lengt h interquartile range, given that the
characterisation of Metasurface Technolo gies as the overall business owner for the
intra-group transactions to take up the ultimate business risk among the two parties and the
statutory tax rate in Malaysia is higher that in Singapore, the financial results in Malaysia
would not reduce the overall tax burden of the Group. As such, the transfer pricing analysis
conducted by the Transfer Pricing Consultant concluded that our Group’s intra-group
transactions between Metasurface Techno logies and SGP Malaysia during the Track
Record Period were reasonable and generally consistent with the arm’s length principle
from both Singapore and Malaysia transfer pricing perspectives, in compliance with
relevant transfer pricing rules, guidance and r egulations in Singapore and Malaysia, and the
practical risk that the transfer pricing arrangements being investigated and challenged by
the relevant tax authorities is considered rem ote. Our Directors further confirmed that our
Group’s transfer pricing arrangements have not been challenged or investigated by the
relevant tax authorities in Singapore or Malaysia during the Track Record Period and up to
the Latest Practicable Date.
After considering the analysis results and reviewing the transfer pricing reports
prepared by the Transfer Pricing Consultant, our Directors are of the view that the transfer
pricing arrangements under the above intra-group transactions are considered arm’s length
in nature, reasonable and in compliance with the applicable transfer pricing rules, guidance
and regulations in Singapore and Malaysia.
Measure to ensure on-going compliance
Our Group’s transfer pricing arrangements are part of our normal business operation
where an arm’s length transaction price ne eds to be established. We have implemented a
general pricing policy to follow the arm’s length principle and to achieve an arm’s length
outcome. Our management had been and will continue to closely monitor our Group’s
transfer pricing arrangements including reviewing the reasonableness of the transfer pricing
policy of our intra-group transactions from time to time to ensure compliance with the
arm’s length principle.
Our Directors (after considering the ana lysis results from the Transfer Pricing
Consultant) confirm that ou r Group has fulfilled the applicable transfer pricing
documentation compliance requirements in Singapore and Malaysia during the Track
Record Period. Further, our Directors are not aware of any enquiry, audit or investigation
by any relevant tax authority in Singapore or Malaysia with respect to the transfer pricing
arrangements carried out by our Group.
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PROCUREMENT
Overview
Our procurement team is responsible for the strategic purchasing planning and
supplier management in relation to our procurement of raw materials. We sourced our raw
materials from various independent third part y suppliers mainly located in Singapore and
the U.S. We maintain steady relationships wi th our suppliers. Although we are required by
some of our customers to procure materials or processing services from certain designated
suppliers, we do not depend on any of our suppliers for procurement during the Track
R e c o r dP e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
We sourced our machinery and equipment fro m third party manufacturers in various
places including Germany, Japan and Taiwan.
In each year during the Track Record Period , purchases from our five largest suppliers
were approximately S$7.5 million and S $6.8 million, respectively, representing
approximately 47.4% and 52.2%, respectively, of our total purchases, and purchases
from our largest supplier were approximately S$2.4 million and S$1.9 million, respectively,
representing approximately 14.9% and 14.6%, respectively, of our total purchases for the
years ended 31 December 2022 and 2023.
Our five largest suppliers during the Track Rec o r dP e r i o di n c l u d ec e r t a i nr a wm a t e r i a l s
suppliers and processing service providers in Singapore. We have maintained business
relationships with our five largest suppliers in each year of the Track Record Period for an
average period of over six years.
Purchase of machinery and equipment
We generally procure machinery and equi pment such as CNC machines, coordinate
measuring machines and other equipment from our suppliers according to our production
needs. According to the CIC Report, there are more than 200 suppliers based in Singapore
involved in manufacturing and trading of m achines such as CNC lathe machines and CNC
milling machines, who can offer machines at c omparable prices, terms and quality, and are
potential alternative suppliers of the Group.
Purchase of raw materials
For procurement of raw materials, some of our customers may have a list of preferred
or approved suppliers for sourcing the raw materials used in the manufacturing process. We
would then procure such raw materials from their designated suppliers or from suppliers
selected from their pre-approved lists of suppliers. After we obtain information in relation
to the material type and size we need, we will send the requirements to the suppliers to seek
quotations. The credit terms granted by our major suppliers are typically ranging from 30
days to 60 days. According to the CIC Report, Singapore has an established metal material
market with transparent pricing. There are approximately 50 to 100 alternative suppliers
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supplying metal material (e.g., aluminium) based in Singapore who can provide metal
material to us with comparable prices, terms and quality, and the Group could also import
metal materials from abroad.
Save for the arrangements under the PACE Agreements entered into by us with
Customer A to manufacture and maintain a certain level of stocks in the manufacturing
sites of Customer A from time to time (for details of which, see ‘‘— PACE Agreements’’ in
this section), we generally make our purchas e on a back-to-back basis that we only place
order with our suppliers based on the volume of purchase orders we receive and our
production planning. We will issue purchase requisitions and purchase orders to our
suppliers according to the raw materials required for the production as per our customer
request.
Upon receipt of the raw materials, we will conduct incoming quality inspection. For
more information on our incoming qualit y control, see ‘‘— Quality Management —
Incoming quality control’’.
Procurement of processing services
To better manage our production cost and c omplement our production capability and
capacity, we engage third-party processing service providers for some of our non-core
manufacturing processes during the Track Record Period. According to the CIC Report,
there are more than 200 suppliers involved in tr eatment and processing of metals based in
Singapore, who are readily available alterna tive suppliers with comparable prices, terms
and quality to us.
For precision machining, we may send the parts and components to third-party
processing service providers for surface trea tment and cleaning, as the surface treatment
and cleaning process require specific licen ce and special equipment to operate and such
arrangement could minimise our capital expenditures, control our production costs and
hence achieve cost-effectiveness of our manufacturing process.
For precision welding, we may send the parts and components to third-party
processing service providers for the milling process when CNC machines are required for
such process. We may also engage third-party p rocessing service providers for cleaning
process that requires the use of chemical of which specific licence is required.
We select our service providers after taking into consideration of factors such as
reliability, qualification, production capacity, product quality and pricing terms and also
based on the list of approved suppliers of our customers (if applicable).
We conduct incoming quality inspection to ensure the semi-finished products we
receive from our processing service providers adhere to our stringent quality requirements.
If there is any identified issue with the prod uct quality, we will issue a non-compliance
report and return the product to the third-pa rty processing service provider for repair or
reproduction.
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Generally, we do not enter into any framework agreement with the third-party
processing service providers as we only engage them on an as-needed basis. The credit terms
granted by the third-party service providers are typically ranging from 30 days to 90 days.
We measure the quality of products processe d by the third-party processing service
providers in accordance with our quality assurance system. For more information on our
quality assurance process, see ‘‘— Quality Management’’.
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we did not experience any material product quality dispute with our third
party machinery and equipment suppliers, raw material suppliers or processing service
providers. We believe that, if necessary, we c an identify and engage substitute without
material difficulty.
Management of suppliers
We impose stringent standards on sel ection of our suppliers. We maintain a
procurement policy which comprises the evaluation process for selection of new suppliers
and the annual review of existing suppliers. For more information, see ‘‘— Quality
Management — Supplier management’’.
We usually request our supplier candidates to provide samples of their products for
testing and our personnel from procurement department, quality control department and
engineers from the relevant production department may jointly conduct on-site inspection
on the candidates’ production facility.
We constantly monitor the quality of our suppliers and perform evaluation every one
or two years based on their pr oduction capacity, product and service quality, ability to
timely deliver and pricing terms, in cluding transportation costs.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material shortage or delay in the supply of our raw materials.
Key terms with suppliers
We generally do not enter into long-term su pply agreements with our suppliers but
procure raw materials on an order-by-order basis. We set out below a summary of the key
terms of our purchase orders to our suppliers during the Track Record Period:
Principal terms Summary
Specifications : The purchase orders typically set out the
specifications, quantities and pricing terms.
Delivery and inspection : Our suppl iers are usually responsible for
delivering the raw materials to our production
facilities. We are entitled to inspect the raw
materials upon arrival.
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Principal terms Summary
Payment terms : We generally settle our purchases with our
suppliers in SGD or USD. If products are
delivered in instalments, we are entitled to
request for rendering separate invoices for
each instalment in respect of each delivery. We
usually make payment to our suppliers by bank
transfer and/or cheque.
Credit terms : For local supplie rs, we are generally granted 30
to 60 days of credit term. For overseas
suppliers, payment in advance may be required
either in the full purchase amount payable upon
order or 50% partial down payment payable
upon order and remaining balance payable
prior to shipment.
Our suppliers
In each year during the Track Record Period , purchases from our five largest suppliers
were approximately S$7.5 million and S$6.8 millio n, accounting for approximately 47.4%
and 52.2% of our total purchases, respectively, and purchases from our largest supplier
were approximately S$2.4 million and S$1.9 millio n, accounting for approximately 14.9%
and 14.6% of our total purchases, respectively for the years ended 31 December 2022 and
2023.
Our Directors do not consider that our business is dependent on any single supplier
and we have maintained stable business relationships with our major suppliers.
Our five largest suppliers during the Track Record Period are independent third
parties. To the best knowledge of our Directors, none of our Directors or any person who,
to the best knowledge of our Directors, owns more than 5% of the issued share capital of
any of our subsidiaries (or any of their respect ive associates) had any interest in any of our
five largest suppliers in each year of the Track Record Period.
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The tables below set out the details of our f ive largest suppliers in each year of the
Track Record Period:
For the year ended 31 December 2022
Supplier
Products
purchased/
service
received Background and principal business
Year
commencing
relationship
Typical credit
terms and payment
method
Transaction amount
and percentage of
our total purchases
S$’000 %
Supplier A Parts A limited liability company and based in
Singapore which is principally engaged in
manufacturing and supply of
instrumentation solutions, valves, fittings,
and systems for the ultra-high purity and
process industries.
2015 30/60 days, by
cheque
2,373 14.9
SL Metals Pte
Ltd
Materials A group listed on the Catalist of the
Singapore Exchange Securities Trading
L i m i t e da n db a s e di nS i n g a p o r ew h i c hi s
principally engaged in supply of
aluminium alloy products.
2009 60/90 days, by
cheque
1,629 10.3
Banner
Industries
Asia Pacific
Pte Ltd
Parts A limited liability company and based in
Singapore which is principally engaged in
distribution of high purity components.
2021 30 days, by bank
transfer
1,251 7.9
Supplier B Parts A limited liability company and based in
Singapore which is principally engaged in
wholesale of general tools including locks
and hinges.
2016 60 days, by cheque 1,147 7.2
Mega Valve
and Fitting
Pte Ltd
(1)
Parts A limited liability company and based in
Singapore which is principally engaged in
distribution of ultra high purity products
for the semiconductor and LCD
industries.
2016 30 days, by cheque 1,123 7.1
Sub-total 7,523 47.4
All other suppliers 8,343 52.6
Total 15,866 100.0
Note:
1. Mega Valve and Fitting Pte Ltd is also our cu stomer during the Track Record Period. For more
information, see ‘‘— Overlapping Customer and Supplier’’.
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For the year ended 31 December 2023
Supplier
Products
purchased/
service
received Background and principal business
Year
commencing
relationship
Typical credit
terms and payment
method
Transaction amount
and percentage of
our total purchases
S$’000 %
Supplier A Parts A limited liability company and based in
Singapore which is principally engaged in
manufacturing and supply of
instrumentation solutions, valves, fittings,
and systems for the ultra-high purity and
process industries.
2015 30/60 days, by
cheque
1,913 14.6
Mega Valve
and Fitting
Pte Ltd
(1)
Parts A limited liability company and based in
Singapore which is principally engaged in
distribution of ultra high purity products
for the semiconductor and LCD
industries.
2016 30 days, by cheque 1,468 11.2
Banner
Industries
Asia Pacific
Pte Ltd
Parts A limited liability company and based in
Singapore which is principally engaged in
distribution of high purity components.
2021 30 days, by bank
transfer
1,332 10.2
Supplier C Parts A limited liability company and based in
Singapore which is principally engaged in
provision of fluid system solutions and
services.
2022 60 days, by cheque 1,193 9.1
Supplier D Parts A group listed on the New York Stock
Exchange and based in the U.S. which is
principally engaged in manufacturing of
motion and control technologies and
systems. Supplier D recorded net sales of
US$19,065 million for the year ended 31
December 2023.
2020 30 days, by cheque 932 7.1
Sub-total 6,838 52.2
All other suppliers 6,257 47.8
Total 13,095 100.0
Note:
1. Mega Valve and Fitting Pte Ltd is also our cu stomer during the Track Record Period. For more
information, see ‘‘— Overlapping Customer and Supplier’’.
Overlapping Customer and Supplier
We may, from time to time, have overlapping suppliers and customers, which,
according to the CIC Report, is a common practice for contract manufacturers and service
providers in the precision engineering industry as raw material suppliers may also require
precision engineering services for their own manufacturing equipment and/or products.
This interdependence stems from the maturity of the precision engineering industry, close
and complementary relationship between the b usiness partners and the need for specialised
expertise at each process along the supply chain.
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During the Track Record Period, Mega Valve and Fitting Pte Ltd, one of our major
suppliers for the years ended 31 December 2022 and 2023, procured precision welding
services from us. The revenue generated from Mega Valve and Fitting Pte Ltd amounted to
approximately S$21,000 and S$1,300 for t he years ended 31 December 2022 and 2023,
respectively.
Negotiations of the terms of our agreements with Mega Valve and Fitting Pte Ltd with
respect to such overlapping transactions were conducted on an individual basis and the
relevant services procured and offered were neither inter-connected nor inter-conditional
with each other. Our Directors confirmed that all of such transactions with Mega Valve and
Fitting Pte Ltd during the Track Record Period were conducted in the ordinary course of
business under normal commercial t erms and on arm’s length basis.
During the Track Record Period, certain of our top five customers procured mainly
OEM parts from their approved suppliers on our behalf. Our purchases from these
customers amounted to:
. Customer A, one of our major customers: approximately S$1,900 and S$9,000 for
the years ended 31 December 2022 and 2023, respectively
. Customer B, one of our major customers: approximately S$12,000 and nil for the
years ended 31 December 2022 and 2023, respectively
The terms of our agreements with Customer A and Customer B with respect to such
overlapping transactions were on an individual basis and the relevant products or services
procured and offered were not inter-conditional with each other. Such customers procured
parts from their suppliers on our behalf to speed up the procurement process, which we then
used for manufacturing for such customers.
Our Directors confirmed that all of such transactions with Customer A and Customer
B during the Track Record Period were conducted in the ordinary course of business under
normal commercial terms and on arm’s length basis.
INVENTORIES AND WAREHOUSING
Inventory control and provisioning policy
We have production facilities in Singapor e and Malaysia. For more information, see
‘‘— Properties’’.
Our inventory mainly comprises raw materials for production, work in progress and
finished goods. It is our policy to maintain an optimal inventory level to minimise our stock
holding cost.
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Pursuant to the consignment arrangement entered into by us with Customer A
pursuant to the PACE Agreements, Customer A may request for delivery of our finished
goods to their manufacturing sites on consig nment basis when the stock level of such
finished goods drops below a minimum stock level and subsequently accepts and releases
such items when needed (no later than 180 days after issuance of the replenishment orders).
For more information on the PACE Agreements, see ‘‘— Our Customers — Customer
concentration and reliance on our five largest customers — Our business relationship with
Customer A — PACE Agreements’’.
To effectively monitor our inventory level, save for the arrangement under the PACE
Agreements, we generally purchase raw materia ls according to customers’ purchase orders
and market condition. Finished goods are produced and transported to customers promptly
to satisfy customers’ demands and therefore w e endeavour to maintain minimal inventory
level.
Our Directors confirm that during the Track Record Period, we have not experienced
any significant delays or shortages in the su pply of raw materials which would impact our
operation and we do not anticipate significant difficulties in obtaining alternative sources of
supply, if necessary. For more information on r i s ka s s o c i a t e dw i t hs u p p l yo fr a wm a t e r i a l s ,
see ‘‘Risk Factors — We may be unable to effect ively and efficiently manage the supply and
quality of our raw materials and we generally do not enter into long term supply agreements
with our major suppliers of raw materials’’.
Logistics
We have our own logistics team for delivery of our products to customers located in
Singapore. Our logistic team consists of t wo trucks and two truck drivers, incurring
depreciation, hire purchase principal and interest expenses, drivers’ salary, maintenance,
insurance and petrol expenses of approximately S$140,000 and S$136,000, respectively for
the years ended 31 December 2022 and 2023. As at 31 December 2023, each truck has a
remaining useful life of three years. During the Track Record Period, the trucks have been
used to deliver parts to our customers in Singapore and transporting parts between our
Singapore Factory and Malaysia Factory. For customers located outside Singapore, subject
to requirements set out in the purchase orders, external courier is arranged for pickup of the
products from our warehouse in accordance with our customers’ instructions.
During the Track Record Period and up to the Latest Practicable Date, our Group did
not experience any material adverse impact on our operations as a result of failure to meet
delivery schedules of our customers.
QUALITY MANAGEMENT
We are committed to ensuring quality in respect of our products and services delivered
to our customers and maintaining a comprehensive quality control system. In order to
control the variables within our production process, we ensure that quality checks are in
place at various stages of the operational process and our quality control personnel in
Singapore will be responsible for maintaining our products delivered are up to the expected
standards.
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During the Track Record Period and up to the Latest Practicable Date, we did not
have any material return to our suppliers or any material return from our customers which
would cause any material and adverse impact on our operations or financial condition. The
main quality control procedures, w here applicable, are as follows:
Incoming quality control
Upon receiving raw materials from suppliers, we will first check the quality and
quantity of the materials according to the purchase orders. We will also verify the
specifications indicated on the certificate of conformance attached to the materials and
inspect the dimension of the incoming materials according to the internal production work
instructions. We will follow up with our supplie rs to obtain corrective action and recovery
plan when necessary. When required by our customer under any specific request, the
material verification shall be conducted at least once a year by a third party on a selective
basis.
Supplier management
We impose stringent standards on selectio n of our suppliers. For monitoring of our
suppliers, we have an overall qualification and evaluation process for selection of new
suppliers and review of existing suppliers. We maintain a list of approved suppliers and the
procurement, production and quality control departments are responsible for the
evaluation process and determining if the new or qualified supplier meets our
requirements to produce critical parts or handle specific process required by our
customers. For existing suppliers, we conduct regular performance evaluation based on
product quality, delivery lead time and procurement costs to determine whether the
suppliers can remain on our approved supplier list. We generally evaluate our existing and
new suppliers based on factors such as whether the relevant supplier is on the approved
supplier list of our customers (if applicable), the relevant supplier’s t echnical capabilities,
location, overall procurement costs, lea d time, terms and cond itions, credibility,
qualification and certification as well as resu lts from site visits. In particular, we conduct
site visits to inspect the factories of new s uppliers for new machinery or equipment. New
suppliers of raw materials are required to submit the first article inspection report for our
assessment. For certain raw materials, we are required by our customers to use their
designated suppliers.
In-process inspection
Our production team submits the first piece or first set-up pieces of the semi-finished
products with internal production work instructions to our quality inspector. Whenever
there is any change in the machinery set-ups such as change of tools, the quality inspector is
required to check the first set-up pieces before the machinists proceed to mass production.
The quality inspector is required to check all the relevant dimensions of the product
according to the internal production work instructions using machinery and equipment
such as coordinate measuring machine, OD micrometre, thread gauge, pin gauge and
surface roughness tester. If any relevant part does not pass our internal quality inspection
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due to discrepancy of its dimensions with the specifications, the quality inspector will return
the part together with the internal production work instructions to the production team
which will then undertake corrective actions.
It is the responsibility of the machinists to send the repaired or reproduced part to the
quality inspector for further inspection. The q uality inspector will only accept the part when
all the relevant dimensions comply with the internal production work instructions
specifications.
Final inspection
Finished products shall be sent to quality inspector for final inspection. The quality
inspector will conduct surface check and dimen sion check for each product (i.e. whether any
discrepancy of dimension will affect its functionality or assembly of such product). For
products which dimensions are not critical to the functionality or assembly, the quality
inspector shall conduct sampling check.
Final products are inspected/verified in accordance with the requirements of the
Customer Production Drawings and/or purchase orders as applicable, to ensure that the
finished product and service conforms to the specified requirements. No products are
dispatched, or work considered completed until all the above activities have been
conducted, recorded and duly authorised.
First article inspection
Subsequent to the completion of the first article inspection conducted by the quality
inspector, the inspection report together wit h the first article will have to be submitted for
customer approval subject to the customer’s requirement (if applicable). We will only
continue with the mass production after obtaining approval from our customers, if needed.
Quality management certifications
We obtained a number of quality management certifications which are relevant to our
operations. The following sets out a list of certifications held by us as at the Latest
Practicable Date. These certifications are subject to a periodic review or renewal due to
change of standard of the issuing authorities.
Certifications Entity accredited Expiry date
ISO 9001 : 2015 Metasurface Technologies 26 June 2025
ISO 14001 : 2015 Metasurface Technologies 26 June 2025
ISO 45001 : 2018 Metasurface Technologies 26 June 2025
ISO 9001 : 2015 SPW 7 April 2025
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RESEARCH AND DEVELOPMENT
During the Track Record Period and up to the Latest Practicable Date, we did not
engage in any significant research and developm ent activities. Nonetheless, we develop our
manufacturing capabilities primarily thro ugh staff development and investing in our
production facilities.
Investment in associate
We have invested in and ventured into the innovation and manufacturing of meta
optics components through our investment in Metaoptics Technologies, which had been an
insignificant subsidiary of our Group since its incorporation in June 2021 and until
completion of various rounds of investments and share transfers and is currently our
associate. Meta optics technology is a new technology which enables the production of flat
surface lens of smaller size, lighter weight, lower power consumption and wider light as
compared to existing conventional 3D Lens. Metaoptics Technologies is currently in
collaboration with a renowned research institute in Singapore and seeking to expand into
innovating the technology of developing and conducting mass production of meta optics
components, which could be used by customers to install on the optical sensors, camera and
flash lens, autonomous vehicles and augmented reality/mixed reality displays. For more
information on the shareholding changes in Metaoptics Technologies, see ‘‘History and
Development — Reorganisation’’.
Our Group became acquainted with Accelerate through introduction by Mr. Thng.
Accelerate contributes to our Group’s techno logical development by licencing to us its
technologies and intellectual property right si no r d e rf o ru st od e v e l o pa n dc o m m e r c i a l i s e
its technologies and licenced products. It has also introduced new technologies that could
enhance the value of our investment in associate through R&D collaborations with
Metaoptics Technologies in the optical metalens technology business.
The Licence Agreement
After we incorporated Metaoptics Technologies with the intention of investing and
venturing into metalens technology business, Accelerate, knowing that technological
advancement in optics is Metaoptics Technologies’ major R&D focus area, decided to
licence its Technology (defined below) to us. Our Directors believe this is beneficial to both
our Group and Accelerate as Accelerate could support the R&D of Metaoptics
Technologies (which at that time was newly incorporated and had limited resources)
while Metaoptics Technologies could help comm ercialise Accelerate’s Licenced Products
(defined below) and generate new sources of rev enue (which represents investment returns
to our Group and Accelerate as direct and indirect shareholders of Metaoptics
Technologies, respectively). Accelerate licenced the Technology to both Metasurface
Technologies and Metaoptics Technolog ies, but it was only utilised by Metaoptics
Technologies during the Track Record Peri od as the Technology concerns optics. In
particular, Metaoptics Technologies used the Technology to develop new versions of
modifications, improvements and upgrades to the Licenced Products during the Track
Record Period.
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The table below sets out the salient terms of the arrangement under the Licence
Agreement:
Parties: (i) Accelerate, the licensor; and
(ii) Metasurface Techno logies and Metaoptics
Technologies, each a licensee
Term: 10 December 2021 to 9 December 2031
Licenced right: Accelerate grants each licensee to use the Technology to
develop enhancements and to use, manufacture, distribute,
market and sell Accelerate’s Licenced Products.
Technology: Know-how (such as for h igh resolution direct laser writing
and flat optics design and manufacturing) and patents (such
as optical devices and super oscillation lens) (the
‘‘Technology ’’).
Licenced products: Diffractive optica l lenses, flat lenses and nanoimprint
masters for use within the optical field which incorporates
the Technology (the ‘‘ Licenced Products ’’). A Licenced
Product includes a complete system incorporating the
Technology, which may include hardware, software,
accessories and implementation manuals.
Fees: Licence fee: Metasurface Technologies shall issue and allot
ordinary shares to Accelerate representing approximately
5% of Metasurface Technologies’ then total issued share
capital. Accelerate was entitled to a put option right, call
option right and anti-dilution right, as detailed in ‘‘—
Special rights’’ below, which were terminated on 26 April
2023.
Royalties: starting from 1 January 2022 until the end of the
term, Metaoptics Technologies shall pay annual royalties to
Accelerate constituting 1.5% of the gross revenue
attributable to the Licenced Products, subject to the
annual minimum royalties set out in the Licence
Agreement. The annual minimum royalties are waived for
the two years ending 31 December 2022 and 2023.
Payment terms of
royalties:
Payable annually, within 30 days after 13 December of each
year.
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Commercialisation
obligations:
Metaoptics Technologies sha ll, among others, raise capital
and reach commercialisation milestones within the timeline
specified in the Licence Agreement. For example, it shall
have a pilot or mass production line ready for producing flat
lens in Singapore by 31 December 2026.
Termination: Metasurface Technologies or Metaoptics Technologies may
request to terminate the Licence Agreement after eight years
from 13 December 2021 by giving Accelerate written notice
of no less than 30 days. Accelerate may agree to the
proposed termination if Metasurface Technologies or
Metaoptics Technologies is unable to achieve any sale of
the Licenced Products and is able to demonstrate to
Accelerate its best efforts have been undertaken to achieve
such sale.
Also, either party shall be entitled to terminate the Licence
Agreement by giving written notice to the other party, in the
event (i) the other party breaches the Licence Agreement
and fails to remedy the breach (where capable of remedy)
within 30 days upon receipt of a written notice containing
full particulars of the breach, (ii) an encumbrance takes
possession, or a receiver is appointed, of any property or
assets of the other party, (iii) the other party makes any
voluntary arrangement with its creditors, (iv) the other
party goes into liquidation (except for the purpose of
amalgamation or reconstruction), or (v) the other party
ceases, or threatens to cease, to carry on business.
Given that the Licenced Products primarily involve optical lens which are not
Metasurface Technologies and SPW’s principal areas of business operations, the Directors
are of the view that the Licenced Products do not and will not compete with the Group. The
revenue derived from the Licenced Products a ttributable to Metaoptics Technologies was
nil and nil for each of the two years ended 31 December 2022 and 2023 as the Licenced
Products are still not commercialised yet.
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INTELLECTUAL PROPERTY
We have branded and marketed our business by using ‘‘Metasurface’’ and
 .
We rely on a combination of patent and personal data protection laws as well as
non-disclosure agreements with our employees to protect our intellectual property rights
and know-how.
As at the Latest Practicable Date, we hel d five registered trademarks in Hong Kong
and Singapore and we were also the registered holder of one domain name. Further
information is set out in ‘‘Statutory and General Information — B. Further information
about our business — 2. Material intellectual property rights’’ in Appendix V to this
prospectus.
Our key employees are required to enter into a non-disclosure agreement with us,
under which such employee is bound by a non-disclosure obligation during his or her
employment and after termination of his or he r employment in respect of any confidential
information relating to us, including withou t limitation to any private, confidential or
secret information of us obtained by the employee in the course of his or her employment.
Our Directors are of the view that we have taken all reasonable steps and measures to
protect our intellectual property rights aga inst any potential infringement. During the
Track Record Period and up to the Latest Practicable Date, there had not been any material
pending or threatened claims made against us, nor had there been any material claims made
by us against third parties, with respect to the i nfringement of intellectual property rights
owned by us or third parties.
INFORMATION TECHNOLOGY SYSTEMS
We believe that robust and reliable informat ion technology systems are essential to
sustain our competitive edge in our operations. As such, we continuously invest in the
upgrade and integration of our information technology systems.
SPW has adopted the Solidwork system, a manufacturing ERP system for streamlining
our precision welding manufacturing process. We have also adopted the Minitab Statistical
Software for analysis of business data and for prediction and forecast of our sales. We have
used the MasterChem and Hypermill software s ystem for our turning and milling processes.
We also apply use software such as MCOSMOS, CALYPSO 2020 and VDMIS for our
coordinate measuring machine.
COMPETITION
Precision component engineering is wid ely applied to produce components with
complex structures or certain special techni cal parts in many growing industries and the
downstream customers consists of OEMs and their contract manufacturers and service
providers in the diverse end-use industries, s uch as semiconductor, aerospace and oil & gas.
According to the CIC Report, revenue of global semiconductor industry is projected to
reach US$880.7 billion in 2028 with a CAGR of 10.6% between 2023 and 2028. Global sales
of semiconductor manufacturin g equipment also increased f rom US$61.7 billion in 2019 to
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US$106.3 billion in 2023, registering a CAG R of 14.6% between 2019 and 2023 and is
expected to reach US$180.6 billion in 2028, registering a CAGR of 11.2% between 2023 and
2028. As our Group is a precision engineering s ervices provider, specialising in providing
precision machining and precision welding services for international companies mainly in
the semiconductor and other sectors, includ ing aerospace and data storage industries.
Therefore, the continual growth of the semiconductor industry in the world is expected to
drive up the demand and presents more opportunities for precision components, and
therefore supports the further development of Singapore’s precision component engineering
industry.
Our main competitors include both domestic and international companies providing
precision component engineering services in Singapore. We compete with them primarily in
product quality, technical level, production ca pacity, pricing terms, in-time delivery, span
of one-stop services offerings, ex perience and after-sales services.
Our strategic location in Singapore positions us above our competitors outside
Singapore, primarily due to macro-economic shifts affecting the regional semiconductor
industry, our geographical proximity with c ustomers and favourable domestic policies and
incentives in Singapore for the precision engi neering industry. Ther efore, we consider the
direct competition from international companies providing precision component
engineering services in the semiconductor industry without presence in Singapore is
relatively remote.
Due to factors such as macro-economic conditions and dynamic international
situations, certain global major semiconductor manufacturers and semiconductor
equipment manufacturers have been shifting their manufacturing bases and operations
from China to Southeast Asia. Such changes have provided more opportunities for
Singapore as a leading regional hub for advanced manufacturing, and service providers in
Singapore and are expected to bring more demand for services and products of the Group.
For details, see ‘‘— Impact of The Covid- 19 Outbreak and U.S.-China Trade War’’.
In addition, among our five largest customers for the years ended 31 December 2022
and 2023, Customer A, Customer D and Intevac Asia Pte. Ltd. have production base in
Singapore and Customer B and Customer C have production base in Malaysia. Customer
A’s decision to invest S$600 million in a ne w Singapore facility and decisions of its
customers and their related companies, such as Vanguard (an affiliate of Taiwan
Semiconductor Manufacturing Company Limited (TSMC)) and United Microelectronics
Corporation (UMC), to further invest in pr oduction facilities in Singapore, further
highlight the strategic value seen in local ope rations in Singapore. Our Group’s strategic
location with production facilities based in Singapore and Malaysia allows us to benefit
from these developments with enhanced logistical efficiencies. This proximity and
alignment with industry trend give us an edge over our competitors in other regions.
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In addition, various favourable policies and measures introduced by the Singapore
government such as Industry Transformation Maps (ITMs) and Precision Engineering
Industry Digital Plan (IDP) a lso promote the further development of the precision
engineering industry in Singapore, providing us further competitive edge over our
competitors outside Singapore. For detai ls, see ‘‘Industry Overview — Overview of
Singapore’s Precision Component Engineering Industry — Key growth drivers of
Singapore’s precision component engineering industry’’.
We seek to differentiate ourselves throug h our use of multi-axis CNC machines.
Multi-axis CNC machines, in particular, CNC machines with more axes (directions of
movements), allow for machining in multiple d irections simultaneously. The 5-axis CNC
machines we use in our production can move in five different directions, being three linear
areas (up and down, left and right, back and forth) and two rotational axes. Compared to
3-axis or 4-axis CNC machines, which can only move in three directions or four directions
respectively, 5-axis CNC machines can rea ch more angles and create more complex and
detailed parts without the need to manually moving the machined parts for multiple
processes. With more machining steps to be completed in the same timeframe, our use of
multi-axis CNC machines can reduce machining cycles and operational costs in terms of the
labour hours spent on manually moving the machined parts for multiple processes and the
total lead time on production. A dditionally, multi-axis systems facilitate more complex
machining operations such as simultaneou s milling, drilling and cutting, thus enhancing
both production efficiency and ensuring machining accuracy. Our Directors believe that
other core aspects that set us apart from our competitors and foster our competitiveness are
the solid relationships with our customers t hrough regular communication and our strong
technical know-how. For more information on the competitive landscape of the industry
and our competitive strengths, see ‘‘Indu stry Overview — Competitive Landscape of
Singapore’s Precision Component Engineering Industry in the Semiconductor Segment’’
and ‘‘Industry Overview — Competitive advantages of the Group’’.
According to the CIC Report, entry barriers faced by new competitors in the precision
component engineering industry are (i) large capital investment required to purchase
machinery and equipment to achieve high accura cy and versatility in production, (ii) intense
competition for recruitment of skilled work ers and difficult access to technological
know-how, (iii) long-term and steady relationship with downstream customers, which
creates difficulties for new players to establish mutual dependence and complimentary
business relationship with customers within a sh ort period of time, and (iv) industry specific
qualification and certification requirement s. For more information on these entry barriers,
see ‘‘Industry Overview — Competitive Land scape of Singapore’s Precision Component
Engineering Industry in the Semiconductor Segment — Entry barriers for the precision
component engineering industry’’.
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EMPLOYEES
Number of employees
As at 31 December 2023, we had 141 full time employees. The following table sets out
the breakdown of our employees by function and geographical location:
Function Singapore Malaysia
Number of
employees
%o ft o t a l
employees
Number of
employees
%o ft o t a l
employees
Production 69 71.1 37 84.1
Quality Control 4 4.1 4 9.1
Procurement 3 3.1 1 2.3
Sales 10 10.3 — —
Finance, human resources
and administration 11 11.4 2 4.5
Total 97 100 44 100
As at 31 December 2023, we had 62 foreign workers in Singapore and 4 foreign
workers in Malaysia. As advised by our Singapore Legal Advisers, for the manufacturing
sector in Singapore, the number of foreign workers that an employer can hire is limited by
the quota or dependency ratio ceiling, and employers shall pay the requisite levy according
to the qualification of the foreign workers employed. As advised by our Malaysia Legal
Advisers, a valid employment permit is requ ired for non-citizens to be employed in
Malaysia. As advised by our Singapore Legal Advisers and Malaysia Legal Advisers, during
the Track Record Period and up to the Latest Practicable Date, our Group has complied
with the relevant laws and regulations in relation to the employment of foreign workers in
Singapore and Malaysia in all material aspec ts. For more information, see ‘‘Regulatory
Overview — Laws and regulations in Singapo re — Employment of Foreign Manpower Act’’
and ‘‘Regulatory Overview — Laws and reg ulations in Malaysia — Employment and
Labour Protection’’.
Remuneration policy
As advised by our Singapore Legal Advisers and our Malaysia Legal Advisers, as at the
Latest Practicable Date, we had entered into letters of appointment with our employees in
accordance with the applicable laws in Si ngapore or Malaysia, respectively. The
remuneration package we offer to our employees mainly include wages, salaries,
allowance and mandatory provident fund. We generally determine our employee salaries
based on each employee’s qualification, ex perience and suitability and we intend to
maintain the competitiveness of our remuneration package in order to attract and retain
talented labour.
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We review the performance of our employees annually for the purpose of promotion
appraisals and salary adjustment. Employees are remunerated based on standard market
rates and experience and bonus are awarded according to the performance of employees.
We have also entered into a non-disclosure agreement with our key employees which sets
out the confidentiality clause during a nd after the termination of employment.
Training and recruitment policies
We generally recruit our employees from open market and by referral. We intend to use
our best efforts to attract and retain suitable personnel to work with us. We determine our
demand for additional manpower with reference to our available manpower and our
business needs.
We provide on-the-job training to our employees and comprehensive orientation for
new employees in order to improve our employees’ technical competence and work
efficiency. Our human resources team has the overall responsibility for staff training
administration and will also conduct annual review of the training matrix. All new
employees shall undergo a briefing on the general rules and regulations on safety on the day
of work commencement.
Trainings we provide to our employees include understanding and updates on our
internal control and quality requirement rega rding our customers’ supply chain, industry
code of conduct training to ensure that our working conditions are safe and that our
business operations are environmentally friendly and conducted ethically, and the
restriction of hazardous substances directive training, which provides information on the
restriction of the use of certain hazardous substances in our electronic equipment. We also
subsidise our welders to obtain ASME BPVC Section IX: 2017 certification.
Central Provident Fund and Employees Provident Fund
We participate in the Central Provident Fund and Employees Provident Fund and
have paid the relevant contribution for our employees in accordance with the relevant laws
in Singapore and Malaysia, respectively. For more information on these provident fund
requirements in Singapore and Malaysia, see ‘‘Regulatory Overview — Central Provident
Fund Act’’ and ‘‘Regulatory Overview — Employees Provident Fund Act 1991’’.
Deployment of labour services
During the Track Record Period, subject to our capacity, resources level and sales
demand, we procured labour services from independent third party service providers and
Meson Technology for our precision machining and precision welding services to handle
additional or ad hoc customer orders, if neces sary, when our existing human resources are
tied up. Under the labour services arrangemen t, the service providers assigned workers to
our Singapore Factory to carry out mechanical work involved in the precision machining
and precision welding processes by using our own machinery and equipment, thereby
increasing our Group’s manpower and enhanc ing the utilisation rate of our production
facilities. The procurement fees were paid on hourly basis and denominated in SGD.
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During the Track Record Period and up to the Latest Practicable Date, as advised by
our Singapore Legal Advisers and Malaysi a Legal Advisers, there was no material
non-compliance incident in respect of applicable labour laws and regulations in Singapore
and Malaysia that would have a material adverse impact on our Group.
IMPACT OF THE COVID-19 OUTBREAK AND U.S.-CHINA TRADE WAR
U.S.-China Trade War
With respect to the U.S.-China trade war, the U.S. imposed a series of sanctions or
restrictions, such as high tariffs on chips and parts imported from China, to hobble China’s
chip industry. The U.S.-China trade war, coupled with other external factors such as global
economic cycle and COVID-19 pandemic, has exacerbated the global semiconductor chip
supply shortage. As a result, due to factors such as macro-economic conditions and
dynamic international situations, certain global major semiconductor manufacturers and
semiconductor equipment manufacturers have been shifting their manufacturing bases and
operations from China to Southeast Asian countries, providing more business opportunities
for Singapore, as a leading regional hub for a dvanced manufacturing, and Singaporean
service providers. Within the wafer manufacturing sector in the semiconductor industry,
integrated device manufacturers (IDM) co mpanies such as Micron Technology, Infineon
Technologies, NXP Semiconductors, STMicroelectronics, and along with foundry
companies such as Global Foundries, United Microelectronics Corporation (UMC) and
Vanguard International Semiconductor Corporation (Vanguard) had been expanding their
manufacturing facilities in Singapore. In par ticular, Customer A announced ‘‘Singapore
2030’’ in December 2022. As part of the plan, C ustomer A planned to invest S$600 million
in a new facility at Tampines Industrial Cresc ent in Singapore by 2024, which is expected to
be a 700,000 square feet plant and include more than 200,000 square feet of equipment
manufacturing clean room space, to expand its chip-making operations in the next eight
years and strengthen its manufacturing capacity, R&D, ecosystem partnerships and
workforce development in Singapore. Acco rding to the CIC Report, the two largest
customers of Customer A are Taiwan Semicon ductor Manufacturing Company Limited
(TSMC) and Samsung Electronics Co. Ltd, which together accounted for more than 30% of
Customer A’s total net sales for each of its financial years ended 31 October 2021, 2022 and
2023. As an affiliate of TSMC, Vanguard announced in October 2023 its plan to further
build a 12-inch chip plant in Singapore following its acquisition of an 8-inch chip plant in
Singapore from GlobalFoundries in 2019 . Another customer of Customer A, UMC
announced in 2022 its plan to invest US$5 billio n in a chip-making factory in Singapore, to
manufacture 22 and 28 nanometer chips for cars, IoT devices and computers. The UMC’s
new facility in Singapore is expected to be comp leted by mid-2024, with initial production
to commence in early 2025. Such shifting trend and strengthening of production base by the
semiconductor manufacturing equipment suppliers and semiconductor manufacturers in
Singapore are expected to bring more demand for services and products of the Group.
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Going forward, it is expected that the geographical source of upstream raw materials
suppliers and the geographical locations of the Group’s downstream customers will remain
largely unchanged as the Group mainly procured raw materials from domestic suppliers in
Singapore and from Malaysia, the U.S. and Europe and mainly sell its products to
customers based in the U.S., Singapore and Malaysia.
The COVID-19 pandemic
The COVID-19 pandemic has disrupted global supply chains, leading to global chip
shortage. The lingering effect of the global chip shortage and the surge in demand for
electronic products have consequently led to increase in demand in the semiconductor
industry in 2022 during the Track Record Period. In 2022, with the eventual uplift of
COVID-19 preventive and lock-down measures by governments in different countries, in
order to secure the production capacity of the ir suppliers in the post COVID-19 period to
cope with the expected growing demand for chips, semiconductor companies increased its
capital expenditure and investment in semico nductor manufacturing equipment. Therefore,
the surge in production and demand resulted in accumulation of inventories during 2022.
This then caused semiconductor companies and semiconductor equipment manufacturing
companies to slow down their purchases and undertake periodic de-stocking measures in
2023, leading to decrease in demand of our p recision machining parts and components
during the year end ed 31 December 2023.
Our Directors consider that, during the Track Record Period and up to the Latest
Practicable Date, the U.S.-China trade war, global semiconductor chip supply shortage and
the COVID-19 pandemic did not bring any material adverse impact to our Group’s business
and financial performance as demonstrated by that (i) our Group has maintained a
relatively stable total revenue level for th e year ended 31 December 2023 when compared to
the corresponding period in 2022, (ii) based on our Group’s unaudited management
accounts, our total revenue for the four mo nths ended 30 April 2024 increased when
compared to the same period in 2023, and ( iii) the Group has achieved an increase in
adjusted profit margin (Non-IFRS measure) f rom approximately 16.7% for the year ended
31 December 2022 to approximately 18.9% for the year ended 31 December 2023. Based on
the above, the Sole Sponsor is not aware of any material finding which would suggest the
U.S.-China trade war, global semiconductor chip supply shortage and the COVID-19
pandemic had any material adverse impact to the Group’s business and financial
performance during the Track Record Period and up to the Latest Practicable Date.
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HEALTH, SAFETY, ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
We are subject to various health, safety, soc ial and environmental protection laws and
regulations and our operations are regularly inspected by local government authorities. We
endeavour to promote co rporate and social resp onsibility, proactivel y identify any major
environmental and social sustainability ris ks related to our business and mitigate any
negative impact of our operations on the environment. We have adopted internal control
policies and procedures with respect to the us e of energy, climate change and employees’
welfare and safety. We have also set up metrics and targets for environmental, health and
safety management and review major environmental and social sustainability risk
performance on a regular basis.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material occupational, health and safety and environmental incidents nor
were we subject to any material claims for personal or property damages or for health or
safety related compensation and as advised by our Singapore Legal Advisers and Malaysia
Legal Advisers, we were in compliance with the relevant Singapore and Malaysia laws and
regulations on occupational, health and safety and environmental protection applicable to
our Group in all material respects. There was no material work related accidents or injuries
that resulted in any material adverse impa ct on our business operations and financial
position during the Track Record Period and up to the Latest Practicable Date.
Our Directors consider that the annual cost of compliance with the applicable health,
safety, social, and environmental protection laws and regulations was not material during
the Track Record Period and up to the Latest Practicable Date and we do not expect the
cost of such compliance to be material going forward.
Our ESG Governance
Our Directors have overall responsib ility for our strategies and reporting on
environmental, social and governance (‘‘ ESG’’) matters. Our Directors will support our
commitment to fulfilling environmental and soci al responsibilities which include but are not
limited to the following:
. developing and adopting policies on e nvironmental, social and corporate
governance responsibilities (the ‘‘ ESG Policy ’’);
. conducting materiality assessments of environmental-related, climate-related,
social-related risks;
. reviewing our performance on annual basis and monitoring the effectiveness and
ensuring the implementation of our ESG Policy;
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. staying informed about the latest ESG-rela ted laws and regulations, including the
applicable sections of the GEM Listing Rules, and updating our ESG Policy in
accordance with the latest regulatory updates;
. following and monitoring the latest requ irements regarding ESG disclosure and
regulatory compliance;
. identifying our key stakeholders based on our business operations and
establishing the communication channels to engage with them with respect to
ESG matters;
. assessing ESG-related risks and opportunities on a regular basis according to
applicable laws, regulations and policie s, especially risks in relation to climate
changes, to ensure our responsibilities w ith respect to ESG matters are met; and
. preparing and reviewing the ESG report.
Moreover, our administrative staff will se rve as a supportive role to our Directors in
monitoring the implementation of the agreed ESG Policy and strategies, conducting
materiality assessments of environmental-relate d, climate-related and social-related risks
and how we adapt our business in light of climate change, reporting to our Directors on an
annual basis regarding the implementation and effectiveness of our ESG Policy, and
assisting in the preparation of ESG report.
O u rB o a r dw i l le s t a b l i s ha nE S Gc o m m i t t e et oa s s i s to u rB o a r di no v e r s e e i n gE S G
governance, ensuring the implementation o f ESG policies, monitoring ESG-related
performance and targets, adjusting ESG strategies and preparing the ESG report. In
a d d i t i o n ,w ea l s op l a nt oe s t a b l i s ha nE S Gt a s kf o r c et e a mt os u p p o r to u rB o a r da n dt h e
ESG committee in implementing ESG policies, targets and strategies, conducting
materiality assessments of environmental, social and climate-related risks, assessing
corresponding responses, collecting ESG data for the ESG report, and continuously
monitoring the implementation and effectiveness of measures adopted to address our
ESG-related risks and respons ibilities. The ESG committee and the ESG task force team are
expected to report to our Board periodically on the ESG performance of our Group, the
effectiveness of our ESG systems and recommendations, if any. Our Group will conduct
consistent ESG training sessions and provide education on pertinent market trends related
to ESG for both the ESG committee and the E SG task force team. The ESG committee and
the ESG task force team will collaborate to aid the Board in staying abreast of the Stock
Exchange’s reporting standards an d associated listing regulations.
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The Board will adopt the following approaches to identify, assess, manage and review
material ESG issues in relation to environmental, social and climate issues:
1. Identify: the committee will establish communication channels with key
stakeholders on an ongoing basis to understand ESG related concerns and
monitor the impact of our environmental, social and climate-related performance
on the key stakeholders. The Board believes that open dialogues with stakeholders
play a crucial role in maintaining our business sustainability.
2. Strategic planning: the committee will set up risk management and internal
control systems, which are designed to meet our specific business needs and to
minimise our risk exposure. The committee plans strategically and sets ESG goals
at the beginning of each year.
3. Assess: the committee will review and assess ESG reports of companies in similar
industries to ensure relevant ESG related risks are identified on a timely basis;
engage professional advisers to advise on compliance with ESG related matters.
4. Review: the committee will review the progress made against ESG-related goals to
guide us to achieve better ESG performance via implementing our ESG Policy,
design a set of systematic risk management practices to be put in place to ensure
the effective operation of our financial and operational functions, compliance
control systems, material control, asset management and risk management.
Measures to identify, assess and manage ESG related risks
We believe that environmental protection is of high importance and have taken
relevant measures in the course of our business operations to ensure that we comply with
the applicable regulations in all material aspects. We are subject to environmental
protection laws and regulations in Malaysia where we have production plants, including but
not limited to the Environmental Quality Act 1974 in Malaysia. For more information, see
‘‘Regulatory Overview — Laws and Regulations in Malaysia — Environment Protection’’.
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We have identified the following material ESG related issues and their potential
impacts on our business, strategy and financial performance:
Material ESG issues Potential risks, oppor tunities and impacts Mitigating actions
Resources and energy
management
Ineffective management of resources and
energy may potentially lead to
excessive energy usage, leading to
higher operational expenses
. Promoting energy conservation
and environmentally friendly
procurement practices.
. Performing overall waste
management in our offices, our
Singapore Factory and our
Malaysia Factory.
. Assessing the energy
consumption and optimising
the corresponding procedures.
Impact of climate
change
There may be risk of increasingly severe
extreme weather conditions, such as
more frequent storms, flooding and
typhoons. Extreme weather conditions
may cause disruptions to our
manufacturing facilities and
equipment and may also pose threat to
the health and safety of our
employees.
We may potentially be subject to
increased operation and maintenance
c o s t sa sw e l la sl a b o u rc o s t s .W em a y
also experience adverse impacts from
production disruption if our
operations are hindered by such
extreme weather conditions.
. Providing work arrangements
for bad weather and/or extreme
climate conditions to mitigate
potential injuries to employees
and increase in insurance
premiums.
. Reviewing and accounting for
greenhouse gas emissions and
resource consumptions.
. Deploying of labour services to
the extent compliant with laws
and regulations in Singapore
and Malaysia
. Engaging suppliers in other
regions which have capacity to
provide required raw materials,
parts and components
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Material ESG issues Potential risks, oppor tunities and impacts Mitigating actions
Potential transitional
risks in relation to
policy change
Risks that the environmental laws and
regulations may be amended from time
to time and changes in those laws and
regulations may cause us to incur
additional costs in order to comply
with more stringent rules.
Transitioning to a lower-carbon
economy as well as extensive policy,
legal, technology and market changes
may also take place to address
mitigation and adaptation
requirements related to climate
change. Due to climate change and
climate-related issues, regulators may
require more disclosure on emission.
Such transitional risks may potentially
lead to impacts such as increased
operational cost from change of
internal procedures. Any failure to
comply with the new environmental
regulations would expose us to
penalties, fines, suspensions or actions
in other forms.
. Monitoring the changes in
ESG-related regulatory
requirements and market trend
from time to time.
Human capital
development
Insufficient resources devoted towards
the development of human capital,
such as lack of training and promotion
opportunities, may put our Group at
risk of higher turnover rates and less
competent workforce in medium and
long term.
. Providing employees with
competitive social benefits and
career development
opportunities.
. Strong human capital
development and the provision
of competitive remuneration
packages may improve
employee retention and
dedication.
Privacy and data
security
Inadequate privacy and data protection
policies can expose our Group to the
risk of data leaks and privacy
breaches, resulting in higher costs due
to regulatory actions, litigations, fines,
and damage to our reputation.
. Implementing a policy that
mandates all employees to sign
non-disclosure agreements
mitigates privacy and data
security risks.
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We have identified physical risks and transitional risks as two major categories of risks
arising from climate change.
In view of the nature of our business, we do not anticipate climate change and other
environment-related risks to have any material impact on our business operation, financial
performance and strategy. During the Track Record Period and up to the Latest Practicable
Date, we had not experienced any material imp act on our business operation, strategy or
financial performance as a result of environme nt-related issues. For more information, see
‘‘Risk Factors — Risks Relating to Our Business and the Industry in Which We Operate —
Our Operations may be Affected by Adverse Weather Conditions, Natural disasters, Acts of
God or Wars and Terrorism’’ and ‘‘Risk Factors — Risks Relating to Our Business and the
Industry in which We Operate — Increasing Emphasis on Environmental, Social and
Governance Issues may Impose Additional Costs on us or Expose us to Additional Risks.
Failure to Comply with the Laws and Regulation s in relation to Environmental, Social and
Governance Matters may subject us to Penalties and Adversely Affect our Business,
Financial Condition and Results of Operations’’.
Metrics and target for assessing and managing ESG related risks
We monitor the following metrics to assess and manage the environmental and
climate-related risks arising from our business operations:
Electricity consumption and GHG emission
In order to save energy and reduce greenhouse gas (‘‘ GHG’’) emissions, we are
committed to monitoring our electricity cons umption levels regularly and implement
measures to save energy and reduce GHG emissions and to further enhance our
employees’ awareness of efficient use of electricity and the importance of energy
conservation. We monitor our electricity consumption levels regularly and have
adopted measures such as purchasing appliances and equipment with higher energy
efficiency in forthcoming replacements, tur ning off or setting electronic appliances in
idle or during lunch hours to sleep mode, and encouraging our employees to turn on
fans rather than air conditioners depending on weather conditions and to clean and
maintain air conditioning systems. Going forward, we plan to enhance our efforts in
driving energy efficiency and conduct more in-depth assessments on opportunities to
minimise our emissions impact from our economic activities as we continue to grow
our business.
Waste management
We generate wastes such as waste coolant, l ubricant oil, machined metal chips and
other recyclable solid wastes such as packaging materials in our operation. We have
engaged third party service providers to collect and process our waste materials.
Routine domestic waste generated from our daily operations is stored in accordance
with local garbage classification requirements and transferred to waste treatment
plants. In order to reduce the impact of our disposal of wastes to the environment, we
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have put recycling boxes to collect materials which can be re-used, implemented waste
separation mechanism to collect wastes and prioritise to purchase consumables with
refill pack.
As at the Latest Practicable Date, we were certified with ISO 14001 : 2015
environmental management systems certification.
Our environmental protection performance
Energy consumption and water consumption are closely related to climate change,
which presents businesses with both long -term risks and opportunities. To better
understand, quantify and manage the climate change related impacts, risks, and
opportunities in our operation, it is integral to measure and disclose our energy and
water consumption as the first step in our ESG journey.
The table below sets out the quantitat ive disclosure of our energy and water
consumption and our greenhouse gas emissions in the course of our operations during
the Track Record Period.
For the
year ended
31 December
2022
For the
year ended
31 December
2023
Energy consumption
Consumption of purchased electricity
(kWh ’000) 4,164.6 3,175.0
Intensity (kWh/revenue S$’000) 106.3 96.0
Water consumption
Water consumption (m
3) 7,448.8 6,747.0
Intensity (m 3/revenue S$’000) 0.2 0.17
Greenhouse gas emissions
Scope 2 emission (tonnes) (1) 2,831.9 2,159.0
Intensity (tonne/revenue S$’000) 0.07 0.06
Our targets for energy saving and water saving are as follows:
— energy consumption intensity and greenhouse gas emission (scope 2) intensity
will be reduced by 5% by 2026 compared with 2022.
— water consumption intensity will be reduced by 2% by 2026 compared with
2022.
Note:
(1) Scope 2 emissions represent indirect emissions from the consumption of purchased electricity.
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Our Group will continue to monitor emission of waste water, solid waste, noise
control, greenhouse gas emissions and air pollution control regularly and our human
resources department will continue to keep record of pollutant emissions.
Health and Safety, Social Responsibilities and Corporate Governance
Human resources
Equal opportunity is applicable to all aspects of employment. We hire employees based
on their merits and it is our corporate policy to offer equal opportunities to our employees
regardless of gender, age, race, religion or any other social or personal characteristics. We
enter into employment contracts with al l of our employees in accordance with the
applicable Singapore and Malaysia laws and regulations. Promotions and other job
opportunities are offered to existing employees and suitable candidates, and selection is
based on assessment of work performance of all individuals on merit, qualifications and
abilities, and suitability for the position.
We also focus on embracing diversity within our Group and equal treatment of all our
employees in hiring, training, wellness, as well as professional and personal development.
We encourage our employees to constantly imp rove their skills and abilities and develop
competencies through engaging in both intern al and external training programmes. For
details, see ‘‘— Employees — Training and recruitment policies’’. We will continue to
promote work-life balance and create a positive workplace for all our employees. We have
been committed to serving the community an d fulfilling our social responsibilities.
Occupational safety and health
We endeavour to providing a safe working environment for our employees and
implement stringent safety policies in our production at all times to promote occupational
health and safety and ensure compliance w ith applicable laws and regulations.
We have established and set out a series of safety guidelines, rules and procedures for
various aspects of our production activities, including fire safety, occupational health and
machinery maintenance. We arrange training o n occupational health to our employees from
time to time, and require our employees to strictly comply with our operation manuals when
operating the production equipment and machines.
Anti-corruption
We have a zero-tolerance policy again st any form of fraud or bribery, and are
committed to the prevention, deterrence, dete ction and investigation of all forms of fraud
and bribery. In addition, we impose a whistleblowing procedure that allows employees to
report actual or suspected wrongdoing. The identities of the whistleblowers will be kept
strictly confidential.
In relation to our corporate governance, w e have specific policies on declaration of
potential conflicts of interest, anti-money laundering measures and procurement
management to ensure compliance with all re levant laws and regulations and to avoid
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corruption in our business operations. During the Track Record Period and up to the Latest
Practicable Date, to the best of the knowledge and belief of our Directors, there were no
legal proceedings regarding corrupt practices brought against us or any of our Directors,
senior management or employees. In accordance with the Corporate Governance Code and
ESG Reporting Guide set out in Appendices C1 and C2 to the GEM Listing Rules
respectively, we will put in place mechanisms th at will effectively enable us to continue to
fulfil our corporate responsibility in resp ect of corporate governance and ESG matters
following the Listing.
PROPERTIES
Owned premises
As at the Latest Practicable Date, we own ed a production facility in Johor, Malaysia
and an investment property in Singapore, details of which are set out below:
No. Location Use of property
Approximate gross
floor area (square
metres)
1. No.6,
Jalan Laman Setia 7/4,
Taman Laman Setia,
81550 Gelang Patah,
Johor (the ‘‘Johor Property ’’)
(1)
Production facilities 2,185
2. 10B Enterprise Road,
Singapore
629828 (the ‘‘Enterprise Road Property ’’)(2)
Investment property 653
Notes:
1. As at the Latest Practicable Date, our Mal aysia Factory was located at the Johor Property.
2. As at the Latest Practicable Date, we leased the property to an independent third party at a monthly
rent of S$8,500 (plus GST). The property is used as investment property.
As at the Latest Practicable Date, all of our property interests (except for our
Enterprise Road Property) were used for non-property activities as defined under Rule
8 . 0 1 ( 2 )o ft h eG E ML i s t i n gR u l e s .
P u r s u a n tt oR u l e8 . 0 1 A ( 2 )o ft h eG E ML i s t i n gRules, a listing applicant’s property
interests that do not form part of its property activities are exempt from the valuation
requirement if the carrying amount of the property interests is below 15% of its total assets.
As at 31 December 2023, save as the Tuas Property as set out in Appendix III to this
prospectus, no single property interest that forms part of our non-property activities had a
carrying amount of 15% or more of our total assets as shown in our latest audited
consolidated financial statements.
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Pursuant to Rule 8.01A(1) of the GEM Listing Rules, a valuation report to disclose
valuation information is required for propert y used for property activities, except those
with a carrying amount below 1% of the total assets. As at 31 December 2023, the carrying
amount of our Enterprise Road Property was below 1% of our total assets as shown in our
latest audited consolidated financial statements.
Accordingly, save as the Tuas Property as set out in Appendix III to this prospectus,
we have not included our other property interests in a property valuation report pursuant to
Rule 8.01A of the GEM Listing Rules. A similar exemption applies under section 6 of the
Companies (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice (Chapter 322 of the Laws of Hong Kong), with respect of the requirement under
section 342(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
and paragraph 34(2) of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
Leased properties
As at the Latest Practicable Date, we lease d two properties from independent third
parties, details of which are set out as follows:
No. Location
Use of
property
Approximate
gross floor
area (square
metres) Tenure Monthly rent
1. No. 43 Tuas View
Circuit, Singapore
637360
(note)
(the ‘‘Tuas
Property ’’)
Production
facilities
11,412 Leased by Metasurface
Technologies for a
term of approximately
23 years expiring on 30
January 2038.
S$122,835.69 exclusive
of GST (being S$1.00
per square foot of the
gross floor area of the
Tuas Property which is
subject to regular
rental adjustment)
2. No. 16, Jalan
Laman Setia 2/8,
Taman Laman
Setia, Setia Eco
Village, 81550
Gelang Patah,
Johor
Residential
purpose for
foreign
employees
143 Tenanted by SGP
Malaysia for a term of
two years from
1 September 2023 to
31 August 2025
(subject to a further
term of two years with
rental to be mutually
agreed)
RM1,200
Note:
As at the Latest Practicable Date, our Singapore Fac tory was located at the Tuas Property. Metasurface
Technologies also leased parts of the property t o two independent third parties and SPW under three
tenancy agreements at monthly rents of S$100,000, S$18,000 and S$17,550, respectively. To the best
knowledge of our Directors, the property was used as production facilities by each of the tenants. For
more information, see ‘‘Property Valua tion’’ in Appendix III to this prospectus.
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LICENCES, PERMITS AND APPROVALS
As advised by our Singapore Legal Advisers and Malaysia Legal Advisers, during the
Track Record Period and up to the Latest Practicable Date, (i) we had obtained all material
requisite licences, permits and approvals having regard to the business scope of our Group
for our business operations in Singapore and Malaysia, and (ii) we are not aware of any
legal impediments to renewing such licences, permits and approvals.
The following table sets out some the licences relevant to our business operations as at
the Latest Practicable Date:
Holder
Name/Category of
Licences/Approvals/
Permits/Certificates
Relevant statutory
board or government
departments Expiry date
SGP Malaysia Approval to install
machinery in a
factory
Johor Department of
Occupational
Safety And Health
No expiry date
SGP Malaysia Certificate of
Completion and
Compliance (Form F)
No. LAM/J/4921 to
certify that the
building at the Johor
Property is safe and
fit for occupation
S i o wC h i e nF u( a sa
qualified person
under the Uniform
Building By-Laws
1986)
No expiry date
SGP Malaysia Fire Certificate Fire and Rescue
Department of
Malaysia
7 March 2025
INSURANCE
During the Track Record Period and up to the Latest Practicable Date, we maintained
various insurance policies including business insurance (which covers property, business
interruption, public and production broad form liability), work injury compensation
insurance, hospital and surgical (for foreign workers) policy, industrial all risk insurance,
public liability insurance, combined general lia bility insurance and keyman insurance. Our
Directors consider that our insurance coverage is adequate having considered our current
business operation and is in line with the industry norm. For the years ended 31 December
2022 and 2023, we incurred insurance expense s of approximately S$83,000 and S$157,000,
respectively.
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LEGAL PROCEEDINGS AND REGULATORY COMPLIANCE
During the Track Record Period and up to t he Latest Practicable Date, we were not
engaged in any litigation, arbitration or cla im of material importance. In addition, our
Directors are not aware of any litigation, arbi tration or claim pending or threatened by or
against us which may have a material adverse effect on our business, financial condition or
results of operations.
As confirmed by our Singapore Legal Advisers and Malaysia Legal Advisers, during
the Track Record Period and up to the Latest Pr acticable Date, we had not been involved in
any material non-compliance matters which res ulted or may result in a material impact on
our business operation or financial condition.
INTERNAL CONTROL MEASURES AND RISK MANAGEMENT
Internal control
Our Directors are responsible for the formulation of and for overseeing the
implementation of our internal control measures and the effectiveness of our risk
management system. In accordance with the a pplicable laws and regulations, we have
established procedures for developing and maintaining our internal control system,
covering areas such as corporate governance, operations, management, finance and audit.
In order to manage our external and internal risks and in preparation for the Listing,
we engaged an independent internal control consultant to perform an assessment on the
effectiveness of our internal controls to identi fy deficiencies in our internal control system
and to provide recommendations for improving our internal control system.
Having considered the findings and recommendations of the independent internal
control consultant, we have taken actions to improve our internal control system. The
independent internal control consultant has performed follow-up assessment on our
i n t e r n a lc o n t r o ls y s t e mw i t hr e g a r dt ot h ei mprovement actions adopted by us and provided
us an updated report. As advised by the independent internal control consultant, no
material deficiencies were identified in the follow-up assessment.
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The following table sets out certain key internal control findings identified by the
independent internal control consultant with corresponding remedial actions taken:
Key Findings Recommendations
Remedial actions
t a k e nb yu s
Employee handbook and conflict
of interest
We have not established
employee handbook and code
of conduct to define and guide
the behaviour, activities and
decisions within the
organisation.
In addition, there is no
mechanism in place to govern
staffs’ declaration on
potential conflict of interests
on an annual basis, or as and
when required.
The management should
consider establishing employee
handbook which includes the
details of employment,
benefits, code of conduct,
conflict of interest and
disciplinary action.
The management should also
consider requiring relevant
staff to declare on potential
conflict of interests on an
annual basis, or as and when
required.
Employee Handbook including
code of conduct, benefits,
remuneration, attendance,
probation termination and
confidentiality has been
established to raise staff
awareness on the human
resources matters. Employee
Handbook has been adopted
with the approval of Director
and distributed to all staff.
T h e ya r er e q u i r e dt os i g no n
the Acknowledgement of
R e c e i p to fE m p l o y e e
Handbook for confirmation.
Mechanism for the declaration
of conflict of interest has
been established and included
in the Employee Handbook.
The managerial staff is
r e q u i r e dt of i l e da
Declaration Form to declare
for any potential conflict of
interest identified.
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Key Findings Recommendations
Remedial actions
t a k e nb yu s
Whistle blowing policies and
procedures
Whistle-blowing policies and
procedures are established for
reporting on grievances,
misconduct or violations.
However, formal confidential
email or telephone hotlines
a r en o ti np l a c ef o rt h e
enforcement of the
whistle-blowing policy.
Management should consider
establishing formal
confidential email or
telephone hotli nes to protect
the identification of
whistle-blowers and effective
enforcement of the
whistle-blowing policy.
The whistle-blowing policy has
been updated and approved
by the Director. It specifies
the reporting and
investigation procedure of
misconduct, malpractice and
irregularity. The
whistle-blower could be able
to raise concern by email. The
Audit Committee shall receive
information on each report of
concerns and follow up with
actions taken.
Authorisation matrix for
approval and payment
execution
All the payments of the Group
are approved by either the
Director or Managing
Director. There is no formal
delegation of authority that
sets out the approval limits
for endorsing different types
of activities.
Besides, either the Director or
Managing Director is the
authorised signatory of
cheque payment of the
Group. Dual control is not
established in this aspect.
The management should
consider setting delegation of
authorities, formalising the
approving limits and
respective authority for
endorsing differe nt activities.
Besides, the management should
consider establishing dual
control for cheque payment.
Authorisation from two
personnels is required to
execute a payment.
Delegations of Authority Policy
has been established to set out
the approval limits for
endorsing different types of
activities. The relevant policy
has been approved by the
Director.
Besides, dual control has been
established for cheque
payments. Signatures from
t w od i r e c t o r sa r er e q u i r e dt o
execute a payment.
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Key Findings Recommendations
Remedial actions
t a k e nb yu s
Vendor management
When there is a need for a new
vendor, the Finance
Department is responsible to
perform background checks to
ensure the quality of potential
vendors meets the Group’s
standard. However, there is
no documentation to record
the above acceptance
procedures of new vendors
and the results of background
check is not retained either as
justification.
Moreover, the evaluation of
vendors’ performance is
performed on an ongoing
basis through discussion
between the relevant user
department, purchase/
production department and
management. However, it is
noted that the results of
evaluation were not
documented.
The management should
consider retaining the result
of background check. The
result should be passed to
appropriate personnel for
review and the approval
record of the acceptance of
new vendors should be
maintained.
Moreover, the management
should consider retaining
evaluation result of vendor in
writing. Approval of the
result should be documented
in order to ascertain the
quality of vendor meets the
Group’s standard.
Procurement, Accounts Payable
and Payment Policy has been
established and approved by
the Director. When selecting
new vendors, the purchase
department should perform
evaluation based on the
reputation, qualifications,
quotations or other related
materials provided by the
vendors. The results should be
recorded by filling in the
vendor evaluation form,
which should be reviewed and
s i g n e db yaD i r e c t o ra s
evidence. Onsite inspection
should be performed if
necessary. The information of
the selected vendor will be
recorded in the accounts
system and on the Approved
Vendor List. The list should
be maintained by the purchase
department together with the
reference documents, such as
contracts and quotations.
The evaluation of existing
vendors should also be
p e r f o r m e dy e a r l yb yt h e
purchase department based on
the previous performance as
well as the updated
qualifications of the vendors.
The results should be
recorded on the existing
vendor evaluation form,
which should be approved by
a Director. The vendors list
and the accounts system
should also be updated based
on the evaluation results.
BUSINESS
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In view of the nature and reasons for the deficiencies identified by our independent
internal control consultant, the actions taken and the follow-up assessment on the enhanced
internal control measures conducted by the independent internal control consultant, our
Directors are of the view that our enhanced in ternal control measures are adequate and
effective having regard to our obligations and the obligations of our Directors under the
GEM Listing Rules and other relevant legal and regulatory requirements.
We have implemented various risk manage ment policies and measures to identify,
assess and manage risks arising from our operati ons. Details on risk categories identified by
our management, control strategies and dele gation of responsibilitie s for managing risks
have been codified in our policies. We are exposed to various risks, such as credit risk,
liquidity risk, interest rate risk, currency risk , operational risk, strategic risk and legal and
compliance risk in the course of our business operations. For more information on the
major risks identified by our management, see ‘‘Risk Factors — Risks relating to our
business and the industry in which we operate’’. Furthermore, we recognise the importance
of good corporate governance in management and internal control procedures, and have
adopted the following measures to manage potential conflicts of interest and to safeguard
the interests of our Shareholders:
. the establishment of an audit committee r esponsible for overseeing our financial
records, internal control procedures a n dr i s km a n a g e m e n ts y s t e m s .F o rm o r e
information on the qualifications and e xperience of these committee members as
well as a detailed description of the res ponsibility of our au dit committee, see
‘‘Directors and Senior Management — Board Committees — Audit Committee’’;
. the establishment of an internal audit policy which specifies the scope of work,
authority and responsibility of internal a udit function. Our internal audit function
may be outsourced to independent professional party to evaluate and assess our
risk management and internal management system, if needed;
. we will continue to monitor our complianc e with the relevant laws and regulations
and our senior management team will work closely with our employees to
implement actions required to ensure our compliance with relevant laws and
regulations; and
. the engagement of compliance adviser and external legal advisers to advise us on
compliance with the GEM Listing Rules and to ensure our compliance with
relevant regulatory requirements an d applicable laws, where necessary.
Corporate governance
Our management is responsible for overseeing our risk management function and
conducting annual assessment of our risk management measures. In addition, our Board is
responsible for making decisions in respect of our policies and supervising the management
in the execution of our operations.
BUSINESS
–2 4 7–


--- page 259 ---
We have established our audit committee comprising three independent non-executive
Directors to review and monitor the effectiveness of our financial controls, internal control
and risk management systems. We have also stre ngthened our auditing system to ensure the
appropriate functioning of the risk management and operation oversight systems.
BUSINESS ACTIVITIES WITH SUPPLIER IN RELATION TO THE RELEVANT
REGION
During the Track Record Period, we indirectly procured aluminium products from the
Relevant Region through one of our suppliers in Singapore, who sourced from a sanctioned
entity located in the Relevant Region. As the sanctioned entity is a Russia-based company
designated on the Entity List maintained by the BIS, provision of items subject to the EAR
to this sanctioned entity is prohibited pursuant to the sanctions designation. Our
transactions involving the Relevant Region w ere limited to the aforementioned indirect
procurements of Russian-origin aluminium products that were denominated in SGD and
took place in Singapore. Since 1 January 2023, the supplier involved in the aforementioned
indirect procurements has ceased to supply any Russian-origin aluminium products to us.
Our cost of sales attributable to such indirect procurements from the Relevant Region were
approximately S$0.3 million, nil and nil for the years ended 31 December 2022 and 2023 and
up to the Latest Practicable Date, respectively, representing approximately 1.2%, nil and nil
of our Group’s total cost of sales for the years ended 31 December 2022 and 2023 and up to
the Latest Practicable Date, respectively, an d approximately 8.1%, nil and nil of the total
aluminium products the Group procured for the years ended 31 December 2022 and 2023
and up to the Latest Practicable Date, respectively. The amounts of open orders and
backlogs requiring aluminium products (regar dless of the origins) as at 30 April 2024 was
approximately S$10.7 million. Aluminium blo cks and stainless steel constitute our major
raw materials. On 12 April 2024, the U.S. and the UK issued trade sanctions and export
controls restrictions to (among other metals) aluminium of Russian Federation origin. As
advised by our International Sanctions Legal A dvisers, however, such restrictions are not
applicable to relevant metals produced prior to 13 April 2024, including aluminium
products of Russian Federation origin indirectly procured by us prior to 1 January 2023.
Based on the advice of our International Sanctions Legal Advisers, we do not believe that
there are other international trade restrictions and/or export controls that would restrict
our Group’s access to the requisite raw materials during the Track Record Period and up to
the Latest Practicable Date. As advised by our International Sanctions Legal Advisers,
during the Track Record Period, our indirect procurement of aluminium products from the
Relevant Region via our non-sanctioned supplier in Singapore, who procured from a
Russia-based sanctioned entity designated on t he Entity List maintained by the BIS, did not
represent a violation of the limited restrict ions on such entity. Therefore, our indirect
procurement of aluminium products from the sanctioned entity did not implicate any
sanctions laws and regulations that could result in sanctions risk to the Group. Based on the
aforementioned advice of our International Sanctions Legal Advisers, review of the other
due diligence documents and our Directors’ confirmation, the Sole Sponsor concurs with
the views of our International Sanctions Legal Advisers and our Directors.
BUSINESS
–2 4 8–


--- page 260 ---
In order to control and monitor the sanctions risk exposure to our Group, the
following internal control and risk man agement measures have been implemented:
. The Finance Manager of our Group should regularly review the relevant sanctions
regulations and establish a watch-list of s anctioned countries and individuals or
entities. The list should then be distributed to all employees within our Group to
raise awareness among all business units to prevent violation of the relevant
sanctions in relation to any Primary Sanction Activity and Secondary
Sanctionable Activity for the purpose of the Guide for New Listing Applicants
in the future;
. If any potential business partner is located or has nationality identified from one
of the sanctioned countries, the relev ant staff must report to the head of the
business unit and subsequently notify the Chief Financial Officer and the Board of
Directors;
. If any potential sanction risk or suspicious transaction is identified, our Group
may seek advice from our external international legal counsel with necessary
expertise and experience in international sanctions matters; and
. Our Group will arrange external international legal counsel to provide training
programmes to our Directors, senior management and other relevant personnel
from time to time, and to provide advice and assistance in evaluating the potential
sanctions risks in our daily operations, if necessary.
U.S.
Primary sanctions risk
As advised by our International Sanctions Legal Advisers, U.S. primary sanctions are
applicable to activities involving a U.S. nexu s such as funds transfers in U.S. currency that
clear through the U.S. financial system or are processed by U.S. payment processors.
During the Track Record Period, we indirectly procured aluminium products from the
Relevant Region via our non-sanctioned supplier in Singapore, who procured from a
R u s s i a - b a s e dS a n c t i o n e dP e r s o nd e s i g n a t e do nt h eE n t i t yL i s tm a i n t a i n e db yt h eB I S .
Entities designated on the Entity List maintained by the BIS are restricted from receiving
items subject to the EAR without a licence from BIS. The EAR applies to (i) exports of
commodities, software and technology from th e United States to foreign countries and to
re-export from one foreign country to another, and (ii) shipments from one foreign country
to another of foreign-made products that incorporate more than de minimis amount
(varying from 25% to less than 10%) of controlled U.S. origin parts, components or
materials, or the foreign direct product with certain controlled U.S. technology.
BUSINESS
–2 4 9–


--- page 261 ---
As advised by our International Sanctions Legal Advisers, considering that our
activities indirectly involving the Sancti oned Person designated on the Entity List were
limited to procurement, as such, no BIS licence under the EAR would have been required
for the purpose of the indirect procurement and our business dealings with the Relevant
Region do not appear to violate or implicate any breaches of applicable U.S. sanctions laws
or regulations.
Secondary sanctions risk
The U.S. has also enacted secondary sanct ions targeting non-U.S. persons who are
engaged in dealings with certain SDNs or with certain types of industries in Iran, Syria and
Russia even if no SDNs are involved, as well as those who are dealing in ‘‘confiscated’’
property in Cuba.
On 24 February 2023, OFAC issued a sectoral determination pursuant to EO 14024 to
authorise the imposition of economic sanctions to any person determined to operate or have
operated in the metals and mining sector of the Russian Federation economy (the ‘‘ Sectoral
Determination ’’). Pursuant to FAQ 1115 issued by the OFAC, metal and mining sector of
Russia includes ‘‘any act, process, or industry of extracting, at the surface or underground,
ores, coal, precious stones, or any other minerals or geological materials in the Russian
Federation, or any act of procuring, processing , manufacturing, or refining such geological
materials, or transporting them to, fro m, or within the Russian Federation’’.
On 8 February 2023, we informed our supp lier in Singapore to cease to supply any
Russian materials from the Sanctioned Person to us via written request. On 9 February
2023, we received written response from the supplier in Singapore that it will not supply any
Russian materials from the Sanctioned Person to us from the date thereof onwards. As
advised by our International Sanctions Legal Advisers, our indirect procurements from the
Relevant Region through our supplier in Singapore were prior to the date of the Sectoral
Determination and the Sectorial Determination has no retrospective effect. On the basis
that we have informed our supplier in Singapore to cease to supply any aluminium products
or any other materials from the Sanctioned Person in the Relevant Region, our dealings
during the Track Record Period did not involve any activities or persons that would appear
to give rise to U.S. secondary sanctions risk.
UN, EU, UK, United Kingdom overseas territories and Australia
As further advised by our International Sanctions Legal Advisers, our business
dealings in relation to the Relevant Region do not appear to implicate restrictive measures
adopted by UN, EU, UK, the United Kingdom overseas territories and Australia. For a
summary of the sanctions regimes imposed by th ese countries, see ‘‘Regulatory Overview —
Sanctions Laws and Regulations’’.
BUSINESS
–2 5 0–


--- page 262 ---
Summary
Based on our best understanding and as advi sed by our International Sanctions Legal
Advisers, we believe that we are not subject to sanctions risk that could have a material
adverse effect due to our historical indirect transactions involving the Relevant Region
during the Track Record Period. Please also see ‘‘Risk Factors — We could be adversely
affected as a result of any sales or purchase we make to or from certain countries that are,
or become subject to, sanctions administered by the United States, EU, UK, UN, Australia
and other relevant sanctions authorities.’’
While we have open orders and backlogs that require aluminium products, our
Directors are of the view that the cessation of indirect procurement from the Sanctioned
Person has no material impact on the Group’s business operations and financial
performance since our supplier involved in such indirect procurements has substituted
our orders and backlog orders with aluminium products from other markets with the same
specifications requested by our customers at comparable cost, including Europe, United
States and South Africa. Our Group could also procure aluminium products from other
suppliers which are non Russian-origin to fulfil the production needs from our backlog
orders.
Based on the above, the Sole Sponsor is not aware of any material finding which would
cause it to disagree with the views expressed by the Directors.
BUSINESS
–2 5 1–


--- page 263 ---
OVERVIEW
Upon completion of the Capitalisation Issu e and the Share Offer and without taking
into account any Shares which may be issued and allotted upon exercise of any options
which may be granted under the Post-IPO Share Option Scheme, (i) SGP BVI, which is
directly wholly-owned by Dato’ Sri Chua (the spouse of Mrs. Chua), will be interested in
approximately 39.10% of the issued share capital of the Company, and (ii) Baccini, which is
directly wholly-owned by Mrs. Chua (the spouse of Dato’ Sri Chua), will be interested in
approximately 16.50% of the issued share capi tal of the Company. As such, Dato’ Sri Chua
and Mrs. Chua, who are close associates under the GEM Listing Rules and jointly control
our Group, will be together interested in approximately 55.60% of the issued share capital
of the Company in aggregate. Accordingly, each of SGP BVI, Dato’ Sri Chua, Baccini and
Mrs. Chua will be regarded as our Controlling S hareholders immediately after the Listing.
BACKGROUND OF OUR CONTROLLING SHAREHOLDERS
Our Group was co-founded by Dato’ Sri Chua and his brother-in-law in January 2000
when the first corporate entity of our Group, Metasurface Technologies, was incorporated.
Dato’ Sri Chua’s brother-in-law ceased to be a shareholder by 2003. Since incorporation,
Dato’ Sri Chua and Mrs. Chua have together worked closely to expand our Group’s
business. Since 2003 when Mrs. Chua became a Shareholder of Metasurface Technologies,
they had been together exercising control over our Group. Their overall management
influence and controlling int erests over our Group are evid enced by the acting in concert
arrangements between them in respect of the affairs of our Group, the details of which are
set out in ‘‘— Controlling Shareholders and Mr . A Chua acting in concert’’ below. Upon the
Listing, Dato’ Sri Chua and Mrs. Chua will continue to exercise their ultimate control over
our Group within the boundaries of the GEM Listing Rules, Takeovers Code and all other
applicable laws and regulations in Hong Kong and elsewhere. For details of the biographies
of Dato’ Sri Chua and Mrs. Chua, please see the section headed ‘‘Directors and Senior
Management — Board of Directors — Executive Directors’’ in this prospectus.
Each of SGP BVI and Baccini are investment holding entities incorporated in the BVI
pursuant to the Reorganisation. Their only business purposes are for holding the interests
in our Group.
Controlling Shareholders and Mr. A Chua acting in concert
Since January 2003, when Dato’ Sri Chua and Mrs. Chua were both Shareholders of
Metasurface Technologies, Dato’ Sri Chua and Mrs. Chua have, in exercising and
implementing the management and operations of our Group, been acting in concert with
each other. These arrangements are long-standing understanding between Dato’ Sri Chua
and Mrs. Chua. The acting in concert arrangemen ts regarding shareholding interests in our
Group also include Mr. A Chua, a nephew of Dato’ Sri Chua and Mrs. Chua, who joined
our Group in July 2021. He has been serving as the operations director of Metaoptics
Technologies (an associate of our Group) since April 2023 and, between July 2021 and
March 2023, served as an employee of Metasu rface Technologies responsible for the
preparation works for the Listing. As a pri vate family arrangement and consensus, Mr. A
Chua has been a shareholder of Metaoptics Technologies since September 2021, and as at
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 5 2–


--- page 264 ---
the Latest Practicable Date, has shareholding interests in Metaoptics Technologies of
approximately 0.76%. He has agreed to consolidate the management, control and
operations regarding the Chua family’s shareholding interests in our Group and any
associate. As Mr. A Chua joined the Group at a relatively young age and had little prior
experience in corporate governance, Dato’ Sri Chua, Mrs. Chua and Mr. A Chua agreed
that, as a family consensus, Mr. A Chua shall act in concert with Dato’ Sri Chua and Mrs.
Chua, especially for voting arrangements and decisions made in respect of any subsidiaries
or associates of the Group in which Mr. A Chua is a shareholder. As at the Latest
Practicable Date, as Mr. A Chua is a shareholder of Metaoptics Technologies only, his
acting in concert arrangement applies to Metaoptics Technologies only.
On 29 June 2023, Dato’ Sri Chua, Mrs. Chua and Mr. A Chua executed the Deed of
AIC Confirmation, a confirmatory deed pursuant to which they have confirmed their acting
in concert arrangements in the past as well as t heir intention to continue to act in the above
manner upon Listing to consolidate their control over our Group until and unless the Deed
of AIC Confirmation is terminated in writing. The Deed of AIC Confirmation covers our
Company, all of our subsidiaries and all other e ntities through which they exercise control
over our Group, and contains the following salient terms, among others:
(1) they have agreed to, and shall continue until the termination of the Deed of AIC
Confirmation to, consult each other and reach an unanimous consensus among
themselves on such matters being the subject matters of any shareholders’
resolution, prior to putting forward such resolution to be passed at any
shareholders’ meeting of our Company, our subsidiaries and all other entities
they together control or individually co ntrol and through which they exercise
control over our Group, and have historically voted on such resolutions in the
same way;
(2) they have centralised, and shall conti nue until the termination of the Deed of AIC
Confirmation to centralise, the ultimate c ontrol and right to make final decisions
with respect to their interests in the businesses and projects of our Company, our
subsidiaries and all other entities the y together or individually control and
through which they exercise control over our Group; and
(3) they have operated, and shall continue until the termination of the Deed of AIC
Confirmation to operate, our Company, our subsidiaries and all other entities
they together or individually control and through which they exercise control over
our Group as a single business venture.
By virtue of these acting in concert arrangements, Dato’ Sri Chua, Mrs. Chua and Mr.
A Chua are persons acting in concert with each other under the Takeovers Code. They are
also associates of each other within the meanings of the GEM Listing Rules.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 265 ---
INDEPENDENCE FROM OUR CON TROLLING SHAREHOLDERS
Our Directors are satisfied that our Group can function, operate and carry on our
business independently from and does not place undue reliance on our Controlling
Shareholders based on the following reasons:
No competition and clear delineation of business
Each of our Controlling Shareholders, our D irectors, includi ng our independent
non-executive Directors, and our substantial Shareholders has confirmed that as at the
Latest Practicable Date, he/she/it does not have and none of his/her/its respective close
associates has any business or interest apart from our business which competes or may
compete with our business and would require disclosure under Rule 11.04 of the GEM
Listing Rules.
Meson Technology
Meson Technology was, for a period of time prior to January 2022, a company
wholly-owned by Dato’ Sri Chua, an executive Director, Chairman of our Board and a
Controlling Shareholder. Meson Technolo gy served as an outsourced provider of
labour services in relation to precision engi neering products and services to customers
in the oil and gas industry. For the years ended 31 December 2022 and 2023, we
generated a total income of approximat ely S$0.6 million and S$1.2 million,
respectively, from our customers in the oil and gas industry, of which approximately
S$0.3 million and S$10,000 was revenue genera ted from precision engineering services
and approximately S$0.3 million and S$ 1.2 million was other income derived from
ancillary services rendered, such as tubular thread inspection, tubu lar body inspection,
tubular inventory management and storage. Initially, Dato’ Sri Chua received the
entire equity interests in Meson Technology from his father, Mr. Chua Hong Kim, in
October 2020 upon his retirement, with the original intention that it will become a
specialised service provider of outsourced labour in the oil and gas industry.
In the precision engineering industry, the labour services provided to customers in
the oil and gas industry require specific industry knowledge and technical experiences.
During the Track Record Period, aside from revenue generated from precision
engineering services, we also generated oth er income from certain ancillary technical
services, as supported by the labour services provided by Meson Technology, we
offered at the request by our oil and gas customers, such as (i) pipe care services, (ii)
maintenance and management of inventor y and pipe yard, and (iii) deployment of
skilled labour and personnel to ensure efficient operation of pipe yard. In addition,
Meson Technology’s personnel and labour are deployed to our Group’s premises to (i)
perform pre-cleaning of oil pipes for pre-production for our customer orders in the oil
and gas industry, and (ii) provide on-site technical training assistance to our Group’s
staff members in relation to business in the oil and gas industry. The services provided
by Meson Technology amounted to approximately S$0.3 million and S$0.2 million,
respectively, for the years ended 31 Dece mber and 2022 and 2023, which were charged
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 266 ---
to our Group on a cost-plus administrative charge basis. The credit terms offered by
Meson Technology was 30 days, which was in line with our other independent service
providers.
During the Track Record Pe riod, as we expanded our business in the oil and gas
industry both in terms of business volume and customer base, our Directors decided to
engage personnel with specialised technic al skills at the recommendation of a key oil
and gas customer of our Group, which is an in dustrial and electronic manufacturing
conglomerate in Japan. This, coupled with the intention of Dato’ Sri Chua to
streamline the corporate structure for the purpose of the Listing, led to the transfer by
Dato’ Sri Chua of the entire equity interests of Meson Technology to Mr. Seng Chong
How (‘‘Mr. Seng ’’), whom we acquainted through the introduction by this oil and gas
customer. At the relevant time, it was, as our Directors understand, Mr. Seng’s
intention to develop and grow Meson Technology and to expand its customer base in
the oil and gas industry while continuing to serve our Group with the technical
expertise. Mr. Seng has long-standing exp eriences in the oil and gas industry of more
than 35 years with technical expertise acquired through his previous work, for instance
as an external consultant, to the Japanese oil and gas customer mentioned above. His
other relevant experiences and positions within the industry include (i) a business
adviser to the oil and gas pipe division of a company based in the PRC principally
engaged in import and export of chemicals and raw metals, (ii) an oil and gas business
adviser at the infrastructure and metal division of the trading arm of a Japanese
automotive manufacturer, (iii) the managing director of an oil and gas trading
company based in Singapore, and (iv) a sales executive at the Singapore branch of a
company headquartered in Japan which was t hen principally engaged in steel, metals,
maritime machinery and automotive businesses.
The consideration for Dato’ Sri Chua’s transfer of the entire equity interests in
Meson Technology was nominal at S$1 because Meson Technology had been
loss-making for the year ended 31 Decembe r 2021 (the financial year preceding the
transfer). In addition, Dato’ Sri Chua accep ted the nominal consideration taking also
into account the potential business benefits Mr. Seng, with his technical expertise,
could bring to our Group by providing continual business support in the oil and gas
industry via Meson Technology.
In March 2024, on the account of the busi ness challenges encountered by Mr.
Seng in operating Meson Technology and the difficulty in soliciting other customers in
the oil and gas industry, Mr. Seng accepted the position as a technical service
consultant of our Group. With Mr. Seng appointed as our employee, we began to
consolidate in-house the oil and gas labour functions. As at the Latest Practicable
Date, all business transactions with Meson Technology had ceased. There is no
material adverse impact on our oil and gas business as Mr. Seng continued to
contribute his technical experience to our Group as an employee. As a technical service
consultant, Mr. Seng’s work responsibilities primarily focus on our Group’s precision
engineering services in the oil and gas indust ry which include (i) liaising with our oil
and gas customers on engineering matters, (ii) reviewing and preparing the process
matrix, (iii) training, guiding and supervising our labour to carry out the relevant
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 267 ---
operations, (iv) quality inspection on completed jobs, and (v) preparing quality reports
for shipment release to customers. As at the Latest Practicable Date, Mr. Seng’s
remuneration amounted to S$8,000 per month, determined based on his years of
experience in the oil and gas industry, his expected scope of work and the prevailing
market rate of similar roles requiring comparable experience.
During the Track Record Period, our Group was Meson Technology’s sole
customer. For the years ended 31 December 2022 and 2023, the revenue contribution
of our Group to Meson Technology was app roximately S$0.3 million and S$0.2
million, respectively. As far as our Directors are concerned, all of Meson Technology’s
costs and expenses relevant to the provision of services to our Group during the Track
Record Period had been properly charged to us in the form of fees for the relevant
services. As at the Latest Practicable Date, to the best knowledge of our Directors,
Meson Technology had ceased operations and we do not expect that there will be any
future business transactions between Meson Technology and us.
Mr. Seng is an independent third party of our Group. Other than his employment
with our Group and previous business dealings (as a shareholder and director of
Meson Technology), with us, Mr. Seng has no other past or present relationship
(including business, family, employment, trust, financing or otherwise) with Meson
Technology, our Company, our subsidiaries, their respective shareholders, directors,
senior management or any of their respective associates.
Management independence
Our Company has a Board and members of senior management that function
independently from our Controlling Sharehold ers and their respective associates. Our
Board comprises three executive Directors and three independent non-executive
Directors. Our senior management consists of four members. Notwithstanding that
Dato’ Sri Chua and Mrs. Chua, our Controllin g Shareholders, are each an executive
Director, our Directors believe that our Directors and members of our senior
management are able to manage our busin ess independently from our Controlling
Shareholders on the basis of the following reasons:
(i) with three independent non-executive Directors out of a total of six Directors
on our Board, which meets the minimum requirement under the GEM Listing
Rules, there will be a sufficiently robust and independent voice within our
Board to counter-balance any situation involving a conflict of interest and to
protect the interests of our independent Shareholders;
(ii) chance of actual or potential conflict has been minimised by virtue of the
Deed of Non-competition, details of which are set out in ‘‘— Deed of
Non-competition’’ in this section below;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 268 ---
(iii) each of our Directors is aware of his/ her fiduciary duties as a Director of our
Company, which require, among other things, that he/she acts for the benefit
and in the best interests of our Shareholders as a whole and does not allow
any conflict between his/her duties as a Director and his/her personal
interests to affect the performance of his/her duties as a Director;
(iv) in the event that there is a potential conflict of interests arising out of any
transaction to be considered by the Board, the interested Director(s) shall
abstain from voting at the relevant board meetings of our Company in
respect of such transaction and shall not be counted in the quorum; and
(v) a number of corporate governance measures are in place to avoid any
potential conflict of interests be tween our Company an d our Controlling
Shareholders, and to safeguard the interests of our independent
Shareholders. See ‘‘— Corporate Governance Measures’’ in this section
below.
Operational independence
Our Company makes business decisions independently from our Controlling
Shareholders. On the basis of the following reasons, our Directors consider that our
Company will continue to be operationa lly independent from our Controlling
Shareholders and other businesses or com panies controlled by our Controlling
Shareholders:
(i) our Group owns all trademarks material to our business operations and
therefore is not reliant on any tra demarks owned by our Controlling
Shareholders. Our Group is not reliant on other businesses or companies
controlled by our Controlling Shareholders;
(ii) our Group is the holder of all relevant licences material to the operation of
our business, or has been granted the right to such relevant licences by parties
independent from our Controlling Share holders, and has sufficient capital,
equipment and employees to operate our business independently from our
Controlling Shareholders;
(iii) our Group has our own administrative and corporate governance
infrastructure (including its own accounting, corporate secretarial and
human resources departments);
(iv) our Group has established a set of int ernal control procedures to facilitate
the effective operation of our business;
(v) we have our own management team to handle our day-to-day operations;
(vi) all of the properties used as our production facilities are owned by us or
leased from independent third parties by our Group; and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 269 ---
(vii) we do not rely on our Controlling Sha reholders for access to customers and
suppliers.
Based on the abovementioned arrangemen ts, our Directors are of the view that
our Group will be able to operate independ ently from our Controlling Shareholders.
Related party transactions between our Group and entities controlled or previously
controlled by our Controlling Shareholders
During the Track Record Period, no related party transactions were entered into
between our Group and our Controlling Sha reholders or entities controlled or
previously controlled by them, except for o ur related party transactions with Meson
Technology in the amount of approximately S$21,000 and nil for the years ended 31
December 2022 and 2023, respectively. See note 29 to the Accountant’s Report
included in Appendix I to this prospectus. Save as disclosed in note 29 to the
Accountant’s Report and ‘‘Continuing Connected Transactions’’ in this prospectus,
our Directors have confirmed that no other related party transaction or connected
transaction with entities controlled by o ur Controlling Shareholders is expected to
continue upon Listing.
Financial independence
We have our own financial management an d accounting systems and the ability to
operate independently from our Controlling Shareholders from a financial perspective.
We are capable of making financial decisio ns according to our own business needs. Our
Directors also believe that we have sufficie nt capital, internal resources and credit
profile in the case of future external financing needs to support our daily operations
independently from our Controlling Shareholde rs and their respective close associates.
Our Directors are of the view that our Gro up will be financially independent of our
Controlling Shareholders and their respe ctive associates upon the Listing for the
following reasons:
(i) Strong financial positions : We have been financially sound throughout the
Track Record Period. See the section headed ‘‘Financial Information’’ in this
prospectus for details.
(ii) Strong credit position : Besides having a strong financial position and cash
generating operation as mentioned above, based on discussions with relevant
lending banks, our Directors confirm that our Group also has a strong credit
position on a stand-alone basis. We expect to continue to generate stable cash
from our operating activities considering our expected increase in our sales to
customers. All the non-trade amoun ts due to and from our Controlling
Shareholders and companies controlle d by our Controlling Shareholders will
be fully settled upon the Listing. All guarantees, indemnities and other
securities provided for our benefit by our Controlling Shareholders will be
released upon the Listing. There will be no financial assistance, security
and/or guarantee provided by our Cont rolling Shareholders in favour of our
G r o u pu p o nt h eL i s t i n g .
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 5 8–


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DEED OF NON-COMPETITION
For the purpose of the Listing, the Contr olling Shareholders have entered into the
Deed of Non-competition, pursuant to which each of the Controlling Shareholders has
unconditionally and irrevocably undertaken to our Company (for itself and on behalf of
each other member of our Group) that he/she/it would not, and would procure that
his/her/its close associates (except any members of our Group) would not, directly or
indirectly, during the restricted period set out below, either on his/her/its own account or in
conjunction with or on behalf of any person, firm or company, among other things, carry
on, participate or be interested or engaged in or acquire or hold (in each case whether as a
shareholder, director, partner, agent, employee or otherwise, and whether for profit, reward
or otherwise) any activity or business which competes or is likely to compete, directly or
indirectly, with the business carried on or c ontemplated to be carried on by any member of
our Group from time to time (the ‘‘ Restricted Business ’’).
Each of the Controlling Shareholders has also undertaken to our Company the
following:
(a) to provide all information requested by our Company which is necessary for the
annual review by our independent non-executive Directors and the enforcement of
the Deed of Non-competition or a negative confirmation, as appropriate;
(b) to procure our Company to disclose decisions on matters reviewed by the
independent non-executive Directors relating to the compliance and enforcement
of the Deed of Non-competition either through the annual report, or by way of
announcements to the public; and
(c) to make an annual declaration on compliance with his/her/its undertakings under
the Deed of Non-competition in the annual reports of our Company as the
independent non-executive Directors think fit and/or as required under the GEM
Listing Rules.
The Deed of Non-competition does not apply to:
(a) any interests in the shares of any member of our Group; and
(b) interests in the shares of a company (other than our Group) which shares are
listed on the Stock Exchange or a recognised stock exchange provided that:
(i) any Restricted Business conducted or engaged in by such company (and
assets relating thereto) accounts for less than 10% of that company’s
consolidated turnover or consolidat ed assets, as shown in that company’s
latest audited accounts; or
(ii) the total number of the shares held by t he relevant Controlling Shareholders
and/or his/her/its close associates in aggregate does not exceed 5% of the
issued shares of that class of the comp any in question and such Controlling
Shareholders and his/her/its close associates, whether acting singly or jointly,
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 5 9–


--- page 271 ---
are not entitled to appoint a majority of the directors of that company and at
any time there should exist at least an other shareholder of that company
(together, where appropriate, with its close associates) whose shareholdings
in that company should be more than the total number of shares held by the
Controlling Shareholders and/or his/her/its close associates in aggregate.
The ‘‘restricted period’’ stated in the Deed of Non-competition refers to the period
during which (i) our Shares remain listed on the Stock Exchange; (ii) the relevant
Controlling Shareholders and/or his/her/its c lose associate hold an equity interest in our
Company; and (iii) the relevant Controlling Share holders and/or his/her/its close associates
jointly or severally are entitled to exercise or control the exercise of not less than 30% (or
such other amount as may from time to time be s pecified in the Takeovers Code as the level
for triggering a mandatory general offer) in aggregate of the voting power at general
meetings of our Company. In other words, if our Company were no longer listed on the
Stock Exchange or condition (ii) or (iii) does not hold true in respect of any Controlling
Shareholder, the Deed of Non-competition would not apply in respect of such Shareholder.
We believe the 30% threshold is justifiable as it is equivalent to the thresholds applied under
the GEM Listing Rules and the Takeovers Code for the concept of ‘‘control’’.
Each of the Controlling Shareholders has join tly and severally, unconditionally and
irrevocably agreed, undertaken and covenanted to procure that, during the restricted
period, any business investment or other commercial opportunity which directly or
indirectly competes or may lead to competi tion with the Restricted Business (the ‘‘ New
Opportunity ’’) given to, identified by or offered to him/her/it and/or any of his/her/its close
associates (other than any members of our Company), is first referred to our Group in the
following manner:
(a) the relevant Controlling Shareholder is req uired to refer, or to procure the referral
of, the New Opportunity to our Company, and shall give written notice (the
‘‘Offer Notice ’’) to our Company of any New Opportunity containing all
information reasonably necessary for o ur Company to consider whether (i) such
New Opportunity would constitute compet ition with our core business, and (ii) it
is in the interests of our Company and our Shareholders as a whole to pursue such
New Opportunity, including but not limited to the nature of the New Opportunity
and the details of the investment or acquisition costs; and
(b) upon receiving the Offer Notice, our Company shall seek opinions and decisions
from a board committee (comprising all the independent non-executive Directors
who do not have a material interest in the New Opportunity) (the ‘‘ Independent
Board ’’) as to whether, among others, it is in the interest of the Company and its
shareholders as a whole to pursue the New Opportunity.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 6 0–


--- page 272 ---
Our Independent Board will also review, on an annual basis, the compliance with the
Deed of Non-competition by our Controlling S hareholders, the results of which will be
disclosed in our annual/interim/quart erly reports (whenever applicable).
CORPORATE GOVERNANCE MEASURES
Upon the Listing, our Company may enter into connected transactions with certain
companies outside our Group controlled by our Controlling S hareholders from time to
time. Each of our Controlling Shareholder s has undertaken to our Company under the
Deed of Non-competition that he/she/it shall not, and shall procure that his/her/its close
associates shall not own, invest in, participate in, develop, operate or engage in any business
or company which directly or indirectly comp etes, or may compete, with our business. Our
Company will further adopt the following measures to manage the conflict of interests
arising from the possible competing business of our Controlling Shareholders and to
safeguard the interests of our independent Shareholders:
(i) in preparation for the Listing, our Company has amended our Articles to comply
with the GEM Listing Rules. In particular, our Articles provides that, except for
certain exceptions permitted under the Articles, a Director shall not vote on any
board resolution approving any contract in relation to which he or his close
associates has/have a material interest, nor shall such Director be counted in the
quorum present at the meeting. Accordingly, a Director who holds directorship
and/or senior management positions in th e Controlling Shareholders or any of its
associates (other than our Company or any other member of our Group) shall not
vote on any board resolution regarding any transactions proposed to be entered
into between any member of our Group an d the Controlling Shareholders or any
of their respective associates (other than our Company or any member of our
Group), nor shall such Director be counted in the quorum present at such
meeting;
(ii) we have appointed UOB Kay Hian as our compliance adviser, which will provide
a d v i c ea n dg u i d a n c et ou sw i t hr e s p e c tt ocompliance with the applicable laws and
the GEM Listing Rules, including but not limited to various requirements relating
to Directors’ duties and internal controls;
(iii) our independent non-execu tive Directors will review, at least on an annual basis,
the compliance with the Deed of N on-competition by our Controlling
Shareholders;
(iv) each of our Controlling Shareholders has undertaken to provide all information
necessary for the annual review by our independent non-executive Directors and
the enforcement of the Deed of Non-competition;
(v) we will disclose decisions on matters reviewed by our independent non-executive
Directors relating to compliance and enforcement of the Deed of
Non-competition either through an annual report, or by way of announcement
to the public;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 6 1–


--- page 273 ---
(vi) each of our Controlling Shareholders will make an annual declaration of
compliance with the Deed of Non-competition in the annual reports of our
Company;
(vii) the management structure of our G roup includes an audit committee, a
remuneration committee, and a nomination committee, the terms of reference of
each of which will require them to be alert to prospective conflict of interests and
to formulate their proposals accordingly; and
(viii) pursuant to the Corporate Governance Code in Appendix C1 to the GEM Listing
Rules, our Directors, including our indepe ndent non-executive Directors, will be
able to seek independent professional advice from external parties in appropriate
circumstances at our costs.
We are expected to comply with the Corporate Governance Code in Appendix C1 to
the GEM Listing Rules which sets out principles of good corporate governance in relation
to, among others, our Directors, chief executive, Board composition, the appointment,
re-election and removal of Directors, thei r responsibilities and remuneration and
communication with our Shareholders. Our Company will state in our interim and
annual reports whether we have compiled with such code, and will provide details of, and
reasons for, any deviation from it in the corporate governance reports attached to our
annual reports.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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OVERVIEW
As part of our Group’s ordinary course of business, we have entered into certain
transactions with entities that, upon Listing , will become our connected persons within the
meaning given under Chapter 20 of the GEM Listing Rules. Following the Listing, these
transactions will continue and will constitute continuing connected transactions under the
GEM Listing Rules.
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
Upon Listing, the following transactions will constitute fully-exempt continuing
connected transactions under the GEM Listing Rules:
Procurement of components and accessories
Our precision component engineering serv ices require the use of certain U.S. made
components, parts and materials. Such U.S. made components, parts and materials are
usually procured for a specific product of a particular U.S. based customer and may
not be suitable for all products of the particular U.S. based customer or products
supplied to other U.S. based customers. Our Directors are of the view that, given the
relatively smaller quantity of components, p a r t sa n dm a t e r i a l sw en e e df o ro u rb u s i n e s s
operations (as compared to sizable conglomerates), it is more costly for us to directly
procure from local U.S. suppliers who gener ally impose significant minimum order
quantities on international orders. Our Dir ectors note that certain local U.S. suppliers
also tend to supply to international customers via their offshore distributors who
charge a high margin and also impose high minimum order quantities.
As Metasurface & Co (formerly known a s Q’son Corp) is based in the U.S., it
could procure parts and components directly from U.S. based manufacturers,
distributors or stockists in a more cost-effective manner by saving on piece price
and international shipping cost and by a lower minimum order quantity, as compared
to procurement of U.S. made components and parts through Singapore distributors or
stockists who generally charge a high margin and require a higher minimum order
quantity that our Directors consider excessive to our business needs. Singapore
distributors or stockists may also wait for su fficiently large accumulated orders before
they ship the parts to Singapore which results in inflexible shipment and delays in our
receipt of these parts which may affect our production schedule. To the best of our
Directors’ knowledge and based on our Group’s communications with the relevant
suppliers based in the U.S., certain supplie rs do not tend to directly ship and sell the
components, parts and materials to customers outside of the U.S. Therefore, Mr. Jee
Wee Liang (brother of Mrs. Chua and brother-in-law of Dato’ Sri Chua), who resides
in the U.S., established Metasurface & Co t o help facilitate our Group’s procurement
of components, parts and materials in the U.S. Upon receiving requests of specific
components, parts and materials from our customers, the Group would then approach
Metasurface & Co to request for fee quotes from independent local U.S. suppliers.
Upon approval from our Group on the fee quotes, Metasurface & Co would then
procure the parts from local independent U.S. suppliers directly and ship the parts to
Singapore according to the schedule indicated by us. Metasurface & Co’s pricing
CONTINUING CONNECTED TRANSACTIONS
–2 6 3–


--- page 275 ---
mechanism is based on the procurement cost of the parts plus (i) administrative and
other miscellaneous costs, and (ii) shipping costs incurred, whereas other independent
suppliers may charge for the identical components, parts and materials at higher
marked-up prices. As far as our Directors are concerned, all of Metasurface & Co’s
costs and expenses relevant to the sales of products to our Group during the Track
Record Period had been properly charged to us in the form of purchase costs for the
relevant products.
During the Track Record Period, we procured components, parts and materials,
including stainless steel screw heads, corro sion resistant ball screws, pull-handles and
helicoils (the ‘‘U.S. Procurements ’’) from U.S. based suppliers through Metasurface &
Co. Since our Group was the sole customer of Metasurface & Co during the Track
Record Period, our purchases from Metasurface & Co are identical to the revenue
contribution of our Group to Metasurface &C o ,w h i c ha m o u n t e dt oa p p r o x i m a t e l y
S$0.4 million and S$0.1 million for the years ended 31 December 2022 and 2023,
respectively.
Metasurface & Co is directly wholly-o wned by Mr. Jee Wee Liang, brother of
Mrs. Chua (an executive Director and a Controlling Shareholder). Metasurface & Co is
therefore an associate of a connected person of our Company under the GEM Listing
Rules.
We expect that the annua l amounts to be charged to us by Metasurface & Co
under the U.S. Procurements will continue to be less than HK$3,000,000 and each of
the applicable percentage ratios (as defined in the GEM Listing Rules) will continue to
be less than 5%. As such, the U.S. Procurements constitute de minimis transactions and
are fully-exempt continuing connected transactions under Rule 20.74 of the GEM
Listing Rules. Therefore, such transactions will be exempted from the reporting,
announcement, annual review and sharehold ers’ approval requirements under Chapter
20 of the GEM Listing Rules. We will ensure that the U.S. Procurements will comply
with the other applicable provis ions under the GEM Listing Rules.
Shared administrative services
During the Track Record Period, in our ordinary and usual course of business, we
shared with Metaoptics Technologies our administrative resources, including but not
limited to accounting and book keeping resou rces and supporting staff resources (the
‘‘Shared Administrative Services ’’). As Metaoptics Technologies was a subsidiary of our
Group during the Track Record Period unti l May 2023, we did not formally allocate
these resources and their corresponding exp enses to Metaoptics Technologies. During
the Track Record Period, the Shared Administrative Services paid by Metaoptics
Technologies to our Group amounted to nil and approximately S$3,000 for the years
ended 31 December 2022 and 2023, respectiv ely. During the year ended 31 December
2023, in respect of Metaoptics Technologies, our Group’s administrative and finance
personnel assisted in preparing management reports, payment vouchers and forecast as
well as liaising with external auditors and professionals. The fees of S$3,000 charged by
our Group to Metaoptics Technologies for the Shared Administrative Services was
CONTINUING CONNECTED TRANSACTIONS
–2 6 4–


--- page 276 ---
calculated based on the number of hours spent (approximately 80 hours) by our
relevant staff performing th e Shared Administrative Services multiplied by their
respective hourly rate, on a pro-rata b asis commencing from the period after
Metaoptics Technologies ceased to be a subsidiary of our Group in May 2023.
On 24 November 2023, we have formalised the Shared Administrative Services
and entered into a framework agreement (the ‘‘ Shared Administrative Services
Agreement ’’) with Metaoptics Technologies for a term commencing on 1 June 2023
until 31 December 2024 and thereafter shall be renewed in writing for subsequent
periods of three years, subject to compliance with the GEM Listing Rules. Pursuant to
the Shared Administrative Services Agreement, we shall share with Metaoptics
Technologies the Shared Administrat ive Services by charging Metaoptics
Technologies for the Shared Administrative Services on an at cost basis annually
and that the relevant costs must be identifiable and allocated to Metaoptics
Technologies based on actual expenses incurred by us. The cost basis shall be
calculated by actual time cost spent by the relevant personnel.
As at the Latest Practicable Date, Metaoptics Technologies is owned as to
approximately 30.95% by Mr. Thng, an executive Director and a substantial
Shareholder. Metaoptics Technologies is therefore an associate of a connected
person of our Company under the GEM Listing Rules.
We expect that the amounts to be charged to Metaoptics Technologies under the
Shared Administrative Services will continue to be on an at cost basis, and the costs
involved will continue to be identifi able and allocated to us and Metaoptics
Technologies on a fair and equitable basis. As such, the Shared Administrative
Services will constitute fully-exempt con tinuing connected transactions under Rule
20.96 of the GEM Listing Rules. We will en sure that the Shared Administrative
Services will comply with the other applicable provisions under the GEM Listing
Rules.
Letter of appointment
Mr. SOH Cheng Heong (‘‘ Mr. CH Soh ’’) is a brother of Mr. Soh (a director of
SGP Malaysia and a member of our senior management) and a brother-in-law of Ms.
Pang (a director of SPW, a Shareholder and the spouse of Mr. Soh), and therefore an
associate of connected persons of our Company under the GEM Listing Rules. Mr. CH
Soh has been general manager of SPW since 12 April 2021 (the ‘‘ Employment ’’). On 26
May 2023, Mr. CH Soh entered into a supplemental agreement with SPW pursuant to
which the end date of the term of Employment was amended to 11 April 2024. On 4
April 2024, the term of Employment was renewed for three years and the end date of
the term was amended to 11 April 2027.
CONTINUING CONNECTED TRANSACTIONS
–2 6 5–


--- page 277 ---
During the years ended 31 December 2022 and 2023, the aggregate remuneration
to Mr. CH Soh amounted to approximately S$91,000 and S$130,000, respectively. We
expect Mr. CH Soh will continue to be employed by our Group in the same position
upon and following the Listing. We expect that the annual remuneration payable to
Mr. CH Soh shall continue to be less than HK$3,000,000, as determined by our
Directors with reference to Mr. CH Soh’s remuneration under his letter of
appointment and the expected adjustmen ts in remuneration during the term of
Employment. Each of the applicable percentage ratios (as defined in the GEM Listing
Rules) will continue to be less than 5%. A s such, the Employment constitutes a de
minimis transaction and is a fully-exempt continuing connected transaction under Rule
20.74 of the GEM Listing Rules. Therefore, such transaction will be exempted from the
reporting, announcement, annual review and shareholders’ approval requirements
under Chapter 20 of the GEM Listing Rules . We will ensure that the Employment will
comply with the applicable provisions under the GEM Listing Rules.
CONFIRMATION FROM OUR DIRECTORS
Our Directors (including our independent non-executive Directors) are of the view that
the U.S. Procurements, the Shared Administr a t i v eS e r v i c e sa n dt h eE m p l o y m e n ta n dt h e
terms of each of them have been and will be conducted on normal commercial terms and in
the interests of our Company and our Shareholders as a whole.
CONTINUING CONNECTED TRANSACTIONS
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OVERVIEW
The following table sets out certain information of our Directors:
Name Age Position
Date of
appointment
as Director
Date of
joining our
Group
Roles and responsibilities
in our Group
Relationship with
other Directors
or senior
management
Dato’ Sri CHUA
Chwee Lee (CAI
Shuili) ( 蔡水理)
53 Chairman of our
Board,
Executive
Director and
chief executive
officer
7 December
2021
6J a n u a r y
2000
Overall management and
strategic planning of
the growth and
operations of our
Group
Spouse of Mrs.
Chua
Ms. JEE Wee Jene
(余偉娟)
53 Executive
Director
7 December
2021
6J a n u a r y
2000
Assuming overall
responsibilities in
finances,
administration,
compliance and
human resources
Spouse of Dato’
Sri Chua
Mr. THNG Chong
Kim ( 程章金)
61 Executive
Director
7 December
2021
1 July 2021 Formulating our overall
business strategies
and corporate
development
None
Mr. TAN Chek Kian
(陳志強)
52 Independent
non-executive
Director
7 June 2024 7 June 2024 Providing independent
judgement on
strategy, policy,
performance,
accountability,
internal control and
corporate governance
None
Mr. ANG Yong
Sheng, Jonathan
(HONG
Yongsheng)
(洪勇勝)
36 Independent
non-executive
Director
7 June 2024 7 June 2024 Providing independent
judgement on
strategy, policy,
performance,
accountability,
internal control and
corporate governance
None
Mr. CHAN Yang
Kang ( 田揚康)
43 Independent
non-executive
Director
7 June 2024 7 June 2024 Providing independent
judgement on
strategy, policy,
performance,
accountability,
internal control and
corporate governance
None
DIRECTORS AND SENIOR MANAGEMENT
–2 6 7–


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The following table sets out certain information of our senior management:
Name Age Position
Date of
appointment
as senior
management
Date of
joining our
Group
Roles and responsibilities
in our Group
Relationship with
other Directors
or senior
management
Dato’ Sri CHUA
Chwee Lee
(CAI Shuili)
(蔡水理)
52 Chairman of our
Board,
Executive
Director and
chief executive
officer
2 May 2023 4 January
2000
Overall management and
strategic planning of
the growth and
operations of our
Group
Spouse of Mrs.
Chua
Mr. SOH Cheng
Joo ( 蘇振裕)
51 Managing
director of
weldment
production
2 May 2023 13 April 2018 Managing development
of our Group’s
precision welding
business
None
Ms. HOU Jing
(侯婧)
38 Chief financial
officer
2 May 2023 1 September
2022
Overseeing the financial
management,
accounting and
company secretarial
affairs of our Group
None
Mr. ONG Eng
Guan ( 翁湧原)
64 Senior sales
manager
2 May 2023 17 August
2015
Managing our Group’s
customer
relationship, internal
team coordination,
and general project
management matters
None
BOARD OF DIRECTORS
Our Board currently consists of six Directors, comprising three executive Directors and
three independent non-executive Directors.
Executive Directors
Dato’ Sri CHUA Chwee Lee (CAI Shuili) ( 蔡水理)
Dato’ Sri Chua, aged 53, was appointed as a Director on 7 December 2021 and the
chief executive officer and Chairman of our Board on 2 May 2023. He was redesignated as
an executive Director on 2 May 2023. Dato’ Sri Chua founded our Group in 2000 and since
then has been spearheading our Group’s strate gic development and business expansion.
With over 30 years of invaluable experience in high precision and tolling design, he
contributes to our Group’s overall management and its growth and operations via strategic
planning.
Dato’ Sri Chua received his training in high precision manufacturing from the
Vocational and Industrial Training Board of Singapore. He was awarded the National
Trade Certificate (Grade 3) in metal machini ng with a certificate of merit for outstanding
performance in November 1989 and the National Trade Certificate (Grade 2) in tool and
die making (injection mould) (practical and theory parts) in August 1990.
DIRECTORS AND SENIOR MANAGEMENT
–2 6 8–


--- page 280 ---
Dato’ Sri Chua was honoured as a Dato’ Sri by the Sultan of Pahang, a state in
Malaysia in December 2018, and was awarded ‘‘Successful Entrepreneur (Platinum
Category)’’ by GRC Press Holdings in 2010 in its annual ‘‘Successful Entrepreneur
(Singapore Edition)’’ publication. The publication featured successful Singaporean
entrepreneurs who have demonstrated outsta nding performance in their own sectors and
was supported by a number of well-known organisations including the National Safety
Council of Singapore, the American Chamber of Commerce in Singapore, the Canadian
Chamber of Commerce and the Singapore Indian Chamber of Commerce and Industry.
Dato’ Sri Chua is a Controlling Shareholder of our Company. He is also the spouse of
Mrs. Chua, who is our executive Director and Controlling Shareholder. Dato’ Sri Chua is
also a director of Metasurface Technologies, SPW and SGP Malaysia, all of which are our
wholly-owned subsidiaries.
Ms. JEE Wee Jene ( 余偉娟)
Mrs. Chua, aged 53, was appointed as a Director on 7 December 2021. She was
redesignated as an executive Director on 2 May 2023.
As the spouse of Dato’ Sri Chua, Mrs. Chua has worked closely with Dato’ Sri Chua
since our Group’s establishment and throughout the Group’s business expansion. She
joined our Group since establishment as finance manager of Metasurface Technologies, a
subsidiary of our Group, where her main r esponsibility is to manage Metasurface
Technologies’ finance and administrativ e departments. Mrs. Chua assumes overall
responsibilities in our Group in finances, administration, compliance and human resources.
Mrs. Chua has an academic background in both computer studies and accounting. She
studied at Informatics Computer School Singapore and obtained a Diploma in Computer
Studies from the University of Cambridge Local Examinations Syndicate (in collaboration
with Informatics Computer School Singapore) through distance learning in November 1994
and an International Diploma in Computer Studies from the National Computing Centre
through distance learning in September 199 5. She was also awarded a Book-keeping and
Accounts — Second Level and Accounting — Third Level by the London Chamber of
Commerce and Industry Examinations Board in 1996 and 1997, respectively.
Mrs. Chua is a Controlling Shareholder of our Company. She is also the spouse of
Dato’ Sri Chua, who is our executive Director, chief executive officer, Chairman of our
Board and a Controlling Shareholder. Mrs . Chua is also a director of Metasurface
Technologies.
M r .T H N GC h o n gK i m(程章金)
Mr. Thng, aged 61, was appointed as a Director on 7 December 2021. He was
redesignated as an executive Director on 2 May 2023. His main role in our Group is to
formulate our overall business strategies and corporate development.
DIRECTORS AND SENIOR MANAGEMENT
–2 6 9–


--- page 281 ---
Since July 2021, Mr. Thng has been the Vice President (Special Projects) at
Metasurface Technologies. Mr. Thng has accu mulated approximately 15 years of work
experience in product and process engineering and over five years of experience in advanced
optics. Before joining our Group, Mr. Thng held key management positions in several
multinational companies. From August 2012 to April 2018, Mr. Thng was employed as the
Vice President, Special Projects at ams-OSRAM Asia Pacific Pte. Ltd. (currently known as
Ams Sensors Holdings Asia Pte. Ltd.), a supp lier of sensors headquartered in Singapore.
During his employment with Heptagon Advan ced Micro Optics, Mr. Thng mainly worked
on the engineering and production of sensor modules. From August 2006 to July 2011, Mr.
Thng worked as the General Manager in Bench mark Electronics Manufacturing (S) Pte
Ltd, where his last position was Senior Business Development Executive, of which he was
mainly responsible for overseeing the overa ll business, handling production schedule and
customer deliveries.
From July 2005 to August 2006, Mr. Thng worked as the Senior Product Engineering
Director at Seagate Technology, an OEM company headquartered in the U.S. During his
employment, he was mainly responsible for managing product engineering. From July 2001
to July 2005, he was appointed the Senior Advanced Manufacturing Director of
Magnecomp International Limited in Chin a ,w h e r eh ew a sr e s p o n s i b l ef o rm a n a g i n g
advanced manufacturing and engineering.
From November 1988 to June 1999, he was employed at Conner Peripherals Pte Ltd
(which was later acquired by Seagate Technology in the mid-1990s) and Seagate
Technology, where he was responsible for product engineering.
Mr. Thng graduated from Singapore Polytechnic in May 1983 with a Technical
Diploma in Electronics and Communication Engineering.
Mr. Thng is a substantial Shareholder of our Company.
Independent Non-Executive Directors
Mr. TAN Chek Kian ( 陳志強)
Mr. Tan, aged 52, was appointed as an independent non-executive Director on 7 June
2024, and is mainly responsible for providing independent judgement on strategy, policy,
performance, accountab ility, internal control and corporate governance.
Mr. Tan has over 25 years of finance and audit experience. Since February 2020, he has
been serving as an independent director, the chairman of the human resources committee
and a member of the audit risk committee of 1 FSS Pte Ltd, a subsidiary of MOH Holdings
Pte Ltd (the holding company of Singapore’ s public healthcare institutions) which
principally supports finance services for Sin gapore’s public healthcare system. He assists
in the overall strategy and direction and prov ides leadership and guidance to the senior
management team.
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From November 2005 to August 2022, he was employed at S&P Global Ratings
Singapore Pte. Limited, a group company of S&P Global (NYSE: SPGI), a company
primarily focusing on financial information and analytics. His last position there was Vice
President, Finance & Operations, Globa l Emerging Markets and he was primarily
responsible for developing a national-scale business model, products and processes in
emerging markets globally.
Prior to that, he worked at Exel Singapore Pte Ltd (currently known as DHL Supply
Chain Singapore Pte. Ltd.) with his last positi on being a regional finan cial controller, where
he assisted the chief financial officer, and at KPMG as an auditor, with his last position as
audit supervisor.
Mr. Tan obtained a master of business administration degree from the National
University of Singapore on 31 December 2004 and a bachelor of accountancy degree from
the Nanyang Technological University in Singapore in June 1995. He was qualified as a
certified public accountant of Singapore in November 1998 and was conferred a chartered
accountant of Singapore in July 2013. He has been a member of the Institute of Singapore
Accountants since August 1996.
Mr. ANG Yong Sheng, Jonathan (HONG Yongsheng) ( 洪勇勝)
Mr. Ang, aged 36, was appointed as an independent non-executive Director on 7 June
2024, and is mainly responsible for providing independent judgement on strategy, policy,
performance, accountab ility, internal control and corporate governance.
Mr. Ang has approximately nine years of experience in providing legal support and
approximately seven years of experience in private funds and investment management.
Since January 2016, Mr. Ang has been working at Tembusu Partners Pte Ltd, a
Singapore-based private equity firm which specialises in venture and growth-stage
investments in fast-growing markets of Gr eater China, India, and Southeast Asia. He
was first employed as a senior associate and wa ss u b s e q u e n t l yp r o m o t e dt ot h ep o s i t i o no f
Chief Operating Officer. During his employment, Mr. Ang has taken part in setting up new
funds, as well as providing legal support to the firm. From August 2014 to January 2016, he
was an associate at TSMP Law Corporation, where he practised as a lawyer.
Mr. Ang obtained a bachelor of laws degree from the National University of Singapore
in June 2013, and was subsequently admitted to the Singapore Bar in 2014. He is currently a
non-practising lawyer of the Law Society of Singapore. He has also held a Chartered
Financial Analyst designation since January 2020.
Mr. CHAN Yang Kang ( 田揚康)
Mr. Chan, aged 43, was appointed as an independent non-executive Director on 7 June
2024, and is mainly responsible for providing independent judgement on strategy, policy,
performance, accountab ility, internal control and corporate governance.
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Mr. Chan has over 12 years of experience in the legal industry. Since September 2023,
he has been employed by Linklaters and is currently on secondment to NEOM Company, a
company based in the Kingdom of Saudi Arabia leading the project to build a new urban
area. He is primarily responsible for providing legal advice to the central legal team of
NEOM Company. From May 2020 to August 2023, he was a partner at Hill Dickinson
Hong Kong. From May 2019 to May 2020, he was an associate at Paul Hastings LLP. From
December 2012 to March 2019, he was an associate at Wilson Sonsini Goodrich and Rosati.
Mr. Chan obtained a bachelor of laws and bachelor of business (banking and finance)
at the Monash University, Australia, in October 2008 and a postgraduate certificate in laws
at the City University of Hong Kong in July 2010. He was admitted as a solicitor in Hong
Kong in February 2013.
SENIOR MANAGEMENT
For biographical details of Dato’ Sri Chua Chwee Lee, see ‘‘— Board of Directors —
Executive Directors’’ in this section above.
Mr. SOH Cheng Joo ( 蘇振裕)
Mr. Soh, aged 51, is the managing director of SPW where he mainly manages the spare
part fabrication process of semiconductor equipment. He joined our Group on 13 April
2018 as director of SGP Malaysia. He joined SPW on 1 March 2015 (which was later
acquired by our Group on 1 December 2021) as managing director. He was also appointed
as our managing director of weldment production on 2 May 2022. His key role in our
Group is to manage the development of our Group’s welding business. Also a key member
of our Group’s management, Mr. Soh has experience in various welding processes.
Prior to commencing employment at SPW in March 2015, Mr. Soh worked at
Integrated Manufacturing Technologies Pte. Ltd. which was principally engaged in
manufacturing electronic components and boards.
Mr. Soh was awarded the Executive Diploma in Professional Supervisory
Management, first class from the University of Technology Malaysia in April 2016.
In November 2015, Mr. Soh, as the associate welding inspector, was certified by the
American Welding Society for complying with the requirements of the ‘‘AWS QC1,
Standard for AWS Certification of Welding In spectors’’. In October 2012, he was awarded a
statement of attainment by the Singapore Workforce Skills and Qualifications for
performing welding inspection. In March 2005 , he completed the orbital welding basics
at Integrated Manufacturing Technologies-International. In January 2002, he completed a
training programme at Air Transport Training College Pte Ltd and obtained a professional
certificate in aerospace working operati ons (mechanical). In May 2000, he completed a
training course in E.B. Welder Process Engineering at a PTR-Precision Technologies service
school. In January 1993, he completed a cou rse on TIG wielding-theory and practical
organised by General Electric (U.S.A.) Aviation Service Operation Pte. Ltd. (currently
known as GE Aviation Service Operation Pte Ltd).
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Mr. Soh is a director of SGP Malaysia and the spouse of Ms. Pang, who is a director of
SPW and a shareholder of our Company.
Ms. HOU Jing ( 侯婧)
Ms. Hou, aged 38, joined our Group on 1 September 2022. On 2 May 2023, she was
appointed as chief financial officer of our Group. Her key role is to oversee the Group’s
financial management, accounting and company secretarial affairs.
Ms. Hou has accumulated more than 10 years of experience in financial management,
business strategy planning, accounting and regulatory compliance prior to joining our
Group. From September 2018 to August 2022, she worked as the group accountant and
subsequently as the group finance manager at Rich Capital Holdings Limited (formerly
known as Infinio Group Limited) (SGX: 5G4), a Singapore-based company listed on the
Catalist of the Singapore Stock Exchange whic h engages in the business of development of
residential and industrial properties in Singapore. During this employment, she was mainly
responsible for overseeing all aspects of the financial reporting cycle, preparing annual
forecasts and budgets, and coordinating with internal and external parties to ensure
compliance with the Catalist Rules.
Before joining Rich Capital Holdings Limited, Ms. Hou has practised as an auditing
professional for seven years. She worked at Cypress Singapore Pac CPA Firm from August
2011 to December 2013, and at Foo Kon Tan Gr ant Thornton LLP (subsequently renamed
as Foo Kon Tan LLP and became a member of HLB International in 2015) from January
2014 to September 2018, both of which are accounting firms in Singapore.
Ms. Hou was awarded a bachelor of science degree in applied accounting from the
Oxford Brookes University through distance learning in 2011 and she became a member of
the Institute of Singapore Chartered Accountants in 2017. She was also admitted as a fellow
of the Association of Chartered C ertified Accountants in 2019.
Mr. ONG Eng Guan ( 翁湧原)
Mr. Ong Eng Guan, aged 64, is the senior programme manager of Metasurface
Technologies. He joined our Group on 17 August 2015. He was also appointed as our senior
sales manager on 2 May 2023. His main respons ibilities in our Group i nvolve managing our
Group’s customer relationship, coordinating between the Group’s finance, administrative
and production teams, as well as overseeing general project management matters.
Mr. Ong has over 25 years of experience in the electronic and semiconductor industry.
Prior to joining our Group, Mr. Ong worked as a procurement engineer in Compaq Asia
Pte Ltd from March 1996, where he was responsible for sourcing for components and
introducing new products. During his employment, he has contributed to the launch of the
Armada 4100 notebook.
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From February 2006 to June 2010, Mr. Ong worked as a procurement manager in
Benchmark Electronics Manufacturing (S) Pte Ltd. He was responsible for sourcing,
developing, and maintaining relationships with supplier networks, and was recognised for
his contributions towards winning multiple new projects and assisted the company in
achieving excellent quality assessments of customers.
Mr. Ong was awarded a diploma in electrical engineering from the Tunku Abdul
Rahman College (subsequently known as Tunku Abdul Rahman University College) in
Malaysia in October 1982.
JOINT COMPANY SECRETARIES
Ms. HOU Jing was appointed as one of our joint company secretaries on 2 May 2023.
For details of Ms. Hou’s biography, please see ‘‘— Senior Management’’ in this section
above.
Mr. NG Cheuk Kin ( 吳卓健) was appointed as one of our joint company secretaries of
our Company on 2 May 2023, which will take effect on the Listing Date.
Mr. Ng is a Senior Manager of Corporate Services of Tricor Services Limited and has
over 12 years of experience in the corporate secretarial and audit field. Mr. Ng obtained a
bachelor of business administration degree from The Chinese University of Hong Kong in
December 2010. Mr. Ng is a Certified Public Accountant of Hong Kong Institute of
Certified Public Accountants.
We have sought a waiver from strict compliance with the requirements under Rules
5.14 and 11.07(2) of the GEM Listing Rules. See ‘‘Waiver from Strict Compliance with the
GEM Listing Rules — Joint Company Secretaries’’.
COMPLIANCE ADVISER
We have appointed UOB Kay Hian as our comp liance adviser in compliance with Rule
6A.19 of the GEM Listing Rules. Pursuant to Rule 6A.23 of the GEM Listing Rules, we will
consult with and seek advice from our compliance adviser on a timely basis in the following
circumstances:
(a) before the publication of any regulatory announcement, circular or financial
report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated including share issues and share repurchases;
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(c) where we propose to use the proceeds of the Share Offer in a manner different
from that detailed in this prospectus or where our business activities,
developments or results deviate from any forecast, estimate, or other
information in this prospectus; and
(d) where the Stock Exchange makes an inquiry of our Company regarding unusual
movements in the price or trading volume of the securities of our Company, the
possible development of a false market in the securities of our Company or any
other matters.
The term of the appointment shall commen ce on the Listing Date and end on the date
on which our Company distributes its annual rep ort in respect of its financial results for the
first full financial year commencing after the Listing Date. Our Company may exercise its
right to terminate the appointment of our compliance adviser in accordance with Rule
6A.26 of the GEM Listing Rules and in such event, appoint a replacement compliance
adviser in accordance with Rule 6A.27 of the GEM Listing Rules.
BOARD COMMITTEES
Audit Committee
Our Company established an audit committee with written terms of reference in
compliance with Rules 5.28 and 11.07(5) of the GEM Listing Rules and the Corporate
Governance Code as set out in Appendix C1 to the GEM Listing Rules. The audit
committee has three members, namely Mr. TAN Chek Kian, Mr. CHAN Yang Kang and
Mr. ANG Yong Sheng, Jonathan, all being our independent non-executive Directors. Mr.
TAN Chek Kian has been appointed as the chairman of the audit committee, and is our
independent non-executive Director possessing the appropriate professional qualifications
as required in Rule 5.05(2) of the GEM Listi ng Rules. The primary duties of the audit
committee include, among other things, making responsibilities to the Board on the
appointment, reappointment and removal of the external auditor, reviewing our Group’s
financial information, overseeing our Group’s financial reporting system, risk management
and internal control systems.
Remuneration Committee
The Company established a remuneration committee with written terms of reference in
compliance with Rule 5.34 of the GEM Listing Rules and the Corporate Governance Code
as set out in Appendix C1 to the GEM Listing Rules. The remuneration committee has
three members, namely Mr. CHAN Yang Kan g, Mr. TAN Chek Kian and Mr. ANG Yong
Sheng, Jonathan. Mr. CHAN Yang Kang has been appointed as the chairman of the
remuneration committee. The primary duties of the remuneration committee include,
among other things, making recommendations to the Board on our Group’s policy and
structure for all Directors’ and senior management’s remuneration and on the establishment
of a formal and transparent procedure for developing the remuneration policy and the
remuneration packages of each individual e xecutive Director and senior management.
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Nomination Committee
The Company established a nomination committee with written terms of reference in
compliance with Rule 5.36A of the GEM Listing Rules and the Corporate Governance
Code as set out in Appendix C1 to the GEM Listing Rules. The nomination committee has
three members, namely, Dato’ Sri Chua, Mr. TAN Chek Kian and Mr. CHAN Yang Kang.
Dato’ Sri Chua has been appointed as the chairman of the nomination committee. The
primary duties of the nomination committee include, among other things, making
recommendations on any proposed changes to the Board to complement our Company’s
corporate strategy.
BOARD DIVERSITY
Our Board has adopted a board diversity policy in accordance with Rule 17.104 of the
GEM Listing Rules. With a view to achieving sustainable and balanced development, we
are committed to promoting diversity in our Board in order to bring in innovation, fresh
and broad business perspectives and enhance the decision-making process of our Board.
Our Board is of the view that greater diversity will help our Company better understand and
meet the needs of different stakeholders and m aintain our competitive advantages in the
precision component engineering industry.
The selection of Director candidates will be based on a range of perspectives on
diversity, including but not limited to gender, age, cultural and educational background,
professional experience, skills, knowledge an d length of service. All Board appointments
will be based on meritocracy and contribution that the selected candidates may bring to our
Board, and candidates will be considered against objective criteria, having due regard for
the benefits of diversity on our Board. In compliance with our Board’s diversity policy, our
Board currently comprises members from diverse gender, age, cultural and educational
background. Our Directors have a balanced m ix of knowledge and experience in the areas
of engineering, corporate finance, acco unting and law. They obtained education
qualifications in various majors including engineering, laws and accounting.
In addition, our Company recognises and embraces the benefits of having a diverse
Board and sees increasing diversity at the Board level, including gender diversity, as an
essential element in maintaining our Compan y’s competitive advantage and enhancing its
ability to attract, retain and motivate employ ees from the widest pool of available talent.
We have taken, and will continue to take, steps to promote gender diversity at all levels of
our Company, including but not limited to our Board and senior management levels. Our
Group will work to maintain gender diversity of our Board. Our Board currently has and
will continuously use its best endeavours to maintain at least one female representation and
will appoint additional female directors to our Board after Listing (keeping in mind the
importance of management continuity and the timeline for retirement and reappointment of
Directors under the Articles) and our nomination committee will, on suitable basis, use its
best endeavours to identify and recommend mu ltiple suitable female candidates to our
Board for its consideration. We will also cont inue to ensure that there is gender diversity
when recruiting staff at mid to senior level so that we will have a pipeline of female senior
management and potential successors to our Board in due time to ensure gender diversity of
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our Board. We currently have and will continuously use our best endeavours to maintain at
least one female senior management memb er. Our Group will continue to emphasise
training of female talent and provide long-term development opportunities for our female
staff, for example by involving them in board-level meetings and decision-making, giving
them greater responsibilities in leading board-level initiatives, providing them with regular
evaluation and performance f eedbacks, and encouraging them to also participate in the
process of identifying and nurturing junior female employees with high potentials.
Our nomination committee will monitor th e implementation of our Board diversity
policy on an ongoing basis. It shall report annually, in our corporate governance report, on
our Board’s composition under perspectives of diversity together with a summary of our
Board diversity policy, the measurable object ives for implementing this policy and the
progress of achieving our objectives to achieve Board diversity.
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors and senior management receive remuneration from our Group in the
form of salaries and bonuses, contributions to defined retirement benefits schemes and
share-based payment.
The aggregate amounts of remuneration (including salaries and bonuses, contributions
to retirement benefits schemes and share-based payment) paid to our Directors for the years
ended 31 December 2022 and 2023 were app roximately S$1.9 million and S$3.4 million,
respectively. None of the Directors had waived any remuneration during the same period.
The aggregate amounts of remuneration (including salaries and bonuses, contributions
to retirement benefits schemes and share-ba sed payment) paid to our Group’s five highest
paid individuals, including Directors, for t he years ended 31 December 2022 and 2023 were
approximately S$2.2 million and S $3.8 million, respectively.
No payment was made by the Group to th eD i r e c t o r so rt h ef i v eh i g h e s tp a i d
individuals as an inducement to join or upon joining the Group or as a compensation for
loss of office in respect of the Track Record Period.
Save as disclosed above, no other payments have been made or are payable in respect
of the Track Record Period by any of member of the Group to any of the Directors.
Under the arrangements currently in force, we estimate the aggregate remuneration,
excluding discretionary bonus, of our Direc tors for the financial year ending 31 December
2024 to be approximately S$0.9 million.
For additional information on our Directors’ remuneration during the Track Record
Period as well as information on the highest paid individuals, see note 9 to the Accountant’s
Report included in Appendix I to this prospectus.
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DIRECTOR’S CONFIRMATION
Except as disclosed in this prospectus, each of our Directors (i) did not hold other
positions in our Company or other members of our Group as at the Latest Practicable Date,
(ii) had no other relationship with any Directors, members of senior management,
substantial shareholders or Controlling Shareholders of our Company as at the Latest
Practicable Date, (iii) did not hold any othe r directorship in any public company with
securities listed on any securities market in Hong Kong or overseas during the three years
immediately preceding the date of this prospectus, and (iv) did not conduct any business
activities that compete, or may compete, eit her directly or indirect ly, with our business,
which would require disclosure under Rule 11.04 of the GEM Listing Rules.
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 5.02D of the GEM Listing Rules on 15 September 2022, 5 January 2023 and
19 April 2023, and (ii) understands his or her obligations as a director of a listed issuer
under the GEM Listing Rules.
Each of the independent non-executive Directors has confirmed (i) his/her
independence as regards each of the factors referred to in Rules 5.09(1) to (8) of the
GEM Listing Rules, (ii) he/she has no past or p resent financial or other interest in the
business of the Company or its subsidiaries or any connection with any core connected
person of the Company under the GEM Listing Rules as at the Latest Practicable Date, and
(iii) that there are no other factors that may affect his/her independence at the time of
his/her appointments.
See ‘‘C. Further Information about our Directors, Chief Executive and Substantial
Shareholders’’ in Appendix V to this prospectus for details of our Directors’ respective
interests or short positions (if any) in our Shares, particulars of our Directors’ service
contracts and letters of appointment and our Directors’ remuneration.
Except as disclosed in this prospectus, to the best of the knowledge, information and
belief of our Directors having made all reasonable enquiries, there was no other matter with
respect to our Directors that needs to be brought to the attention of our Shareholders and
there was no information relating to our Directors that is required to be disclosed pursuant
to Rules 17.50(2)(h) to (v) of the GEM Listin g Rules as at the Latest Practicable Date.
POST-IPO SHARE OPTION SCHEME
The Company has conditionally approved and adopted the Post-IPO Share Option
Scheme. The principal terms of the Post-IPO Share Option Scheme are summarised in ‘‘D.
Post-IPO Share Option Scheme’’ in Appendix V to this prospectus.
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CODE PROVISION C.2.1 OF THE CORPORATE GOVERNANCE CODE
Pursuant to code provision C.2.1 of the Corporate Governance Code, as set out in
Appendix C1 to the GEM Listing Rules, the res ponsibilities between the chairman and the
chief executive officer should be segregated and should not be performed by the same
individual. However, we do not have a separate chairman and chief executive officer and
Dato’ Sri Chua is performing these two roles. Dato’ Sri Chua is responsible for the overall
management, operation and strategic development of our Group and has been instrumental
to our growth and business operations si nce founding our Group in 2000. Taking into
account the continuation of management and the implementation of our business strategies,
our Directors (including our independent non -executive Directors) consider it is most
suitable for Dato’ Sri Chua to hold both the positions of chief executive officer and the
chairman of the Board and the existing arrangements are beneficial to the management of
our Group and are in the interests of our Company and our Shareholders as a whole. The
balance of power and authority is ensured by the operation of the senior management and
our Board, both of which comprises experienced and high-calibre individuals. Our Board
comprises three executive Directors (including Dato’ Sri Chua) and three independent
non-executive Directors, and therefore has a strong independence element in its
composition.
Save as disclosed above, we are in compliance with all code provisions of Part 2 of the
Corporate Governance Code as set out in Appendix C1 to the GEM Listing Rules. Our
Directors recognise the importance of good corporate governance in management and
internal procedures so as to achieve effectiv e accountability. Our Dir ectors will review our
corporate governance policies and compliance with the Corporate Governance Code as set
out in Appendix C1 to the GEM Listing Rules each financial year and comply with the
‘‘comply or explain’’ principle in our corpora te governance report which will be included in
our annual reports after the Listing.
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SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, the following persons or entities will, immediately
following the completion of the Capitalisatio n Issue and the Share Offer and without taking
into account any Shares which may be issued an d allotted upon exercise of options which
may be granted under the Post-IPO Share Option Scheme, have an interest or a short
position in our Shares or underlying Shares which would fall to be disclosed to our
Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of
the SFO, or who are directly and/or indirect ly interested in 10% or more of the total
number of shares in any class of share carrying r ights to vote in all circumstances at general
meetings of any member of our Group:
Interest in our Company
As at
the Latest Practicable Date
As at
the Listing Date
Name of shareholder
Capacity/
Nature of interest
Number and
class of
securities (L) (1)
Approximate
percentage of
shareholding
Number and
class of
securities (L) (1)
Approximate
percentage of
shareholding
SGP BVI Beneficial interest (2) 2,668,459
Shares
47.68% 58,647,335
Shares
39.10%
Dato’ Sri Chua Interest in controlled
corporation (2)
2,668,459
Shares
47.68% 58,647,335
Shares
39.10%
Interest of spouse (2) 1,126,058
Shares
20.12% 24,748,479
Shares
16.50%
Baccini Beneficial interest (3) 1,126,058
Shares
20.12% 24,748,479
Shares
16.50%
Mrs. Chua Interest in controlled
corporation (3)
1,126,058
Shares
20.12% 24,748,479
Shares
16.50%
Interest of spouse (3) 2,668,459
Shares
47.68% 58,647,335
Shares
39.10%
Angelling Beneficial interest (4) 559,651
Shares
10.00% 12,299,998
Shares
8.20%
Mr. Thng Interest in controlled
corporation (4)
559,651
Shares
10.00% 12,299,998
Shares
8.20%
Ms. Pang Beneficial interest 371,343
Shares
6.64% 8,161,369
Shares
5.44%
Mr. Soh Interest of spouse (5) 371,343 6.64% 8,161,369
Shares
5.44%
Notes:
(1) The letter ‘‘L’’ denotes the entity/person’s long position in the Shares.
(2) SGP BVI is wholly-owned by Dato’ Sri Chua, and therefore Dato’ Sri Chua is deemed to be
interested in the 58,647,335 Shares held by SGP BVI pursuant to the SFO. Dato’ Sri Chua is the sole
director of SGP BVI. Mrs. Chua is the spouse of Dat o’ Sri Chua, and therefore, Dato’ Sri Chua is
deemed to be interested in the 24,748,479 Shares held by Mrs. Chua through her controlled
corporation, Baccini, pursuant to the SFO.
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(3) Baccini is wholly-owned by Mrs. Chua, and ther efore Mrs. Chua is deemed to be interested in the
24,748,479 Shares held by Baccini pursuant to the SFO. Mrs. Chua is the sole director of Baccini.
Dato’ Sri Chua is the spouse of Mrs. Chua, and therefore, Mrs. Chua is deemed to be interested in
the 58,647,335 Shares held by Dato’ Sri Chua th rough his controlled corporation, SGP BVI,
pursuant to the SFO.
(4) Angelling is wholly-owned by Mr. Thng, and therefore Mr. Thng is deemed to be interested in the
12,299,998 Shares held by Angelling pursuan t to the SFO. Mr. Thng is the sole director of
Angelling.
(5) Ms. Pang is the spouse of Mr. Soh, and therefore, Mr. Soh is deemed to be interested in the
8,161,369 Shares held by Ms. Pang, pursuant to the SFO.
Save as disclosed above, our Directors are not aware of any person who will,
immediately following completion of the Capitalisation Issue and the Share Offer and
without taking into account any Shares which may be issued and allotted upon exercise
of options which may be granted under the Post-IPO Share Option Scheme, have
interests or short positions in our Shares or underlying Shares which would fall to be
disclosed to our Company and the Stock Exchange under the provisions of Divisions 2
a n d3o fP a r tX Vo ft h eS F O ,o r ,w h oi s ,d i r e c t l yo ri n d i r e c t l y ,i n t e r e s t e di n1 0 %o r
more of the nominal value of any class of shares carrying rights to vote in all
circumstances at general meetings of our Company.
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SHARE CAPITAL OF OUR COMPANY
The following is a description of the authorised and issued share capital of our
Company as at the date of this prospectus and shares issued or to be issued as fully paid or
credited as fully paid immediately following th e completion of the Capitalisation Issue and
the Share Offer:
Authorised share capital:
Approximate
aggregate
nominal value
HK$
1,000,000,000 Shares of par value of HK$0.001 each 1,000,000.00
Shares issued or to be issued, fully paid or credited as fully paid:
5,596,511 Shares in issue as at the date of this prospectus 5,596.51
117,403,489 Shares to be issued pursuant to the
Capitalisation Issue
117,403.49
27,000,000 Shares to be issued under the Share Offer 27,000.00
150,000,000 Total 150,000.00
Assumptions
The above table assumes that the Share Offer has become unconditional and the Shares
are issued pursuant to the Capitalisation Issu e and the Share Offer. It takes no account of
any Shares which may be issued and allotted upon exercise of any options which may be
granted under the Post-IPO Share Option Scheme or which may be issued and allotted or
repurchased by us pursuant to the general mandates granted to our Directors to issue or
repurchase Shares as described below.
RANKING
Our Company has only one class of shares, namely ordinary shares, each of which
ranks pari passu with the other shares. The Offer Shares will carry the same rights as all
Shares in issue or to be issued and, in particul ar, will qualify for all dividends or other
distributions declared, made or paid after the date of this prospectus (save for entitlements
to the Capitalisation Issue).
CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING
ARE REQUIRED
Pursuant to the Cayman Companies Act and the terms of our Memorandum of
Association and our Articles of Association, our Company may from time to time by
ordinary resolution of shareholders (i) increase its capital; (ii) consolidate and divide our
capital into Shares of larger amount; (iii) di vide our Shares into several classes; (iv)
subdivide our Shares into Shares of smaller amount; and (v) cancel any Shares which have
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not been taken. In addition, our Company may subject to the provisions of the Cayman
Companies Act reduce our share capital by speci al resolution of shareholders. For details,
see ‘‘2. Articles of Association — (a) Shares — ( iii) Alteration of capital’’ in Appendix IV to
this prospectus.
Pursuant to the Cayman Companies Act and the terms of our Memorandum of
Association and our Articles of Association, all or any of the special rights attached to our
Shares or any class of Shares may be varied, modified or abrogated either with the consent
in writing of the holders of not less than three -fourths in nominal value of the issued Shares
in that class or with the sanction of a special resolution passed at a separate general meeting
of the holders of the Shares in that class. For details, see ‘‘2. Articles of Association — (a)
Shares — (ii) Variation of rights of existing s hares or classes of shares’’ in Appendix IV to
this prospectus.
GENERAL MANDATE TO ISSUE SHARES
Subject to the Share Offer becoming unconditional, our Directors have been granted a
general mandate to issue and allot Shares and sell and/or transfer our treasury shares,
particulars of which are set out in ‘‘A. Further Information about Our Group — 5.
Resolutions passed in extraordinary genera l meeting of our Shareholders on 7 June 2024’’ in
Appendix V to this prospectus.
GENERAL MANDATE TO REPURCHASE SHARES
Subject to the Share Offer becoming unconditional, our Directors have been granted a
general mandate to repurchase Shares, particulars of which are set out in ‘‘A. Further
Information about Our Group — 5. Resolutions passed in extraordinary general meeting of
our Shareholders on 7 June 2024’’ and ‘‘A. Further Information about Our Group — 6.
Repurchase of our own securities’’ in Appendix V to this prospectus.
POST-IPO SHARE OPTION SCHEME
Our Company has conditionally approved and adopted the Post-IPO Share Option
Scheme, particulars of which are set out in ‘‘D. Post-IPO Share Option Scheme’’ in
Appendix V to this prospectus.
MINIMUM PUBLIC FLOAT
Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of the Listing and at
all times thereafter, we must maintain the min imum prescribed percentage of at least 25%
of our total issue share capital (or such other percentage as may be prescribed as the
minimum public shareholding under the GEM Listing Rules from time to time) in the hands
of the public (as defined in the GEM Listing Rules).
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The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial statements and
notes included in ‘‘Appendix I — Accountant’s Report.’’ The historical financial information
as set out in the Accountant’s Report incorporates the consolidated financial statements of
our Group during the Track Record Period. You should read the whole Accountant’s Report
as set out in Appendix I to this prospectus and not rely merely on the information in this
section.
The following discussion and analysis contain forward-looking statements that involve
risks and uncertainties. These statements are based on assumptions and analysis made by us
in light of our experience and perception of historical trends, current conditions and
expected future developments, as well as other factors that we believe are appropriate under
the circumstances. You should not place undue reliance on any such statements. Our actual
future results and timing of selected events could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including those set forth
under ‘‘Risk Factors’’, ‘‘Forward-Looking Statements’’ and elsewhere in this prospectus.
OVERVIEW
Established in 2000, we are a precision engin eering services provider headquartered in
Singapore, specialising in providing preci sion machining and welding services for
international companies in the semiconductor and other sectors. We offer our customers
precision engineering services including (i) pr ecision machining services, and (ii) precision
welding services. Leveraging our technical c apabilities and know-how and machinery and
equipment, we have established our market pos ition in the precision component engineering
value chain by offering specia lised services tailored to our cu stomers’ specific technical
requirements and commercial needs.
BASIS OF PRESENTATION
Immediately prior to and after the Reorganisation, the business of our Group is
conducted by Metasurface Technologies and its subsidiaries, which have been owned and
controlled by the Controlling Sha reholders. Pursuant to the Reorganisation, Metasurface
Technologies and the business of our Group were transferred to and held by the Company.
The Company has not been involved in any other business prior to the Reorganisation and
does not meet the definition of a business. The Reorganisation is merely a reorganisation of
the ownership structure of the business of our Group with no changes in management of
such business and the ultimate owne rs of such business remain the same.
Accordingly, the Group resulting fro m the Reorganisation is regarded as a
continuation of the business under Metasurface Technologies and the historical financial
information as set out in the Accountant’s Report has been prepared and presented as a
continuation of the consolidated financial statements of Metasurface Technologies and its
subsidiaries, with the assets and liabilitie s of the Group recognised and measured at the
carrying amounts of the business of our Group under the consolidated financial statements
of Metasurface Technologies for all years presented, since the respective dates of
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incorporation of the consolidating entitie s, or since the date when the consolidating
companies first came un der the control of the Controlling Shareholders, whichever is the
earlier.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to be, affected by a number of
factors, many of which may be beyond our control. A discussion of the key factors is set
forth below.
Development of global and Singapore’ s precision engineering industry
According to the CIC Report, the global output value of the precision engineering
industry increased from approximately S$403.4 billion in 2019 to approximately S$525.7
billion in 2023 and is expected to further increase to S$646.5 billion in 2028, indicating a
CAGR of approximately 4.2% between 2023 and 2028. In particular, the Singapore
government values the importance of the precision component engineering industry and has
introduced various favourable policies and measures such as Industry Transformation
Maps (ITMs) and Precision Engineering Industry Digital Plan (IDP) to promote the further
development of the industry. Singapore’s output value of the precision engineering industry
increased from approximately S$9.4 billion i n 2019 to approximately S$10.6 billion in 2023,
and is expected to further increase to S$ 14.4 billion in 2028, indicating a CAGR of
approximately 6.3% between 2023 and 2028.
The precision engineering industry serves a wide range of end-use industries, such as
the semiconductor, aerospace, and data storage industries, and the growth of the industry is
highly related to the growth and broad trend of the end-use industries, according to the CIC
Report. During the Track Record Period, a significant portion of our revenue was derived
from our major customers in the semiconductor manufacturing equipment industry.
Therefore, our financial performance and future growth depend on the overall growth of
the global semiconductor industry.
The semiconductor manufacturing equipment industry has experienced steady growth
over the last five years from 2019 to 2023 and is expected to sustain the growth in the long
term. According to the CIC Report, revenue of the global semiconductor industry is
projected to reach US$880.7 billion in 2028 w ith a CAGR of 10.6% between 2023 and 2028,
and global sales of semiconductor manufacturing equipment increased from approximately
US$61.7 billion in 2019 to US$106.3 billion in 2023, registering a CAGR of 14.6% during
the period, and is expected to further increase to US$180.6 billion in 2028 driven by
capacity expansion, new fabrication projects, and high demand for advanced technologies
and solutions across the front-end and back-end segments of the semiconductor industry.
However, the global semiconductor industry and the global semiconductor manufacturing
equipment industry are driven by fluctuations of inventory and worldwide economic
growth. Accordingly, our business could be affected by the market movements of the global
semiconductor industry. The volatility and un certainty within the global semiconductor
industry and the global semiconductor manufacturing equipment industry are in turn
driven by changes in economic, political or financial conditions and other factors such as
impact of tariffs and/or trade barriers.
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Diversification of Customer Base
We believe that our track record and success were, to a certain extent, attributed to our
solid customer base. Apart from maintain ing an established customer base in the
semiconductor industry, diversifying our customer portfolio and expanding into other
industries will also be critical for our future growth.
We have made consistent efforts to strategically diversify our business into other
downstream industries including aerospace and data storage industries, through which we
can solicit more business opportunities and p rovide more diversified services. We seek to
increase the percentage of revenue contri bution from customers in other downstream
industries in the future, so that we will be less reliant on our major customers, and to
capture the potential growth of other indust ries and thereby be less susceptible to risks
relating to any single industry in the future.
Fluctuations in prices of raw materials and labour costs
According to the CIC Report, the primary cost of precision component engineering
service providers includes raw material costs and labour costs. Since the supply of metal raw
materials in Singapore mainly relies on imports from certain major economies such as
Malaysia, the U.S., the EU and South Africa, the global economy affects the price of metal
raw materials in Singapore. For the years ended 31 December 2022 and 2023, our direct
material cost accounted for approximately 64.6% and 61.6% of our total cost of sales,
respectively. According to the CIC Report, prices of iron and steel and of aluminium in
Malaysia, the U.S., the EU and South Africa g enerally maintained an upward trend from
2019 to 2023 and are expected to grow further at CAGRs ranging from 1.1% to 4.0% and
0.3% to 5.7%, respectively, over the period from 2023 to 2028. Therefore, if the prices of
our material supplies increase significant ly, we may incur additional costs to acquire
sufficient quantity of these materials to meet our production needs.
The table below sets forth a sensitivity analysis which is hypothetical in nature and is
for illustration purpose only of our direct mate rial cost, illustrating its impact on our profit
before income tax if the price of our raw materials had been 3%, 6% and 9% higher or
lower during the Track Record Period, assuming all other variables being held constant:
Year ended 31 December
2022 2023
S$’000 S$’000
(Decrease)/increase in profit before income tax
Increase/decrease by 3% (447)/447 (450)/450
Increase/decrease by 6% (893)/893 (901)/901
Increase/decrease by 9% (1,340)/1,340 (1,351)/1,351
In addition, according to the CIC Report, with the continuous development of the
economy, the average monthly salaries in th e manufacturing industry in Singapore and
Malaysia have shown an increasing trend during 2019 to 2023 with the CAGR of 4.3% and
7.7%, respectively. Further, with the exp ected gradual recovery of the global economy
FINANCIAL INFORMATION
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(including Singapore and Malaysia) from the COVID-19 pandemic, the average monthly
salaries in the manufacturing industry in Singapore and Malaysia are expected to maintain
steady growth over the next five years with the CAGR of 3.1% and 5.7%, respectively, from
2023 to 2028.
The table below sets forth a sensitivity analysis which is hypothetical in nature and is
for illustration purpose only of our direct labou r cost and wages and salaries for our general
and administrative staff, illustrating its i mpact on our profit before income tax if the
average monthly salaries of our production as well as general and administrative staff had
been 4%, 8% and 12% higher or lower during the Track Record Period, assuming all other
variables being held constant:
Year ended 31 December
2022 2023
S$’000 S$’000
(Decrease)/increase in profit before income tax
Increase/decrease by 4% (303)/303 (352)/352
Increase/decrease by 8% (606)/606 (705)/705
Increase/decrease by 12% (910)/910 (1,057)/1,057
If we cannot identify alternative sources of quality materials and/or talents when
needed, the resulting loss of production volume may materially and adversely affect our
ability to deliver products to our customers in a timely manner, or at a ll, and therefore our
business, financial condition, results of operations and prospects could be materially and
adversely affected.
Management of Production Capacity
Our growth also depends, to a large extent, on our ability to manage and expand our
production capacity as well as to improve our manufacturing efficiency.
Our Directors consider that efficient manage ment of production facilities and skilled
workforce is essential to enhancing our production capacity. During the Track Record
Period, in order to meet the growing demand for our services, we had continually acquired
new machinery and equipment to enhance our production capacity and efficiency. The
continual acquisition of new machinery and equipment, however, would lead to an increase
in depreciation expenses, which in turn would negatively impact our results of operations.
Besides, we have also exerted constant effor ts in retaining our existing workforce and
attracting additional skilled technicians a nd machinists, which enable us to provide
precision engineering services to our custome rs, thereby improving our service capacity and
competitiveness.
Furthermore, leveraging our dedicated quality control team, we are able to ensure our
components and parts are of exact and precise measurements as specified by our customers,
and hence to enhance our customer satisfaction and competitiveness.
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Nevertheless, if we cannot identify and employ technicians and machinists with the
required skills, the deployment of our production facilities may not be optimised, and we
may not be able to expand or maintain our pro duction utilisation, and accordingly, our
financial performance and results of operations could be materially and adversely affected.
Seasonality
During the Track Record Period, we did not experience material seasonality. However,
as far as we are aware, there is stronger demand for products in the end-use industries (such
as electronic products) during festive seasons such as Thanksgiving Day and Christmas,
which also drives the procurement of parts and components for manufacturing equipment
of semiconductor during the second half of the year.
MATERIAL ACCOUNTING POLICY INFORMATION, ESTIMATES, ASSUMPTIONS
AND JUDGMENTS
We have identified certain accounting policie s that are significant to the preparation of
our consolidated financial statements. Some of our accounting policies involve subjective
assumptions and estimates, as well as comple x judgments relating to accounting items. In
each case, the determination of these items requires our management to make subjective and
complex judgments based on historical experie nce and other factors, including expectations
of future events that are believed to be reasonable under the circumstances, and
consequently, the resulting accounting estimates may not necessarily match with the
corresponding actual results. When reviewing our consolidated financial statements, you
should consider (i) our material accounting policy information, (ii) the judgments and other
uncertainties affecting the application of s uch policies, and (iii) the sensitivity of our
reported results to changes in conditions an d assumptions, where applicable. Our material
accounting policy information, estimates, assumptions and judgments, which are important
for an understanding of our financial condition and results of operations, are described in
further details in Note 2 and Note 3 of Appendix I to this prospectus. We set forth below
those accounting policies which we believe ar e of the most significant importance to us or
involve the most significant estimates and jud gments in the preparation of our consolidated
financial statements:
Revenue Recognition
We measure our revenue based on the consideration to which our Group expects to be
entitled in exchange for transferring our good s or services to a customer, excluding amounts
collected on behalf of third parties.
We recognise our revenue when our Group satisfies a performance obligation by
transferring our goods and services to the customer, which is when the customer obtains
control of the goods and services. A performance obligation may be satisfied at a point in
time or over time. The amount of revenue recognised is the amount allocated to the satisfied
performance obligation.
Our Group supplies parts and components of precision engineering equipment through
our provision of precision machining and precision welding services.
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Revenue from sale of goods and services in the ordinary course of business is
recognised when the Group satisfies a perfor mance obligation (‘‘PO’’) by transferring
control of a promised good or service to the customer. The amount of revenue recognised is
the amount of the transaction price allocated t o the satisfied PO. Transaction price is the
amount of consideration in the contract to which the Group expects to be entitled in
exchange for transferring the promised goods or services. The transaction price is allocated
to each PO in the contract on the basis of the r elative stand-alone selling prices of the
promised goods or services.
Revenue is recognised at a point in time upon satisfaction of the PO, which generally
coincides with the delivery of goods and when services are rendered. Revenue from these
sales is recognised based on the price specified in the contract and revenue is only
recognised to the extent that it is highly proba ble that a significant reversal will not occur.
No significant element of financing is deeme dp r e s e n ta st h es a l e sa r em a d ew i t hac r e d i t
term of 30 to 60 days, which is consistent with market practice. The Group concluded
obligation to repair or replace faulty products under the standard warranty terms is remote
and no provision has been recognised.
Inventories
We measure our inventories at the lower of cost and net realisable value. Cost is
determined using the first-in, first-out method. The cost of finished goods and
work-in-progress comprises raw materials, di rect labour, other direct costs and related
production overheads (based on normal operating capacity). Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessa ry to make the sale. A write down on cost is
made for where the cost is not recoverable o r if the selling prices have declined. Cost
includes all costs of purchase and other costs incurred in bringing the inventories to their
present location and condition. Allowance is made for obsolete, slow moving and defective
inventories.
Property, plant and equipment
We record our property, plant and equipment initially at cost. Subsequent to
recognition, we measure our property, pla nt and equipment at cost less accumulated
depreciation and any accumulated impairm ent losses. The cost of property, plant and
equipment includes its purchase price and any costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner
intended by management. Dismantlement, removal or restoration costs are included as part
of the cost of plant and equipment if the ob ligation for dismantlement, removal or
restoration is incurred as a consequence of acquiring or using the property, plant and
equipment.
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Depreciation of property, plant and equip ment is calculated on the straight-line
method so as to write off the cost of the assets over their estimated useful lives as follows:
Category Useful life
. Freehold building 50 years
. Plant and machinery 3 to 15 years
. R e n o v a t i o n 5t o1 0y e a r s
. Office equipment 10 years
. Furniture and fittings 10 years
. Computers 3 years
. Motor vehicles 10 years
The residual value, useful lives and depreciation method are reviewed at the end of
each reporting period, and adjusted prosp ectively, if appropriate. The effects of any
revision are recognised in profit or loss when the changes arise.
Subsequent expenditure relating to our property, plant and equipment that has already
been recognised is added to the carrying amount of the asset only when it is probable that
future economic benefits associated with the item will flow to the entity and the cost of the
item can be measured reliably. All other repair and maintenance expenses are recognised in
profit or loss when incurred.
The carrying amounts of our property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying amount may
not be recoverable.
An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss on
de-recognition of the asset is included in profit or loss in the year the asset is derecognised.
Share-based payments
Our share-based payments during the Track Record Period arose from shares and
anti-dilution rights granted to certain management and shareholders of our Group. The fair
value of shares granted is recognised in profit or loss as share-based payment expense and is
derived using the market approach or asset based approach in relation to the relevant
share-based payment transactions. These valuation approaches are subject to a number of
assumptions and with regard to the limitations of the models.
In the market approach, the fair value of the share-based payment transactions is
based on the multiplication of the normalised ea rnings before interest, tax, depreciation and
amortisation by an appropriate market multiple, which is derived from an analysis of the
trading multiples of certain comparable companies. The market approach result is then
adjusted for a discount for lack of marketability to arrive at the fair value.
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In the asset-based valuation approach, the fa ir value of the equity interest granted is
based on the net asset value of the entities now comprising our Group at the grant date.
Under this method, all operating assets an d liabilities (including off-balance sheet,
intangible and contingent) are adjusted to r eflect the application standard or type of
value. After all of the operating assets and lia bilities of a business are defined and valued,
the difference between the value of the total as sets and total liabilities provides an estimate
of the value for the equity of the business.
Details of our Group’s share-based paymen ts recognised during the Track Record
Period are disclosed in Note 31 of Appendix I to this prospectus.
DESCRIPTION OF SELECTED CONSOLIDATED STATEMENTS OF
C O M P R E H E N S I V EI N C O M EL I N EI T E M S
The following table sets forth our selected consolidated statements of comprehensive
income for the periods indicated. Our historic al results presented below are not necessarily
indicative of the results that may be expected for any future period.
Years ended 31 December
2022 2023
S$’000 S$’000
Continuing operations
Revenue 39,116 38,769
Cost of sales (23,060) (24,354)
Gross profit 16,056 14,415
Other income 1,130 2,731
Other gains/(losses), net 177 (426)
Administrative expenses (10,489) (11,666)
Operating profit 6,874 5,054
Finance costs (1,579) (1,343)
Share of loss from an associate — (366)
Profit before tax 5,295 3,345
Income tax expense (1,495) (1,061)
Profit from continuing operations 3,800 2,284
Discontinued operation
(Loss)/profit from discontinued operations (1,095) 2,143
Profit for the year 2,705 4,427
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Non-IFRS Measure
To supplement our consolidated financial statements which are presented in
accordance with the IFRS, we also use adjusted profit from continuing operations
(non-IFRS measure) as an additional financial measure, which is not required by, or
presented in accordance with, the IFRS. We define adjusted profit from continuing
operations (non-IFRS measure) as profit from continuing operations for the financial year
adjusted by adding back (i) share-based payments which arose from grant of shares and
exercise of anti-dilution rights granted to cer tain employees and shareholders of our Group,
w h i c ha r en o n - c a s hi nn a t u r e ;a n d( i i )L i s t i n ge x p e n s e si nr e l a t i o nt ot h eS h a r eO f f e r .W e
have made such adjustments consistently during the Track Record Period.
We believe that our presentation of the adjusted profit from continuing operations
(non-IFRS measure) when shown in conjunction with the corresponding IFRS measure
provides useful information to potential investors and management in facilitating a
comparison of our operating performance from period to period by eliminating the impacts
of the share-based payments and Listing expenses. However, our presentation of the
adjusted profit from continuing operations (non-IFRS measure) may not be comparable to
similarly titled measures presented by other companies. The use of the adjusted profit from
continuing operations (non-IFRS measure) has limitations as any other analytical tool, and
should not be considered in isolation from, or as a substitute for or superior to, the analysis
of our results of operations or financial condition as reported under the IFRS.
The following table reconciles our adjusted profit from continuing operations
(non-IFRS measure) with our profit from continuing operations for the financial year
and also sets out our adjusted profit margin (non-IFRS measure) for the periods indicated:
For the year ended
31 December
2022 2023
S$’000 S$’000
Profit from continuing operations 3,800 2,284
Add:
Share-based payments
(1) 815 3,151
Listing expenses in relation to the Share Offer 1,930 1,896
Adjusted profit from continuing operations (2)
(non-IFRS measure) 6,545 7,331
Adjusted profit margin (3)
(non-IFRS measure) 16.7% 18.9%
Notes:
(1) Share-based payments arose from grant of shares and exercise of anti-dilution rights granted to
certain employees and shareholders of our Group which were non-cash in nature.
FINANCIAL INFORMATION
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(2) Adjusted profit from continuing operations (non- IFRS measure) refers to profit from continuing
operations for the period by adding back (i) share -based payments which are non-cash in nature;
and (ii) Listing expenses in relation to the Share Offer.
(3) Adjusted profit margin (non-IFRS measure) equa ls adjusted profit from continuing operations
(non-IFRS measure) as a percentage of revenue.
Revenue
Revenue by service type
During the Track Record Period, we derived revenue primarily from the following two
service types:
(i) Precision machining services which involve machining processes for removing
materials from a workpiece with high a ccuracy to create parts and components
with tight tolerance, and accounted for approximately 58.6% and 40.1% of our
total revenue for the years ended 31 Dece mber 2022 and 2023, respectively; and
(ii) Precision welding services which inv olve the application of weldment equipment
and specialised welding technique on a workpiece in a very precise and controlled
fashion, and accounted for approximately 41.4% and 59.9% of our total revenue
for the years ended 31 December 2022 and 2023, respectively.
The following table sets forth the breakdow n of our total revenue by service type for
the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Precision machining 22,913 58.6 15,545 40.1
Precision welding 16,203 41.4 23,224 59.9
Total 39,116 100.0 38,769 100.0
Revenue by customer sector
During the Track Record Period, we serve d customers in various sectors, primarily
including the semiconductor, aerospace and data storage industries.
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The following table sets forth the breakdown of our total revenue by customer sector
for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Semiconductor 35,729 91.3 34,077 87.9
Aerospace 101 0.3 1,646 4.3
Data storage 2,423 6.2 2,411 6.2
Others
(1) 863 2.2 635 1.6
Total 39,116 100.0 38,769 100.0
Note:
(1) Others mainly refer to solar industry and oil and gas industry.
Revenue by customer geographical location
During the Track Record Period, we gener ated revenue primarily from customers
located in Singapore, Malaysia and the U.S. The following table sets forth the breakdown
of our total revenue by customer geographical location for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Singapore 20,741 53.0 14,807 38.2
Malaysia 12,627 32.3 16,072 41.5
U.S. 3,507 9.0 5,267 13.6
Others
(1) 2,241 5.7 2,623 6.7
Total 39,116 100.0 38,769 100.0
Note:
(1) Others mainly refer to Switzerland.
Cost of Sales
Cost of sales represents costs directly attributable to the provision of our services.
During the Track Record Period, our cost of sa les comprised (i) direct material cost; (ii)
direct labour cost for our production staff, an d (iii) manufacturing overheads, which mainly
include depreciation of property, plant and equipment as well as right-of-use assets and
FINANCIAL INFORMATION
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utilities consumed for our production purpos es. For the years ende d 31 December 2022 and
2023, our cost of sales was approximately S$23 .1 million and S$24.4 million, respectively.
The following table sets forth the breakdown of our cost of sales for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Direct material cost 14,886 64.6 15,016 61.6
Direct labour cost 4,367 18.9 5,349 22.0
Manufacturing overheads 3,807 16.5 3,989 16.4
Total 23,060 100.0 24,354 100.0
The following table sets forth the breakdown of our cost of sales by service type for the
periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Precision machining 13,026 56.5 10,658 43.8
Precision welding 10,034 43.5 13,696 56.2
Total 23,060 100.0 24,354 100.0
Gross Profit and Gross Profit Margin
Our gross profit was approximately S$16 .1 million and S$14.4 million for the years
ended 31 December 2022 and 202 3, respectively. Our overall gross profit margin was
approximately 41.0% and 37.2% for the years ended 31 December 2022 and 2023,
respectively.
The following table sets forth the breakdown of our gross profit and gross profit
margin by service type for the periods indicated:
Year ended 31 December
2022 2023
Gross profit
Gross profit
margin Gross profit
Gross profit
margin
S$’000 % S$’000 %
Precision machining 9,887 43.2 4,887 31.4
Precision welding 6,169 38.1 9,528 41.0
Total/Overall 16,056 41.0 14,415 37.2
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Other Income
During the Track Record Period, our other income primarily included (i) rental income
generated from (a) the Enterprise Road Property, being our investment property in
Singapore, and (b) part of our Tuas Property which was sublet to independent third parties;
(ii) service income generated from our provision of services, such as tubular thread
inspection, tubular body inspection, tubular inventory management and storage and other
logistic services related to tubular management, to an independent third party, which is
principally engaged in trading of steel tubulars a nd provision of related services; (iii) sales
income related to our sale of scrap materials generated from production; (iv) government
grants received from authorities in Singapore mainly related to job support schemes such as
Wage Credit Scheme and Special Employment Credit; and (v) others, such as insurance
claim.
We provided tubular and logistics related service to an independent third party as
certain portion of our Tuas Property was leased to a wholly owned subsidiary of this
independent third party which is mainly engaged in the business of manufacturing pipes and
tubes.
Our other income amounted to approximat ely S$1.1 million and S$2.7 million for the
years ended 31 December 2022 and 2023, respec tively. The following table sets forth the
breakdown of our other income for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Rental income 285 25.2 1,299 47.5
Service income 318 28.2 1,190 43.6
Scrap material sales income 374 33.1 134 4.9
Government grants 86 7.6 87 3.2
Others
(1) 67 5.9 21 0.8
1,130 100.0 2,731 100.0
Note:
(1) Others mainly refer to insurance claim.
FINANCIAL INFORMATION
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Other gains/(losses), net
During the Track Record Period, our other net gains or losses primarily included (i)
gain on disposal of plant and equipment; (ii) gain on dilution of shareholding in Metaoptics
Technologies after it became our associate; (iii) unrealised gains from the change in fair
value of our key man insurance recognised in profit or loss; and adjusted by (iv) net
currency exchange gains or losses attributable to net transactional currency exposures
arising from our sales which are denominated in foreign currencies mainly in USD, which
fluctuated against SGD during the Track Record Period.
Our other net gains or (losses) amounted t o approximately S$0.2 million and S$(0.4)
million for the years ended 31 December 2022 a nd 2023, respectively. The following table
sets forth the breakdown of our other net gains or losses for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Unrealised gains 14 7.9 — —
Net currency exchange
gains/(losses) 108 61.0 (489) 114.8
Gain on disposal of plant
and equipment 55 31.1 40 (9.4)
Gain on dilution of
shareholding in
an associate — — 23 (5.4)
177 100.0 (426) 100.0
Administrative Expenses
During the Track Record Period, our admini strative expenses included (i) wages and
salaries (including bonuses, contributions to defined retirement benefits schemes and other
staff welfare) for our general and administr ative staff; (ii) depreciation expenses of
property, plant and equipmen t, right-of-use assets and i nvestment property; (iii)
amortisation expenses of intangible assets; (iv) share-based payments; (v) Listing
expenses; (vi) professional fees; (vii) re pair and maintenance costs; (viii) business
development expenses; (ix) property tax; (x) utilities; and (xi) others.
FINANCIAL INFORMATION
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Our administrative expenses amounted to approximately S$10.5 million and S$11.7
million for the years ended 31 December 2022 a nd 2023, respectively. The following table
sets forth the breakdown of our administrative expenses for the periods indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Wages and salaries 3,213 30.6 3,462 29.7
Depreciation expenses 917 8.8 1,018 8.7
Amortisation expenses 935 8.9 288 2.5
Business development expenses 444 4.2 289 2.5
Share-based payments 815 7.8 3,151 27.0
Listing expenses 1,930 18.4 1,896 16.3
Professional fees 312 3.0 235 2.0
Repair and maintenance costs 498 4.7 186 1.6
Property tax 209 2.0 249 2.1
Utilities 444 4.2 345 2.9
Others 772 7.4 547 4.7
10,489 100.0 11,666 100.0
Our share-based payments during the Track Record Period arose from grant of shares
and exercise of anti-dilution rights grante dt oe m p l o y e e sa n ds h a r e h o l d e r so fo u rG r o u p .
Expenses incurred with respect to the share-based payments had increased our
administrative expenses during the Track R ecord Period, especially for the year ended 31
December 2023.
Details of the share-based payments (included both from continuing operations and
discontinued operations) are set out below.
FINANCIAL INFORMATION
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For the year ended 31 December 2022
Employee/Shareholder
Share
Issuance Date Events
Share-based
payment
S$’000
1. Mr. Thng (employee
and shareholder of our
Group)
11 March 2022 Following Metaoptics Technologies’
issue and allotment of 31,865
ordinary shares to Origgin,
pursuant to the Metaoptics
Anti-Dilution Undertaking,
Metasurface Technologies
transferred 6,373 ordinary shares in
Metaoptics Technologies to Mr.
Thng at a nominal consideration of
S$1.
79
2. Mr. Thng (employee
and shareholder of our
Group)
11 March 2022 Following Metaoptics Technologies’
issue and allotment of 31,865
ordinary shares to Origgin,
pursuant to the Metaoptics
Anti-Dilution Undertaking,
Metasurface Technologies
transferred 6,373 ordinary shares in
Metaoptics Technologies to Mr.
Thng at a nominal consideration of
S$1.
196
3. Mr. Thng (employee
and shareholder of our
Group)
12 April 2022 Following Metaoptics Technologies’
issue and allotment of 16,093
ordinary shares to Autec, pursuant
to the Metaoptics Anti-Dilution
Undertaking, Mr. A Chua, who
acted in accordance of the
instructions of Dato’ Sri Chua,
transferred 3,219 ordinary shares in
Metaoptics Technologies to Mr.
Thng at a nominal consideration of
S$1.
40
4. Mr. Thng (employee
and shareholder of our
Group)
25 August
2022
Following Metaoptics Technologies’
issue and allotment of 35,574
ordinary shares to MMI, pursuant
to the Metaoptics Anti-Dilution
Undertaking, Metasurface
Technologies transferred 7,896
ordinary shares in Metaoptics
Technologies to Mr. Thng at a
nominal consideration of S$1.
98
FINANCIAL INFORMATION
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Employee/Shareholder
Share
Issuance Date Events
Share-based
payment
S$’000
5. Mr. Thng (employee
and shareholder of our
Group)
27 September
2022
Pursuant to the Anti-dilution
Undertaking, Dato’ Sri Chua and
Mrs. Chua transferred 13,990
ordinary shares and 13,990
ordinary shares in Metasurface
Technologies, respectively, to Mr.
Thng at a nominal consideration of
S$1.
413
6. Mr. Thng (employee
and shareholder of our
Group)
14 October
2022
In conjunction with the 2nd Pre-IPO
Investment, Dato’ Sri Chua and
Mrs. Chua transferred 13,623
ordinary shares and 13,623
ordinary shares in Metasurface
Technologies, respectively, to Mr.
Thng at a nominal consideration of
S$1 pursuant to the Anti-dilution
Undertaking.
402
1,228
For the year ended 31 December 2023
Employee/Shareholder
Share
Issuance Date Events
Share-based
payment
S$’000
1. Dr. Kuznetsov
(employee of
Metaoptics
Technologies)
2 January
2023
Metasurface Technologies transferred
7,549 ordinary shares of Metaoptics
Technologies to Dr. Kuznetsov at
n oc o n s i d e r a t i o na sp a r to fh i s
remuneration package for his
services to Metaoptics
Technologies.
106
2. MMI (shareholder of
our Group)
30 January
2023
Pursuant to the 3rd Pre-IPO
Investment, MMI subscribed for,
and Metasurface Technologies
a l l o t t e da n di s s u e dt oM M I ,
139,913 ordinary shares in
Metasurface Technologies at a
consideration of S$1,000,000.
797
FINANCIAL INFORMATION
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Employee/Shareholder
Share
Issuance Date Events
Share-based
payment
S$’000
3. Mr. Thng (employee
and shareholder of our
Group)
30 January
2023
In conjunction with the 3rd Pre-IPO
Investment, Dato’ Sri Chua and
Mrs. Chua transferred 7,364
ordinary shares and 7,364 ordinary
shares (in total 14,728 ordinary
shares) in Metasurface
Technologies, respectively to Mr.
Thng, at a nominal consideration of
S$1 pursuant to the Anti-Dilution
Undertaking.
217
4. Accelerate
(shareholder of our
Group)
30 January
2023
Pursuant to Accelerate’s anti-dilution
right under the amended and
restated shareholders’ agreement
dated 30 January 2023 entered into
between, among others,
Metasurface Technologies,
Accelerate and MMI, Accelerate
subscribed for, and Metasurface
Technologies allotted and issued to
Accelerate, 7,364 ordinary shares in
Metasurface Technologies at a
nominal consideration of S$1.
78
5. Mr. Thng (employee
and shareholder of our
Group)
16 May 2023 Pursuant to a share purchase
agreement dated 16 May 2023
entered into between Mr. Thng and
Metasurface Technologies,
Metasurface Technologies
transferred 125,767 ordinary shares
in Metaoptics Technologies held by
it to Mr. Thng at a consideration of
S$180,000.
2,059
3,257
The anti-dilution rights granted to certa in of our employees and shareholders of our
Group have been terminated on 26 April 2023. For more information on our share-based
payments and the anti-dilution rights grante d, see ‘‘History and Development — Corporate
Development — Our subsidiaries — Anti-dilution Undertaking’’ and Note 31 of Appendix I
to this prospectus.
FINANCIAL INFORMATION
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Finance Costs
During the Track Record Period, our finance costs included (i) interest expense on our
borrowings; (ii) interest expense on lease liab ilities in relation to (a) our Tuas Property we
leased from an independent third party, which is used as our production facilities in
Singapore and (b) certain machineries and motor vehicles acquired by us on hire purchase
arrangements; (iii) interest ex pense on provision for reinstatement cost in connection with
our Tuas Property leased by us; (iv) interest expense and unwinding of discount on deposits
received from the tenant of our Tuas Property which will be released to the tenant at the end
of the lease period; and (v) interest expense on non-Listing put option in relation to the 3rd
Pre-IPO Investment. Our finance costs wer e approximately S$1.6 million and S$1.3 million
for the years ended 31 December 2022 and 2023, respectively.
The following table sets forth the breakdown of our net finance costs for the periods
indicated:
Year ended 31 December
2022 2023
S$’000 % S$’000 %
Interest expense on
borrowings 511 32.4 207 15.4
Interest expense on lease
liabilities 1,097 69.5 1,080 80.4
Interest expense on
provision for
reinstatement cost 9 0.6 9 0.7
Interest expense on deposits
received — — 18 1.3
Unwinding of discount on
deposits received (38) (2.5) — —
Interest expense on
non-Listing put option — — 29 2.2
1,579 100.0 1,343 100.0
FINANCIAL INFORMATION
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Income tax expense
Our income tax expense consists of current and deferred income tax. The following
table sets forth the breakdown of our income tax expense for the periods indicated:
Year ended 31 December
2022 2023
S$’000 S$’000
Income tax
— Current year 910 1,412
— Over-provision in prior year — (32)
910 1,380
Deferred tax
— Current year 585 (134)
— Over-provision in prior year — (185)
585 (319)
Total income tax expense 1,495 1,061
Our Company was incorporated in the Cayman Islands as an exempted company with
limited liability under the Cayman Companie s Act and accordingly, is exempted from the
Cayman Islands income tax.
Singapore and Malaysia income tax has b een provided at the rate of 17% and 24% on
the estimated assessable profit during the Track Record Period.
Since the year of assessment for 2020 onwards, a 75% tax exemption is applied on the
first S$10,000 of normal chargeable income and a further 50% tax exemption is applied on
the next S$190,000 of normal chargeable income in Singapore.
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we had made all the require d tax filings and had paid all outstanding tax
liabilities with the relevant tax authorities in the relevant jurisdictions and we are not aware
of any outstanding or potential disputes with such tax authorities.
FINANCIAL INFORMATION
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PERIOD TO PERIOD COMPARISON
Year ended 31 December 2022 compared with year ended 31 December 2023
Revenue
Our revenue slightly decreased by app roximately S$0.3 million or 0.9% from
approximately S$39.1 million for the year ended 31 December 2022 to approximately
S$38.8 million for the year ended 31 December 20 23. The decrease was mainly attributable
to the decrease in sales from precision machin ing services by approximately S$7.4 million,
offset by the increase in sales from precision welding services by approximately S$7.0
million over such period.
Revenue by service type
Revenue from precision machining service s decreased by approximately S$7.4 million
or 32.2% from approximately S$22.9 millio n for the year ended 31 December 2022 to
approximately S$15.5 million for the year ended 31 December 2023. The decrease was
mainly attributable to the decrease in sales of precision machining services to Customer A
and a customer based in Malaysia, which is a part of a group listed on the Toronto Stock
Exchange and the New York Stock Exchange and headquartered in Canada and is
principally engaged in the provision of supp ly chain solutions to customers in advance
technology solutions and connectivity and cloud solutions industries, during the year for
the provision of precision machining servi ces by approximately S$4.6 million and S$0.9
million, respectively, which were primarily due to the decrease in purchase orders for
certain parts and components from these customers. Such decrease in purchase orders from
customers of our precision machining services was mainly due to postponed delivery of
certain precision machining parts and components, in particular during the second half of
2023 as requested by our customers, most of which were then expected to be delivered in the
second and third quarters of 2024. To the best knowledge of the Company, the postponed
delivery requests in the precision machining parts and components by our customers was
primarily due to their de-stocking of the then ex isting inventories on hand. According to the
CIC Report, the COVID-19 pandemic has disrupted global supply chains, leading to global
chip shortage. The lingering effect of the global chip shortage and the surge in demand for
electronic products have consequently led to increase in demand in the semiconductor
industry in 2022. In 2022, with the eventual up lift of COVID-19 preventive and lock-down
measures by governments in different countries, in order to secure the production capacity
of their suppliers in the post COVID-19 period to cope with the expected growing demand
for chips, semiconductor companies increased its capital expenditure and investment in
semiconductor manufacturing equipment. Therefore, the surge in production and demand
resulted in accumulation of inventories during 2022. This then caused semiconductor
companies and semiconductor equipment ma nufacturing companies to slow down their
purchases and undertake periodic de-stocking measures in 2023, leading to decrease in
demand of our precision machining parts and components during the year ended 31
December 2023.
FINANCIAL INFORMATION
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Revenue from precision welding services increased by approximately S$7.0 million or
43.3% from approximately S$16.2 millio n for the year ended 31 December 2022 to
approximately S$23.2 million for the yea r ended 31 December 20 23. The increase was
primarily attributable to the increase in pur chase orders from Customer C and Customer B
during the year for the provision of precision welding services by approximately S$4.6
million and S$1.4 million, respectively, which wer e primarily due to the increase in purchase
orders for certain parts and components from these customers. During the Track Record
Period, we received both repeated orders and new orders from our existing customers for
our precision welding services. Our customers continue to place recurring orders after we
successfully passed the initial quality inspection and become an approved supplier for such
products, demonstrating their satisfaction to the quality of our products. Our customers
also requested for precision welding services for new parts and components from time to
time. Notwithstanding the periodic de-stocking phenomenon experienced by the
semiconductor manufacturing equipment industry in 2023 which impacted certain
precision engineering processes such as preci sion machining, the demand for precision
welding services remained relatively resilient in 2023 as the precision welding process will
still be required for the ordered precision machined parts and components once such
components reach the stage for further pr ocessing, such as precision welding,
sub-assemblies, assemblies or system integration within the production chain.
Revenue by customer sector
Revenue from customers in the semicondu ctor industry slightly decreased by
approximately S$1.6 million or 4.6% from a pproximately S$35.7 million for the year
ended 31 December 2022 to approximately S$ 34.1 million for the year ended 31 December
2023. The decrease in proportion of our revenue contribution from customers in the
semiconductor industry was mainly attributable to our efforts to diversify our customer
sectors, for instance in the aerospace industry. Revenue from customers in the aerospace
industry increased by approximately S$1.5 m illion from approximately S$0.1 million for the
year ended 31 December 2022 to approximately S$1.6 million for the year ended 31
December 2023. The increase was mainly attributable to the increase in purchase orders
from Customer B for aerospace related parts and components for the year ended 31
December 2023. Customer B recorded an increase in its sales in relation to aerospace and
defence by approximately 4% from 2022 to 2023, by leveraging its market position in both
defence and commercial aerospace sectors to capture the increase in the global market size
of the aerospace and defence market in 2023, partly driven by increased air travel and
aviation activities.
Revenue from customers in the data storage industry remained stable at approximately
S$2.4 million and S$2.4 million for the y ears ended 31 Decemb er 2022 and 2023,
respectively.
Revenue by customer geographical location
Revenue from customers located in Singa pore decreased by approximately S$5.9
million from approximately S$20.7 million for the year ended 31 December 2022 to
approximately S$14.8 million for the yea r ended 31 December 2023. Revenue from
FINANCIAL INFORMATION
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--- page 317 ---
customers located in Malaysia increa sed by approximately S$3.5 million from
approximately S$12.6 million for the year ended 31 December 2022 to approximately
S$16.1 million for the year ended 31 December 2023. Revenue from customers located in the
U.S. increased by approximately S$1.8 million from approximately S$3.5 million for the
year ended 31 December 2022 to approximately S$5.3 million for the year ended 31
December 2023. The increase in proportion of revenue contribution from customer located
in Malaysia and the U.S. was mainly attributable to (i) increase in sales to Customer C for
certain parts and components in Malaysia, a nd (ii) increase in sales to Customer B and
I n t e v a cA s i aP t e .L t d .f o rc e r t a i np a r t sa n dc o m p o n e n t si nr e l a t i o nt ot h ea e r o s p a c ea n d
data storage sector in the U.S..
Cost of sales
Our cost of sales increased by approximately S$1.3 million or 5.6% from
approximately S$23.1 million for the year ended 31 December 2022 to approximately
S$24.4 million for the year end ed 31 December 2023, which w as attributable to the (i)
increase in direct labour cost by approximate ly S$1.0 million as a result of the increase in
procurement of third party labour services to fulfil the increased sales in respect to precision
welding services; and (ii) incr ease in direct material costs by approximately S$0.1 million
due to increase in sales from our precision weld ing services, which generally required more
inputs of standard parts such as valve and fittings in the production process.
Gross profit and gross profit margin
As a result of the foregoing, our gross profit decreased by approximately S$1.7 million
or 10.2% from approximately S$16.1 millio n for the year ended 31 December 2022 to
approximately S$14.4 million for the year ended 31 December 2023. Our overall gross profit
margin decreased from approximately 41 .0% for the year ended 31 December 2022 to
approximately 37.2% for the year ended 31 December 2023, which was mainly attributable
to the decrease in the gross profit margin for our precision machining services from
approximately 43.2% for the year ended 31 December 2022 to approximately 31.4% for the
year ended 31 December 2023. The decrease in the gross profit margin for our precision
machining services was mainly attributable to th at our cost of sales for precision machining
services comprised relatively large portion o f overhead costs such as labour costs as well as
depreciation of property, plant and equipment and right-of-use assets which were relatively
static regardless of sales performance, therefore our cost of sales for precision machining
only decreased by approximately 18.2% wh ile our revenue for precision machining
decreased by approximately 32.2%, which was primarily due to the normalisation of our
customers’ purchase orders during the year after their surge in production and demand for
our products in 2022 when there was eventu al uplift of COVID-19 preventive and lock
down measures by governments in different co untries, thus leading t o the decrease in the
gross profit margin for our precision machining services during the year ended 31 December
2023. Our cost of sales for precision machining s ervices comprised relatively larger portion
of fixed overhead costs than our precision welding services as our precision machining
services involved more use of advanced machineries and equipment such as CNC turning
and milling machines which are of higher va lue than the welding tools used for our
precision welding services, and therefore incurred larger depreciation expenses.
FINANCIAL INFORMATION
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The gross profit margin for our precision welding services increased from
approximately 38.1% for the year ended 31 D ecember 2022 to approximately 41.0% for
the year ended 31 December 2023, which was mainly attributable to the bulk purchase
discount we received from our suppliers as a results of the increase in our sales of precision
welding services during the year.
Other income
Other income increased by approximatel y S$1.6 million or 141.7% from approximately
S$1.1 million for the year ended 31 December 2 022 to approximately S$2.7 million for the
year ended 31 December 2023. The increase wa s mainly attributable to (i) the increase in
rental income by approximately S$1.0 million, primarily due to the recognition of full year
rental income during the year ended 31 December 2023 from part of the Tuas Property
which we sublet to an independent third part y since November 2022; and (ii) increase in
service income by approximately S$0.9 million d ue to the recognition of full year service
income generated from our provision of services, such as tubular thread inspection, tubular
body inspection, tubular inventory management and storage and other logistic services
related to tubular management, to an independent third party, which is principally engaged
in trading of steel tubulars and provision of related services for the year ended 31 December
2023, partially offset by the decrease in sc rap material sales income generated by
approximately S$0.2 million.
Other gains/(losses), net
Other net gains or losses decreased by app roximately S$0.6 million from a net gain of
approximately S$0.2 million for the year ended 31 December 2022 to a net loss of
approximately S$0.4 million for the year end ed 31 December 2023, mainly attributable to
the recognition of net currency losses of app roximately S$0.5 million for the year ended 31
December 2023 when compared to a net curre ncy gain of approximately S$0.1 million for
the year ended 31 December 2022 due to the fluctuations of USD against SGD during the
respective year.
Administrative expenses
Administrative expenses increased b y approximately S$1.2 million or 11.2% from
approximately S$10.5 million for the year end ed 31 December 2022 to approximately S$11.7
million for the year ended 31 December 2023. Th e increase was mainly attributable to (i)
increase in share-based payments for the employees and shareholders of approximately
S$2.3 million, which was partially offset by (ii) decrease in amortisation expenses of
approximately S$0.6 million, mainly attributab le to the derecognised intangible assets as a
results of disposal of interests in Metaoptics T echnologies and (iii) decrease in repair and
maintenance costs by approximately S$0.3 m illion. For further details of the share-based
payments, see Note 31 of Appendix I to this prospectus.
FINANCIAL INFORMATION
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Finance costs
Finance costs decreased by approximately S$0.3 million or 14.9% from approximately
S$1.6 million for the year ended 31 December 2 022 to approximately S$1.3 million for the
year ended 31 December 2023. The decrease was mainly attributable to the repayment of
our borrowings, resulting in decrease in our bo rrowings from approx imately S$5.5 million
as at 31 December 2022 to approximatel y S$4.2 million as at 31 December 2023. The
decrease in our borrowings led to the decrease in interest expense on borrowings by
approximately S$0.3 million for t he year ended 31 December 2023.
Income tax expense
Income tax expense decreased by appr oximately S$0.4 million or 29.0% from
approximately S$1.5 million for the year e nded 31 December 2022 to approximately
S$1.1 million for the year ended 31 December 2 023. The decrease was mainly due to the
over-provision of current and deferred tax expenses in prior year.
Our effective tax rate was approximately 28.2% and 31.7% for the years ended 31
December 2022 and 2023, respectively.
(Loss)/profit from discontinued operation
Our profit or loss from discontinued operation represents the operating results of
Metaoptics Technologies before the disposal on 16 May 2023. Our profit or loss from
discontinued operation increased from a los s of approximately S$1.1 million for the year
ended 31 December 2022 to a profit of appro ximately S$2.1 million for the year ended 31
December 2023. The increase was primarily due to (i) the recognition of gains on disposal of
Metaoptics Technologies for the year ende d 31 December 2023 of approximately S$2.5
million which comprises a gain on disposal of co ntrolling interest of approximately S$1.6
million and a gain on retained investment of approximately S$1.0 million.
We recognised gains on disposal of Metaoptics Technologies as the fair value of the
interests in Metaoptics Technologies we disposed of and retained as investment in an
associate was greater than the corresponding carrying value of the net assets of Metaoptics
Technologies as at the date of disposal. The valuation of Metaoptics Technologies at the
date of disposal was undertaken by an independent qualified professional valuer.
Profit for the year
As a result of the foregoing, we recorded pr ofits of approximately S$2.7 million and
approximately S$4.4 million for the years ende d 31 December 2022 and 2023, respectively.
FINANCIAL INFORMATION
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DESCRIPTION OF SELECTED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION LINE ITEMS
The following table sets forth our consolidated statements of financial position as at
the dates indicated:
As at 31 December
2022 2023
S$’000 S$’000
ASSETS
Non-current assets
Property, plant, and equipment 7,235 5,710
Prepayments — 203
Right-of-use assets 27,044 26,249
Investment property 616 575
Goodwill 4,429 4,429
Intangible assets 6,697 2,281
Other assets 359 359
Other receivables — Amount due from an associate — 2,880
Investment in an associate — 1,015
Deferred tax assets 325 644
Total non-current assets 46,705 44,345
Current assets
Inventories 7,873 6,641
Trade and other receivables 9,345 7,742
Prepayments 1,091 1,907
Cash and bank balances 4,392 9,225
Total current assets 22,701 25,515
Total assets 69,406 69,860
EQUITY AND LIABILITIES
Equity
Share capital —* 1
Accumulated losses (10,724) (6,117)
Currency translation reserve (145) (154)
Capital reserve 32,165 33,267
Total equity attributable to owners of the Company 21,296 26,997
Non-controlling interests 1,013 —
22,309 26,997
* Less than S$1,000
FINANCIAL INFORMATION
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As at 31 December
2022 2023
S$’000 S$’000
LIABILITIES
Current liabilities
Borrowings 5,542 4,018
Lease liabilities 2,682 2,652
Trade and other payables 9,089 7,564
Contract liabilities 297 —
Income tax payable 993 1,381
Total current liabilities 18,603 15,615
Non-current liabilities
Borrowings — 219
Lease liabilities 27,719 26,214
Trade and other payables 458 489
Provisions 260 269
Deferred tax liabilities 57 57
Total non-current liabilities 28,494 27,248
Total liabilities 47,097 42,863
Total equity and liabilities 69,406 69,860
Net current assets 4,098 9,900
Property, plant and equipment
During the Track Record Period, our property, plant and equipment mainly consisted
of (i) plant and machineries; (ii) freehold building and freehold land; (iii) renovation for
factory and office; (iv) furniture and fittings; (v) motor vehicles; (vi) office equipment
software; and (vii) computers. As at 31 December 2022 and 2023, our property, plant and
equipment were approximately S$7.2 million and S$5.7 million, respectively. The decrease
in our property, plant and equipment by appr oximately S$1.5 million was mainly due to
depreciation expenses of approximately S$1.3 million.
FINANCIAL INFORMATION
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Depreciation on our property, plant and equipment was charged to profit or loss
during the years ended 31 December 2022 and 2023 as set out as below:
Year ended 31 December
2022 2023
S$’000 S$’000
Cost of sales 909 1,032
Administrative expenses 235 259
Total 1,144 1,291
The property, plant and equipment with the carrying value of approximately S$1.2
million and S$1.2 million as at 31 December 2022 a nd 2023, respectively, were pledged for a
term loan as disclosed in ‘‘— Indebtedness — Borrowings’’ and Note 25(a) of Appendix I to
this prospectus.
Right-of-use Assets
During the Track Record Period, our right-of-use assets were in relation to lease
arrangements for (i) the leasehold property in relation to the Tuas Property for a lease term
of approximately 23.5 years; and (ii) machineries and motor vehicles under hire purchase
arrangement. The lease payments of these right-of-use assets are payable on monthly basis.
The balances of our right-of-use assets remained relatively stable at approximately S$27.0
million and S$26.2 million as at 31 Decem ber 2022 and 2023, respectively.
During the years ended 31 December 2022 and 2023, depreciation expenses on our
right-of-use assets amounted to approx imately S$1.9 million and S$2.1 million,
respectively.
Investment Property
Our investment property represents the carrying amount of the Enterprise Road
Property which has been leased to an independent third party. Our investment property
amounted to approximately S$0.6 million a nd S$0.6 million as at 31 December 2022 and
2023, respectively.
Amounts recognised in our profit and loss for the investment property during the
Track Record Period are set out as below:
Year ended 31 December
2022 2023
S$’000 S$’000
Rental income from operating leases 83 99
Direct expenses from property that generated rental
income 57 57
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Our investment property is stated at cost less accumulated depreciation. Depreciation
is charged on a straight-line basis over an esti mated useful life of 28 years. During the years
ended 31 December 2022 and 2023, depreciatio n expenses on our investment property
amounted to approximately S$41,000 and S$41,000, respectively.
The investment property wit h the carrying value of approx imately S$0.6 million and
S$0.6 million as at 31 December 2022 and 2023, r espectively, was pledged to a term loan as
disclosed in ‘‘— Indebtedness — Borrowings’’ and Note 25(a) of Appendix I to this
prospectus.
The fair value of the investment property w as approximately S$0.9 million and S$0.9
million as at 31 December 2022 and 2023, respec tively, based on a valuation conducted by
an independent property valuer.
Goodwill
As at 31 December 2022 and 2023, the carrying amount of our goodwill was
approximately S$4.4 million and S $4.4 million, respectively.
Impairment tests for goodwill
Our goodwill arises from the acquisition of SPW, a subsidiary of our Group under the
precision welding segment, and being a cash-generating unit (the ‘‘ CGU’’) of our Group.
Our Group assesses whether our goodwill has suffered any impairment on an annual
basis. For the years ended 31 December 2022 and 2023, the recoverable amount was
determined based on value-in-use calculations which require the use of assumptions. The
calculations use cash flow projections based on financial budgets approved by the
management covering a five-year period.
Cash flows beyond the five-year period are ex trapolated using the estimated terminal
growth rates stated below. These growth rate s are consistent with forecasts included in
industry reports specific to the industry in which the CGU operates. The pre-tax discount
rate reflects specific risks relating to the r elevant segment and the countries in which it
operates.
The following table sets out the key assumptions for the value-in-use calculation:
2022 2023
Revenue growth rate 6%–34.6%
1 1%–5.1% 2
Pre-tax discount rate 3 16.9% 16.9%
Terminal growth rate 4 1.8% 1.8%
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Notes:
1. For goodwill assessment as at 31 December 2022, the revenue growth rate of 2023 was relatively
high at 34.6%, as we have taken into account certain purchase orders from our major customers
which were expected to be delivered in 2023 while the growth rate for 2024 to 2027 were expected to
be relatively stable.
2. In respect of the goodwill assessment as at 31 December 2023, we took a prudent approach to revise
the five-year budget plan to reflect a lower growth rate as our customers were undergoing a periodic
de-stocking process in 2023 and requested us to pos tpone delivery of certain parts and components.
3. We have assessed the discount rate based on the Capital Asset Pricing Model (CAPM) and
parameters adopted for the valuation for the Ac quisition with reference to the market data of
comparable companies and other public data sour ces, where applicable, including the 20-year
government bond yield rate and adjusted the com pany specific risk when e stimating the discount
rates. We consider that the overall changes to the parameters of the discount rates between the years
were not material. We have also adopted a prudent view in the impairment assessment for both
years, and considered a high level of company speci fic risk premium in their discount rate derivation
for both December 2022 and 2023. Hence the same pre-tax discount rates were adopted throughout
the Track Record Period.
4. We have considered Singapore’s 20-year proj ected average inflation rate from The Economist
Intelligence Unit (EIU) as well as the long-ter m risk-free rate as indicated by the Singapore
Government Bond yields, as parameters to estimat e the terminal growth rates. We consider that a
1.8% terminal growth rate is appr opriate as it falls within the afor ementioned estimates for both
December 2022 and 2023.
If the following key parameters (i.e. revenue growth rate and pre-tax discount rate)
change, with all other variables held constant, the headroom between the estimated
recoverable amount and the carrying amount of the relevant goodwill would decrease as
follows:
2022 2023
S$’000 S$’000
Revenue growth rate decreased by 4% (2022 : 5%) 9,716 18,795
Pre-tax discount rate increased by 3% (2022 : 3%) 22,454 22,575
Based on the assessment performed, the headrooms available for the CGU were
approximately S$29.0 million and S$30.9 million as at 31 December 2022 and 2023,
respectively.
The directors and management have consid ered and assessed reasonably possible
changes for other key assumptions and have not identified any instances that could cause
the carrying amount of the CGU to exceed its recoverable amount.
There was no provision for impairment of goodwill for the years ended 31 December
2022 and 2023, respectively.
FINANCIAL INFORMATION
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Intangible assets
Our intangible assets decrea sed by approximately S$4.4 million from approximately
S$6.7 million as at 31 December 2022 to approx imately S$2.3 million as at 31 December
2023, primarily due to (i) disposal of Metaoptics Technologies with carrying amount of
intangible assets of approximately S$3.9 millio n, and (ii) the amortisation of approximately
S$0.5 million for the year ended 31 December 2023.
During the Track Record Period, our intangible assets consisted of (i) know-how
transferred by Mr. Thng to our Group in 2021 in exchange for his acquisition of certain
shareholdings in Metasurface Technologies and Metaoptics Technologies, (ii) customer
relationship and customer contracts recogn ised from the acquisition of SPW, and (iii)
licence granted by Accelerate to our Group pursuant to the Licence Agreement for us to use
its technologies and intellectual property right s to develop enhancements and commercialise
its technologies and licenced products for a co nsideration of approximately S$2.9 million.
The upfront fee of approximately S$2.9 m illion payable by our Group to Accelerate
pursuant to the Licence Agreement was settled in full by offsetting against the consideration
of the same amount for the subscription in Metasurface Technologies’s ordinary shares
payable by Accelerate.
The estimated useful lives of the know-how and licence are seven years and 10 years,
respectively, which were determined with reference to the technological obsolescence,
product life cycles, expected usage and expiration of the respective contracts. The estimated
useful lives of our customer contracts and customer relationships are 10 years, which was
determined based on our assessment of the es timated years of relationships with our
customers, attrition rate and historical experience. In assessing the estimated useful life of
customer contracts and cust omer relationships, a bench marking analysis has been
performed on similar transactions and a 10-year useful life falls within the commonly
observed range for customer rela tionships. For further details of our intangible assets, see
Note 16 of Appendix I to this prospectus.
During the years ended 31 December 2022 and 2023, amortisation expenses on our
intangible assets amounted to approximately S$1.5 million and S$0.5 million, respectively.
Other assets
During the Track Record Period, our other a ssets represented keyman insurance asset
(life insurance settlement contract) which is ini tially recognised as a financial instrument at
the amount of premium paid and subsequently carried at fair value at the end of each
reporting period, with changes in fair value recognised in profit or loss. As at 31 December
2022 and 2023, our other assets were approximately S$0.4 million and S$0.4 million,
respectively.
Investment in an associate
Investment in an associate consists of our investment in Metaoptics Technologies
subsequent to our disposal of approximately 33.32% interests in Metaoptics Technologies
to Mr. Thng on 16 May 2023.
FINANCIAL INFORMATION
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We recorded investment in an associate of n il and approximately S$1.0 million as at 31
December 2022 and 2023, respectively, primar ily due to the reduction of our shareholdings
in Metaoptics Technologies from approximate ly 53.5% to 20.2% following the disposal and
its subsequent reclassification as investme nt in an associate. As at 31 December 2023, we
held approximately 18.78% shares in Metaoptics Technologies.
During the years ended 31 December 2022 a nd 2023, share of loss from an associate
amounted to nil and approximately S$0.4 million, respectively.
Deferred income taxes
As at 31 December 2022 and 2023, our net deferred tax assets were approximately
S$0.3 million and S$0.6 million, respectively.
Deferred income tax asse ts and liabilities are offset when there is a legally enforceable
right to offset current income tax assets again st current income tax liabilities and when the
deferred income taxes relate to the same taxation authority.
Our deferred tax assets are recognised only if it is probable that future taxable amounts
will be available to utilise those tem porary differences and losses.
Inventories
During the Track Record Period, our inventories consisted of (i) raw materials, (ii)
work in progress, (iii) finished goods, and (i v) product consumable s. As at 31 December
2022 and 2023, we had inventories of appr oximately S$7.9 million and S$6.6 million,
respectively. The decrease in our inventories balance as at 31 December 2023 when
compared to 31 December 2022 was mainly attr ibutable to (i) the utilisation of our raw
materials to cope with our sales near the yea r end; and (ii) the provision for inventory
obsolescence of approx imately S$0.4 million.
The following table sets forth the breakdown of our inventory balances as at the dates
indicated:
As at 31 December
2022 2023
S$’000 S$’000
Raw materials 2,582 1,984
Work in progress 3,876 3,629
Finished goods 1,351 1,220
Product consumables 64 222
7,873 7,055
Less: Provision for inventory obsolescence — (414)
Total 7,873 6,641
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We had written off finished goods with cost of approximately S$130,000, nil and nil for
the years ended 31 December 2022 and 2023 a nd up to the Latest Practicable Date,
respectively according to our inventory polic y as a result of buffer inventories we produced
for certain parts ordered by our customers to cope with any urgent orders. We recognised
approximately S$18.9 million and S$14.9 millio n of our cost of inventories in our cost of
sales for the years ended 31 December 2022 and 2023, respectively. We have established our
internal policy regarding inventory managem ent. Our accounting department will monitor
and identify if there is any obsolete or slow mov ing inventory on a yearly basis and assess if
provision or a write-down on cost is requir ed to be made on any stock according to our
inventory policy. For obsolete and slow moving inventory which provision was made or had
been written off, we would not dispose of such inventory without the consent of the relevant
customer but instead keep such inventory at our w arehouse. Besides, there is possibility that
our customers may subsequently request for such inventory that we considered obsolete.
Considering that no disposal of obsolete or slow moving inventory was made during the
Track Record Period and our obsolete inventory may possibly be sold to customers
whenever they require such item, the Directors believe that the ESG risk relating to our
obsolete and slow moving inven tory management is minimal. Pr ovision for impairment and
obsolescence on inventory should be made with the approval of the Directors or
management of our Group upon identification of any obsolete inventory. During the
Track Record Period, we have made provision for or written off our inventories (as
appropriate) according to our inventory policy. Inventories are written down if the
anticipated net realisable value declines belo w the carrying amount of the inventories. The
calculation of the net realisable value takes into consideration specific characteristics of
each inventory category, such as age, expected sales movements, slow-moving indicators,
etc.
As at 30 April 2024, approximately S$4.2 m illion, accounting for approximately
63.4%, of our inventories as at 31 December 2023 was subsequently consumed or sold. Our
Group adopts a build-to-order inventory policy and places order to purchase raw materials
for production after we receive purchase orde rs from our customers. The relatively low
subsequent usage of inventories as at 30 April 2024 was due to postponed delivery of certain
parts and components as requested by our customers, most of which were then expected to
be delivered in the second and third quarters of 2024. To the best knowledge of the
Company, the postponed delivery requests in the parts and components by our customers
was primarily due to their de-stocking of the then existing inventories on hand since the
second quarter of 2023. Our Directors have assessed and made sufficient provision for our
inventories and do not believe there is any reco verability issue for our inventories during the
Track Record Period and up to the Latest Practicable Date.
FINANCIAL INFORMATION
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The following table sets forth our average inventory turnover days for the periods
indicated:
For the year ended
31 December
2022 2023
Average inventory turnover days (1) 91 109
Note:
(1) Average inventory turnover days for each perio d is calculated by dividing the average opening and
closing balances of inventories by cost of sales of our Group for that period and then multiplied by
the number of days in that period.
Our average inventory turnover days incr eased from approximately 91 days for the
year ended 31 December 2022 to 109 days for the year ended 31 December 2023 due to
postponed delivery of certain parts and comp onents as requested by our customers. Our
average inventory turnover days during the T rack Record Period were generally in line with
our project lead time which typically ranges from 4 to 17 weeks for our precision machining
services and 9 to 22 weeks for our precision welding services from receipt of purchase orders
to delivery. For details of our business flo w, see ‘‘Business — Our Business Model’’.
The following table sets forth the ageing analysis of our inventories after considering
the provision for inventory obsole scence as at the dates indicated:
As at 31 December 2023
Raw
materials
Work in
progress
Finished
goods
Product
consumables Total
S$’000 S$’000 S$’000 S$’000 S$’000
0–30 days 1,537 1,744 491 151 3,923
31–60 days 215 300 109 13 637
61–90 days 38 116 95 11 260
Over 91 days 166 1,139 470 46 1,821
1,956 3,299 1,165 221 6,641
FINANCIAL INFORMATION
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As at 31 December 2022
Raw
materials
Work in
progress
Finished
goods
Product
consumables Total
S$’000 S$’000 S$’000 S$’000 S$’000
0–30 days 1,256 1,916 456 14 3,642
31–60 days 770 635 376 13 1,794
61–90 days 240 850 119 10 1,219
Over 91 days 316 475 400 27 1,218
2,582 3,876 1,351 64 7,873
Trade and other receivables
The following table sets forth the breakdown of our trade and other receivables as at
the dates indicated:
As at 31 December
2022 2023
S$’000 S$’000
Non-current
Non-trade
Amount due from an associate — 2,880
— 2,880
Current
Trade
Trade receivables from third parties 7,952 6,614
Non-trade
GST receivables 193 36
Deposits 1,200 1,092
1,393 1,128
9,345 7,742
Trade receivables
Trade receivables are amounts due from customers for goods sold or services
performed in the ordinary course of our busin ess. Our trade receivables are generally due
for settlement within 30 to 60 days of the invoice date and therefore are all classified as
current. They are non-interest bearing and are recognised at their original invoice amounts
which represent their fair value on initial r ecognition. Based on the impairment review
conducted by our management, during the Track Record Period, we expect the occurrence
FINANCIAL INFORMATION
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of losses from non-performance by the counterparties of our trade and other receivables
was remote and loss allowance provision for our trade and other receivables was
immaterial. As a result, there was no bad debt or provision on our trade receivables
made during the Track Record Period.
Our trade receivables decr eased from approximately S$8.0 million as at 31 December
2022 to S$6.6 million as at 31 December 2023 whic h was mainly due to a larger settlement of
trade receivables by our customers near year end of 2023.
The following tables set forth the ageing analysis of our trade receivables, based on
invoice date, as at the dates indicated, and our average trade receivables turnover days for
the periods indicated:
As at 31 December
2022 2023
S$’000 S$’000
0 to 30 days 3,370 4,642
31 to 60 days 2,728 1,597
61 to 90 days 1,606 196
Over 90 days 248 179
7,952 6,614
For the year ended
31 December
2022 2023
Average trade receivables turnover days
(1) 65 69
Note:
(1) Average trade receivables turnover days for each period is calculated by dividing the average
opening and closing balances of trade receivables by revenue of our Group for that period and then
multiplied by the number of days in that period.
Our average trade receivables turnover days remained relatively stable at
approximately 65 days for the year ended 31 December 2022 and approximately 69 days
for the year ended 31 December 2023.
The financial assets measured at amortised cost during the Track Record Period
include trade receivables, other receivables and cash and bank balances. Our management
estimated the expected credit loss (‘‘ ECL’’) rates of these financial assets in accordance with
IFRS 9 during the Track Record Period, which were estimated to be minimal and
immaterial to our Group.
As at 30 April 2024, approximately S$6.6 million or 99.3% of our trade receivables as
at 31 December 2023 were subsequently settled.
FINANCIAL INFORMATION
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Non-trade receivables
During the Track Record Period, our non-trad e receivables primarily consisted of (i)
amount due from an associate, Metaoptics Technologies, for the aggregate consideration
settled by the Group for the intangible assets acquired by Metaoptics Technologies under
the Licence Agreement with Accelerate, (ii) de posits we placed with the landlord as tenant
of the Tuas Property and as well as deposits for electricity and bank guarantee, and (iii)
GST receivables with respect to GST refunds.
Our non-trade receivables increase d by approximately S$2.6 million from
approximately S$1.4 million as at 31 Decembe r 2022 to S$4.0 million as at 31 December
2023 primarily due to the increase in amount due from an associate of approximately S$2.9
million, partially offset by decrease in GST recei vables and deposits by approximately S$0.2
million and S$0.1 million, respect ively as at 31 December 2023.
Our amount due from an associate is non-trade in nature, interest-free and repayable
on demand. As agreed between our Group and Metaoptics Technologies, such amount will
not be settled prior to the Listing and is expected to be settled by Metaoptics Technologies
from the operating cashflow generated from its business operations and investment from its
investors after Listing. The amount due from an associate arose from the amount
Metasurface Technologies settled the upfront licence fee for certain technologies licenced
under the Licence Agreement with its share c apital for Metaoptics Technologies when
Metaoptics Technologies was still our subsidiary, to support the continual development of
Metaoptics Technologies. After Metaoptics Technologies became our associate, this
amount was reclassified as amount due from an associate. Considering that our Group
remained as an investor with approximately 17.10% equity interests in Metaoptics
Technologies as at the Latest Practicable Date, the Directors consider that it is
strategically advantageous to provide Metao ptics Technologies sufficient time to settle
the amount due to us to support their ongoing development in optics technology and to
ensure their operational stability.
Pursuant to Rule 20.29 of the GEM Listing Rules, continuing connected transactions
are connected transactions involving the pr o v i s i o no fg o o d so rs e r v i c e so rf i n a n c i a l
assistance, which are carried out on a continuing or recurring basis and are expected to
extend over a period of time. The amoun t of S$2,880,000 due from Metaoptics
Technologies, being an associate of our Gr oup, arose from the Pre-IPO Investment,
which is one-off and non-recurring in nature and entered into prior to the Listing. For
details, please see ‘‘History and Development — Pre-IPO Investments — 2nd Pre-IPO
Investment by Accelerate’’ in this prospectus. Such amount was regarded as an amount due
from an associate purely due to the reclassif ication after Metaoptics Technologies became
our associate, accordingly, it will not constitu te a continuing connected transaction subject
to the relevant requirements under Chapter 20 of the GEM Listing Rules after Listing.
FINANCIAL INFORMATION
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Prepayments
During the Track Record Period, our current and non-current prepayments amounted
to approximately S$1.1 million and S$2.1 million as at 31 December 2022 and 2023,
respectively, which were mainly related to the prepayments for Listing expenses of
approximately S$1.0 million and S$1.8 m illion for the years ended 31 December 2022 and
2023, respectively.
Cash and bank balances
During the Track Record Period, our cash and bank balances, which consisted of our
cash at bank and cash on hand, were approxim ately S$4.4 million and S$9.2 million as at 31
December 2022 and 2023, respectively. The increase in our cash and bank balances as at 31
December 2023 when compared with that as a t 31 December 2022 was mainly resulted from
the cash generated from operations during the year ended 31 December 2023.
Trade and other payables
The following table sets forth the breakdown of our trade and other payables as at the
dates indicated:
As at 31 December
2022 2023
S$’000 S$’000
Current
Trade
Trade payables to third parties 5,919 2,357
5,919 2,357
Non-trade
Other payables to third party — 350
Amount due to a shareholder — 1,029
Amount due to a director 225 228
Accrued expenses 2,925 3,592
GST payables — 1
Deposits received 20 7
3,170 5,207
9,089 7,564
Non-current
Non-trade
Deposits received 458 489
9,547 8,053
FINANCIAL INFORMATION
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Trade payables
During the Track Record Period, our trade payables represent trade payables to third
parties mainly in relation to our procurement of raw materials and processing services from
third-party suppliers. Our trade payables to third parties are non-interest bearing and are
generally on 30 to 60 days’ credit terms based on invoice date.
The decrease in our trade payables from approximately S$5.9 million as at 31
December 2022 to approximately S$2.4 millio n as at 31 December 2023 was primarily due
to our prompt repayment of trade payables near the year end.
The following tables set forth the ageing analysis of our trade payables based on
invoice dates as at the dates indicated and our average trade payables turnover days for the
periods indicated:
As at 31 December
2022 2023
S$’000 S$’000
0 to 30 days 1,429 1,703
31 to 60 days 1,607 244
61 to 90 days 1,108 143
Over 90 days 1,775 267
5,919 2,357
For the year ended
31 December
2022 2023
Average trade payables turnover days
(1) 74 62
Note:
(1) Average trade payables turnover days for each period is calculated by dividing the average opening
and closing balances of trade payables by cost of sales of our Group for that period and then
multiplied by the number of days in that period.
Our average trade payables turnover days d ecreased from approximately 74 days for
the year ended 31 December 2022 to approxima tely 62 days for the year ended 31 December
2023 since we had expedited our settlement of outstanding payables to our suppliers in
order to accelerate the procurement and delivery of the imminent orders of raw materials
from the suppliers to facilitate our production schedule.
As at 30 April 2024, approx imately S$2.2 million, or approximately 92.1%, of our
trade payables as at 31 December 2023 had been subsequently settled.
FINANCIAL INFORMATION
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Non-trade payables
During the Track Record Period, our non-trade payables mainly represented (i)
accrued expenses which mainly include accru ed Listing expenses and accrued salaries and
bonuses payable to our employees, (ii) amount due to a director, which is expected to be
fully settled upon the Listing, (iii) deposits whi ch consisted of the deposit received from the
tenants of our Enterprise Road Property and for the sublet of our Tuas Property; (iv)
amount due to a shareholder which represents amount payable to a pre-IPO investor for
non-Listing put option in relation to the 3rd Pre-IPO Investment; and (v) other payable to
third party which consists of rental payable to ESR-LOGOS Property Management (S) Pte
Ltd for our Tuas Property.
Our non-trade payables increased by appro ximately S$2.1 million from approximately
S$3.6 million as at 31 December 2022 to approx imately S$5.7 million as at 31 December
2023 primarily due to (i) increase in amount du e to a shareholder by approximately S$1.0
million; (ii) increase in accrued expenses by a pproximately S$0.7 million for the year ended
31 December 2023; and (iii) increase in other p ayables to third party by approximately
S$0.4 million;.
The amount due to a shareholder relates to a non-Listing put option granted to the
pre-IPO investor. Upon Listing, the non-Listing put option to require our Company to
purchase all of its shares expires without delivery and shall remain unexercisable
perpetually. It shall not be reinstated pursuant to the shareholders’ agreement and the
carrying amount of the non-Listing put option will be reclassified to equity.
Our amount due to a director is non-trade in nature and non-interest bearing, the
amount of which is expected to be settled upon the Listing.
Contract Liabilities
Our contract liabilities o f approximately S$0.3 million as at 31 December 2022
represented an advance service fee received from a customer in respect of purchase in
advance for components for es timated future orders. The c ontract liabilities as at 31
December 2022 have been fully settled as at the Latest Practicable Date. We did not have
any contract liabilit y as at 31 December 2023.
Provisions
Our provisions amounted to approximat ely S$0.3 million and S$0.3 million as at 31
December 2022 and 2023, respectively, represe nting the provision for reinstatement costs
based on the present value of costs to be incurred for removing the renovations from our
Tuas Property upon the termination of the lease of the property.
FINANCIAL INFORMATION
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Accumulated losses
We recorded accumulated losses of appro ximately S$10.7 million and S$6.1 million as
at 31 December 2022 and 2023, respectively, primarily due to the net losses we had incurred
for certain financial years before the Track Record Period. Such net losses were primarily
due to (i) the adoption of IFRS 16 as at 1 January 2019 for which the retrospective
restatement adjustment had resulted in higher expenses arising from the depreciation of the
right-of-use assets and interest expenses from t he lease liabilities, (ii) decrease in revenue
and gross profit during the financial years prior to the Track Record Period, which was
primarily due to significant decrease in sales fr om a customer, which is principally engaged
in manufacturing of semi-conductor processi ng equipment and its contract manufacturers
and/or service providers. During the relevan t period, such customer recorded a decrease in
its sales in the LED Lighting, Display & Compound Semiconductor market segment, and
(iii) certain of our operating expenses (includi ng depreciation expenses for our property,
plant and equipment and finance costs) are relatively fixed in nature, regardless of the
performance of our revenue during the previous financial years.
Despite the net losses made for the financi al years prior to the Track Record Period,
our Group recorded adjusted profit from continuing operations of approximately S$6.5
million and S$7.3 million for the years ended 3 1 December 2022 and 2 023, respectively
primarily due to our profits generated from operations during the periods. For more
information on the period to period comparis on of the financial info rmation for the years
ended 31 December 2022 and 2023, see ‘‘— Period to Period Comparison’’.
Non-controlling interests
Our non-controlling interests represent the portion of Metaoptics Technologies’ net
results of operations and its net assets, which a re attributable to the interests that are not
owned directly or indirectly by the equity holders of our Company.
As at 31 December 2022 and 2023, our non -controlling interests amounted to
approximately S$1.0 million and nil. There w as no non-controlling interest held by the
Group as at 31 December 2023 due to the de-recognition of the carrying value of our
non-controlling interest in Met aoptics Technologies upon our disposal of approximately
33.32% interest in Metaoptics Technologies in May 2023.
FINANCIAL INFORMATION
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INDEBTEDNESS
The following table sets forth a breakdown of our indebtedness as at the dates
indicated:
As at 31 December
As at
30 April
20242022 2023
S$’000 S$’000 S$’000
(unaudited)
Current
Borrowings 5,542 4,018 3,658
Lease liabilities 2,682 2,652 2,877
Amount due to a shareholder — 1,029 1,029
8,224 7,699 7,564
Non-current
Borrowings — 219 195
Lease liabilities 27,719 26,214 26,104
27,719 26,433 26,299
35,943 34,132 33,863
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we did not have any material difficulty in obtaining bank loans and other
borrowings, default in payment of bank loans and other borrowings or breach of covenants.
Except as disclosed herein, we did not have an y other banking facilities (utilised or not),
outstanding loan capital, bank overdrafts and liabilities under acceptances or other similar
indebtedness, debentures, mortgages, charges or loans, or acceptance credits or hire
purchase commitments, guarantees or other ma terial contingent liabilities as at the Latest
Practicable Date.
Our Directors confirm that there was no material change in the Group’s indebtedness
since the Latest Practicable Date up to the date of this prospectus.
FINANCIAL INFORMATION
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Borrowings
Our current and non-curren t borrowings amounted to approximately S$5.5 million,
S$4.2 million and S$3.9 million as at 31 Dec ember 2022 and 2023 and 30 April 2024,
respectively, with effective interest rates generally ranging from 2.75% to 7.00% per annum
as at 31 December 2022 and 2023, respectively. For details of the effective interest rates of
our borrowings during the Track Record Period, see Note 25 of Appendix I to this
prospectus. During the Track Record Period, our borrowings consisted of (i) secured
and/or guaranteed bank loans and (ii) secured and/or guaranteed bank overdraft. The
decrease in our total borrowin gs by approximately S$1.3 million from approximately S$5.5
million as at 31 December 2022 to approximatel y S$4.2 million as at 31 December 2023 was
primarily attributable to settlement of our current bank loans during the year ended 31
December 2023. Our borrowings maintained r elatively stable at approximately S$4.2
million and S$3.9 million as at 31 December 2023 a nd 30 April 2024. The following table
sets forth the breakdown of our borrowings as at the dates indicated:
As at 31 December
As at
30 April
20242022 2023
S$’000 S$’000 S$’000
(unaudited)
Current
Bank overdraft (secured/unsecured and
guaranteed) 188 — —
Bank loans (secured/unsecured and
guaranteed) 5,354 4,018 3,658
5,542 4,018 3,658
Non-current
Bank loans, secured and guaranteed — 219 195
5,542 4,237 3,853
FINANCIAL INFORMATION
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For further details of our secured/unsecure d and guaranteed borrowings, see Note 25
of Appendix I to this prospectus. The guarantees provided by the Controlling Shareholders
in relation to the bank overdraft and bank loan are expected to be fully released or replaced
by corporate guarantee provided by our Group upon the Listing.
In accordance with the loan agreements we entered into with our banks, certain banks
reserved a right to demand repayment at their discretion at any time (the ‘‘ on-demand
clauses ’’) although the agreed repayment schedules are more than one year. As a result of
these on-demand clauses, the relevant bank b orrowings of approximately S$4.1 million and
S$2.4 million as at 31 December 2022 and 2023, respectively, have been classified as current
liabilities.
Furthermore, our current liabilities included borrowings by our Group with a total
carrying amount of approximately S$5.5 m illion, S$4.0 million and S$3.7 million as at 31
December 2022, 31 December 2023 an d 30 April 2024, respectively.
Terms of our bank borrowings include, among others, the following major covenants
and undertakings:
(i) customary covenants and undertakings, which include, among others, periodic
reporting and making available certain documents, purchase of insurance
regarding the relevant cha rged properties, maintaining a current account with
the relevant lending bank to fac ilitate repayment of borrowings;
(ii) financial covenants, which include, among others, (a) maintaining a minimum
tangible net worth of $6.0 million, (b) the outstanding amount under the relevant
facility not exceeding a certain percentage of the prevailing market value of the
property secured in favour of the lending bank ranging from approximately
75.8% to 80.0%, and (c) the market value of our Johor Property being not less
than RM9 million.
As at 30 April 2024 (being the latest practic able date for indebtedness purpose), we
have outstanding bank borrowings of app roximately S$3.9 million and there is no
unutilised bank borrowings.
FINANCIAL INFORMATION
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Lease Liabilities
During the Track Record Period, we recorded lease liabilities in relation to our lease
contracts for leasehold property, machiner ies and motor vehicles. As at 31 December 2022
and 2023 and 30 April 2024, our current and non -current lease liabilities amounted to
approximately S$30.4 million, S$28.9 mill ion and S$29.0 million, respectively. The
following table sets forth the breakdown of our lease liabilities as at the dates indicated:
As at 31 December
As at
30 April
20242022 2023
S$’000 S$’000 S$’000
(unaudited)
Current
Leasehold property 946 982 1,026
Leased machineries 1,612 1,531 1,639
Leased motor vehicles 124 139 212
2,682 2,652 2,877
Non-current
Leasehold property 24,719 23,737 23,371
Leased machineries 2,830 2,015 1,792
Leased motor vehicles 170 462 941
27,719 26,214 26,104
30,401 28,866 28,981
The decrease in our lease liabilities by appro ximately S$1.5 million from approximately
S$30.4 million as at 31 December 2022 to appr oximately S$28.9 million as at 31 December
2023 was mainly attributable to payment of the capital and interest element of our lease
liabilities of approximately S$3.9 million in r elation to machineries under hire purchase
arrangement and rental payment for our Tuas Property which was partially offset by the
new lease entered into of approximately S$ 1.3 million and interests expense on lease
liabilities of approximately S$1.1 million durin g the year. The slight increase in our lease
liabilities from approximately S$28.9 millio n as at 31 December 2023 to approximately
S$29.0 million as at 30 April 2024 was mainly attributable to addition of new motor
vehicles.
FINANCIAL INFORMATION
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Amount due to a shareholder
As at 31 December 2023 and 30 April 2024, we recognised an amount due to a
shareholder of approximately S$1.0 million a nd S$1.0 million, respectively which represents
amount payable to MMI, a pre-IPO Investor for a non-Listing put option in relation to the
3rd Pre-IPO Investment. Pursuant to the 3rd Pre-IPO Investment, we granted the MMI a
non-Listing put option. In the event the List ing fails to materialise by a date falling 12
months after the first submission of our Listing application (which shall automatically be
extended until, whichever is earlier, (i) the date of our successful Listing, or (ii) the date
upon the earliest occurrence of any one of the following events (the ‘‘ Event of
Reinstatement ’’): (a) our Company formally withdraw s the Listing application or (b) the
Listing application lapses and our Company doe s not submit a renewed Listing application
within six months after the lapse), MMI has the option (but not the obligation) to require
our Company to purchase all (and not part only) of its shares held on the date it issues a put
option notice, at a price equivalent to the subscription consideration paid by MMI, plus
interest on the subscription consideration commencing on the date immediately following
the date falling 12 months after the first submis sion of our Listing application and continue
until the date of MMI’s put option notice. The interest shall be fixed at a simple interest
rate of 6% per annum and be prorated by the number of days where the period of time is
not a full calendar year.
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we financed our operations mainly through a
combination of cash generated from operatin g activities, borrowings and funds from our
shareholders and investors. Following the completion of the Share Offer, we intend to
continue to fund our cash requirements mainly through our net cash flows generated from
operating activities, borrowings and the net proceeds from the Share Offer, if necessary,
together with any additional debt or equity f inancing that is available and suitable to us
from time to time.
FINANCIAL INFORMATION
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The following table sets forth our selected consolidated cash flow items for the periods
indicated:
Year ended 31 December
2022 2023
S$’000 S$’000
Operating cash flows before working capital changes 11,793 12,169
Changes in working capital (2,457) (691)
Income tax paid (301) (992)
Net cash generated from operating activities 9,035 10,486
Net cash used in investing activities (647) (407)
Net cash used in financing activities (6,275) (5,079)
Net increase in cash and cash equivalents 2,113 5,000
Effect of currency translation on cash and
cash equivalents (72) 21
Cash and cash equivalents as at beginning of the year 2,163 4,204
Cash and cash equivalents as at end of the year 4,204 9,225
Cash Flows generated from Operating Activities
Cash flows generated from operating activiti es represented profit before tax adjusted
for (i) certain non-cash or non-operating act ivities related items, which mainly include
depreciation of property, plant and equipment, investment property and right-of-use assets,
amortisation of intangible assets, sha re-based payments for the employees and
shareholders, gains on disposal of a subsidiary , interest expense, inventories written-off
or provided and unrealised currency translation gain or loss; (ii) the effect of changes in
working capital, which mainly include mov ements in trade and other receivables,
prepayments, trade and other payables and inventories; and (iii) income tax payment.
For the year ended 31 December 2023, our net cash generated from operating activities
was approximately S$10.5 million, which was prim arily attributable to (a) our profit before
tax of approximately S$5.5 million, as adjusted for major non-cash and n on-operating items
such as (i) interest expense of approximately S$1.3 million; (ii) depreciation of property,
plant and equipment of approximately S$1.3 m illion; (iii) depreciation of right-of-use assets
of approximately S$2.1 million; (iv) amortisa tion of intangible assets of approximately
S$0.5 million; (v) share-based payments for our employees and shareholders of
approximately S$3.3 million; (vi) gains on d isposal of a subsidiary of approximately
S$2.5 million, (b) negative changes in workin g capital, which primarily comprised of (i)
increase in trade and other receivables of ap proximately S$1.6 million mainly attributable
to increase in amount due from an associate; (ii) increase in prepayments of approximately
S$0.3 million mainly attributable to prepaymen t of Listing expenses; partially offset by
FINANCIAL INFORMATION
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decrease in inventories of approximately S$0. 8 million mainly attributable to the utilisation
of raw materials to cope with our sales near the year end and the provision of inventory
obsolescence and (c) income tax p aid of approximately S$1.0 million.
For the year ended 31 December 2022, our net cash generated from operating activities
was approximately S$9.0 million, which was prim arily attributable to (a) our profit before
tax of approximately S$4.2 million, as adjusted for major non-cash and n on-operating items
such as (i) interest expense of approximately S$1.6 million; (ii) depreciation of property,
plant and equipment of approximately S$1.1 m illion; (iii) depreciation of right-of-use assets
of approximately S$1.9 million; (iv) amortisa tion of intangible assets of approximately
S$1.5 million; and (v) share-based payment s for our employees and shareholders of
approximately S$1.2 million, (b) negative c hanges in working capital, which primarily
comprised of (i) increase in inventories o f approximately S$4.3 million mainly due to
increase in our purchase of raw materials in re sponse to the growth in sales, (ii) increase in
trade and other receivables of approximately S$2.3 million mainly attributable to increase
in sales during the year; partially offset by an increase in trade and other payables of
approximately S$4.2 million mainly due to increase in our purchase of raw materials and (c)
income tax paid of approximately S$0.3 million.
Cash Flows generated used in Investing Activities
For the year ended 31 December 2023, we had net cash used in investing activities of
approximately S$0.4 million, primarily du e to addition of right-of-use assets of
approximately S$0.1 million, purchase of property, plant a nd equipment of
approximately S$0.2 million for our business ope rations and disposal of a subsidiary, net
on cash disposed of approximately S$0.1 million.
For the year ended 31 December 2022, we had net cash used in investing activities of
approximately S$0.6 million, primarily du e to addition of right-of-use assets of
approximately S$0.5 million and purchase of property, plant and equipment of
approximately S$0.2 million for expansion of our scale of operations; partially offset by
proceeds from disposal of property, plant and equipment of approximately S$55,000.
Cash Flows used in Financing Activities
For the year ended 31 December 2023, we had net cash used in financing activities of
approximately S$5.1 million, primarily due to (i) payment of principal portion of lease
liabilities of approximately S$2.8 million ma inly in relation to machineries under hire
purchase arrangement and rental payment for our Tuas Property; (ii) repayment of
borrowings of approximately S $1.5 million; (iii) interest paid of approximately S$1.3
million; and (iv) Listing expenses paid of appr oximately S$0.8 million, partially offset by (i)
proceeds from issue of new shar es of a subsidiary of S$1.0 million in relation to the issuance
and allotment of shares in Metasurface Technologies to MMI, a pre-IPO Investor of our
Company, a shareholder of Metaoptics Technologies and an independent third party of our
Group, in relation to the 3rd Pre-IPO Inves tment on 30 January 2023; and (ii) proceeds
from new borrowings of app roximately S$0.3 million.
FINANCIAL INFORMATION
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For the year ended 31 December 2022, we had net cash used in financing activities of
approximately S$6.3 million, primarily due to (i) repayment of borrowings of
approximately S$2.3 million; (ii) payment o f principal portion of lease liabilities of
approximately S$2.4 million mainly in relation to machineries under hire purchase
arrangement and rental payment for our Tuas Property; (iii) interest paid of
approximately S$1.6 million; (iv) Listing exp enses paid of approximately S$0.6 million;
and (v) repayment of advance s from a director of approximately S$0.5 million, partially
offset by (i) proceeds from iss ue of new shares of Metaoptics Technology to non-controlling
interests of approximately S$0.9 million; and (ii) proceed from borrowings of
approximately S$0.3 million.
NET CURRENT ASSETS
The following table sets forth our current as sets, current liabilities and net current
assets as at the dates indicated:
As at 31 December
As at
30 April
20242022 2023
S$’000 S$’000 S$’000
(unaudited)
Current assets
Inventories 7,873 6,641 5,491
Trade and other receivables 9,345 7,742 7,651
Prepayments 1,091 1,907 2,098
Cash and bank balances 4,392 9,225 11,393
22,701 25,515 26,633
Current liabilities
Borrowings 5,542 4,018 3,658
Lease liabilities 2,682 2,652 2,877
Trade and other payables 9,089 7,564 8,066
Contract liabilities 297 — —
Income tax payable 993 1,381 1,591
18,603 15,615 16,192
Net current assets 4,098 9,900 10,441
We had net current assets of approximately S$4.1 million, S$9.9 million and
S$10.4 million as at 31 December 2022, 31 December 2023 and 30 April 2024,
respectively. Our net current assets increased by approximately S$5.8 million from
approximately S$4.1 million as at 31 December 2022 to approximately S$9.9 m illion
as at 31 December 2023, mainly due to (i) increase in cash and bank balances of
approximately S$4.8 million primarily generate d from our operating activities; (ii) increase
FINANCIAL INFORMATION
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in prepayments by approximat ely S$0.8 million primarily due to the increase in prepaid
Listing expenses; (iii) reduction in curre nt borrowings by approximately S$1.5 million,
which was partially offset by (iv) decrease in trade and other receivables by approximately
S$1.6 million mainly due to a larger settlement o f trade receivables by our customers near
year end of 2023.
Our net current assets remained relatively stable as at 30 April 2024.
WORKING CAPITAL SUFFICIENCY
Our Directors have confirmed that we have sufficient working capital for our
requirements for at least the next 12 months from the date of this prospectus, taking into
account our current cash and cash equivalents, available banking facilities, cash flows from
operating activities and the estimated net proceeds from the Share Offer.
CAPITAL EXPENDITURES
During the Track Record Period, we incurred capital expenditures for purchases of our
property, plant and equipment as well as right-of-use assets, which amounted to
approximately S$0.7 million and S$0.3 m illion for the years ended 31 December 2022 and
2023, respectively.
COMMITMENTS
Capital Commitments
Capital commitments represent capital ex penditure contracted for as at the end of a
reporting period but not yet recognised in our consolidated financial statements. As at 31
December 2022 and 2023, we had no capital commitments.
Operating Lease Arrangements
The future minimum rentals payable under non-cancellable operating leases as at the
e n do fe a c ho ft h ey e a r se n d e d3 1D e c e m b e r2 0 2 2a n d2 0 2 3a r ea sf o l l o w s :
As at 31 December
2022 2023
S$’000 S$’000
Not later than one year 3,739 1,893
Two to five years 10,972 8,020
More than five years 24,313 22,248
We lease certain portion of our Tuas Property to third parties under operating lease
arrangements. These non-cancellable leases h ave remaining lease terms of approximately
2.2 years.
FINANCIAL INFORMATION
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The future minimum rentals receivable under t hese non-cancellable operating leases as
at the end of each of the years ended 31 December 2022 and 2023 are as follows:
As at 31 December
2022 2023
S$’000 S$’000
Not later than one year 1,299 1,404
Two to five years 1,477 217
CONTINGENT LIABILITIES
As at the Latest Practicable Date, our Group did not have any material contingent
liabilities.
RELATED PARTY TRANSACTIONS AND BALANCES
Related Party Transactions
During the Track Record Period, we had certain related party transactions, mainly in
relation to (i) purchase of goods and services and (ii) shared administrative fee.
Purchase of goods and services
During the Track Record Peri od, we procured labour supply services from a related
party, Meson Technology. The relevant related party transactions amounted to
approximately S$21,000 and nil for the years ended 31 December 2022 and 2023,
respectively. We had a common director and common shareholder with Meson
Technology, being Dato’ Sri Chua (prior to him ceasing to act as a shareholder and
director of Meson Technology) in January 2022.
Shared administrative fee
During the Track Record Period, we incu rred approximately S$3,000 of shared
administrative fee with Metaoptics Technologies for the year ended 31 December 2023,
subsequent to Metaoptics Technologies becoming our associate company since May 2023.
Our Directors confirm that all the aforementioned related party transactions during
the Track Record Period were conducted on normal commercial terms that are reasonable
and in the interest of our Group as a whole. Our Directors further confirm that these related
party transactions would not distort our results of operations for the Track Record Period
nor make our historical results not reflective of our future performance in all material
aspects. For further details on related party transactions and balances, see Note 29 of
Appendix I to this prospectus.
FINANCIAL INFORMATION
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During the Track Record Period, we had bank loans guaranteed and/or secured by
related parties of our Group or their owned properties. Our Directors confirm that all the
guarantees provided by our related parties are expected to be released or replaced by
corporate guarantees to be provided by our Group upon the Listing.
OFF BALANCE SHEET TRANSACTIONS
During the Track Record Period and up to the Latest Practicable Date, we had not
entered into any off-balance sheet transactions.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods and as at the
dates indicated:
As at/for the year ended
31 December
2022 2023
Gross Profit Margin (%)
(1) 41.0 37.2
N e tP r o f i tM a r g i n( % )(2) 6.9 11.4
Current Ratio (3) 1.2 1.6
Quick Ratio (4) 0.8 1.2
Return on Assets (%) (5) 3.9 6.3
Return on Equity (%) (6) 15.0 17.1
Gearing Ratio (%) (7) 24.8 15.7
Notes:
(1) Gross profit margin is calculated by dividing gr oss profit of the financial year by revenue of the
financial year.
(2) Net profit margin is calculated by dividing pr ofit for the year by revenue for the financial year.
(3) Current ratio is calculated by dividing total curr ent assets by total current liabilities as at the dates
indicated.
(4) Quick ratio is calculated by dividing total current a ssets less inventories by total current liabilities as
at the dates indicated.
(5) Return on assets is calculated by dividing prof it for the year by total assets as at the end of the
financial year and multiplied by 100%.
(6) Return on equity is calculated by dividing prof it attributable to owners of the Company for the
financial year by total equity attributable to ow ners of the Company as at the end of the financial
year and multiplied by 100%.
(7) Gearing ratio is calculated by dividing total bor rowings by total equity as at the dates indicated and
multiplied by 100%.
FINANCIAL INFORMATION
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Gross profit margin
Our gross profit margin decreased from approximately 41.0% for the year ended 31
December 2022 to approximately 37.2% for the year ended 31 December 2023, which was
mainly attributable to the decrease in the gros s profit margin for our precision machining
services from approximately 43.2% for the year ended 31 December 2022 to approximately
31.4% for the year ended 31 December 2023. As our cost of sales for precision machining
services comprised relatively large portion o f overhead costs such as labour costs as well as
depreciation of property, plant and equipment and right-of-use assets which were relatively
static regardless of sales performance, our c ost of sales for precision machining only
decreased by approximately 18.2% while our r evenue for precision machining decreased by
approximately 32.2%, thus leading to the decrease in the gross profit margin for our
precision machining services during the year ended 31 December 2023.
N e tp r o f i tm a r g i n
Our net profit margin incr eased from approximately 6.9% for the year ended 31
December 2022 to approximately 11.4% for the year ended 31 December 2023, which was
due to (i) increase in our other income, mainl y attributable to the increase in our rental
income and service income, and (ii) recogn ition of gains on disposal of Metaoptics
Technologies.
Current ratio
Our current ratio as at 31 December 2022 an d 2023 was approximately 1.2 times and
1.6 times, respectively. The increase in the current ratio as at 31 December 2023 was mainly
due to (i) increase in cash and bank balance s of approximately S$4.8 million primarily
generated from our operating activities; (ii) in crease in prepayments by approximately S$0.8
million primarily due to the increase in prepai d Listing expenses; (iii) reduction in current
borrowings by approximately S$1.5 million; and (iv) decrease in trade payables by
approximately S$3.5 million primarily due to our prompt repayment of trade payables near
the year end.
Quick Ratio
Our quick ratio as at 31 December 2022 and 20 23 was approximately 0.8 times and 1.2
times respectively. The quick ratio increased as at 31 December 2023 due to the increase in
our cash and bank balances, increase in prepayments, reduction in current borrowings and
decrease in trade payables as mentioned above.
Return on Assets
Our return on assets for the years ended 31 December 2022 and 2023 was
approximately 3.9% and 6.3%, respectively.
T h er e t u r no na s s e t si n c r e a s e df r o mt h ey e a re n d e d3 1D e c e m b e r2 0 2 2t ot h ey e a r
ended 31 December 2023 due to increase in our profit for the year as a result of the increase
in our other income and the recognitio n of gains on disposal of a subsidiary.
FINANCIAL INFORMATION
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Return on Equity
Our return on equity for the years ended 31 December 2022 and 2023 was
approximately 15.0% and 17.1%, respectively.
The return on equity increased from the year ended 31 December 2022 to the year
ended 31 December 2023 due to increase in our profit for the year as a result of the increase
in our other income and the recognitio n of gains on disposal of a subsidiary.
Gearing Ratio
Our gearing ratio as at 31 December 2022 and 2023 was approximately 24.8% and
approximately 15.7%, respectively.
The gearing ratio decrease as at 31 December 2023, primarily due to reduction of our
total borrowings of approximate ly S$1.3 million as at 31 December 2023.
FINANCIAL RISK DISCLOSURE
We are exposed to a variety of financial risks from our operation. The key financial
risks include credit risk, liquidity risk and mar ket risk (including foreign currency risk and
interest rate risk).
Our Board of Directors regularly reviews and agrees on the policies and procedures for
the management of these risks, which are ex ecuted by the management team. During the
Track Record Period and up to the Latest Practicable Date, it has been our Group’s policy
that no trading in derivatives for speculative purposes shall be undertaken.
There has been no change to our Group’s exposure to these financial risks or the
manner in which we manage and measures the risks.
Credit risk
Credit risk is managed on a group basis. Our financial assets are trade and other
receivables and cash and bank balances.
The amount of those assets stated in the Consolidated Statements of Financial Position
represent our maximum exposure to credit risk in relation to financial assets.
Our credit risk is concentrated on a number of long established customers. As at 31
December 2022 and 2023, trade receivables fr om the top three customers accounted for
approximately 29.4%, 11.6% and 10.0% and 15.4%, 28.3% and 27.7% of our total trade
receivables, respectively.
We have policies in place to ensure that sales are made to customers with an
appropriate credit history and to limit the amo unt of credit limit to customers to minimise
credit risk resulting from counterparty default. We have assessed that the credit risk is
considered to be low based on our historical e xperience in collection of trade and other
receivables.
FINANCIAL INFORMATION
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Our bank deposits are placed with reputable financial institutions. Our management
does not expect any losses from non-performance by these banks.
In estimating the expected credit loss, cred it evaluation on individual customer is
performed by the management. The evaluation focused on assessing the size and
background of each customer, as well as per taining to the current and future general
economic environment in which the customer operates. Our management estimates the
expected credit loss rate of each customer by performing quantitative assessment on the
customers’ credit rating, and apply default probability and other loss rates taking into
account the life of the receivables and forward-looking information. For forward-looking
information, the management has identified Si ngapore government structural balance and
current account balance as percentage of gross domestic product as the most relevant
factors, and accordingly, has adjusted the expected loss rate based on these factors.
Liquidity risk
Liquidity risk refers to the risk that we wi ll encounter difficulties in meeting our
short-term obligations due to shortage of funds. Our exposure to liquidity risk arises
primarily from the maturities of financial liab ilities. Our objective is to maintain a balance
between continuity of funding and flexibility t hrough the use of stand-by credit facilities.
Our operations are financed mainly through equity and borrowings. Our Directors are
satisfied that funds are available to finance our operations. For more information on the
maturity profile of our Group’s financial liab ilities, see Note 34(b) of Appendix I to this
prospectus.
Market risk
Market risk represents the risk that changes in market variables, such as interest rates
and foreign exchange rates will affect our Group’s income. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters,
while optimising the return on risk.
Interest rate risk
Our Group is exposed to interest rate risk through the impact of rate changes on our
interest earning financial assets and i nterest bearing financial liabilities.
Our interest earning financial assets are m ainly bank balances which are short-term in
nature. Therefore, any future variations in in terest rates will not have a material impact on
the results of our Group.
Our interest bearing financial liabilities a re mainly borrowings. The interest rates and
terms of repayment of term loans of our Group are disclosed in Note 25 of Appendix I to
this prospectus. For more information on the interest rate profile of our interest-bearing
financial instruments and the sensitivity ana lysis of our interest rates, see Note 34(c) of
Appendix I to this prospectus.
FINANCIAL INFORMATION
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Foreign currency risk
Our Group has transactional currency exposures arising from sales or purchases that
are denominated in a currency other than the functional currency of our Group, primarily
USD.
Our Group does not have significant exposure to foreign currency risk other than those
bank balances and trade and other receivabl es held by our Group which are denominated
USD (not the functional currency of our Group) at the reporting date as disclosed in the
Note 34(c) of Appendix I to this prospectus. Our Directors consider that we will have
sufficient foreign exchange assets, primari ly from our cash and bank balances as well as
trade receivables which are denominated in U SD to meet our foreign exchange liabilities as
they became due.
DIVIDENDS
During the Track Record Period and up to the Latest Practicable Date, no dividend or
distribution had been declared, made or paid by our Company or any of the other
companies now comprising our Group. As at the Latest Practicable Date, our Company did
not have a dividend policy in place.
After completion of the Listing, our Share holders will be entitled to receive dividend
declared, made or paid by us. Any declaration of dividends, however, is subject to the
recommendation of our Directors at their discretion, and depending on, among other
things, our results of operations, working capital and cash position, future business and
earnings, capital requirements, contractual re s t r i c t i o n s ,i fa n y ,a sw e l la sa n yo t h e rf a c t o r s
which our Directors may consider relevant. I n addition, any declaration and payment as
well as the amount of the dividends will be subject to the provisions of (i) our Articles of
Association, which provides that divid ends may be declared in any currency to our
Shareholders in a general meeting out of the profits of the Company but no dividend shall
be declared in excess of the amount recommended by the Board; and (ii) the Cayman
Companies Act, which allows dividends to be paid out of sums standing to the credit of the
Company’s share premium account if immediate ly following the date on which the dividend
is proposed to be paid, the Company is able to pay its debts as they fall due in the ordinary
course of business. Our dividend distrib ution record in the past may not be used as a
reference or basis to determine the level of d ividends that may be declared or paid by us in
the future. Any future declarations and payments of dividends will be at the absolute
discretion of our Directors and may require the approval of our Shareholders.
DISTRIBUTABLE RESERVES
As at 31 December 2023, our Company did not have any distributable reserves
available for distribution to our Shareholders.
FINANCIAL INFORMATION
–3 3 9–


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LISTING EXPENSES
The estimated total Listing expenses in connection with the Share Offer (based on the
mid-point of our indicative price range for the Share Offer) are approximately S$8.9
million, representing approximately 72.6% of the gross proceeds of the Share Offer (based
on the mid-point of our indicative price range for the Share Offer). Our Listing expenses are
categorised into underwriting-related ex penses of approximately S$1.0 million and
non-underwriting-related expenses of approximately S$7.9 million. The
non-underwriting-related expenses can be fur ther classified into fees and expenses of legal
advisers and accountants of a pproximately S$4.9 million and other fees and expenses of
approximately S$3.0 million.
Prior to the Track Record Period, we have incurred Listing Expenses of approximately
S$0.2 million, of which approximately S$0.1 million was charged to our consolidated
statement of comprehensive income and the remaining amount of approximately S$0.1
million was recorded as prepayment which is to b e deducted from equity after the Listing.
During the Track Record Period, we had incurred Listing expenses of approximately S$4.9
million, of which approximately S$3.8 million was charged to our consolidated statement of
comprehensive income and the remaining amount of app roximately S$1.1 million was
recorded as prepayment which is to be deducte d from equity after the Listing. We expect to
further incur Listing expenses (including underwriting commissions) of approximately
S$3.8 million (based on the mid-point of our ind icative price range for the Share Offer) by
the completion of the Share Offer, of which an estimated amount of approximately S$2.3
million will be charged to our consolidated stat ement of comprehensive income for the year
ending 31 December 20 24 and an estimated amount of approximately S$1.5 million which is
directly attributable to the issue of the Shar es to the public and to be deducted from equity.
The aforementioned Listing expenses are the latest practicable estimates by us and are
provided for reference only and the actual amounts may differ.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
Please refer to Part A of Appendix II to this prospectus for details. The unaudited pro
forma statement of our adjusted consolidated net tangible assets prepared in accordance
with Rule 7.31 of the GEM Listing Rules is for illustrative purposes only and is set out
therein to illustrate the effect of the Share O ffer on our net tangible assets attributable to
the owners of our Company as at 31 December 2023 as if the Share Offer had taken place on
that date. Because of its hypothetical nature, the unaudited pro forma statement may not
give a true picture of our net tangible assets attributable to the owners of our Company as
at 31 December 2023 or as at any subsequent date.
FINANCIAL INFORMATION
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RECENT DEVELOPMENTS AND MATERIAL ADVERSE CHANGE
For details of the impact o f recent developments on our business, operations and
financial position, see ‘‘Summary — Recent De velopments and Material Adverse Change.’’
Save as disclosed in ‘‘— Listing Expenses’’, our Directors confirm that, up to the date
of this prospectus, there has been no material adverse change to our financial, operational
and/or trading position since 31 December 2 023, being the date to which our most recent
audited consolidated financial statements were prepared, and there has been no event since
31 December 2023 and up to the date of this prospectus that would materially affect the
information shown in our audited consolidat ed financial information included in the
Accountant’s Report set out in Appendix I to this prospectus.
NO ADDITIONAL DISCLOSURE REQUIR ED UNDER THE GEM LISTING RULES
Our Directors have confirmed that, as at the Latest Practicable Date, there were no
circumstances which would have given rise to any disclosure requirement under Rules 17.15
to 17.21 of the GEM Listing Rules.
FINANCIAL INFORMATION
–3 4 1–


--- page 353 ---
BUSINESS OBJECTIVES AND STRATEGIES
Our business objective is to provide best-in-class value in precision manufacturing
which is built on trust, knowledge, innovation and synergy as well as to forge mutually
beneficial partnership with our customers. See ‘‘Business — Our Strategies’’ for a detailed
description of our future plans.
REASONS FOR THE LISTING
Our Directors believe that the Listing would be instrumental in enabling us to achieve
our business strategies and provide us with the following:
Broader access to capital for future growth
Our operations are working capital inte nsive due to the nature of our industry
including capital investment on advanced production machinery and equipment and
purchase of raw materials. In order to fund our growth during the Track Record
Period, we have relied on our bank credit fac ilities and other borro wings to finance our
working capital. Our Directors consider that it is necessary for us to diversify our
funding sources rather than to rely on our exist ing banking credit facilities to fund our
growth and maintain our operation going forward.
The Listing can provide us with a fund-raising platform for external financial
resources with a broadened shareholder base . It can also provide us with the flexibility
to adjust our capital structure from time t o time through accessing a wider spectrum of
fund raising venue, including debt and equity funding raising, and negotiating more
favourable terms of financing from financial institutions as and when appropriate.
This will in turn enable us to implement a ny future expansion plans and better
withstand external shocks and market fluctuations.
Expand customer base with wider industries coverage and increase competitiveness
The precision engineering industry is highly competitive. Most of our customers
are listed companies which have stringent supplier selection criteria, thereby our
reputation and corporate profile are vital as it is one of the criteria for their selection of
suppliers. We believe that we can expand our customer base in different industries
upon Listing as we will have enhanced corporate profile and brand image and
customers are generally more inclined to develop business relationship with a listed
company with public financial disclosures, regulatory supervision and better business
reputation. We believe that with higher standard of corporate governance, we could
provide better assurance and confidence to our customers which could enhance our
competitiveness and expand our customer base.
FUTURE PLANS AND USE OF PROCEEDS
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Stronger ability to attract talent and retain existing staff
As a precision engineering services provider, our operation depends on the
continued service of our skilled workfor ce and on our ability to attract, retain and
motivate such workforce. As disclosed in t he section headed ‘‘Business — Business
Strategies’’ in this prospectus, the competit ion for talent is intense in Singapore and we
need to continue to attract and recruit addit ional machinists and technicians to utilise
our production capacity. We believe that the Listing will provide us with more means,
such as offering a more attractive employment environment, with more career
advancement opportunities, to attract and retain quality talents to further expand our
business.
Funding needs for implementing our business strategies
As at 30 April 2024, our cash and bank balances, which represent our immediately
available working capital, amounted to approximately S$11.4 million, as set out in
‘‘Financial information — Net current assets’’. Our Directors consider that the amount
of our cash and bank balances fluctuate from time to time, depending on the timing of
(i) payment from our customers; and (ii) payment to our suppliers of raw materials and
services. Therefore, the amount of our cash and bank balances as at a particular date
may not fully reflect our general liquidity position.
Based on the current scale of our operations and the costs incurred by us during
the Track Record Period, our Directors est imate that currently we have to incur an
average monthly expense of approximat ely S$3.1 million, primarily comprising
material costs, production and administra tive staff costs, production overhead and
other general administrative costs as well as loan and lease principal repayment, for
our daily operations. In particular, as at 30 April 2024, our current liabilities of
approximately S$16.2 million (excluding our income tax payable) consist of trade and
other payables, borrowings and lease lia bilities. There is no assurance that our
customers will repay our trade receivables i n a timely manner and our working capital
will not deteriorate due to potential mismatch in time between receipt of payments
from our customers and payments to our third party suppliers and service providers.
For details of the potential mismatch of cashflow, see ‘‘Risk Factors — Our cash flows
and working capital may deteriorate due to potential mismatch in time between receipt
of payments from our customers and payment s to our third party suppliers and service
providers, and failure of our customers to pay the amounts owed to us in a timely
manner may adversely affect our liquidity, financial condition and operating results’’.
Based on the above analysis, and without taking into account other transactions
that took place after 30 April 2024, our current cash resources available of
approximately S$11.4 million is sufficie nt to meet our average monthly expenses
only for approximately three months. Therefore, our Directors consider that we will
need to raise additional funding through the Share Offer to facilitate the
implementation of our future plans, while maintaining sufficient working capital for
our business operations.
FUTURE PLANS AND USE OF PROCEEDS
–3 4 3–


--- page 355 ---
Based on the above, our Directors believe that the Listing will benefit our Group
as a whole.
USE OF PROCEEDS
O u rD i r e c t o r sh a v ed r a w nu pa ni m p l e m e n t a t i o np l a nd u r i n gt h ep e r i o du pt o3 0J u n e
2026 with a view to developing ourselves along our business strategies for achieving our
business objectives. The detailed implementation plan and expected timetable for the
implementation of the plan with respect to it ems requiring us to make material financial
commitments are summarised below. We intend to apply all our net proceeds of the Share
Offer by 30 June 2026.
We estimate that the net proceeds of the Share Offer, after deducting underwriting
commissions, and other estimated expenses in relation to the Share Offer, are
approximately HK$20.6 million (equivalent to approximately S$3.5 million), assuming an
Offer Price of HK$2.69 per Share, being the mid-point of the indicative Offer Price range of
HK$2.38 to HK$3.00 per Share. We intend to use such net proceeds for the following
purposes:
1. approximately HK$12.4 million (equivalent to approximately S$2.1 million)
(approximately 60.1% of our total est imated net proceeds) will be used for
expanding our scale of operation and e nhancing our produc tion capabilities,
among which:
(a) approximately HK$7.0 million (equi valent to approximately S$1.2 million)
(approximately 33.8% of our total estimated net proceeds), will be used for
procurement of raw materials as part of our effort to enhance our cash flow
management and supply chain management;
(b) approximately HK$5.4 million (equivalent to approximately S$0.9 million
and approximately 26.3% of our total estimated net proceeds) will be used
for enhancing our human resources management.
2. approximately HK$3.1 million (equivalent to approximately S$0.5 million)
(approximately 15.4% of our total est imated net proceeds) will be used for
strengthening our quality control capa bilities in relation to our precision
machining services, among which:
(a) approximately HK$1.3 million (equi valent to approximately S$0.2 million)
(approximately 6.6% of our total est imated net proceeds) will be used for
enhancing our information system for our precision machining services;
(b) approximately HK$1.8 million (equi valent to approximately S$0.3 million)
(approximately 8.8% of our total est imated net proceeds) will be used for
acquiring a new coordinate measuring machine for our precision machining
services;
FUTURE PLANS AND USE OF PROCEEDS
–3 4 4–


--- page 356 ---
3. approximately HK$1.0 million (equivalent to approximately S$0.2 million and
approximately 4.7% of our total estimated net proceeds) will be used for
enhancing our marketing efforts for the purpose of maintaining relationships with
existing customers and diversifying our customer base;
4. approximately HK$2.0 million (equivalent to approximately S$0.3 million)
(approximately 9.8% of our total estimated net proceeds) will be used for
repayment of bank borrowings; and
5. approximately HK$2.1 million (equivalent to approximately S$0.4 million)
(approximately 10.0% of our total est imated net proceeds) will be used for
working capital and general corporate purposes.
In summary, the implementation of our busi ness strategies from the Listing Date up to
the six months ending 30 June 2026 will be fu nded by the net proceeds of the Share Offer as
follows:
From
the Listing
Date to
31 December
2024
For the
six months
ending
30 June
2025
For the
six months
ending
31 December
2025
For the six
months
ending
30 June
2026 Total
Approximate
percentage
of net
proceeds
S$’000 S$’000 S$’000 S$’000 S$’000 %
(1) Expansion of scale of operation
(a) Procurement of raw materials 294 294 294 294 1,176 33.8
(b) Human resources management
(i) Recruitment and retention of
machinists and technicians
and implement night shifts 163 203 203 203 772 22.2
(ii) Improving remuneration
packages of existing
employees 12 12 12 12 48 1.4
(iii) Enhancing in-house logistic
c a p a b i l i t y —6 51 51 59 5 2 . 7
(2) Strengthen our quality control
capabilities
(a) Enhancing our information system
(i) Upgrading new CNC machinery
programming software 120 — — — 120 3.5
(ii) Acquiring new production
management systems — 54 54 — 108 3.1
(b) Purchasing a new coordinate
measuring machine 307 — — — 307 8.8
(3) Diversification of customer base
M a r k e t i n g e x p e n s e s 4 14 14 14 1 1 6 4 4 . 7
(4) Repayment of bank borrowings 342 — — — 342 9.8
(5) Working capital and general
corporate purpose 87 87 87 87 348 10.0
Total 1,366 756 706 652 3,480 100
FUTURE PLANS AND USE OF PROCEEDS
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--- page 357 ---
In the event that the Offer Price is set at the high-end or the low-end of the indicative
Offer Price range, the estimated net pro ceeds from the Share Offer will increase to
approximately HK$28.3 million (equivalent to approximately S$4.8 million) or decrease to
approximately HK$12.9 million (equivalent to approximately S$2.2 million), after
deducting the related listing expenses, respectively. The above allocation of the net
proceeds will be adjusted on a pro rata basis in the event that the Offer Price is fixed at a
higher or lower level compared to the mid point of the estimated Offer Price range.
If the net proceeds of the Share Offer are not immediately used for the above purposes,
we will only deposit such net proceeds into sh ort-term interest-bearing accounts at licenced
commercial banks and/or other authorised financial institutions (as defined under the
SFO).
In the event of any material change in our use of net proceeds from the purposes
described above or in our allocation of the net proceeds among the purposes described
above, a formal announcement will be issued in accordance with the GEM Listing Rules.
Our Directors consider that the net proceed s from the Share Offer together with our
internal resources will be sufficient to finance the implementation of our business plans as
set out in the paragraphs headed ‘‘Implementation Plans’’ in this section. Investors should
be aware that any part of our business plans may not proceed according to the timeframe as
described above due to various factors. Under such circumstances, our Directors will
evaluate carefully the situation and will set as ide the funds as short-term deposits until the
relevant business pla n(s) materialise.
IMPLEMENTATION PLANS
In pursuance of the business objective and strategies set out above, our implementation
plans are set out below from the Listing Date to 31 December 2024 and then for each of the
six-month periods until 30 June 2026. Investors should note that the following
implementation plans are formulated on the bases and assumptions referred to in the
paragraph headed ‘‘Bases and assumptions’’ below. These bases and assumptions are
inherently subject to many uncertainties and unpredictable factors, in particular the risk
f a c t o r ss e to u ti nt h es e c t i o nh e a d e d‘ ‘ R i s kF a c t o r s ’ ’i nt h i sp r o s p e c t u s .T h e r ei sn o
assurance that our business objectives will be achieved or our business plans will be
implemented according to the estimated timeframe or at all.
FUTURE PLANS AND USE OF PROCEEDS
–3 4 6–


--- page 358 ---
For the period from the Listing Date to 31 December 2024
Business Strategies Implementation plans Use of proceeds
S$’000
(1) Expansion of our
scale of
operation
(a) To procure raw materials for
our existing and upcoming
purchase orders
294
(b) (i) To recruit (i) five
machinists for precision
machining services and
(ii) two technicians for
precision welding
services and to
implement night shifts
163
(ii) To improve
remuneration packages
of existing employees
12
(2) Strengthening our
quality control
capabilities
(a) To purchase and upgrade the
CNC programming software
of our CNC machines
120
(b) To purchase a new
coordinate measuring
machine to replace the
existing coordinate
measuring machine for the
purpose of measuring the
accuracy of parts against the
design specifications
307
FUTURE PLANS AND USE OF PROCEEDS
–3 4 7–


--- page 359 ---
Business Strategies Implementation plans Use of proceeds
S$’000
(3) Diversification of
our customer
base
(a) To carry out marketing
activities
(i) To host our existing
and prospective
customers to our
factories to
demonstrate or update
them regarding our
latest production
capabilities
(ii) To maintain our
corporate website with
external service
provider
41
(4) Repayment of
bank borrowings
(a) To repay certain bank
borrowings which were used
for general working capital
purpose. Such borrowings
include: (i) bank borrowings
repayable over the remaining
term of the loan until 2025
with effective interest rate of
2.75% per annum and total
outstanding amount of S$1.5
million as at 31 December
2023
342
(5) Working capital
and general
corporate
purposes
(a) To finance the general
working capital needs of our
Group
87
FUTURE PLANS AND USE OF PROCEEDS
–3 4 8–


--- page 360 ---
For the period from 1 January 2025 to 30 June 2025
Business Strategies Implementation plans Use of proceeds
S$’000
(1) Expansion of our
scale of
operation
(a) To procure raw materials 294
(b) (i) To recruit (i) one CNC
programmer for
developing CNC
programming
instructions to control
the CNC machines; (ii)
one production planner
to conduct production
planning to optimise the
production flow and
raw materials planning;
a n dt or e t a i na n dp a y
remuneration for (i) five
machinists for precision
machining; and (ii) two
technicians for precision
welding services
203
(ii) To improve
remuneration packages
of existing employees
12
(iii) To purchase a truck
and recruit a truck
driver
65
(2) Strengthening our
quality control
capabilities
(a) To purchase and install a
production planning system
to optimise the productions
flow and monitor our
business performance
54
FUTURE PLANS AND USE OF PROCEEDS
–3 4 9–


--- page 361 ---
Business Strategies Implementation plans Use of proceeds
S$’000
(3) Diversification of
our customer
base
(a) To carry out marketing
activities
(i) To host our existing
and prospective
customers to our
factories to
demonstrate or update
them regarding our
latest production
capabilities
(ii) To maintain our
corporate website with
external service
provider
41
(4) Working capital
and general
corporate
purposes
(a) To finance the general
working capital needs of our
Group
87
FUTURE PLANS AND USE OF PROCEEDS
–3 5 0–


--- page 362 ---
For the period from 1 July 2025 to 31 December 2025
Business Strategies Implementation plans Use of proceeds
S$’000
(1) Expansion of our
scale of
operation
(a) To procure raw materials 294
(b) (i) To retain and pay
remuneration for (i) five
machinists for precision
machining services and
two technicians for
precision welding
services and to
implement night shifts;
and
203
(ii) one CNC programmer;
and one production
planner
(c) To improve the
remuneration packages of
existing employees
12
( d ) T or e t a i na n dp a y
remuneration for the truck
driver
15
(2) Strengthening our
quality control
capabilities
(a) To purchase and install a
production management
system
54
FUTURE PLANS AND USE OF PROCEEDS
–3 5 1–


--- page 363 ---
Business Strategies Implementation plans Use of proceeds
S$’000
(3) Diversification of
our customer
base
(a) To carry out marketing
activities
(i) To host our existing
and prospective
customers to our
factories to
demonstrate or update
them regarding our
latest production
capabilities
(ii) To maintain our
corporate website with
external service
provider
41
(4) Working capital
and general
corporate
purposes
(a) To finance the general
working capital needs of our
Group
87
FUTURE PLANS AND USE OF PROCEEDS
–3 5 2–


--- page 364 ---
Period from 1 January 2026 and 30 June 2026
Business Strategies Implementation plans Use of proceeds
S$’000
(1) Expansion of our
scale of
operation
(a) To procure raw materials 294
(b) (i) To retain and pay
remuneration for (i) five
machinists for precision
machining services and
two technicians for
precision welding
services and to
implement night shifts;
(ii) one production
planners; and one CNC
programmers
203
(ii) To improve the
remuneration packages
of existing employees
12
(iii) To retain and pay
remuneration for the
truck driver
15
(2) Diversification of
our customer
base
(a) To carry out marketing
activities
41
(3) Working capital
and general
corporate
purposes
(a) To finance the general
working capital needs of our
Group
87
BASES AND ASSUMPTIONS
Potential investors should note that the a ttainability of our business objective and
strategies depend on a number of bases and assumptions, in particular:
(1) we will have sufficient financial resourc es to meet the planned capital expenditure
and business development requirements during the period to which our future
plans relate;
(2) there will be no material changes in the funding requirement for each of our future
plans described in this prospectus from the amount as estimated by our Directors;
FUTURE PLANS AND USE OF PROCEEDS
–3 5 3–


--- page 365 ---
(3) there will be no material changes in the existing laws and regulations, or other
governmental policies relating to us, or in the political, economic or market
conditions in which we operates;
(4) there will be no material changes in the bases or rates of taxation in those
countries in which we operate;
(5) the Share Offer will be completed in accordance with and as described in the
section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus;
(6) there will be no significant changes in the interest rates or the foreign currency
exchange rates from those currently prevailing;
(7) we will be able to retain key personnel in the management and the main
operational departments;
(8) we will be able to solicit new customers or retain our existing customers and
suppliers;
(9) there will be no disasters, natural, polit ical or otherwise, which would materially
disrupt our businesses or operations; and
(10) we will not be materially and adversely affected by any risk factors set out in the
section headed ‘‘Risk Factors’’ in this prospectus.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 366 ---
PUBLIC OFFER UNDERWRITERS
UOB Kay Hian (Hong Kong) Limited
(in alphabetical order)
Chiyu International Capital Limited
Cinda International Capital Limited
Maxa Capital Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Public Offer. The Public
Offer is fully underwritten by the Public Offe r Underwriters on a conditional basis on the
terms and conditions set out in the prospectus relating thereto and the Public Offer
Underwriting Agreement. The Placing is expected to be fully underwritten by the Placing
Underwriters subject to the terms and conditions of the Placing Underwriting Agreement.
If, for any reason, the Offer Price is not agree d between the Sole Overall Coordinator (for
itself and on behalf of the Underwriters) and our Company, the Share Offer will not
proceed and will lapse.
The Share Offer comprises the Public Offer o f initially 2,700,000 Public Offer Shares
and Placing of initially 24,300,000 Placing Shares.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Public Offer Underwriting Agreement
Pursuant to the Public Offer Underwritin g Agreement, our Company is offering the
Public Offer Shares for subscription by members of the public in Hong Kong on and subject
to the terms and conditions set out in this pro spectus and the Public Offer Underwriting
Agreement at the Offer Price.
Subject to (i) the Listing Committee granting approval for the listing of, and
permission to deal in, the Shares in issue and to be issued as mentioned in this prospectus
pursuant to the Capitalisation Issue, the Share Offer and the exe rcise of options that may be
granted under the Post-IPO Share Option Scheme, and such approval not having been
withdrawn, and (ii) certain other conditions set out in the Public Offer Underwriting
Agreement, the Public Offer Underwriters hav e agreed severally and not jointly to subscribe
or procure subscribers for their respective applicable proportions of the Public Offer Shares
being offered which are not taken up under the Public Offer on the terms and conditions set
out in this prospectus and the Public Offer Underwriting Agreement.
The Public Offer Underwriting Agreement is conditional on and subject to, among
other things, the Placing Underwriting Agreement having been executed and becoming
unconditional and not having been ter minated in accordance with its terms.
UNDERWRITING
–3 5 5–


--- page 367 ---
Grounds for termination
The obligations of the Public Offer Underwriters to subscribe or procure subscribers
for the Public Offer Shares under the Public Offer Underwriting Agreement are subject to
termination by notice in writing issued by the Sole Sponsor and the Sole Overall
Coordinator (for itself and on behalf of the Public Offer Underwriters) if at any time prior
to 8 : 00 a.m. (Hong Kong time) on the Listing Date:
(a) there develops, occurs, exists or comes into effect:
(i) any local, national, regional or inter national event (or series of events) or
circumstance in the nature of force majeure (including any acts of
government, declaration of a national or international emergency or war,
calamity, crisis, epidemic, pandemi c, outbreak of infectious disease,
economic sanctions, strikes, lock-outs, fire, explosion, flooding,
earthquake, volcanic eruption, civil commotion, riots, public disorder, acts
of war, outbreak or escalation of hostilities (whether or not war is declared),
acts of God or acts of terrorism (whether or not responsibility has been
claimed)) in or affecting Hong Kong, Singapore, Malaysia, the United States,
the United Kingdom, the European Union (taken as a whole), the Cayman
Islands, the PRC or any other jurisdiction relevant to our Group (collectively
the ‘‘Relevant Jurisdictions (Underwriting) ’’); or
(ii) any change, or any event or circumstance or series of events or
circumstances, resulting or likely t o result in or representing a change or
development, in any local, national, regional or international financial,
political, military, industrial, legal, f iscal, economic, regulatory, credit,
market or currency matters or conditions or exchange control or any
monetary or trading settlement system o r other financial markets (including,
but not limited to, conditions in the stock or bond markets, money and
foreign exchange markets, interbank markets and credit markets) in or
affecting any of the Relevant Jurisdictions (Underwriting); or
(iii) any moratorium, suspension or restrict ion (including, wit hout limitation, any
imposition of or requirement for any minimum or maximum price limit or
price range) in or on trading in securi ties generally on the Stock Exchange,
the London Stock Exchange, the Shanghai Stock Exchange, the Shenzhen
Stock Exchange, the New York Stock Exchange, the Singapore Stock
Exchange or in the NASDAQ Global Market; or
(iv) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority)
or any other Relevant Jurisdictions (Und erwriting) (declared by the relevant
Authorities (as defined in the Public Offer Underwriting Agreement)) or any
disruption in commercial banking or foreign exchange trading or securities
settlement or clearance services, procedures or matters in or affecting any of
the Relevant Jurisdictions (Underwriting); or
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(v) any new Law (as defined in the Public Offer Underwriting Agreement), or
any change or development involving a prospective change or any event or
circumstance or series of events or circumstances resulting or likely to result
in a prospective change in, any exis ting law or in the interpretation or
application thereof by any court or other competent Authority in or affecting
any of the Relevant Jurisdictions (Underwriting); or
(vi) any imposition of economic sanctions, or the withdrawal of trading
privileges, in whatever form, directly or indirectly, by, or for, any of the
Relevant Jurisdictions (Underwriting); or
(vii) any change or development involv ing a prospective change in or affecting
Taxation (as defined in the Public Offer Underwriting Agreement) or
exchange control, currency exchange rates or foreign investment regulations
(including, without limitation, a change in the system under which the value
of the Hong Kong currency is linked to the U.S. dollar, or a material
devaluation of the U.S. dollar or Hong Kong dollar against any foreign
currencies in the Relevant Jurisdictions (Underwriting)), or the
implementation of any exchange control, in any of the Relevant
Jurisdictions (Underwriting) or affect ing an investment in the Offer Shares;
or
(viii) the issue or requirement to issue by our Company of any supplement or
amendment to this prospectus or the offering circulars in connection with the
Placing (or to any other document used in connection with the contemplated
offer, subscription and sale of the Offer Shares) pursuant to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance or the GEM Listing
Rules or any requirement or request of the Stock Exchange and/or the SFC,
without the prior written consent of the Sole Sponsor and the Sole Overall
Coordinator; or
(ix) any valid demand by any creditor for repayment or payment of any
indebtedness of any member of our Group or in respect of which any member
of our Group is liable prior to its stated maturity; or
(x) an order or a petition is presented for the winding up or liquidation of any
member of our Group or any member of our Group makes any composition
or arrangement with its creditors or enters into a scheme of arrangement or
any resolution is passed for the winding-up of any member of our Group or a
provisional liquidator, receiver or manager is appointed over all or part of
the assets or undertaking of any member of our Group or anything
analogous thereto occurs in respect of any member of our Group; or
UNDERWRITING
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(xi) any litigation, actions, writs, suits and proceedings (including any
investigation or inquiry by or before any Authority), claims (whether or
not any such claim involves or results in any action, suit or proceeding),
demands, judgment and awards being instigated against any member of our
Group or any of the Controlling Sharehol ders or any executive Director; or
(xii) save as disclosed in this prospectus, the offering circulars in connection with
the Placing and any other document authorised and approved by our
Company to be issued, given or used in connection with the contemplated
offering and sale of the Offer Shares or otherwise in connection with the
Share Offer and in each case, all amendments or supplements thereto, with
the exception of any document in which solicitation of an offering or sale of
the Offer Shares is expressly disclaimed (collectively the ‘‘ Offering
Documents ’’), any contravention by any member of our Group or any
executive Director of the GEM Listing Rules, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the Companies Ordinance or other
applicable laws; or
(xiii) any non-compliance of this prospectus (or any other Offering Document) or
any aspect of the Share Offer with the GEM Listing Rules, the Companies
(Winding Up and Miscellaneous Provis ions) Ordinance or other applicable
Laws; or
(xiv) any change, development or event in volving a prospective change in or an
actual materialisation of any of the risks set out in the section headed ‘‘Risk
Factors’’; or
(xv) there is a breach of any provision of, or any obligation imposed upon any
party to, the Public Offer Underwriting Agreement or the Placing
Underwriting Agreement (other than obligations imposed upon any of the
Sole Sponsor, the Sole Overall Coordinator, the Capital Market
Intermediaries, the Public Offer Underw riters or the Placing Underwriters);
or
(xvi) there is an event, act or omission which gives or is likely to give rise to any
liability of any of the Warrantors (as defined in the Public Offer
Underwriting Agreement) pursuant t o the indemnities given by any of
them under the Public Offer Underwriting Agreement or the Placing
Underwriting Agreement, as applicable; or
(xvii) there is a breach of, or any matter, event or circumstance rendering or which
may render, any of the representations, warranties, agreements and
undertakings given by any of the Warrantors in the Public Offer
Underwriting Agreement or the Placing Underwriting Agreement, as
applicable, untrue, incorrect or incomplete in any respect or misleading; or
UNDERWRITING
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(xviii) any Authority in any Relevant Jurisdiction (Underwriting) commencing any
investigation or other action, or announcing an intention to investigate or
take other action, against any member of our Group or any of our
Controlling Shareholders or any of our executive Directors;
which, individually or in the aggregate, in the sole and absolute opinion of the
Sole Sponsor and the Sole Overall Coordinator (for itself and on behalf of the
Public Offer Underwrite rs) acting reasonably:
(A) has or will or may have a material adverse change or effect, or any
development involving a prospective material adverse change or effect, in, on
or affecting the assets, liabilities, bus iness, general affairs, management,
prospects, shareholders’ equity, profits, losses, results of operations, position
or condition, financial, operational or trading or otherwise, or performance
of our Group as a whole (‘‘ Material Adverse Change ’’); or
(B) has or will or may have a material adverse effect on the success or
marketability of the Share Offer or the level of applications under the Public
Offer or the level of interest under the Placing; or
(C) makes or will or may make it impracticable or incapable for any part of the
P u b l i cO f f e ro rt h eP l a c i n gt op r o c e e da se n v i s a g e do rt om a r k e tt h eS h a r e
Offer or to deliver the Offer Share s on the terms and in the manner as
contemplated by this prospectus; or
(D) has or will or may have the effect of (i) making any part of the Public Offer
Underwriting Agreement (includ ing underwriting) incapable or
impracticable of performance in accordance with its terms or (ii)
preventing or delaying the processing of applications and/or payments
pursuant to the Share Offer or pursuant to the underwriting thereof; or
(b) there has come to the notice of the Sole Sponsor and the Sole Overall Coordinator
that:
(i) any statement contained in any of the Offering Documents, Operative
Documents (as defined in the Public Offer Underwriting Agreement) and/or
the preliminary offering circular in connection with the Placing (collectively,
the ‘‘Offer Related Documents ’’) (but excluding information relating to the
Sole Sponsor and the Underwriters) wa s, when it was issued, or has become,
untrue, incorrect, inaccurate or incomplete in any material respect or
misleading or deceptive, or that any forecast, estimate, expression of opinion,
intention or expectation expressed or contained in any of the Offer Related
Documents is not fair and honest in all material respects and not made on
reasonable grounds or, where appropriate, not based on reasonable
assumptions with reference to the facts and circumstances then subsisting; or
UNDERWRITING
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(ii) any matter has arisen or has been di scovered which would or might, had it
arisen or been discovered immediately before the date of this prospectus,
constitute a material omission from, or material misstatement in, any of the
Offer Related Documents; or
(iii) there is any Material Adverse Change; or
(iv) the approval by the Listing Committee of the listing of, and permission to
deal in, the Shares in issue and to be issued pursuant to the Capitalisation
Issue and the Share Offer and the exercise of options that may be granted
under the Post-IPO Share Option Scheme is refused or not granted on or
before the Listing Date, or if granted, the approval is subsequently
withdrawn, cancelled, qualified (ot her than by customary conditions),
revoked or withheld; or
(v) any of the experts specified in this prospectus (other than the Sole Sponsor)
or other person whose consent (other than the Underwriters) is required for
the issue of this prospectus or the formal notice in connection with the Public
Offer with the inclusion of its reports, letters and/or legal opinions (as the
case may be) and references to its name included in the form and context in
which it respectively appears has withd rawn its consent to being named in, or
to the issue of, this prospectus or the formal notice in connection with the
Public Offer; or
(vi) our Company withdraws this prospectus (and/or any other document issued
or used in connection with the Share Offer) or the Share Offer; or
(vii) there is a prohibition on our Compan y for whatever reason from offering,
allotting, issuing or selling any of the Offer Shares pursuant to the terms of
the Share Offer; or
(viii) any executive Director is being charged with an indictable offence which may
materially and adversely affect his s uitability to act as a Director under the
GEM Listing Rules or prohibited by operation of law or otherwise
disqualified from taking part in the management of a company; or
(ix) the chairman of the Board, the chief executive officer of the Company or any
executive Director vacates his office; or
(x) the Shares being rejected for clearing and settlement in CCASS on or before
the Listing Date or such admission subsequently being revoked prior to the
commencement of trading of the Shares on the Stock Exchange; or
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(xi) a significant portion of the orders in the bookbuilding process at the time
when the Placing Underwriting Agreement is entered into have been
withdrawn, terminated, cancelled or o therwise not fulfilled which, in the
opinion of the Sole Sponsor and the Sole Overall Coordinator acting
reasonably, makes it incapable or i mpracticable for the Share Offer to
proceed as envisaged under the Public Offer Underwriting Agreement or the
Placing Underwriting Agreement.
Undertakings to the Stock Exchange pursuant to the GEM Listing Rules
Undertakings by our Company
Pursuant to Rule 17.29 of the GEM Listing Rules, our Company has undertaken to the
Stock Exchange that we will not issue any further Shares or securities convertible into
equity securities of our Company (whether or not of a class already listed) or enter into any
a g r e e m e n tt os u c ha ni s s u ew i t h i ns i xm o n t h sfrom the Listing Date (whether or not such
issue of Shares or securities will be complete d within six months from the Listing Date),
except in certain circumstances prescribe d under Rule 17.29 of the GEM Listing Rules
which include the issue of Shares pursuant to a share scheme under chapter 23 of the GEM
Listing Rules.
Undertakings by our Con trolling Shareholders
Pursuant to Rule 13.16A(1) of the GEM Listing Rules, each of our Controlling
Shareholders has undertaken to each of the Stock Exchange and our Company that, save as
permitted under the GEM Listing Rules:
(a) in the period commencing on the date by reference to which disclosure of
his/her/its shareholding is made in this prospectus and ending on the date which is
six months from the Listing Date, he/she/it shall not dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances (but save pursuant to a bon a fide commercial loan) in respect of,
any of the Shares in respect of which he/she/it is shown by this prospectus to be
the beneficial owner (the ‘‘ Relevant Securities ’’); or
(b) in the period of six months commencing on the date on which the period referred
to in (a) above expires, he/she/it shall not dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the Relevant Securities if, immediately following such disposal
or upon the exercise or enforcement of such options, rights, interests or
encumbrances, he/she/it would cease to be a controlling shareholder of our
Company.
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Pursuant to Rule 13.19 of the GEM Listing Rules, each of our Controlling
Shareholders has further undertaken to each of the Stock Exchange and our Company
that within the period commencing on the date by reference to which disclosure of
his/her/its shareholding is made in this prospectus and ending on the date which is 12
months from the Listing Date, he/she/it shall:
(a) in the event that he/she/it pledges or charges any direct or indirect interest in the
Relevant Securities under Rule 13.18(1) of the GEM Listing Rules, or pursuant to
any right or waiver granted by the Stock Exchange pursuant to Rule 13.18(4) of
the GEM Listing Rules, at any time during the relevant periods, he/she/it will
inform our Company immediately thereafte r, disclosing the details specified in
Rules 17.43(1) to 17.43(4) of the GEM Listing Rules; and
(b) having pledged or charged any interest in securities referred to in paragraph (a)
above, he/she/it will inform our Company immediately in the event that he/she/it
becomes aware that the pledgee or chargee has disposed of or intends to dispose of
such interest and of the number of securities affected.
Our Company will inform the Stock Exchan ge as soon as we have been informed of the
matters referred to in paragraphs (a) and (b) above (if any) by our Controlling Shareholders
and subject to the then applicable requirem ents of the GEM Listing Rules disclose such
matters by way of an announcement.
Undertakings to the Public Offer Underwriters pursuant to the Public Offer Underwriting
Agreement
Undertakings by our Company
Pursuant to the Public Offer Underwriting Agreement, we have undertaken to each of
the Sole Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the Joint
Bookrunners, the Joint Lead Managers, the CMIs and the Public Offer Underwriters that,
except for the issue, offer or sale of the Shares by our Company pursuant to the
Capitalisation Issue, the Share Offer and the e xercise of options that may be granted under
the Post-IPO Share Option Scheme, not to, without the prior written consent of the Sole
Sponsor and the Sole Overall Coordinator (for itself and on behalf of the Public Offer
Underwriters) and unless in compliance with the GEM Listing Rules, at any time during the
period commencing on the date of the Public O ffer Underwriting Agreement and ending on,
and including, the date that is six months after the Listing Date (the ‘‘ First Six-Month
Period ’’):
(i) allot, issue, sell, accept subscription fo r, offer to allot, issue or sell, contract or
agree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
UNDERWRITING
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transfer or dispose of or create an Encum brance (as defined in the Public Offer
Underwriting Agreement) over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indirectly, conditionally or unconditionally,
a n yS h a r e so ra n yo t h e rs e c u r i t i e so fo u rC o m p a n yo ra n yi n t e r e s ti na n yo ft h e
foregoing (including, without limitatio n, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any
warrants or other rights to purchase, any Shares or other securities of our
Company or any interest in any of the foregoing) or deposit any Shares or other
securities of our Company with a depositary in connection with the issue of
depositary receipts; or
(ii) enter into any swap, derivative or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of subscription or ownership
of any Shares or other securities of our Company or any interest therein
(including, without limitation, any securities convertible into or exchangeable or
exercisable for, or that represent the right to receive, or any warrants or other
rights to purchase, any Shares or other securities of our Company or any interest
in any of the foregoing); or
(iii) enter into any transaction with the sa me economic effect as an y transaction set
out in paragraphs (i) or (ii) above; or
(iv) offer or agree or contract to effect any transaction set out in paragraphs (i), (ii) or
(iii) above or publicly announce any intention to do so,
in each case, whether any of the transactions se t out in paragraphs (i), (ii) or (iii) above is to
be settled by delivery of Shares or other securities of our Company, or in cash or otherwise
(whether or not the issue of such Shares or oth er securities will be completed within the
First Six-Month Period). In the event that, during the six-month period commencing on the
date on which the First Six-Month Period expires (the ‘‘ Second Six-Month Period ’’), our
Company enters into any of the transactions s et out in paragraphs (i), (ii) or (iii) above or
offers or agrees or contracts to, or publicly announces an intention to, enter into any such
transactions, our Company shall take all reasonable steps to ensure compliance with
applicable legal and regulatory requirements relating to the avoidance of creating a
disorderly or false market in the Shares or other securities of our Company. Each of our
Controlling Shareholders also undertakes to each of the Sole Sponsor, the Sole Overall
Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the Joint Lead
Managers, the CMIs and the Public Offer Underwriters to procure our Company’s
compliance with the foregoing undertakings.
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Undertakings by our Con trolling Shareholders
Our Controlling Shareho lders undertake (the ‘‘ Controlling Shareholders’ Lock-up
Undertakings ’’) to each of our Company, the Sole Sponsor, the Sole Overall Coordinator,
the Sole Global Coordinator, the Joint Book runners, the Joint Lead Managers, the CMIs
and the Public Offer Underwriters that, without the prior written consent of the Sole
Sponsor and the Sole Overall Coordinator (for itself and on behalf of the Public Offer
Underwriters) and unless in compliance with t he GEM Listing Rules that he/she/it will not
and will procure that his/her/its affiliate(s) (w hich is/are the relevant registered owner(s) of
the Relevant Securities (as defined below)) w ill not during the First Six-Month Period:
(i) offer, pledge, charge, sell, offer, contract or agree to sell, pledge, assign, mortgage,
charge, hypothecate, lend, grant or sell (or agree to grant or sell) any option,
warrant, contract or right to subscribe for or purchase, grant or purchase (or
agree to grant or purchase) any option, warrant, contract or right to sell, lend or
otherwise transfer or dispose of, make any short sale, or otherwise transfer or
dispose of or create an Encumbrance over, or agree to transfer or dispose of or
create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or other securities of our Company or any interest
therein (including but not limited to any securities convertible into or
exchangeable for, or that represent the right to receive, or any warrants or
other rights to purchase, any Shares or other securities of our Company) directly
or indirectly held by him/her/it as at the date of the Public Offer Underwriting
Agreement (the ‘‘Relevant Securities ’’); or
(ii) enter into any swap, derivative or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Shares or
other securities of our Company or any interest therein (including any securities
convertible into or exchangeable or exercisable for, or that represent the right to
receive, or any warrants or other rights to purchase the Relevant Securities; or
(iii) enter into any transaction with the sa me economic effect as an y transaction set
out in paragraphs (i) or (ii); or
(iv) publicly disclose that he/she/it will o r may enter into any transaction set out in
paragraphs (i), (ii) or (iii),
whether any of the transaction set out in paragr aphs (i), (ii) or (iii) above is to be settled by
delivery of Shares or other securities of our Company, or in cash or otherwise (whether or
not the issue of such Shares or other securities will be completed within the First Six-Month
Period); that he/she/it shall not during the Second Six-Month Period, enter into any
transaction described in paragraphs (i), (ii) or (iii) above or offer, agree or contract to or
publicly announce any intention to enter into any such transaction if, immediately
following such transaction, he/she/it will cease to be a Controlling S hareholder. Until the
expiry of the Second Six-Month Period, in the event that any of our Controlling
Shareholders enters into any such transaction s specified in (i), (ii) or (iii) above or offers,
agrees or contracts to, or publicly announces an intention to enter into any such
transaction, he/she/it will notify the Sole Sponsor and the Sole Overall Coordinator and
UNDERWRITING
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take all reasonable steps to ensure his/her/it s compliance with applicable Laws insofar as
they relate to the avoidance of creating a disor derly or false market in the securities of our
Company.
Each of our Controlling Shareholders has fu rther undertaken to each of our Company,
the Sole Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the Joint
Bookrunners, the Joint Lead Managers, the CMIs and the Public Offer Underwriters that,
within a period commencing on the date of th e Public Offer Underwriting Agreement and
ending on and including a date which is 12 months from the Listing Date, he/she/it shall:
(i) if and when he/she/it pledges or charges any Shares or other securities of our
Company (or any interests therein) beneficially owned by him/her/it, immediately
inform our Company, the Sole Sponsor and the Sole Overall Coordinator in
writing of such pledge or charge together with the number of Shares or securities
(or interests therein) so pledged or charged; and
(ii) if and when he/she/it receives indications, either verbal or written, from any
pledgee or chargee that any of the pledge d or charged Shares or securities (or
interests therein) of our Company will be disposed of, immediately inform our
Company, the Sole Sponsor and the Sole Overall Coordinator in writing of such
indications.
We undertake to the Sole Sponsor, the Sole Overall Coordinator, the Sole Global
Coordinator, the Joint Bookrunners, the Joint Lead Managers, the CMIs and the Public
Offer Underwriters that upon receiving such information in writing from a Controlling
Shareholder, we will, as soon as reasonably practicable and if required pursuant to the
GEM Listing Rules, notify the Stock Exchan ge and make a public disclosure in accordance
with applicable Laws.
Public Underwriters’ interests in our Company
Except for their respective obligations unde r the Public Offer Underwriting Agreement
and/or the Placing Underwriting Agreement a nd save as disclosed in this prospectus, as at
the Latest Practicable Date, none of the Pub lic Offer Underwriters had any shareholding
interest in the Company or had any right or opt ion (whether legally enforceable or not) to
subscribe for or purchase, or to nominate persons to subscribe for or purchase, any
securities of our Company.
Following the completion of the Share Offer, the Public Offer Underwriters and their
affiliated companies may hold a certain portio n of the Shares as a result of fulfilling their
respective obligations under the Public Offer Underwriting Agreement and/or the Placing
Underwriting Agreement.
UNDERWRITING
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Indemnity
We have agreed to indemnify, among others, the Sole Sponsor, the Sole Overall
Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the Joint Lead
Managers, the CMIs and the Public Offer Underwriters for certain losses which they may
suffer or incur, including losses arising from their performance of their obligations under
the Public Offer Underwriting Agreement and any breach or alleged breach (with valid
grounds) by us of the Public Offer Underwriting Agreement.
Placing
Placing Underwriting Agreement
In connection with the Placing, our Com pany expects to enter into the Placing
Underwriting Agreement on the Price Determi nation Date with the Placing Underwriters.
Under the Placing Underwriting Agreement, the Placing Underwriters would, subject to
certain conditions set out therein, agree severally but not jointly to procure subscribers for,
or itself to subscribe for, their respective a pplicable proportions of the Placing Shares
initially being offered pursuant to the Placing. It is expected that the Placing Underwriting
Agreement may be terminated on similar g rounds as the Public Offer Underwriting
Agreement. See the section headed ‘‘Structure and Conditions of the Share Offer — The
Placing’’.
Commissions and Expenses
The Underwriters and the CMIs will receive an underwriting commission of 8.0% of
the aggregate Offer Price payabl e for all the Offer Shares (the ‘‘ Fixed Fees ’’). In addition,
our Company may, at our sole and absolute discretion, pay to all or any of the
Underwriters or the CMIs (in such proportions as our Company may solely determine) a
discretionary incentive fee of up to 2.0% of the aggregate Offer Price in respect of all the
Offer Shares (the ‘‘ Incentive Fees ’’).
Assuming the Incentive Fees will be fully paid, the aggregate amount of fees payable by
us to all syndicate members will be 10.0% of the gross proceeds from the Share Offer, with
the proportion of 80.0% in Fixed Fees and 20.0% in Incentive Fees.
UOB Kay Hian is the sole overall coordinator of the Share Offer. The names of the
capital market intermediaries involved in the Share Offer are set out in the section headed
‘‘Directors and Parties Involved in the Share Offer — Capital Market Intermediaries’’. The
amount of Fixed Fees payable to all syndicated members represents 80% of the total Fixed
Fees and Incentive Fees payable to all syndic ate members (assuming the Incentive Fees are
paid in full).
INDEPENDENCE OF THE SOLE SPONSOR
The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in
Rule 6A.07 of the GEM Listing Rules.
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THE SHARE OFFER
This prospectus is published in connection with the Public Offer as part of the Share
Offer. The Share Offer consists of:
. the Public Offer of 2,700,000 Offer Shares (subject to reallocation) as described
under the paragraph headed ‘‘— The Public Offer’’ below; and
. the Placing of 24,300,000 Shares (subject to reallocation) as described under the
paragraph headed ‘‘— The Placing’’ below.
Investors may apply for the Offer Shares under the Public Offer or indicate an interest,
if qualified to do so, for the Offer Shares under the Placing, but may not do both.
The Offer Shares will represent 18% of the enlarged issued share capital of the
Company immediately after completion of t he Capitalisation Issue and the Share Offer
(without taking into account any Shares which may be issued and allotted upon the exercise
of options which may be granted under the Post-IPO Share Option Scheme).
The number of Offer Shares to be offered under the Public Offer and the Placing
respectively may be subject to reallocation as described in the paragraph headed ‘‘—
Reallocation and clawback’’ below.
THE PUBLIC OFFER
Number of Public Offer Shares initially offered
Our Company is initially offering 2,700,000 Public Offer Shares at the Offer Price,
representing 10% of the total number of Offer Shares available under the Share Offer, for
subscription by the public in Hong Kong. The number of Shares offered under the Public
Offer will represent 1.8% of the enlarged issued share capital of our Company immediately
after completion of the Capitalisation Issu e and the Share Offer (without taking into
account any Shares which may be issued and allotted upon the exercise of options which
may be granted under the Post-IPO Share Option Scheme).
The Public Offer is open to members of the public in Hong Kong as well as to
institutional, professional and other investors. Professional investors generally include
brokers, dealers, companies (including fund managers) whose ordinary business involves
dealing in shares and other securities and corporate entities which regularly invest in shares
and other securities.
Completion of the Public Offer is subject to the conditions as set out in the paragraph
headed ‘‘— Conditions of the Public Offer’’ below.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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Allocation
Allocation of the Public Offer Shares to investors under the Public Offer will be based
solely on the level of valid applications re ceived under the Public Offer. The basis of
allocation may vary, depending on the number of Public Offer Shares validly applied for by
applicants. Such allocation could, where appropriate, consist of balloting, which would
mean that some applicants may receive a higher allocation than others who have applied for
the same number of Public Offer Shares, and those applicants who are not successful in the
ballot may not receive any Public Offer Shares.
Reallocation and clawback
The allocation of Offer Shares between the Public Offer and the Placing is subject to
reallocation. Paragraph 4 of Practice Note 6 of the GEM Listing Rules requires a clawback
mechanism to be put in place which would have the effect of increasing the number of Offer
Shares under the Public Offer to a certain percentage of the total number of Offer Shares
offered under the Share Offer if certain pr escribed total demand levels are reached.
If the Placing is fully or oversubscribed and t he number of Offer Sha res validly applied
for under the Public Offer represents (a) 15 times or more but less than 50 times, (b) 50
t i m e so rm o r eb u tl e s st h a n1 0 0t i m e so r( c )1 0 0t i m e so rm o r eo ft h et o t a ln u m b e ro fO f f e r
Shares available under the Public Offer, then Offer Shares will be reallocated to the Public
Offer from the Placing. As a result of such reallocation, the total number of Offer Shares
available under the Public Offer will be increased to 8,100,000 Offer Shares (in the case of
(a)), 10,800,000 Offer Shares (in the case of (b)) and 13,500,000 Offer Shares (in the case of
(c)), representing 30%, 40% and 50% of the total number of Offer Shares available under
the Share Offer, respectively.
In addition, the Sole Overall Coordinator may reallocate Offer Shares from the Placing
to the Public Offer to satisfy valid applicatio ns under the Public Offer. In accordance with
the Guide for New Listing Applicants, if such reallocation is done in the circumstance that
the Placing Shares are undersubscribed or other than pursuant to the clawback mechanism
above, the total number of Offer Shares available under the Public Offer following such
reallocation shall be not more than 5,400,00 0 Offer Shares (representing 20% of the total
number of Offer Shares available under the Share Offer), and the final Offer Price shall be
fixed at the low-end of the indicative Offer Price range (i.e., HK$2.38 per Offer Share)
stated in this prospectus.
If the Public Offer is not fully subscribed, the Sole Overall Coordinator may reallocate
all or any unsubscribed Public Offer Shares to the Placing, in such proportions as the Sole
Overall Coordinator deems appropriate.
The Offer Shares to be offered in the Public O ffer and the Offer Shares to be offered in
the Placing may, in certain circumstances, be reallocated between these offerings at the
discretion of the Sole Overall Coordinator.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 6 8–


--- page 380 ---
Applications
Each applicant under the Public Offer will be required to give an undertaking and
confirmation in the application submitted b y him that he and any person for whose benefit
he is making the application have not applied for or taken up, or indicated an interest for,
and will not apply for or take up, or indicate an interest for, any Offer Shares under the
Placing, and such applicant’s application is liable to be rejected if the said undertaking or
confirmation is breached or untrue (as the case may be) or if such applicant has been or will
be placed or allocated Offer Shares under the Placing.
The Listing is sponsored by the Sole Sponsor. Applicants under the Public Offer may
be required to pay, on application (subject to application channels), the maximum Offer
Price of HK$3.00 per Offer Share in addition to the brokerage, the SFC transaction levy,
the AFRC transaction levy and the Stock Exchange trading fee payable on each Offer
Share. If the Offer Price, as finally determined in the manner described in the section headed
‘‘— Pricing of the Share Offer’’ below, is less than the maximum Offer Price of HK$3.00 per
Offer Share, appropriate refund payments (including the brokerage, the SFC transaction
levy, the AFRC transaction levy and the Stock Exchange trading fee attributable to the
surplus application monies) will be made to succes sful applicants, without interest (subject
to application channels). Further details ar e set out in the section headed ‘‘How to Apply
for Public Offer Shares.’’
References in this prospectus to applicatio ns, application monies or to the procedure
for application relate solely to the Public Offer.
THE PLACING
Number of Placing Shares initially offered
Subject to the reallocation as described above, the number of Offer Shares to be
initially offered for subscription under the Placing will be 24,300,000 Placing Shares,
representing 90% of the total number of Offer Shares available under the Share Offer, and
16.2% of the Company’s enlarged issued share capital immediately after the completion of
the Capitalisation Issue and the Share Offer ( without taking into account any Shares which
may be issued and allotted upon the exercise of options which may be granted under the
Post-IPO Share Option Scheme).
Allocation
The Placing will include selective marketin g of the Placing Shares to institutional and
professional investors and other investors anticipated to have a sizeable demand for such
Placing Shares. Professional investors generally include brokers, dealers, companies
(including fund managers) whose ordinary bu siness involves dealing in shares and other
securities and corporate entities which regul arly invest in shares and other securities.
Allocation of the Placing Shares pursuant to t he Placing will be effected in accordance with
the ‘‘book-building’’ process described in the section headed ‘‘— Pricing of the Share Offer’’
below and based on a number of factors, including the level and timing of demand, the total
size of the relevant investor’s invested asse ts or equity assets in the relevant sector and
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 6 9–


--- page 381 ---
whether or not it is expected that the relevant investor is likely to buy further Offer Shares,
and/or hold or sell its Offer Shares, after the Listing. Such allocation is intended to result in
a distribution of the Offer Shares on a basis which would lead to the establishment of a solid
professional and institutional shareholder base to the benefit of the Company and our
Shareholders as a whole.
The Sole Overall Coordinator (for itself and on behalf of the Underwriters) may
require any investor who has been offered the Placing Shares under the Placing, and who
has made an application under the Public Offer t o provide sufficient information to the Sole
Overall Coordinator so as to allow it to identify the relevant application under the Public
Offer and to ensure that it is excluded from an y application of the Public Offer Shares under
the Public Offer.
Reallocation
The total number of the Offer Shares to be issued or sold pursuant to the Placing may
change as a result of the clawback mechanism described in the section headed ‘‘— The
Public Offer — Reallocation and clawback’’ above and/or any reallocation of unsubscribed
Offer Shares originally in cluded in the Public Offer.
PRICING OF THE SHARE OFFER
The Placing Underwriters will be soliciting from prospective investors’ indications of
interest in acquiring the Placing Shares in the Share Offer. Prospective professional and
institutional investors will be required to specify the number of the Placing Shares under the
Share Offer they would be prepared to acquire either at different prices or at a particular
price. This process, known as ‘‘book-buildin g,’’ is expected to continue up to, and to cease
on or around, the last day for lodging applications under the Public Offer.
Pricing for the Offer Shares for the purpose of the various offerings under the Share
Offer will be fixed on the Price Determination Date, which is expected to be on or before
12 : 00 noon on Thursday, 27 June 2024, by agreement between the Sole Overall
Coordinator (for itself and on behalf of the Underwriters) and the Company and the
number of Offer Shares to be allocated under various offerings will be determined shortly
thereafter.
The Offer Price will be not more than HK$3.00 per Offer Share and is expected to be
not less than HK$2.38 per Offer Share unless otherwise announced, as further explained
below, not later than the morning of the last day for lodging applications under the Public
Offer. Applicants under the Public Offer may be required to pay, on application (subject to
application channels), the maximum Offer Price of HK$3.00 per Offer Share plus brokerage
of 1.0%, SFC transaction levy of 0.0027%, the AFRC transaction levy of 0.00015% and
Stock Exchange trading fee of 0.00565% payable on each Offer Share. Prospective investors
s h o u l db ea w a r et h a tt h eO f f e rP r i c et ob ed e t e r m i n e do nt h eP r i c eD e t e r m i n a t i o nD a t em a y
be, but is not expected to be, lower than the indicative Offer Price range stated in this
prospectus.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 7 0–


--- page 382 ---
Reduction in Offer Price range and/or number of Offer Shares
The Sole Overall Coordinator (for itself and on behalf of the Underwriters) may, where
considered appropriate, based on the level of int erest expressed by prospective professional
and institutional investors during the book-building process, and with the consent of the
Company, reduce the number of Offer Share s offered in the Share Offer and/or the Offer
Price below that stated in this prospectus at any time on or prior to the morning of the last
day for lodging applications under the Public Offer. In such a case, the Company will, as
soon as practicable following the decision to make such reduction, and in any event not
later than the morning of the day which is the last day for lodging applications under the
Public Offer, cause there to be posted on the websites of the Stock Exchange
(
www.hkexnews.hk ) and of the Company ( www.metatechnologies.com.sg )n o t i c e so ft h e
reduction, cancellation of the Share Offer and relaunch of the Share Offer at the revised
number of Offer Shares and/or indicative Offer Price range. The Company will also, as soon
as practicable following the decision to make such change, issue a supplemental or new
prospectus updating investors of the change in the number of Offer Shares and/or indicative
Offer Price range, and giving investors at least three business days to consider the new
information.
Applicants should have regard to the possi bility that any announcement of a reduction
in the number of Offer Shares and/or the Offer Price may not be made until the day which is
the last day for lodging applications unde r the Public Offer. In the absence of the
publication of any such notice so announced and any such supplemental or new prospectus
so published, the number of Offer Shares and/or the indicative Offer Price range shall not
be reduced below that stated in this prospectus and the Offer Price shall under no
circumstances be set outside the Offer Price range indicated in this prospectus.
If there is any change to the offer size due to change in the number of Offer Shares
(other than pursuant to the reallocation mech anism as disclosed in this prospectus), or
change to the Offer Price falling outside the indicative Offer Price range as stated in this
prospectus, or if the Company becomes aware that there has been a significant change
affecting any matter contained in this prospect us or a significant new matter has arisen, the
inclusion of information in respect of wh ich would have been required to be in this
prospectus had it arisen before this prospectus was issued, after the issue of this prospectus
and before the commencement of dealings in our S hares, we are required to cancel the Share
Offer and relaunch it with a supplemental or new prospectus in FINI.
Announcement of final pricing of the Offer Shares
The final pricing of the Offer Shares, the level of indications of interest in the Share
Offer, the results of applications and the ba s i so fa l l o t m e n to ft h eP u b l i cO f f e rS h a r e s
available under the Public Offer, are expected to be posted on the websites of the Stock
Exchange (
www.hkexnews.hk ) and of the Company ( www.metatechnologies.com.sg ).
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 7 1–


--- page 383 ---
UNDERWRITING
The Public Offer is fully underwritten by t he Public Offer Underwriters under the
terms of the Public Offer Underwriting Agr eement and is conditional upon the Placing
Underwriting Agreement being signed and becoming unconditional.
The Company expects to enter into the Placing Underwriting Agreement relating to the
Placing on or around the Price Determination D ate. These underwriting arrangements and
the respective Underwriting Agreements a r es u m m a r i s e di nt h es e c t i o nh e a d e d
‘‘Underwriting.’’
CONDITIONS OF THE PUBLIC OFFER
Acceptance of all applications for the Offer Shares pursuant to the Public Offer will be
conditional upon, among other things:
. the Listing Committee granting listing of, and permission to deal in, the Shares in
issue and to be issued pursuant to the Ca pitalisation Issue and the Share Offer
(including the Shares which may be issued and allotted upon the exercise of
options which may be granted under the Post-IPO Share Option Scheme);
. the Offer Price having been duly agreed on or around the Price Determination
Date;
. the execution and delivery of the Placing Underwriting Agreement on or around
the Price Determination Date; and
. the obligations of the Underwriters under each of the Placing Underwriting
Agreement and the Public Offer Under writing Agreement having become
unconditional and not having been terminated in accordance with the terms of
the respective agreements,
in each case on or before the dates and times specified in such Underwriting Agreements
(unless and to the extent such conditions are waived on or before such dates and times) and
in any event not beyond the 30th day after the date of this prospectus.
The consummation of each of the Public Offer and the Placing is conditional upon,
among other things, the other becoming unconditional and not having been terminated in
accordance with its terms.
If the above conditions are not fulfille d or waived prior to the dates and times
specified, the Share Offer will lapse and the Sto ck Exchange will be not ified immediately.
We will cause the notice of the lapse of the Public Offer to be published on the Stock
Exchange’s website and on our Company’s website on the next day following such lapse.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 7 2–


--- page 384 ---
Share certificates for the Offer Shares are expected to be issued on Friday, 28 June 2024
but will only become valid evidence of title at 8 : 00 a.m. on Tuesday, 2 July 2024, provided that
(i) the Share Offer has become unconditional in all respects and (ii) the right of termination as
described in the paragraph headed ‘‘Underwriting — Underwriting arrangements and expenses
— Grounds for termination’’ in this prospectus has not been exercised.
ADMISSION OF THE SHARES INTO CCASS
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the Shares and
our Company complies with the stock admission requirements of HKSCC, the Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement o f dealings in the Shares on GEM or any other
date HKSCC chooses. Settlement of transac tions between Exchange Participants (as
defined in the GEM Listing Rules) is required to take place in CCASS on the second
settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Public Offer becomes unconditional at or before 8 : 00 a.m. in Hong
Kong on Tuesday, 2 July 2024, it is expected that dealings in the Shares on GEM will
commence at 9 : 00 a.m. on Tuesday, 2 July 2024. The Shares will be traded in board lots of
1,000 Shares.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
–3 7 3–


--- page 385 ---
IMPORTANT NOTICE TO INVESTO RS OF PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Public Offer and below
are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews> New Listings> New Listing Information’’ section, and our website
at
www.metatechnologies.com.sg.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR PUBLIC OFFER SHARES
1. Who Can Apply
You can apply for Public Offer Shares if you or the person(s) for whose benefit
you are applying for:
. a r e1 8y e a r so fa g eo ro l d e r ;a n d
. h a v eaH o n gK o n ga d d r e s s(for the HK eIPO White Form service only ).
Unless permitted by the GEM Listing Rules, you cannot apply for any Public
Offer Shares if you or the person(s) for whose benefit you are applying for:
. are an existing Shareholder or close associates; or
. are a Director or any of his/her close associates.
2. Application Channels
The Public Offer period will begin at 9 : 00 a.m. on Friday, 21 June 2024 and end at
12 : 00 noon on Wednesday, 26 June 2024 (Hong Kong time).
HOW TO APPLY FOR PUBLIC OFFER SHARES
–3 7 4–


--- page 386 ---
To apply for Public Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
HK eIPO White
Form service
You may apply online via the HK
eIPO White Form service in
the IPO App (which can be
downloaded by searching
‘‘IPO App ‘‘in App Store or
Google Play or downloaded at
www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp )
or the designated website at
www.hkeipo.hk .
Investors who would like to
receive a physical Share
certificate. Public Offer
Shares successfully
applied for will be
allotted and issued in
your own name.
From 9 : 00 a.m. on Friday,
21 June 2024 to 11 : 30
a.m. on Wednesday, 26
June 2024, Hong Kong
time.
The latest time for
completing full payment
of application monies will
be 12 : 00 noon on
Wednesday, 26 June
2024, Hong Kong time.
HKSCC EIPO
channel
Your broker or custodian who is
a HKSCC Participant will
submit an EIPO application
on your behalf through
HKSCC’s FINI system in
accordance with your
instruction.
Investors who would
not
like to receive a physical
Share certificate. Public
Offer Shares successfully
applied for will be
a l l o t t e da n di s s u e di nt h e
name of HKSCC
Nominees, deposited
directly into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the earliest
and latest time for giving
such instructions, as this
m a yv a r yb yb r o k e ro r
custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities
subject to capacity limitations and potential service interruptions and you are advised
not to wait until the last day of the application period to apply for Public Offer Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit
through the HK eIPO White Form service to make an application for Public Offer
Shares, an actual application shall be deemed to have been made. If you are a person
for whose benefit the electronic application instructions are given, you shall be deemed
to have declared that only one set of electronic application instructions has been given
for your benefit. If you are an agent for another person, you shall be deemed to have
declared that you have only given one set of electronic application instructions for the
benefit of the person for whom you are an agent and that you are duly authorised to
give those instructions as an agent.
HOW TO APPLY FOR PUBLIC OFFER SHARES
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--- page 387 ---
For the avoidance of doubt, giving an application instruction under the HK eIPO
White Form service more than once and obtaining different payment reference numbers
without effecting full payment in respect of a particular reference number will not
constitute an actual application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorised the HK eIPO White Form Service Provider to apply on the terms and
conditions in this prospectus, as supplemented and amended by the terms and
conditions of the HK eIPO White Form service.
By instructing your broker or custodian to apply for Public Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each
of you jointly and severally) are deemed to have instructed and authorised HKSCC to
cause HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to
apply for Public Offer Shares on your behalf and to do on your behalf all the things
stated in this prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instructions given by you or for your
benefit to HKSCC (in which case an application will be made by HKSCC Nominees on
your behalf) provided such application instruction has not been withdrawn or
otherwise invalidated before the closing time of the Public Offer.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC
nor HKSCC Nominees shall be liable to you or any other person in respect of any
actions taken by HKSCC or HKSCC Nominees on your behalf to apply for Public
Offer Shares or for any breach of the terms and conditions of this prospectus.
3 . I n f o r m a t i o nR e q u i r e dt oA p p l y
You must provide the following in formation with your application:
For Individual Applicants For Corporate Applicants
. Full name(s) 2 as shown on your
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order of
priority:
i. Hong Kong identity card; or
ii. national identification
document; or
iii. passport
. Identity document number
. Full name(s)
2 as shown on your identity
document
. Identity document’s issuing country or
jurisdiction
. Identity document type, with order of priority:
i. legal entity identifier (LEI) registration
document; or
ii. certificate of incorporation; or
iii. business registration certificate; or
iv. other equivalent document
. Identity document number
HOW TO APPLY FOR PUBLIC OFFER SHARES
–3 7 6–


--- page 388 ---
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a
valid e-mail address, a contact telephone num ber and a Hong Kong address. You are also
required to declare that the identity informati on provided by you follows the requirements as
described in Note 2 below. In particular, whe re you cannot provide a Hong Kong identity card
number, you must confirm that you do not hold a Hong Kong identity card. The number of
joint applicants may not exceed four. If you are a firm, the applicant must be in the individual
members’ names.
2. The applicant’s full name as shown on their iden tity document must be used. If an applicant’s
identity document contains both an English and Chinese name, both English and Chinese
names must be used. Otherwise, either English or Chinese names will be accepted. The order of
priority of the applicant’s identity documen t type must be strictly followed and where an
individual applicant has a valid Hong Kong identity card, the Hong Kong identity card
number must be used when making an application to subscribe for shares in the Public Offer.
Similarly for corporate applicants, a LEI number must be used if an entity has a LEI
certificate.
3. If the applicant is a trustee, the client identif ication data (CID) of the trustee, as set out above,
will be required. If the applicant is an investmen t fund (i.e. a collective investment scheme or
CIS), the CID of the asset management company or the individual fund, as appropriate, which
has opened a trading account with the b roker will be required, as above.
4. The maximum number of joint account holders on FINI is capped at four in accordance with
market practice.
5. If you are applying as a nominee, you must provi de: (i) the full name (as shown on the identity
document), the identity document’s issuing count ry or jurisdiction, the identity document
type; and (ii), the identity document number, for each of the beneficial owners or, in the
case(s) of joint beneficial owners, for each joi nt beneficial owner. If you do not include this
information, the application will be t reated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is
dealing in securities; and (ii) you exercise s tatutory control over that company, then the
application will be treated as being for your benefit and you should provide the required
information in your application as stated above.
‘‘Unlisted company’’ means a company with no e quity securities listed on the Stock Exchange
or any other stock exchange.
‘‘Statutory control’’ means you:
. control the composition of the board of directors of the company;
. control more than half of the voting power of the company; or
. hold more than half of the issued share capit al of the company (not counting any part of
it which carries no right to participate beyond a specified amount in a distribution of
either profits or capital).
HOW TO APPLY FOR PUBLIC OFFER SHARES
–3 7 7–


--- page 389 ---
For those applying through HKSCC EIPO channel, and making an application
under a power of attorney, we and the Sole Overall Coordinator, as our agent, have
discretion to consider whether to accept it on any conditions we think fit, including
evidence of the attorney’s authority.
Failing to provide any required information may result in your application being
rejected.
4. Permitted Number of Public Offer Shares for Application
Board lot size : 1,000
Permitted number of
Public Offer Shares
for application and
amount payable on
application/successful
allotment
: Public Offer Shares are available for application in
specified board lot sizes only. Please refer to the
amount payable associated with each specified
board lot size in the table below.
The maximum Offer Price is HK$3.00 per Share.
If you are applying through the HKSCC EIPO
channel, you are required to prefund your
application based on the amount specified by your
broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.
By instructing your broker or custodian to apply for
Public Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorised HKSCC
to cause HKSCC Nominees (acting as nominee for
the relevant HKSCC Participants) to arrange
payment of the final Offer Price, brokerage, SFC
transaction levy, the Stock Exchange trading fee and
the AFRC transaction levy by debiting the relevant
nominee bank account at the Designated Bank for
your broker or custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of Shares you
have selected. You must pay the respective
maximum amount payable on application in full
upon application for Public Offer Shares.
HOW TO APPLY FOR PUBLIC OFFER SHARES
–3 7 8–


--- page 390 ---
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of Public
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
(HK$) (HK$) (HK$) (HK$)
1,000 3,030.25 15,000 45,453.83 80,000 242,420.40 900,000 2,727,229.50
2,000 6,060.51 20,000 60,605.10 90,000 272,722.96 1,000,000 3,030,255.00
3,000 9,090.76 25,000 75,756.38 100,000 303,025.50 1,200,000 3,636,306.00
4,000 12,121.02 30,000 90,907.66 200,000 606,051.00 1,400,000 4,242,357.00
5,000 15,151.28 35,000 106,058.93 300,000 909,076.50 1,600,000 4,848,408.00
6,000 18,181.54 40,000 121,210.20 400,000 1,212,102.00 1,800,000 5,454,459.00
7,000 21,211.79 45,000 136,361.48 500,000 1,515,127.50 2,000,000 6,060,510.00
8,000 24,242.05 50,000 151,512.76 600,000 1,818,153.00 2,200,000 6,666,561.00
9,000 27,272.30 60,000 181,815.30 700,000 2,121,178.50 2,400,000 7,272,612.00
10,000 30,302.56 70,000 212,117.86 800,000 2,424,204.00 2,700,000
(1) 8,181,688.50
(1) Maximum number of Public Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange
trading fee and AFRC transaction levy. If your application is successful, brokerage will be
paid to the Exchange Participants (as de fined in the GEM Listing Rules) or to the HK eIPO
White Form Service Provider (for applications made through the application channel of the
HK eIPO White Form Service Provider) while the SFC transaction levy, the Stock Exchange
trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and
the AFRC, respectively.
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your
own benefit, except where you are a nominee and provide the information of the
underlying investor in your application as required under the paragraph headed ‘‘— A.
Applications for Public Offer Shares — 3. Information Required to Apply’’ in this
section. If you are suspected of submitting or cause to submit more than one
application, all of your applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service,
(ii) HKSCC EIPO channel, or (iii) both channe ls concurrently are prohibited and will
be rejected. If you have made an application through the HK eIPO White Form or
HKSCC EIPO channel, you or the person(s) for whose benefit you have made the
application shall not apply for any Placing Shares.
The Hong Kong Share Registrar would record all applications into its system and
identify suspected multiple applications with identical names and identification
document numbers according to the Be st Practice Note on Treatment of
Multiple/Suspected Mult iple Applications (‘‘ Best Practice Note ’’) issued by the
Federation of Share Registrars Limited.
HOW TO APPLY FOR PUBLIC OFFER SHARES
–3 7 9–


--- page 391 ---
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Public Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us
and/or the Sole Overall Coordinator, as our agents, to execute any
documents for you and to do on your behalf all things necessary to
register any Public Offer Shares allocated to you in your name or in the name
of HKSCC Nominees as required by the Articles of Association, and (if you
are applying through the HKSCC EIPO channel) to deposit the allotted
Public Offer Shares directly into CCASS for the credit of your designated
HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and
application procedures set out in this prospectus, the IPO App and the
designated website of the HK eIPO White Form s e r v i c e( o ra st h ec a s em a y
be, the agreement you entered into with your broker or custodian), and agree
to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the
arrangements, undertakings and warranties under the participant agreement
between your broker or custodian and HKSCC and observe the General
Rules of HKSCC and the HKSCC Operational Procedures for giving
application instructions to apply for Public Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of Shares
set out in this prospectus and they do not apply to you, or the person(s) for
whose benefit you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and
have relied only on the information and representations contained therein in
making your application (or as the case may be, causing your application to
be made) and will not rely on any other information or representations;
(vi) agree that the Relevant Persons (Share Offer), the Hong Kong Share
Registrar and HKSCC will not be liable for any information and
representations not in this prospectus and any supplement to it;
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(vii) agree to disclose the details of your application and your personal data and
any other personal data which may be required about you and the person(s)
for whose benefit you have made the application to us, the Relevant Persons
(Share Offer), the Hong Kong Share Re gistrar, HKSCC, HKSCC Nominees,
the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
for the purposes under the paragraph headed ‘‘— G. Personal Data — 3.
Purposes and 4. Transfer of personal data’’ in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, H KSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent
misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or
HKSCC Nominees on your behalf cannot be revoked once it is accepted,
which will be evidenced by the notification of the result of the ballot by the
Hong Kong Share Registrar by way of publication of the results at the time
a n di nt h em a n n e ra ss p e c i f i e di nt h ep a r a g r a p hh e a d e d‘ ‘ —B .P u b l i c a t i o no f
Results’’ in this section;
(x) confirm that you are aware of the situations specified in the paragraph
headed ‘‘— C. Circumstances In Whic h You Will Not Be Allocated Public
Offer Shares’’ in this section;
(xi) agree that your application or HKSCC Nominees’ application, any
acceptance of it and the resulting contract will be governed by and
construed in accordance with the laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordin ance, the Articles of Association and
laws of any place outside Hong Kong that apply to your application and that
neither we nor the Relevant Persons (Share Offer) will breach any law inside
and/or outside Hong Kong as a result of the acceptance of your offer to
purchase, or any action arising from y our rights and obligations under the
terms and conditions contained in this prospectus;
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(xiii) confirm that (a) your application or HKSCC Nominees’ application on your
behalf is not financed directly or indirectly by the Company, any of the
directors, chief executives, substa ntial Shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their
respective close associates; and (b) you are not accustomed or will not be
accustomed to taking instructions from the Company, any of the directors,
chief executives, substantial shareholde r(s) or existing shareholder(s) of the
C o m p a n yo ra n yo fi t ss u b s i d i a r i e so ra n yo ft h e i rr e s p e c t i v ec l o s ea s s o c i a t e s
in relation to the acquisition, dispo sal, voting or other disposition of the
Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Sole Overall Coordinator will
rely on your declarations and representations in deciding whether or not to
allocate any Public Offer Shares to you and that you may be prosecuted for
making a false declaration;
(xvi) agree to accept Public Offer Shares applied for or any lesser number
allocated to you under the application;
(xvii) declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for
whose benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other
application has been or will be made for your benefit by giving electronic
application instructions to HKSCC directly or indirectly or through the
application channel of the HK eIPO White Form Service Provider or by any
one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another
person) warrant that (1) no other application has been or will be made by you
as agent for or for the benefit of that person or by that person or by any
other person as agent for that perso n by giving electronic application
instructions to HKSCC and the HK eIPO White Form Service Provider and
(2) you have due authority to give electronic application instructions on
behalf of that other person as its agent.
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B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Public Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website The ‘‘IPO Results’’ function in the
IPO App or the designated results
of allocation website at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result )
w i t ha‘ ‘ s e a r c hb yI D ’ ’f u n c t i o n .
24 hours, from 11 : 00 p.m. on
Friday, 28 June 2024 to 12 : 00
midnight on Thursday, 4 July
2024 (Hong Kong time)
The full list of (i) wholly or
partially successful applicants
using the HK eIPO White Form
service and HKSCC EIPO
channel, and (ii) the number of
Public Offer Shares conditionally
allotted to them, among other
things, will be displayed at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result ).
The Stock Exchange’s website at
www.hkexnews.hk and our website
at www.metatechnologies.com.sg
which will provide links to the
above mentioned websites of the
Hong Kong Share Registrar.
No later than 11 : 00 p.m. on
Friday, 28 June 2024 (Hong
Kong time)
Telephone +852 3691 8488 — the allocation
results telephone enquiry line
provided by the Hong Kong
Share Registrar.
Between 9 : 00 a.m. and 6 : 00 p.m.,
from Tuesday, 2 July 2024 to
Friday, 5 July 2024 (Hong Kong
time) on a business day
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6 : 00 p.m. on Thursday, 27 June 2024 (Hong Kong time).
HOW TO APPLY FOR PUBLIC OFFER SHARES
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HKSCC Participants can log into FINI and review the allotment result from 6 : 00
p.m. on Thursday, 27 June 2024 (Hong Kong time) on a 24-hour basis and should
report any discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the fin al Offer Price, the level of indications
of interest in the Placing, the level of app lications in the Public Offer and the basis of
allocations of Public Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.metatechnologies.com.sg by no later than
11 : 00 p.m. on Friday, 28 June 2024 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED PUBLIC
OFFER SHARES
You should note the following situations in which Public Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application m ade by HKSCC Nominees on your behalf
may be revoked pursuant to Section 44A ( 6 )o ft h eC o m p a n i e s( W i n d i n gU pa n d
Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application
We, the Sole Overall Coordinator, the Hong Kong Share Registrar and their
respective agents and nominees have full discretion to reject or accept any application,
or to accept only part of any application, without giving any reasons.
3. If the allocation of Public Offer Shares is void:
The allocation of Public Offer Shares will be void if the Stock Exchange does not
g r a n tp e r m i s s i o nt ol i s tt h eS h a r e se i t h e r :
. within three weeks from the closing date of the application lists; or
. within a longer period of up to six weeks if the Stock Exchange notifies us of
that longer period within three weeks of the closing date of the application
lists.
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4. If:
. you make multiple applications or suspected multiple applications. You may
refer to the paragraph headed ‘‘— A. Applications for Public Offer Shares —
5. Multiple Applications Prohibited’’ in this section on what constitutes
multiple applications;
. your application instr uction is incomplete;
. your payment (or confirmation of funds, as the case may be) is not made
correctly;
. the Underwriting Agreements do not become unconditional or are
terminated;
. we believe or the Sole Overall Coordinator believes that by accepting your
application, it or we would v iolate applicable securities or other laws, rules or
regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold suffici ent application funds on deposit with their
Designated Bank before balloting. After b alloting of Public Offer Shares, the
Receiving Bank will collect the portion of these funds required to settle each
HKSCC Participant’s actual Public Offer Sha re allotment from their Designated Bank.
There is a risk of money settlement failure. I nt h ee x t r e m ee v e n to fm o n e y
settlement failure by a HKSCC Participant ( or its Designated Bank), who is acting on
your behalf in settling payment for your allotted shares, HKSCC will contact the
defaulting HKSCC Participant and its Des i g n a t e dB a n kt od e t e r m i n et h ec a u s eo f
failure and request such defaulting HKSCC Participant to rectify or procure to rectify
the failure.
However, if it is determined that such se ttlement obligation cannot be met, the
affected Public Offer Shares will be reallo cated to the Placing. Public Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, yo u will not be allocated any Public Offer
Shares due to the money settlement failure by such HKSCC Participant. None of us,
the Relevant Persons (Share Offer), the Hong Kong Share Registrar and HKSCC is or
will be liable if Public Offer Shares are not allocated to you due to the money
settlement failure.
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D. DESPATCH/COLLECTION OF SHA RE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one Share certificate for a ll Public Offer Shares allotted to you under
the Public Offer (except pursuant to applications made through the HKSCC EIPO channel
where the Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
Share certificates will only become valid at 8 : 00 a.m. on Tuesday, 2 July 2024 (Hong
Kong time), provided that the Share Offer has become unconditional and the right of
termination described in the section headed ‘‘Underwriting’’ has not been exercised.
Investors who trade Shares prior to the receipt of Share certificates or the Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the re levant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of Share certificate (1)
For application of
1,000,000 Public Offer
Shares or more
Collection in person at the Hong Kong Share
Registrar, Tricor Investor Services Limited, at
17/F, Far East Finance Centre, 16 Harcourt
Road, Hong Kong
Time: from 9 : 00 a.m. to 1 : 00 p.m. on
Tuesday, 2 July 2024 (Hong Kong time)
Share certificate(s) will be issued in the name
of HKSCC Nominees, deposited into CCASS
and credited to your designated HKSCC
Participant’s stock account.
No action by you is required.
If you are an individual, you must not
authorise any other person to collect for you.
If you are a corporate applicant, your
authorised representative must bear a letter
of authorisation from your corporation
stamped with your corporation’s chop.
Both individuals and authorised
representatives must produce, at the time of
collection, evidence of identity acceptable to
the Hong Kong Share Registrar.
Note: If you do not collect your Share
certificate(s) personally within the
time above, it/they will be sent to the
address specified in your application
instructions by ordinary post at your
own risk.
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HK eIPO White Form service HKSCC EIPO channel
For application of less than
1,000,000 Public Offer
Shares
Your Share certificate(s) will be sent to the
address specified in your application
instructions by ordinary post at your own risk.
Date: Friday, 28 June 2024
Refund mechanism for surplus application monies paid by you
Date Tuesday, 2 July 2024 Subject to the arrangement between you and
your broker or custodian
Responsible party Hong Kong Share Registrar Your broker or custodian
Application monies paid
through single bank
account
e-Auto Refund payment instructions to your
designated bank account
Your broker or custodian will arrange refund
to your designated bank account subject to the
arrangement between you and it
Application monies paid
through multiple bank
accounts
Refund cheque(s) will be despatched to the
address as specified in your application
instructions by ordinary post at your own risk
(1) Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm
warning and/or Extreme Conditions in force in Hong Kong in the morning on Friday, 28 June 2024,
rendering it impossible for the relevant Share ce rtificates to be despatched to HKSCC in a timely
manner, the Company will procure the Hong Kong Share Registrar to arrange for delivery of the
supporting documents and Share certificates in acc ordance with the contingency arrangements as
agreed between them. You may refer to ‘‘— E. Severe Weather Arrangements’’ in this section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or clo se on Wednesday, 26 June 2024 if, there
is:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. Extreme Conditions
(collectively ‘‘Severe Weather Signals ’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday,
26 June 2024.
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Instead they will open between 11 : 45 a.m. and 12 : 00 noon and/or close at 12 : 00
noon on the next business day which does not have Severe Weather Signals in force at
any time between 9 : 00 a.m. and 12 : 00 noon.
Prospective investors should be aware that a postponement of the opening/closing
of the application lists may result in a delay in the Listing Date. Should there be any
changes to the dates mentioned in the section headed ‘‘Expected Timetable’’ in this
prospectus, an announcement will be made and published on the Stock Exchange’s
website at
www.hkexnews.hk and our website at www.metatechnologies.com.sg of the
revised timetable.
If a Severe Weather Signal is hoisted on Friday, 28 June 2024, the Hong Kong
Share Registrar will make appropriate arrangements for the delivery of the Share
certificates to the CCASS Depository’s service counter so that they would be available
for trading on Tuesday, 2 July 2024.
If a Severe Weather Signal is hoisted on Friday, 28 June 2024, for application of
less than 1,000,000 Public Offer Shares, the d espatch of physical Share certificates will
be made by ordinary post when the post office re-opens after the Severe Weather
Signal is lowered or cancelled (e.g. in th e afternoon of Friday, 28 June 2024 or on
Tuesday, 2 July 2024).
If a Severe Weather Signal is hoisted on Tuesday, 2 July 2024, for application of
1,000,000 Public Offer Shares or more, physical Share certificate(s) will be available for
collection in person at the Hong Kong Share Registrar’s office after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Tuesday, 2 July 2024 or
on Wednesday, 3 July 2024).
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the Shares
or any other date HKSCC chooses. Settlement of transactions between Exchange
Participants (as defined in the GEM Listin g Rules) is required to take place in CCASS
on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
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You should seek the advice of your broker or other professional adviser for details of
the settlement arrangement as such arrangem ents may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal
data collected and held by the Company, the Hong Kong Share Registrar, the Receiving
Bank and the Relevant Persons (Share Offer) about you in the same way as it applies to
personal data about applicants other than HKSCC Nominees.
This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you
have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Person Information Collection Statement
This Personal Information Collection S tatement informs the applicant for, and
holder of, Public Offer Shares, of the policies and practices of the Company and the
Hong Kong Share Registrar in relation to personal data and the Personal Data
(Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Public Offer Shares to
ensure that personal data supplied to the Company or its agents and the Hong Kong
Share Registrar is accurate and up-to-dat e when applying for Public Offer Shares or
transferring Public Offer Shares into or out of their names or in procuring the
services of the Hong Kong Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in
your application for Public Offer Share s being rejected, or in the delay or the
inability of the Company or the Hong Kong Share Registrar to effect transfers or
otherwise render their services. It may also prevent or delay registration or transfers
of Public Offer Shares which you have successfully applied for and/or the despatch
of Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Public Offer Shares inform the
C o m p a n ya n dt h eH o n gK o n gS h a r eR e g i s trar immediately of any inaccuracies in
the personal data supplied.
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3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever
means) for the following purposes:
. processing your application and refund cheque and e-Auto Refund
payment instruction(s), where applicab le, verification of compliance with
the terms and application procedures set out in this prospectus and
announcing results of allocation of Public Offer Shares;
. compliance with applicable laws an d regulations in Hong Kong and
elsewhere;
. registering new issues or transfers into or out of the names of the holders of
the Shares including, where applicable, HKSCC Nominees;
. maintaining or updating the regi ster of members of the Company;
. verifying identities of applicants for and holders of the Shares and
identifying any duplicate applications for the Shares;
. facilitating Public Offer Shares balloting;
. establishing benefit entitlements of holders of the Shares, such as
dividends, rights issues, bonus issues, etc.;
. distributing communications from the Company and its subsidiaries;
. compiling statistical information and profiles of the holder of the Shares;
. disclosing relevant information to fa cilitate claims on entitlements; and
. any other incidental or associated purposes relating to the above and/or to
enable the Company and the Hong Kong Share Registrar to discharge their
obligations to applicants and holders of the Shares and/or regulators and/
or any other purposes to which applicants and holders of the Shares may
from time to time agree.
HOW TO APPLY FOR PUBLIC OFFER SHARES
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4. Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar
relating to the applicants for and hold e r so fP u b l i cO f f e rS h a r e sw i l lb ek e p t
confidential but the Company and the Hong Kong Share Registrar may, to the
extent necessary for achieving any of the above purposes, disclose, obtain or transfer
(whether within or outside Hong Kong) the personal data to, from or with any of the
following:
. the Company’s appointed agents such as financial advisers, receiving bank
and overseas principal share registrar;
. HKSCC or HKSCC Nominees, who will use the personal data and may
transfer the personal data to the Hong Kong Share Registrar, in each case
for the purposes of providing its serv ices or facilities or performing its
functions in accordance with its rules or procedures and operating FINI
and CCASS (including where applicants for Public Offer Shares request a
deposit into CCASS);
. any agents, contractors or third-p arty service providers who offer
administrative, telecommunication s, computer, payment or other services
to the Company or the Hong Kong Share Registrar in connection with
their respective business operation;
. the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
including for the purpose of the Stock Exchange’s administration of the
GEM Listing Rules and the SFC’s performance of its statutory functions;
and
. any persons or institutions with which the holders of Public Offer Shares
have or propose to have dealings, such as their bankers, solicitors,
accountants or brokers etc.
5. Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal data
of the applicants and holders of Public Offer Shares for as long as necessary to fulfil
the purposes for which the personal data were collected. Personal data which is no
longer required will be destroyed or dealt with in accordance with the Personal Data
(Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
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6. Access to and correction of personal data
Applicants for and holders of Public Offer Shares have the right to ascertain
whether the Company or the Hong Kong Share Registrar hold their personal data,
to obtain a copy of that data, and to correct any data that is inaccurate. The
Company and the Hong Kong Share Registrar have the right to charge a reasonable
fee for the processing of such requests. All requests for access to data or correction
of data should be addressed to the Company and the Hong Kong Share Registrar, at
their registered address disclosed in the section headed ‘‘Corporate information’’ in
this prospectus or as notified from time to time, for the attention of the company
secretary, or the Hong Kong Share Registrar for the attention of the privacy
compliance officer.
HOW TO APPLY FOR PUBLIC OFFER SHARES
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ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION
The following is the text of a report set out on pages I-1 to I-3, received from the
Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this prospectus. It is prepared and addressed to
the directors of the Company and to the Sponsor pursuant to the requirements of HKSIR 200,
Accountants’ Reports on Historical Financial Information in Investment Circulars issued by
the Hong Kong Institute of Certified Public Accountants.
ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF METASURFACE TECHNOLOGIES HOLDINGS LIMITED AND
UOB KAY HIAN (HONG KONG) LIMITED
Introduction
We report on the historical financial in formation of Metasurface Technologies
Holdings Limited (the ‘‘ Company ’’) and its subsidiaries (together, the ‘‘ Group ’’) set out on
pages I-4 to I-87, which comprises the consolidated statements of financial position as at 31
December 2022 and 2023, the company statements of financial position as at 31 December
2022 and 2023, and the consolidated statemen ts of comprehensive income, the consolidated
statements of changes in equity and the consolidated statements of cash flows for each of
the years ended 31 December 2022 and 2023 (the ‘‘ Track Record Period ’’) and material
accounting policy information and other ex planatory information (together, the ‘‘ Historical
Financial Information ’’). The Historical Financial Information set out on pages I-4 to I-87
forms an integral part of this report, whic h has been prepared for inclusion in the
prospectus of the Company dated 21 June 2024 (the ‘‘ Prospectus ’ ’ )i nc o n n e c t i o nw i t ht h e
initial listing of shares of the Company on GEM of The Stock Exchange of Hong Kong
Limited.
Directors’ responsibility for the H istorical Financial Information
The directors of the Company are responsible for the preparation of Historical
Financial Information that gives a true and fair view in accordance with the basis of
presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial
Information, and for such internal control as the directors determine is necessary to enable
the preparation of Historical Financial Information that is free from material misstatement,
whether due to fraud or error.
PricewaterhouseCoopers, 22/F Prince's Building, Central, Hong Kong SAR, China
T: +852 2289 8888, F: +852 2810 9888, www.pwchk.com
APPENDIX I ACCOUNTANT’S REPORT
–I - 1–


--- page 405 ---
Reporting accountant’s responsibility
Our responsibility is to express an opinion on the Historical Financial Information and
to report our opinion to you. We conducted our work in accordance with Hong Kong
Standard on Investment Circular Reporting Engagements 200, Accountants’ Reports on
Historical Financial Information in Investment Circulars issued by the Hong Kong Institute
of Certified Public Accountants (‘‘ HKICPA ’’). This standard requires that we comply with
ethical standards and plan and perform our work to obtain reasonable assurance about
whether the Historical Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountant’s judgement, including the assessment of risks of material
misstatement of the Historical Financial Information, whether due to fraud or error. In
making those risk assessments, the reporting ac countant considers internal control relevant
to the entity’s preparation of Historical Fina ncial Information that gives a true and fair
view in accordance with the basis of presenta tion and preparation set out in Notes 1.3 and
2.1 to the Historical Financial Information in order to design procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal cont rol. Our work also included evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating th e overall presentation of the Historical
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountant’s report, a true and fair view of the financial position of the Company as at 31
December 2022 and 2023 and the consolidated financial position of the Group as at 31
December 2022 and 2023 and of its consolidated financial performance and its consolidated
cash flows for the Track Record Period in accordance with the basis of presentation and
preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.
APPENDIX I ACCOUNTANT’S REPORT
–I - 2–


--- page 406 ---
Report on matters under the Rules Governing the Listing of Securities on GEM of The Stock
Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and the Companies (Winding Up and
Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 as were considered necessary.
Dividends
No dividends have been paid by Metasurface Technologies Holdings Limited in respect
of the Track Record Period.
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its date of
incorporation.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong
21 June 2024
APPENDIX I ACCOUNTANT’S REPORT
–I - 3–


--- page 407 ---
I. HISTORICAL FINANCIAL INFORMATION OF THE GROUP
PREPARATION OF HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part
of this accountant’s report.
The consolidated financial statements of the Group for the years ended 31
December 2022 and 2023 (the ‘‘Track Record Period’’), on which the Historical
Financial Information is based, were audited by PricewaterhouseCoopers, in
accordance with Internatio nal Standards on Auditing issued by the International
Auditing and Assurance Standards Board (‘‘Underlying Financial Statements’’).
The Historical Financial Information is p resented in Singapore dollars (S$’000)
and all values are rounded to the nearest thousands except when otherwise indicated.
APPENDIX I ACCOUNTANT’S REPORT
–I - 4–


--- page 408 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended
31 December
2022
Year ended
31 December
2023
Note S$’000 S$’000
Continuing operations
Revenue 4 39,116 38,769
Cost of sales 7 (23,060) (24,354)
Gross profit 16,056 14,415
Other income 5 1,130 2,731
Other gains/(losses), net 6 177 (426)
Administrative expenses 7 (10,489) (11,666)
Operating profit 6,874 5,054
Finance costs 8 (1,579) (1,343)
Share of loss from an associate — (366)
Profit before tax 5,295 3,345
Income tax expense 10 (1,495) (1,061)
Profit from continuing operations 3,800 2,284
Discontinued operation
(Loss)/profit from discontinued operation 38 (1,095) 2,143
Profit for the year 2,705 4,427
Profit/(loss) attributable to:
Owners of the Company 3,192 4,607
Non-controlling interests (487) (180)
Other comprehensive loss
Items that may be reclassified to profit or loss
Currency translation differences on foreign
operations (9) (9)
Total comprehensive income for the year 2,696 4,418
APPENDIX I ACCOUNTANT’S REPORT
–I - 5–


--- page 409 ---
Year ended
31 December
2022
Year ended
31 December
2023
Note S$’000 S$’000
Total comprehensive income/(loss) for the year
attributable to:
Owners of the Company 3,183 4,598
Non-controlling interests (487) (180)
2,696 4,418
Total comprehensive income/(loss) for the year
attributable to owners of the Company arising
from:
— Continuing operations 4,278 2,455
— Discontinued operation (1,095) 2,143
3,183 4,598
Earnings/(loss) per share for profit/(loss)
attributable to owners of the Company
Basic and diluted earnings/(loss)
per ordinary share arising from
(expressed in S$ per share)*: 11
Continuing operations 0.68 0.41
Discontinued operation (0.11) 0.41
0.57 0.82
* The earnings/(loss) per share presented above has not taken into account the proposed capitalisation issue
pursuant to the resolutions in writing of the shar eholders passed on 7 June 2024 because the proposed
capitalisation issue has not become e ffective as at the date of this report.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6–


--- page 410 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
31 December
2022
As at
31 December
2023
Note S$’000 S$’000
ASSETS
Non-current assets
Property, plant, and equipment 12 7,235 5,710
Prepayments 22 — 203
Right-of-use assets 13 27,044 26,249
Investment property 14 616 575
Goodwill 15 4,429 4,429
Intangible assets 16 6,697 2,281
Other assets 17 359 359
Other receivables
— Amount due from an associate 21 — 2,880
Investment in an associate 18 — 1,015
Deferred tax assets 19 325 644
Total non-current assets 46,705 44,345
Current assets
Inventories 20 7,873 6,641
Trade and other receivables 21 9,345 7,742
Prepayments 22 1,091 1,907
Cash and bank balances 23 4,392 9,225
Total current assets 22,701 25,515
Total assets 69,406 69,860
EQUITY AND LIABILITIES
Equity
Share capital 24 —* 1
Accumulated losses (10,724) (6,117)
Currency translation reserve (145) (154)
Capital reserve 24 32,165 33,267
Total equity attributable to owners of the
Company 21,296 26,997
Non-controlling interests 37 1,013 —
22,309 26,997
* Less than S$1,000.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7–


--- page 411 ---
As at
31 December
2022
As at
31 December
2023
Note S$’000 S$’000
LIABILITIES
Current liabilities
Borrowings 25 5,542 4,018
Lease liabilities 26 2,682 2,652
Trade and other payables 27 9,089 7,564
Contract liabilities 4(a)(ii) 297 —
Income tax payable 993 1,381
Total current liabilities 18,603 15,615
Non-current liabilities
Borrowings 25 — 219
Lease liabilities 26 27,719 26,214
Trade and other payables 27 458 489
Provisions 28 260 269
Deferred tax liabilities 19 57 57
Total non-current liabilities 28,494 27,248
Total liabilities 47,097 42,863
Total equity and liabilities 69,406 69,860
Net current assets 4,098 9,900
APPENDIX I ACCOUNTANT’S REPORT
–I - 8–


--- page 412 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at
31 December
2022
As at
31 December
2023
Note S$’000 S$’000
ASSETS
Non-current asset
Investment in a subsidiary 1 — 19,369
Total non-current asset — 19,369
Current assets
Trade and other receivables 21 —* —*
Prepayments 22 — 1,812
Total current assets —* 1,812
Total assets —* 21,181
EQUITY AND LIABILITIES
Equity
Share capital 24 —* 1
Capital reserve 24 — 19,368
Accumulated losses (15) (3,895)
Total equity attributable to owners of the
Company (15) 15,474
LIABILITIES
Current liabilities
Trade and other payables 27 15 5,707
Total current liabilities 15 5,707
Total liabilities 15 5,707
Total equity and liabilities —* 21,181
Net current liabilities (15) (3,895)
* Less than S$1,000.
APPENDIX I ACCOUNTANT’S REPORT
–I - 9–


--- page 413 ---
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
capital
Accumulated
losses
Currency
translation
reserve
Capital
reserve Total
Non-controlling
interests Total equity
Note S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
At 1 January 2022 —* (13,916) (136) 26,836 12,784 515 13,299
Profit for the financial year — 3,192 — — 3,192 (487) 2,705
Other comprehensive loss for the
financial year, net of tax — — (9) — (9) — (9)
Total comprehensive income/
(loss) for the financial year — 3,192 (9) — 3,183 (487) 2,696
Transactions with owners:
Issue of new shares by a
subsidiary:
— Loan capitalisation 1.2(xiii)(a) — — — 4,285 4,285 — 4,285
— S e t t l e m e n t o f l i c e n c e f e e 1 . 2 ( x i v ) ( a ) ———————
Share-based payment expenses
for the employees and
shareholders 31 — — — 1,044 1,044 184 1,228
Change in non-controlling
i n t e r e s t s i n a s u b s i d i a r y 3 7 ————— 8 0 1 8 0 1
At 31 December 2022 — * (10,724) (145) 32,165 21,296 1,013 22,309
* Less than S$1,000.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 0–


--- page 414 ---
Attributable to owners of the Company
Share
capital
Accumulated
losses
Currency
translation
reserve
Capital
reserve Total
Non-controlling
interests
Total
equity
Note S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
At 1 January 2023 —* (10,724) (145) 32,165 21,296 1,013 22,309
Profit for the financial year — 4,607 — — 4,607 (180) 4,427
Other comprehensive loss for the
financial year, net of tax — — (9) — (9) — (9)
Total comprehensive income/
(loss) for the financial year — 4,607 (9) — 4,598 (180) 4,418
Transactions with owners:
Share swap as part of
reorganisation:
Share issuance to the original
parent in exchange for existing
shares 24(b) 1 — — 19,368 19,369 — 19,369
Share reorganisation 24(b) — — — (19,369) (19,369) — (19,369)
D i s p o s a l o f a s u b s i d i a r y 3 7 ————— ( 9 2 8 ) ( 9 2 8 )
Share-based payment expenses
for the employees and
shareholders 31 — — — 1,149 1,149 49 1,198
Change in non-controlling
interests in a subsidiary 37 — — — (46) (46) 46 —
At 31 December 2023 1 (6,117) (154) 33,267 26,997 — 26,997
* Less than S$1,000.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 1–


--- page 415 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the
year ended
31 December
2022
For the
year ended
31 December
2023
Note S$’000 S$’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash generated from operations 32(a) 9,336 11,478
Income tax paid (301) (992)
Net cash generated from operating activities 9,035 10,486
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions of property, plant and equipment (239) (174)
Additions of right-of-use assets (463) (100)
Proceeds from disposal of property, plant and
equipment 55 —
Disposal of a subsidiary, net of cash disposed 38 — (133)
Net cash used in investing activities (647) (407)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of new shares of a
subsidiary to non-controlling interests
1.2(x)(a)
1.2(xii)(a) 850 —
Proceeds from issue of new shares of a
subsidiary 1.2(xvi)(a) — 1,000
Payment of listing expenses (625) (787)
Interest paid 32(b) (1,608) (1,287)
Payment of principal portion of lea se liabilities 32(b) (2,440) (2,803)
Proceeds of borrowings 32(b) 300 300
Repayment of borrowings 32(b) (2,287) (1,505)
Advances from a director 32(b) — 228
Repayment of advances from a director 32(b) (465) (225)
Net cash used in financing activities (6,275) (5,079)
Net increase in cash and cash equivalents 2,113 5,000
Effect of currency translation on cash and cash
equivalents (72) 21
Cash and cash equivalents as at beginning of the
year 2,163 4,204
Cash and cash equivalents as at end of the year 23 4,204 9,225
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 2–


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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1 General information, reorganisation and basis of presentation
1.1 General information
Metasurface Technologies Holdings Limited (the ‘‘Company’’) is a limited liability company
incorporated on 7 December 2021 in the Cayman Isla nds. The registered office of the Company is at
Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
The principal activity of the Company is an investment holding company of a group of companies
headquartered in Singapore principally engaged in th e business of, among others, precision machining
services, precision welding services and sale of las er diodes (the ‘‘Listing Business’’). The principal
activities of its subsidiaries ar e disclosed in Note 1.2 below.
The ultimate controlling party is Dato’ Sri Chua Chwee Lee and Ms. Jee Wee Jene (‘‘Dato’ Sri
Chua’’ and ‘‘Mrs. Chua’’, the ‘‘Controlling Shareholders’’), who are also directors of the Company.
1.2 Reorganisation
Prior to the incorporation of the Company and the completion of the reorganisation (the
‘‘Reorganisation’’) as described below, the prin cipal activities were carried out by Metasurface
Technologies Pte. Ltd. (‘‘Metasurface Technologies’’), a company incorporated in Singapore on 6
January 2000. Metasurface Technologies was coll ectively controlled by Dato’ Sri Chua and Mrs. Chua
throughout the Track Record Period. On 17 June 2023, Dato’ Sri Chua, Mrs. Chua and Mr. Aloysius
Chua Hao Peng (‘‘Mr. A Chua’’, a nephew of Dato’ Sri Chua) as defined below executed a confirmatory
deed pursuant to which they have confirmed their ac ting in concert arrangements in the past as well as
their intention to continue to act in concert to conso lidate their control over the Group until and unless
the confirmatory deed is terminated in writing.
In preparation for the listing of the Company’s shares on GEM of The Stock Exchange of Hong
Kong Limited (the ‘‘Listing’’), the Group underwent the Reorganisation to transfer the Listing Business to
the Company principally through the following steps:
(i) 15 June 2021 — Incorporation of Metaopt ics Technologies Pte. Ltd. (‘‘Metaoptics
Technologies’’)
Metaoptics Technologies was incorporated in Singapore on 15 June 2021. On incorporation,
Metaoptics Technologies had 290,000 issued ordinary shares of $1 each, of which 261,000
ordinary shares were allotted and issued to M etasurface Technologies and 29,000 ordinary
shares were allotted and issued to Mr. Thng C hong Kim (‘‘Mr. Thng’’, an executive Director
of the Company).
(ii) 23 September 2021 — Share transfers in Metaoptics Technologies
(a) 14,500 shares in Metaoptics Technologies were transferred from Metasurface
Technologies to Mr. A Chua at a nominal value of consideration of S$1.
(b) In return for providing the know-how to Meta surface Technologies and its subsidiaries,
29,000 shares in Metaoptics Technologies were transferred from Metasurface
Technologies to Mr. Thng at a nominal value of consideration of S$1 to reward Mr.
Thng’s continual contribution to the Group.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 3–


--- page 417 ---
(iii) 8 October 2021 — Share transfers in Metasurface Technologies
(a) Each of Mr. Jee Wee Chek, Mr. Lee Liang Seng, Mr. Ng Cheow Boo and Ms. Chong
Siow Ming transferred 10,000 shares, 2,000 shares, 211,581 shares and 5,000 shares in
Metasurface Technologies to Dato’ Sri Chua , respectively, at a consideration of S$1
payable by Dato’ Sri Chua based on the nominal value of the shares.
(b) In return for providing the know-how to Meta surface Technologies and its subsidiaries,
Dato’ Sri Chua transferred 391,164 shares i n Metasurface Technologies to Mr. Thng at a
total consideration mutually agreed of S$1.
(iv) 30 November 2021 — Metaoptics Technol ogies temporary transferred to Mr. A Chua
During the initial period of Metaoptics Technolog ies’ incorporation, management were still
exploring the business prospects and future de velopment plans of Metaoptics Technologies
and had not decided whether the inclusion of Metaoptics Technologies into the Group would
be in the best interests of the Group and the shareholders as a whole. On 30 November 2021,
Metasurface Technologies transferred all its 217,500 shares held in Metaoptics Technologies
(75%) to Mr. A Chua at a consideration of S$1 per share. Immediately upon completion of the
share transfer, Metaoptics Technologies w as held by Mr. A Chua as to 80% and Mr. Thng as
to 20%. Following subsequent discussion among the directors, the then potential
collaborators, investors and business partn ers of Metaoptics Technologies, the directors
decided to include Metaoptics Technologie s in the Group, having considered that the
upcoming projects, potential research and dev elopment capabilities and development of
Metaoptics Technologies could benefit and create synergies to the Group as a whole. As a
result, on 10 March 2022, Mr. A Chua transferred 217,500 shares (75%) in Metaoptics
Technologies to Metasurface Technologies a t a consideration of $S1 per share. Mr. A Chua
had at all material times throughout the period from 30 November 2021 to 10 March 2022 held
217,500 shares in Metaoptics Technologies for th e sole benefit of Metasurface Technologies.
(v) 1 December 2021 — Acquisition of Singapore Precision Welding Pte. Ltd. (‘‘SPW’’)
Pursuant to a share purchase agreement dated 16 November 2021 of Dato’ Sri Chua and Ms.
Pang Chen May (‘‘Ms. Pang’’) transferred 35,000 shares, each representing half of the entire
issued share capital of SPW, to Metasurfac e Technologies at a consideration of S$5,474,550
for each of his/her portion of the SPW shares (in aggregate S$10,949,100), which was satisfied
by the allotment and issue of 371,343 shares in Metasurface Technologies to each of Dato’ Sri
Chua and Ms. Pang. The consideration was determined based on the then fair value of SPW.
(vi) 3 December 2021 — Incorporation of SGP Capi tal Holdings Limited (‘‘SGP BVI’’), Baccini
Capital Holdings Limited (‘‘Baccini’’) and Angelling Capital Holdings Limited (‘‘Angelling’’);
(a) SGP BVI was incorporated in the British Virgin Islands (‘‘BVI’’) as a company with
limited liability. On incorporation, 100 s hares were allotted and issued to Dato’ Sri
Chua at a consideration of US$100. SGP BVI is intended to be the intermediate holding
company of Dato’ Sri Chua’s shareholding in the Company.
(b) Baccini was incorporated in the BVI as a company with limited liability. On
incorporation, 100 shares were allotted and issued to Mrs. Chua at a consideration of
US$100. Baccini is intended to be the inte rmediate holding company of Mrs. Chua’s
shareholding in the Company.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 4–


--- page 418 ---
(c) Angelling was incorporated in the BVI as a company with limited liability. On
incorporation, 100 shares were allotted a nd issued to Mr. Thng at a consideration of
US$100. Angelling is intended to be the inte rmediate holding company of Mr. Thng’s
shareholding in the Company.
(vii) 7 December 2021 — Incorporation of the Company
The Company was incorporated in the Cayman I slands as an exempted company with limited
liability. On incorporati on, the authorised share capital was HK$380,000 divided into
380,000,000 shares of HK$0.001 each, of which one sh are was allotted and issued to the initial
subscriber and subsequently transferred to SGP BVI on the same day.
(viii) 13 December 2021 — First Undertaking from Dato’ Sri Chua to Mr. Thng
As a reward for Mr. Thng’s continual contributio n to the growth of the Listing Business and
its fund-raising activities as well as providi ng the know-how to Metasurface Technologies and
its subsidiaries, Dato’ Sri Chua agreed to grant Mr. Thng an anti-dilution right to maintain his
10% shareholding in Metasurface Technologies and undertook to transfer, or procure the
transfer of, a number of shares in Metasurfa ce Technologies to Mr. Thng from time to time
prior to the submission of the listing applicat ion of Metasurface Technologies or a related
corporation for the purpose of the Listing to m aintain Mr. Thng’s shareholding proportion of
10% in the event Mr. Thng’s shareholding in Metasurface Technologies is diluted to below
10% (the ‘‘First Undertaking’’). The First Undertaking was terminated on 25 April 2023 (Note
1.2(xix)).
(ix) 28 December 2021 — Pre-IPO investment by nine investors and share transfers to Mr. Thng
(a) Metasurface Technologies allotted, and n ine investors, each an independent third party
of the Group, subscribed for ordinary shares in Metasurface Technologies set out in the
table below (the ‘‘1st Pre-IPO Investment ’’). The considerations paid by all nine
investors were based on commercial negotiation.
Name
Number of
ordinary
shares Consideration
(S$’000)
Zou Shuling 43,440 700
Hong Haicheng 40,958 660
Soo Siew Har and Ho Gim Hai 37,235 600
Chua Lee Chai 31,029 500
Tan Beng Kiat 31,029 500
Deborah Chua Wee Wei 31,029 500
Tan Kok Thye George 15,514 250
Poh Seng Kah 12,412 200
(b) In conjunction with the 1st Pre-IPO Investment, Dato’ Sri Chua and Mrs. Chua
transferred 86,401 ordinary shares and 12,132 ordinary shares (in total 98,533 ordinary
shares) of Metasurface Technologies to Mr. Thng respectively, at nil consideration
pursuant to the First Undertaking.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 5–


--- page 419 ---
(x) 11 March 2022 — Metaoptics Technologies’ allo tment and issue of shares to Origgin Ventures
Pte. Ltd. (‘‘Origgin’’) and share transfers to Mr. Thng, Second Undertaking from Metasurface
Technologies to Mr. Thng
(a) Pursuant to a share subscription agr eement entered into between Metaoptics
Technologies and Origgin (an independe nt third party of the Group) dated on 11
March 2022, Origgin subscribed for, and Met aoptics Technologies allotted and issued to
Origgin, 31,865 ordinary shares in Meta optics Technologies at a consideration of
S$200,000. The consideration was determ ined based on commercial negotiations
between Metaoptics Technologies and Origgin.
(b) Pursuant to the shareholders’ agreement dated the same date entered into, among
others, Metasurface Technologies agreed to grant Origgin an anti-dilution right to
maintain its 9.90% shareholding in Metaopt ics Technologies and undertook to transfer,
or procure the transfer of, such number of sha res in Metaoptics Technologies to Origgin
from time to time prior to the termination of this right to maintain Origgin’s
shareholding proportion of 9.90% in the eve nt Origgin’s shareholding in Metaoptics
Technologies is diluted to below 9.90% (‘‘Ori ggin Anti-dilution Right’’). This right was
terminated on 25 August 2022 (Note 1.2(xii)(d)).
(c) As a reward for Mr. Thng’s continual c ontribution to the gr owth of Metaoptics
Technologies’ business and its fund-raising a ctivities as well as providing the know-how
to Metaoptics Technologies and its related co mpanies including the grant of several
patents, Metasurface Technologies agreed to grant Mr. Thng an anti-dilution right to
maintain his 20% shareholding in Metaoptic s Technologies and undertook to transfer,
or procure the transfer of, a number of sha res in Metaoptics Technologies to Mr. Thng
from time to time prior to the submission of the listing application of Metasurface
Technologies or a related corporation for th e purpose of the Listing to maintain Mr.
Thng’s shareholding proportion of 20% in the event Mr. Thng’s shareholding in
Metaoptics Technologies is diluted to below 20% (the ‘‘Second Undertaking’’). The
Second Undertaking were terminated on 25 April 2023.
(d) On 11 March 2022, Metasurface Technologie s transferred 6,373 shares in Metaoptics
Technologies to Mr. Thng at a nominal consideration of S$1.
(xi) 12 April 2022 — Metaoptics Technologies’ a llotment and issue of shares to Autec Solutions
Pte. Ltd. (‘‘Autec’’) and share transfers in M etasurface Technologies to Origgin and Mr. Thng
(a) Pursuant to a share subscription agr eement entered into between Metaoptics
Technologies and Autec (an independent third party of the Group) dated the same
date, Autec subscribed for, and Metaoptics T echnologies allotted and issued to Autec,
16,093 ordinary shares in Metaoptics Technol ogies at a consideration of S$200,000. The
consideration was determined based on commercial negotiations between Metaoptics
Technologies and Autec.
(b) Mr. A Chua, transferred 7,901 shares in Metaoptics Technologies to Metasurface
Technologies at a nominal consideration of S$1.
(c) Mr. A Chua, who acted in accordance with the instructions of Dato’ Sri Chua,
transferred 3,219 shares in Metaoptics Technologies to Mr. Thng at a total
consideration mutually agreed of S$1.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 6–


--- page 420 ---
(d) Pursuant to the Origgin Anti-dilution Ri ght, Metasurface Technologies transferred
1,593 shares in Metaoptics Technologies to Origgin at a nominal consideration of S$1 in
satisfaction of Origgin’s ant i-dilution right to maintain its shareholding in Metaoptics
Technologies at 9.90% at all times.
(xii) 25 August 2022 — Metaoptics Technologies’s allotment and issue of shares to MMI Holdings
Limited (‘‘MMI’’) and Origgin, and share transfers to Mr. Thng
(a) Pursuant to a share subscription agr eement entered into between Metaoptics
Technologies and MMI dated on 25 August 2022, MMI subscribed for, and
Metaoptics Technologies allotted and i ssued to MMI, 35,574 ordinary shares in
Metaoptics Technologies at a consideration of S$500,000. The consideration was
determined based on commercial negotia tions between Metaoptics Technologies and
MMI.
(b) Pursuant to the Second Undertaking, Meta surface Technologies transferred 7,896 shares
in Metaoptics Technologies to Mr. Thng at a nominal consideration of S$1.
(c) Pursuant to Origgin Anti-dilution Rig ht, Origgin subscribed for, and Metaoptics
Technologies allotted and issued to Ori ggin, 3,909 ordinary shares in Metaoptics
Technologies at a nominal consideration of S$1.
(d) Upon completion of the above allotments and share transfer, an amended and restated
shareholders’ agreement was entered into a mong Metaoptics Technologies and all of its
then shareholders, namely, Metasurface Technologies, Mr. Thng, Mr. A Chua, Origgin,
Autec and MMI. Under this amended and restated shareholders’ agreement, Origgin no
longer has an anti-dilution right.
(xiii) 27 September 2022 — Loan capitalisation in Metasurface Technologies and share transfer to
Mr. Thng
(a) Pursuant to a deed entered into by Metasurface Technologies and Mrs. Chua dated on
27 September 2022, an amount of S$4,285,000 owed by Metasurface Technologies to
Mrs. Chua was set-off against the monies for t he subscription of 279, 800 ordinary shares
in Metasurface Technologies, payable by Mrs. Chua to Metasurface Technologies.
(b) Pursuant to the First Undertaking, each of Dato’ Sri Chua and Mrs. Chua transferred
13,990 (in total 27,980 ordinary shares) ordin ary shares in Metasurface Technologies to
Mr. Thng at a nominal consideration of S$1.
(xiv) 14 October 2022 — Metasurface Technologies’ allotment and issue of shares to Accelerate
Technologies Pte. Ltd. (‘‘Accelerate’’) and share transfers to Mr. Thng
(a) Pursuant to a share subscription agr eement entered into between Metasurface
Technologies and Accelerate (an independent third party of the Group) dated on 14
October 2022, Accelerate subscribed for, an d Metasurface Technologies allotted and
issue to Accelerate, 272,462 ordinary shares in Metasurface Technologies at a
consideration of S$2,880,000 (the ‘‘2nd Pre-I PO Investment’’). The consideration was
determined by commercial negotiations be tween Metasurface Technologies and
Accelerate and was settled in full by offsetting the licence fee of S$2,880,000 payable
by Metasurface Technologies to Accelerate pursuant to a licence agreement dated 10
December 2021 for using Accelerate’s technolog ies and intellectual property rights to
develop enhancements on and to commercia lise Accelerate’s technologies and licenced
products.
APPENDIX I ACCOUNTANT’S REPORT
–I - 1 7–


--- page 421 ---
(b) Pursuant to the shareholders’ agreement dated 14 October 2022 entered into, among
existing shareholders of Metasurface Tec hnologies and Accelerate, Accelerate holds
anti-dilution right on its shareholding in M etasurface Technologies at 5% at all times.
The right was terminated on 26 April 2023 (Note 1.2(xix)).
(c) In conjunction with the 2nd Pre-IPO Inves tment, each of Dato’ Sri Chua and Mrs. Chua
transferred 13,623 ordinary shares (in total 27,246 ordinary shares) in Metasurface
Technologies to Mr. Thng at a nominal consideration of S$1 pursuant to the First
Undertaking.
(xv) 2 January 2023 — Metasurface Technologie s transferred 7,549 shares of Metaoptics
Technologies to Dr. Kuznetsov at no consideration as part of his remuneration package for
his services to Metaoptics Technologies.
(xvi) 30 January 2023 — Metasurface Technologie s’ allotment and issue of shares to MMI and
Accelerate, and share transfers to Mr. Thng
(a) Pursuant to a share subscription agr eement entered into between Metasurface
Technologies and MMI dated the same date, MMI subscribed for, and Metasurface
Technologies allotted and issued to MMI, 139,913 ordinary shares in Metasurface
Technologies at a consideration of S$1,000,000 (the ‘‘3rd Pre-IPO Investment’’, together
with the 1st Pre-IPO Investment and the 2nd Pre-IPO Investment, the ‘‘Pre-IPO
Investments’’). The consideration was de termined by commercial negotiations between
Metasurface Technologies and MMI.
(b) On the same date, Metasurface Technolog ies granted MMI an non-listing put option. In
the event the Listing fails to materialise by a date, whichever is earlier, (i) falling 12
months after the first submission of the Compa ny’s Listing application; (ii) the Listing
date; (iii) the Company formally withdraws t he Listing application or (iv) the Listing
application lapses and the Company does not submit a renewed Listing application
within six months after the lapse, MMI has the option to require Metasurface
Technologies to purchase all of the shares held by MMI, at a price equivalent to the
subscription consideration paid by MMI, plus interest on the subscription
consideration. The interest is fixed at a simple interest rate of 6% per annum.
(c) In conjunction with the 3rd Pre-IPO Inve stment, each of Dato’ Sri Chua and Mrs. Chua
transferred 7,364 ordinary shares (in tot al 14,728 ordinary shares) in Metasurface
Technologies to Mr. Thng at a nominal consideration of S$1 pursuant to the First
Undertaking. Pursuant to Accelerate’s a nti-dilution right under the amended and
restated shareholders’ agreement dated 30 January 2023 entered into, among others,
Metasurface Technologies, Accelerate a nd MMI, Accelerate subscribed for, and
Metasurface Technologies allotted and issu ed to Accelerate, 7,364 ordinary shares in
Metasurface Technologies at a nominal consideration of S$1.
(xvii) 31 March 2023 — Share transfer to Aquaspring Group Limited (‘‘Aquaspring’’)
Pursuant to a share purchase agreement da ted on 31 March 2023 entered into between
Aquaspring (an independent third party of th e Group) and Mr. Thng. Mr. Thng transferred
37,744 ordinary shares in Metaoptics Technologie s, representing approximately 9.99% of the
entire issued share capital of Metaoptics Tec hnologies to Aquaspring at a consideration of
S$800,000. The consideration was determined based on commercial negotiations between Mr.
Thng and Aquaspring.
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(xviii) 10 April 2023 — Share transfers to the nine investors by Mrs. Chua
Mrs. Chua transferred 208,615 ordinary sha res in Metasurface Technologies to the nine
investors in proportion of their respective s hareholdings of the 1st Pre-IPO Investment at
nominal consideration of S$1.
(xix) 25 April 2023 and 26 April 2023 — Termination of anti-dilution rights
The anti-dilution rights granted to Mr. Thng in respect of Metasurface Technologies and
Metaoptics Technologies have been terminated on 25 April 2023. The anti-dilution right
granted to Accelerate in respect of Metasurfac e Technologies has been terminated on 26 April
2023.
(xx) 26 April 2023 — Consolidation o f Listing Business under the Company
Pursuant to a restructuring deed dated 26 April 2023, each shareholder of Metasurface
Technologies transferred all shares in Meta surface Technologies held by him/her to the
Company, at a consideration for which the Com pany issued 5,596,510 ordinary shares in the
Company to him/her (or an entity designated b y him/her) in proportion of their respective
shareholdings in Metasurface Technologies.
(xxi) 16 May 2023 — Share transfer to Mr. Thng
Pursuant to a share purchase agreement dated 16 May 2023 entered into between Mr. Thng
and Metasurface Technologies, Metasurface Tec hnologies transferred 125,767 ordinary shares
in Metaoptics Technologies held by it, represen ting approximately 33.3% of the entire issued
share capital of Metaoptics Technologies, to Mr. Thng at a cash consideration of S$180,000.
The consideration was determined based on a ne gotiation between Metasurface Technologies
and Mr. Thng. Upon completion of the share transfer, Metaoptics Technologies became an
associate of the Group and since then has been held by Metasurface Technologies as to
approximately 20.2%.
Further to the share transfer, on 9 June 2023, Mr . Thng transferred 25,500 ordinary shares in
Metaoptics Technologies, representing approxim ately 6.76% of the entir e issued share capital
of Metaoptics Technologies, to MMI at a consid eration of S$36,496. Upon completion of this
share transfer, Mr. Thng held approximat ely 36.56% equity interest in Metaoptics
Technologies.
Upon completion of the Reorganisation, the Company became the holding company of the
companies comprising the Group.
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As at the date of this report, the Company has d irect or indirect interests in the following
subsidiaries:
Effective interest held
Company name
Place and date of
incorporation/
establishment
Issued and
fully paid
share capital
As at
31 December
2022
As at
31 December
2023
As at the
date of
this report
Principal activities/
place of operation Notes
(’000)
Directly held by the Company
Metasurface Technologies Pte.
Ltd.
Singapore, 6
January 2000
S$26,936 100% 100% 100% Manufacture of dies, moulds,
tools, jigs and fixtures,
Singapore
(i)
Indirectly held by the Company
Metaoptics Technologies Pte.
Ltd.
Singapore, 15 June
2021
S$1,190 55.5% N/A* N/A* Design and manufacturing of
optics lens and module,
Singapore
(i)
Singapore Precision Welding
Pte. Ltd.
Singapore, 15
November 2006
S$70 100% 100% 100% Manufacturer and suppliers of
ultra high vacuum) & high
vacuum weldment, ultra high
purity & high purity gas line
weldment for semiconductor
industry, Singapore
(i)
SGP 1st Engineering Sdn.
Bhd.
Malaysia, 6 August
2013
MYR1,361 100% 100% 100% Industries engineering,
Malaysia
(ii)
* Metaoptics Technologies Pte. Ltd. has ceased to be a subsidiary of the Group from 16 May 2023 (Note 1.2
(xxi)) and became an associate of the Group.
(i) The statutory financial statements of thes e subsidiaries for the year ended 31 December 2022
were audited by Prime Accountants LLP.
(ii) The statutory financial statements of this s ubsidiary for the year ended 31 December 2022 was
audited by Ing Wang & Co.
All companies now comprising the Group have adopted 31 December as the year-end date.
1.3 Basis of presentation
Immediately prior to and after the R eorganisation, the Listing Busi ness is conducted by Metasurface
Technologies and its subsidiaries, which have been ow ned and controlled by the Controlling Shareholders.
Pursuant to the Reorganisation, Metasurface Technol ogies and the Listing Busi ness were transferred to
and held by the Company. The Company has not b een involved in any other business prior to the
Reorganisation and does not meet the definitio n of a business. The Reorganisation is merely a
reorganisation of the ownership structure of the List ing Business with no changes in management of such
business and the ultimate owners of the Listing Business remain the same.
Accordingly, the Group resulting from the Reor ganisation is regarded as a continuation of the
Listing Business under Metasurface Technologies a nd, for the purpose of this report, the Historical
Financial Information has been prepared and present ed as a continuation of the consolidated financial
statements of Metasurface Technologies and its subsid iaries, with the assets and liabilities of the Group
recognised and measured at the carrying amounts of the Listing Business under the consolidated financial
statements of Metasurface Technologies for all years pr esented, since the respective dates of incorporation
of the consolidating entities, or since the date wh en the consolidating companies first came under the
control of the Controlling Shareholders, whichever is the earlier.
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2 Summary of material accounting policy information
The material accounting policies applied in the preparat ion of the Historical Financial Information are set
out below. These policies have been consistently applied t o all the years presented, un less otherwise stated. The
Historical Financial Information is for the Group consisting of the Company and its subsidiaries now
comprising the Group.
2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards ( ‘‘IFRS’’) as issued by the IASB. IFRS Accounting
Standards comprise the follow ing authoritative literature:
. IFRS Accounting Standards
. IAS Standards
. Interpretations developed by the IFRS Interpre tations Committee (IFRI C Interpretations) or
its predecessor body, the Standing Interpretations Committee (SIC Interpretations). The
financial statements have been prepared on the h istorical cost basis ex cept as disclosed in Note
2.14.
New or amended Standards and Interpretations effective after 1 January 2024
A number of amendments to standards that are relevant to the Group but not yet effective for
the Track Record Period have not been early adopted by the Group.
Description
Effective for annual periods
beginning on or after
Amendments to IAS 1 — Classification of liabilities as
current or non-current
1 January 2024
Amendment to IAS 1 — Non-current liabilities with
covenants
1 January 2024
Amendment to IFRS 16 — Lease liability in a sale and
leaseback
1 January 2024
Amendments to IAS 7 and IFRS 7 — Supplier finance
arrangements
1 January 2024
Amendments to IFRS 10 and IAS 28 — Sale or
contribution of assets bet ween an investor and its
associate or joint venture
To be determined
Amendments to IAS 21 — Lack of exchangeability 1 January 2025
The Group has assessed the related impact to t he Group of the above amendments upon initial
application. According to the assessment made by the directors of the Company, none of the above
is expected to have a material impact on the result s of operation and financial position of the Group.
2.2 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of e ach entity in the Group are measured using the
currency of the primary economic environment in which the entity operates (‘‘functional currency’’).
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For the purposes of the consolidated financial sta tements, the results an d financial position of
each entity in the Group are expressed in Singapore dollars (‘‘S$’’), which is the functional currency
of the Company and the presentation currency for the consolidated financial statements.
(ii) Transactions and balances
Transactions in a currency other than the func tional currency (‘‘foreign currency’’) are
translated into the functional currency using the e xchange rates at the dates of the transactions.
Currency exchange differences resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denom inated in foreign currencies at the closing rates
at the end of each reporting period are recognised in profit or loss.
Monetary items include primarily financial as sets (other than equity investments), contract
assets and financial liabilities. However, in the consolidated financial statements, currency
translation differences arising from borrowi ngs in foreign currencies and other currency
instruments designated and qualifying as net investment hedges and net investment foreign
operations, are recognised in other comprehensive income and accumulated in the currency
translation reserve.
When a foreign operation is disposed of or any l oan forming part of the net investment of the
foreign operation is repaid, a proportionate sh are of the accumulated currency translation
differences is reclassified to profit or loss as part of the gain or loss on disposal.
All other foreign exchange gains and losses i mpacting profit or loss are presented in net
gain/loss in profit or loss within ‘‘other operati ng expenses’’ unless a significant net gain will be
presented within ‘‘other income’’.
(iii) Translation of Group entities’ financial statements
The results and financial position of all the Gr oup entities (none of which has the currency of
a hyperinflationary economy) that have a functiona l currency different from the presentation
currency are translated into the pre sentation currency as follows:
. assets and liabilities are translated at the cl osing exchange rates at the reporting date;
. income and expenses are translated at average exchange rates (unless the average is not a
reasonable approximation of the cumulati ve effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated using the exchange
rates at the dates of the transactions); and
. all resulting currency translation differe nces are recognised in other comprehensive
income and accumulated in the currency transl ation reserve. These currency translation
differences are reclassified to profit or loss on disposal or partial disposal with loss of
control of the foreign operation.
On the disposal of a foreign operation (i.e. a dis posal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control ove r a subsidiary that includes a foreign operation,
or a partial disposal of an interest in a joint arra ngement or an associate that includes a foreign
operation of which the retained interest becomes a financial asset), all of the exchange differences
accumulated in equity in respect of that operation attributable to the owners of the Company are
reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation
that does not result in the Group losing control o ver the subsidiary, the proportionate share of
accumulated exchange differences is re-att ributed to non-controlling interests and are not
APPENDIX I ACCOUNTANT’S REPORT
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recognised in profit or loss. For all other partial dis posals (i.e. partial dispos als of associates or joint
arrangements that do not result in the Group losi ng significant influence or joint control), the
proportionate share of the accumulated exchange d ifferences is reclassi fied to profit or loss.
Goodwill and fair value adjustm ents arising on the acquisition of foreign operations are
treated as assets and liabilities of the foreign ope rations and translated at t he closing rates at the
reporting date.
2.3 Principles of Consolidation and equity accounting
(i) Subsidiaries
Subsidiaries are all entities (including struct ured entities) over which the Group has control.
The Group controls an entity when the Group is ex posed to, or has rights to, variable returns from
its involvement with the entity and has the abilit y to affect those returns through its power over the
entity. Subsidiaries are fully consolidated fr om the date on which control is transferred to the
Group. They are deconsolidated from the date on that control ceases.
In preparing the consolidated financial stateme nts, transactions, balances and unrealised gains
on transactions between group entities are eliminate d. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairme nt indicator of the transferred asset. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests comprise the porti on of a subsidiary’s net results of operations and
its net assets, which is attributable to the interes ts that are not owned directly or indirectly by the
owners of the Company. They are shown separately i n the consolidated statement of comprehensive
income, statement of changes in equity, and statem ent of financial position. Total comprehensive
income is attributed to the non-controlling int erests based on their respective interests in a
subsidiary, even if this results in the non-cont rolling interests having a deficit balance.
(ii) Disposal of a subsidiary
When a change in the Group’s ownership interest in a subsidiary result in a loss of control
over the subsidiary, the assets and liabilities of the subsidi ary including any goodwill are
derecognised. Amounts previously recognised in other comprehensive income in respect of that
e n t i t ya r ea l s or e c l a s s i f i e dt op r o f i to rl o s so rt r a n s f e r r e dd i r e c t l yt or e t a i n e de a r n i n g si fr e q u i r e db y
a specific standard.
Any retained equity interest in the entity is rem easured at fair value. The difference between
the carrying amount of the retained interest at t he date when control is lost and its fair value is
recognised in profit or loss.
(iii) Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of
control over the subsidiary are accounted for as t ransactions with equity owners of the Company.
Any difference between the change in the carryin g amounts of the non-controlling interest and the
fair value of the consideration paid or received is reco gnised within equity attributable to the owners
of the Company.
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(iv) Associates
Associates are all entities over which the Group has significant influence but not control or
joint control. Interests in associates are accounted for using the equity method of accounting (see (v)
below), after initially being recognised at cost.
Gain or losses on dilution of equity interest in associates are recognised in the consolidated
statement of comprehensive income.
(v) Equity method
Under the equity method of accounting, the inves tment in associate is initially recognised at
cost and adjusted thereafter to recognise the Group’ s share of the post-acquisition profits or losses
of the investee in profit or loss, and the Group’s sha re of movements in other comprehensive income
of the investee in other comprehensive income. Di vidends received or receivable from associate are
recognised as a reduction in the c arrying amount of the investment.
Where the Group’s share of losses in an equity -accounted investment equals or exceeds its
interest in the entity, including any other uns ecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obl igations or made payments on behalf of the other
entity.
Unrealised gains on transactions between the Group and its associate is eliminated to the
extent of the Group’s interest in the entities. Unr ealised losses are also eliminated unless the
transaction provides evidence of an impairment o f the asset transferred. Accounting policies of
equity accounted investees have been changed where necessary to ensure consistency with the
policies adopted by the Group. The carrying amount of equity-accounted investments is tested for
impairment in accordance with the policy described in Note 2.8.
2.4 Separate financial statements
Investments in subsidiaries are accounted fo r at cost less impairment. Cost includes direct
attributable costs of investment. The results of subs idiaries are accounted for by the Company on the basis
of dividend received and receivable.
Impairment testing of the investments in subsid iaries is required upon receiving a dividend from
these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period
the dividend is declared or if the carrying amount of th e investment in the separate financial statements
exceeds the carrying amount in the consolidated financ ial statements of the investee’s net assets including
goodwill.
2.5 Segment reporting
An operating segment is a component in the Group th at engages in business activities from which it
may earn revenues and incur expenses, including reve nues and expenses that relate to transactions with
any of the Group’s other components.
Operating segments are reported in a manner consis tent with the internal reporting provided and
reviewed regularly to the chief operating decisi on-makers of the Group (‘‘CODM’’), which has been
identified as the chief executive officer, chief financ ial officer and the chief operating officer of the Group.
APPENDIX I ACCOUNTANT’S REPORT
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2.6 Property, plant and equipment
All items of property, plant and equipment are init ially recorded at cost. Subsequent to recognition,
property, plant and equipment are measured at cost le ss accumulated depreciation and any accumulated
impairment losses. The cost of property, plant and eq uipment includes its purchase price and any costs
directly attributable to bringing the asset to the l ocation and condition necessary for it to be capable of
operating in the manner intended by management. Dis mantlement, removal or restoration costs are
included as part of the cost of plant and equipmen t if the obligation for dismantlement, removal or
restoration is incurred as a consequence of acqui ring or using the property, plant and equipment.
No provision for depreciation is made on freehol d land. Depreciation of other property, plant and
equipment is calculated on the stra ight-line method so as to write off the cost of the assets over their
estimated useful lives as follows:
Category Useful life
. Freehold building 50 years
. Office equipment 10 years
. Renovation 5 to 10 years
. Plant and machinery 3 to 15 years
. Motor vehicles 10 years
. Computers 3y e a r s
. Furniture and fittings 10 years
The residual value, useful lives and depreciatio n method are reviewed at the end of each reporting
period, and adjusted prospectively, if appropriate. T he effects of any revision are recognised in profit or
loss when the changes arise.
Subsequent expenditure relating to property, plan t and equipment that has already been recognised
is added to the carrying amount of the asset only whe n it is probable that future economic benefits
associated with the item will flow to the entity and t he cost of the item can be measured reliably. All other
repair and maintenance expenses are recognised in profit or loss when incurred.
The carrying amounts of property, plant and equipm ent are reviewed for impairment when events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An item of property, plant and equipment is d erecognised upon disposal or when no future
economic benefits are expected from its use or disposal . Any gain or loss on de-recognition of the asset is
included in profit or loss in the year the asset is derecognised.
2.7 Investment property
Investment property is property that held for long-t erm rental yields and/or for capital appreciation.
Investment properties are initially recognised at co st and subsequently carried at cost less accumulated
depreciation and accumulated impairment losses. Depr eciation is calculated using the straight-line method
to allocate the depreciable amounts over t he estimated useful lives as follows:
. Leasehold property 28 years
The residual values, useful lives and depreciatio n method of investment property is reviewed, and
adjusted as appropriate, at each reporting date. The e ffects of any revision are recognised in profit or loss
when the changes arise. Investment property is su bject to renovations or improvements at regular
intervals. The cost of major renovations and improve ments is capitalised and the carrying amounts of the
replaced components are recognised in profit or loss. The cost of maintenance, repairs and minor
improvements is recognised in profit or loss when incurred.
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On disposal of an investment property, the dif ference between the disposal proceeds and the
carrying amount is recognised in profit or loss.
2.8 Impairment of non-financial assets
Non-financial assets of the Group comprise inve stment property, property, plant and equipment,
right-of-use assets, investment in an associate , intangible assets, goodwill and prepayments.
The Group assesses at each reporting date whet her there is an indication that an asset may be
impaired. If any indication exists, (or, where applic able, when an annual impairment testing for an asset is
required), the Group makes an estimat e of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an a sset’s or cash-generating unit’s fair value less
costs of disposal and its value in use and is determin ed for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or group of assets. Where the
carrying amount of an asset or cash-generating unit ex ceeds its recoverable amount, the asset is considered
impaired and is written down t o its recoverable amount.
Impairment losses are recognised in profit or lo ss. A previously recognised impairment loss is
reversed only if there has been a change in the estimate s used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If t hat is the case, the carrying amount of the asset is
increased to its recoverable amount. That increas e cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairmen t loss been recognised previously. Such reversal is
recognised in profit or loss.
2.9 Intangible assets
Goodwill
Goodwill on acquisitions of subsidiaries and bus inesses, represents the excess of (i) the sum of
the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of
the identifiable net assets acquired. Goodwill on s ubsidiaries is recognised separately as intangible
assets and carried at cost less accumulated impairment losses. Gains and losses on the disposal of
subsidiaries include the carrying amount of goodw ill relating to the entity sold. Goodwill is not
amortised but is tested for impairment annually.
Licence, know-how, customer contra cts and customer relationship
Licence, patents, customer contracts and relati onship acquired are initially recognised at cost
and are subsequently carried at cost less accumulated amortisation and accumulated impairment
losses. These costs are to be amortised to profit o r loss using the straight-line method over years,
which is the shorter of their estimated useful liv es and periods of contractual rights as follows:
Category Useful life
. Know-how 7 years
. Customer contracts 0.5 years
. Customer relationship 10 years
. Licence 10 years
The useful lives of know-how and licence are e stimated with reference to the technical
obsolescence and product life cycles, expected us age and the expiries of the respective contracts.
APPENDIX I ACCOUNTANT’S REPORT
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The useful life of customer-contracts and cust omer relationships are estimated based on the
attrition rate, historical experience, cont ract periods and life cycles of customers.
2.10 Financial assets
(a) Initial recognition and measurement
Financial assets are recognised when, and only when the entity becomes a party to the
contractual provisions of the instruments.
Trade receivables are measured at the amount of consideration to which the Group expects to
be entitled in exchange for transferring prom ised goods or services to a customer, excluding
amounts collected on behalf of third party, if the trade receivables do not contain a significant
financing component at initial recognition.
(b) Subsequent measurement
Investments in debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model
for managing the asset and the contractual cash f low characteristics of the asset. The three
measurement categories for clas sification of debt instruments a re amortised cost, fair value
through other comprehensive income (‘‘FVOCI’’) and fair value through profit or loss
(‘‘FVPL’’). The Group’s debt instruments at amortised cost comprise trade and other
receivables, and cash and cash equivalents.
Debt instruments that are held for the collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at amortised cost.
Interest income from these financial assets is included in profit or loss using the effective
interest method. Gains and losses on debts instr ument are recognised in profit or loss when the
assets are derecognised or impaired, a nd through the amortisation process.
(c) Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the
asset has expired or have been transferred and the G roup has transferred substantially all risks and
rewards of ownership. On derecognition of a financial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss that had
been recognised in other comprehensive income for debt instruments is recognised in profit or loss.
On disposal of an equity investment, the diffe rence between the carrying amount and sales
proceed is recognised in profit or loss if there was no election made to recognise fair value changes in
other comprehensive income. If there was an elect ion made, any difference between the carrying
amount and sales proceed amount would be recognised in other comprehensive income and
transferred to retained profits along with the am ount previously recognised in other comprehensive
income relating to that asset.
(d) Impairment
The Group assesses on a forward-looking basis th e expected credit losses associated with its
debt financial assets carried at amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. Note 34 details how the Group
determines whether there has been a significant increase in credit risk.
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For trade receivables, the Group applies the si mplified approach permitted by the IFRS 9,
which requires expected lifetime losses to be reco gnised from initial recognition of the receivables.
2.11 Financial liabilities
Financial liabilities of the Group comprise trade and other payables, borrowings and lease
liabilities. Financial liabilities are presented as current liabilities unless t he Group has an unconditional
right to defer settlement for at least 12 months after t he statement of financial position date, in which case
they are presented as non-current liabilities.
For a contract that contains an obligation for an entity to purchase its own equity instruments for
cash or another financial asset gives rise to a financi al liability for the present value of the redemption
amount (for example, for the present value of the forw ard repurchase price, option exercise price or other
redemption amount).
(a) Initial recognition and measurement
Financial liabilities are recognised when, a nd only when, the Group becomes a party to the
contractual provisions of the financial instrume nt. The Group determines the classification of its
financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial
liabilities not at FVPL, directly attributable transaction costs.
(b) Subsequent measurement
After initial recognition, financial liabiliti es that are not carried at FVPL are subsequently
measured at amortised cost using the effective i nterest method. Gains and losses are recognised in
profit or loss when the liabilities are derecogn ised, and through the amortisation process.
(c) Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. On derecognition, the difference between the carrying amounts and the
consideration paid is recognised in profit or loss.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks an d on hand which are subject to an insignificant
risk of changes in value and bank overdrafts. Bank ov erdrafts are presented as current borrowings on the
statements of financial positi on. For cash subject to restriction, assessment is made on the economic
substance of the restriction and whether they m eet the definition of cash and cash equivalents.
2.13 Inventories
Inventories are measured at the lower of cost and net realisable value. Cost is determined using the
first-in, first-out method. The cost of finished goods and work-in-progress compr ises raw materials, direct
labour, other direct costs and related production over heads (based on normal operating capacity). Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale. A write down on cost is made for where the
cost is not recoverable or if the selling prices have decl ined. Cost includes all costs of purchase and other
costs incurred in bringing the inventorie s to their present location and condition.
Allowance is made for obsolete, slow moving and defective inventories.
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2.14 Keyman insurance
The Group acquired a keyman insurance contract. T he insurance contract is initially recognised at
the amount of the premium paid and subsequently carried at cash surrender value at the end of each
reporting period, with changes in cash surrender value recognised in profit or loss.
Changes in the cash surrender value are recognised in ‘‘other gains/(losses), net’’.
2.15 Trade and other receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional unless
they contain significant financing components, wh en they are recognised at fair value. The Group holds
the trade receivables with the objective of collecting t he contractual cash flows and therefore measures
them subsequently at amortised cost using the e ffective interest method. See Note 21 for further
information about the Group’s trade receivables and No te 34 for a description of the Group’s impairment
policies.
Prepayments, deposits and other receivables mainl y comprise prepaid listing expense based on the
percentage of work done by professional parties, ren tal deposits, utilities deposits as well as GST
receivables.
2.16 Provisions
Provisions are recognised when the Group has a pres ent obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of re sources embodying economic be nefits will be required
to settle the obligation and the amount of th e obligation can be es timated reliably.
Provisions are reviewed at the end of each reporti ng period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required to settle the
obligation, the provision is reversed. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, wh ere appropriate, the risks s pecific to the liability.
When discounting is used, the increase in the provis ion due to the passage of time is recognised as a
finance cost.
2.17 Fair value measurement
Fair value of an asset or a liability, except for sh are-based payment and lease transactions, is
determined as the price that would be received to sell a n asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The measurement assumes that the
transaction to sell the asset or transfer the liabilit y takes place either in the principal market or in the
absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement t akes into account a market participant’s ability
to generate economic benefits by using the asset in i ts highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
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When measuring the fair value of an asset or a lia bility, the Group uses observable market data as
far as possible. Fair values are cate gorised into different levels in a f air value hierarchy based on the input
used in the valuation technique as follows:
Level 1 : quoted prices (unadjusted) in active mark ets for identical assets or liabilities that the
Group can access at the measurement date.
Level 2 : inputs other than quoted prices included w ithin Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3 : unobservable inputs for the asset or liability.
The Group recognises transfers b etween levels of the fair value hierarchy as of the date of the event
or change in circumstances that caused the transfers.
2.18 Government grants
Grants from the government are recognised as a receivable at their fair value when there is
reasonable assurance that the grant will be receive d and the Group will comply with all the attached
conditions.
Government grants receivable are recognised as in come over the periods necessary to match them
with the related costs which they are intended to com pensate, on a systematic basis. Government grants
relating to expenses are shown separately as other income.
2.19 Trade and other payables
These amounts represent liabilities for goods and s ervices provided to the Group prior to the end of
financial year which are unpaid. Tr ade and other payables are presente d as current liabilities unless
payment is not due within 12 months after the reportin g period. They are recognised initially at their fair
value and subsequently measured at amorti sed cost using the effective interest method.
2.20 Borrowings and borrowing costs
Borrowings
Borrowings are recognised initially at fair value , net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost; any di fference between initial recognised amount and the
redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method.
Fees paid on the establishment of loan facilities a re recognised as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down. In this case, the
fee is deferred until the draw-down occurs. To the ext ent there is no evidence that it is probable that
some or all of the facility will be drawn down, the f ee is capitalised as a pre-payment for liquidity
services and amortised over the perio d of the facility to which it relates.
Borrowings are removed from the statement of fin ancial position when the obligation specified
in the contract is discharged, cancelled or expired . The difference between the carrying amount of a
financial liability that has been extinguished or tr ansferred to another party and the consideration
paid, including any non-cash assets transferred or lia bilities assumed, is recognised in profit or loss.
Where the terms of a financial liability are r enegotiated and the Company issues equity
instruments to a creditor to extinguish all or par t of the liability (debt for equity swap), a gain or
loss is recognised in profit or loss, which is meas ured as the difference between the carrying amount
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of the financial liability and the fair value of the equ ity instruments issued. B orrowings are classified
as current liabilities unless the Group has an unconditi onal right to defer settlement of the liability
for at least 12 months after the end of the reporting period.
Borrowing costs
Borrowing costs directly attributable to the a cquisition, construc tion or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. B orrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of funds.
Borrowing costs that are not directly attri butable to the acquisition, construction or
production of a qualifying asset are recognised in pr ofit or loss using the effective interest method.
2.21 Employee benefits
Defined contribution plans
Defined contribution plans are post-employ ment benefit plans under which the Group pays
fixed contributions into separa te entities such as the Central Provident Fund and Malaysian
Employees Provident Fund, on a mandatory, cont ractual or voluntary b asis. The Group has no
further payment obligations once t he contributions have been paid.
Short-term employee benefits
Short-term employee benefit obligations ar e measured on an undiscounted basis and are
expensed as the related service is provided. A lia bility is recognised for the amount expected to be
paid if the Group has a present legal or constructi ve obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be estimated reliably.
2.22 Leases
The Company assesses at contract inception whethe r a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an i dentified asset for a period of time in exchange for
consideration.
(a) As lessee
The Group applies a single recognition and me asurement approach for all leases, except for
short-term leases and leases of low-value assets. T he Group recognises lease liabilities representing
the obligations to make lease payments and right-o f-use assets representing the right to use the
underlying leased assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the
date the underlying asset is available for use). Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurre d, and lease payments made at or before the
commencement date less any lease incentives r eceived. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term and the estimated useful lives of the
assets.
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If ownership of the leased asset transfers to the Group at the end of the lease term or the
cost reflects the exercise of a purchase option, depreciation is calculated using the estimated
useful life of the asset. The right-of-use asset s are also subject to impairment. The accounting
policy for impairment is disclosed in Note 2.8 ‘‘Impairment of non-financial assets’’.
The Group’s right-of-use assets are presented in Note 13.
Lease liabilities
A tt h ec o m m e n c e m e n td a t eo ft h el e a s e ,t h eG roup recognises lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substanc e fixed payments) less any lease incentives
receivable, variable lease payments that de pend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The le ase payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of
penalties for terminating the lease, if the lease term reflects the Group exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate are recognised as
expenses (unless they are incurred to produce inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of leas e payments, the Group uses the lessee’s
incremental borrowing rate at the lease commencement date because the interest rate implicit
in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of leas e liabilities is remeasured if there is a
modification, a change in the le ase term, a change in the lease payments (e.g. changes to future
payments resulting from a change in an index or rate used to determine such lease payments)
or a change in the assessment of an option to purchase the underlying asset.
The Group’s lease liabilities are presented in Note 26.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recogn ition exemption to its short-term leases of
machinery (i.e. those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leas es of office equipment that are considered to be
low value. Lease payments on short-term leases and leases of low value assets are recognised
as expense on a straight-line basis over the lease term.
(b) As lessor
Leases in which the Group does not transfer substa ntially all the risks and rewards incidental
to ownership of an asset are classified as operati ng leases. Rental income arising from operating
leases on the Group’s investment properties is acc ounted for on a straight-line basis over the lease
terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised over the lease term on the same basis as rental
income. Contingent rents are recognised as revenue in the period in which they are earned.
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2.23 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is a legally enforceable right to of f s e ta n dt h e r ei sa ni n t e n t i o nt os e t t l eo nan e tb a s i s
or realise the asset and settle th e liability simultaneously.
2.24 Revenue and income recognition
Revenue is measured based on the consideratio n to which the Group expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf
of third parties.
Revenue is recognised when the Group satisfies a pe rformance obligation by transferring a promised
good or service to the customer, which is when the customer obtains control of the good or service. A
performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised
is the amount allocated to the sati sfied performance obligation.
The Group’s recognition policies on revenue fr om contracts with customers, other sources of
revenue and other income are further described as follows.
(a) Sales of goods and services
The Group sells parts and components of precisi on engineering equipment that undergo the
precision machining and welding services.
Revenue from sale of goods and services in the ordinary course of business is recognised when
the Group satisfies a performance obligation (‘‘ PO’’) by transferring control of a promised good or
service to the customer. The amount of revenue reco gnised is the amount of the transaction price
allocated to the satisfied PO. Transaction price is the amount of consideration in the contract to
w h i c ht h eG r o u pe x p e c t st ob ee n t i t l e di ne x c h a n g efor transferring the promised goods or services.
The transaction price is allocated to each PO in th e contract on the basis of the relative stand-alone
selling prices of the promised goods or services.
Revenue is recognised at a point in time upon satisf action of the PO, which generally coincides
with the delivery of goods and when services are re ndered. Revenue from these sales is recognised
based on the price specified in the contract and rev enue is only recognised to the extent that it is
highly probable that a significant reversal will not occur. No significant element of financing is
deemed present as the sales are made with a credit term of 30 to 60 days, which is consistent with
market practice. The Group concluded obligation to repair or replace faulty products under the
standard warranty terms is remote and no provision has been recognised.
(b) Service income
Service income represents the provision of ha ndling and logistics ser vices to the customers.
The service income is recognised as other income in profit or loss upon completion of the services.
(c) Scrap material sales income
The sale value of scrap is credited to profit and loss account as other income.
(d) Other income — lease income
Lease income from operating leases where the Group is a lessor is recognised in other income
on a straight-line basis over the lease term.
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2.25 Current and deferred income tax
The income tax expense or credit for the period i s the tax payable on the current period’s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temp orary differences and to unused tax losses.
(a) Current income tax
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the reporting period in the countries where the Company and its
subsidiaries operate and generate taxable incom e. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probabl e that a taxation authority will accept an uncertain
tax treatment. The Group measures its tax balan ces either based on the most likely amount or the
expected value, depending on which method provid es a better prediction of the resolution of the
uncertainty.
(b) Deferred income tax
Deferred income tax is provided in full, using th e liability method, on temporary differences
arising between the tax bases of ass ets and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accountin g nor taxable profit or loss and does not give rise to
equal taxable and deductible temporary differences. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted by the end of the reporting period
and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised only if it is p robable that future taxable amounts will be
available to utilise those tem porary differences and losses.
Deferred tax liabilities and assets are not reco gnised for temporary differences between the
carrying amount and tax bases of investments in foreign operations where the Group is able to
control the timing of the reversal of the temporary d ifferences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset whe re there is a legally enforceable right to offset
current tax assets and liabilities and where the d eferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive inco me or directly in equity, respectively.
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(c) Offsetting
Deferred and income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred income tax
assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity
or different taxable entities where there is an i ntention to settle the balances on a net basis.
2.26 Key management personnel
Key management personnel of the Group are those per sons having the authority and responsibility
for planning, directing and controlling the activiti es of the Group. The key management personnel include
all directors of the Company.
2.27 Related parties
A related party is defined as follows:
(a) A person or a close member of that person’s f amily is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each
parent, subsidiary and fellow subs idiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the
third entity.
(v) The entity is a post-employment benefit p lan for the benefit of employees of either the
Company or an entity related to the Group. If the Group is itself such a plan, the
sponsoring employers are also related to the Group.
(vi) The entity is controlled or jointly c ontrolled by a person identified in (a).
(vii) A person identified in (a)(i) has signifi cant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
(viii) the entity, or any member of a group of whic h it is a part, provides key management
personnel services to the Group or to the parent of the Group.
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2.28 Share capital
Classification
Ordinary shares with discretionary dividends a re classified as equity. Incremental costs
directly attributable to the issue of new shares or options are deducted against equity. 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 Company. All sh ares rank equally with regards to the Company’s
residual assets.
Dividend
Liability is recognised for the amount of any dividend declared, being appropriately
authorised and no longer at the discretion of t he Group, on or before the end of the reporting
period but not distributed at the end of the reporti ng period. Distributions to holders of an equity
instrument is recognised directly in equity.
2.29 Share-based payments
Share-based compensation benefits are provide d to employees and shareholders. Information
relating to these schemes is set out in Note 31.
The fair value of shares granted is recognised as an employee benefits expense or share-based
payments to shareholders with a corresponding incr ease in equity. The total amount to be expensed is
determined by reference to the fair value of the shares granted.
If the equity instruments granted vest immediately, the counterparty is not required to complete a
specified period of service befor e becoming unconditionally entitled t o those equity instruments. In the
absence of evidence to the contrary, the Company shall presume that services rendered by the
counterparty as consideration for the equity instrume nts have been received. In this case, on grant date the
entity shall recognise the services received in f ull, with a corresponding increase in equity.
2.30 Discontinued operation
A discontinued operation is a component of the Gr oup that has been disposed of or is classified as
held for sale and that represents a separate major line of business, is part of a single co-ordinated plan to
dispose of such a line of business. The results of disc ontinued operation are presented separately in the
consolidated statements of comprehensive income.
3 Critical accounting estimates and judgements
The key assumptions concerning the future and other k ey sources of estimation uncertainty at the end of
the reporting period are discussed below. The Group based its assumptions and estimates on parameters
available when the financial stateme nts were prepared. Existing circum stances and assumptions about future
developments, however, may change due to market chan ges or circumstances arising beyond the control of the
Group. Such changes are reflected in the assumptions when they occur.
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(a) Impairment of non-financial assets
The Group performed impairment assessment at e ach reporting date to determine whether the
goodwill may be impaired. The Group estimat es the recoverable amount of the goodwill or the
cash-generating unit (‘‘CGU’’), based on the value in use calculation (‘‘VIU’’). The VIU is based on
discounted cash flow forecast of the CGU, the preparation of which requires management to use
assumptions and estimates relating to revenue growth rate, terminal gro wth rate and pre-tax discount rate
of the CGU. The assumptions and estimates used are inherently subjective and may be affected by
uncertainties around future market or economic condi tion. The impairment assessment and the carrying
amount of the goodwill are disclosed in Note 15 to the financial statements.
Non-financial assets other than goodwill of the Group comprise licence, know-how, customer
contracts, customer relationship a n di n v e s t m e n ti na na s s o c i a t ea r ereviewed for impairment whenever
there is any indication that the assets may be impai red. If any such indication exists, an impairment
assessment will be performed acc ordingly. The recoverable amount of an asset or group of assets is
assessed as the higher of its fair valu e less costs of disposal and its value in use. Non-financial assets other
than goodwill that suffered an impairment are review ed for possible reversal of the impairment at the end
of each reporting period.
Management has concluded that there was no impai rment in respect of these assets at the reporting
date. The carrying amounts of the Group’s intangibl e assets are disclosed in Note 16 to the financial
statements.
(b) Useful lives of property, plant and equipment
The cost of property, plant and equipment is depreci ated on a straight-line basis over its estimated
useful life which is estimated to be within 3 to 50 yea rs based on assets specifications, industry norms, and
other factors. This estimate is dependent on variables such as usage levels and technological developments
and will be reassessed at the end of every reporting period. The carrying amount of the Group’s property,
plant and equipment is disclosed in Note 12.
(c) Share based payments
Share-based payments comprises anti-diluti on rights granted to certain management and
shareholders of the Group, acquisiti on of identified and unidentified goods and services. The fair value
of the shares granted is recognised in profit or loss as share-based payment expense. The fair value of the
shares granted is derived using the market approach and subject to assumptions.
In the market approach, the fair value of the equity interest in the entities now comprising the
Group is based on the multiplication of the normalised earnings before i nterest, tax, depreciation and
amortisation by an appropriate market multiple. T he market approach result is then adjusted for a
discount for lack of marketabi lity to arrive at fair value.
The share-based payments recognised are disclosed in Note 31.
APPENDIX I ACCOUNTANT’S REPORT
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4 Revenue and operating segments
(a) Revenue from contracts with customers
(i) Disaggregation of revenue from contracts with customers:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations
Sale of goods and its related services:
Precision machining 22,913 15,545
Precision welding 16,203 23,224
39,116 38,769
Discontinued operation
Sale of laser diodes 66 —
Total revenue from contracts with customers 39,182 38,769
Timing of revenue recognition for revenue
Point in time 39,182 38,769
(ii) Contract liabilities
Service fee received in advance where the goods or services have not been delivered are
recognised as contract liabilities. The revenue wi ll be recognised in profit or loss at a point in time
when the goods or services are delivered.
As at
1 January As at 31 December
2022 2022 2023
S$’000 S$’000 S$’000
Contract liabilities
— Advance service fee received — 297 —
Total contract liabilities — 297 —
Revenue recognised in relation to contract liabilities
Year ended 31 December
2022 2023
S$’000 S$’000
Revenue recognised in current period that was included
in the contract liability balance at the beginning of
the period — 297
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Unsatisfied performance obligations
Year ended 31 December
2022 2023
S$’000 S$’000
Aggregate amount of the transaction price allocated to
contracts that are partially or fully unsatisfied as at
31 December
— Advance service fee received 297 —
The transaction price allocated to unsatisfied performance obligations in 2022 is recognised as
revenue in 2023.
(b) Information about major customers
Revenue from each major customer which contri buted 10% or more of the Group’s revenue for each
of the Track Record Period, is set out below:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Customer A 12,449 8,400
Customer B 6,317 7,804
Customer F 4,418 8,960
Customer G 4,236 N/A
5 Other income
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations
Rental income 285 1,299
Service income 318 1,190
Scrap material sales income 374 134
Government grants 86 87
Others 67 21
1,130 2,731
Discontinued operation
Others 26 1
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Government grants consist of Special Employment Cr edit, Senior Employment Credit, Progressive Wage
Credit Scheme, and Jobs Growth Incentive. Special Employment Credit was introduced in 2012 to encourage
businesses to hire Singaporean employees aged above 55. Th e Special Employment Credit will be paid to eligible
employers for a 9 year period from 2012 to 2022. The Senior Employment Credit effected from 2023 to 2035, by
providing wage offsets to support employers in hiring senior workers aged above 60.
The Progressive Wage Credit Scheme was introduce d to provide transitional wage support for employers
to adjust to upcoming mandatory wage increases for lo wer-wage workers and voluntarily raise wages of
lower-wage workers for eligible resident employ ees from 2022 to 2026. Job Growth Incentive introduced to
support employers to accelerate the hiring of local workf orce, so as to create good and long-term jobs for locals
from September 2020 to March 2023. There are no unfulfi lled conditions or other contingencies attaching to
these grants.
6 Other gains/(losses), net
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations
Unrealised gains (Note 17) 14 —*
Net currency exchange gains/(losses) 108 (489)
Gain on disposal of plant and equipment 55 40
Gain on dilution of shareholding in an associate (Note 18) —2 3
177 (426)
Discontinued operation
Gain on disposal of a subsidiary
— Gain on disposal of controlling interest (Note 38) — 1,574
— Gain on retained investment (Note 38) — 955
— 2,529
* Less than S$1,000.
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7 Expenses by nature
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations
Change in work-in-progress and finished goods (2,505) 378
Raw materials and consumables used 15,928 13,095
Production and direct costs* 2,942 2,718
Inventories provision (Note 20) — 414
Inventories written-off (Note 20) 130 —
Depreciation of propert y, plant and equipment (Note 12) 1,144 1,291
Depreciation of right-of-use assets (Note 13) 1,901 2,086
Depreciation of investment property (Note 14) 41 41
Amortisation of intangible assets (Note 16) 935 288
Business development expenses 444 289
Employee benefit expenses (Note 9.1) 8,424 11,087
Share-based payments for the shareholders (Note 31) — 875
Listing expenses 1,930 1,896
Professional fees 312 235
Repair and maintenance 498 186
Property tax 209 249
Utilities 444 345
Insurance 83 157
Bank charges and administrative fees 85 17
Other expenses 604 373
Total cost of sales and administrative expenses 33,549 36,020
Discontinued operation
Amortisation of intangible assets (Note 16) 560 209
Share-based payments for shareholders (Note 31) 196 —
Employee benefit expenses (Note 9.1) 239 139
Production and direct costs 62 —
Other expense 130 39
1,187 387
* Included in the production and direct costs are mainl y handling, delivery, freight charges, welding
gases, subcontractor costs.
APPENDIX I ACCOUNTANT’S REPORT
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8 Finance costs
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Interest expense on borrowings (Note 32(b)) 511 207
Interest expense on lease liabilities (Note 26) 1,097 1,080
Interest expense on provision for reinstatement cost 9 9
Interest expense on deposits received — 18
Unwinding of discount on deposits received (38) —
Interest expense on non-Listing put option (Note 1.2(xvi)) —2 9
1,579 1,343
9 Employee benefit expenses
9.1 Employee benefit expenses (inc luding directors’ emoluments)
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations
Salaries and bonuses 6,876 7,535
Contributions to defined contri bution retirement benefits
schemes 619 987
Share-based payments for the employees (Note 31) 815 2,276
Staff welfare 114 289
8,424 11,087
Discontinued operation
Salaries and bonuses 22 33
Share-based payments for the employees (Note 31) 217 106
239 139
Employee benefit expenses was charged to pro fit or loss during the years ended 31 December 2022
and 31 December 2023 as set out below:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Cost of sales 4,396 5,349
Administrative expenses 4,028 5,738
Total 8,424 11,087
APPENDIX I ACCOUNTANT’S REPORT
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During the years ended 31 December 2022 and 2023, no forfeited contributions were utilised by the
Group to reduce its contributions to retirement benefi ts schemes. There is no balance available as at 31
December 2022 and 2023 to reduce future contributions.
Five highest paid individuals
The five highest paid individuals during the Tr ack Record Period included three directors of
the Company for the years ended 31 December 2022 and 2023 with details of the emoluments
reflected in the analysis shown in Note 9.2. Detai ls of the emoluments payable to five highest paid
individuals for the years ended 31 December 2022 and 2023 were as follows:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Salaries and bonuses 1,074 1,422
Contributions to defined contri bution retirement benefits
schemes 53 73
Share-based payments for the employees (Note 31) 1,032 2,276
2,159 3,771
The emoluments of the remaining non-director individuals fell within the following bands:
Number of individuals
Year ended
31 December
2022
Year ended
31 December
2023
Emolument bands
Nil to S$180,000
(equivalent to HK$Nil to HK$1,000,000) 2 1
S$180,001 to S$270,000
(equivalent to HK$1,000,001 to HK$1,500,000) — 1
APPENDIX I ACCOUNTANT’S REPORT
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9.2 Benefits and interests of directors
(a) Directors’ emoluments
The emoluments paid or payable to the directors of the Company were as follows:
Year ended 31 December 2022
Name Fees Salary
Discretionary
bonuses
Allowances and
benefits in kind
Employer’s
contribution to
a retirement
benefit scheme
Other
emoluments
paid or payable
in respect of
director’s other
services in
connection with
the management
of the affairs of
the Company or
its subsidiaries
undertaking Total
(note (i)) (note (ii)) (note (iii))
S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Dato’ Sri Chua Chwee
L e e — 4 4 7——1 5— 4 6 2
Ms. Jee Wee Jene — 257 — — 15 — 272
Mr. Thng Chong Kim — 92 — — 12 1,032 1,136
— 796 — — 42 1,032 1,870
Year ended 31 December 2023
Name Fees Salary
Discretionary
bonuses
Allowances and
benefits in kind
Employer’s
contribution to
a retirement
benefit scheme
Other
emoluments
paid or payable
in respect of
director’s other
services in
connection with
the management
of the affairs of
the Company or
its subsidiaries
undertaking Total
(note (i)) (note (ii)) (note (iii))
S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Dato’ Sri Chua Chwee
Lee — 617 75 — 22 — 714
Ms. Jee Wee Jene — 257 21 — 17 — 295
Mr. Thng Chong Kim — 84 — — 10 2,276 2,370
— 958 96 — 49 2,276 3,379
APPENDIX I ACCOUNTANT’S REPORT
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Notes:
(i) Salary to a director is generally an emolument paid or payable to the directors in respect
of that person’s services in connection with the management of the affairs of the
Company or its subsidiaries undertakings. Dato’ Sri Chua and Mrs. Chua were
appointed as executive directors of the Co mpany on 12 July 2021. During the Track
Record Period, the independent non-executi ve directors had not yet been appointed and
no directors’ remuneration was paid o r payable in the capacity of independent
non-executive directors. No directors of t he Company waived any emoluments and no
emoluments were paid by the Group to any of the directors of the Company as an
inducement to join or upon joining the Group or as a compensation for loss of office as
director during the Track Record Period.
(ii) Discretionary bonuses are determined bas ed on the financial performance of the Group
and the performance of each individual.
(iii) The share-based payments paid to Mr. T hng Chong Kim comprised of S$1,032,000 and
S$217,000 for his services rendered under the continuing operations for the years ended
31 December 2022 and 2023 respectively. The sha re-based payments compensated for his
services rendered under the discontinued operation was S$2,059,000 for the year ended
31 December 2023.
(b) Directors’ retirement and termination benefits
None of the directors received or will receive any r etirement benefits or termination benefits
during the Track Record Period.
(c) Consideration provided to third parties for making available directors’ services
The Group did not pay consideration to any thir d parties for making available directors’
services during the Track Record Period.
(d) Information about loans, quasi-loans and other dea lings in favour of directors, controlled bodies
corporate by and connected entities with such directors
There are no loans, quasi-loans and other deal ings in favour of directors, controlled body
corporate by and connected entities with su ch Directors during the Track Record Period.
(e) Directors’ material interests in transactions, arrangements or contracts
Other than disclosed in Notes 1.2 and 29, there a re no significant transactions, arrangements
and contracts in relation to the Group’s business to which the Group was a party and in which a
director of the Company had a material interest, whe ther directly or indirectly, subsisted at the end
of the Track Record Period or at any time during the Track Record Period.
APPENDIX I ACCOUNTANT’S REPORT
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10 Income tax expense
Singapore and Malaysia, two of the Group’s main tax ju risdictions, had headline corporate tax rates of
17% and 24% (2022 : 17% and 24%) respectively.
The amount of income tax expense charged to the cons olidated statements of comprehensive income
represents:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Income tax
— Current year 910 1,412
— Over-provision in prior year — (32)
910 1,380
Deferred tax
— Current year 585 (134)
— Over-provision in prior year — (185)
585 (319)
Income tax expense
Continuing operations 1,495 1,061
Discontinued operation — —
1,495 1,061
The taxation on the Group’s profit before tax differs f rom the theoretical amount that would arise using
the tax rate applicable to the Group as follows:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Reconciliation of taxation
Profit from continuing operations before income tax 5,295 3,345
(Loss)/profit from discontinued operation before income tax (1,095) 2,143
4,200 5,488
Tax calculated at tax rate of 17% 714 933
Difference in overseas tax rate (6) 8
Expenses not deductible for tax purposes 703 791
Income not subject to tax (15) (437)
Unabsorbed capital allowance and unutilised tax
losses not recognised as deferred tax assets 116 —
Tax exemption (Note) (17) (17)
Over-provision in prior year — (217)
Income tax expense for continuing operations 1,495 1,061
APPENDIX I ACCOUNTANT’S REPORT
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Note: During the years of assessment 2020 onwards, tax exemption relates to 75% tax exemption of the
first S$10,000 of normal chargeable income and a further 50% tax exemption on the next
S$190,000 of normal chargeable income.
11 Earnings/(loss) per share
(a) Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the net prof it/(loss) attribut able to owners of
the Company by the weighted average number of ordin ary shares outstanding during the financial year.
Year ended
31 December
2022
Year ended
31 December
2023
Profit/(loss) attributable to owners of the Company (S$’000)
Continuing operations 3,800 2,284
Discontinued operation (608) 2,323
3,192 4,607
Weighted average number of ordinary shares outstanding
for basic earnings per share (Note) 5,596,511 5,596,511
Earnings/(loss) per share (S$)
Continuing operations 0.68 0.41
Discontinued operation (0.11) 0.41
0.57 0.82
Note: The weighted average number of shares has been retrospectively adjusted for the effect of the
issuance of shares in connection with the Re organisation completed on 16 May 2023 (Note
1.2).
(b) Diluted earnings/(loss) per share
As the Group has no dilutive instruments as at 31 December 2022 and 2023, the Group’s diluted
earnings/(loss) per share equals to its basic earnings/(loss) per share.
APPENDIX I ACCOUNTANT’S REPORT
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12 Property, plant and equipment
Group
Freehold
land
Freehold
building
Office
equipment Renovation
Plant and
machineries
Motor
vehicles
Furniture
and fittings Computers Total
S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Cost
As 1 January 2022 646 1,508 42 1,663 21,253 114 424 267 25,917
Additions — — — 1 101 38 250 279 669
D i s p o s a l s ———— ( 3 5 2 ) ——— ( 3 5 2 )
W r i t e o f f ———— ( 3 ) —— ( 1 0 ) ( 1 3 )
Currency translation
differences (38) (89) (1) (9) (26) — (2) — (165)
At 31 December 2022
and 1 January 2023 608 1,419 41 1,655 20,973 152 672 536 26,056
A d d i t i o n s ————4 3—3 79 4 1 7 4
Disposal of a subsidiary
(Note 38) ——————— ( 3 0 8 ) ( 3 0 8 )
Currency translation
differences (35) (81) (1) (8) (24) (1) (2) — (152)
At 31 December 2023 573 1,338 40 1,647 20,992 151 707 322 25,770
Accumulated depreciation
At 1 January 2022 — 151 33 1,001 16,327 80 276 219 18,087
Depreciation for the year — 28 3 111 909 37 20 36 1,144
D i s p o s a l ———— ( 3 5 2 ) ——— ( 3 5 2 )
W r i t e o f f ———— ( 3 ) —— ( 1 0 ) ( 1 3 )
Currency translation
differences — (9) (1) (7) (26) — (2) — (45)
At 31 December 2022
and 1 January 2023 — 170 35 1,105 16,855 117 294 245 18,821
Depreciation for the year — 27 3 109 1,032 12 67 41 1,291
Disposal of a subsidiary
(Note 38) ——————— ( 8 ) ( 8 )
Currency translation
differences — (10) (1) (7) (24) — (2) — (44)
At 31 December 2023 — 187 37 1,207 17,863 129 359 278 20,060
Carrying amount
At 1 January 2022 646 1,357 9 662 4,926 34 148 48 7,830
At 31 December 2022 608 1,249 6 550 4,118 35 378 291 7,235
At 31 December 2023 573 1,151 3 440 3,129 22 348 44 5,710
APPENDIX I ACCOUNTANT’S REPORT
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Depreciation was charged to profit or loss dur ing the years ended 31 December 2022 and 31 December
2023 as set out below:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Cost of sales 909 1,032
Administrative expenses 235 259
Total 1,144 1,291
The property, plant and equipment with the carrying value of S$1,249,000 and S$1,151,000 as at 31
December 2022 and 2023 respectively were pledged fo r a term loan as disclosed in Note 25(a)(ii).
13 Right-of-use assets
Group
Leasehold
property Machineries
Motor
vehicles Total
S$’000 S$’000 S$’000 S$’000
Cost
At 1 January 2022 29,821 7,481 791 38,093
Addition — 1,925 — 1,925
At 31 December 2022 and
1 January 2023 29,821 9,406 791 40,018
Addition — 620 790 1,410
Disposal — — (269) (269)
31 December 2023 29,821 10,026 1,312 41,159
Accumulated depreciation
At 1 January 2022 9,140 1,663 270 11,073
Depreciation for the year 1,279 525 97 1,901
At 31 December 2022 and
1 January 2023 10,419 2,188 367 12,974
Depreciation for the year 1,279 660 147 2,086
Disposal — — (150) (150)
At 31 December 2023 11,698 2,848 364 14,910
Carrying amount
At 1 January 2022 20,681 5,818 521 27,020
At 31 December 2022 19,402 7,218 424 27,044
At 31 December 2023 18,123 7,178 948 26,249
APPENDIX I ACCOUNTANT’S REPORT
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--- page 453 ---
The Group entered into lease arrangements for leasehold property, machineries and motor vehicles. The
l e a s et e r m so ft h e s el e a s e da s s e t sa r ed i s c l o s e da sf o l l o w s :
Lease term
(Years)
Leasehold property 23.5
Machineries 10–15
Motor vehicles 10
The lease payments of these right-of-use assets are p ayable on a monthly-basis a nd the details of related
lease liabilities is disclosed in Note 26.
Depreciation was charged to profit or loss dur ing the years ended 31 December 2022 and 31 December
2023 as set out below:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Cost of sales 1,260 1,368
Administrative expenses 641 718
Total 1,901 2,086
14 Investment property
S$’000
Historical cost
As at 31 December 2021, 31 December 2022 and 31 December 2023 1,150
Accumulated depreciation
As at 31 December 2021 and 1 January 2022 (493)
Depreciation for the year (41)
As at 31 December 2022 and 1 January 2023 (534)
Depreciation for the year (41)
As at 31 December 2023 (575)
Carrying Amount
As at 1 January 2022 657
As at 31 December 2022 616
As at 31 December 2023 575
APPENDIX I ACCOUNTANT’S REPORT
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--- page 454 ---
Amounts recognised in profit and loss for an investment property
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Rental income from operating leases 83 99
Direct expenses from a property that generated rental income 57 57
The investment property as at 31 December 2022 and 2023 was pledged for a term loan as disclosed in
Note 25(a)(i).
Fair value measurement
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Fair value for disclosure purposes only:
Fair value at end of the year 920 900
The fair value of the investment property was measured as at 31 December 2022 and 2023 based on a
valuation made by Jones Lang LaSalle Corporate App raisal and Advisory Limited, a firm of independent
professional external valuers. The firm holds a recognised and relevant profess ional qualificati on with sufficient
recent experience in the location and catego ry of the investment property being valued.
15 Goodwill
S$’000
At 1 January 2022, 31 December 2022, 1 January 2023 and 31 December 2023 4,429
Impairment tests for goodwill
The goodwill is arisen from the acquisition of SPW, a subsidiary of the Group, under the precision
welding segment, being a CGU of the Group.
The Group assesses whether goodwill has suffere d any impairment on an annual basis. For the 2022
and 2023 reporting periods, the recoverable amount wa s determined based on val ue-in-use calculations
which require the use of assumptions. The calculat ions use cash flow projections based on financial
budgets approved by management covering a five-year period.
APPENDIX I ACCOUNTANT’S REPORT
–I - 5 1–


--- page 455 ---
Cash flows beyond the five-year period are extra polated using the estimated terminal growth rates
stated below. These growth rates are consistent with forecasts included in industry reports specific to the
industry in which the CGU operates. The pre-tax discount rate reflects s pecific risks relating to the
relevant segment and the countries in which it operates.
The following table sets out the key assu mptions for the value-in-use calculation:
2022 2023
Revenue growth rate 6%–34.6% 1%–5.1%
Pre-tax discount rate 16.9% 16.9%
Terminal growth rate 1.8% 1.8%
If the following key parameters (i.e. revenue grow th rate and pre-tax discount rate) change, with all
other variables held constant, the headroom between the estimated recoverabl e amount and the carrying
amount of the relevant goodwill would decrease as follows:
2022 2023
S$’000 S$’000
Revenue growth rate decreased by 4% (2022 : 5%) 9,716 18,795
Pre-tax discount rate increased by 3% (2022 : 3%) 22,454 22,575
Based on the assessment performed, the headr ooms available for the CGU were approximately
S$28,950,000 and S$30,867,000 as at 31 December 2022 and 2023.
The directors and management have considered and a ssessed reasonably possible changes for other
key assumptions and have not identified any instances that could cause the carrying amount of the CGU
to exceed its recoverable amount.
There was no provision for impairment of goodw ill for the years ended 31 December 2022 and 2023.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 456 ---
16 Intangible assets
Group Know-how
Customer
contracts
Customer
relationship Licence Total
S$’000 S$’000 S$’000 S$’000 S$’000
Cost
At 1 January 2022 1,900 776 2,881 2,880 8,437
Additions — — — — —
At 31 December 2022 1,900 776 2,881 2,880 8,437
Disposal of a subsidiary
(note a, b) (Note 38) (1,900) — — (2,880) (4,780)
At 31 December 2023 — 776 2,881 — 3,657
Accumulated amortisation
At 1 January 2022 (68) (129) (24) (24) (245)
Amortisation for the year (272) (647) (288) (288) (1,495)
At 31 December 2022 and
1 January 2023 (340) (776) (312) (312) (1,740)
Amortisation for the year (101) — (288) (108) (497)
Disposal of a subsidiary
(Note 38) 441 — — 420 861
At 31 December 2023 — (776) (600) — (1,376)
Carrying amounts
As at 31 December 2022 1,560 — 2,569 2,568 6,697
As at 31 December 2023 — — 2,281 — 2,281
Note (a)
On 8 September 2021 and 1 November 2021, Mr. Thng transferred know-how to the Group in exchange
for certain shareholding in Metasurface Technologie s and Metaoptics Technologies, details of which are
set out in Note 1.2(ii) to (iii) above.
The valuation of the know-how acquired by the Gr oup was undertaken by an independent qualified
professional valuer. The fair values of the know- how amounting to S$1,900,000 were derived using the
income approach, relief from royalty method and s ubject to a number of assumptions including as royalty
rates, useful lives of the know-how, discount rates and rates of obsolescence.
Note (b)
The Group entered into a licence agreement with Accel erate (the ‘‘Licence Agreement’’) on 10 December
2021, pursuant to which Accelerate grants the Group the rights to, among others, use Accelerate’s
technologies and intellectual property rights to devel op enhancements and to commercialise Accelerate’s
technologies and licenced products fo r a consideration of S$2,880,000.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 457 ---
17 Other assets
Group and Company
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Keyman insurance:
At 1 January 345 359
Unrealised gains recognised in profit or loss (Note 6) 14 —*
At 31 December 359 359
* Less than S$1,000.
Keyman insurance asset (life insur ance settlement contract) is initially recognised at the amount of the
premium paid and subsequently ca rried at cash surrender value at th e end of each reporting period, with
changes recognised in profit or loss.
Changes in the cash surrender value are recognised in ‘‘other gains/(losses), net’’.
18 Investment in an associate
The investment in Metaoptics Technologies is initial ly recognised at its fair value on 16 May 2023 upon its
loss of control.
Following the Group’s disposal of Metaoptics T echnologies on 16 May 2023 (Note 38), Metaoptics
Technologies has entered into share subscription agreem ents in December 2023 and allotted additional ordinary
shares to Autec, Aquaspring and Haur-Jye Technolog y Co., Ltd. Upon completion of the share issuance,
Metasurface Technologies’ shareholding was diluted and decreased from 20.2% to 18.78%. As at 31 December
2023, the Group held 18.78% in Metaoptics Technologies.
Group
2022 2023
S$’000 S$’000
Equity investment at cost
At 1 January ——
Fair value of the retained interest a rising from the partial disposal
of a subsidiary (Note 38) — 1,358
Share of loss
— Share of results of an associate — (366)
— Gain on dilution of shareholding in an associate (Note 6) —2 3
At 31 December — 1,015
APPENDIX I ACCOUNTANT’S REPORT
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The summarised financial information of the associat e, not adjusted for the propor tion ownership interest
held by the Group, was as follows:
Summarised statement of financial position
As at
31 December
2023
S$’000
Current assets 358
Non-current assets 9,081
Current liabilities (3,168)
Non-current liabilities (865)
Net assets 5,406
Group’s share in % 18.78%
Group’s share in net assets (in S$’000) 1,015
Carrying amounts as at 31 December 2023 (in S$’000) 1,015
Summarised statement of profit or loss (in S$’000)
Administrative expenses (in S$’000) 1,947
Group’s share in % 18.78%
Share of loss for the year (in S$’000) (366)
19 Deferred income taxes
Deferred income tax assets and liabilities are offse t when there is a legally enforceable right to offset
current income tax assets against current income tax lia bilities and when the deferred income taxes relate to the
same taxation authority.
The balances shown in the consolidated statement of fin ancial position, after appr opriate offsetting, are as
follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Deferred tax assets 325 644
Deferred tax liabilities (57) (57)
APPENDIX I ACCOUNTANT’S REPORT
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The movement in the net deferred income tax account is as follows:
2022 2023
S$’000 S$’000
At 1 January 853 268
(Charged)/credited to profit or loss (Note 10) (585) 319
At 31 December 268 587
The movement in deferred income tax assets and liabili ties prior to offsetting of balances within the same
tax jurisdiction is as follows:
Deferred income tax assets
Tax losses
Lease
liabilities
Unabsorbed
capital
allowance Total
S$’000 S$’000 S$’000 S$’000
At 1 January 2022 226 4,514 1,234 5,974
Charged to profit or loss (6) (140) (757) (903)
At 31 December 2022 and 1 January 2023 220 4,374 477 5,071
(Charged)/credited to profit or loss (45) (166) 113 (98)
At 31 December 2023 175 4,208 590 4,973
Deferred income tax liabilities
Property,
plant and
equipment
Right-of-use
assets
Intangible
assets Total
S$’000 S$’000 S$’000 S$’000
At 1 January 2022 866 3,561 694 5,121
Charged/(credited) to profit or loss 46 (224) (140) (318)
At 31 December 2022 and
1 January 2023 912 3,337 554 4,803
Charged/(credited) to profit or loss (362) 110 (165) (417)
At 31 December 2023 550 3,447 389 4,386
The deferred income tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the tem porary differences can be utilised. The Group did not recognise capital
allowances of S$0.93 million and Nil as of 31 Decembe r 2022 and 2023 respectively. In addition, there are
unutilised tax losses with no expiry d ate of S$0.60 million which has not been recognised as deferred tax assets
as of 31 December 2022 from Metaoptics Technologies for which no foreseeable future taxable income to be
utilised for the subsidiary.
APPENDIX I ACCOUNTANT’S REPORT
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20 Inventories
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Raw materials 2,582 1,984
Work in progress 3,876 3,629
Finished goods 1,351 1,220
Product consumables 64 222
7,873 7,055
Less: Provision for inventory obsolescence — (414)
7,873 6,641
The cost of inventories recognised as an expense and included in ‘‘cost of sales’’ amounted to S$18,932,000
and S$14,901,000 for the years ended 31 December 2022 and 2023 respectively.
The Group has provided inventory provision of S$414,000 for the year ended 31 December 2023. These
were recognised as an expense and included in ‘‘cost of s ales’’ in the consolidated statement of comprehensive
income.
There is no inventory write-down or reversal reco gnised for the year ended 31 December 2023. The Group
has written-off finished goods with cost of S$130,000 for the year ended 31 December 2022.
21 Trade and other receivables
Group Company
As at
31 December
As at
31 December
As at
31 December
As at
31 December
2022 2023 2022 2023
S$’000 S$’000 S$’000 S$’000
Non-current
Non-trade
Amount due from an associate — 2,880 — —
Current
Trade
Trade receivables from third
parties 7,952 6,614 — —
Non-trade
Amounts due from shareholders —* —* —* —*
GST receivables 193 36 — —
193 36 —* —*
Deposits 1,200 1,092 — —
9,345 7,742 —* —*
* Less than S$1,000.
APPENDIX I ACCOUNTANT’S REPORT
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a) Trade receivables from c ontracts with customers
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due fo r settlement within 30 to 60 days after the invoice
date and therefore are all classified as current.
As at 31 December 2022 and 31 December 2023, the ageing analysis of the trade receivables based on
invoice date were as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
0 to 30 days 3,370 4,642
31 to 60 days 2,728 1,597
61 to 90 days 1,606 196
Over 90 days 248 179
7,952 6,614
The Group’s trade receivables are denominated in S$.
b) Amounts due from shareholders and an associate is non- trade in nature, interest-free and repayable
on demand.
c) The Group’s exposure to credit risk is dis closed in Note 34(a) ‘‘Credit risk’’.
22 Prepayments
Group Company
As at
31 December
2022
As at
31 December
2023
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000 S$’000 S$’000
Non-current — 203 — —
Current 1,091 1,907 — 1,812
1,091 2,110 — 1,812
Included in prepayments were primarily prepaid listing expenses amount ing to S$1,024,000 and
S$1,812,000 as at 31 December 2022 and 2023 respectively.
APPENDIX I ACCOUNTANT’S REPORT
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23 Cash and bank balances
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Cash at bank 4,391 9,224
Cash on hand 11
4,392 9,225
The currency exposure profile of cash and cash equivalents is disclosed in Note 34.
For the purpose of presenting the consolidated st atements of cash flows, cash and cash equivalents
comprise the following at the end of the financial year:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Cash and bank balances as per above 4,392 9,225
Less: Bank overdrafts (Note 25) (188) —
Balance per statement of cash flows 4,204 9,225
24 Share capital and reserves
(a) Share capital
Share capital as at 31 December 2022 and 31 December 2023 represent the paid-up share capital of
the Company, which was the holding company of t he Listing Business after completion of the
Reorganisation as defined in Note 1.2.
APPENDIX I ACCOUNTANT’S REPORT
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Following the reorganisation, the issued and pai d-up share capital at par value of HK$0.001 was
S$953 comprising 5,596,511 shares.
No. of ordinary shares
Authorised
share capital
Issued share
capital
Authorised
share capital
Issued share
capital
S$’000 S$’000
2022
At 1 January 2022 and
31 December 2022,
ordinary shares at par value,
HK$0.001 380,000,000 1 67 —*
2023
At 1 January 2023, ordinary shares
at par value, HK$0.001 380,000,000 1 67 —*
Share reorganisation
(Note 1.2(xx)) — 5,596,510 — 1
At 31 December 2023,
ordinary shares at par value,
HK$0.001 380,000,000 5,596,511 67 1
* Less than S$1,000.
(b) Capital Reserves
Capital reserve represents:
i) the combined share capital of the subsidiari es now comprising the Group after elimination of
inter-company investments (Note 1.2).
ii) the contributions from the owners and the non-controlling interests to the share-based
payments for the employees and shareholders upon the issuance or transfer of shares of the
subsidiaries of the Group.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 0–


--- page 464 ---
25 Borrowings
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Current (Note (a))
Bank overdrafts
— secured and guaranteed 82 —
— unsecured and guaranteed 106 —
188 —
Bank loans (Note (a) & (b))
— secured and guaranteed 5,118 2,064
— unsecured and guaranteed 236 1,954
5,354 4,018
5,542 4,018
Non-current
Bank loan, secured and guaranteed (Note (a)) — 219
— 219
5,542 4,237
(a) Securities granted
(i) Bank borrowing of S$336,000 and S$285,000 as at 31 December 2022 and 2023 respectively
was secured by a mortgage of the investment p roperty of the Group as disclosed in Note 14
above and the personal guarantees of Dato’ Sri Chua and Mrs. Chua. The loan was repayable
over 18 years commencing from August 2010. The effective interest rate was 3.41% and 3.44%
as at 31 December 2022 and 2023 respectively.
(ii) Bank borrowing of approximately MYR 6,502, 000 (equivalent to approximately S$1,981,000)
and approximately MYR 6,194,000 (equivalent to approximately S$1,779,000) and as at 31
December 2022 and 2023 respectively was repayable monthly over a period of 12 years
commencing from August 2016. It was secured by a ) corporate guarantee of a subsidiary of the
Group; b) legal charge over the properties of the Group as disclosed in Note 12 above and c)
personal guarantee of Dato’ Sri Chua. The effe ctive interest rate was 4.44% as at 31 December
2022 and 2023 respectively.
(iii) Bank borrowing of S$22,000 and S$ Nil as at 31 December 2022 and 2023 respectively was
secured by the personal guarantees of Dato’ Sri Chua and Mrs. Chua. The loan was repayable
over 5 years commencing from May 2018. The e ffective interest rate was 4.88% per annum as
at 31 December 2022.
(iv) Bank borrowing of S$189,000 and S$111,000 as at 31 December 2022 and 2023 was secured by
the personal guarantees of Dato’ Sri Chua and Mrs. Chua. The loan was repayable over 5
years commencing from April 2020. The effective interest rate was 7% per annum as at 31
December 2022 and 2023.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 1–


--- page 465 ---
(v) Bank borrowing of S$28,000 and S$ Nil as at 31 December 2022 and 2023 respectively was
secured by a property owned by Dato’ Sri Chua and Mrs. Chua and their personal guarantees.
The effective interest rate was 6.25% per annum as at 31 December 2022.
(vi) Bank borrowing of S$25,000 and S$ Nil as at 31 December 2022 and 2023 respectively was
secured by the personal guarantees of Dato’ Sri Chua and Mrs. Chua. The effective interest
rate is 2.88% per annum as at 31 December 2022.
(vii) Bank borrowing of S$2,489,000 and S$1,489,000 as at 31 December 2022 and 2023 respectively
was repayable monthly over a period of 5 years commencing from June 2020. It was secured by
a property owned by Dato’ Sri Chua and Mrs . Chua and their personal guarantees. The
effective interest rate was 2.75% per annum as at 31 December 2022 and 2023.
(viii) Bank borrowing of S$284,000 and S$284,000 as at 31 December 2022 and 2023 respectively
was secured by a legal assignment of all company’s rights, title, interest and benefits under and
arising out of the Keyman Insurance Policy (N ote 17) including all proceeds receivable under
the policy and all proceeds of any repayment or refund of premiums by the insurer. The
effective interest rate was 5.75% per annum as at 31 December 2022 and 2023.
(ix) Bank overdraft of S$106,000 and S$ Nil as at 31 December 2022 and 2023 respectively was
secured by the personal guarantees of Dato’ Sri Chua and Mrs. Chua. The effective interest
rate was 5.5% per annum as at 31 December 2022.
(x) Bank overdraft of S$82,000 and S$ Nil as at 31 December 2022 and 2023 respectively was
secured by a mortgage of the investment property of the Group as disclosed in Note 14 and the
personal guarantees of Dato’ Sri Chua and Mrs . Chua. The effective interest rate was 5.5%
per annum as at 31 December 2022.
(xi) Bank borrowing of S$289,000 as at 31 December 2023 was secured by the personal guarantee
of Dato’ Sri Chua Chwee Lee and Mrs. Chua . The loan was repayable over 4 years
commencing from November 2023. The effective interest rate was 5.5% per annum as at 31
December 2023.
(b) Financial covenants
In accordance with the loan agreements relating to a total loan balance of S$4,059,000 and
S$2,351,000, as at 31 December 2022 and 2023 the lenders reserved their right to demand repayment at
their discretion at any time (the ‘‘on-demand clause s’’) although the agreed repayment schedules are more
than one year. As a result of these on-demand clauses, the Group does not have an unconditional right to
defer settlement of these liabilities for more than tw elve months. Accordingly, these borrowings have been
classified as current liabilities as at 31 December 2022 and 2023.
Furthermore, included in the amounts of bank bo rrowings with on-demand clauses mentioned
above, there is a bank borrowing which includes cov enant clauses that require a subsidiary of the Group
to maintain a minimum tangible net worth of S$6 million. During the financial year ended 31 December
2023, the subsidiary of the Group has obtained a writ ten letter from the bank in respect of the removal of
the tangible net worth covenant upon the Listing an d repayment of S$0.5 million as agreed with the bank.
(c) Note 34(b) set out disclosures of liquidity risk.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 2–


--- page 466 ---
26 Lease liabilities
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Current
Leasehold property 946 982
Leased machineries 1,612 1,531
Leased motor vehicles 124 139
2,682 2,652
Non-current
Leasehold property 24,719 23,737
Leased machineries 2,830 2,015
Leased motor vehicles 170 462
27,719 26,214
30,401 28,866
The Group as a lessee
The Group has lease contracts for leasehold prope rty, machineries and motor vehicles. The lease
terms of these leased assets are disclosed in Note 13.
The Group also has certain leases of office equi pment with low value. The Group applies the ‘lease
of low-value assets’ recognition exemptions for these leases.
(i) Amounts recognised in the profit or loss
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Depreciation expenses:
— Right-of-use assets (Note 13) 1,901 2,086
— Investment property (Note 14) 41 41
Interest expense on lease liabilities (Note 8) 1,097 1,080
Expense relating to short-term and low-value leases 9 8
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 3–


--- page 467 ---
(ii) Total cash outflows
The Group had total cash outflows for leases including short-term and low-value leases
amounting to S$3,537,000 and S$3,882,000 for the years ended 31 December 2022 and 2023
respectively.
The future minimum rentals payable under non-can cellable operating leases as at the end of each
financial year are as follows:
2022 2023
S$’000 S$’000
Not later than one year 3,739 1,893
Two to five years 10,972 8,020
More than five years 24,313 22,248
The Group as a lessor
The Group leases certain portion of the ware house premise amounting to third party under
operating lease arrangements. These non-cancellable leases have remaining lease terms of 2.2 years.
The future minimum rentals receivable under non-ca ncellable operating leases as at the end of each
financial year are as follows:
2022 2023
S$’000 S$’000
Not later than one year 1,299 1,404
Two to five years 1,477 217
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 4–


--- page 468 ---
27 Trade and other payables
Group Company
As at
31 December
2022
As at
31 December
2023
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000 S$’000 S$’000
Current
Trade
Trade payables to third parties 5,919 2,357 — —
5,919 2,357 — —
Non-trade
Other payables to a subsidiary — — 15 3,463
Other payables to third party — 350 — —
Amount due to a shareholder
(Note 1.2 (xvi), Note (a)) —1 , 0 2 9 — —
Amount due to a director 225 228 — —
Accrued expenses 2,925 3,592 — 2,244
GST payables — 1 — —
Deposits received 20 7 — —
3,170 5,207 15 5,707
9,089 7,564 15 5,707
Non-current
Non-trade
Deposits received 458 489 — —
9,547 8,053 15 5,707
Note (a): The amount due to a shareholder relates to a non-Listing put option granted to the
shareholder. Upon Listing, the non-Listing put option to require the Company to purchase
all of its shares expires without delivery and sha ll remain unexercisable perpetually. It shall
not be reinstated pursuant to the shareholde rs’ agreement and the carrying amount of the
non-Listing put option will b e reclassified to equity.
Trade payables to third parties and related parties are non-interest bearing and are generally on 30 to 60
days’ terms based on invoice date.
The amounts due to third parties are unsecured, non-interest bearing and repayable on demand.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 5–


--- page 469 ---
The ageing analysis of trade payables of the G roup based on invoice date were as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
0–30 days 1,429 1,703
31–60 days 1,607 244
61–90 days 1,108 143
Over 90 days 1,775 267
5,919 2,357
28 Provisions
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Provision for reinstatement cost 260 269
The provision for reinstatement cost is based on the present value of costs to be incurred to remove the
renovations from the leasehold property. The estimat e is based on quotations from external contractors.
29 Related parties
For the purposes of this report, parties are consid ered to be related to the Group if the Group or the
Company has the ability, directly or indirectly, to contro l the party or exercise significant influence over the
party in making financial and operating decisions, o r vice versa, or where the Group or the Company and the
party are subject to common cont rol. Related parties may be individuals or other entities.
The Group has related party relationship with the re lated corporations with co mmon shareholders, its
directors and key management personnel.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 6–


--- page 470 ---
(a) The relationships of related parties are identified below:
Names of related parties Country of
incorporation/residence
Relationship with the Group
Meson Technology Pte. Ltd. Singapore Common director and common
shareholder until January 2022
Dato’ Sri Chua Chwee Lee Singapore Executive director of the
Company, chairman of the
Board, chief executive officer,
and controlling shareholder of
the Company
Ms. Jee Wee Jene Singapore Executive director of the Company
and controlling shareholder of
the Company
Mr. Thng Chong Kim Singapore Executive director of the Company
(Note)
Ms. Pang Chen May Malaysia A shareholder of the Company and
director of a subsidiary of the
Company
Metaoptics Technologies Pte. Ltd. Singapore An associate since 16 May 2023
Note: The related party transactions with Mr. Thng Chong Kim includes the share-based
payments (Notes 9.1 and 31), director’s emolument (Note 9.2) and share transfers to Mr.
Thng during the years ended 31 December 2022 and 2023 (Note 1.2).
Key management personnels are defined as those per sons having authority and responsibility for
planning, directing and controllin g the activities of the Group either directly or indirectly. The key
management personnels include all directors of the Company.
(b) Details of the related party transactions (o ther than key management personnel remuneration
disclosed in Note 9.2 above) with the Group and the Company are as follows:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
i) Continuing operations
Purchase of goods and services
Meson Technology Pte. Ltd. 21 —
ii) Discontinued operation
Shared administrative fee
Metaoptics Technologies Pte. Ltd. — 3
The related party transactions were charged in accordance with the terms of the respective
agreements. Outstanding balances are disclosed accordingly in Notes 21 and 27.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 7–


--- page 471 ---
(c) Key management compensation
Key management includes the directors of the Gr oup. The compensation paid or payable to key
management for employee services is disclosed in Note 9.
(d) Amount due from an associate
As at 31 December 2023, the amount due from an associate was S$2,880,000. It is non-trade in
nature, interest-free and repayable on demand. Management does not expect the receivable to be
due for settlement prior to the Listing.
30 Capital commitments
There were no capital expenditures contracted for but not recognised as at 31 December 2022 and 2023.
31 Share-based payments
Set out below are the summaries of share-based paymen ts arising from shares granted and anti-dilution
rights during the Track Record Period:
Year ended 31 December 2022
Contribution from shareholders:
Entity Transaction type Grant date
Share
issuance date
Number of
shares
Vesting
period
Transaction
Price
Fair value
per share/
anti-dilution
rights per
share at
grant date
Share-based
payments Note
S$ S$ S$’000
Employees:
Metaoptics
Technologies
Grant and exercise
of anti-dilution
rights
11 March 2022 11 March 2022 6,373 Fully vested 1.00 12.43 79 1.2(x)(d)
Exercise of
anti-dilution rights
12 April 2022 3,219 40 1.2(xi)(c)
Exercise of
anti-dilution rights
25 August 2022 7,896 98 1.2(xii)(b)
Metasurface
Technologies
Exercise of
anti-dilution rights
13 December
2021
27 September
2022
27,980 Fully vested 1.00 14.74 413 1.2(xiii)(b)
14 October 2022 27,246 402 1.2(xiv)(c)
1,032
Shareholders:
Metaoptics
Technologies
Grant of shares 11 March 2022 11 March 2022 31,865 Fully vested 6.28 12.43 196 1.2(x)(a)
1,228
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 8–


--- page 472 ---
Year ended 31 December 2023
Contribution from shareholders:
Entity Transaction type Grant date
Share issuance/
transfer date
Number of
shares Vesting period
Transaction
Price
Fair value
per share/
anti-dilution
rights per
share at
grant date
Share-based
payments Note
S$ S$ S$’000
Employees:
Metaoptics
Technologies
Transfer of shares 2 January 2023 2 January 2023 7,549 Fully vested 1.00 14.04 106 1.2(xv)
Metasurface
Technologies
Exercise of
anti-dilution rights
13 December
2021
30 January 2023 14,728 Fully vested 1.00 14.74 217 1.2(xvi)(c)
Metaoptics
Technologies
Transfer of shares 16 May 2023 16 May 2023 125,767 Fully vested 180,000 17.80 2,059 1.2(xxi)
2,382
Shareholders:
Metasurface
Technologies
Grant of shares 30 January 2023 30 January 2023 139,913 Fully vested 1,000,000 12.84 797 1.2(xvi)(a)
Metasurface
Technologies
Exercise of
anti-dilution rights
14 October 2022 30 January 2023 7,364 Fully vested 1.00 10.57 78 1.2(xvi)(c)
875
3,257
The valuation of the share-based payment transac tions during the Track Record Period was undertaken
by an independent qualified professional valuer. The val uer has appropriate profes sional qualifications and
recent experience in the valuation of similar business ent erprise. The fair values of the shares granted are derived
using the market approach in relation to Metasurface T echnologies’ share-based payment transactions and the
asset-based valuation approach in re lation to Metaoptics Technologies’ sh are-based payment transactions.
These valuation approaches are subject to a number of a ssumptions and with regar d to the limitation of the
models.
In the market approach, the fair value of the sha re-based payment transactions is based on the
multiplication of the normalised ear nings before interest, tax, depreciat ion and amortisation (‘‘adjusted
EBITDA’’) and appropriate market multiple, which is d erived from an analysis of the trading multiples of
certain comparable companies. These trading multiples were computed based on the enterprise values (i.e.
market capitalisation implied from traded stock pr ice plus debt) of the comparable companies as at the
valuation date divided by their EBITDA. The market appr oach result is then adjusted for a discount for lack of
marketability to arrive at the fair value.
In the asset-based valuation approach, the fair value of the share-based payment transactions is based on
the net asset value of the Metaoptics Technologies at the grant date. Under this method, all operating assets and
liabilities (including off-balance sheet, intangible and contingent) are adjusted to reflect the application
standard or type of value. After all of the operating asse ts and liabilities of a busin ess are defined and valued,
the difference between the value of the total assets and tot al liabilities provides an estimate of the value for the
equity of the business.
APPENDIX I ACCOUNTANT’S REPORT
–I - 6 9–


--- page 473 ---
32 Notes to the consolidated statements of cash flows
(a) Reconciliation of profit before tax to net cash generated from operations
Year ended
31 December
2022
Year ended
31 December
2023
Note S$’000 S$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Continuing operations 5,295 3,345
Discontinued operation (1,095) 2,143
4,200 5,488
Adjustments for:
Depreciation of property, plant and equipment 12 1,144 1,291
Depreciation of right-of-use assets 13 1,901 2,086
Depreciation of investment property 14 41 41
Amortisation of intangible assets 16 1,495 497
Share-based payments for the employees and
shareholders 31 1,228 3,257
Gain on disposal of property, plant and equipment (55) (40)
Gain on disposal of controlling interest 6 — (1,574)
Gain on retained investment 6 — (955)
Inventories written-off 7 130 —
Inventories provision 7 — 414
Finance costs 8 1,579 1,343
Unrealised currency translation (gain)/loss 130 (22)
Gain on dilution of shareholding in an associate 6 — (23)
Share of loss of an associate — 366
Operating cash flows before working capital changes
(note) 11,793 12,169
Changes in working capital:
(Increase)/decrease in inventories (4,346) 818
Increase in trade and other receivables (2,285) (1,601)
Increase in prepayments (33) (261)
Increase in other assets (14) —
Increase in trade and other payables 4,221 353
Net cash generated from operations 9,336 11,478
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 0–


--- page 474 ---
Note:
Operating cash flows before working capital changes includes:
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Continuing operations 11,908 12,240
Discontinued operation (115) (71)
11,793 12,169
(b) Reconciliation of liabilities arising from financing activities
This section sets out an analysis of liabilities arisi ng from financing activities and the movements for
each of the years presented.
Amount due
t oad i r e c t o r
Lease
liabilities Borrowings Total
S$’000 S$’000 S$’000 S$’000
As at 1 January 2022 106 31,379 12,514 43,999
Financing cash flows:
— Repayment of advances
from a director (465) — — (465)
— Interest paid — — (511) (511)
— Repayment of borrowings — — (2,287) (2,287)
— Capital element of lease
liabilities paid — (2,440) — (2,440)
— Interest element of lease
liabilities paid — (1,097) — (1,097)
— Proceeds of borrowings — — 300 300
Other changes:
— Increase in liabilities from
entering into new leases — 1,462 — 1,462
— Interests expense — 1,097 511 1,608
— Translation difference and
reclassification — — (116) (116)
—L o a np a i do nb e h a l fb ya
director 4,869 — (4,869) —
— Capitalisation of loan via
allotment and issue of
shares (Note 1.2 (xiii)) (4,285) — — (4,285)
As at 31 December 2022 225 30,401 5,542 36,168
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 1–


--- page 475 ---
This section sets out an analysis of liabilities arising from financing activities and the movements for each
of the years presented.
Amount due
t oad i r e c t o r
Lease
liabilities Borrowings Total
S$’000 S$’000 S$’000 S$’000
As at 1 January 2023 225 30,401 5,542 36,168
Financing cash flows:
— Advances from a director 228 — — 228
— Repayment of advances to a
director (225) — — (225)
— Interest paid — — (207) (207)
— Repayment of borrowings — — (1,505) (1,505)
— Capital element of lease
liabilities paid — (2,803) — (2,803)
— Interest element of lease
liabilities paid — (1,080) — (1,080)
— Proceeds of borrowings — — 300 300
Other changes:
— Increase in liabilities from
entering into new leases — 1,310 — 1,310
— Interests expense — 1,080 207 1,287
— Translation difference — (42) (100) (142)
As at 31 December 2023 228 28,866 4,237 33,331
33 Fair value of assets and liabilities
(a) Assets and liabilities not carried at fair value but which fair values are disclosed:
Carrying
amount
Fair value
measurement
Level 2
S$’000 S$’000
Group
As at 31 December 2022
Investment property 616 920
As at 31 December 2023
Investment property 575 900
The above does not include financial assets and financial liabilities whose carrying amounts
measured on the amortised cost ba sis approximate their fair value due to their short-term nature and
where the effect if discounting is immaterial or that th ey are floating rate instruments that are-priced to
market interest rates on or near the end of the reporting period.
Fair value measurement of the investme nt property is disclosed in Note 14.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 2–


--- page 476 ---
(b) Assets and liabilities not measured at fair value
Cash and cash equivalents, other receivables, oth er payables including amounts due to directors and
related parties.
The carrying amounts of these balances approx imate their fair values due to the short-term
nature of these balances.
Trade receivables and trade payables
The carrying amounts of these receivables and payables approximate their fair values as they
are subject to normal trade credit terms.
Borrowings and lease liabilities
The carrying amounts of borrowings and lease lia bilities approximate their fair values as they
are subject to interest rates close to market rate of interests for similar arrangements with financial
institutions.
34 Financial risk management
Financial instruments by categories
The table below provides an analysis of financial instruments categorised as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Financial assets at amortised cost
Trade receivables 7,952 6,614
Other receivables (Note) 1,200 3,972
Cash and bank balances 4,392 9,225
13,544 19,811
(Note) Excluding prepayments and GST receivables
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Financial liabiliti es at amortised cost
Lease liabilities 30,401 28,866
Trade and other payables 9,547 8,053
Loans and borrowings 5,542 4,237
45,490 41,156
The Group’s activities expose it to a variety of fina ncial risks from its operation. The key financial
risks include credit risk, liquidity risk and market r isk (including foreign currency risk and interest rate
risk).
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 3–


--- page 477 ---
The Board of Directors reviews and agrees policies and procedures for the management of these
risks, which are executed by the management team. I t is and has been the Group’s policy throughout the
Track Record Period that no trading in derivativ es for speculative purposes shall be undertaken.
The following sections provide d etails regarding the Group’s ex posure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
There has been no change to the Group’s exposure to these financial risks or the manner in which
the Group manages and measures the risks.
(a) Credit risk
Credit risk is managed on a gr oup basis. The Group’s financial assets are trade and other
receivables and cash and bank balances.
The amount of those assets stated in the consol idated statements of financial position
represent the Group’s maximum exposure to cre dit risk in relation to financial assets.
The Group’s credit risk is concentrated on a num ber of long established customers. As at 31
December 2022 and 2023, trade receivables from the top three customers accounted for
approximately 29.4%, 11.6%, 10.0% and 15. 4%, 28.3%, 27.7% of the Group’s total trade
receivables, respectively.
The Company has policies in place to ensure that sales are made to customers with an
appropriate credit history and to limit the amount of credit limit to customers to minimise credit
risk resulting from counterparty default.
In estimating the expected credit loss, the Group applies the IFRS simplified approach to
measuring expected credit losses which uses a l ifetime expected loss allowance for all trade
receivables. Credit evaluation on individual custo mer is performed by management. The evaluation
focused on assessing credit risk characteristics o f each customer, as well as pertaining to the current
and future general economic environment in which the customer operates. Management estimates
the expected credit loss rate of each customer by performing quantitative assessment on the
customers’ credit rating, and apply default proba bility, the likelihood of r ecovery of the individual
customer and forward-looking information on mac roeconomic factors affecting the ability of the
customers to settle the receivables. Based on the management’s analysis, the loss allowance was
determined as immaterial and hence no provision was provided.
The credit risk on cash and bank balances are minimal as they are placed with reputable
financial institutions with high cre dit ratings and no history of default.
(b) Liquidity risk
Liquidity risk refers to the risk that the Grou p and Company will encounter difficulties in
meeting its short-term obligat ions due to shortage of funds. The Group and Company’s exposure to
liquidity risk arises prim arily from the maturities of financia l liabilities. The Group and Company’s
objective is to maintain a balance b etween continuity of funding and flexibility through the use of
stand-by credit facilities. The Group and Compa ny’s operations are financed mainly through equity
and borrowings. The directors are satisfied that f unds are available to finance the operations of the
Group and Company.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 4–


--- page 478 ---
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity prof ile of the Group’s financial liabilities at the
reporting date based on contractual undiscounted repayment obligations.
31 December 2022
Group
Carrying
amount
Contractual
cash flows
One year
or less
Two to
five years
More than
five years
S$’000 S$’000 S$’000 S$’000 S$’000
Financial liabilities
Borrowings 5,542 6,406 1,988 2,702 1,716
Lease liabilities 30,401 39,024 3,739 10,972 24,313
Trade and other
payables 9,547 9,599 9,089 510 —
Total undiscounted
financial liabilities 45,490 55,029 14,816 14,184 26,029
31 December 2023
Group
Carrying
amount
Contractual
cash flows
One year
or less
Two to five
years
More than
five years
S$’000 S$’000 S$’000 S$’000 S$’000
Financial liabilities
Borrowings 4,237 4,878 1,777 1,663 1,438
Lease liabilities 28,866 36,531 3,651 10,563 22,317
Trade and other
payables 8,053 8,075 7,565 510 —
Total undiscounted
financial liabilities 41,156 49,484 12,993 12,736 23,755
31 December 2022
Company
Carrying
amount
Contractual
cash flows
One year
or less
Two to five
years
More than
five years
S$’000 S$’000 S$’000 S$’000 S$’000
Financial liabilities
Trade and other
payables 15 15 15 — —
Total undiscounted
financial liabilities 15 15 15 — —
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 5–


--- page 479 ---
31 December 2023
Company
Carrying
amount
Contractual
cash flows
One year
or less
Two to five
years
More than
five years
S$’000 S$’000 S$’000 S$’000 S$’000
Financial liabilities
Trade and other
payables 5,707 5,707 5,707 — —
Total undiscounted
financial liabilities 5,707 5,707 5,707 — —
(c) Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign
exchange rates will affect the Group’s income. The objective of market risk management is to
manage and control market risk exposures within a cceptable parameters, while optimising the return
on risk.
(i) Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest
earning assets and interest-bearing financial liabilities.
Interests earning financial assets are mai nly bank balances which are short-term in
nature. Therefore, any future variations in interest rates will not have a material impact on the
results of the Group.
Interests bearing financial liabilities are m ainly borrowings. The interest rates and terms
of repayment of term loans of the Group are disclosed in the notes to the financial statements.
Exposure to interest rate risk
At the reporting date, the interest rate profile of the Group’s interest-bearing
financial instruments, as reporte d to the management, was as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Variable rate instruments
Financial liabilities
Borrowings 2,789 2,348
The sensitivity analysis below has been determined based on the exposure to
interest rates for interest-bearing financia l instruments at the end of the reporting date.
A 1% increase or decrease is used for the possible change in interest rates.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 6–


--- page 480 ---
If the interest rates have been 1% higher and all other variables were held
constant, the Group’s profit or l oss would decrease as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Effect on profit or loss (23) (19)
If the interest rates have been 1% lower and all other variables were held constant,
the above will have a vice-versa effect.
(ii) Foreign currency risk
Foreign currency risk arise when transacti ons are denominated in foreign currencies
other than functional currency such as the Un ited States dollars (US$). The Group has
exposure to foreign currency risk arising from s ales or purchases that are denominated in US$.
The Group does not have any significant exposure to foreign currency risk other than
the following bank balances and trade and other receivables held by the Group which are
denominated in US$ at the reporting date as follows:
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Financial assets
Cash and bank balances 3,386 8,577
Trade and other receivables 6,778 5,516
10,164 14,093
A 5% strengthening of Singap ore dollar against the US$ denominated balances as at the
reporting date would change the result of the Group by the amounts shown below. This
analysis assumes that all other variables remain constant.
Increase/(decrease)
in profit before tax
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
US$ (422) (319)
A 5% weakening of Singapore dollar aga inst US$ would have had equal but opposite
effect on the above currencies to the amount s shown above, on the basis that all other
variables remain constant.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 7–


--- page 481 ---
35 Capital management
The primary objective of the Group’s capital manageme nt is to ensure that it maintains a strong credit
rating and net current asset position in order to supp ort its business and maximise shareholder value. The
capital structure of the Group comprises iss ued share capital and retained earnings.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust t he capital structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issu e new shares. No changes were made to the objectives,
policies or processes during the financial years ended 31 December 2022 and 2023. The Group monitors capital
on the basis of the gearing ratio. Th is ratio is calculated as net debt divided by total capital. Net debt is
calculated as total liabilities (excl uding provision, deferred tax liabilities and income tax payable) less cash and
bank balances. Total capital is calculated as total equi ty, as shown in the statement o f financial position, plus
net debts.
Group Company
As at
31 December
2022
As at
31 December
2023
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000 S$’000 S$’000
Net debt:
Borrowings 5,542 4,237 — —
Lease liabilities 30,401 28,866 — —
Trade and other payables 9,547 8,053 15 5,707
Contract liabilities 297 — — —
Total liabilities 45,787 41,156 15 5,707
Less cash and bank balances (4,392) (9,225) — —
Net debt 41,395 31,931 15 5,707
Total equity 22,309 26,997 (15) 15,474
Total capital 63,704 58,928 — 21,181
Net debt-to-total capital 0.65 0.54 N/A 0.27
36 Segment information
Management has determined the operating segments based on the report reviewed by senior management
that are used to make strategic decisions. Senior manag ement comprises Chief Executive Officer, the Chief
Financial Officer, and the department heads of each business within each segment and is the Group’s Chief
Operating Decision Maker (‘‘CODM’’).
The Group’s CODM considers the business from three segments:
(a) Precision machining is a machining process of r emoving materials from a workpiece with standard
for high accuracy to create parts and components wit h tight of tolerance. The Group sells parts that
undergo the precision machining process which include s turning, milling, gri nding and drilling, etc.
(b) Precision welding is a process which involves th e use of weldment equipment and specialised welding
technique on a workpiece in a very precise and c ontrolled fashion. The Group sells parts that
undergo the precision welding process which typi cally used for small parts, parts with tight
dimensional tolerance, or parts re quiring a barely visible line weld.
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 8–


--- page 482 ---
(c) Sale of laser diodes (Di scontinued operation).
The Group measures and tracks the profitability in terms of operati ng margin and adjusted earnings
before interest, tax, depreciation and am ortisation (‘‘Adjusted EBITDA’’).
The segment information for the reportable segments are as follows:
Continuing operations
Discontinued
operation
Precision
machining
Precision
welding
Sale of laser
diodes
Unallocated
items Total
S$’000 S$’000 S$’000 S$’000 S$’000
2022
Sales
Total segment sales 28,060 16,825 66 — 44,951
Inter-segment sales (5,147) (622) — — (5,769)
Sales to external parties 22,913 16,203 66 — 39,182
Adjusted EBITDA/LBITDA 4,868 6,036 (529) (15) 10,360
Depreciation of property, plant
and equipment (917) (220) (7) — (1,144)
Depreciation of right-of-use assets (1,874) (27) — — (1,901)
Depreciation of investment
property (41) — — — (41)
Amortisation of intangible assets — (935) (560) — (1,495)
Segment assets 44,973 18,584 5,165 — 68,722
Segment assets includes:
Additions to:
— right-of-use assets 1,925 — — — 1,925
— property, plant and equipment 320 114 235 — 669
Segment liabilities 40,887 2,546 2,599 15 46,047
APPENDIX I ACCOUNTANT’S REPORT
–I - 7 9–


--- page 483 ---
The segment information for the reportable segments are as follows:
Continuing operations
Discontinued
operation
Precision
machining
Precision
welding
Sale of laser
diodes
Unallocated
items Total
S$’000 S$’000 S$’000 S$’000 S$’000
2023
Sales
Total segment sales 19,077 23,446 — — 42,523
Inter-segment sales (3,532) (222) — — (3,754)
Sales to external parties 15,545 23,224 — — 38,769
Adjusted EBITDA/LBITDA 4,134 8,506 2,352 (4,246) 10,746
Depreciation of property, plant
and equipment (1,164) (127) — — (1,291)
Depreciation of right-of-use assets (2,040) (46) — — (2,086)
Depreciation of investment
property (41) — — — (41)
Amortisation of intangible assets — (288) (209) — (497)
Segment assets 43,044 22,986 — 1,812 67,842
Segment assets includes:
Additions to:
— right-of-use assets 1,032 378 — — 1,410
— property, plant and equipment 62 42 70 — 174
Segment liabilities 37,232 1,935 — 2,258 41,425
(a) Reconciliations
(i) Segment profits
A reconciliation of adjusted LBITDA/EBITDA t o profit/(loss) before tax is as follows:
2022 2023
S$’000 S$’000
Adjusted EBITDA for reportable segments 10,904 12,640
Adjusted LBITDA for discontinued operation (529) 2,352
Adjusted LBITDA for unallocated items (15) (4,246)
Total adjusted EBITDA 10,360 10,746
Depreciation of properties, plant and equipment (1,144) (1,291)
Depreciation of right-of-use assets (1,901) (2,086)
Depreciation of investment property (41) (41)
Amortisation of intangible assets (1,495) (497)
Finance costs — net (1,579) (1,343)
Profit before tax 4,200 5,488
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 0–


--- page 484 ---
(ii) Segment assets
The amounts reported to the Group’s CODM wit h respect to total assets are measured in a
manner consistent with that of the financial stat ements. All assets are allocated to reportable
segments other than income tax assets and other assets.
Segment assets are reconciled to total assets as follows:
2022 2023
S$’000 S$’000
Segment assets for reportable segments 68,722 66,024
Unallocated items — 1,818
Total segment assets 68,722 67,842
Unallocated:
Investment in an associate — 1,015
Deferred income tax assets 325 644
Other assets 359 359
Total assets 69,406 69,860
(iii) Segment liabilities
The amounts provided to the Group’s CODM with res pect to total liabilities are measured in a
manner consistent with that of the fin ancial statements. These liabilities are allocated based on the
operations of the segment. All liabilities are allo cated to the reportable segments other than income
tax liabilities and lease liabilities.
Segment liabilities are reconciled to total liabilities as follows:
2022 2023
S$’000 S$’000
Segment liabilities for re portable segments 46,032 39,167
Unallocated items 15 2,258
Total segment liabilities 46,047 41,425
Unallocated:
Current income tax liabilities 993 1,381
Deferred income tax liabilities 57 57
Total liabilities 47,097 42,863
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 1–


--- page 485 ---
(b) Geographical information
The Group is domiciled in Singapore. Majority of th e Group’s activities are carried out in Singapore
and majority of the Group’s assets and liabilities are located in Singapore. Revenue from external
customers is analysed by geographica l location of relevant customers.
The non-current assets, excluding deferred incom e tax assets and other assets are analysed by the
geographical area in which the non-current assets are located.
Revenue by geography
Year ended
31 December
2022
Year ended
31 December
2023
S$’000 S$’000
Singapore* 20,741 14,807
Malaysia 12,627 16,072
United States of America 3,507 5,267
Others 2,307 2,623
39,182 38,769
* The revenue from the discontinued operation is located in Singapore.
Non-current assets by geography
As at
31 December
2022
As at
31 December
2023
S$’000 S$’000
Singapore 44,121 41,582
Malaysia 1,900 1,760
46,021 43,342
37 Subsidiary with material non-controlling interests
The Group includes one subsidiary, Metaoptics Tec hnologies Pte. Ltd. with material non-controlling
interests in 2022. Metaoptics Technologies has ceased to be a subsidiary and classified as an investment in
associate in 2023.
Name
Proportion of
ownership interests
held by
non-controlling
interests
Loss allocated to
non-controlling
interests
Accumulated
non-controlling
interests
2022 2023 2022 2023 2022 2023
Metaoptics Technologies Pte. Ltd. 44.5%* —
# 487 180 1,013 —
* Changes in ownership interests held by non-controll ing interests in Metaoptics Technologies following
the subscription of shares by investors and shar e transferred to employees of the subsidiary as
disclosed in Note 1.2.
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 2–


--- page 486 ---
# Metaoptics Technologies has ceased to be a subsidiary and classified as an investment in an associate
during the year ended 31 December 2023.
The changes in non-controlling interests during the year are as follows:
2022 2023
S$’000 S$’000
Balance as at 1 January 515 1,013
Non-controlling interests share of l oss for the financial year (487) (180)
Non-controlling interests share o f capital reserve arising from:
— Share-based payments expense* 184 49
Effect of changes in non-controlling interests
# 801 46
Derecognition of the carrying value of the non-controlling interest
upon disposal — (928)
Balance as at 31 December 1,013 —
* This represents the sharing of the contribution f rom shareholders arising from the share-based
payments expense upon issuance or transfer of sh ares of a subsidiary of the Group to shareholders
and employees as disclosed in Note 1.2(ii)(a), (b), (x)(a), (d), (xi)(a), (c), (xii)(b).
# This represents the effect of changes in ownershi p interests held by non-controlling interests in
Metaoptics Technologies from 44.5% to 46.5% for the year ended 31 December 2023 (2022 : 25.0%
to 44.5%).
Summarised financial information of a subsidia ry with material non-controlling interests
Set out below is the summarised financial information for a subsidiary that has non-controlling
interests that are material to the Group. These are presented before inter-company eliminations.
Summarised statement of financial position
Metaoptics
Technologies
As at
31 December
2022
S$’000
Current
Assets 806
Liabilities (2,889)
Total current net liabilities (2,083)
Non-current
Assets 4,359
Liabilities —
Total non-current net assets 4,359
Net assets 2,276
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 3–


--- page 487 ---
Summarised income statement
Metaoptics
Technologies
Year ended
31 December
2022
S$’000
Revenue 66
Loss before income tax (1,095)
Income tax expense —
Loss for the financial year (1,095)
Other comprehensive loss (1,095)
Total comprehensive loss (1,095)
Total comprehensive loss allocated t o non-controlling interests (487)
Summarised cash flows
Metaoptics
Technologies
Year ended
31 December
2022
S$’000
Net cash used in operating activities (177)
N e tc a s hu s e di ni n v e s t i n ga c t i v i t i e s (235)
Net cash generated from financing activities 850
38 Disposal of subsidiary and discontinued operation
Pursuant to a share purchase agreement dated 16 May 2023 entered into between Mr. Thng and
Metasurface Technologies, Metasurface Technologie s transferred 125,767 ordinary shares in Metaoptics
Technologies held by it, representing approximately 33.3% of the entire issued share capital of Metaoptics
Technologies, to Mr. Thng at a cash consideration of S $180,000. Upon completion of the share transfer,
Metaoptics Technologies ceased as a subsidiary of the Group.
Following the disposal of subsidiary with loss of control, the Group’s shareholding in Metaoptics
Technologies decreased from 53.5% to 20.2%. The Group cons iders that it still has significant influence over
Metaoptics Technologies and reclassifi ed it as an investment in an associate.
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operation , the operating
results of the Metaoptics Technologies before the comp letion date of share transfer have been presented as
discontinued operation in the Group’s c onsolidated statements of comprehensive income for the financial year
ended 31 December 2023. The comparative figures in the c onsolidated statement of comprehensive income for
the year ended 31 December 2022 were re-presented to refl ect the reclassification be tween continuing operations
and discontinued operation of the Group accordingly.
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 4–


--- page 488 ---
Financial information re lating to the discontinued operation fo r the period from the beginning of the
Track Record Period to the date of disposal is set out below.
(i) Financial results and cash flow information
The financial results and cash flow informatio n presented are for the financial year ended
31 December 2022 and the financial period from 1 January 2023 to 16 May 2023.
Year ended
31 December
2022
Period from
1 January
2023 to
16 May 2023
S$’000 S$’000
Revenue (Note 4) 66 —
Cost of sales (62) —
Gross profit 4 —
Other income 26 1
Administrative expense (1,125) (387)
Loss after tax (1,095) (386)
Gain on disposal of a subsidiary — 2,529
(Loss)/profit from discontinued operation (1,095) 2,143
(Loss)/profit and total com prehensive (loss)/income
attributable to:
Owners of the Company (608) 2,323
Non-controlling interests (487) (180)
(1,095) 2,143
Year ended
31 December
2022
Period from
1 January
2023 to
16 May 2023
S$’000 S$’000
Net operating cash outflows (177) (82)
Net investing cash outflows (235) (203)
Net financing cash inflows 850 —
Net cash inflows/(outfl ows) from discontinued
operation 438 (285)
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 5–


--- page 489 ---
(ii) Details of the discontinued operation
Net assets of Metaoptics Technologie s as at the date of deconsolidation:
S$’000
Plant and equipment 300
Intangible assets 3,919
Trade and other receivables 324
Prepayments 29
Cash and bank balances 313
Total assets 4,885
Amount due to a shareholder (2,880)
Other payables and accruals (9)
Total liabilities (2,889)
Net assets disposed of 1,996
Less: non-controlling interests (928)
Net assets attributable to Metasurfa ce Technologies deconsolidated of 1,068
S$’000
Consideration
— Cash consideration 180
— Share-based payment (Note 31) 2,059
2,239
Fair value of the retained investmen t in Metaoptics Technologies* 1,358
Less: carrying amount of net assets att ributable to Metasurface Technologies
disposed of (1,068)
Gain on disposal of a subsidiary 2,529
Less: gain on retained investment (955)
Gain on disposal of controlling interest 1,574
* The Group engaged a professional independent valuer to carry out a valuation of Metaoptics
Technologies as at the date of disposal.
S$’000
Consideration settled by cash 180
Less: cash and bank balances disposed of (313)
Net cash outflow from disposal of a subsidiary (133)
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 6–


--- page 490 ---
39 Subsequent events
There have been no material events subsequent to th e Track Record Period which require adjustment or
disclosure in accordance with IFRS.
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have be en prepared by the Group or the Company or
any of the companies now comprising the Group in respect of any period subsequent to 31
December 2023 and up to the date of this report. No dividend or distribution has been
declared, made or paid by the Company or any of the other companies now comprising the
Group in respect of any period subsequent to 31 December 2023.
APPENDIX I ACCOUNTANT’S REPORT
–I - 8 7–


--- page 491 ---
The information set out in this Appendix does not form part of the Accountant’s Report
from PricewaterhouseCoopers, Certified Public Accountants, the reporting accountant of the
Company, as set out in Appendix I to this prospe ctus, and is included herein for illustrative
purposes only. The unaudited pro forma financial information should be read in conjunction
with the section headed ‘‘Financial Information’’ in this prospectus and the Accountant’s
Report set out in Appendix I in this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma stateme nt of adjusted net tangible assets has been
prepared in accordance with Rule 7.31 of the GEM Listing Rules for the purpose of
illustrating the effect of the Share Offer on t he audited consolidated net tangible assets
attributable to the owners of the Company as of 31 December 2023, as if the Share Offer
had taken place on 31 December 2023.
The unaudited pro forma statement of adjusted net tangible assets has been prepared
for illustrative purposes only and because of its hypothetical nature, it may not give a true
picture of the consolidated net tangible assets attributable to owners of the Company as of
31 December 2023 had the Share Offer been completed as at 31 December 2023 or at any
future dates following the completion of the Share Offer. The unaudited pro forma adjusted
net tangible assets attributable to owners of the Company are based on the audited
consolidated net tangible assets attributab le to owners of the Company as at 31 December
2023, as shown in the Accountant’s Report of the Group, the text of which is set out in
Appendix I to this prospectus, and adjusted as described below.
Audited
consolidated net
tangible assets
attributable
to owners
of the Company
as at
31 December
2023
Estimated net
proceeds from the
Share Offer
Estimated impact
to the net tangible
assets upon the
termination of the
non-Listing
put option
Unaudited pro
f o r m aa d j u s t e dn e t
tangible assets
of the Company
attributable
to owners of
the Company as
at 31 December
2023
Unaudited pro forma
adjusted net tangible
assets per Share
(Note 1) (Note 2) (Note 3) (Note 4) (Note 5)
S$’000 S$’000 S$’000 S$’000 S$ HK$
B a s e do na nO f f e rP r i c e
of HK$2.38 per
Share 20,287 6,148 1,029 27,464 0.18 1.08
B a s e do na nO f f e rP r i c e
of HK$3.00 per
Share 20,287 8,750 1,029 30,066 0.20 1.19
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 492 ---
Notes:
(1) The audited consolidated net tangible assets a ttributable to the owners of the Company as at 31
December 2023 is extracted from the Accountant’s Report as set out in Appendix I to this
prospectus, which is based on the audited consolid ated net assets attributable to the owners of the
Company as at 31 December 2023 of approximately S$26,997,000, with an adjustment for the
intangible assets and goodwill attributable to owners of the Company as at 31 December 2023 of
approximately S$6,710,000.
(2) The estimated net proceeds to be received by the Group from the Share Offer are based on the
indicative Offer Prices of HK$2.38 and HK$3.00 pe r Share, respectively, after deduction of the
underwriting fees and other related expenses payable by the Group (excluding listing expenses of
approximately S$3,972,000 which have been charged to our consolidated statement of
comprehensive income of the Group prior to 31 December 2023) paid/payable by the Group and
does not take into account any shares which may be issued and allotted upon exercise of any options
which may be granted under the Post-IPO Share Option Scheme.
(3) Upon the Listing, the non-Listing put option gr anted to a shareholder of the Company to require
the Company to purchase all of its shares shall re main unexercisable perpetually and shall not be
reinstated pursuant to the shareholders’ agreem ent. Accordingly, for the purpose of the unaudited
pro forma adjusted net tangible assets, the una udited pro forma adjusted net tangible assets
attributable to owners of the Company will be increased by S$1,029,000, being the carrying amount
of the non-Listing put option as of 31 December 2023.
(4) The unaudited pro forma adjusted net tangible a ssets per Share is arrived at after the adjustments
referred to in the preceding paragraphs and on the basis that 150,000,000 Shares were in issue,
assuming that the Share Offer has been completed on 31 December 2023 but does not take into
account any shares which may be issued and allot ted upon exercise of any options which may be
granted under the Post-IPO Share Option Scheme.
(5) For the purpose of this unaudited pro forma adj usted net tangible assets, the amounts stated in
Singapore dollars are converted into Hong Kong dollars at a rate of S$1.00 to HK$5.9193, as set out
in ‘‘Information about this prospectus and the Share Offer’’ to this prospectus. No representation is
made that Singapore dollar amounts have been, could have been or may be converted to Hong Kong
dollars, or vice versa, at that rate.
(6) No adjustment has been made to the unaudited pro forma adjusted net tangible assets per Share to
reflect any trading result or other transactions of the Group entered into subsequent to 31 December
2023.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 493 ---
B. REPORT FROM THE REPORTING ACCOUNTANT ON THE UNAUDITED PRO
FORMA FINANCIAL INFORMATION
The following is the text of a report received from PricewaterhouseCoopers, Certified
Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO F ORMA FINANCIAL INFORMATION
To the Directors of Metasurface Technologies Holdings Limited
We have completed our assurance engag ement to report on the compilation of
unaudited pro forma financial information of M etasurface Technologies Holdings Limited
(the ‘‘Company ’’) and its subsidiaries (collectively the ‘‘ Group ’’) by the directors of the
Company (the ‘‘ Directors ’’) for illustrative purposes only. The unaudited pro forma
financial information consists of the unaudited pro forma statement of adjusted
consolidated net tangible assets of the Gr oup as at 31 December 2023, and related notes
(the ‘‘Unaudited Pro Forma Financial Information ’’) as set out on pages II-1 to II-2 of the
Company’s prospectus dated 21 June 2024, in connection with the proposed initial public
offering of the shares of the Company (the ‘‘ Prospectus ’’). The applicable criteria on the
basis of which the Directors have compiled the Unaudited Pro Forma Financial
Information are described on pages II-1 to II-2 of the Prospectus.
The Unaudited Pro Forma Financial Inform ation has been compiled by the Directors
to illustrate the impact of the proposed initia l public offering on the Group’s financial
position as at 31 December 2023 as if the propos ed initial public offering had taken place at
31 December 2023. As part of this process, in formation about the Group’s financial
position has been extracted by the Directors from the Group’s financial information for the
year ended 31 December 2023, on which an accountant’s report has been published.
Directors’ Responsibility for the Unaud ited Pro Forma Finan cial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 7.31 of the Rules Governing the Listing of
Securities on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘ Listing Rules ’’) and
with reference to Accounting Guideline 7, Preparation of Pro Forma Financial Information
for Inclusion in Investment Circulars (‘‘AG 7 ’’) issued by the Hong Kong Institute of
Certified Public Accountants (‘‘ HKICPA ’’).
PricewaterhouseCoopers, 22/F Prince's Building, Central, Hong Kong SAR, China
T: +852 2289 8888, F: +852 2810 9888, www.pwchk.com
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 3–


--- page 494 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements , issued by the HKICPA, which requires the firm
to design, implement and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Reporting Accountant’s Responsibilities
Our responsibility is to express an opinion, as required by paragraph 7.31(7) of the
Listing Rules, on the Unaudited Pro Forma F inancial Information and to report our
opinion to you. We do not accept a ny responsibility for any reports previously given by us
on any financial information used in the comp ilation of the Unaudited Pro Forma Financial
I n f o r m a t i o nb e y o n dt h a to w e dt ot h o s et ow h om those reports were addressed by us at the
dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus , issued by the HKICPA. This standard
requires that the reporting accountant plans and performs procedures to obtain reasonable
assurance about whether the Directors have compiled the Unaudited Pro Forma Financial
I n f o r m a t i o ni na c c o r d a n c ew i t hp a r a g r a p h7 . 3 1o ft h eL i s t i n gR u l e sa n dw i t hr e f e r e n c et o
AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited
Pro Forma Financial Information, nor have we, in the course of this engagement,
performed an audit or review of the financial information used in compiling the Unaudited
Pro Forma Financial Information.
The purpose of unaudited pro forma financial information included in a prospectus is
solely to illustrate the impact of a significant e vent or transaction on unadjusted financial
information of the entity as if the event had occurred or the transaction had been
undertaken at an earlier date selected for pur poses of the illustration. Accordingly, we do
not provide any assurance that the actual outcome of the proposed initial public offering at
31 December 2023 would have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 4–


--- page 495 ---
A reasonable assurance engagement to report on whether the unaudited pro forma
financial information has been properly comp iled on the basis of the applicable criteria
involves performing procedures to assess wh ether the applicable criteria used by the
directors in the compilation of the unaudited pro forma financial information provide a
reasonable basis for presenting the significant effects directly attributable to the event or
t r a n s a c t i o n ,a n dt oo b t a i ns u f f i c i e nt appropriate evidence about whether:
. The related pro forma adjustments give app ropriate effect to those criteria; and
. The unaudited pro forma financial informat ion reflects the proper application of
those adjustments to the unadj usted financial information.
The procedures selected depend on the reporting accountant’s judgement, having
regard to the reporting accountant’s understanding of the nature of the company, the event
or transaction in respect of which the unaudi ted pro forma financial information has been
compiled, and other relevant e ngagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Our work has not been carried out in accordance with auditing standards or other
standards and practices generally accepted in the United States of America or auditing
standards of the Public Company Accounting Oversight Board (United States) or standards
and practices of any professional body in any other overseas jurisdiction and accordingly
should not be relied upon as if it had been carried out in accordance with those standards
and practices.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled by
the Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 7.31(1) of the Listing
Rules.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 21 June 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 496 ---
The following is the text of a letter and valuat ion certificate prepared for the purpose of
incorporation in this prospectus received from Jones Lang LaSalle Corporate Appraisal and
Advisory Limited, an independent valuer, in connection with its valuation as at 31 March 2024
of the property interest held by the Group.
Jones Lang LaSalle Corporate Appraisal and Advisory Limited
7/F One Taikoo Place 979 King’s Road Hong Kong
tel +852 2846 5000 fax +852 2169 6001
Company Licence No.: C-030171
21 June 2024
The Board of Directors
Metasurface Technologies Holdings Limited
Cricket Square, Hutchins Drive,
PO Box 2681, Grand Cayman, KY1-1111
Cayman Islands
Dear Sirs,
In accordance with your instructions to value the property interest held by
Metasurface Technologies Holdings Limited (the ‘‘ Company ’’) and its subsidiaries
(hereinafter together referred to as the ‘‘ Group ’’) in Singapore, we confirm that we have
carried out inspections, made relevant enqui ries and searches and obtained such further
information as we consider necessary for the purpose of providing you with our opinion on
the market value of the property interest as at 31 March 2024 (the ‘‘ valuation date ’’).
Our valuation is carried out on a market value basis. Market value is defined as ‘‘the
estimated amount for which an asset or liability should exchange on the valuation date
between a willing buyer and a willing seller in a n arm’s-length transaction after proper
marketing and where the parties had each acted knowledgeably, prudently and without
compulsion’’.
We have valued the property interest by the income approach. An income approach
determination of value is achieved by the conversion of expected future cash flow or cost
savings generated by the property into a present value. It is based on the principle that an
informed buyer would pay no more for the property than an amount equal to the present
worth of anticipated future benefits (i ncome or cost savings) from the same or a
substantially similar asset or liab ility with a similar risk profile.
Our valuation has been made on the assumption that the seller sells the property
interest in the market without the benefit of a deferred term contract, leaseback, joint
venture, management agreement or any similar arrangement, which could serve to affect the
values of the property interest.
APPENDIX III PROPERTY VALUATION
–I I I - 1–


--- page 497 ---
No allowance has been made in our report for any charge, mortgage or amount owing
on any of the property interest valued nor for any expense or taxation which may be
incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free
from encumbrances, restrictions and outgoings of an onerous nature, which could affect
their values.
In valuing the property interest, we have complied with all requirements contained in
Chapter 8 of the Rules Governing the Listing of Securities on GEM issued by The Stock
Exchange of Hong Kong Limited; the RICS Valuation — Global Standards published by
the Royal Institution of Chartered Surveyors; the HKIS Valuation Standards published by
the Hong Kong Institute of Surveyors, and the International Valuation Standards
published by the International Valuation Standards Council.
We have relied to a very considerable extent on the information given by the Group
and have accepted advice given to us on such matters as tenure, planning approvals,
statutory notices, easements, particulars of occupancy, lettings, and all other relevant
matters.
We have been shown copies of title documents including the Lease of Land and
Building, Sublet Approval Letters, Sublet Agr eements and other official plans relating to
the property interest and have made relevant enquiries. Where possible, we have examined
the original documents to verify the existing t itle to the property interest and any material
encumbrance that might be attached to the property interest or any tenancy amendment.
We have relied considerably on the advice given by the Company’s Singapore Legal Adviser
— Drew & Napier, concerning the validity of the property interest in Singapore.
We have not carried out detailed measurements to verify the correctness of the areas in
respect of the property but have assumed that the areas shown on the title documents and
official site plans handed to us are correct. All documents and contracts have been used as
reference only and all dimensions, measurements and areas are approximations. No on-site
measurement has been taken.
We have inspected the exterior and, where possible, the interior of the property.
However, we have not carried out investigatio n to determine the suitability of the ground
conditions and services for any development thereon. Our valuation has been prepared on
the assumption that these aspects are satisfac tory. Moreover, no structural survey has been
made, but in the course of our inspection, we did not note any serious defect. We are not,
however, able to report whether the property is free of rot, infestation or any other
structural defect. No tests were carried out on any of the services.
The site inspection of the property was carried out on 12 December 2022 by Mr. Albert
Mak, who is a probationer of the RICS and has 3 years’ experience in the valuation of
property in Hong Kong and the Asia-Pacific region and holds a master’s degree of Real
Estate from the University of Reading.
APPENDIX III PROPERTY VALUATION
–I I I - 2–


--- page 498 ---
We have had no reason to doubt the truth and accuracy of the information provided to
us by the Group. We have also sought confirmation from the Group that no material
factors have been omitted from the information supplied. We consider that we have been
provided with sufficient information to arrive at an informed view, and we have no reason
to suspect that any material information has been withheld.
Unless otherwise stated, all monetary figures stated in this report are in Singapore
Dollars (S$).
Our valuation certificate is attached below for your attention.
Yours faithfully,
For and on behalf of
Jones Lang LaSalle Corporate Appraisal and Advisory Limited
Gilbert C. H. Chan
MRICS MHKIS RPS (GP)
Senior Director
Note: Gilbert C.H. Chan is a Chartered Surveyor who has 30 y ears’ experience in the valuation of properties in
Hong Kong and 28 years of property valuation experi ence in the Asia-Pacific region. Mr. Chan has been
with Jones Lang LaSalle Corporate Appraisal and Advisory Limited for over 15 years.
APPENDIX III PROPERTY VALUATION
–I I I - 3–


--- page 499 ---
VALUATION CERTIFICATE
Property Description and tenure
Particulars of
occupancy
Market value in
existing state as at
31 March 2024
S$
43 Tuas View Circuit
Singapore 637360
The property is located at the western
side of Tuas South Avenue 9 and the
southern side of Tuas South Avenue
8. The locality is considered as an
established industrial estate and close
to the Malaysia-Singapore Second
Link which connects Tuas to Johor in
Malaysia. The immediate
neighbourhood comprises a mixture
of factories, warehouses and
dormitories.
The property comprises a block of
2-storey workshop, a block of 3-storey
ancillary office building and a storage
yard erected thereon, which was
completed in 2012.
The property has a total gross floor
area of 122,835.69 sq.ft. on the whole
Lot 4128K of Mukim 7 with site area
of 141,416.12 sq.ft.
The right-of-use of the property has
been leased to Metasurface
Technologies Pte. Ltd. (‘‘ MST’’), a
wholly-owned subsidiary of the
Company, for a term from 5
December 2014 until 30 January 2038
at an initial rent of S$122,835.69 per
month exclusive of GST (being S$1.00
per square foot per month on the
gross floor area of the property),
subject to step-up rental adjustments
in accordance with the terms of the
lease agreement. As at the valuation
date, the monthly rent paid by MST
for the property was S$155,049.61
exclusive of goods and services tax
(‘‘GST’’).
As at the valuation
date, a portion of the
property was occupied
by MST for
production, workshop,
office and ancillary
purposes. A portion of
workshop was sublet to
a third-party company,
whilst a portion of
workshop and office
was sublet to a
wholly-owned
subsidiary of the
Company (see notes 5
and 6 below).
No commercial
value
(see note 8 below)
APPENDIX III PROPERTY VALUATION
–I I I - 4–


--- page 500 ---
Notes:
1. Pursuant to a Lease of Land and Building (the ‘‘ Tuas Lease Agreement ’’) at Private Lot A2105140 at 43
Tuas View Circuit in Tuas Industrial Estate Singapore 637360 dated 5 December 2014 between RBC Trust
Company (Singapore) Limited (formerly known as RBC In vestor Services Trust Singapore Limited) (in its
capacity as trustee of Cambrid ge Industrial Trust) (the ‘‘ Former Lessor ’’) and MST (formerly known as
Q’son Precision Engineering Pte. L td.), the land with site area of appr oximately 141,416.12 sq.ft. and the
buildings erected on with a proposed gross floor area of approximately 122,835.69 sq.ft. were leased to
MST for a term from 5 December 2014 until 30 January 2038, being 1 day before the expiry of the
leasehold term of 30 years from 1 February 2008 as s tipulated in the head lease dated 18 July 2011 between
Jurong Town Corporation (the ‘‘ Head Lessor ’’) and the Former Lessor. Unless otherwise permitted by the
Head Lessor, the Former Lessor and the government a uthorities, MST shall at all times use the property
strictly and only for the purpose of m anufacturing, precision machinin g, clean room assemblies, storage of
components, equipments with ancillary office only.
2. Pursuant to a Notice of Change of Trustee dated 30 March 2023 from the ESR-LOGOS REIT to MST, the
change of trustee of ESR-LOGOS REIT from RBC Tru st Company (Singapore) Limited to Perpetual
(Asia) Limited (the ‘‘ Lessor ’’) has been completed on 25 November 2022. The change of trustee does not
affect the terms and conditions of all existing tenan cy and other agreements, which remain unchanged and
in full force and effect according to the legal opinion from the Company’s Singapore legal advisers (the
‘‘Singapore Opinion ’’).
3. Pursuant to a Sublet Approval Letter dated 17 Mar ch 2022 from the Head Lessor to the Former Lessor, a
portion of the property with a perm itted sublet area of approximatel y 2,282.36 sq.m. was agreed to be
subleased by the Former Lessor to an independent third party for electroplating use for a term
commencing from 1 March 2022 until 28 February 2025. As advised by the Company, MST is required to
pay the Former Lessor a monthly subletting fee of S$718.01 exclusive of GST.
4. Pursuant to a Sublet Approval Letter dated 22 June 2023 from the Head Lessor to the Lessor, a portion of
the property with a permitted sublet area of approx imately 1,068 sq.m. was agreed to be subleased by the
Lessor to SPW for manufacturing of precision wel ding parts for a term commencing from 10 June 2023
until 31 January 2038 or the expiry of the lease term.
5. Pursuant to an Agreement for Lease and Service (the ‘‘ Third Party Agreement ’’) dated 15 July 2022
between MST and an independent third party, a portion of workshop with a gross floor area of
approximately 2,282.36 sq.m. or 24,567.12 sq.ft. was subleased to an independent third party for a term
commencing from 1 November 2022 until 28 February 2025, strictly and only for the purpose of
manufacturing, precision machining, clean room a ssemblies, storage of components, equipments with
ancillary office according to the Singapore Opini on. Pursuant to the Third Party Agreement, MST is
entitled to receive a total monthly rent of S$100,000 exclusive of GST.
6. Pursuant to an intragroup Facilit y and Operation Agreement (the ‘‘ SPW Agreement ’’) between MST and
Singapore Precision Welding Pte. Ltd. (‘‘ SPW’’), a wholly-owned subsidiary of the Company, a portion of
workshop with a total gross floor area of approxim ately 11,500 sq.ft. was subleased to SPW commencing
from 1 January 2022 and shall be automatically ren ewed on a yearly basis, strictly and only for the
purpose of manufacturing, precision machinin g, clean room assemblies, storage of components,
equipments with ancillary office according to the Singapore Opinion. Pursuant to the SPW Agreement,
MST is entitled to receive a total monthly rent of S$17, 250 for the use of operation space and a flat rate of
S$300 for the use of office and other common facil ities exclusive of the GST and electricity.
APPENDIX III PROPERTY VALUATION
–I I I - 5–


--- page 501 ---
7. We have been provided with the Singapore Opinion re garding the property interest, salient points are
extracted below:
a. MST currently leases the property located at 43 Tuas View Circuit, Singapore 637360. The property,
where required, has been duly registered in accordance with the Land Titles Act 1993 and is valid
and enforceable;
b. the Company’s Singapore legal advisers have not sighted any Document (as defined in the Singapore
Opinion) to suggest that the use of the leased prope rty located at 43 Tuas View Circuit, Singapore
637360 by MST is not in accordance with its permitted use under applicable laws of Singapore or the
lease agreement(s);
c. the area sublet to an independent third party and the terms of the Third Party Agreement comply
with the Tuas Lease Agreement in all material respects;
d. MST’s accessibility to and from the property is not affected as a result of the line of road reserve in
any material respect;
e. MST has full corporate power and authority r equired for the lease of the property; and
f. MST has full corporate power and authority r equired to lease out a portion of the property
mentioned in notes 5 and 6.
8. We have attributed no commercial value to the pr operty due to the borrow-to-use land nature of such
interest.
APPENDIX III PROPERTY VALUATION
–I I I - 6–


--- page 502 ---
Set out below is a summary of certain provisions of the Memorandum and Articles of
Association of the Company and of certain aspects of Cayman company law.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 7 December 2021 under the Companies Act (As Revised) of the Cayman
Islands (the ‘‘ Companies Act ’’). The Company’s constitutional documents consist of its
Memorandum of Association (the ‘‘ Memorandum ’’) and its Articles of Association (the
‘‘Articles ’’).
1. MEMORANDUM OF ASSOCIATION
(a) The Memorandum states, inter alia , that the liability of members of the Company
is limited to the amount, if any, for the time being unpaid on the shares
respectively held by them and that the objects for which the Company is
established are unrestricted (including acting as an investment company), and that
the Company shall have and be capable of exercising all the functions of a natural
person of full capacity irrespective of any question of corporate benefit, as
provided in section 27(2) of the Companies Act and in view of the fact that the
Company is an exempted company that the Company will not trade in the
Cayman Islands with any person, firm or corporation except in furtherance of the
business of the Company carried on outside the Cayman Islands.
(b) The Company may by special resolution alter its Memorandum with respect to
any objects, powers or other matters specified therein.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on 7 June 2024 with effect from the Listing
Date. The following is a summary of certain provisions of the Articles:
(a) Shares
(i) Classes of shares
The share capital of the Compan y consists of ordinary shares.
(ii) Variation of rights of existing shares or classes of shares
Subject to the Companies Act, if at any time the share capital of the
Company is divided into different classes of shares, all or any of the special rights
a t t a c h e dt ot h es h a r e so ra n yc l a s so fs h a r e sm a y( u n l e s so t h e r w i s ep r o v i d e df o rb y
the terms of issue of that class) be varied, modified or abrogated either with the
consent in writing of the holders of not less than three-fourths in nominal value of
the issued shares of that class or with the sanction of a special resolution passed at
a separate general meeting of the holders of the shares of that class. To every such
separate general meeting the provision s of the Articles relating to general
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I V - 1–


--- page 503 ---
meetings will mutatis mutandis apply, but so that the necessary quorum (including
at an adjourned meeting) shall be two persons holding or representing by proxy
not less than one-third in nominal value of the issued shares of that class.
Any special rights conferred upon the holders of any shares or class of shares
shall not, unless otherwise expressly provided in the rights attaching to the terms
of issue of such shares, be deemed to be varied by the creation or issue of further
shares ranking pari passu therewith.
(iii) Alteration of capital
The Company may by ordinary resolution of its members:
(i) increase its share capital by the creation of new shares;
(ii) consolidate all or any of its capital into shares of larger amount than its
existing shares;
(iii) divide its shares into several c lasses and attach to such shares any
preferential, deferred, qualified or special rights, privileges, conditions
or restrictions as the Company in general meeting or as the directors
may determine;
(iv) subdivide its shares or any of them into shares of smaller amount than is
fixed by the Memorandum; or
(v) cancel any shares which, at the date of passing of the resolution, have
not been taken and diminish the amount of its capital by the amount of
the shares so cancelled.
The Company may reduce its share capital or any capital redemption reserve
or other undistributable reserve in any way by special resolution.
(iv) Transfer of shares
All transfers of shares may be effected by an instrument of transfer in the
usual or common form or in a form prescribed by The Stock Exchange of Hong
Kong Limited (the ‘‘ Stock Exchange ’’) or in such other form as the board may
approve and which may be under hand or, if the transferor or transferee is a
clearing house or its nominee(s), by hand or by machine imprinted signature or by
such other manner of execution as the board may approve from time to time.
Notwithstanding the foregoing, for s o long as any shares are listed on the
Stock Exchange, titles to such listed shares may be evidenced and transferred in
accordance with the laws applicable to an d the rules and regulations of the Stock
Exchange that are or shall be applicable to such listed shares. The register of
members in respect of its listed shares (whether the principal register or a branch
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I V - 2–


--- page 504 ---
register) may be kept by recording the particulars required by Section 40 of the
Companies Act in a form otherwise than legible if such recording otherwise
complies with the laws applicable to an d the rules and regulations of the Stock
Exchange that are or shall be applicable to such listed shares.
The instrument of transfer shall be exec uted by or on behalf of the transferor
and the transferee provided that the board may dispense with the execution of the
instrument of transfer by the transferee. The transferor shall be deemed to remain
the holder of the share until the name of the transferee is entered in the register of
members in respect of that share.
The board may, in its absolute discretion, at any time transfer any share
upon the principal register to any branch register or any share on any branch
register to the principal register or any other branch register.
The board may decline to recognise any instrument of transfer unless a fee
(not exceeding the maximum sum as the Stock Exchange may determine to be
payable) determined by the Directors is paid to the Company, the instrument of
transfer is properly stamped (if applicab le), it is in respect of only one class of
share and is lodged at the relevant registration office or registered office or such
other place at which the principal regis ter is kept accompanied by the relevant
share certificate(s) and such other evidence as the board may reasonably require
to show the right of the transferor to mak e the transfer (and if the instrument of
transfer is executed by some other person on his behalf, the authority of that
person so to do).
The registration of transfers may be s uspended and the register closed on
giving notice by advertisement in any newspaper or by any other means in
accordance with the requirements of the Stock Exchange, at such times and for
such periods as the board may determine. The register of members must not be
closed for periods exceeding in the whole thirty (30) days in any year. The period
of thirty (30) days may be extended for a further period or periods not exceeding
thirty (30) days in respect of any year if approved by members by ordinary
resolution.
Subject to the above, fully paid shares are free from any restriction on
transfer and free of all liens in favour of the Company.
(v) Power of the Company to purchase its own shares
The Company is empowered by the Companies Act and the Articles to
purchase its own shares subject to certain restrictions and the board may only
exercise this power on behalf of the Company subject to any applicable
requirements imposed from time to time by the Stock Exchange.
The board may accept the surrender for no consideration of any fully paid
share.
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I V - 3–


--- page 505 ---
(vi) Power of any subsidiary of the Company to own shares in the Company
There are no provisions in the Articles r elating to ownership of shares in the
Company by a subsidiary.
(vii)Calls on shares and forfeiture of shares
The board may from time to time make such calls upon the members in
respect of any monies unpaid on the shares held by them respectively (whether on
account of the nominal value of the shares or by way of premium). A call may be
made payable either in one lump sum or by instalments. If the sum payable in
respect of any call or instalment is not paid on or before the day appointed for
payment thereof, the person or persons from whom the sum is due shall pay
interest on the same at such rate not exceeding twenty per cent. (20%) per annum
as the board may agree to accept from the day appointed for the payment thereof
to the time of actual payment, but the board may waive payment of such interest
wholly or in part. The board may, if it thi nks fit, receive from any member willing
to advance the same, either in money or money’s worth, all or any part of the
monies uncalled and unpaid or instalments payable upon any shares held by him,
and upon all or any of the monies so advanced the Company may pay interest at
such rate (if any) as the board may decide.
If a member fails to pay any call on the day appointed for payment thereof,
the board may serve not less than fourteen (14) clear days’ notice on him requiring
p a y m e n to fs om u c ho ft h ec a l la si su n p a i d, together with any interest which may
have accrued and which may still accrue up to the date of actual payment and
stating that, in the event of non-payment at or before the time appointed, the
shares in respect of which the call wa s made will be liable to be forfeited.
If the requirements of any such notice are not complied with, any share in
respect of which the notice has been given may at any time thereafter, before the
payment required by the notice has been made, be forfeited by a resolution of the
board to that effect. Such forfeiture will include all dividends and bonuses
declared in respect of the forfeited share and not actually paid before the
forfeiture.
A person whose shares have been forfeited shall cease to be a member in
respect of the forfeited shares but shall, notwithstanding, remain liable to pay to
the Company all monies which, at the date of forfeiture, were payable by him to
the Company in respect of the shares, to gether with (if the board shall in its
discretion so require) interest thereon from the date of forfeiture until the date of
actual payment at such rate not exceeding twenty per cent. (20%) per annum as
the board determines.
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I V - 4–


--- page 506 ---
(b) Directors
(i) Appointment, retirement and removal
At each annual general meeting, one third of the Directors for the time being
(or if their number is not a multiple of three, then the number nearest to but not
less than one third) shall retire from office by rotation provided that every
Director shall be subject to retirement a t an annual general meeting at least once
every three years. The Directors to retire by rotation shall include any Director
who wishes to retire and not offer himself for re-election. Any further Directors so
to retire shall be those who have been longest in office since their last re-election
or appointment but as between persons who became or were last re-elected
Directors on the same day those to retire will (unless they otherwise agree among
themselves) be determined by lot.
Neither a Director nor an alternate Director is required to hold any shares in
the Company by way of qualification. Further, there are no provisions in the
Articles relating to retirement of Directors upon reaching any age limit.
The Directors have the power to appoint any person as a Director either to
fill a casual vacancy on the board or as an addition to the existing board. Any
Director so appointed shall hold office only until the first annual general meeting
of the Company after his appointment and shall then be eligible for re-election.
A Director (including a managing or o ther executive Director) may be
removed by an ordinary resolution of the Company before the expiration of his
term of office (but without prejudice to any claim which such Director may have
for damages for any breach of any contract between him and the Company) and
members of the Company may by ordinary resolution appoint another in his
place. Unless otherwise determined by the Company in general meeting, the
number of Directors shall not be less than two. There is no maximum number of
Directors.
T h eo f f i c eo fd i r e c t o rs h a l lb ev a c a t e di f :
(aa) he resigns by notice in writing delivered to the Company;
(bb) he becomes of unsound mind or dies;
(cc) without special leave, he is absen t from meetings of the board for six (6)
consecutive months, and the board resolves that his office is vacated;
(dd) he becomes bankrupt or has a receiving order made against him or
suspends payment or compounds with his creditors;
(ee) he is prohibited from being a director by law; or
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I V - 5–


--- page 507 ---
(ff) he ceases to be a director by virtue of any provision of law or is removed
from office pursuant to the Articles.
The board may appoint one or more of its body to be managing director,
joint managing director, or deputy managing director or to hold any other
employment or executive office with the Company for such period and upon such
terms as the board may determine and the board may revoke or terminate any of
such appointments. The board may delegate any of its powers, authorities and
discretions to committees consisting of such Director or Directors and other
persons as the board thinks fit, and it may from time to time revoke such
delegation or revoke the appointment of and discharge any such committees either
wholly or in part, and either as to persons or purposes, but every committee so
formed must, in the exercise of the pow ers, authorities and discretions so
delegated, conform to any regulations that may from time to time be imposed
upon it by the board.
(ii) Power to allot and issue shares and warrants
Subject to the provisions of the Companies Act and the Memorandum and
Articles and to any special rights conferred on the holders of any shares or class of
shares, any share may be issued (a) with or have attached thereto such rights, or
such restrictions, whether with regard to dividend, voting, return of capital, or
otherwise, as the Directors may determi ne, or (b) on terms that, at the option of
the Company or the holder thereof, it is liable to be redeemed.
The board may issue warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for any class of
shares or securities in the capital of the Company on such terms as it may
determine.
Subject to the provisions of the Companies Act and the Articles and, where
applicable, the rules of the Stock Exchange and without prejudice to any special
rights or restrictions for the time being attached to any shares or any class of
shares, all unissued shares in the Company are at the disposal of the board, which
may offer, allot, grant options over or otherwise dispose of them to such persons,
at such times, for such consideration and on such terms and conditions as it in its
absolute discretion thinks fit, but so that no shares shall be issued at a discount to
their nominal value.
Neither the Company nor the board is obliged, when making or granting any
allotment of, offer of, option over or disposal of shares, to make, or make
available, any such allotment, offer, option or shares to members or others with
registered addresses in any particular territory or territories being a territory or
territories where, in the absence of a registration statement or other special
formalities, this would or might, in the opinion of the board, be unlawful or
impracticable. Members affected as a result of the foregoing sentence shall not be,
or be deemed to be, a separate class of members for any purpose whatsoever.
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(iii) Power to dispose of the assets of the Company or any of its subsidiaries
There are no specific provisions in the A rticles relating to the disposal of the
assets of the Company or any of its subsidiaries. The Directors may, however,
exercise all powers and do all acts and things which may be exercised or done or
approved by the Company and which are not required by the Articles or the
Companies Act to be exercised or done by the Company in general meeting.
(iv) Borrowing powers
T h eb o a r dm a ye x e r c i s ea l lt h ep o w e r so ft h eC o m p a n yt or a i s eo rb o r r o w
money, to mortgage or charge all or any part of the undertaking, property and
assets and uncalled capital of the Company and, subject to the Companies Act, to
issue debentures, bonds and other securities of the Company, whether outright or
as collateral security for any debt, liab ility or obligation of the Company or of any
third party.
(v) Remuneration
The ordinary remuneration of the Directors is to be determined by the
Company in general meeting, such sum (unless otherwise directed by the
resolution by which it is voted) to be divided amongst the Directors in such
proportions and in such manner as the board may agree or, failing agreement,
equally, except that any Director holding office for part only of the period in
respect of which the remuneration is payab le shall only rank in such division in
proportion to the time during such period for which he held office. The Directors
are also entitled to be prepaid or repaid all travelling, hotel and incidental
expenses reasonably expected to be incurred or incurred by them in attending any
board meetings, committee meetings or ge neral meetings or separate meetings of
any class of shares or of debentures of the Company or otherwise in connection
with the discharge of their duties as Directors.
Any Director who, by request, goes or resides abroad for any purpose of the
Company or who performs services which in the opinion of the board go beyond
the ordinary duties of a Director may b e paid such extra re muneration as the
board may determine and such extra remuneration shall be in addition to or in
substitution for any ordinary remuneration as a Director. An executive Director
appointed to be a managing director, joint managing director, deputy managing
director or other executive officer shall receive such remuneration and such other
benefits and allowances as the board may from time to time decide. Such
remuneration may be either in addition to or in lieu of his remuneration as a
Director.
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The board may establish or concur or join with other companies (being
subsidiary companies of the Company or companies with which it is associated in
business) in establishing and making contributions out of the Company’s monies
to any schemes or funds for providing pensions, sickness or compassionate
allowances, life assurance or other benefits for employees (which expression as
used in this and the following paragraph shall include any Director or past
Director who may hold or have held any executive office or any office of profit
with the Company or any of its subsidiaries) and ex-employees of the Company
and their dependents or any class or classes of such persons.
The board may pay, enter into agreemen ts to pay or make grants of revocable
or irrevocable, and either subject or not subject to any terms or conditions,
pensions or other benefits to employees and ex-employees and their dependents,
or to any of such persons, including pensions or benefits additional to those, if
any, to which such employees or ex-emp loyees or their dependents are or may
become entitled under any such scheme or fund as is mentioned in the previous
paragraph. Any such pension or benefit may, as the board considers desirable, be
granted to an employee either before and in anticipation of, or upon or at any
time after, his actual retirement.
The board may resolve to capitalise all or any part of any amount for the
time being standing to the credit of any reserve or fund (including a share
premium account and the profit and loss account) whether or not the same is
available for distribution by applying such sum in paying up unissued shares to be
allotted to (i) employees (including dire ctors) of the Company and/or its affiliates
(meaning any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated associ ation or other entity (other than the
Company) that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, the Company) upon
exercise or vesting of any options or awards granted under any share incentive
scheme or employee benefit scheme or other arrangement which relates to such
persons that has been adopted or approved by the members in general meeting, or
(ii) any trustee of any trust to whom shares are to be issued and allotted by the
Company in connection with the operation of any share incentive scheme or
employee benefit scheme or other arrang ement which relates to such persons that
has been adopted or approved by the members in general meeting.
(vi) Compensation or payments for loss of office
Pursuant to the Articles, payments to any Director or past Director of any
sum by way of compensation for loss of office or as consideration for or in
connection with his retirement from office (not being a payment to which the
Director is contractually entitled) must be approved by the Company in general
meeting.
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(vii)Loans and provision of security for loans to Directors
The Company must not make any loan, directly or indirectly, to a Director or
his close associate(s) if and to the extent it would be prohibited by the Companies
Ordinance (Chapter 622 of the laws of Hong Kong) as if the Company were a
company incorporated in Hong Kong.
(viii) Disclosure of interests in contracts with the Company or any of its subsidiaries
A Director may hold any other office or place of profit with the Company
(except that of the auditor of the Company) in conjunction with his office of
Director for such period and upon such terms as the board may determine, and
may be paid such extra remuneration therefor in addition to any remuneration
provided for by or pursuant to the Articles. A Director may be or become a
director or other officer of, or otherwise interested in, any company promoted by
the Company or any other company in which the Company may be interested, and
shall not be liable to account to the Company or the members for any
remuneration, profits or other benefits received by him as a director, officer or
member of, or from his interest in, such o ther company. The board may also cause
the voting power conferred by the shares in any other company held or owned by
the Company to be exercised in such manner in all respects as it thinks fit,
including the exercise thereof in favour of any resolution appointing the Directors
or any of them to be directors or officers of such other company, or voting or
providing for the payment of remuneration to the directors or officers of such
other company.
No Director or proposed or intended Director shall be disqualified by his
office from contracting with the Company, either with regard to his tenure of any
office or place of profit or as vendor, purchaser or in any other manner
whatsoever, nor shall any such contract or any other contract or arrangement in
which any Director is in any way interested be liable to be avoided, nor shall any
Director so contracting or being so interested be liable to account to the Company
or the members for any remuneration, profit or other benefits realised by any such
contract or arrangement by reason of such Director holding that office or the
fiduciary relationship thereby establis hed. A Director who to his knowledge is in
any way, whether directly or indirectly, interested in a contract or arrangement or
proposed contract or arrangement with the Company must declare the nature of
his interest at the meeting of the board at which the question of entering into the
contract or arrangement is first taken into consideration, if he knows his interest
then exists, or in any other case, at the first meeting of the board after he knows
that he is or has become so interested.
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A Director shall not vote (nor be counted in the quorum) on any resolution
of the board approving any contract or arrangement or other proposal in which he
or any of his close associates is materially interested, but this prohibition does not
apply to any of the following matters, namely:
(aa) the giving of any secu rity or indemnity either:
(aaa) to the Director or his close associate(s) in respect of money lent or
obligations incurred or undertaken by him or any of them at the
request of or for the benefit of the Company or any of its
subsidiaries; or
(bbb) to a third party in respect of a debt or obligation of the Company
or any of its subsidiaries for which the Director or his close
associate(s) has himself/themselves assumed responsibility in whole
or in part and whether alone or jointly under a guarantee or
indemnity or by the giving of security;
(bb) any proposal concerning an offe ro fs h a r e so rd e b e n t u r e so ro t h e r
securities of or by the Company or any other company which the
Company may promote or be interested in for subscription or purchase
where the Director or his close associate(s) is/are or is/are to be
interested as a participant in the underwriting or sub-underwriting of
the offer;
(cc) any proposal or arrangement concerning the benefit of employees of the
Company or its subsidiaries including:
(aaa) the adoption, modification or operation of any employees’ share
scheme or any share incentive or share option scheme under which
the Director or his close associate(s) may benefit; or
(bbb) the adoption, modification or operation of a pension fund or
retirement, death or disability benefits scheme which relates to the
Directors, his close associate(s) and employee(s) of the Company or
any of its subsidiaries and does not provide in respect of any
Director, or his close associate(s), as such any privilege or
advantage not generally accorded to the class of persons to which
such scheme or fund relates;
(dd) any contract or arrangement in which the Director or his close
associate(s) is/are interested in the same manner as other holders of
shares or debentures or other securities of the Company by virtue only
of his/their interest in shares or debentures or other securities of the
Company.
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(c) Proceedings of the Board
The board may meet for the despatch of business, adjourn and otherwise regulate
its meetings as it considers appropriate. Questions arising at any meeting shall be
determined by a majority of votes. In the case of an equality of votes, the chairman of
the meeting shall have an additional or casting vote.
(d) Alterations to constitutional documents and the Company’s name
The Articles may be rescinded, altered or amended by the Company in general
meeting by special resolution. The Articl es state that a special resolution shall be
required to alter the provisions of the Memorandum, to amend the Articles or to
change the name of the Company.
(e) Meetings of members
(i) Special and ordinary resolutions
A special resolution of the Company must be passed by a majority of not less
than three-fourths of the votes cast by such members as, being entitled so to do,
vote in person or, in the case of such members as are corporations, by their duly
authorised representatives or, where proxies are allowed, by proxy at a general
meeting of which notice has been duly given in accordance with the Articles.
Under the Companies Act, a copy of any special resolution must be
forwarded to the Registrar of Companies in the Cayman Islands within fifteen
(15) days of being passed.
An ordinary resolution is defined in the Articles to mean a resolution passed
by a simple majority of the votes of such members of the Company as, being
entitled to do so, vote in person or, in the case of corporations, by their duly
authorised representatives or, where proxies are allowed, by proxy at a general
meeting of which notice has been duly given in accordance with the Articles.
(ii) Voting rights and right to demand a poll
Subject to any special rights or restrictions as to voting for the time being
attached to any shares, at any general meeting on a poll every member present in
person or by proxy or, in the case of a member being a corporation, by its duly
authorised representative shall have one vote for every fully paid share of which
h ei st h eh o l d e rb u ts ot h a tn oa m o u n tp a i du po rc r e d i t e da sp a i du po nas h a r ei n
advance of calls or instalments is treated for the foregoing purposes as paid up on
the share. A member entitled to more than one vote need not use all his votes or
cast all the votes he uses in the same way.
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At any general meeting a resolution put to the vote of the meeting is to be
decided by way of a poll save that the chairman of the meeting may in good faith,
allow a resolution which relates purely to a procedural or administrative matter to
b ev o t e do nb yas h o wo fh a n d si nw h i c hc a s ee v e r ym e m b e rp r e s e n ti np e r s o n( o r
being a corporation, is present by a duly authorised representative), or by
proxy(ies) shall have one vote provided that where more than one proxy is
appointed by a member which is a clearin g house (or its nominee(s)), each such
proxy shall have one vote on a show of hands. Votes (whether on a show of hands
or by way of poll) may be cast by such means, electronic or otherwise, as the
Directors or the chairman of the meeting may determine.
Any corporation which is a member may by resolution of its directors or
other governing body authorise such person as it thinks fit to act as its
representative at any general meeting of the Company or at any meeting of any
class of members.
The person so authorised shall be entitled to exercise the same powers on
behalf of such corporation as the corporation could exercise if it were an
individual member and such corporation shall for the purposes of the Articles be
deemed to be present in person at any such meeting if a person so authorised is
present thereat.
If a recognised clearing house (or its nominee(s)) is a member of the
Company it may authorise such person o r persons as it thinks fit to act as its
representative(s) at any meeting of the Company or at any meeting of any class of
members of the Company provided that, if more than one person is so authorised,
the authorisation shall specify the number and class of shares in respect of which
each such person is so authorised. A person authorised pursuant to this provision
shall be deemed to have been duly authorised without further evidence of the facts
a n db ee n t i t l e dt oe x e r c i s et h es a m ep o w ers on behalf of the recognised clearing
house (or its nominee(s)) as if such person was the registered holder of the shares
of the Company held by that clearing house (or its nominee(s)) including, the right
to speak and to vote, and where a show of hands is allowed, the right to vote
individually on a show of hands.
All members have the right to speak and vote at a general meeting except
where a member is required, by the rules of the Stock Exchange, to abstain from
voting to approve the matter under consideration.
Where the Company has any knowledge that any member is, under the rules
of the Stock Exchange, required to abs tain from voting on any particular
resolution of the Company or restricted to voting only for or only against any
particular resolution of the Company, any votes cast by or on behalf of such
member in contravention of such requirement or restriction shall not be counted.
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(iii) Annual general meetings and e xtraordinary general meetings
The Company must hold an annual general meeting of the Company for each
financial year and such general meeting must be held within six (6) months after
the end of the Company’s financial year, unless a longer period would not infringe
the rules of the Stock Exchange.
Extraordinary general meetings may b e convened on the requisition of one or
more members holding, at the date of deposit of the requisition, not less than
one-tenth of the paid up capital of the Company having the right of voting at
general meetings, on a one vote per share basis. Such requisition shall be made in
writing to the board or the secretary for the purpose of requiring an extraordinary
general meeting to be called by the board for the transaction of any business or
resolution specified in such requisiti on. Such meeting shall be held within 2
months after the deposit of such requisition. If within 21 days of such deposit, the
board fails to proceed to convene suc h meeting, the requisitionist(s)
himself/herself (themselves) may do so in the same manner, and all reasonable
expenses incurred by the requisitionis t(s) as a result of the failure of the board
shall be reimbursed to the requisitionist(s) by the Company.
Notwithstanding any provisions in th e Articles, any general meeting or any
class meeting may be held by means of such telephone, electronic or other
communication facilities as to permit all persons participating in the meeting to
communicate with each other, and particip ation in such a meeting shall constitute
presence at such meeting.
(iv) Notices of meetings and business to be conducted
An annual general meeting must be called by notice of not less than
twenty-one (21) clear days. All other general meetings must be called by notice of
at least fourteen (14) clear days. The notice is exclusive of the day on which it is
served or deemed to be served and of the day for which it is given, and must
specify the time and place of the meeting and particulars of resolutions to be
considered at the meeting and, in the case of special business, the general nature of
that business.
In addition, notice of every general meeting must be given to all members of
the Company other than to such members as, under the provisions of the Articles
or the terms of issue of the shares they hold, are not entitled to receive such
notices from the Company, and also to, among others, the auditors for the time
being of the Company.
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--- page 515 ---
Any notice to be given to or by any person pursuant to the Articles may be
served on or delivered to any member of the Company personally, by post to such
member’s registered address or by advertisement in newspapers in accordance
with the requirements of the Stock Exchange. Subject to compliance with Cayman
Islands law and the rules of the Stock Exchange, notice may also be served or
delivered by the Company to any member by electronic means.
All business that is transacted at an extraordinary general meeting and at an
annual general meeting is deemed speci al, save that in the case of an annual
general meeting, each of the following business is deemed an ordinary business:
(aa) the declaration and sanctioning of dividends;
(bb) the consideration and adoption of the accounts and balance sheet and
the reports of the directors and the auditors;
(cc) the election of directors in place of those retiring;
(dd) the appointment of auditors and other officers; and
(ee) the fixing of the remuneration of the directors and of the auditors.
(v) Quorum for meetings and separate class meetings
No business shall be transacted at any general meeting unless a quorum is
present when the meeting proceeds to business, but the absence of a quorum shall
not preclude the appointment of a chairman.
The quorum for a general meeting shall be two members present in person
(or, in the case of a member being a corporation, by its duly authorised
representative) or by proxy or, for quorum purposes only, two persons appointed
by the clearing house as authorised representative or proxy, or, for quorum
purposes only, two persons appointed by the clearing house as authorised
representative or proxy, and entitled to v ote. In respect of a separate class meeting
(including an adjourned meeting) convened to sanction the modification of class
rights the necessary quorum shall be two p ersons holding or representing by proxy
not less than one-third in nominal value of the issued shares of that class.
(vi) Proxies
Any member of the Company entitled to attend and vote at a meeting of the
Company is entitled to appoint another person as his proxy to attend and vote
instead of him. A member who is the holder of two or more shares may appoint
more than one proxy to represent him and vote on his behalf at a general meeting
of the Company or at a class meeting. A proxy need not be a member of the
Company and is entitled to exercise the same powers on behalf of a member who
is an individual and for whom he acts as proxy as such member could exercise. In
APPENDIX IV SUMMARY OF THE CON STITUTION OF THE COMPANY
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--- page 516 ---
addition, a proxy is entitled to exercise the same powers on behalf of a member
which is a corporation and for which he acts as proxy as such member could
exercise as if it were an individual membe r. Votes may be given either personally
(or, in the case of a member being a corporation, by its duly authorised
representative) or by proxy.
(f) Accounts and audit
The board shall cause true accounts to be kept of the sums of money received and
expended by the Company, and the matters in respect of which such receipt and
expenditure take place, and of the propert y, assets, credits and liabilities of the
Company and of all other matters required by the Companies Act or necessary to give
a true and fair view of the Company’s affairs and to explain its transactions.
The accounting records must be kept at the registered office or at such other place
or places as the board decides and shall always be open to inspection by any Director.
No member (other than a Director) shall h ave any right to inspect any accounting
record or book or document of the Company except as conferred by law or authorised
by the board or the Company in general meeting. However, an exempted company
must make available at its registered office in electronic form or any other medium,
copies of its books of account or parts thereof as may be required of it upon service of
an order or notice by the Tax Information Authority pursuant to the Tax Information
Authority Act of the Cayman Islands.
A copy of every balance sheet and profit and loss account (including every
document required by law to be annexed thereto) which is to be laid before the
Company at its general meeting, together with a printed copy of the Directors’ report
and a copy of the auditors’ report, shall not less than twenty-one (21) days before the
date of the meeting and at the same time as the notice of annual general meeting be sent
to every person entitled to receive notices of general meetings of the Company under
the provisions of the Articles; however, sub ject to compliance with all applicable laws,
including the rules of the Stock Exchange, the Company may send to such persons
summarised financial statements derived from the Company’s annual accounts and the
directors’ report instead provided that any such person may by notice in writing served
on the Company, demand that the Company sends to him, in addition to summarised
financial statements, a complete printed copy of the Company’s annual financial
statement and the directors’ report thereon.
At the annual general meeting or at a subsequent extraordinary general meeting in
each year, the members shall by ordinary resolution appoint an auditor to audit the
accounts of the Company and such auditor shall hold office until the next annual
general meeting. Moreover, the members may, at any general meeting, by ordinary
resolution remove the auditor at any time before the expiration of his terms of office
and shall by ordinary resolution at that meeting appoint another auditor for the
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--- page 517 ---
remainder of his term. The remuneration of the auditors shall be fixed and approved by
the Company by an ordinary resolution passed at a general meeting or in such manner
a st h em e m b e r sm a yb yo r d i n a r yr e s o l u t i o nd e t e r m i n e .
The financial statements of the Company shall be audited by the auditor in
accordance with generally accepted auditing standards which may be those of a
country or jurisdiction other than the Cayman Islands. The auditor shall make a
written report thereon in accordance with generally accepted auditing standards and
the report of the auditor must be submitted to the members in general meeting.
(g) Dividends and other methods of distribution
The Company in general meeting may declare dividends in any currency to be paid
to the members but no dividend shall be declared in excess of the amount
recommended by the board.
The Articles provide dividends may be declared and paid out of the profits of the
Company, realised or unrealised, or from a ny reserve set aside from profits which the
directors determine is no longer needed. With the sanction of an ordinary resolution
dividends may also be declared and paid out of share premium account or any other
fund or account which can be authorised for this purpose in accordance with the
Companies Act.
Except in so far as the rights attaching to, or the terms of issue of, any share may
otherwise provide, (i) all dividends shall be declared and paid according to the amounts
paid up on the shares in respect whereof the dividend is paid but no amount paid up on
a share in advance of calls shall for this purpose be treated as paid up on the share and
(ii) all dividends shall be apportioned and paid pro rata according to the amount paid
up on the shares during any portion or portions of the period in respect of which the
dividend is paid. The Directors may deduct from any dividend or other monies payable
to any member or in respect of any shares all sums of money (if any) presently payable
by him to the Company on account of calls or otherwise.
Whenever the board or the Company in general meeting has resolved that a
dividend be paid or declared on the share capital of the Company, the board may
further resolve either (a) that such dividen d be satisfied wholly or in part in the form of
an allotment of shares credited as fully paid up, provided that the members entitled
thereto will be entitled to elect to receive suc h dividend (or part thereof) in cash in lieu
of such allotment, or (b) that members entitl ed to such dividend will be entitled to elect
to receive an allotment of shares credited as fully paid up in lieu of the whole or such
part of the dividend as the board may think fit.
The Company may also upon the recommendation of the board by an ordinary
resolution resolve in respect of any one particular dividend of the Company that it may
be satisfied wholly in the form of an allotment of shares credited as fully paid up
without offering any right to members to elect to receive such dividend in cash in lieu
of such allotment.
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--- page 518 ---
Any dividend, interest or other sum payable in cash to the holder of shares may be
paid by cheque or warrant sent through the post addressed to the holder at his
registered address, or in the case of joint holders, addressed to the holder whose name
stands first in the register of the Company in respect of the shares at his address as
appearing in the register or addressed to such person and at such addresses as the
holder or joint holders may in writing direct. Every such cheque or warrant shall,
unless the holder or joint holders otherwise direct, be made payable to the order of the
holder or, in the case of joint holders, to the order of the holder whose name stands
first on the register in respect of such shar es, and shall be sent at his or their risk and
payment of the cheque or warrant by the bank on which it is drawn shall constitute a
good discharge to the Company. Any one of two or more joint holders may give
effectual receipts for any dividends or other moneys payable or property distributable
in respect of the shares held by such joint holders.
Whenever the board or the Company in general meeting has resolved that a
dividend be paid or declared the board ma y further resolve that such dividend be
satisfied wholly or in part by the distribution of specific assets of any kind.
All dividends or bonuses unclaimed for one year after having been declared may
be invested or otherwise made use of by the board for the benefit of the Company until
claimed and the Company shall not be constituted a trustee in respect thereof. All
dividends or bonuses unclaimed for six years after having been declared may be
forfeited by the board and shall revert to the Company.
No dividend or other monies payable by the Company on or in respect of any
share shall bear intere st against the Company.
(h) Inspection of corporate records
Pursuant to the Articles, the register and branch register of members maintained
in Hong Kong shall be open to inspection for at least two (2) hours during business
hours by members without charge, or by any other person upon a maximum payment
of HK$2.50 or such lesser sum specified by the board, at the registered office or such
other place at which the register is kept in accordance with the Companies Act or,
upon a maximum payment of HK$1.00 or such lesser sum specified by the board, at the
office where the branch register of members is kept, unless the register is closed in
accordance with the Articles.
(i) Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles rel ating to rights of minority shareholders
in relation to fraud or oppression. Howeve r, certain remedies are available to members
of the Company under Cayman Islands law, as summarised in paragraph 3(f) of this
Appendix.
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--- page 519 ---
(j) Procedures on liquidation
Unless otherwise provided by the Compan ies Act, a resolution that the Company
be wound up by the court or be wound up voluntarily shall be a special resolution.
Subject to any special rights, privileges or restrictions as to the distribution of
available surplus assets on liquidation for the time being attached to any class or
classes of shares:
(i) if the Company is wound up and the assets available for distribution amongst
the members of the Company shall be more than sufficient to repay the whole
of the capital paid up at the commencement of the winding up, the excess
shall be distributed pari passu amongst such members in proportion to the
amount paid up on the shares held by them respectively; and
(ii) if the Company is wound up and the assets available for distribution amongst
the members as such shall be insufficient to repay the whole of the paid-up
capital, such assets shall be distributed so that, as nearly as may be, the losses
shall be borne by the members in proportion to the capital paid up, or which
ought to have been paid up, at the commencement of the winding up on the
shares held by them respectively.
If the Company is wound up (whether the liquidation is voluntary or by the court)
the liquidator may, with the authority of a special resolution and any other sanction
required by the Companies Act divide among the members in specie or kind the whole
or any part of the assets of the Company whether the assets shall consist of property of
one kind or shall consist of properties of d ifferent kinds and the liquidator may, for
such purpose, set such value as he deems fair upon any one or more class or classes of
property to be divided as aforesaid and may determine how such division shall be
carried out as between the members or different classes of members. The liquidator
may, with the like authority, vest any part of the assets in trustees upon such trusts for
the benefit of members as the liquidator, with the like authority, shall think fit, but so
that no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability.
(k) Subscription rights reserve
The Articles provide that to the extent that it is not prohibited by and is in
compliance with the Companies Act, if warrants to subscribe for shares have been
issued by the Company and the Company does any act or engages in any transaction
which would result in the subscription pri ce of such warrants being reduced below the
par value of a share, a subscription rights reserve shall be established and applied in
paying up the difference between the subscription price and the par value of a share on
any exercise of the warrants.
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3. CAYMAN ISLANDS COMPANY LAW
The Company is incorporated in the Cayman Islands subject to the Companies Act
and, therefore, operates subject to Cayman Islands law. Set out below is a summary of
certain provisions of Cayman company law, a lthough this does not purport to contain all
applicable qualifications and exceptions o r to be a complete review of all matters of
Cayman company law and taxation, which may differ from equivalent provisions in
jurisdictions with which intere sted parties may be more familiar:
(a) Company operations
As an exempted company, the Company’s operations must be conducted mainly
outside the Cayman Islands. The Company is required to file an annual return each
year with the Registrar of Companies of t he Cayman Islands and pay a fee which is
based on the amount of its authorised share capital.
(b) Share capital
The Companies Act provides that where a company issues shares at a premium,
whether for cash or otherwise, a sum equal to the aggregate amount of the value of the
premiums on those shares shall be transferred to an account, to be called the ‘‘share
premium account’’. At the option of a company, these provisions may not apply to
premiums on shares of that company allo tted pursuant to any arrangement in
consideration of the acquisition or cancellation of shares in any other company and
issued at a premium.
The Companies Act provides that the share premium account may be applied by
the company subject to the provisions, if any, of its memorandum and articles of
association in (a) paying distributions or dividends to members; (b) paying up unissued
shares of the company to be issued to members as fully paid bonus shares; (c) the
redemption and repurchase of shares (subject to the provisions of section 37 of the
Companies Act); (d) writing-off the pre liminary expenses of the company; and (e)
writing-off the expenses of, or the commission paid or discount allowed on, any issue
of shares or debentures of the company.
No distribution or dividend may be paid to members out of the share premium
account unless immediately following the dat e on which the distribution or dividend is
proposed to be paid, the company will be able to pay its debts as they fall due in the
ordinary course of business.
The Companies Act provides that, subject to confirmation by the Grand Court of
the Cayman Islands (the ‘‘ Court ’’), a company limited by shares or a company limited
by guarantee and having a share capital may, if so authorised by its articles of
association, by special resolution reduce its share capital in any way.
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(c) Financial assistance to purchase shares of a company or its holding company
There is no statutory restriction in the Cayman Islands on the provision of
financial assistance by a company to another person for the purchase of, or
subscription for, its own or its holding company’s shares. Accordingly, a company
may provide financial assistance if the d irectors of the company consider, in
discharging their duties of care and acting in good faith, for a proper purpose and
in the interests of the company, that such assistance can properly be given. Such
assistance should be on an arm’s-length basis.
(d) Purchase of shares and warrants by a company and its subsidiaries
A company limited by shares or a company limited by guarantee and having a
share capital may, if so authorised by its articles of association, issue shares which are
to be redeemed or are liable to be redeemed at the option of the company or a
shareholder and the Companies Act expressly provides that it shall be lawful for the
rights attaching to any shares to be varied , subject to the provisions of the company’s
articles of association, so as to provide that such shares are to be or are liable to be so
redeemed. In addition, such a company may, if authorised to do so by its articles of
association, purchase its own shares, inclu ding any redeemable shares. However, if the
articles of association do not authorise the manner and terms of purchase, a company
cannot purchase any of its own shares unless the manner and terms of purchase have
first been authorised by an ordinary resolution of the company. At no time may a
company redeem or purchase its shares unless they are fully paid. A company may not
redeem or purchase any of its shares if, as a result of the redemption or purchase, there
would no longer be any issued shares of the company other than shares held as treasury
shares. A payment out of capital by a company for the redemption or purchase of its
own shares is not lawful unless immediately following the date on which the payment is
proposed to be made, the company shall be able to pay its debts as they fall due in the
ordinary course of business.
Shares purchased by a company is to be treated as cancelled unless, subject to the
memorandum and articles of association of the company, the directors of the company
resolve to hold such shares in the name of th e company as treasury shares prior to the
purchase. Where shares of a company are held as treasury shares, the company shall be
entered in the register of members as holdi ng those shares, however, notwithstanding
the foregoing, the company is not to be tr eated as a member for any purpose and must
not exercise any right in respect of the treas ury shares, and any purported exercise of
such a right shall be void, and a treasury share must not be voted, directly or indirectly,
at any meeting of the company and must not be counted in determining the total
number of issued shares at any given time, w hether for the purposes of the company’s
articles of association or the Companies Act.
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A company is not prohibited from purchasing and may purchase its own warrants
subject to and in accordance with the terms and conditions of the relevant warrant
instrument or certificate. There is no requirement under Cayman Islands law that a
company’s memorandum or articles of association contain a specific provision
enabling such purchases and the directors of a company may rely upon the general
power contained in its memorandum of association to buy and sell and deal in personal
property of all kinds.
Under Cayman Islands law, a subsidiary may hold shares in its holding company
and, in certain circumstances, may acquire such shares.
(e) Dividends and distributions
The Companies Act permits, subject to a solvency test and the provisions, if any,
of the company’s memorandum and articles of association, the payment of dividends
and distributions out of the share premium account. With the exception of the
foregoing, there are no statutory provisions relating to the payment of dividends.
Based upon English case law, which is regarded as persuasive in the Cayman Islands,
dividends may be paid only out of profits.
No dividend may be declared or paid, and no other distribution (whether in cash
or otherwise) of the company’s assets (including any distribution of assets to members
on a winding up) may be made to the company, in respect of a treasury share.
(f) Protection of minorities and shareholders’ suits
The Courts ordinarily would be expected to follow English case law precedents
which permit a minority shareholder to commence a representative action against or
derivative actions in the name of the company to challenge (a) an act which is ultra
vires the company or illegal, (b) an act whic h constitutes a fraud against the minority
and the wrongdoers are themselves in control of the company, and (c) an irregularity in
the passing of a resolution which requires a qualified (or special) majority.
In the case of a company (not being a bank) having a share capital divided into
shares, the Court may, on the application of members holding not less than one fifth of
the shares of the company in issue, appoint an inspector to examine into the affairs of
the company and to report thereon in such manner as the Court shall direct.
Any shareholder of a company may petition the Court which may make a winding
up order if the Court is of the opinion that it is just and equitable that the company
should be wound up or, as an alternative to a winding up order, (a) an order regulating
the conduct of the company’s affairs in the future, (b) an order requiring the company
to refrain from doing or continuing an act complained of by the shareholder petitioner
or to do an act which the shareholder petitioner has complained it has omitted to do,
(c) an order authorising civil proceedings to be brought in the name and on behalf of
the company by the shareholder petitioner on such terms as the Court may direct, or
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(d) an order providing for the purchase of the shares of any shareholders of the
company by other shareholders or by the company itself and, in the case of a purchase
by the company itself, a reduction of the company’s capital accordingly.
Generally claims against a company by its shareholders must be based on the
general laws of contract or tort applicable in the Cayman Islands or their individual
rights as shareholders as established by the company’s memorandum and articles of
association.
(g) Disposal of assets
The Companies Act contains no specific restrictions on the power of directors to
dispose of assets of a company. However, as a matter of general law, every officer of a
company, which includes a director, managing director and secretary, in exercising his
powers and discharging his duties must do so honestly and in good faith with a view to
the best interests of the company and exe rcise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
(h) Accounting and auditing requirements
A company must cause proper books of account to be kept with respect to (i) all
sums of money received and expended by the company and the matters in respect of
which the receipt and expenditure takes place; (ii) all sales and purchases of goods by
the company; and (iii) the asset s and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such
books as are necessary to give a true and fair view of the state of the company’s affairs
and to explain its transactions.
An exempted company must make available at its registered office in electronic
form or any other medium, copies of its books of account or parts thereof as may be
required of it upon service of an order or notice by the Tax Information Authority
pursuant to the Tax Information Authority Act of the Cayman Islands.
(i) Exchange control
There are no exchange control regulations or currency restrictions in the Cayman
Islands.
(j) Taxation
Pursuant to the Tax Concessions Act of the Cayman Islands, the Company has
obtained an undertaking:
(1) that no law which is enacted in the Cayman Islands imposing any tax to be
levied on profits, income, gains or appreciation shall apply to the Company
or its operations; and
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(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance
tax shall not be payable on or in respec to ft h es h a r e s ,d e b e n t u r e so ro t h e r
obligations of the Company.
The undertaking for the Company is for a period of twenty years from 31
December 2021.
The Cayman Islands currently levy no taxes on individuals or corporations based
upon profits, income, gains or appreciations and there is no taxation in the nature of
inheritance tax or estate duty. There are no other taxes likely to be material to the
Company levied by the Government of the Cayman Islands save for certain stamp
duties which may be applicab le, from time to time, on certain instruments executed in
or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a
party to a double tax treaty entered into with the United Kingdom in 2010 but
otherwise is not party to any double tax treaties.
(k) Stamp duty on transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman
Islands companies except those which hol d interests in land in the Cayman Islands.
(l) Loans to directors
There is no express provision in the Co mpanies Act prohibiting the making of
loans by a company to any of its directors.
(m) Inspection of corporate records
The notice of registered office is a matte r of public record. A list of the names of
the current directors and alternate directors (if applicable) is made available by the
Registrar of Companies for inspection by any person on payment of a fee. The register
of mortgages is open to inspection by creditors and members.
Members of the Company have no general right under the Companies Act to
inspect or obtain copies of the register of members or corporate records of the
Company. They will, however, have such rights as may be set out in the Company’s
Articles.
(n) Register of members
An exempted company may maintain its principal register of members and any
branch registers at such locations, whether within or without the Cayman Islands, as
the directors may, from time to time, think f it. The register of members shall contain
such particulars as required by Section 40 of the Companies Act. A branch register
must be kept in the same manner in which a principal register is by the Companies Act
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required or permitted to be kept. The company shall cause to be kept at the place
where the company’s principal register is kept a duplicate of any branch register duly
e n t e r e du pf r o mt i m et ot i m e .
There is no requirement under the Companies Act for an exempted company to
make any returns of members to the Registrar of Companies of the Cayman Islands.
The names and addresses of the members are, accordingly, not a matter of public
record and are not available for public in spection. However, an exempted company
shall make available at its registered office, in electronic form or any other medium,
such register of members, including any branch register of members, as may be
required of it upon service of an order or notice by the Tax Information Authority
pursuant to the Tax Information Authority Act of the Cayman Islands.
(o) Register of Directors and Officers
The Company is required to maintain at its r egistered office a register of directors
and officers which is not available for inspection by the public. A copy of such register
must be filed with the Registrar of Companies in the Cayman Islands and any change
must be notified to the Registrar within thirty (30) days of any change in such directors
or officers.
(p) Beneficial Ownership Register
An exempted company is required to maintain a beneficial ownership register at
its registered office that records details of the persons who ultimately own or control,
directly or indirectly, 25% or more of the equity interests or voting rights of the
company or have rights to appoint or remove a majority of the directors of the
company. The beneficial ownership register is not a public document and is only
accessible by a designated competent authority of the Cayman Islands. Such
requirement does not, however, apply to an exempted company with its shares listed
on an approved stock exchange, which includes the Stock Exchange. Accordingly, for
so long as the shares of the Company are listed on the Stock Exchange, the Company is
not required to maintain a beneficial ownership register.
(q) Winding up
A company may be wound up (a) compulsorily by order of the Court, (b)
voluntarily, or (c) under the supervision of the Court.
The Court has authority to order winding up in a number of specified
circumstances including where the members of the company have passed a special
resolution requiring the company to be wound up by the Court, or where the company
is unable to pay its debts, or where it is, in the opinion of the Court, just and equitable
to do so. Where a petition is presented by members of the company as contributories
on the ground that it is just and equitable that the company should be wound up, the
Court has the jurisdiction to make certain other orders as an alternative to a
winding-up order, such as making an order regulating the conduct of the company’s
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affairs in the future, making an order authorising civil proceedings to be brought in the
name and on behalf of the company by the petitioner on such terms as the Court may
direct, or making an order providing for the purchase of the shares of any of the
members of the company by other members or by the company itself.
A company (save with respect to a limited duration company) may be wound up
voluntarily when the company so resolves by special resolution or when the company
in general meeting resolves by ordinary resolution that it be wound up voluntarily
because it is unable to pay its debts. In the case of a voluntary winding up, such
company is obliged to cease to carry on its business (except so far as it may be
beneficial for its winding up) from the time of passing the resolution for voluntary
winding up or upon the expiry of the period or the occurrence of the event referred to
above.
For the purpose of conducting the proceedings in winding up a company and
assisting the Court therein, there may be a ppointed an official liquidator or official
liquidators; and the court may appoint to such office such person, either provisionally
or otherwise, as it thinks fit, and if more persons than one are appointed to such office,
the Court must declare whether any act required or authorised to be done by the
official liquidator is to be done by all or any one or more of such persons. The Court
may also determine whether any and what security is to be given by an official
liquidator on his appointment; if no official liquidator is appointed, or during any
vacancy in such office, all the property of the company shall be in the custody of the
Court.
As soon as the affairs of the company are fully wound up, the liquidator must
make a report and an account of the winding up, showing how the winding up has been
conducted and how the property of the company has been disposed of, and thereupon
call a general meeting of the company for the purposes of laying before it the account
and giving an explanation thereof. This fina l general meeting must be called by at least
21 days’ notice to each contributory in any manner authorised by the company’s
articles of association and published in the Gazette.
(r) Reconstructions
There are statutory provisions which facilitate reconstructions and
amalgamations approved by (i) a majority i n number representing seventy-five per
cent. (75%) in value of creditors, or (ii) seventy-five per cent. (75%) in value of
shareholders or class of shareholders, as the case may be, as are present at a meeting
called for such purpose and thereafter sanctioned by the Court. Whilst a dissenting
shareholder would have the right to express to the Court his view that the transaction
for which approval is sought would not provide the shareholders with a fair value for
their shares, the Court is unlikely to disapprove the transaction on that ground alone
in the absence of evidence of fraud o r bad faith on behalf of management.
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The Companies Act also contains statu tory provisions which provide that a
company may present a petition to the Court for the appointment of a restructuring
officer on the grounds that the company (a) is or is likely to become unable to pay its
debts within the meaning of section 93 of the Companies Act; and (b) intends to
present a compromise or arrangement to its creditors (or classes thereof) either,
pursuant to the Companies Act, the law of a foreign country or by way of a consensual
restructuring. The petition may be presented by a company acting by its directors,
without a resolution of its shareholder s or an express power in its articles of
association. On hearing such a petition, the Court may, among other things, make an
order appointing a restructuring officer or make any other order as the Court thinks
fit.
(s) Take-overs
Where an offer is made by a company for the shares of another company and,
within four (4) months of the offer, the holders of not less than ninety per cent. (90%)
of the shares which are the subject of the offer accept, the offeror may at any time
within two (2) months after the expiration of the said four (4) months, by notice in the
prescribed manner require the dissenting shareholders to transfer their shares on the
terms of the offer. A dissenting shareholder may apply to the Court within one (1)
month of the notice objecting to the transfer. The burden is on the dissenting
shareholder to show that the Court should exercise its discretion, which it will be
unlikely to do unless there is evidence of fraud or bad faith or collusion as between the
offeror and the holders of the shares who have accepted the offer as a means of unfairly
forcing out minority shareholders.
(t) Indemnification
Cayman Islands law does not limit the extent to which a company’s articles of
association may provide for indemnification of officers and directors, except to the
extent any such provision may be held by the Court to be contrary to public policy (e.g.
for purporting to provide indemnificatio n against the consequences of committing a
crime).
(u) Economic Substance Requirements
Pursuant to the International Tax Cooperation (Economic Substance) Act of the
Cayman Islands (‘‘ES Act ’’) that came into force on 1 January 2019, a ‘‘relevant entity’’
is required to satisfy the economic substance test set out in the ES Act. A ‘‘relevant
entity’’ includes an exempted company incorporated in the Cayman Islands as is the
Company; however, it does not include an entity that is tax resident outside the
Cayman Islands. Accordingly, for so long as t h eC o m p a n yi sat a xr e s i d e n to u t s i d et h e
Cayman Islands, including in Hong Kong, it is not required to satisfy the economic
substance test set out in the ES Act.
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4. GENERAL
Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law,
have sent to the Company a letter of advice summarising certain aspects of Cayman Islands
company law. This letter, together with a copy of the Companies Act, is available on display
as referred to in the paragraph headed ‘‘Documents Available on Display’’ in Appendix VI
to this prospectus. Any person wishing to have a detailed summary of Cayman Islands
company law or advice on the differences betw een it and the laws of any jurisdiction with
which he is more familiar is recommended to seek independent legal advice.
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A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of our Company
Our Company was incorporated in the Cayman Islands under the Cayman
Companies Act as an exempted company wit h limited liability on 7 December 2021.
Our principal place of business in Singapore is at No. 43 Tuas View Circuit, Singapore
637360. Our registered office is at Cricket Square, Hutchins Drive, PO Box 2681,
Grand Cayman, KY1-1111 Cayman Islands. We have been registered with the
Registrar of Companies in Hong Kong as a non-Hong Kong company under Part 16 of
the Companies Ordinance on 14 May 2024 and have established a principal place of
business in Hong Kong at 5/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong
Kong. Mr. Ng Cheuk Kin has been appointed as the authorised representative of our
Company for the acceptance of service of process and notices on behalf of our
C o m p a n yi nH o n gK o n g .
As a company incorporated in the Cayman Islands, our operations are subject to
the Memorandum of Association and the A rticles of Association and the Cayman
Islands company law. A summary of cert ain provisions of the Memorandum of
Association and the Articles of Associatio n and certain aspects of the Cayman Islands
company law is set out in Appendix IV to this prospectus.
2. Changes in the share capital of our Company
As at the date of incorporation of our Company, our Company had an authorised
share capital of HK$380,000, divided in to 380,000,000 shares of HK$0.001 each.
The following changes in the share capital of our Company have taken place since
the date of incorporation of our Company up to the date of this prospectus:
(a) At the time of incorporation, one Share was issued and allotted to an
independent third party as the first subscriber, and the said one Share was
subsequently transferred to SGP BVI on the same day;
(b) On 26 April 2023, our Company issued and allotted 2,668,458 ordinary
shares, 1,126,058 ordinary shares, 559,651 ordinary shares, 371,343 ordinary
shares, 279,826 ordinary shares, 139,913 ordinary shares, 80,789 ordinary
shares, 76,172 ordinary shares, 69,247 ordinary shares, 57,706 ordinary
shares, 57,706 ordinary shares, 57,706 ordinary shares, 28,853 ordinary
shares and 23,082 ordinary shares to each of SGP BVI, Baccini, Angelling,
Ms. Pang, Accelerate, MMI, Zou Shuling, Hong Haicheng, Soo Siew Har
a n dH oG i mH a i ,C h u aL e eC h a i ,T a nB e n gK i a t ,D e b o r a hC h u aW e eW e i ,
Tan Kok Thye George and Poh Seng Kah, respectively; and
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(c) On 7 June 2024, our authorised share capital was increased from
HK$380,000 divided into 380,000,000 Shares of HK$0.001 each, to
HK$1,000,000 divided into 1,000,000,000 Shares of HK$0.001 each, by the
creation of 620,000,000 Shares of HK$0.001 each.
Immediately following the completion of the Capitalisation Issue and the Share
Offer but without taking into account any Shares which may be issued and allotted
upon exercise of the options which may be granted under the Post-IPO Share Option
Scheme, the issued share capital of our Company will be HK$150,000, divided into
150,000,000 Shares, all fully paid or credited as fully paid.
Save as disclosed above and in ‘‘5. Resolutions passed in extraordinary general
meeting of our Shareholders on 7 June 2024’’ below, there has been no alteration in the
share capital of our Company since its incorporation.
3. Our subsidiaries
Certain details of our subsidiaries are set out in Appendix I to this prospectus.
Save as set out in Appendix I to this prospectus, we do not have any other subsidiaries.
The following alterations in the share capital of our subsidiaries have taken place
within the two years immediately preceding the date of this prospectus:
(a) On 27 September 2022, Mrs. Chua subscribed for, and Metasurface
Technologies issued and allotted to Mrs. Chua, 279,800 ordinary shares in
Metasurface Technologies as a result of which an outstanding amount of
approximately S$4,285,000 due from Metasurface Technologies to Mrs.
Chua was deemed to be full repaid;
(b) On 14 October 2022, Accelerat e subscribed for, and Metasurface
Technologies issued and allotted to Accel erate, 272,462 ordinary shares in
Metasurface Technologies at an aggregate consideration of S$2,880,000; and
(c) On 30 January 2023, MMI subscribed for, and Metasurface Technologies
issued and allotted to MMI, 139,913 ordinary shares in Metasurface
Technologies at an aggregate consideration of S$1,000,000.
Save as disclosed above, there has been no alteration in the share capital of our
subsidiaries within the two years immedia tely preceding the date of this prospectus.
4. Corporate reorganisation
In order to rationalise our structure and prepare for the Listing, our Group has
undertaken several restructuring steps, particulars of which are set out in ‘‘History and
Development — Reorganisation’’.
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5. Resolutions passed in extraordinary general meeting of our Shareholders on 7 June
2024
Pursuant to the resolutions passed in extraordinary general meeting by our
Shareholders on 7 June 2024 :
(a) conditional upon (i) the Listing Committee granting the approval of the
listing of, and the permission to deal in, the Shares in issue and to be issued
pursuant to the Capitalisation Issue and the Share Offer and the Shares
which may be issued upon exercise of the Post-IPO Share Options, and such
listing and permission not subsequently having been revoked prior to the
commencement of dealing in the Shares on the Stock Exchange, (ii) the Offer
Price having been duly agreed between the Sole Overall Coordinator (for
itself and on behalf of the Underwriters) and our Company, (iii) the
execution and delivery of the Placing Underwriting Agreement on or around
the Price Determination Date, and (iv ) the obligations of the Underwriters
under each of the Underwriting Agreements having become unconditional
and not having been terminated in accordance with the terms therein or
otherwise, in each case on or before such dates as may be specified in such
agreements:
(1) the Share Offer was approved and our Directors were authorised to
approve the allotment and issue of the Shares pursuant to the Share
Offer on and subject to the terms and conditions thereof as set out in
this prospectus;
(2) the proposed Listing was approved and our Directors were authorised to
implement the proposed Listing;
(3) the Capitalisation Issue was appr oved and conditional on the share
premium account of our Company being credited as a result of the Share
Offer, our Directors were authori sed to capitalise approximately
HK$117,403.49 standing to the credit of the share premium account
of our Company by applying such sum in paying up in full at par
117,403,489 Shares, such Shares to be allotted and issued on the Listing
Date, credited as fully-paid at par to our Shareholder(s) whose name(s)
appear on the register of members of our Company at the close of
business on 28 June 2024 in proportion (as near as possible without
involving fractions so that no frac tion of a share shall be allotted and
issued) to their then shareholding in our Company and the Shares to be
allotted and issued pursuant to the Ca pitalisation Issue shall carry the
same rights in all respects with the then existing issued Shares and our
Directors were authorised to allot and issue the Shares under the
Capitalisation Issue and to giv e effect to such capitalisation;
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(4) a general unconditional mandate relating to the issue of Shares was
given to our Directors to exercise all powers of our Company to allot,
issue and deal with, or sell and/or transfer treasury shares, otherwise
than pursuant to a rights issue, or any scrip dividend scheme or similar
arrangement providing for allotment and issue of Shares in lieu of the
whole or in part of a dividend on Shares in accordance with our Articles,
or any specific authority granted by our Shareholders in general
meeting(s), or pursuant to the exercise of any Post-IPO Share Options
or any other arrangement which may be regulated under Chapter 23 of
the GEM Listing Rules, such number of Shares representing up to 20%
of the total number of Shares in issue immediately upon completion of
the Capitalisation Issue and the Shar e Offer (excluding treasury shares),
and such mandate to remain in effect until the conclusion of our next
annual general meeting unless by an ordinary resolution passed at that
meeting, the authority is renewed, ei ther unconditionally or subject to
conditions, or the expiration of the period within which our next annual
general meeting is required by our Articles or any applicable laws of the
Cayman Islands to be held, or when the passing of an ordinary
resolution of our Shareholders in a general meeting revoking, varying or
renewing such mandate, which occurs first (the ‘‘ Relevant Period ’’);
(5) a general unconditional mandate relating to the repurchase of Shares
was given to our Directors to exercise all powers for and on behalf of
our Company to repurchase on the Stock Exchange, or on any other
approved stock exchange on which our securities may be listed and
which is recognised by the SFC and the Stock Exchange for this
purpose, subject to and in accordan ce with all applicable laws and/or
requirements of the GEM Listing Rules or of any other stock exchange
on which our securities may be listed, as amended from time to time
such number of Shares representing up to 10% of the total number of
Shares in issue immediately upon comp letion of the Capitalisation Issue
and Share Offer (excluding treasury shares), such mandate to remain in
effect during the Relevant Period;
(6) the extension of the Issuing Mandate by the addition to the total number
of Shares in issue which may be allotted and issued or agreed
conditionally or unconditionally to be allotted or issued by our
Directors pursuant to such Issuing Mandate of the aggregate number
of Shares repurchased by our Company pursuant to the Repurchase
Mandate, provided that such extended amount shall not exceed 10% of
the total number of Shares in issue immediately upon completion of the
Capitalisation Issue and the Share Offer (excluding treasury shares); and
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(7) the Post-IPO Share Option Scheme was approved and adopted with such
additions, amendments or modifications thereto as may be approved by
our Directors in their absolute discretion and our Directors were
authorised, at their absolute discretion, to implement the Post-IPO
Share Option Scheme, to grant Post-IPO Share Options thereunder, to
allot, issue and deal with the Shares thereunder, to modify or amend the
Post-IPO Option Scheme, to apply to the Stock Exchange for the listing
of, and permission to deal in, the Shares issued upon exercise of the
Post-IPO Share Options, and to take all such steps as may be necessary,
desirable or expedient to implement or give effect to the Post-IPO Share
Option Scheme;
(b) our Articles was adopted in substitution of and to the exclusion of the
existing articles of association of our Company with effect from the Listing
Date;
(c) the authorised share capital of our Company was increased from
HK$380,000 divided into 380,000,000 Shares of HK$0.001 each to
HK$1,000,000 divided into 1,000,000,000 Shares of HK$0.001 each by the
creation of an additional 620,000,000 Shares of HK$0.001 each with effect
from the Listing Date; and
(d) our Memorandum was adopted in substitution for and to the exclusion of the
existing memorandum of associatio n of our Company with effect from the
date of the resolution.
6. Repurchase of our own securities
As mentioned in ‘‘5. Resolutions passed in extraordinary general meeting of our
Shareholders on 7 June 2024’’ above, a general unconditional mandate was granted to
our Directors to exercise all powers of our Company to repurchase Shares on the Stock
Exchange or on any other stock exchange on which the securities of our Company may
be listed.
(a) Provisions of the GEM Listing Rules
The GEM Listing Rules permit a company with a primary listing on the
Stock Exchange to repurchase its securities on the Stock Exchange subject to
certain restrictions, the more important of which are summarised below:
(i) Shareholders’ approval
All proposed repurchases of securities (which must be fully paid up in
the case of shares) by a company with a primary listing on the Stock
Exchange must be approved in advance by an ordinary resolution by
shareholders in general meeting, either by way of general mandate or by
specific approval of a particular transaction.
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(ii) Source of funds
Repurchases must be funded out of funds legally available for such
purpose. A listed company may not repurchase its own securities on the
Stock Exchange for a consideration other than cash or for settlement
otherwise than in accordance with the trading rules of the Stock Exchange as
amended from time to time. Subject to the foregoing, any repurchase by our
Company may be made out of the profits or share premium of our Company
or out of the proceeds of a fresh issue of Shares made for the purpose of the
repurchase and, in the case of any premium payable on the purchase, out of
the profits of our Company or from sums standing to the credit of the share
premium account of our Company. Subject to the Cayman Companies Act, a
repurchase may also be made out of capital.
(iii) Trading restrictions
The total number of shares which a listed company may repurchase on
the Stock Exchange is the number of sha res representing up to a maximum of
10% of the aggregate number of shares in issue (excluding treasury shares). A
company may not issue or announce a proposed issue of new securities for a
period of 30 days immediately following a repurchase (other than an issue of
securities pursuant to an exercise of warrants, share options or similar
instruments requiring the company to issue securities which were outstanding
prior to such repurchase) without the prior approval of the Stock Exchange.
In addition, a listed company is prohibited from repurchasing its shares on
the Stock Exchange if the purchase p rice is higher by 5% or more than the
average closing market price for the five preceding trading days on which its
shares were traded on the Stock Exchange. The GEM Listing Rules also
prohibit a listed company from repurchasing its securities if the repurchase
would result in the number of listed securities which are in the hands of the
public falling below the rel evant prescribed minimum percentage as required
by the Stock Exchange. A listed company is required to procure that the
broker appointed by it to effect a repurchase of securities shall disclose to the
Stock Exchange such information with respect to the repurchase as the Stock
Exchange may require.
(iv) Status of repurchased securities
Following a repurchase of Shares, the Company may cancel any
repurchased Shares and/or hold them as treasury shares subject to, among
others, market conditions and its capital management needs at the relevant
time of the repurchases, which may change due to evolving circumstances.
Shareholders and potential investors of the Company are advised to pay
attention to any announcement to be published by the Company in the
future, including but without limitation, any relevant next day disclosure
return (which shall identify, amongst others, the number of repurchased
APPENDIX V STATUTORY AND GENERAL INFORMATION
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shares that are to be held in treasury or cancelled upon settlement of such
repurchase, and where applicable, the reasons for any deviation from the
intention statement previous disclosed) and any relevant monthly return.
For any treasury shares of the Company deposited with CCASS pending
resale on the Stock Exchange, the Company shall, upon approval by the
Board implement the below interim measures which include (without
limitation):
(i) procuring its broker not to give any instructions to HKSCC to vote
at general meetings for the treasury shares deposited with CCASS;
(ii) in the case of dividends or distributions (if any and where
applicable), withdrawing the tr easury shares from CCASS, and
either re-register them in its own name as treasury shares or cancel
them, in each case before the relevant record date for the dividend
or distributions; or
(iii) taking any other measures to en sure that it will not exercise any
shareholders’ rights or receive any entitlements which would
otherwise be suspended under the applicable laws if those Shares
were registered in its own name as treasury shares.
(v) Suspension of repurchases
A listed company may not make any repurchase of securities at any time
after inside information has come to its knowledge until the information has
been made publicly available. In particular, during the period of one month
immediately preceding the earlier of (a) the date of the board meeting (as
such date is first notified to the Stock Exchange in accordance with the GEM
Listing Rules) for the approval of a listed company’s results for any year,
half-year, quarterly or any other interim period (whether or not required
under the GEM Listing Rules) and (b) the deadline for publication of an
announcement of a listed company’s results for any year or half-year under
the GEM Listing Rules, or quarterly or any other interim period (whether or
not required under the GEM Listing Rules), and ending on the date of the
results announcement, the listed company may not repurchase its shares on
the Stock Exchange other than in exceptional circumstances. In addition, the
Stock Exchange may prohibit a repurchase of securities on the Stock
Exchange if a listed company has breached the GEM Listing Rules.
(vi) Reporting requirements
Certain information relating to re purchases of securities on the Stock
Exchange or otherwise must be reported to the Stock Exchange not later than
30 minutes before the earlier of the commencement of the morning trading
session or any pre-opening session on the following business day. In addition,
a listed company’s annual report is required to disclose details regarding
APPENDIX V STATUTORY AND GENERAL INFORMATION
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repurchases of securities made during the year, including a monthly analysis
of the number of securities repurchased, the purchase price per share or the
highest and lowest price paid for all such repurchases, where relevant, and
the aggregate prices paid, and the reasons for making the repurchases.
(vii)Core connected persons
A listed company is prohibited from knowingly repurchasing securities
on the Stock Exchange from a core connected person and a core connected
person is prohibited from knowingly se lling his securities to the company.
(b) Reasons for repurchases
Our Directors believe that the ability to r epurchase Shares is in the interests
of our Company and the Shareholders. Repurchases may, depending on market
conditions, funding arrangements and oth er circumstances, result in an increase in
the net assets and/or earnings per Share. Our Directors sought the grant of a
general mandate to repurchase Shares to give our Company the flexibility to do so
if and when appropriate. The number of Shares to be repurchased on any occasion
and the price and other terms upon which the same are repurchased will be
decided by our Directors at the relevant time having regard to the circumstances
then pertaining. Repurchases of Shares will only be made when our Directors
believe that such repurchases will benefit our Company and our Shareholders.
(c) Funding of repurchases
In repurchasing Shares, our Company may only apply funds lawfully
available for such purpose in accordance with our Memorandum of Association
and our Articles of Association, the GEM Listing Rules and the applicable laws of
the Cayman Islands. There could be a material and adverse impact on the working
capital and/or gearing position of our Company (as compared with the position
disclosed in this prospectus) in the event that the repurchase mandate were to be
carried out in full at any time during the share repurchase period. However, our
Directors do not propose to exercise the mandate to such extent as would, in the
circumstances, have a material and adverse effect on the working capital
requirements of our Company or the gearing levels which in the opinion of our
Directors are from time to time appropriate for our Company.
(d) General
The exercise in full of the repurchase mandate, on the basis of 150,000,000
Shares in issue immediately following the completion of the Capitalisation Issue
and the Share Offer (without taking into account any Shares which may be issued
and allotted upon the exercise of the options which may be granted under the
Post-IPO Share Option Scheme), could accordingly result in up to 15,000,000
Shares being repurchased by our Company during the Relevant Period.
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None of our Directors nor, to the best of their knowledge having made all
reasonable enquiries, any of their resp ective close associates, has any present
intention to sell any Shares to our Company or our subsidiaries.
Our Directors have undertaken to the Stock Exchange that, so far as the
same may be applicable, they will exercise the repurchase mandate in accordance
with the GEM Listing Rules and the app licable laws in the C ayman Islands.
No core connected person of our Company has notified our Company that he
or she has a present intention to sell Shares to our Company, or has undertaken
not to do so, if the repurchase mandate is exercised.
If, as a result of any repurchase of S hares pursuant to the repurchase
mandate, a Shareholder’s proportiona te interest in the voting rights of our
Company is increased, such increase will be treated as an acquisition for the
purposes of the Takeovers Code. Accordingly, a Shareholder or a group of
Shareholders acting in concert could obtain or consolidate control of our
Company and become obliged to make a mandatory offer in accordance with Rule
26 of the Takeovers Code. Save as aforesaid, our Directors are not aware of any
consequences which would arise under the Takeovers Code as a consequence of
any repurchases pursuant to the repurchase mandate.
Any repurchase of Shares that results in the number of Shares held by the
public falling below 25% of the total numbe r of Shares in issue, being the relevant
minimum prescribed percentage as required by the Stock Exchange (or such other
percentage as may be so prescribed from t ime to time), could only be implemented
if the Stock Exchange agreed to waive the requirement regarding the public float
under Rule 11.23 of the GEM Listing Rules. However, our Directors have no
present intention to exercise the repurchase mandate to such an extent that, under
the circumstances, there would be insufficient public float as prescribed under the
GEM Listing Rules.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following contracts (not being contracts entered into in the ordinary course of
business) were entered into by our Company or its subsidiaries within the two years
preceding the date of this prospectus and are or may be material:
(a) the set-off deed dated 27 September 20 22 entered into between Metasurface
Technologies Pte. Ltd. and JEE Wee Jene, pursuant to which an outstanding
amount of S$4,285,301.09 due from Met asurface Technologies Pte. Ltd. to
JEE Wee Jene was deemed to be fully se t-off by the issue and allotment of
279,800 ordinary shares in Metasurface Technologies Pte. Ltd. to JEE Wee
Jene;
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(b) the subscription agreement dated 14 October 2022 entered into between
Metasurface Technologies Pte. Ltd. and Accelerate Technologies Pte. Ltd.,
pursuant to which, Metasurface Technologies Pte. Ltd. agreed to allot and
issue, and Accelerate Technologies Pte. Ltd. agreed to subscribe for, 272,462
ordinary shares in Metasurface Technol ogies Pte. Ltd., for a consideration of
S$2,880,000;
(c) the subscription agreement dated 30 January 2023 entered into between
Metasurface Technologies Pte. Ltd. and MMI Holdings Limited, pursuant to
which, Metasurface Technologies Pte. Ltd. agreed to allot and issue, and
MMI Holdings Limited agreed to subscribe for, 139,913 ordinary shares in
Metasurface Technologies Pte. Ltd., for a consideration of S$1,000,000;
(d) the restructuring deed dated 26 April 2023 entered into among Metasurface
Technologies Holdings Limited, Metasurface Technologies Pte. Ltd., CHUA
Chwee Lee, SGP Capital Holdings Limited, JEE Wee Jene, Baccini Capital
Holdings Limited, THNG Chong Kim, A ngelling Capital Holdings Limited,
PANG Chen May, Accelerate Technologies Pte. Ltd., MMI Holdings
Limited, ZOU Shuling, HONG Haicheng, SOO Siew Har and HO Gim
Hai, CHUA Lee Chai, TAN Beng Kia t, Deborah CHUA Wee Wei, TAN
Kok Thye George and POH Seng Kah, pursuant to which (i) CHUA Chwee
Lee transferred to Metasurface Technologies Holdings Limited 2,668,459
ordinary shares in Metasurface Techn ologies Pte. Ltd., in return for which
Metasurface Technologies Holdings L imited issued and allotted 2,668,458
ordinary shares to SGP Capital Holdings Limited, (ii) JEE Wee Jene
transferred to Metasurface Technologies Holdings Limited 1,126,058
ordinary shares in Metasurface Techn ologies Pte. Ltd., in return for which
Metasurface Technologies Holdings L imited issued and allotted 1,126,058
ordinary shares to Baccini Capital Holdings Limited, (iii) THNG Chong Kim
transferred to Metasurface Technologies Holdings Limited 559,651 ordinary
shares in Metasurface Technologies Pte. Ltd., in return for which
Metasurface Technologies Holding s Limited issued and allotted 559,651
ordinary shares to Angelling Capital Holdings Limited, (iv) PANG Chen
May transferred to Metasurface Technologies Holdings Limited 371,343
ordinary shares in Metasurface Techn ologies Pte. Ltd., in return for which
Metasurface Technologies Holding s Limited issued and allotted 371,343
ordinary shares to PANG Chen May, (v) Accelerate Technologies Pte. Ltd.
transferred to Metasurface Technologies Holdings Limited 279,826 ordinary
shares in Metasurface Technologies Pte. Ltd., in return for which
Metasurface Technologies Holding s Limited issued and allotted 279,826
ordinary shares to Accelerate Technologies Pte. Ltd., (vi) MMI Holdings
Limited transferred to Metasurface Technologies Holdings Limited 139,913
ordinary shares in Metasurface Techn ologies Pte. Ltd., in return for which
Metasurface Technologies Holding s Limited issued and allotted 139,913
ordinary shares to MMI Holdings Limited, (vii) ZOU Shuling transferred to
Metasurface Technologies Holdings Limited 80,789 ordinary shares in
Metasurface Technologies Pte. Ltd., in return for which Metasurface
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 539 ---
Technologies Holdings Limited issued and allotted 80,789 ordinary shares to
ZOU Shuling, (viii) HONG Haicheng transferred to Metasurface
Technologies Holdings Limited 76,172 ordinary shares in Metasurface
Technologies Pte. Ltd., in return for which Metasurface Technologies
Holdings Limited issued and allotted 76,172 ordinary shares to HONG
Haicheng, (ix) SOO Siew Har and HO Gi mH a it r a n s f e r r e dt oM e t a s u r f a c e
Technologies Holdings Limited 69,247 ordinary shares in Metasurface
Technologies Pte. Ltd., in return for which Metasurface Technologies
Holdings Limited issued and allotted 69,247 ordinary shares to SOO Siew
Har and HO Gim Hai, (x) CHUA Lee Chai transferred to Metasurface
Technologies Holdings Limited 57,706 ordinary shares in Metasurface
Technologies Pte. Ltd., in return for which Metasurface Technologies
H o l d i n g sL i m i t e di s s u e da n da l l o t t e d5 7 , 7 0 6o r d i n a r ys h a r e st oC H U AL e e
Chai, (xi) TAN Beng Kiat transferred to Metasurface Technologies Holdings
Limited 57,706 ordinary shares in Metasurface Technologies Pte. Ltd., in
return for which Metasurface Technologies Holdings Limited issued and
allotted 57,706 ordinary shares to TAN Beng Kiat, (xii) Deborah CHUA
Wee Wei transferred to Metasurface Technologies Holdings Limited 57,706
ordinary shares in Metasurface Techn ologies Pte. Ltd., in return for which
Metasurface Technologies Holdings Limited issued and allotted 57,706
ordinary shares to Deborah CHUA Wee Wei, (xiii) Tan Kok Thye George
transferred to Metasurface Technologies Holdings Limited 28,853 ordinary
shares in Metasurface Technologies Pte. Ltd., in return for which
Metasurface Technologies Holdings Limited issued and allotted 28,853
ordinary shares to Tan Kok Thye George and (xiv) Poh Seng Kah transferred
to Metasurface Technologies Holdings Limited 23,082 ordinary shares in
Metasurface Technologies Pte. Ltd., in return for which Metasurface
Technologies Holdings Limited issued and allotted 23,082 ordinary shares
to Poh Seng Kah;
(e) the share purchase agreement dated 16 May 2023 entered into between
THNG Chong Kim and Metasurface Technologies Pte. Ltd., pursuant to
which, Metasurface Technologies Pte. Ltd. agreed to sell and THNG Chong
Kim agreed to purchase 125,767 ordinary shares in Metaoptics Technologies
Pte. Ltd. for a consideration of S$180,000;
(f) the Deed of Non-competition;
(g) the Deed of Indemnity; and
(h) the Public Offer Underwriting Agreement.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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2. Material intellectual property rights
As at the Latest Practicable Date, we have registered and have applied for the
registration of the following intellectual property rights which are material in relation
to our business.
(a) Trademarks
As at the Latest Practicable Date , we have registered the following
trademarks which are material to our business:
No. Trademark Class Registered owner
Place of
registration
Registration
number Expiry date
1.
 40 Metasurface
Technologies
Hong Kong 305823243 5 December 2031
2.
 40 Metasurface
Technologies
Singapore 40202128812P 26 November 2031
3.
 40 Metasurface
Technologies
Singapore 40202128813V 26 November 2031
(b) Domain Names
As at the Latest Practicable Date, we have registered the following domain
names which are material to our business:
No. Domain Name Registered owner Expiry date
1. Metatechnologies.com.sg Metasurface
Technologies
1 October 2024 Note
Note: Our Singapore Legal Advisers are not aware of any legal impediments which may
result in Metasurface Technologies being unable to renew the domain name upon its
expiry date.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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C. FURTHER INFORMATION ABOUT OUR DIRECTORS, CHIEF EXECUTIVE
AND SUBSTANTIAL SHAREHOLDERS
1. Disclosure of interests
(a) Interests of Directors and chief executives
The interests of our Directors and chief executives immediately upon
completion of the Capitalisation Issue a nd the Share Offer (without taking into
account the Shares which may be issued and allotted upon exercise of the options
which may be granted under the Post-IPO Share Option Scheme) in the Shares,
underlying Shares or debentures of us or any of our associated corporations
(within the meaning of Part XV of the SFO) which will have to be notified to us
and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests and short positions in which they are taken or deemed to have
under such provisions of the SFO), or which will be required to be notified to our
Company and the Stock Exchange pursuant to the ‘‘required standard of
dealings’’ as contained in Chapter 5 of the GEM Listing Rules, once the Shares
are listed, are as follows:
(i) Our Company
Shares in our Company (1)
Name of Director/
chief executive
Personal
interests (held
as beneficial
owner)
Interests of
spouse
Corporate
interests
(interests of
controlled
corporations)
Total
interests
Approximate
percentage of
total number
of issued
shares
Dato’ Sri Chua (2) — 24,748,479 58,647,335 83,395,814 55.60%
Mrs. Chua (3) — 58,647,335 24,748,479 83,395,814 55.60%
Mr. Thng (4) — — 12,299,998 12,299,998 8.20%
Notes:
(1) All interests in shares in our Company are held in long position.
(2) SGP BVI is wholly-owned by Dato’ Sri Chua, and therefore Dato’ Sri Chua is
deemed to be interested in the 58,647,335 Shares held by SGP BVI pursuant to the
SFO. Dato’ Sri Chua is the sole direct or of SGP BVI. Mrs. Chua is the spouse of
Dato’ Sri Chua, and therefore, Dato’ Sri Chua is deemed to be interested in the
24,748,479 Shares held by Mrs. Chua throug h her controlled corporation, Baccini,
pursuant to the SFO.
(3) Baccini is wholly-owned by Mrs. Chua , and therefore Mrs. Chua is deemed to be
interested in the 24,748,479 Shares held by Baccini pursuant to the SFO. Mrs.
Chua is the sole director of Baccini. Dato’ Sri Chua is the spouse of Mrs. Chua,
and therefore, Mrs. Chua is deemed to be interested in the 58,647,335 Shares held
by Dato’ Sri Chua through his controlled corporation, SGP BVI, pursuant to the
SFO.
(4) Angelling is wholly-owned by Mr. Thng , and therefore Mr. Thng is deemed to be
interested in the 12,299,998 Shares held by Angelling pursuant to the SFO. Mr.
Thng is the sole director of Angelling.
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(ii) Our associated corporations
Shares in our associated corporations
Name of Director/
chief executive
Personal
interests (held
as beneficial
owner)
Corporate
interests
(interests of
controlled
corporations)
Total
interests
Approximate
percentage of
total number
of issued
shares
SGP BVI
Dato’ Sri Chua 100 — 100 100%
Baccini
Mrs. Chua 100 — 100 100%
Angelling
Mr. Thng 100 — 100 100%
(b) Interests of our substantial Shareholders
Immediately upon completion of the Capitalisation Issue and the Share Offer
(without taking into account any Shar es which may be issued and allotted upon
the exercise of the options which may be granted under the Post-IPO Share
Option Scheme), so far as our Directors are aware, the following persons (not
being a Director or a chief executive of us) will have an interests or short position
in the Shares or underlying Shares which would fall to be disclosed to us and the
Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO,
or who will, directly or indirectly, be interested in 10% or more of the nominal
value of any class of share capital carryin gr i g h t st ov o t ei na l lc i r c u m s t a n c e sa t
general meetings of any other member of our Group:
(i) Our Company
Shares in our Company (1)
Name of Substantial
Shareholder Capacity/Nature of interests
Number of
Shares
Approximate
percentage of
total number
of issued
Shares
SGP BVI Beneficial interests 58,647,335 39.10%
Baccini Beneficial interests 24,748,479 16.50%
Angelling Beneficial interests 12,299,998 8.20%
Ms. Pang Beneficial interests 8,161,369 5.44%
Note:
(1) All interests in shares in our Company are held in long position.
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(c) Negative statement regarding interests in securities
None of our Directors or our chief executive will immediately upon
completion of the Capitalisation Issue a nd the Share Offer (without taking into
account the Shares which may be issued and allotted upon exercise of the options
which may be granted under the Post-IPO Share Option Scheme) have any
disclosure interests (as referred to in ( a) above), other than as disclosed at (a)
above.
Taking no account of Shares which may be taken up under the Share Offer,
none of our Directors know of any persons who will immediately upon completion
of the Capitalisation Issue and Share O ffer (without taking into account the
Shares which may be issued and allotted upon exercise of the options which may
be granted under the Post-IPO Share Option Scheme) have a notifiable interest
(for the purposes of the SFO) in the Shares or, having such a notifiable interest,
have any short positions (within the meaning of the SFO) in the Shares, other than
as disclosed at (a) and (b) above.
2. Directors’ service contracts and letters of appointment
Our executive Directors have each signed a service agreement with us for an initial
term of three years, commencing from Listing Date (subject to termination in certain
circumstances as stipulated in th e relevant service agreement).
The annual remuneration payable to our executive Directors by our Group
(excluding discretionary bonus) is as follows:
Director
Remuneration
(per year)
(S$)
Dato’ Sri Chua 600,000
Mrs. Chua 240,000
Mr. Thng 60,000
Each of our independent non-executive Directors has signed a letter of
appointment with us for an initial term of t hree years, commencing from the Listing
Date (subject to termination i n certain circumstances as stipulated in the relevant letter
of appointment).
APPENDIX V STATUTORY AND GENERAL INFORMATION
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The annual remuneration payable to our independent non-executive Directors by
our Group (excluding discretionary bonus) is as follows:
Director
Remuneration
(per year)
(S$)
Mr. TAN Chek Kian ( 陳志強) 24,600
Mr. ANG Yong Sheng, Jonathan ( 洪勇勝) 24,600
M r .C H A NY a n gK a n g(田揚康) 24,600
3. Directors’ competing interests
None of our Directors are interested in any business apart from our Group’s
business which competes or may compete, directly or indirectly, with the business of
our Group.
4. Disclaimers
(a) None of our Directors has any direct or indirect interest in the promotion of,
or in any assets which have been, within the two years immediately preceding
the issue of this prospectus, acquired or disposed of by or leased to, any
member of our Group, or are proposed to be acquired or disposed of by or
leased to any member of our Group.
(b) None of our Directors is materially in terested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of our Group taken as a whole.
(c) Save as disclosed in ‘‘Business — Procurement — Our suppliers’’ in this
prospectus, none of our Directors and their close associates, and so far as is
known to our Directors, none of the Shareholders who are interested in more
than 5% of the number of issued shares of our Company, has any interest in
our Company’s five largest custo mers or five largest suppliers.
D. POST-IPO SHARE OPTION SCHEME
1. Summary of the terms of the Post-IPO Share Option Scheme
(i) Purpose of the Post-IPO Share Option Scheme
The purpose of the Post-IPO Share Option Scheme is to motivate Eligible
Participants (as set out in paragrap h (ii) below) to optimise their future
contributions to our Group and/or to reward them for their past contributions,
to attract and retain or otherwise maintain on-going relationships with Eligible
Participants who are significant to a nd/or whose contributions are or will be
beneficial to the performance, growth or success of our Group, and additionally
in the case of Employee Participants (as set out in paragraph (ii) below) and
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 545 ---
Related Entity Participants (as set out in paragraph (ii) below), to enable our
Group to attract and retain individual s with experience and ability and/or to
reward them for their past contributions.
(ii) Who may join
Subject to the provisions in the Post-IPO Share Option Scheme, the Board
shall be entitled at any time within the period of ten (10) years after the date of
adoption of the Post-IPO Share Option Scheme to make an offer to any of the
following classes of persons (‘‘ Eligible Participant(s) ’’):
(1) any director(s) (including executive, non-executive and independent
non-executive directors) and employee(s) (whether full-time or
part-time) of our Group (including persons who are granted Shares or
the options under the Post-IPO Share Option Scheme as inducement to
enter into employment contracts with our Company or its subsidiaries)
(‘‘Employee Participant(s) ’’);
(2) any director(s) and employee(s) of the holding companies, fellow
subsidiaries or associated companies of our Company (‘‘ Related Entity
Participant(s) ’’); and
(3) any person (whether a natural person, a corporate entity or otherwise)
who provides services to our Group on a continuing or recurring basis in
its ordinary and usual course of business which are in the interests of the
long-term growth of our Group, including independent contractor(s),
consultant(s) and/or advisor(s) for research and development, product
commercialization, marketing, innovation upgrading,
strategic/commercial planning on corporate image and investor
relations in investment environment of our Company but excluding
any placing agent(s) or financial adviser(s) providing advisory services
for fundraising, mergers or acquisitions, and auditor(s) or valuer(s)
(‘‘Service Provider(s) ’’).
The Board may consider various factor s to determine the basis of eligibility
of the potential Eligible Participant, incl uding but not limited to the performance,
length of engagement and contribution to our Group.
(iii) Maximum number of Shares
(1) The maximum number of Shares which may be issued upon exercise of
all options to be granted under the Post-IPO Share Option Scheme and
any other schemes of our Company shall not in aggregate exceed 10% of
the Shares in issue as at the Listing Date (‘‘ Scheme Mandate Limit ’’)
(inclusive of Shares representing 1.5 per cent. of the total number of
Shares in issue, being the maximum number of options which may be
granted to Service Providers under the Post-IPO Share Option Scheme
(the ‘‘Service Provider Sublimit ’’)); provided that our Company may at
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--- page 546 ---
any time as the Board may think fit seek approval from our
Shareholders to refresh the Scheme Mandate Limit (inclusive of the
Service Provider Sublimit). Options previously granted under the
Post-IPO Share Option Scheme or any other schemes of our Company
lapsed in accordance with the terms of the Post-IPO Share Option
Scheme or any other schemes of our Company will not be counted for
the purpose of calculating the Scheme Mandate Limit and/or the Service
Provider Sublimit (as the case may be).
(2) Our Company may seek approval of our Shareholders in general
meeting to refresh the Scheme Mandate Limit (inclusive of the Service
Provider Sublimit) such that the maximum number of Shares which may
be issued upon exercise of all options to be granted under the Post-IPO
Share Option Scheme (inclusive of the Service Provider Sublimit) and
any other schemes of our Company (as adopted from time to time), shall
not exceed 10% of the Shares in issue as at the date of the approval by
our Shareholders in general meetin gw h e r et h eS c h e m eM a n d a t eL i m i t
(inclusive of the Service Provider Sublimit) is refreshed (the ‘‘ Renewal
Limit ’’), provided that options previously granted under the Post-IPO
Share Option Scheme or any other share option schemes of our
Company (including options outs tanding, cancelled, lapsed in
accordance with the terms of the Post-IPO Share Option Scheme or
any other schemes of our Company or exercised options) will not be
counted for the purpose of calculating the Renewal Limit.
For the purpose of seeking the approval of our Shareholders for the
Renewal Limit, a circular containing the information and the disclaimer
as required under the GEM Listing Rules must be sent to our
Shareholders.
In the event that our Company seeks approval of our Shareholders in
general meeting to renew the Scheme Mandate Limit (inclusive of the
Service Provider Sublimit) within 3-y ear period after the adoption date
o ft h eP o s t - I P OS h a r eO p t i o nS c h e m e( o rt h ed a t eo fS h a r e h o l d e r s ’
approval for the last refreshment), any Controlling Shareholders (or
Directors (excluding independent non-executive Directors) and the chief
executive of our Company if there is no Controlling Shareholder) and
their associates must abstain from voting in favour of the relevant
resolution at the general meeting and the relevant resolution shall be
approved in accordance with the GEM Listing Rules.
(3) Our Company may seek separate approval of our Shareholders in
general meeting for granting options beyond the Scheme Mandate Limit
provided that the proposed grantee(s) of such option(s) must be Eligible
Participant(s) specifically identified by our Company before such
approval is sought and for whom sp ecific approval is obtained. For
the purpose of seeking the approval of our Shareholders, our Company
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--- page 547 ---
must send a circular to our Shareholders containing the name of the
specified Eligible Participant(s) w ho may be granted such options, the
number and terms of the options to be granted to each specified Eligible
Participant, the purpose of granting such options to the specified
Eligible Participants with an explanation as to how the terms of options
serve such purpose, the information and the disclaimer as required
under the GEM Listing Rules and such further information as may be
required from the Stock Exchange from time to time. In respect of any
options to be granted, the date of the Board meeting for proposing such
grant should be taken as the date of grant for the purpose of calculating
the exercise price of such options.
(iv) Maximum entitlement of each Eligible Participant
No option shall be granted to any Eligib le Participant if any further grant of
options would result in the Shares issued and to be issued upon exercise of all
options granted and to be granted to such person (including exercised, cancelled
and outstanding options but excluding any options lapsed in accordance with the
Post-IPO Share Option Scheme) in the 12-month period up to and including the
date of grant of the options exceeding 1% of the Shares in issue, unless:
(1) such further grant has been duly approved, in the manner prescribed by
the relevant provisions of Chapter 23 of the GEM Listing Rules, by
separate approval of our Shareholders in general meeting at which the
Eligible Participant and his/her/its c lose associates (or associates of the
Eligible Participant is a connected person) shall abstain from voting in
favour of the resolution;
(2) a circular regarding the further grant has been despatched to our
Shareholders in a manner complying with, and containing the
information specified in, the relevant provisions of Chapter 23 of the
GEM Listing Rules (including the identity of the Eligible Participant,
the number and terms of the options to be granted and options
previously granted to such Eligible Pa rticipant in the 12-month period,
the purpose of granting the options and an explanation as to how the
terms of the options serve such purpose); and
(3) the number and terms (including the exercise price) of such option are
fixed before the general meeting of our Company at which the same are
approved.
(v) Grant of options to connected persons
(1) The grant of options to a Director, chief executive or Substantial
Shareholder of our Company or any of his/her/its respective associates
(including discretionary trust in which any connected persons are
beneficiary) requires the approval of all our independent non-executive
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--- page 548 ---
Directors (excluding any independent non-executive Director who is a
prospective grantee of the option) and shall comply with the relevant
provisions of Chapter 23 of the GEM Listing Rules.
(2) Where an option is to be granted to a Substantial Shareholder or an
independent non-executive Director (or any of his/her/its respective
associates), and such grant will result in the Shares issued and to be
issued in respect of all options granted pursuant to the Post-IPO Share
Option Scheme and any other share option schemes of our Company
(including exercised, cancelled and outstanding options but excluding
any options lapsed in accordance with the Post-IPO Share Option
Scheme) to such Eligible Participan t in the 12-month period up to and
including the date of such grant exceeding 0.1% of the Shares in issue at
the relevant time of grant, such grant shall not be valid unless:
I. a circular containing the details of the grant has been despatched to
our Shareholders in a manner complying with, and containing the
matters specified in, the relevant provisions of Chapter 23 of the
GEM Listing Rules, including, in particular, (a) details of the
number and terms of the options to be granted to such Eligible
Participant, which must be fixed before the Shareholders’ meeting
and the date of the Board meeting for proposing such further grant
is to be taken as the date of grant for the purposes of calculating the
exercise price, (b) from the views of the independent non-executive
Directors (excluding any independent non-executive Director who
is the prospective grantee of the option) as to whether the terms of
the grant are fair and reasonable and whether such grant is in the
interests of our Company and our Shareholders as a whole, and
their recommendation to the independent Shareholders as to
voting, (c) information relating to any Directors who are trustees
of the Post-IPO Share Option Scheme or have a direct or indirect
interest in the trustees; and (d) information required under the
GEM Listing Rules or by the Stock Exchange; and
II. the grant has been approved by our Shareholders in accordance
with the GEM Listing Rules in general meeting (taken on a poll) at
which such Eligible Participant and his/her/its associates and all
core connected persons of our Company shall abstain from voting
in favour of the grant (unless such person’s intention to vote
against the proposed grant of option has been stated in the relevant
circular).
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--- page 549 ---
(vi) Time of acceptance and exercise of an option
An offer of grant of an option may be accepted by an Eligible Participant
within the date as specified in the offer letter issued by our Company, being a date
not later than 21 Business Days from the date upon which it is made, by which the
Eligible Participant must accept the o f f e ro rb ed e e m e dt oh a v ed e c l i n e di t ,
provided that such date shall not be mo re than ten (10) years after the date of
adoption of the Post-IPO Share Option Scheme. The vesting period for an option
shall normally not be less than 12 months, except when such option is granted to
the Employee Participant(s) at the discretion of the Board (or the remuneration
committee of our Company if the grantee is a Director and/or a senior manager of
our Company) where (1) the Employee Participant’s employment is terminated
due to death, disability or any out of contr ol event; (2) the options are granted in
batches during a year for administrative and compliance reasons; (3) the options
are granted under a mixed vesting schedule which vest evenly over a 12-month
period; (4) the options are granted based on performance-based vesting conditions
instead of time-based vesting criteria; and (5) any other circumstances under
which the Board (or the remuneration committee of our Company) considers it to
be fair, reasonable and appropriate to do so.
A consideration of HK$1.00 is payable on acceptance of the offer of grant of
an option. Such consideration shall in no circumstances be refundable nor be
deemed to be part of the exercise price. An option may be exercised in whole or in
part (but if in part only, in respect of a board lot or any integral multiple thereof)
by the grantee at any time before the expiry of the period to be determined and
notified by the Board to the grantee which in any event shall not be longer than
ten (10) years commencing on the date of the offer letter and expiring on the last
day of such ten (10)-year period subject to the provisions for early termination as
contained in the Post-IPO Share Option Scheme.
(vii)Performance targets
Unless otherwise determined by the Bo ard and specified in the offer letter,
there is no general performance target tha t has to be achieved before the exercise
of any option.
(viii) Exercise price for Shares
The exercise price of a Share in respect of any particular option granted
under the Post-IPO Share Option Scheme shall be a price determined by the Board
in its absolute discretion and notified to an Eligible Participant, and shall not be
less than whichever is the highest of: (1) the closing price of the Shares as stated in
the Stock Exchange’s daily quotations sheet on the Offer Date (as defined below),
(2) the average closing price of the Shares as stated in the Stock Exchange’s daily
quotation sheets for the five Business Da ys immediately preceding the Offer Date,
and (3) the nominal value of a Share on the Offer Date.
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--- page 550 ---
Where an option is to be granted to an Eligible Participant, the date of the
Board resolution on which the grant was approved and made to the Eligible
Participant shall be taken to be the date of the offer of such option, which must be
aB u s i n e s sD a y( ‘ ‘Offer Date ’’). For the purpose of calculating the exercise price,
where an option is to be granted fewer than five Business Days after the Listing of
the Shares on GEM, the Offer Price shall be used as the closing price for any
Business Day falling within the period before the Listing.
(ix) Ranking of Shares
The Shares to be allotted and issued upon the exercise of an option shall be
subject to the Memorandum and the Articles of Association and the laws of the
Cayman Islands in force from time to time and shall rank pari passu in all respects
with the then existing fully-paid Shares in issue of our Company as at the date of
allotment and issue (the ‘‘ Allotment Date ’’), and will entitle the holders to
participate in all dividends or other distributions paid or made on or after the
Allotment Date other than any dividend or other distributions previously declared
or recommended or resolved to be paid or made if the record date therefor shall be
before the Allotment Date.
(x) Restrictions on the time of grant of options
No option shall be granted after a development of or a matter constituting
inside information has come to our Compa ny’s knowledge until (and including)
the trading day on which such inside information has been announced pursuant to
the requirements of the GEM Listing Rule s and the SFO. In particular, during the
period commencing one (1) month immediately preceding the earlier of:
(1) the date of the meeting of the Board (as such date is first notified to the
Stock Exchange in accordance with the GEM Listing Rules) for the
approval of our Company’s results for any year, half-year, quarterly or
any other interim period (whether or not required under the GEM
Listing Rules); and
(2) the deadline for our Company to publish an announcement of the results
for any year or half-year under the GEM Listing Rules, or quarterly or
any other interim period (whether or not required under the GEM
Listing Rules),
and ending on the date of the results announcement, no option shall be granted.
For the avoidance of doubt, no option may be granted during any period of delay
in publishing a results announcement.
(xi) Period of the Post-IPO Share Option Scheme
Subject to any prior termination by our Company in a general meeting or by
the Board, the Post-IPO Share Option Scheme shall be valid and effective for a
period of ten (10) years commencing on the date of adoption of the Post-IPO
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 551 ---
Share Option Scheme (the ‘‘ Option Period ’’), after which period no further option
shall be granted but in all other respects of all options which remain exercisable at
the end of such period, the provisions of the Post-IPO Share Option Scheme shall
remain in full force and effect.
(xii) Rights on death or permanent disability
Where the grantee of an outstanding option (being an individual) dies or
becomes permanently disabled before exercising an option (or exercising it in full),
he/she (or his/her legal representative (s)) may exercise the option up to the
grantee’s entitlement (to the extent which has become exercisable and not already
exercised) within a period of 12 months following his/her death or permanent
disability or such longer period as the Board may determine.
(xiii) Rights on retirement
Where the grantee of an outstanding option ceases to be an Employee
Participant or Related Entity Participant by reason of his/her retirement pursuant
to such applicable retirement scheme at th e relevant time, his/her option (to the
extent which has become exercisable a nd not already exercised) shall be
exercisable until the expiry of the relevant Option Period.
(xiv) Rights on transfer of employment
Where the grantee of an outstanding option ceases to be an Employee
Participant or Related Entity Partic ipant by reason of his/her transfer of
employment to an affiliate company of o ur Company, his/her option (to the
extent which has become exercisable a nd not already exercised) shall be
exercisable until the expiry of the relevant Option Period unless the Board in its
absolute discretion otherwise determines in which event the option (or such
remaining part thereof) shall be exerci s a b l ew i t h i ns u c hp e r i o da st h eB o a r dh a s
determined.
(xv)Rights on cessation of employment
Where the grantee of an outstanding option ceases to be an Employee
Participant or Related Entity Participan t for any reason other than the grounds in
(xii), (xiii), (xiv), (xxvii)(c)(1) and (2), the option granted to such grantee (to the
extent not already exercised) shall lapse on the date of cessation and shall not be
exercisable unless the Board otherwise determines in which event the option (or
such remaining part thereof) shall be exercisable within such period as the Board
may in its absolute discretion determin ef o l l o w i n gt h ed a t eo fs u c hc e s s a t i o n .
Where the grantee of an outstanding option ceases to be an Employee
Participant or Related Entity Participan t by reason of the termination of his/her
employment by resignation or Culpable Termination (as defined below), the
option (to the extent not already exercised) shall lapse on the date on which the
notice of termination is served (in the case of resignation) or the date on which the
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 552 ---
grantee is notified of the termination of his/her employment (in the case of
Culpable Termination) and not be exercisable unless the Board otherwise
determines in which event the option (or such remaining part thereof) shall be
exercisable within such period as the Board may in its absolute discretion
determine following the date of such service or notification.
(xvi) Rights on cessation of being an executive Director
Where the grantee of an outstanding option being an executive Director of
our Company ceases to be an executive Director of our Company but remains a
non-executive Director of our Company, his/her option (to the extent which has
become exercisable and not already exercised) shall be exercisable until the expiry
of the relevant Option Period unless the Board in its absolute discretion otherwise
determines in which event the option (or such remaining part thereof) shall be
exercisable within such period as the Board has determined, the option (to the
extent not already exercised) shall lapse on the date of cessation of such
appointment and not be exercisable unle ss the Board otherwise determines in
which event the option (or such remaining part thereof) shall be exercisable within
such period as the Board has determined.
(xvii) Rights on cessation of being an Eligible Participant
Where (a) the Board in its absolute discretion at any time determines that a
grantee of an outstanding option has cea sed to be an Eligible Participant; or (b) a
g r a n t e eh a sf a i l e dt oo rn ol o n g e rs a t i s f i e so rc o m p l i e sw i t hs u c hc r i t e r i ao rt e r m s
and conditions that may be attached to the grant of the option or which were the
basis on which the option was granted, the option (to the extent not already
exercised) shall lapse on the date on which the grantee is notified thereof (in the
case of (a)) or on the date on which the grantee has failed to or no longer satisfies
or complies with such criteria or terms and conditions as aforesaid (in the case of
(b)) and not be exercisable unless the Board otherwise determines in which event
the option (or such remaining part thereof) shall be exercisable within such period
as the Board may in its absolute discretion determine following the date of such
notification or the date of such failure /non-satisfaction/non-compliance.
(xviii) Rights of an Eligible Participant which is a corporation
Where a grantee of an outstanding option (being a corporation) (a) has a
liquidator, provisional liquidator, recei ver or any person carrying out any similar
function appointed anywhere in the world in respect of the whole or any part of
the assets or undertaking of the grantee; or (b) has suspended ceased or threatened
to suspend or cease business; or (c) is unable to pay its debts (within the meaning
of section 178 of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance or any similar provisions under the Companies Act) or any applicable
law; or (d) otherwise becomes insolvent; o r (e) suffers a change in its constitution,
directors, shareholding or management which in the opinion of the Board is
material; or (f) commits a breach of any contract entered into between the grantee
or his/her/its associate and any member of our Group, the option (to the extent
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 553 ---
not already exercised) shall lapse on the date of appointment of the liquidator or
receiver or other similar person or on the date of suspension or cessation of
business or on the date when the grantee is deemed to be unable to pay its debts as
aforesaid or on the date of notification by our Company that the said change in
constitution, directors, shareholding or management is material or on the date of
the said breach of contract (as the case may be) and not be exercisable unless the
Board otherwise determines in which eve nt the option (or such remaining part
thereof) shall be exercisable within such period as the Board may in its absolute
discretion determine following the date of such occurrence.
(xix) Rights of an Eligible Participant which is an individual
Where a grantee of an outstanding option (being an individual) (a) is unable
or has no reasonable prospects of being able to pay his debts within the meaning
of the Bankruptcy Ordinance or any other applicable law or has otherwise become
insolvent; or (b) has made any arrangements or compositions with his creditors
generally; or (c) has been convicted of any criminal offence involving his/her
integrity or honesty; or (d) commits a breach of any contract entered into between
the grantee or his/her associate and any member of our Group, the option (to the
extent not already exercised) shall lapse on the date on which he/she is deemed
unable or to have no reasonable prospects of being able to pay his/her debts as
aforesaid or on the date on which a petition for bankruptcy has been presented in
any jurisdiction or on the date on which he/she enters into the said arrangement or
composition with his/her creditors or o n the date of his/her conviction or on the
date of the said breach of contract (as the case may be) and not be exercisable
unless the Board otherwise determines in which event the option (or such
remaining part thereof) shall be exercisable within such period as the Board may
in its absolute discretion determine following the date of such occurrence.
(xx) Rights on general offer or scheme of arrangement
In the event a general or partial offer (whether by way of takeovers offer,
share repurchase offer is made to all the holders of the Shares or scheme of
arrangement or otherwise in like manner) is made to all the holders of Shares (or
all such holders other than the offeror and/or any person controlled by the offeror
and/or any person acting in association or concert with the offeror) and such offer
becomes or is declared unconditional (in the case of a takeovers offer or share
repurchase offer) or is approved by the r equisite majorities at the relevant
meetings of our Shareholders (in the case of a scheme of arrangement), the grantee
shall be entitled to exercise the option (to the extent which has become exercisable
and not already exercised) at any time (in the case of a takeovers offer or share
repurchase offer) within one month after the date on which the offer becomes or is
declared unconditional or (in the case of a scheme of arrangement) prior to such
time and date as shall be notified by our Company, after which it shall lapse.
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--- page 554 ---
(xxi) Rights on winding-up
In the event of a notice being given by our Company to our Shareholders to
convene a general meeting for the purposes of considering, and if thought fit,
approving a resolution to voluntarily wind-up our Company, other than for the
purposes of a reconstruction, amalgamation or scheme of arrangement, our
Company shall on the same date as or soon after it despatches such notice to
convene the general meeting, give notice thereof to all grantees and thereupon, the
grantees (or their respective personal r epresentative(s)) may, subject to the
provisions of all applicable laws, by notice in writing to our Company (such notice
to be received by our Company not later than 2 Business Days prior to the
proposed general meeting of our Company) exercise the option (to the extent that
it has become exercisable and has not already been exercised) either to its full
extent or to the extent specified in such notice, such notice to be accompanied by a
payment or remittance for the full amount of the aggregate exercise price for the
Shares in respect of which the notice is given, whereupon our Company shall as
soon as possible and, in any event, no later than the Business Day immediately
prior to the date of the proposed general meeting referred to above, allot and issue
the relevant Shares to the grantee credite d as fully paid and register the grantee as
the holder of such Shares, which shall rank pari passu with all other Shares in issue
on the date prior to the passing of the resolution to wind-up our Company to
participate in the distribution of assets of our Company available in liquidation.
(xxii) Rights on compromise or arrangement between our Company and our creditors
In the event of a compromise or arrangement between our Company and our
Shareholders and/or creditors is proposed for the purpose of or in connection
with a scheme for the reconstruction of our Company or its amalgamation with
any other company, our Company shall give notice thereof to the grantees who
have unexercised options at the same time as it dispatches notices to all
Shareholders or creditors of our Company summoning the meeting to consider
such a compromise or arrangement and thereupon each grantee (or his/her legal
representatives or receiver) may until the expiry of the earliest of: (a) the Option
Period; (b) the period of two months from the date of such notice; and (c) the date
on which such compromise or arrangement is sanctioned by the court of
competent jurisdiction and becoming effective, exercise in whole or in part his/her
option. Except insofar as exercised in accordance with this paragraph (xxii), all
options outstanding at the expiry of the relevant period referred to in this
paragraph (xxii) shall lapse. Our Company may thereafter require each grantee to
transfer or otherwise deal with the Shares issued on exercise of the option to place
the grantee in the same position as would have been the case had such Shares been
the subject of such compromise or arrang ement, provided that in determining the
entitlement of any grantee to exercise an option at any particular date, the Board
may in its absolute discretion relax or waive, in whole or in part, conditionally or
unconditionally, any additional conditions , restrictions or limitations imposed in
relation to the particular option pursuant to the provisions of the Post-IPO Share
Option Scheme and/or deem the right to exercise the option in respect of the
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 555 ---
Shares the subject thereof to have been exercisable notwithstanding that
according to the terms of the particular option such right shall not have then
vested.
(xxiii) Reorganisation of capital structure
In the event of any change in the capital structure of our Company while any
option may become or remains exercisable , whether by way of capitalisation issue,
rights issue, consolidatio n, subdivision or reduction of the share capital of our
Company, the Board may, if it considers the same to be appropriate, direct that
a d j u s t m e n t sb em a d et o :
(a) the number of Shares subject to outstanding options;
(b) the exercise price per Share of each outstanding option; and/or
(c) the number of Shares subject to the Post-IPO Share Option Scheme.
Where the Board determines that adjustments are appropriate (other than an
adjustment arising from a capitalisation issue), the auditors or an independent
financial adviser (as the Board may select) shall certify in writing to the Board
that any such adjustments are in their opinion fair and reasonable and in
compliance with the GEM Listing, the notes thereto and applicable rules and
guidelines, provided that:
(i) the aggregate percentage of the issued share capital of our Company
available for the grant of options shall remain as nearly as possible the
same as it was before such change but shall not be greater than the
maximum number prescribed by the GEM Listing Rules from time to
time;
(ii) any such adjustments shall be made on the basis that the aggregate
exercise price payable by a grantee on the full exercise of any option
shall remain as nearly as possible t he same as (but shall not be greater
than) it was before such event;
(iii) no such adjustments shall be made the effect of which would be to
enable a Share to be issued at less than its nominal value; and
(iv) any such adjustments shall be made on the basis that the proportion of
the issued share capital of our Company for which any grantee is
entitled to subscribe pursuant to the options held by him/her shall
remain the same, rounded to the nearest whole share, as that to which
he/she/it was previously entitled.
For the avoidance of doubt only, the issue of securities as consideration in a
transaction shall not be regarded as a circumstance requiring an adjustment.
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--- page 556 ---
(xxiv) Cancellation of options
The Board shall be entitled at any time at its absolute discretion for the
following causes to cancel, recover or withhold any option in whole or in part by
giving notice in writing to the grante e stating that such option is thereby
cancelled, recovered or withheld with effect from the date specified in such notice
(the ‘‘Cancellation Date ’’):
(a) the grantee commits or permits or attempts to commit or permit a
breach of any terms or conditions attached to the grant of the option as
provided in the Post-IPO Share Option Scheme;
(b) the grantee makes a written request to the Board for, or agrees to, the
option to be cancelled;
(c) a material misstatement in our Company’s financial statements;
(d) if the grantee has, in the opinion of the Board, conducted himself/herself
in any manner whatsoever to the de triment of or prejudicial to the
interests of our Company or its subsidiary; or
(e) any other circumstances as the Board considers to be reasonable, fair,
equitable and appropriate to cancel, recover or withhold such options.
Such option shall be deemed to have been cancelled with effect from the
Cancellation Date in respect of any part of the option which has not been
exercised as at the Cancellation Date. Where our Company cancels an option held
by a grantee and issues new options to the same grantee, the issue of such new
options may only be made under the Post-IPO Share Option Scheme with
available Scheme Mandate Limit and Service Provider Limit (to the extent not yet
granted) within the limits set out in the Post-IPO Share Option Scheme. For the
avoidance of doubt, the opti ons cancelled will be regarded as utilised for the
purpose of calculating the Scheme Mandate Limit (and the Service Provider
Sublimit).
(xxv) Termination of the Post-IPO Share Option Scheme
Our Shareholders by resolution in general meeting or the Board may at any
time terminate the operation of the Post-IPO Share Option Scheme and in such
event no further option will be offered b ut in all other respects of the options
which remain exercisable upon terminat ion of the Post-IPO Share Option Scheme,
the provisions of the Post-IPO Share Opt ion Scheme shall remain in full force and
effect. Options granted prior to such termination and not then exercised or in
respect of which Shares are not yet issued to the grantees shall continue to be valid
and exercisable subject to and in accordance with the Post-IPO Share Option
Scheme and the GEM Listing Rules.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 557 ---
(xxvi) Rights are personal to grantee
An option shall be personal to the grantee and shall not be assignable nor
transferable, and no grantee shall in any way sell, transfer, charge, mortgage,
encumber, assign or create any interest (w hether legal or beneficial) in favour of
any third party over or in relation to any option or purport to do so or enter into
any agreement to do so, unless a waiver is granted by the Stock Exchange for any
option to be transferred to a vehicle (such as a trust or a private company) for the
benefit of the grantee and any family members of such grantee that would
continue to meet the purpose of the Post-IPO Share Option Scheme and comply
with other requirements of the GEM Listing Rules. Any breach of the foregoing
shall entitle our Company to cancel any outstanding option or part thereof
granted to such grantee without any comp ensation or incurring any liability on
t h ep a r to fo u rC o m p a n y .
(xxvii) Lapse of option
An option shall lapse automatically and not be exercisable (to the extent not
already exercised) on the earliest of the occurrence of any of the following events
unless otherwise relaxed or waived (conditionally or unconditionally) by the
Board:
(a) the expiry of the Option Period (subject to paragraphs (xi) and (xxv));
(b) the expiry of any of the periods referred to in paragraphs (xii) to (xxii)
where applicable;
(c) the date on which the grantee ceases to be an Eligible Participant by
reason of (1) the termination of his/her employment by resignation or
(2) termination of the employmen to fa nE m p l o y e eP a r t i c i p a n to r
Related Entity Participant on the grounds that he/she has been guilty of
serious misconduct, or there exist grounds allowing his/her summary
dismissal under his/her employment contract or under common law, or
he/she is unable or has no reasonable prospects of being able to pay
his/her debts within the meaning of the Bankruptcy Ordinance or any
other applicable law, or he/she has become otherwise insolvent or has
made any arrangements or compositions with his/her creditors
generally, or he/she has been conv icted of any criminal offence
involving his/her integrity or honesty (‘‘ Culpable Termination ’’) or (3)
(if so determined by the Board) on any other ground on which an
employer or a sourcing party would be entitled to terminate his/her/its
employment or engagement at common law or pursuant to any
applicable laws or under the grantee’s service contract or supply
contract with our Company;
(d) (subject to paragraph (xxi)) the date of the commencement of the
winding-up of our Company;
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 2 9–


--- page 558 ---
(e) there is an unsatisfied judgment, order or award outstanding against the
grantee or the Board has reason to believe that the grantee is unable to
pay or to have no reasonable prospect of being able to pay his/her/its
debts within the meaning of the Bankruptcy Ordinance;
(f) there are circumstances which entitle any person to take any action,
appoint any person, commence proceedings or obtain any order of the
type as provided in the Post-IPO Share Option Scheme; or
(g) a bankruptcy order has been made against any director or shareholder
of the grantee (being a corporation) in any jurisdiction.
(xxviii) Alterations to the Post-IPO Share Option Scheme
T h eP o s t - I P OS h a r eO p t i o nS c h e m em a yb ea l t e r e di na n yr e s p e c tb ya
resolution of the Board except that the following shall not be carried out except
with the prior sanction of an ordinary resolution of our Shareholders in general
meeting (with grantees and their associates abstaining from voting):
(a) any material alteration to its terms and conditions or any change to the
terms of options granted (except where the amendment or alteration
take effect automatically under the ex isting terms of the Post-IPO Share
Option Scheme);
(b) any alteration to the provisions of the Post-IPO Share Option Scheme in
relation to the matters set out in Rule 23.03 of the GEM Listing Rules to
the advantage of grantees or Eligible Participants;
(c) any change to the authority of the Directors of our Company in relation
to any alteration to the terms of the Post-IPO Share Option Scheme; and
(d) any alteration to this paragraph (xxviii).
Any change to the terms of granted options must be approved by the Board,
the remuneration committee, the independent non-executive Directors and/or our
Shareholders (as the case may be) if the initial grant of the options was approved
by the Board, the remuneration committee of our Company, the independent
non-executive Directors and/or our Shareholders (as the case may be), except (1)
where the amendment or alteration take effect automatically under the existing
terms of the Post-IPO Share Option Scheme; or (2) to the extent such amendment
or alteration is required by the GEM Listing Rules or any guidelines issued by the
Stock Exchange from time to time.
Our Company must provide to all grantees all details relating to changes in
the terms of the Post-IPO Share Option Scheme during the life of the Post-IPO
Share Option Scheme immediately upon such changes taking effect.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(xxix) Conditions
The Post-IPO Share Option Scheme is conditional on:
(a) the Listing Committee of the Stock Exchange granting approval for the
listing of, and permission to deal in, the Shares in issue and to be issued
pursuant to the Capitalisation Issue, the Share Offer and the exercise of
options that may be granted under the Post-IPO Share Option Scheme;
(b) the obligations of the Underwriters under the Underwriting Agreements
becoming unconditional and not being terminated in accordance with
the terms of the Underwriting Agreements or otherwise; and
(c) the commencement of dealings in the Shares on the GEM of the Stock
Exchange.
2. Present status of the Post-IPO Share Option Scheme
(i) Approval and adoption of the rules of the Post-IPO Share Option Scheme
The rules of the Post-IPO Share Option Scheme were conditionally approved
and adopted by our Shareholders on 7 June 2024.
(ii) Approval of the Stock Exchange required
The Post-IPO Share Option Scheme is conditional, among other matters, on
the Stock Exchange granting the listing of, and permission to deal in, the Shares
to be issued pursuant to the exercise of any options which may be granted under
the Post-IPO Share Option Scheme, whic h shall not exceed 10% of the Shares in
issue as at the Listing Date.
(iii) Application for listing
Application has been made to the Stock Exchange for the listing of, and
permission to deal in, the Shares to be issued pursuant to the exercise of any
options which may be granted under the Post-IPO Share Option Scheme. The
maximum number of Shares which may be issued upon exercise of all options to
be granted under the Post-IPO Share Option Scheme and any other schemes of
our Company shall not in aggregate exceed 10% of the Shares in issue as at the
Listing Date unless our Company obtains the approval of our Shareholders in
general meeting for refreshing the sa id 10% limit under the Post-IPO Share
Option Scheme, provided that options lapsed in accordance with the terms of the
Post-IPO Share Option Scheme or any other share option schemes of our
Company will not be counted for the purpose of calculating the 10% limit
mentioned above.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3 1–


--- page 560 ---
(iv) Grant of options
As at the Latest Practicable Date, no options have been granted or agreed to
be granted under the Post-IPO Share Option Scheme.
(v) Value of options
Our Directors consider it in appropriate to disclose the value of options which
may be granted under the Post-IPO Share Option Scheme as if they had been
granted as at the Latest Practicable Dat e. Any such valuation will have to be made
on the basis of certain option pricing model or other methodology, which depends
on various assumptions including the exerc ise price, the exercise period, interest
rate, expected volatility and other variables. As no options have been granted,
certain variables are not available for calculating the value of options. Our
Directors believe that any calculation of the value of options as at the Latest
Practicable Date based on a number of speculative assumptions would not be
meaningful and would be misleading to investors.
E. OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely
to fall on our Company or any of our subsidiaries.
2. Tax indemnities
Our Controlling Shareholders have entered into the Deed of Indemnity in favour
of our Company (on our own behalf and as trustee for our subsidiaries) (being a
contract referred to in the paragraph he aded ‘‘B. Further Information About our
Business — 1. Summary of Material contra cts’’ in this appendix) pursuant to which
they have, among others, agreed and undertaken, jointly and severally, with our
Company to indemnify our Company (on our own behalf and as trustee for our
subsidiaries) and at all times keep us full y indemnified on demand from and against all
taxation falling on any member of our Group resulting from, or by reference to, any
income, profit or gains earned, accrued or received and/or business and/or assets
acquired before the date on which the S hare Offer becomes unconditional.
3. Sole Sponsor
The Sole Sponsor has declared its independence pursuant to Rule 6A.07 of the
GEM Listing Rules. The Sole Sponsor has made an application on our behalf to the
Stock Exchange for listing of, and permission to deal in, our Shares in issue and to be
issued pursuant to the Capitalisation Issue, the Share Offer and the exercise of options
that may be granted under the Post-IPO Share Option Scheme. All necessary
arrangements have been made to enable our Shares to be admitted into CCASS.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3 2–


--- page 561 ---
The Sole Sponsor will receive a fee of HK$7 .1 million for acting as the sponsor for
the Listing.
4. Qualification of experts
The qualifications of the experts (as defined under the GEM Listing Rules and the
Companies (Winding Up and Miscellaneou s Provisions) Ordinance) who have given
opinions or advice which are contained in, or referred to in, this prospectus (the
‘‘Experts ’’) are set out below:
Name Qualifications
UOB Kay Hian
(Hong Kong) Limited
Licensed to conduct Type 1 (dealing in securities),
Type 4 (advising on securities) and Type 6
(advising on corporate finance) of the regulated
activities under the SFO
PricewaterhouseCoopers Certified Public Accountants under the
Professional Accountant Ordinance (Chapter 50
of the Laws of Hong Kong)
Registered Public Interest Entity Auditor under
Accounting and Financial Reporting Council
Ordinance (Chapter 588 of the Laws of Hong
Kong)
Drew & Napier LLC Qualified lawyers in Singapore
Shearn Delamore & Co. Qualified lawyers in Malaysia
Conyers Dill & Pearman Qualified lawyers in the Cayman Islands
China Insights Industry
Consultancy Limited
Independent industry and market data research
agency
Jones Lang LaSalle
Corporate Appraisal and
Advisory Limited
Chartered surveyors
Hogan Lovells Legal advisers as to International Sanctions
Sim Chong LLC Advocates and solicitors in Singapore
PricewaterhouseCoopers
Limited
Transfer pricing consultant
5. Consents of experts
Each of the Experts has given and has not withdrawn its consent to the issue of
this prospectus with the inclusion of its report and/or letter and/or memorandum
and/or legal opinion (as the case may be) and references to its name included in the
form and context in which it respectively appears.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3 3–


--- page 562 ---
6. Interests of experts
None of the Experts has any shareholding interests in our Company or any of our
subsidiaries or the right (whether legally e n f o r c e a b l eo rn o t )t os u b s c r i b ef o ro rt o
nominate persons to subscribe for securities in our Company or any of our
subsidiaries.
None of the Experts has any direct or indirect interest in the promotion of, or in
any assets which have been, within the two years immediately preceding the issue of
this prospectus, acquired or disposed of by or leased to any member of our Group, or
are proposed to be acquired or disposed of by or leased to any member of our Group.
7. Promoter
Our Company has no promoter for the purpose of the GEM Listing Rules. No
amount or benefit has been paid or given within the two years immediately preceding
t h ed a t eo ft h i sp r o s p e c t u so ri n t e n d e dt ob ep a i do rg i v e nt oa n yp r o m o t e r .
8. Compliance adviser
In accordance with the requirements of the GEM Listing Rules, our Company has
appointed UOB Kay Hian as our compliance a dviser to provide advisory services to
our Company to ensure compliance with the GEM Listing Rules for a period
commencing on the Listing Date, and ending on the date on which our Company
complies with Rule 18.03 of the GEM Listing Rules in respect of our financial results
for the first full financial year commencing after the Listing Date, or until the
compliance adviser agreement is otherwise terminated upon the terms and conditions
set out therein.
9. Preliminary expenses
The preliminary expenses incurred by our Company amounted to approximately
HK$76,000 and were paid by our Company.
10. Binding effect
This prospectus shall have the effect, if an application is made in pursuance of this
prospectus, of rendering all persons concerned bound by all of the provisions (other
than the penal provisions) of sections 44A and 44B of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance insofar as applicable.
11. Bilingual prospectus
The English language and Chinese language versions of this prospectus are being
published separately, in reliance upon the exemption provided by section 4 of the
Companies (Exemption of Companies and Prospectuses from Compliance with
Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3 4–


--- page 563 ---
12. Miscellaneous
(a) Save as disclosed in this prospectus, within the two years immediately
preceding the date of this prospectus:
(i) no share or loan capital of any member of our Group has been issued or
agreed to be issued or is proposed to be fully or partly paid either for
cash or a consideration other than cash;
(ii) no commissions, discounts, brokerages or other special terms have been
g r a n t e di nc o n n e c t i o nw i t ht h ei s s u eo rs a l eo fa n ys h a r eo rl o a nc a p i t a l
of any member of our Group; and
(iii) no commission (except commission to sub-underwriters) has been paid
or payable to any person for subscribing, agreeing to subscribe, or
procuring or agreeing to procure subscription, for any shares in or
debentures of our Company.
(b) No share or loan capital of any member of our Group is under option, or
agreed conditionally or unconditionally to be put under option.
(c) No founder, management or deferred shares of our Company or any of our
subsidiaries have been issued or agreed to be issued.
(d) Our Group has no outstanding debt securities or debentures.
(e) There is no arrangement under which future dividends are waived or agreed
to be waived.
(f) There has not been any interruption in the business of our Group which may
have or has had a significant effect on the financial position of our Group in
the 12 months preceding the date of this prospectus.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3 5–


--- page 564 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were copies of the written consents referred to in
‘‘E. Other Information — 5. Consents of experts’’ in Appendix V to this prospectus and
copies of the material contracts referred to in ‘‘B. Further Information about Our Business
— 1. Summary of Material contracts’’ in Appendix V to this prospectus.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at
www.hkexnews.hk and our Company’s website at
www.metatechnologies.com.sg up to and including the date which is 14 days from the date
of this prospectus:
(a) the Memorandum of Association and the Articles;
(b) the accountant’s report of our Group issued by PricewaterhouseCoopers, the text
of which is set out in Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Company for the years ended
31 December 2022 and 2023;
(d) the letter issued by PricewaterhouseCoopers on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
prospectus;
(e) the letter of advice prepared by Conyers Dill & Pearman summarising certain
aspects of Cayman Islands company law referred to in Appendix IV to this
prospectus;
(f) the Cayman Companies Act;
(g) the legal opinion issued by our Singapore legal advisers, Drew & Napier LLC, in
respect of the applicable laws and regulations of our operations and certain
matters of our Group in Singapore;
(h) the legal opinion issued by our Malaysi a legal advisers, Shearn Delamore & Co.,
in respect of our Group’s operations and other general corporate matters;
(i) the legal memorandum issued by Ho gan Lovells in respect of relevant
International Sanctions applicable to our Group;
(j) the legal opinion issued by our Singapore Special Counsel, Sim Chong LLC, in
respect of certain matters relating to our Group’s history;
(k) the CIC Report;
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
–V I - 1–


--- page 565 ---
(l) the letter, summary of valuation and valua tion certificates relating to the property
interests of our Group prepared by Jones Lang LaSalle Corporate Appraisal and
Advisory Limited, the texts or extracts of which are set out in Appendix III to this
prospectus;
(m) the transfer pricing review report issued by PricewaterhouseCoopers Limited, our
Transfer Pricing Consultant;
(n) the material contracts referred to ‘‘B . Further Information about Our Business —
1. Summary of Material contracts’’ in Appendix V to this prospectus;
(o) the service contracts and letters of a p p o i n t m e n tr e f e r r e dt oi n‘ ‘ C .F u r t h e r
Information about Our Directors, Chief E xecutive and Substantial Shareholders
— 2. Directors’ service contracts and letters of appointment’’ in Appendix V to
this prospectus;
( p ) t h ew r i t t e nc o n s e n t sr e f e r r e dt oi n‘‘E. Other Information — 5. Consents of
experts’’ in Appendix V to this prospectus; and
(q) the rules of the Post-IPO Share Option Scheme.
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
–V I - 2–


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METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡
(Incorporated in the Cayman Islands with limited liability)
Stock Code : 8637
METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡
Sole Sponsor, Sole Overall Coordinator, Sole Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Share Offer
METASURFACE TECHNOLOGIES HOLDINGS LIMITED
ʮ̡
