REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE ON 18 APRIL 2012

This document is important. If you are in any doubt as to the action you should take, you should consult your legal, nancial, tax, or other professional adviser. We have applied to the Singapore Exchange Securities Trading Limited (the SGX-ST) for permission to deal in and for quotation of all our ordinary shares (the Shares) in the capital of Global Premium Hotels Limited (the Company) already issued, the New Shares (as dened herein) which are the subject of this Invitation (as dened herein), the new Shares which may be issued upon the exercise of the Over-allotment Option (as dened herein) (the Over-allotment Shares) and the shares which may be issued upon the vesting of the Awards granted pursuant to the Global Premium Hotels PSP (as dened herein) (the Award Shares). Such permission will be granted when we have been admitted to the Ofcial List of the Main Board of the SGX-ST. The dealing in and quotation of our Shares will be in Singapore dollars. Acceptance of applications for the New Shares will be conditional upon, inter alia, the issue of the New Shares and permission being granted to deal in and for quotation of all of our existing issued Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares. If completion of the Invitation does not occur because permission is not granted or for any other reason, monies paid in respect of any application accepted will be returned to you, subject to applicable laws, at your own risk, without interest or any share of revenue or other benet arising therefrom, and you will not have any claim against us, the Issue Manager, the Underwriter or the Placement Agent (as dened herein). The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus. Admission to the Ofcial List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our Subsidiaries, our existing issued Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) or the Award Shares. In connection with the Invitation, we have granted to the Issue Manager the Over-allotment Option exercisable in whole or in part for up to 67,500,000 Over-allotment Shares, representing not more than 15% of the New Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering overallotments (if any) made in connection with the Invitation. The Stabilising Manager may over-allot and/or effect transactions that may stabilise or maintain the market prices of our Shares at levels which may not otherwise prevail in the open market, subject to compliance with all applicable laws and regulations. Such stabilisation activities, if commenced, may be discontinued by Stabilising Manager at any time at its discretion, subject

to compliance with all applicable laws and regulations. The total number of issued Shares immediately after the completion of the Invitation (and prior to the exercise of the Over-allotment Option) will be 1,000,000,000 Shares. If the Over-allotment Option is exercised in full, the total number of issued Shares immediately after completion of the Invitation will increase by 67,500,000 Shares. A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the Authority) on 26 March 2012 and 18 April 2012 respectively. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our existing issued Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares, as the case may be, being offered for investment. We have not lodged or registered this Prospectus in any other jurisdiction. No Shares shall be allotted on the basis of this Prospectus later than six months after the date of registration of this Prospectus by the Authority. Investing in our shares involves risks which are described in the section entitled Risk Factors of this Prospectus.

Global Premium Hotels Limited

(Incorporated in the Republic of Singapore on 19 September 2011) (Company Registration Number 201128650E) Invitation in respect of 450,000,000 New Shares (subject to the Overallotment Option) comprising: (a) (b) 13,000,000 Public Offer Shares at $0.26 each by way of Public Offer; and 437,000,000 Placement Shares at $0.26 each by way of Placement, payable in full on application. Issue Manager, Underwriter and Placement Agent

Applications should be received by 12:00 noon on 24 April 2012 or such further period or periods as our Directors may, in consultation with the Issue Manager, in their absolute discretion, decide, subject to any limitations under all applicable laws.

We operate one of Singapores largest chains of hotels with 23 hotels, of which 22 are operated under our Fragrance brand and one hotel under the Parc Sovereign brand. We provide economy-tier and mid-tier class of accommodation with 1,738 rooms in Singapore*. We own all our hotels save for Fragrance Hotel Elegance. As at 31 October 2011, the market value of all the 22 hotels which we own amounted to S$747.6 million. We are principally engaged in the business of developing and operating economy-tier to mid-tier class hotels. Our established track record and reputation of providing affordable accommodation has led to our Fragrance brand of hotels becoming wellrecognised in the local and regional hospitality industry. Most of our hotel property assets and hotel operations are strategically located in the city or city-fringe areas.
* As at Latest Practicable Date being16 March 2012

22 1

Fragrance Hotels

Parc Sovereign Hotel

Type of Hotel Target Customer Amenities and Services Room Rates*

Economy-tier hotel Value-conscious customers Basic amenities Room rates range from S$54.21 to S$157.01

Mid-tier hotel Business/up-market travellers Enhanced services and amenities Room rates range from S$139.04 to S$261.80

*Daily room rates (excluding GST) as at Latest Practicable Date, being 16 March 2012

Total Number of Rooms and Hotels in Operation (Rooms) 2000 1800 1600 1400 1200 1000 800 600 400 200 0
Hotels 2006 -2011 CAG R: 13.9%

Hotels Owned Categorised by Lease Tenure

All Hotels Categorised by Years of Operations

23

(Hotels) 25
20 15

18 17 12

19

20

2 11 8

Rooms 2006-2011
1,034 1,212 1,316

CAGR: 10.8%
1,436 1,738

1,356

10 5

19

4
Freehold 1-5 years 6-10 years 11-15 years

2006

2007

2008

2009

2010

2011

Number of rooms islandwide

Number of hotels in operation

Leasehold (999 years) Leasehold (99 years)

Established and distinctive brand name

Developing and operating hotels in Singapore since 1995 Established track record and reputation of providing affordable and value-for-money accommodation in terms of price, location, service and cleanliness Well-recognised brand name in the local and regional hospitality industry

Dedicated and experienced key management personnel

Experienced hands-on management team with in-depth knowledge of hotel operations and hotel property development, and strong understanding of the local hospitality and property market

Offering of quality service and affordable hotel rooms at strategic locations

Hotel rooms have been furnished with essential amenities to provide guests with comfortable stay at affordable prices Hotel staff are trained in-house to maintain consistent level of service to guests Hotels are strategically located either in the city or city-fringe areas and are easily accessible by major roads, public buses and the MRT

Active development and management of hospitality-related assets to provide value accretion to existing portfolio of hotels
Successfully developed 20 hotels, renovated 4 hotels after acquisition and converted 3 buildings to hotels as at the Latest Practicable Date* Wide network of contacts and long-standing relationships with professionals, consultants, builders, agents and suppliers allows better control over the construction or renovations of hotels in terms of costs and downtime As hotel developer and operator, the Group has: Necessary know-how to optimise the design and type of rooms as well as the repair and maintenance of hotels Ability to identify opportune time to upgrade and refurbish hotel portfolio Ability to better pinpoint new sites for development of hotels

Revenue (S$million)
45 40 35 30 25 20 15 10 5 0
FY2008 FY2009 FY2010 9M2010 9M2011 36.9 34.6 44.2 32.3 38.9

Gross Prot and Gross Prot Margin (S$million)

40 35 30 25 20 15 10 5 0 70
FY2008 FY2009 FY2010 9M2010 9M2011 Gross Prot Gross Prot Margin 32.0 29.7 39.1 28.4 34.4

Net Prot and Net Prot Margin (%) (S$million)

20 43.7% 85 15 39.1% 44.9% 44.9% 44.5%

88.3% 85.9%

(%)
60 50 40
19.9 14.5 17.3

86.7%

88.0%

88.3%

90

80

10

16.1

13.5

30 20

75

5 10 0
FY2008 FY2009 Net Prot FY2010 9M2010 9M2011

Net Prot Margin

Regular promotional tie-ups with business partners and active participation in tourism trade conventions and exhibitions
Good working relationship with more than 900 local and overseas travel agents to promote hotels worldwide Work closely with various on-line travel agents such as Booking.com, AsiaTravel.com and Agoda.com, to promote hotels through various on-line channels Entered into contractual arrangements with corporate clients such as shipping companies for the provision of accommodation to their staff and crew while in Singapore Participate in tourism trade conventions and exhibitions in the Asia-Pacic region and overseas road shows, consumer fairs and product updates organised by the Singapore Tourism Board Advertise in trade magazines which are circulated within the tourism industry in the Asia-Pacic region as well as in newspapers, television, buses and cinemas

Integrated Property Management System allows better management of hotel operations

Centrally manage all 23 hotels island-wide to maximise hotel occupancy rates and reduce the manpower required for manual updates

Established relationships with suppliers allows better leverage on economies of scale

Bulk purchase of hotel room supplies and daily necessities centrally, coupled with good relationship with our suppliers, allow us to obtain supplies and daily necessities on favourable terms, reduce operating costs and ensure consistency and quality standards

* As at Latest Practicable Date being 16 March 2012

Singapore's Inbound Tourist Arrivals (2006-2015)

Tourist Arrivals (000 trips)

Incoming Tourism Receipts and Incoming Tourism Receipts from Accommodation (2006-2015)
Incoming Tourism Receipts ($ billions)

Tourist Arrivals Growth Rate

Incoming Tourism Receipts from Accommodation (S$ billions) 20,976 21,472 21,869 30.4 28.5 26.4 24.0 23.0% 14.6 15.3 13.0 19.3 32.0

19,399

19,643

20,372

15,755 14,635

15,759

15,773

13.0

7.9%

7.7% 3.7% 1.3% 0.0% 0.1% 2009 2010 2011E 2012F 2013F 2014F 2015F 2006 2007 2008 2009 2010 3.0% 2.4% 1.9% 2.5 3.1 3.4 2.7 4.1

5.0

5.6

6.0

6.4

6.7

2006

2007

2008

2011E

2012F

2013F

2014F

2015F

Source: Economy-tier Hotels in Singapore report issued by Euromonitor International Ltd. dated 30 November 2011

Key factors contributing to growth of Singapores tourism and hotel industry include:
Global economic recovery following the recession that occurred between the years 2008-2009 saw a rebound in tourist arrivals to Singapore. Inbound tourist arrivals registered 23.0% year on year growth to reach 19.4 million trips in 2010 Leisure visitor arrivals grew by 17% in 2010 to reach 13 million trips due to the opening of two integrated resorts The Singapore Tourism Board is expected to increase higher tourist spending by focusing on more value-added activities such as education, healthcare and expanded tourism offerings through infrastructural investments. Such investments include the International Cruise Terminal, Gardens by the Bay, the River Safari, Mandai Fourth Gate and the Jurong Lake New-long haul routes and regular airfare promotions introduced by low-cost airlines have contributed to the increase in tourist arrival numbers from regional Asian countries

Robust levels of visitor arrivals will ensure the constant growth of the hotel industry in Singapore. Barring major external shocks, AORs (dened herein) are likely to remain above 80% during the forecast period of 2011-2015. However, the economic uncertainty as well as the increase in hotel room inventory is likely to moderate the growth in room rates from 2012 onwards. Whilst the hospitality industry is expected to experience slower growth in 2012 due to uncertain economic conditions, the demand for mid-tier and economy-tier hotels is unlikely to be affected. In the face of adverse economic conditions and tighter budgets, both leisure and business travellers are likely to downgrade to more affordable accommodation that economy-tier hotels provide.

2nd largest economy-tier hotel chain in Singapore More than 85% of hotels owned by the Group are sited on freehold land Acquired 22 hotels at a discount on market value Dividend: We intend to distribute at least 80% of net prot after tax for FY2012

Expand Fragrance and Parc Sovereign brand of hotels

Identify and pursue potential sites for hotel development Add 200-300 (increase of up to 17.3%) rooms to our economy-tier and/or mid-tier hotels within 1 to 2 years after successful acquisition of the development site Expand overseas into the Asia-Pacic region (particularly Malaysia, Indonesia and Phillippines), with focus on the economy-tier hotel market segment, when opportunity arises

Upgrade existing hotels

Refurbish hotels to upgrade and enhance their value

Launch more aggressive marketing strategies

Launch new interactive booking engine to facilitate booking process Strengthen and increase collaborations with Singapore Tourism Board, Singapore Hotel Association, on-line travel agents and budget airlines to promote our hotels

Lower cost of operations

Explore feasibility of establishing own laundry service Review energy efciency of electrical appliances and sanitary ttings, and to upgrade where economically feasible Educate staff on energy conservation

19 April 2012, 9.00 a.m. 24 April 2012, 12.00 noon 26 April 2012, 9.00 a.m.

Opening date and time of public offer Closing date and time of public offer Commencement of trading on SGX-ST

Subscribe now through an ATM (dened herein) or IB website (dened herein) of one of the Participating Banks (dened herein) or on printed white application forms which forms part of the Prospectus, in the manner set out in the Prospectus.

TABLE OF CONTENTS
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. . . . . . . . PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of our Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Competitive Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Business Strategies and Future Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Financial Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Contact Details. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Listing on the SGX-ST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Details of the Invitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Invitation Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Placement Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over-allotment and Stabilisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Subscription for the New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selling Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clearance and Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indicative Timetable for Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USE OF PROCEEDS AND LISTING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risks Relating to our Business and Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risks Relating to Investment in our Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXCHANGE CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIVIDEND POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 7 16 18 18 18 19 20 21 24 25 25 29 31 33 33 33 34 35 35 35 37 38 40 42 42 55 59 60 61 65 66

TABLE OF CONTENTS
GENERAL INFORMATION OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our History and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Subsidiaries and Sole Proprietorships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Credit Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Major Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Major Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permits, Licences, Approvals, Certifications and Government Regulations. . . . . . Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Competitive Strengths. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SELECTED COMBINED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . Selected Combined Results of Operations of our Group . . . . . . . . . . . . . . . . . . . . Selected Combined Financial Position of our Group. . . . . . . . . . . . . . . . . . . . . . . . MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Significant Factors Affecting our Results of Operations . . . . . . . . . . . . . . . . . . . . . Unaudited Pro Forma Combined Financial Statements for FY2010 and 9M2011 . Breakdown by Business Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Review of Financial Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Review of Financial Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital Expenditures and Divestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating Lease Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign Exchange Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes to Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 87 87 91 94 95 97 102 104 104 106 106 107 110 116 116 119 120 120 121 122 122 123 127 130 131 137 139 144 146 147 147 147 148

TABLE OF CONTENTS
PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . Our Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Business Strategies and Future Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SHARE CAPITAL AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Moratorium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management Reporting Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key Executives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Material Background Information on our Directors, Key Executives and Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Directors and Key Executives Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Global Premium Hotels Performance Share Plan . . . . . . . . . . . . . . . . . . . . . . . . . . Objectives of the Global Premium Hotels PSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary of the Global Premium Hotels PSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rationale for participation of Non-Executive Directors . . . . . . . . . . . . . . . . . . . . . . Disclosures in Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of Awards made under the Global Premium Hotels PSP to our Company . . INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS . . . . . . Interested Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Past Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . On-going Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Review Procedures for Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . Potential Conflict of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remuneration Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nominating Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 149 149 151 153 155 155 157 158 159 159 160 166 171 176 177 178 179 179 180 184 185 185 187 187 187 190 192 193 197 197 199 199 200

TABLE OF CONTENTS
OTHER GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX A : INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX B : INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011. . . . . . . . . . . . . . . . . APPENDIX C : INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION . . . . . . . . . . . . . . APPENDIX D : SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX E : DESCRIPTION OF OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX F : TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX G : TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX H : RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX I : VALUERS REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

A-1

B-1

C-1

D-1 E-1

F-1 G-1

H-1 I-1

CORPORATE INFORMATION
BOARD OF DIRECTORS : Mr. Koh Wee Meng, Non-Executive Chairman Mr. Lim Chee Chong, Executive Director and CEO Mr. Sim Mong Yeow, Executive Director and COO Mr. Kau Jee Chu, Independent Director Mr. Woo Peng Kong, Independent Director Mr. Kwan Chee Wai, Independent Director Keloth Raj Kumar (Associate of the Institute of Chartered Secretaries and Administrators) 168 Changi Road #04-01 Fragrance Building Singapore 419730 Oversea-Chinese Banking Corporation Limited 65 Chulia Street #09-00 OCBC Centre Singapore 049513 Deloitte & Touche LLP 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 (Partner-in-charge: Leow Chung Chong Yam Soon, Certified Public Accountant) Duane Morris & Selvam LLP 16 Collyer Quay #17-00 Singapore 048318

COMPANY SECRETARY

REGISTERED OFFICE

ISSUE MANAGER, UNDERWRITER AND PLACEMENT AGENT AUDITORS OF THE COMPANY AND REPORTING ACCOUNTANTS

SOLICITOR TO THE INVITATION AND LEGAL ADVISER TO THE COMPANY ON SINGAPORE LAW SOLICITOR TO THE ISSUE MANAGER, UNDERWRITER AND PLACEMENT AGENT SHARE REGISTRAR AND SHARE TRANSFER AGENT

Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore 048542 Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte Ltd) 80 Robinson Road #02-00 Singapore 068898 Colliers International Consultancy & Valuation (Singapore) Pte Ltd 1 Raffles Place #45-00 One Raffles Place Singapore 048616

INDEPENDENT VALUER

CORPORATE INFORMATION
RECEIVING BANKER : Oversea-Chinese Banking Corporation Limited 65 Chulia Street #09-00 OCBC Centre Singapore 049513 CIMB Bank Berhad 50 Raffles Place #09-01 Singapore Land Tower Singapore 048623 DBS Bank Ltd. 6 Shenton Way DBS Building Tower One Singapore 068809 Hong Leong Finance Limited 16 Raffles Quay #01-05 Hong Leong Building Singapore 048581 Oversea-Chinese Banking Corporation Limited 65 Chulia Street #09-00 OCBC Centre Singapore 049513 RHB Bank Berhad 90 Cecil Street #03-00 RHB Bank Building Singapore 069531 Sing Investments & Finance Limited 96 Robinson Road #01-01 SIF Building Singapore 068899 United Overseas Bank Limited 80 Raffles Place UOB Plaza Singapore 048624 INDUSTRY EXPERT : Euromonitor International Ltd. No. 3 Lim Teck Kim Road #08-01 Genting Centre Singapore 088934

PRINCIPAL FINANCIAL INSTITUTIONS

DEFINITIONS
In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications, the instructions appearing on the screens of the ATMs of Participating Banks and the IB websites of the Participating Banks, unless the context otherwise requires, the following definitions apply throughout where the context so admits: Companies within our Group Company or Global Premium Hotels Fragrance Assets Fragrance Capital Fragrance Hotel Management Fragrance Investment Fragrance Ventures Parc Sovereign Hotel Management Our Hotels Fragrance Chain of Hotels or Fragrance Chain : The chain of hotels under the Fragrance brand name, comprising Fragrance Hotel-Sapphire, Fragrance HotelRuby, Fragrance Hotel-Emerald, The Fragrance Hotel, Fragrance Hotel-Pearl, Fragrance Hotel-Crystal, Fragrance Hotel-Balestier, Fragrance Hotel-Classic, Fragrance Hotel-Rose, Fragrance Hotel-Sunflower, Fragrance Hotel-Selegie, Fragrance Hotel-Kovan, Fragrance Hotel-Viva, Fragrance Hotel-Lavender, Fragrance Hotel-Imperial, Fragrance Hotel-Oasis, Fragrance Hotel-Waterfront, Fragrance Hotel-Ocean View, Fragrance Hotel-Royal, Fragrance Hotel-Bugis, Fragrance Hotel-Elegance and Fragrance HotelRiverside. Please refer to the section entitled General Information of our Group of this Prospectus for details of our hotels Fragrance Chain of Hotels and Parc Sovereign Hotel : : : : : : : Global Premium Hotels Limited Fragrance Assets Pte. Ltd. Fragrance Capital Pte. Ltd. Fragrance Hotel Management Pte. Ltd. Fragrance Investment Pte. Ltd. Fragrance Ventures Pte. Ltd. Parc Sovereign Hotel Management Pte. Ltd.

Our Chain of Hotels or Our Chain

Other Corporations and Organisations ASEAN BCA : : The Association of Southeast Asian Nations Building and Construction Authority of Singapore

DEFINITIONS
CDP CPF DBS Bank EMA FGL FGL Group Fragrance Biz Space Fragrance Heritage Fragrance Homes Fragrance Holdings Fragrance Land Fragrance Properties Fragrance Realty HLB IRAS Issue Manager or Underwriter or Placement Agent or Stabilising Manager or Receiving Banker or OCBC Bank Kensington Land Kensington Village MAS or Authority MHA MOM NEA Participating Banks : : : : : : : : : : : : : : : : The Central Depository (Pte) Limited The Central Provident Fund DBS Bank Ltd. (including POSB) Energy Market Authority Fragrance Group Limited, a company listed on the Main Board of the SGX-ST FGL and its Subsidiaries Fragrance Biz Space Pte. Ltd. Fragrance Heritage Pte. Ltd. Fragrance Homes Pte. Ltd. Fragrance Holdings Pte. Ltd. (formerly known as Fragrance Global Pte. Ltd.) Fragrance Land Pte. Ltd. Fragrance Properties Pte. Ltd. Fragrance Realty Pte. Ltd. Hotels Licensing Board Inland Revenue Authority of Singapore Oversea-Chinese Banking Corporation Limited

: : : : : : :

Kensington Land Pte. Ltd. Kensington Village Pte. Ltd. The Monetary Authority of Singapore Ministry of Home Affairs of Singapore Ministry of Manpower of Singapore National Environment Agency of Singapore OCBC Bank, DBS Bank and United Overseas Bank Limited and its subsidiary, Far Eastern Bank Limited (UOB Group), and Participating Bank means any of the abovementioned entities Securities Clearing & Computer Services (Pte) Ltd. 8

SCCS

DEFINITIONS
SCDF SGX-ST SHA STB URA General AOR Application Forms : : Average occupancy rates is computed by dividing total number of rooms sold by total number of rooms available The official printed application forms to be used for the purpose of the Invitation which form part of this Prospectus Average room rates per day is computed by dividing total room revenue earned by total number of rooms sold Articles of association of our Company, as at the date of lodgement of this Prospectus Automated teller machine The audit committee of our Company A contingent award of Shares granted pursuant to the rules of the Global Premium Hotels PSP, details of which may be found in the section entitled Directors, Management and Staff Global Premium Hotels Performance Share Plan of this Prospectus The Shares which may be issued upon the vesting of the Awards pursuant to the Global Premium Hotels PSP Our board of Directors Business travel, meetings, incentives, conventions and exhibitions The Building Control (Outdoor Advertising) Regulations, Chapter 29 Regulation 6, of Singapore, as amended, supplemented or modified from time to time Chief executive officer Chief operating officer The Companies Act, Chapter 50, of Singapore, as amended, supplemented or modified from time to time : : : : : The Singapore Civil Defence Force Singapore Exchange Securities Trading Limited The Singapore Hotel Association The Singapore Tourism Board Urban Redevelopment Authority

ARR Articles of Association ATM Audit Committee Award

: : : : :

Award Shares Board BTMICE Building Control (Outdoor Advertising) Regulations CEO COO Companies Act

: : : :

: : :

DEFINITIONS
Changi Road Property : A five-storey commercial building with an attic, shops and car parks at the ground floor located at 168 Changi Road, Fragrance Building, Singapore 419730 The Customs Act, Chapter 70, of Singapore, as amended, supplemented or modified from time to time The directors of our Company as at the date of this Prospectus The Electricity Act, Chapter 89A, of Singapore, as amended, supplemented or modified from time to time Applications for the Public Offer Shares made through an ATM or IB website of one of the Participating Banks, subject to and on the terms and conditions of this Prospectus The Employment Act, Chapter 91, of Singapore, as amended, supplemented or modified from time to time The Employment of Foreign Manpower Act, Chapter 91A, of Singapore, as amended, supplemented or modified from time to time Earnings per share The executive directors of our Company as at the date of this Prospectus The Fire Safety Act, Chapter 109A, of Singapore, as amended, supplemented or modified from time to time Financial year ended or, as the case may be, ending 31 December Gross Domestic Product A nine-storey light industrial factory building with surface car parks located at 72 Lorong 19 Geylang Singapore 388510 Global Premium Hotels Performance Share Plan Goods and Services Tax The Hotels Act, Chapter 127, of Singapore, as amended, supplemented or modified from time to time The Hotels Licensing Regulations, as supplemented or modified from time to time Internet banking amended,

Customs Act Directors Electricity Act Electronic Applications

: : : :

Employment Act Employment of Foreign Manpower Act EPS Executive Directors Fire Safety Act FY GDP Geylang Industrial Property Global Premium Hotels PSP GST Hotels Act Hotels Licensing Regulations IB

: :

: : : : : :

: : : : :

10

DEFINITIONS
Independent Directors Integrated Resorts Invitation : : : The independent directors of our Company as at the date of this Prospectus Marina Bay Sands and Resorts World Sentosa Our invitation to the public in Singapore to subscribe for the New Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus The Immigration Act, Chapter 133, of Singapore, as amended, supplemented or modified from time to time The Immigration Regulations, as supplemented or modified from time to time $0.26 for each New Share The key executives of our Company as at the date of this Prospectus The Land Acquisition Act, Chapter 152, of Singapore as amended, supplemented or modified from time to time 16 March 2012, being the latest practicable date prior to the lodgement of this Prospectus with the Authority The date on which our Shares commence trading on the SGX-ST The Listing Manual of the SGX-ST, as amended, supplemented, or modified from time to time A day on which the SGX-ST is open for trading in securities The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion, based on the following assumptions: (a) the properties are sold in the open market without the benefit of a deferred term contract or any similar arrangement which could serve to affect the value of the properties; (b) no allowance is made for any charges, mortgages or amounts owing on the properties, nor for any expenses or taxation which may be incurred in effecting a sale; and amended,

Immigration Act Immigration Regulations Issue Price Key Executives Land Acquisition Act Latest Practicable Date Listing Date Listing Manual Market Day Market Value

: : : : : : : : : :

11

DEFINITIONS
(c) the properties are free from any major or material encumbrances, restrictions and outgoings of an onerous nature which could affect their values

Memorandum Mixed-Use Development Project MRT NAV New Shares

: :

Memorandum of association of our Company, as at the date of lodgement of this Prospectus Mixed-use property development comprising hospitality property development and non-hospitality property development The Singapore Mass Rapid Transit railway transport system Net asset value The 450,000,000 new Shares for which our Company invites applications to subscribe for pursuant to the Invitation, subject to and on the terms and conditions of this Prospectus The nominating committee of our Company Refers to any use of property or property used for other than hospitality uses such as hotels and serviced apartments. Non-hospitality uses of property or nonhospitality property may include property used for commercial, residential, retail and food and beverage outlet purposes Net tangible assets The option granted to the Issue Manager, exercisable in whole or in part for the Over-allotment Shares, representing not more than 15% of the New Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation (Please refer to the section entitled The Invitation Over-allotment and Stabilisation of this Prospectus for more information). Unless indicated otherwise, all information in this Prospectus assumes that the Issue Manager does not exercise the Over-allotment Option Up to 67,500,000 new Shares (representing 15% of the New Shares) which may be issued upon the exercise of the Over-allotment Option

: : :

Nominating Committee non-hospitality uses or property

: :

NTA Over-allotment Option

: :

Over-allotment Shares

12

DEFINITIONS
Pasir Panjang Commercial Property : Fourteen units of two storey shop-houses at 216 Pasir Panjang Road Singapore 118577, 218 Pasir Panjang Road Singapore 118579, 220 Pasir Panjang Road Singapore 118581, 222 Pasir Panjang Road Singapore 118583, 224 Pasir Panjang Road Singapore 118585, 226 Pasir Panjang Road Singapore 118586, 228 Pasir Panjang Road Singapore 118587, 230 Pasir Panjang Road Singapore 118589, 232 Pasir Panjang Road Singapore 118589, 234 Pasir Panjang Road Singapore 118592, 236 Pasir Panjang Road Singapore 118593, 238 Pasir Panjang Road Singapore 118594, 240 Pasir Panjang Road Singapore 118595 and 242 Pasir Panjang Road Singapore 118597 FY2009, FY2010, FY2011 and 1 January 2012 to the Latest Practicable Date The placement of the Placement Shares at the Issue Price by the Placement Agent on behalf of our Company, subject to and on the terms and conditions of this Prospectus The 437,000,000 New Shares which are the subject of the Placement A sophisticated software system that manages our reservation and billing processes centrally The Property Tax (Valuation by Gross Receipts for Hotel Premises) Order as amended, supplemented or modified from time to time The offer by our Company to the public in Singapore for subscription of the Public Offer Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus The 13,000,000 New Shares which are the subject of the Public Offer The total consideration paid by our Company to FGL for the acquisition of our Subsidiaries, amounting to $558.0 million. Please refer to the section entitled General Information of our Group Restructuring Exercise of this Prospectus for further details This Prospectus dated 26 March 2012 issued by our Company in respect of the Invitation The remuneration committee of our Company

Period Under Review Placement

: :

Placement Shares PMS or Property Management System Property Tax (Valuation by Gross Receipts for Hotel Premises) Order Public Offer

: : :

Public Offer Shares Purchase Consideration

: :

Prospectus Remuneration Committee

: :

13

DEFINITIONS
Restructuring Agreement : The restructuring agreement dated 31 March 2012 entered into by our Company and FGL in connection with the acquisition of our Subsidiaries The restructuring exercise implemented in connection with the Invitation, more fully described in the section entitled General Information of our Group Restructuring Exercise of this Prospectus Revenue per available room computed by multiplying AOR by ARR The securities account maintained by a depositor with CDP, excluding a securities sub-account Securities and Futures Act, Chapter 289, of Singapore, as amended, supplemented or modified from time to time The service agreements entered into between our Company and our Executive Directors, Mr. Lim Chee Chong and Mr. Sim Mong Yeow as described in the section entitled Directors, Management and Staff Service Agreements of this Prospectus Securities and Futures (Offer of Investments) (Shares and Debentures) Regulations 2005, as amended, supplemented or modified from time to time Singapore Financial Reporting Standards Registered holders of Shares, except where the registered holder is CDP, the term Shareholders shall, in relation to such Shares mean the depositors whose Securities Accounts are credited with Shares The share lending agreement dated 18 April 2012 entered into between FGL and the Stabilising Manager in connection with the Over-allotment Option The ordinary shares in the capital of our Company Nine months period ended or, as the case may be, ending 30 September

Restructuring Exercise

REVPAR Securities Account Securities and Futures Act or SFA Service Agreements

: : : :

SFR

SFRS Shareholders

: :

Share Lending Agreement Shares 9M Currencies, Units and Others SGD or $ and cents sq. ft. sq. m. % or per cent

: :

: : : :

Singapore dollars and cents, respectively Square feet Square metre Percentage 14

DEFINITIONS
The expressions Associate, Associated Company, Associated Entity, Controlling Shareholders, Related Corporation, Related Entity, Entity At Risk, Interested Person, Interested Person Transaction, Subsidiary and Substantial Shareholder shall have the meanings ascribed to the terms associate, associated company, associated entity, controlling shareholders, related corporation, related entity, entity at risk, interested person, interested person transaction, subsidiary and substantial shareholder respectively in the Fourth Schedule of the SFR, the Companies Act and/or the Listing Manual. The expressions our, ourselves, us, we or our Group or other grammatical variations thereof shall, unless otherwise stated, refer to our Company and our subsidiaries and subsidiary entities taken as a whole. The expression currently in a statement refers to the relevant state of affairs as at the Latest Practicable Date. The terms depositor, depository agent and depository register shall have the same meanings ascribed to them respectively in Section 130A of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Any discrepancies in tables, graphs and/or charts included herein between the amounts listed and the totals thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. All figures and percentages disclosed in this Prospectus are rounded off. Any reference in this Prospectus, the Application Forms and Electronic Applications to any statute or enactment is a reference to that statute or enactment for the time being amended or re-enacted. Any word defined in the Companies Act, the Securities and Futures Act, or the Listing Manual and used in this Prospectus, the Application Forms and Electronic Applications shall, where applicable, have the meaning ascribed to it under the Companies Act, the Securities and Futures Act, or the Listing Manual, as the case may be. Any reference in this Prospectus, the Application Forms and Electronic Applications to our Shares being allotted to an applicant includes allotment to CDP for the account of that applicant. Any reference to a time of day in this Prospectus, the Application Forms and Electronic Applications shall be a reference to Singapore time unless otherwise stated.

15

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in press releases and oral statements that may be made by us or our Directors, Key Executives or employees acting on our behalf, that are not statements of historical fact, constitute forward-looking statements. You can identify some of these statements by forward-looking terms such as anticipate, believe, could, estimate, profit estimate expect, intend, may, plan, will and would or similar words. However, you should note that these words are not the exclusive means of identifying forward-looking statements. All statements regarding our expected financial position, profit estimate, business strategies, plans and prospects are forward-looking statements. These forward-looking statements, including without limitations, statements as to: (a) our revenue and profitability; (b) our planned expansion; (c) any expected growth;

(d) other expected industry trends; and (e) anticipated completion of proposed plans and other matters discussed in this Prospectus regarding matters that are not historical facts, are only predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other important factors include, amongst others, the following: (a) changes in political, social and economic conditions and the regulatory environment in the places in which we conduct our business; (b) our anticipated growth strategies and expected internal growth; (c) changes in competitive conditions and our ability to compete under these conditions;

(d) changes in currency exchange rates; (e) changes in our future capital needs and the availability of financing and capital to fund these needs; (f) other factors beyond our control; and

(g) the factors described in the section entitled Risk Factors of this Prospectus. All forward-looking statements made by or attributable to us, or persons acting on our behalf, contained in this Prospectus are expressly qualified in their entirety by such factors. Given the risks and uncertainties that may cause our actual future results, performance or achievements 16

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

to be materially different than expected, expressed or implied by the forward-looking statements in this Prospectus, we advise you not to place undue reliance on those statements. Our Company, the Issue Manager, Underwriter and Placement Agent are not representing or warranting to you that our actual future results, performance or achievements will be as discussed in those statements. Further, our Company, the Issue Manager, Underwriter and Placement Agent disclaim any responsibility to update any of those forward-looking statements to reflect future developments, events or circumstances for any reason, even if new information becomes available or other events occur in the future. We are, however, subject to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure upon our admission to the Official List of the SGX-ST. In particular, pursuant to Section 241 of the Securities and Futures Act, if after the Prospectus is registered but before the close of the Invitation, our Company becomes aware of (a) a false or misleading statement or matter in the Prospectus; (b) an omission from the Prospectus of any information that should have been included in it under Section 243 of the Securities and Futures Act; or (c) a new circumstance that has arisen since the Prospectus was lodged with the Authority and would have been required by Section 243 of the Securities and Futures Act to be included in the Prospectus, if it had arisen before the Prospectus was lodged and that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority.

17

PROSPECTUS SUMMARY
The information contained in this summary is derived from and should be read in conjunction with the full text of this Prospectus. Terms defined elsewhere in this Prospectus have the same meanings when used herein. Prospective investors should read the entire Prospectus carefully, in particular the matters set out in the section entitled Risk Factors of this Prospectus, before making an investment decision. Overview of our Group On 19 September 2011, our Company was incorporated in Singapore under the Companies Act as a private limited liability company under the name of Global Hotels Pte. Ltd.. We changed our name to Global Premium Hotels Pte. Ltd. on 21 February 2012. We further changed our name to Global Premium Hotels Limited on 29 March 2012 in connection with our conversion to a public company limited by shares. Our Group comprises our Company and our Subsidiaries, Fragrance Assets, Fragrance Capital, Fragrance Investment, Fragrance Ventures, Fragrance Hotel Management and Parc Sovereign Hotel Management. Please refer to the section entitled General Information of our Group Our Corporate Structure of this Prospectus for more details. Our Business We operate one of Singapores largest chains of hotels with 23 hotels, of which 22 hotels are operated under our Fragrance brand and one hotel under the Parc Sovereign brand. We provide economy-tier and mid-tier class of accommodation with 1,738 rooms in Singapore, as at the Latest Practicable Date. We own all our hotels save for Fragrance Hotel-Elegance. As at 31 October 2011, the Market Value of all the 22 hotels which we own amounted to S$747.6 million based on the valuation carried out by Colliers International Consultancy & Valuation (Singapore) Pte Ltd. Further details relating to the valuation of the hotels we own are set out in Appendix I entitled Valuers Report of this Prospectus. We are principally engaged in the business of developing and operating of economy-tier to mid-tier class of hotels. Our established track record and reputation of providing affordable accommodation has led to our Fragrance brand of hotels becoming well-recognised in the local and regional hospitality industry. All our hotel rooms have individually-controlled air-conditioning systems and an attached bathroom. Our hotel rooms also come with facilities such as international direct dialing telephone services, cable television and complementary beverages. Some of our hotels offer additional facilities and amenities comprising wireless internet connectivity, swimming pools, restaurants and convenience stores. Most of our hotels are strategically located in the city or city-fringe areas and easily accessible by major roads, public buses and the MRT. Many of our hotels are also situated near major convention centres, tourist attractions and the Integrated Resorts. A detailed discussion of our business is set out in the section entitled General Information of our Group Our Business of this Prospectus.

18

PROSPECTUS SUMMARY
Our Competitive Strengths Established and distinctive brand name We have been developing and operating hotels in Singapore since 1995 and as at the Latest Practicable Date, we operate 23 hotels across Singapore with 1,738 rooms. Our established track record and reputation of providing affordable and value-for-money accommodation in terms of price, location, service and cleanliness has led to our Fragrance brand of hotels becoming well-recognised in the local and regional hospitality industry. Dedicated and experienced key management personnel We have an experienced management team who are hands-on, have in-depth knowledge of hotel operations and hotel property development and have a strong understanding of the local hospitality and property market. Our Directors, Mr. Koh Wee Meng, Mr. Lim Chee Chong and Mr. Sim Mong Yeow collectively have approximately 27 years of experience in hotel operations and hotel property development, with approximately 15 years, 5 years and 7 years of experience respectively. Please refer to the section entitled General Information of our Group-Competitive Strengths of this Prospectus for more details. Offering of quality service and affordable hotel rooms at strategic locations We place great importance on the quality of the rooms and services offered by our hotels, with all our hotel rooms furnished with essential amenities to provide our guests with a comfortable stay at affordable prices. Most of our hotels are strategically located either in the city or city-fringe areas and easily accessible by major roads, public buses and the MRT. Major shopping and convention centres, tourist attractions and the two Integrated Resorts are conveniently accessible from our hotels. Active development and management of hospitality-related assets to provide value accretion to existing portfolio of hotels Based on our experience in acquiring, developing, converting and renovating hotels, we have established a wide network of contacts with professionals, consultants, builders, agents and suppliers. We believe that our ability to capitalise on these relationships allows us to maintain better control over the construction or renovations of our hotels in terms of costs and downtime. In addition, we are more likely, as hotel developers, to identify opportune time to upgrade and refurbish the hotels within our portfolio. We believe that our experience as developers will also enable us to better pinpoint new sites for development of hotels. Regular promotional tie-ups with business partners and active participation in tourism trade conventions and exhibitions As at the Latest Practicable Date, we have established a good working relationship with more than 900 local and overseas travel agents, who promote our hotels worldwide. Besides that, we work closely with various established on-line travel agents to promote our hotels through

19

PROSPECTUS SUMMARY
various on-line channels. We have also entered into contractual arrangements with corporate clients such as shipping companies for the provision of accommodation to their staff and crew while in Singapore. We have participated in tourism trade conventions and exhibitions in the Asia-Pacific region. In addition, we also actively participate in overseas road shows, consumer fairs and product updates organised by the STB. We believe that our marketing activities help us to identify the current market needs and preferences of present-day travellers so that we can adjust our products and service offerings to better suit their needs. These promotional efforts also enable us to raise our profile among potential guests and contribute to the expansion of the number of guests at our hotels. Integrated Property Management System allows us to better manage our hotel operations We have invested in a sophisticated software system that manages our reservation and billing processes centrally through the PMS. The PMS allows us to centrally manage all the 23 hotels island-wide so as to maximise hotel occupancy rates and reduce the manpower required for manual updates. By being able to manage the occupancy status of Our Chain of Hotels in real-time, we are able to increase the overall occupancy and room revenue of our hotels. Established relationships with our suppliers allows us to better leverage on our economies of scale The bulk purchase of our hotel room supplies and daily necessities centrally, coupled with the good relationship with our suppliers, allows us to obtain such supplies and daily necessities on favourable terms. Our centralised procurement policy also helps to reduce operating costs and monitor the consistency and quality standards of the supplies and daily necessities. A detailed discussion of our competitive strengths is set out in the section entitled General Information of our Group Competitive Strengths of this Prospectus. Our Business Strategies and Future Plans Expansion of our Fragrance and Parc Sovereign brands of hotels We plan to increase the number of hotel properties we operate under the Fragrance and Parc Sovereign brands of hotels. We believe that such expansion plans will allow us to capitalise on our experience in conceptualising and operating economy-tier to mid-tier hotels. We are in the process of identifying potential sites for hotel development and expect to pursue one or more of these opportunities within one year from the Listing Date. We intend to add 200 to 300 rooms to our economy-tier and/or mid-tier hotels within one to two years after successful acquisition of the development site. We also plan to expand overseas as and when the opportunity arises through setting up of new subsidiaries, establishment of joint ventures with local partners and/or acquisitions of business or assets.

20

PROSPECTUS SUMMARY
Upgrading our existing hotels In order to stay competitive in the market and to enhance the value of our hotels, our Group intends to upgrade and refurbish our current portfolio of hotels. Our Group believes that the refurbished hotels will be able to command higher room rates and improve occupancy rates, which would then increase our Groups revenue and profits. Launching of more aggressive marketing strategies We plan to increase our collaborations with on-line travel agents, launch a new interactive booking engine and review existing portal design so as to facilitate the booking process for persons seeking accommodation with us. Furthermore, we plan to strengthen our collaborations with the budget airlines to promote our hotels. We also plan to work closely with the STB and the SHA to promote our economy-tier and mid-tier hotels. Lowering the cost of operations We will review the energy efficiency of the electrical appliances and sanitary fittings in our hotels and where economically feasible, upgrade such appliances and fittings so as to be more energy efficient. In addition, we will educate all our operating staff on energy conservation so as to achieve the dual aims of environmental conservation and cost savings. We will also explore the feasibility of establishing our own laundry service to reduce the outsourcing costs and operating expenses. A detailed discussion of our future plans is set out in the section entitled Prospects, Business Strategies and Future Plans Our Business Strategies and Future Plans of this Prospectus. Our Financial Performance The following tables present a summary of the financial highlights of our Group and should be read in conjunction with the section entitled Managements Discussion and Analysis of Results of Operations and Financial Position, Appendix A entitled Independent Auditors Report on the Combined Financial Statements for the Years Ended 31 December 2010, 2009 and 2008, Appendix B entitled Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011 and Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus.

21

PROSPECTUS SUMMARY
Selected Items from the Results of Operations of our Group
Audited FY2009 ($000) Unaudited Pro 9M2010 Forma FY2010 ($000) ($000) Audited Unaudited 9M2011 Pro Forma ($000) 9M2011 ($000)

FY2008 ($000)

FY2010 ($000)

Revenue Cost of sales Gross profit Other operating income Loss on disposal of property, plant and equipment Administrative expenses Finance costs Profit before income tax Income tax expense Profit for the year/period EPS (cents)(1)

36,893 (4,895) 31,998 196

34,579 (4,883) 29,696 221

44,215 (5,156) 39,059 280

42,465 (5,996) 36,469 264

32,284 (3,867) 28,417 203

38,929 (4,571) 34,358 344

37,860 (5,201) 32,659 308

(9,319) (3,239)

(10,355) (3,184)

(12,223) (3,001)

(51) (11,560) (2,052)

(8,754) (2,346)

(11,296) (2,158)

(10,852) (1,712)

19,636 (3,505)

16,378 (2,867)

24,115 (4,260)

23,070 (4,091)

17,520 (3,040)

21,248 (3,930)

20,403 (3,786)

16,131 2.93

13,511 2.46

19,855 3.61

18,979 3.45 Unaudited

14,480 2.63

17,318 3.15

16,617 3.02

EPS as adjusted for the Invitation (cents)(2)

Notes:

1.61

1.35

1.99

1.90

1.45

1.73

1.66

(1) For comparative purposes, EPS is calculated based on profit for the year/period and the pre-Invitation share capital of 550,000,000 Shares. (2) For comparative purposes, EPS as adjusted for the Invitation is calculated based on profit for the year/period and the post-Invitation share capital of 1,000,000,000 Shares.

22

PROSPECTUS SUMMARY
Selected Items From the Financial Position of our Group
Unaudited Unaudited Pro Pro Forma Audited Forma as at 31 as at 30 as at 30 December September September 2010 2011 2011 ($000) ($000) ($000)

Audited as at 31 December 2008 ($000) Current assets Cash and cash equivalents Trade receivables Other receivables Properties under development Total current assets Non-current assets Property, plant and equipment Total assets Current liabilities Trade payables Other payables Term loans Income tax payable Total current liabilities Non-current liabilities Term loans Deferred tax liability Total non-current liabilities Capital and reserves Share capital Revaluation reserve Merger reserve Retained earnings Total equity Total liabilities and equity 27,100 157,779 17,070 201,949 342,024 98,996 3,760 102,756 1,223 26,067 6,433 3,596 37,319 323,412 342,024 1,923 1,216 15,473 18,612

Audited as at 31 December 2009 ($000)

Audited as at 31 December 2010 ($000)

2,458 985 11,149 23,820 38,412

2,811 1,274 5,982 26,846 36,913

19,143 1,274 46,019 66,436

3,899 1,511 47,443 52,853

11,588 1,511 15,608 28,707

425,284 463,696

701,942 738,855

642,606 709,042

738,718 791,571

738,718 767,425

1,236 45,515 12,198 2,829 61,778

1,188 49,986 7,895 4,435 63,504

1,188 140,893 20,147 8,319 170,547

1,194 5,584 32,643 8,065 47,486

1,194 91,082 20,147 7,921 120,344

134,832 4,751 139,583

150,448 23,815 174,263

443,035 19,528 462,563

108,838 26,447 135,285

443,035 26,447 469,482

27,100 213,654 21,581 262,335 463,696

27,100 451,552 22,436 501,088 738,855

137,500 427,344 (530,900) 41,988 75,932 709,042

27,100 511,459 70,241 608,800 791,571

137,500 511,459 (530,900) 59,540 177,599 767,425

23

PROSPECTUS SUMMARY
Our Contact Details Our registered address is 168 Changi Road #04-01 Fragrance Building Singapore 419730. Our telephone and fax numbers are +65 6348 7888 and +65 6345 5951 respectively. Our company registration number is 201128650E. Our website addresses are http://www.fragrancehotel.com and http://www.parcsovereign.com. Information contained on our websites does not constitute a part of this Prospectus.

24

THE INVITATION
Listing on the SGX-ST We have applied to the SGX-ST for permission to deal in, and for quotation of, all our Shares already issued, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares on the Official List of the SGX-ST. Such permission will be granted when we have been admitted to the Official List of the SGX-ST. Acceptance for applications of the New Shares will be conditional upon the completion of the Invitation, which is subject to certain conditions, including the SGX-ST granting permission to deal in, and for quotation of, all our existing issued Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares. If the said permission from the SGX-ST is not granted, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claim against our Company, and/or the Issue Manager, Underwriter and Placement Agent. Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (the Stop Order) to our Company, directing that no New Shares or no further Shares to which this Prospectus relates, be allotted or issued. Such circumstances will include a situation where this Prospectus (i) contains a statement or matter, which in the opinion of the Authority is false or misleading; (ii) omits any information that should be included in accordance with the Securities and Futures Act; or (iii) does not, in the opinion of the Authority, comply with the requirements of the Securities and Futures Act. A Stop Order may also be issued if the Authority is of the opinion that it is in the public interest to do so. In the event that the Authority issues a Stop Order and applications to subscribe for the New Shares to which this Prospectus relates have been made prior to the Stop Order, then: (a) where the New Shares have not been issued to you, your applications shall be deemed to have been withdrawn and cancelled and our Company shall, within 14 days from the date of the Stop Order, return to you all monies you have paid on account of your applications for the New Shares; or (b) where the New Shares have been issued to you, the SFA provides that the issue of our New Shares shall be deemed to be void and our Company is required, within 14 days from the date of the Stop Order, return to you all monies paid by you for our New Shares. The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our Subsidiaries, our existing issued Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares. A copy of this Prospectus together with copies of the Application Forms have been lodged with and registered by the Authority on 26 March 2012 and 18 April 2012 respectively. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of the Invitation, our Company, our Subsidiaries, our existing issued 25

THE INVITATION
Shares, the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Award Shares, as the case may be, being offered or in respect of which the Invitation is made, for investment. We have not lodged or registered this Prospectus in any other jurisdiction. Neither our Company, the Issue Manager, Underwriter and Placement Agent, the experts nor any other parties involved in the Invitation is making any representation to any person regarding the legality of an investment in our Shares by such person under any investment or other laws or regulations. No information in this Prospectus should be considered as being business, legal or tax advice. You should consult your own professional or other advisers for business, legal or tax advice regarding an investment in our Shares. No person has been or is authorised to give any information or to make any representation not contained in this Prospectus in connection with the Invitation and, if given or made, such information or representation must not be relied upon as having been authorised by our Company, the Issue Manager, Underwriter and Placement Agent. Neither the delivery of this Prospectus and the Application Forms nor any document relating to the Invitation shall, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change in our affairs or in the statements of fact or information contained in this Prospectus since the date of this Prospectus. Where such changes occur and are material or are required to be disclosed by law, we will promptly make an announcement of the same to the SGX-ST and to the public and, if required, lodge a supplementary or replacement prospectus with the Authority and make an announcement of the same to the SGX-ST and to the public and will comply with the requirements of the Securities and Futures Act. You should take note of any such announcement and, upon release of such an announcement, shall be deemed to have given notice of such changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise or representation as to the future performance or policies of our Company or our Subsidiaries. In the event that a supplementary or replacement prospectus is lodged with the Authority, the Invitation shall be kept open for at least 14 days after the lodgement of such supplementary or replacement prospectus. We are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. In particular, if after this Prospectus is registered but before the close of the Invitation, we become aware of: (a) a false or misleading statement in this Prospectus; (b) an omission from this Prospectus of any information that should have been included in it under Section 243 of the Securities and Futures Act; or (c) a new circumstance that has arisen since the Prospectus was lodged with the Authority which would have been required by Section 243 of the Securities and Futures Act to be included in this Prospectus if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act. 26

THE INVITATION
Where prior to the lodgement of the supplementary or replacement prospectus, applications have been made under this Prospectus to subscribe for our New Shares and: (a) where the New Shares have not been issued to you, our Company shall either: (i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give you notice in writing of how to obtain, or arrange to receive a copy of the supplementary or replacement prospectus, as the case may be, and to provide you with an option to withdraw your application; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus, as the case may be, to you, where you have indicated that you wish to obtain, or have arranged to receive, a copy of the supplementary of replacement prospectus; or within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, give you the supplementary or replacement prospectus, as the case may be, and provide you with an option to withdraw your application; or

(ii)

(iii) treat the applications as withdrawn and cancelled, in which case your application shall be deemed to have been withdrawn and cancelled, and our Company shall within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, return all monies paid in respect of any application to you; or (b) where the New Shares have been issued to you, our Company shall either: (i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give you notice in writing of how to obtain, or arrange to receive a copy of the supplementary or replacement prospectus, as the case may be, and to provide you with an option to return to our Company, the Shares which you do not wish to retain title in; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus, as the case may be, to you, where you have indicated that you wish to obtain, or have arranged to receive, a copy of the supplementary of replacement prospectus; or within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, give you the supplementary or replacement prospectus, as the case may be, and provide you with an option to return to our Company the New Shares, which you do not wish to retain title in; or

(ii)

(iii) treat the issue of our Shares as void, in which case the issue shall be deemed void and our Company shall within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, return all monies paid in respect of any application to you. If you wish to exercise your option under paragraph a(i) or a(ii) above to withdraw your application in respect of the New Shares, you shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of 27

THE INVITATION
this, whereupon our Company shall within seven (7) days from the receipt of such notification, return to you all monies you have paid on account of your application for such New Shares. If you wish to exercise your option under paragraph b(i) or b(ii) above to return the New Shares issued to you, you shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of this and return all documents, if any, purporting to be evidence of title to those Shares, to our Company, whereupon our Company shall within seven (7) days from the receipt of such notification and documents, if any, return to you all monies you have paid for those New Shares and the issue of those Shares shall be deemed to be void. Where monies are to be returned to you for the New Shares, it shall be paid to you without any interest or share of revenue or other benefit arising therefrom at your own risk, and you will not have any claim against us, and the Issue Manager, Underwriter and Placement Agent. This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied upon by you in connection with your application for the New Shares and may not be relied upon by any other person or for any other purpose. This Prospectus does not constitute an offer of, or Invitation or solicitation to subscribe for the New Shares in any jurisdiction in which such offer or Invitation or solicitation is unauthorised or unlawful nor does it constitute an offer or Invitation or solicitation to any person to whom it is unlawful to make such offer or Invitation or solicitation. Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, during office hours, subject to availability, from: Oversea-Chinese Banking Corporation Limited 65 Chulia Street OCBC Centre Singapore 049513 and from selected branches of OCBC Bank. A copy of this Prospectus is also available on the SGX-ST website at http://www.sgx.com and the Authority website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf. The Invitation will be open from 9.00 a.m. on 19 April 2012 to 12.00 p.m. on 24 April 2012 or such further period or periods as our Directors may, in consultation with the Issue Manager, in their absolute discretion, decide, subject to any limitations under all applicable laws, PROVIDED ALWAYS THAT where a supplementary prospectus or replacement prospectus has been lodged with the Authority pursuant to Section 241 of the Securities and Futures Act, the Invitation shall be kept open for at least 14 days after the lodgement of the supplementary prospectus or replacement prospectus. Details for the procedure for application for the New Shares are set out in Appendix F entitled Terms, Conditions and Procedures for Application and Acceptance of this Prospectus.

28

THE INVITATION
Details of the Invitation Invitation Size : 450,000,000 New Shares offered in Singapore comprising 13,000,000 Public Offer Shares and 437,000,000 Placement Shares. The New Shares, upon issue and allotment, will rank pari passu in all respects with the existing issued Shares. Issue Price The Invitation : : $0.26 for each New Share. The Invitation comprises an offering of: (a) 13,000,000 Public Offer Shares at the Issue Price, to members of the public in Singapore; and (b) 437,000,000 Placement Shares at the Issue Price, reserved for placement to retail and institutional investors in Singapore. The Placement : The Placement comprises a placement of 437,000,000 Placement Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus. In connection with the Invitation, we have granted the Issue Manager the Over-allotment Option exercisable in whole or in part for up to 67,500,000 Shares, representing not more than 15% of the New Shares, within 30 days from the Listing Date, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation. Unless indicated otherwise, all information in this Prospectus assumes that the Issue Manager does not exercise the Over-allotment Option. The Over-allotment Shares will, upon issue and allotment, rank pari passu in all respects with the existing issued Shares.

Over-allotment Option

29

THE INVITATION
Stabilisation : In connection with the Invitation, the Stabilising Manager or person(s) acting on behalf of the Stabilising may, over-allot or effect transactions that may stabilise or maintain the market price of our Shares at levels which might not otherwise prevail in the open market. Such transactions may be effected on the SGX-ST and in all jurisdictions where it is permissible to do so, in each case, in compliance with all applicable laws and regulatory requirements, including the Securities and Futures Act. Such stabilisation activities may commence on or after the Listing Date and, if commenced, may be discontinued by the Stabilising Manager at any time at its discretion, and shall not be effected after the earlier of (a) the date falling 30 days from the Listing Date; or (b) the date when the Stabilising Manager or its appointed agent has bought, on the SGX-ST, such number of Shares equivalent to the Over-allotment Shares. We consider that the Invitation and quotation of our Shares on the Official List of the SGX-ST will enhance our public image and enable us to tap the capital markets to fund our business growth. It will also provide members of the public, our employees, business associates and those who have contributed to our success with an opportunity to participate in the equity of our Company. The Invitation will also enlarge our capital base for continued expansion of our business. Our Shares will be quoted in Singapore dollars on the Main Board of the SGX-ST, subject to admission of our Company to the Official List of the SGX-ST and permission for dealing in and for quotation of our Shares being granted by the SGX-ST and the Authority not issuing a Stop Order.

Purpose of the Invitation

Listing Status

30

THE INVITATION
Invitation Statistics Issue Price NAV NAV per Share based on the unaudited pro forma combined balance sheet of our Group as at 30 September 2011(1): (a) before adjusting for the estimated net proceeds from the issue of the New Shares and based on the pre-Invitation share capital of 550,000,000 Shares (b) after adjusting for the estimated net proceeds from the issue of the New Shares and based on the post-Invitation share capital of 1,000,000,000 Shares Discount of Issue Price over the pro forma NAV per Share as at 30 September 2011: (a) before adjusting for the estimated net proceeds from the issue of the New Shares and based on the pre-Invitation share capital of 550,000,000 Shares (b) after adjusting for the estimated net proceeds from the issue of the New Shares and based on the post-Invitation share capital of 1,000,000,000 Shares Earnings(2) Unaudited pro forma net EPS of our Group for FY2010 based on the pre-Invitation share capital of 550,000,000 Shares Unaudited pro forma net EPS of our Group for FY2010 based on the pre-Invitation share capital of 550,000,000 Shares, assuming that the Service Agreements had been in place in FY2010 Price Earnings Ratio Pro forma price earnings ratio based on the unaudited pro forma net EPS of our Group for FY2010 Pro forma price earnings ratio based on the unaudited pro forma net EPS of our Group for FY2010, assuming that the Service Agreements had been in place in FY2010 7.5 times 7.8 times 3.45 cents 3.32 cents 19.5% 32.29 cents $0.26

28.97 cents

10.3%

31

THE INVITATION
Net Operating Cash Flow(3) Unaudited pro forma net operating cash flow per Share of our Group for FY2010 based on the pre-Invitation share capital of 550,000,000 Shares Unaudited pro forma net operating cash flow per Share of our Group for FY2010 based on the pre-Invitation share capital of 550,000,000 Shares, assuming that the Service Agreements had been in place in FY2010 Price to Net Operating Cash Flow Pro forma price to net operating cash flow ratio based on the unaudited pro forma net operating cash flow per Share for FY2010 and the pre-Invitation share capital of 550,000,000 Shares Pro forma price to net operating cash flow ratio based on the unaudited pro forma net operating cash flow per Share for FY2010 and the pre-Invitation share capital of 550,000,000 Shares, assuming that the Service Agreements had been in place in FY2010 Market Capitalisation Market capitalisation based on the Issue Price and the post-Invitation share capital of 1,000,000,000 Shares
Notes: (1) Please refer to the section entitled Unaudited Pro Forma Combined Statement of Financial Position as at 30 September 2011 in Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus, for details. (2) The EPS is computed from profit for the year, derived from the section entitled Unaudited Pro Forma Combined Statement of Comprehensive Income for the Year Ended 31 December 2010. Please refer to Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus, for details. (3) Net operating cash flow is defined as cash flows from operating activities. Please refer to the section entitled Unaudited Pro Forma Combined Statement of Cash Flows for the Year ended 31 December 2010 in Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus for details.

5.24 cents

5.11 cents

5.0 times

5.1 times

$260.0 million

32

THE INVITATION
Plan of Distribution The Invitation is for 450,000,000 New Shares offered in Singapore by way of public offer and placement comprising 13,000,000 Public Offer Shares and 437,000,000 Placement Shares managed and underwritten by OCBC Bank. The Issue Price is determined by us in consultation with the Issue Manager, Underwriter and the Placement Agent based on market conditions and estimated market demand for our Shares determined through a book-building process. The Issue Price is the same for each New Share and is payable in full on application. Public Offer Shares The Public Offer Shares are made available to the members of the public in Singapore for subscription at the Issue Price. Members of the public may apply for the Public Offer Shares by way of printed Application Forms or by Electronic Applications as described under Terms, Conditions and Procedures for Application and Acceptance set out in Appendix F of this Prospectus. Pursuant to the Management and Underwriting Agreement entered into between us, and OCBC Bank, as set out in the section entitled Other General Information Management and Underwriting Agreement and Placement Agreement of this Prospectus, we have appointed OCBC Bank to manage the Invitation and to underwrite the 13,000,000 Public Offer Shares. OCBC Bank will receive an underwriting commission of 2.0% of the Issue Price for the Public Offer Shares payable by us for subscribing, or procuring subscribers, for such Public Offer Shares. Our Company may, at our sole discretion, pay to the Underwriter an additional incentive fee of 0.25% of the aggregate Issue Price for the Public Offer Shares payable by us for subscribing, or procuring subscribers, for such Public Offer Shares. OCBC Bank may, at its absolute discretion, appoint one or more sub-underwriters for the Public Offer Shares. In the event of an under-subscription for the Public Offer Shares as at the close of the Invitation, that number of Public Offer Shares not subscribed for shall be made available to satisfy excess applications for the Placement Shares to the extent there is an over-subscription for the Placement Shares as at the close of the Invitation. In the event of an over-subscription for the Public Offer Shares as at the close of the Invitation and/or the Placement Shares are fully subscribed for as at the close of the Invitation, the successful applications for the Public Offer Shares will be determined by ballot or otherwise as determined by us after consultation with the Issue Manager, and approved by the SGX-ST. Placement Shares The Placement Shares are made available to retail and institutional investors who apply through their brokers or financial institutions. Applications for Placement Shares may only be made by way of printed Application Forms as described under Terms, Conditions and Procedures for Application and Acceptance set out in Appendix F of this Prospectus.

33

THE INVITATION
Pursuant to the Placement Agreement entered into between us and OCBC Bank as set out in the section entitled Other General Information Management and Underwriting Agreement and Placement Agreement of this Prospectus, OCBC Bank agreed to subscribe or procure subscribers for the 437,000,000 Placement Shares for a placement commission of 2.0% of the Issue Price for the Placement Shares payable by us. Our Company may, at our sole discretion, pay to the Placement Agent an additional incentive fee of 0.25% of the aggregate Issue Price for the Placement Shares payable by us. OCBC Bank may, at its absolute discretion, appoint one or more sub-placement agent(s) for the Placement Shares. In the event of an under-subscription for the Placement Shares as at the close of the Invitation, that number of Placement Shares not subscribed for shall be made available to satisfy excess applications for the Public Offer Shares to the extent that there is an over-subscription for the Public Offer Shares as at the close of the Invitation. Subscribers and purchasers of the Placement Shares may be required to pay brokerage of up to 1.0% of the Issue Price to the Placement Agent or any sub-placement agent(s) that may be appointed by the Placement Agent. Over-allotment and Stabilisation In connection with this Invitation, our Company has granted OCBC Bank an Over-allotment Option, exercisable in whole or in part by the Stabilising Manager within 30 days from the Listing Date. In the event that the Over-allotment Option is exercised, we will pay a commission of 2.0% of the Issue Price for each Over-allotment Share subscribed by OCBC Bank. Our Company may, at our sole discretion, pay to OCBC Bank an additional incentive fee of 0.25% of the aggregate Issue Price for the Over-allotment Shares payable by us. In connection with this Invitation, OCBC Bank (or person(s) acting on behalf of it) may, in its discretion but subject always to applicable laws and regulations in Singapore, over-allot or effect transaction(s) which stabilise or maintain the market price of the Shares at levels which might not otherwise prevail in the open market. Such transaction(s) may be effected on the SGX-ST and in all jurisdictions where it is permissible to do so, in each case, in compliance with all applicable laws and regulatory requirements including the SFA and any regulation thereunder. The number of Shares that OCBC Bank may buy to undertake stabilising action(s) shall not exceed an aggregate of 67,500,000 Shares representing not more than 15% of the New Shares. However, there is no assurance that OCBC Bank (or any person(s) acting on its behalf) will undertake stabilisation action(s). Such stabilisation activities may commence on or after the commencement of trading of the Shares on the SGX-ST and, if commenced, may be discontinued by OCBC Bank at any time at OCBC Banks discretion in accordance with the laws of Singapore and shall not be effected after the earlier of (a) the date falling 30 days from the Listing Date; or (b) the date when OCBC Bank or its appointed agent(s) has bought on the SGX-ST, such number of Shares equivalent to the Over-allotment Shares, to undertake stabilising action(s). We will publicly announce the total number of Over-allotment Shares which is subject to the Over-allotment Option, through a SGXNET announcement to be posted on the internet at the SGX-ST website http://www.sgx.com, no later than the day immediately following the close of the Invitation. 34

THE INVITATION
Neither our Company nor OCBC Bank makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our Shares. In addition, neither our Company nor OCBC Bank makes any representation that OCBC Bank or any person acting for it will engage in such transaction(s), or that such transaction(s), once commenced, will not be discontinued without notice. Share Lending In connection with the over-allotment and stabilisation, OCBC Bank has entered into the Share Lending Agreement, pursuant to which OCBC Bank may borrow up to 67,500,000 Shares from FGL before the Listing Date for the purpose of covering the over-allotments in connection with this Invitation, if any. Any Shares that may be borrowed by the Stabilising Manager under the Share Lending Agreement will be returned by the Stabilising Manager to FGL either through the purchase of Shares in the open market by the Stabilising Manager in the conduct of stabilising activities or through the exercise of the Over-allotment Option by the Stabilising Manager. Subscription for the New Shares None of our Directors save for Mr. Koh Wee Meng, Mr. Lim Chee Chong and Mr. Sim Mong Yeow, nor our Controlling Shareholders intends to subscribe for the New Shares in the Invitation. To the best of our knowledge, we are unaware of any person who intends to subscribe for 5.0% or more of the New Shares. However, through the book-building process to assess market demand for our Shares, there may be person(s) who may indicate an interest to subscribe for 5.0% or more of the New Shares. If such person(s) were to make an application for 5.0% or more of the New Shares pursuant to the Invitation and subsequently be allotted such number of Shares, we will make the necessary announcements at an appropriate time. The final allotment of Shares will be in accordance with the shareholdings spread and distribution guidelines as set out in Rule 210 of the Listing Manual. No Shares shall be allotted on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus. Please also refer to the section entitled Other General Information Management and Underwriting Agreement and Placement Agreement of this Prospectus for further details on our Management and Underwriting Agreement and Placement Agreement. Selling Restrictions This Prospectus does not constitute an offer, solicitation or Invitation to subscribe for the New Shares in any jurisdiction in which such offer, solicitation or Invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such an offer, solicitation or Invitation. No action has been or will be taken under the requirements of the legislation or regulations of, or of the legal or regulatory authorities of, any jurisdiction, except for the lodgement and/or registration of this Prospectus in Singapore in order to permit an Invitation of the New Shares and the distribution of this Prospectus in Singapore. The distribution of this Prospectus and the offering of the New Shares in certain jurisdictions may be restricted by the 35

THE INVITATION
relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus are required by our Company, the Issue Manager, Underwriter and Placement Agent to inform themselves about, and to observe and comply with, any such restrictions at their own expense and without liability to our Company, the Issue Manager, Underwriter and Placement Agent. Persons to whom a copy of this Prospectus has been issued shall not circulate to any other person, reproduce or otherwise distribute this Prospectus or any information herein for any purpose whatsoever nor permit or cause the same to occur. HONG KONG This Prospectus does not constitute an offer to the public in Hong Kong to subscribe for the Placement Shares. This Prospectus has not been and will not be registered with the Registrar of Companies in Hong Kong. Accordingly, except as mentioned below, no copy of this Prospectus may be issued, circulated or distributed in Hong Kong. A copy of this Prospectus may, however, be issued by the Placement Agent or its designated sub-placement agents to professional investors (within the meaning of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) for the Placement Shares in Hong Kong, or otherwise pursuant to, and in accordance with the conditions of, any applicable exemptions as set out in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) in a manner which does not constitute an invitation or offer of the Placement Shares to the public in Hong Kong or an issue, circulation or distribution in Hong Kong of a prospectus for the purposes of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The offer of the Placement Shares is personal to the person named in the accompanying Application Form, and application for the Placement Shares will only be accepted from such person. An application for the Placement Shares is not invited from any person in Hong Kong other than a person to whom a copy of this Prospectus has been issued by the Placement Agent or its designated sub-placement agents, and if made, will not be accepted, unless the applicant satisfies the Placement Agent or its designated sub-placement agents that he is a professional investor as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). No person to whom a copy of this Prospectus is issued may issue, circulate or distribute this Prospectus in Hong Kong or make or give a copy of this Prospectus to any other person, other than their legal, financial, tax or other appropriate advisers who are subject to a duty of confidentiality to such person. The Placement Agent has agreed with our Company that it (and its sub-placement agents, if any) has not offered or sold, and will not offer or sell, in Hong Kong, by means of any document, any of our Shares other than permitted under the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) and the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and has not issued or had in its possession for the purpose of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document in respect of any of our Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong other than with respect to any of our Shares which are or are intended to be disposed of only to persons 36

THE INVITATION
outside Hong Kong or permitted under the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) or the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This Prospectus may not be issued in Hong Kong to any person other than a professional investor within the meaning of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) or otherwise pursuant to and in accordance with the conditions or any other applicable exemptions set out in the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) or the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). THIS DOCUMENT IS FOR DISTRIBUTION IN HONG KONG ONLY TO PERSONS WHO ARE PROFESSIONAL INVESTORS WITHIN THE MEANING OF THE SECURITIES AND FUTURES ORDINANCE (CAP 571) OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE. THE CONTENTS OF THIS DOCUMENT HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFER. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS DOCUMENT, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE. BY ACCEPTING THIS DOCUMENT YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS. NO PART OF THIS MATERIAL MAY BE (1) COPIED, PHOTOCOPIED OR DUPLICATED IN ANY FORM BY ANY MEANS OR (2) REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON IN WHOLE OR IN PART, FOR ANY PURPOSE. Clearance and Settlement Upon listing and quotation on the Main Board of the SGX-ST, our Shares will be traded under the book-entry settlement system of the CDP and all dealings in and transactions of the Shares through the Main Board of the SGX-ST will be effected in accordance with the terms and conditions for the operation of securities accounts with the CDP, as amended from time to time. Our Shares will be registered in the name of CDP and held by CDP for and on behalf of persons who maintain, either directly or through depository agents, securities accounts with CDP. Persons named as direct securities account holders and depository agents in the depository register maintained by the CDP, other than CDP itself, will be treated, under our Articles of Association and the Companies Act, as members of our Company in respect of the number of Shares credited to their respective securities accounts. Persons holding our Shares in a securities account with CDP may withdraw the number of Shares they own from the book-entry settlement system in the form of physical share certificate(s). Such share certificates will, however, not be valid for delivery pursuant to trades transacted on the Main Board of the SGX-ST, although they will be prima facie evidence of title and may be transferred in accordance with our Articles of Association. A fee of $10.00 for each withdrawal of 1,000 Shares or less and a fee of $25.00 for each withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. In addition, a fee of $2.00 or such other amount as our 37

THE INVITATION
Directors may decide, is payable to the share registrar for each share certificate issued and a stamp duty of $0.20 per $100.00 or part thereof of the last-transacted price is also payable where our Shares are withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade on the Main Board of the SGX-ST must deposit with CDP their share certificates together with the duly executed and stamped instruments of transfer in favour of CDP and have their respective securities accounts credited with the number of Shares deposited before they can effect the desired trades. A deposit fee of $10.00 is payable upon the deposit of each instrument of transfer with CDP. Transactions in our Shares under the book-entry settlement system will be reflected by the sellers securities account being debited with the number of Shares sold and the buyers securities account being credited with the number of Shares acquired. No transfer stamp duty is currently payable for Shares that are settled on a book-entry basis. A Singapore clearing fee for trades in our Shares on the Main Board of the SGX-ST is payable at the rate of 0.04% of the transaction value subject to a maximum of $600.00 per transaction. The clearing fee, instrument of transfer, deposit fee and share withdrawal fee may be subject to GST currently at 7.0%. Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement through CDP on a scripless basis. Settlement of trades on a normal ready basis on the Main Board of the SGX-ST generally takes place on the third Market Day following the transaction date and payment for the securities is generally settled on the following business day. CDP holds securities on behalf of investors in securities accounts. An investor may open an account with CDP or a sub-account with a CDP depository agent. The CDP depository agent may be a member company of the SGX-ST, bank, merchant bank or trust company. Indicative Timetable for Listing The indicative timetable is set out below for the reference of applicants: Indicative Time and Date 19 April 2012, 9.00 a.m. 24 April 2012, 12.00 noon 25 April 2012 26 April 2012, 9.00 a.m. 2 May 2012 Event Opening of Invitation Close of Invitation Balloting of applications, if necessary (in the event of over-subscription for the Public Offer Shares) Commence trading on a ready basis Settlement date for all trades done on a ready basis on 26 April 2012

The above timetable is only indicative as it assumes that the closing of the Invitation takes place on 24 April 2012, the date of admission of our Company to the Official List of the Main Board of the SGX-ST will be 26 April 2012, the SGX-STs shareholding spread requirement will be complied with and the New Shares will be issued or allotted and fully paid prior to 9.00 a.m. on

38

THE INVITATION
26 April 2012. The actual date on which our Shares will commence trading on a ready basis will be announced when it is confirmed by the SGX-ST. The above timetable and procedures may be subject to such modifications as the SGX-ST may, in its discretion, decide, including the decision to permit trading on a ready basis and the commencement date of such trading. In the event of any changes in the closure of the Invitation or the shortening or extension of the time period during which the Invitation is open, we will publicly announce the same: (a) through a SGXNET announcement to be posted on the internet at the SGX-ST website http://www.sgx.com; and (b) in a local English newspaper, such as The Straits Times or The Business Times. Results of the Invitation including the level of subscription and the basis of allotment of the Public Offer Shares will be provided as soon as it is practicable after the close of the Invitation through the channels in (a) and (b) above. Investors should consult the SGX-ST announcement on the ready trading date on the internet (at SGX-ST website http://www.sgx.com), or the newspapers, or check with their brokers on the date on which trading on a ready basis will commence.

39

USE OF PROCEEDS AND LISTING EXPENSES

Based on the Issue Price, our estimated net proceeds from the issue of New Shares (assuming the Over-allotment Option is not exercised), after deducting the underwriting commission, placement commission, brokerage and other estimated expenses payable in relation to the issue of New Shares (estimated to be approximately $4.9 million), will be approximately $112.1 million. We intend to use our gross proceeds from the issue of the New Shares primarily as follows:
Estimated amount allocated for each dollar of the gross proceeds raised from the issue of New Shares (cents) 64 26 6 4 100

Purpose Partial repayment of the Purchase Consideration Development and expansion of hotel business and operations in Singapore and overseas Working capital purposes Expenses incurred in connection with the issue of New Shares Total

Estimated amount ($ million) 74.8 30.0 7.3 4.9 117.0

If the Over-allotment Option is exercised by the Stabilising Manager, we shall use the net proceeds arising therefrom for our working capital requirements. Please see the section entitled General Information of Our Group Restructuring Exercise of this Prospectus for further information on the partial repayment of the Purchase Consideration and section entitled Prospects, Business Strategies and Future Plans of this Prospectus for more details on the future plans of the Group. The foregoing represents our best estimate of the allocation of our net proceeds from the issue of the New Shares based on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary from these estimates and we may find it necessary or advisable to re-allocate our net proceeds within the categories described above or to use portions of our net proceeds for other purposes. In the event that we decide to re-allocate our net proceeds from the issue of the New Shares for other purposes, we will publicly announce our intention to do so through a SGXNET announcement to be posted on the Internet at the SGX-ST website, http://www.sgx.com. We have undertaken to announce periodically via SGXNET the use of the net proceeds from the issue of the New Shares as and when the net proceeds from the issue of the New Shares are materially disbursed, and to provide a status report on the use of the net proceeds from the issue of the New Shares in the annual report(s) of our Company.

40

USE OF PROCEEDS AND LISTING EXPENSES

Pending the deployment of the net proceeds as aforesaid, the net proceeds may be added to our working capital, placed as deposits with banks or financial institutions, or used for investment in short-term deposits, money market or debt instruments, as our Directors may deem appropriate in their absolute discretion. In the event that the amount set aside to meet the estimated expenses listed above is in excess of the actual expenses incurred, such excess amount will be made available for our working capital purposes. Expenses incurred in connection with the Invitation The Invitation involves listing and issuing New Shares. The existing Shares will also be listed on the SGX-ST at the same time as the Invitation. The cost directly attributable to issuing and listing New Shares (including underwriting commission, placement commission and brokerage) will be substantially recognised directly in equity and any cost attributable to listing the existing Shares will be expensed as incurred. We estimate that the Invitation expenses, including the professional fees, underwriting commission, placement commission and brokerage and miscellaneous expenses, will amount to approximately $4.9 million. A breakdown of these expenses (inclusive of GST of 7%) is set out below:
As a percentage of the gross proceeds raised from the Invitation (%)

Estimated amount ($ million) Invitation Expenses(1) Professional Fees Underwriting commission, placement commission and brokerage(2) Miscellaneous expenses (including listing fees) Total
Notes: (1) Assuming the Over-allotment Option is not exercised.

1.4 2.8 0.7 4.9

1.2 2.4 0.6 4.2

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

41

RISK FACTORS
You should evaluate carefully each of the following considerations and all of the other information set forth in this Prospectus before deciding to invest in our Shares. Some of the following considerations relate principally to the industry in which we operate and our business in general. Other considerations relate principally to general, social, economic, political and regulatory conditions, the securities market and ownership of our Shares, including possible future dilution in value of our Shares. If any of the following considerations and uncertainties develop into actual events, our business, financial position or results of operations could be materially and adversely affected. In such a case, the trading price of our Shares could decline due to any of these considerations, and you may lose all or part of your investment in our Shares. RISKS RELATING TO OUR BUSINESS AND INDUSTRY Our financial performance is dependent on the conditions of the hospitality industry A number of factors, many of which are common to the global hospitality industry could affect the conditions of the hospitality industry and our financial performance, including the following: (a) changes in the domestic, regional and global economies which are affected by factors, including, but not limited to, the political landscape, environmental conditions and viral epidemics such as human avian flu and Severe Acute Respiratory Syndrome (SARS); (b) increased threat of terrorism, terrorist events, airline strikes, hostilities between countries or increased risk of natural disasters that may affect travel patterns and reduce the number of business and commercial travellers and tourists; (c) length of a travellers stay which is dependent on business and commercial travel, leisure travel and tourism;

(d) changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; (e) increased competition in the Singapore hospitality industry, for example new supply in the markets which our Group operates in, which could negatively affect our hotels occupancy rates and revenue; (f) increases in operating costs and occurrence of unanticipated costs due to various reasons including inflation, labour costs, workers compensation and health-care related costs, utility and energy costs, property tax, advertising and promotion expenses, insurance, environmental damage and acts of nature and their consequences;

(g) changes in interest rates and in the availability, cost and terms of debt financing and other changes in our business that adversely affect our ability to obtain financing and comply with debt financing covenants; (h) relations between our service providers, suppliers and/or lenders and us;

42

RISK FACTORS
(i) difficulties in identifying hospitality assets to acquire and completing and integrating acquisitions; increase in transportation or fuel costs or strikes among workers in the transportation industry, particularly in the aviation industry; adverse weather patterns; and adverse effects of any downturn in the hospitality industry.

(j)

(k) (l)

As a result of such factors, our business, financial position and results of operations could be materially and adversely affected. We may be adversely affected by disruptions in the global financial markets Since the second half of 2011, factors such as the sovereign debt crisis in Europe and the rising unemployment and weaker than expected economic growth in the United States have raised the possibility of the world economy slipping back into a recession. These adverse conditions have resulted in historic volatility, uncertainty and disruptions in the global economy. The worsening global economic climate may negatively affect the hospitality industry in Singapore and there could be a material adverse effect on our business, financial position and results of operations. We face risks associated with adverse economic conditions in the Asia-Pacific region or other factors that depress the level of disposable income of consumers in these markets Our business is subject to prevailing economic conditions in markets or countries from which our guests originate. In particular, a majority of our guests are from the Asia-Pacific region, especially the Peoples Republic of China, Indonesia, Philippines, India and Malaysia. We believe that we are, and will continue to be, substantially dependent on the ability and willingness of these consumers to spend money on leisure and entertainment activities, including vacations, in Singapore. A deterioration in economic conditions in these countries may reduce the level of disposable income that consumers spend on leisure and entertainment activities, which may reduce their patronage of our hotels, and in turn could have a material adverse effect on our business, financial position and results of operations. Our strategy of investing mainly in hospitality and hospitality-related assets may entail a higher level of risk compared to other types of business that have a more diverse range of investments One of our investment strategies is to invest, directly or indirectly, in a portfolio of real estate which (a) is primarily used for hospitality and/or hospitality-related purposes, whether wholly or partially, and real estate in relation to the foregoing and (b) may exist as part of larger mixed-use developments (where such mixed-use developments may also include nonhospitality uses).

43

RISK FACTORS
A concentration of investments in a portfolio of such specific real estate assets may cause susceptibility to a downturn in the real estate market as well as the hospitality industry in Singapore and the relevant regions elsewhere. A decline in occupancy and room rates for such real estate assets, and/or a decline in the asset value of our portfolio, will have an adverse impact on our business, financial position and results of operations. Real estate investments which we have invested or intend to invest, are relatively illiquid. Such illiquidity may affect our ability to vary our investment portfolio or liquidate part of our assets in response to changes in economic, real estate market or other conditions. For instance, we may be unable to sell our assets on short notice or may be forced to give a substantial reduction in the price that may otherwise be sought for such assets in order to ensure a quick sale. These factors could have an adverse effect on our business, financial position and results of operations. Our acquisition of our current hotel properties or future acquisitions may be subject to risks associated with the acquisition of real estate While we believe that reasonable due diligence has been and will be conducted with respect to our acquisition of hotel properties, there can be no assurance that properties acquired or future acquisitions will not have defects or deficiencies requiring significant capital expenditure, repair or maintenance expenses, or payment or other obligations to third parties. The reports, which we may have relied upon as part of our due diligence on the acquired hotel properties, may contain inaccuracies and deficiencies. Certain building defects and deficiencies may be difficult or impossible to ascertain due to the limitations inherent in the scope of the inspections, the technologies or techniques used and other factors. In addition, laws and regulations (including those relating to real estate) may have been breached and certain regulatory requirements in relation to the current hotel properties or future acquisitions may not be or have not been complied with, which our due diligence did not or might not uncover. As a result, we may incur financial or other obligations in relation to such breaches or non-compliance. In such an event, our business, financial position and results of operations could be materially and adversely affected. In particular, the representations, warranties and indemnities granted in our favour by the vendors of the acquired hotel properties or future acquisitions are subject to limitations as to their scope and as to the amount and timing of claims which can be made thereunder. There can be no assurance that we would be entitled to be compensated for all losses or liabilities suffered or incurred by us as a result of our acquisition of the hotel properties or future acquisitions. Should we be unable to recover all such losses or liabilities suffered or incurred by us, our business, financial position and results of operations could be materially and adversely affected. We face risks associated with high debt financing Immediately following full payment of the Purchase Consideration, our total external borrowings owing to financial institutions in connection with the Restructuring Exercise is approximately $463.2 million with interest rates ranging from 2% to 3% per annum. As such, we have significant obligations to service our borrowings. Our debt to equity ratio (defined as ratio 44

RISK FACTORS
of total external borrowings owing to financial institutions to shareholders equity) immediately following completion of our Restructuring Exercise is 1.6(1). Due to the nature of our hotel development business, we are likely to continue to face high debt levels in the future.
Note: (1) Taking into account the net proceeds of the Invitation of $112.1 million in the computation of shareholders equity as at 30 September 2011.

As such, we are subject to risks normally associated with debt financing, including the risk of changes to interest rates, and the risk that our cash flow may be insufficient to meet payments of principal and interest amounts under our borrowings. In the event we are unable to meet our payment obligations including payment obligations which are accelerated due to a default of any of our other payment obligations, our business and financial performance will be adversely affected. Also, we may underestimate our capital requirements and other expenditures or over-estimate our future cash flows. In such event, additional capital, debt or other forms of financing may be required. If we are unable for any reason to raise such additional capital, debt or other financing, our business, results of operations, liquidity and financial position will be adversely affected. If such financing requirements are met by way of debt financing, we may have restrictions placed on us through such debt financing arrangements which may: (a) limit our ability to pay dividends or require us to seek consents for the payment of dividends; (b) increase our vulnerability to general adverse economic and industry conditions; (c) limit our ability to pursue our growth plans;

(d) require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditure, working capital requirements and other general corporate purposes; and (e) limit our flexibility in planning for, or reacting to, changes in our business and our industry. We may be unable to obtain future financing on favourable terms, or at all, to fund our operations, expected capital expenditure and working capital requirements We may be unable to obtain future financing on favourable terms, or at all, to fund our operations, anticipated capital expenditure and working capital requirements. In addition, lenders may be unwilling to accept security interests in the hotel property being developed as collateral for the loan due to, amongst others, the illiquidity of the relevant property. If we are unable to raise such financing on favorable terms, or at all, we may not be able to fund our operations sufficiently or we may be unable to carry out our planned expansion, all of which could adversely affect our business, financial position, results of operations and ability to implement our growth strategy.

45

RISK FACTORS
We may be subject to additional risks in expanding Our Chain of Hotels Our ability to expand Our Chain of Hotels successfully will depend on a number of factors including the ability to obtain financing on competitive terms, the ability to control construction costs and the ability to obtain the necessary licences and approvals from the relevant authorities. There is no assurance that our expansion plans will be successful or that our existing resources will be able to cope with the additional demands arising from the expansion. If we are unable to meet the demands of expansion, such as retaining or recruiting sufficient staff to service additional hotels, our results of operations may be affected. In addition, should occupancy rates of our new hotels be significantly lower than projected, our business, financial position and results of operations may be adversely affected. In order to grow our business, we may expand our operations or explore strategic alliances, acquisitions or hotel investment opportunities. Any expansion involves numerous risks, such as the costs of setting up operations and increased working capital requirements. There is no assurance that our expansion, if it materialises, will achieve a sufficient level of revenue and if we fail to manage our costs, our results of operations and financial position may be adversely affected. Participation in strategic alliances, acquisitions or hotel investment opportunities involves numerous risks, such as difficulties in the assimilation of the management, operations and personnel and the possible diversion of management attention from our existing business concerns. We are subject to risks associated with developing new hotels New project developments are subject to a number of risks, many of which are outside our control, including: (a) market or site deterioration after acquisition; (b) the possibility of discovering previously undetected defects or problems at a site; and (c) the possibility of construction delays or cost overruns due to delayed regulatory approvals, adverse weather, labour or material shortages, work stoppages and the unavailability of construction and/or long-term financing.

A period of one to two years normally elapses between the acquisition of the site and the projects completion. Between the acquisition of the site and the projects completion, travel preferences, political or social conditions of the location or other conditions critical to the success of the hotel may change, such that we are unable to commence operations of the hotel, repay our debt financing and/or achieve our projected returns. In such an event, our business, financial position and results of operations could be materially and adversely affected. We usually finance the development of hotels by way of loans from financial institutions in addition to internally generated funds. As a significant amount of funds is required in hotel development projects, we would typically seek financing for a substantial proportion of the cost of the hotel developments. Such financing is usually secured by a mortgage over the hotel development. Our ability to engage in new development would depend on our ability to secure such financing at favorable terms. Please refer to the sections entitled Capitalisation and 46

RISK FACTORS
Indebtedness and Managements Discussion and Analysis of Results of Operations and Financial Position Liquidity and Capital Resources of this Prospectus for details of our liabilities and cash flow positions. In planning for the financing of our hotel development projects, we take into consideration various factors, including potential operating yield, the timing of the completion, the expected interest charges to be incurred for the entire duration of the project, the risk of recall of loans and the possibility that financial institutions may require that we provide additional security for our loans. A change in any of the factors may cause our business, financial position and results of operations to be adversely affected. Furthermore, there can be no assurance that we will be able to obtain approval from the relevant authorities, including, without limitation, planning approval from URA, to develop hotels on sites that we may acquire. Should this occur, we may choose to dispose of the site. The price realised on such disposal will depend on, inter alia, market conditions prevailing at the time of the sale, and may be lower than the price we paid to acquire the site. In such an event, our business, financial position and results of operations could be materially and adversely affected. We face significant competition The hospitality industry in Singapore is highly competitive. The level of competition in the Singapore hospitality industry is affected by various factors, including changes in economic conditions, both locally and regionally, changes in local and regional populations, the supply and demand for hotel rooms, changes in travel patterns and preferences and new supply of hotels in the locations which our Group operates in, which could negatively affect our hotels occupancy rates, and materially and adversely affect our business, financial position and results of operations. We offer reasonably-priced accommodation at convenient locations. However, our competitors also have hotels located in these areas. Some of these hotels offer more facilities at their premises at similar or more competitive prices. Some of our competitors may also significantly lower their rates or offer greater convenience, services or amenities, to attract more guests. If their efforts are successful, our business, financial position and results of operations may be adversely affected. There can also be no assurance that demographic, geographic or other changes will not adversely affect the convenience or demand for our hotels. Further details on the competition we face are set out in the section entitled General Information of our Group Competition of this Prospectus. We may face rising labour costs and labour shortage Our hospitality business is labour-intensive. Our ability to meet our labour requirements may be subject to numerous external factors, including the availability of a sufficient number of suitable persons in the relevant work force, prevailing labour costs including wage rates and applicable levies, demographics and health and insurance costs. In addition, recent changes to the labour laws in Singapore in the form of stricter qualifying criteria and salary thresholds for foreign workers, and increases in foreign worker levies and foreign worker accommodation costs could similarly result in an increase in our labour-related costs. 47

RISK FACTORS
Our growth plans will require us to hire, train and retain a significant number of new employees in the future. As we face competition from our competitors for labour, we may have to increase wages and benefits to attract and retain qualified personnel or risk considerable employee turnover. If we are unable to hire, train and retain qualified employees at a reasonable cost, we may be unable to execute our growth strategy and our business, financial position and results of operations could be materially and adversely affected. Our operations are subject to the laws and regulations in Singapore The operation of hotels in Singapore is subject to various laws and regulations, such as the Hotels Act. For example, we presently require hotel licences issued under the Hotels Act for the operation of Our Chain of Hotels. The withdrawal, suspension or non-renewal of any of these licences will have an adverse impact on our business and results of operations. Also, if we are unable to obtain such licences for any new hotels, our business and results of operations could be adversely affected. Further, any changes in such laws and regulations may also have an impact on our business and result in higher costs of compliance. In addition, any failure to comply with these laws and regulations could result in the imposition of fines or other penalties by the relevant authorities. This could have an adverse impact on our business, financial position and results of operations of our hotels. We face risks associated with illegal activities being carried out in our hotels The holders of the Hotel-keepers licence (all of whom are senior employees of our Group) granted in respect of each of our hotels are required to ensure that the prescribed requirements and conditions under the Hotel Licensing Regulations are strictly adhered to. Under the Hotels Act, no licensee shall knowingly permit any person who is a prostitute or of bad character to occupy a room in the hotel or frequent the premises. In addition, gaming, drunkenness, drug abuse or disorderly conduct of any kind is also a prohibited activity under the Hotels Act. We have adopted various measures to enforce strict adherence to the requirements and conditions of the Hotel Licensing Regulations but there can be no assurance that there will be no such illegal activities being carried out in our hotels. In the event that such illegal activities are carried out in our hotels and our Hotel-keepers licence holders are convicted of contravening the provisions of the Hotel Licensing Regulations, they will be liable to a fine not exceeding $1,000, and for a second or subsequent conviction, to a fine not exceeding $2,000. In addition to any other penalty imposed, the court may, pursuant to Section 43 of the Hotels Licensing Regulations, cancel their licence and also cancel or suspend any certificate of registration granted in relation to our hotels. Our Executive Director, Mr. Sim Mong Yeow assisted the police with investigations relating to the failure to register certain guests allegedly engaged in vice activities being carried out at Fragrance Hotel-Kovan in September 2010 and he was issued a warning by the police. Mr Sim assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Imperial and Fragrance Hotel-Lavender in September 2010 and December 2010 respectively and he was issued with a conditional warning by the police against committing any offence in the next twelve months. Mr. Sim also assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Balestier in November 2010 and he was issued with a reminder by the police with regards to the prohibition against vice activities being 48

RISK FACTORS
carried out in the hotel. As the licensee of Fragrance Hotel-Lavender, Mr. Sim assisted the police with investigations relating to vice activities being carried out at Fragrance HotelLavender in November 2011 and December 2011 in contravention of the Hotels Licensing Regulations. As at the Latest Practicable Date, no further action has been taken against Mr. Sim in relation to the December 2011 incident. In relation to the November 2011 incident, Mr. Sim was informed by the police that the case has now been closed. He has also been charged previously and issued with a conditional warning for failing to require two guests of Fragrance Hotel-Kovan to fully furnish their particulars. Please refer to the section entitled Directors, Management and Staff Material Background Information on our Directors, Key Executives and Controlling Shareholders of this Prospectus for further details. In the event that Mr. Sim is convicted for breaching the Hotels Licensing Regulations, within twelve months of the latest conditional warning issued to him in September 2011, in relation to either the original offence, the subsequent offence committed within the 12-month period or both, the Court may, pursuant to section 43 of the Hotels Licensing Regulations, levy fines on Mr. Sim, cancel any or all of his Hotel-keepers licences or cancel or suspend the certificate of registration of the hotel that is the subject of such breach or of any other Group hotel. In the event that the Hotels Licensing Board determines that Mr. Sim does not satisfy the fit and proper criteria, the Hotels Licensing Board may decline to renew Mr. Sims Hotel-keepers licences when the licences expire. In the event that Mr Sims Hotel-keepers licence and certificate of registration of Fragrance Hotel-Kovan, Fragrance Hotel-Imperial, Fragrance Hotel-Lavender and Fragrance HotelBalestier are cancelled, we will lose the revenue and profits generated by these hotels. These hotels contributed to approximately, 21.3% and 29.1% of our revenue and profit before income tax in FY2010. As at the Latest Practicable Date, none of the Hotel-keepers licences or certificates of registration granted in relation to our hotels have been cancelled. In the event that one or more of the Hotel-keepers licence and/or our certificates of registration for our hotels which are essential to our operations is cancelled, our business, financial position and results of operations could be materially and adversely affected. Certain of our hotels contribute significantly to our financial results For 9M2011, six (6) of our hotels, namely Fragrance Hotel-Bugis, Fragrance Hotel-Imperial, Fragrance Hotel-Ruby, Fragrance Hotel-Selegie, Fragrance Hotel-Waterfront and Parc Sovereign Hotel (collectively known as Key Hotels), each contributed more than 5% of our total revenue. In the event that there are disruptions in the business operations of any of the Key Hotels, our business, financial position and results of operations could be materially and adversely affected.

49

RISK FACTORS
Increase in Singapore tourism receipts may not result in an improvement of our financial performance The STBs initiatives to increase tourism receipts have been ongoing. However, there may not be an increase in the number of visitors or their length of stay in Singapore after such initiatives. Accordingly, an increase in the number of visitors or the length of their stay in Singapore may not result in an improvement of our operating results or financial position. We may face delays and cost overruns resulting from mismanagement of our hotel development projects or maintenance and improvement works We manage our own hotel development projects and carry out most of our maintenance and improvement works on our hotels in-house as we believe that good project management is critical to the success of our projects. Depending on the nature of the project, we carry out inspections to ensure the quality of the building materials, conduct site visits to monitor and supervise work progress, and conduct regular meetings to discuss any outstanding issues relating to the project. The failure to properly monitor and manage any of our hotel development projects as well as our maintenance and improvement works may result in delays and cost overruns which may have an adverse impact on our business, financial position and results of operations. We face risks associated with an increase in property tax We are subject to property tax levied on our hotels. Currently, such property tax is based on 10.0% of the annual value of the hotels. The annual value of a hotel comprises the annual value of hotel rooms and other assessable parts of the hotel. Under the Property Tax (Valuation by Gross Receipts for Hotel Premises) Order, the annual value of hotel rooms in any year is assessed at 25.0% of the gross receipts of the preceding calendar year. The annual value of the other assessable parts of the hotel (excluding hotel rooms) is based on their rental value. However, there is no assurance that the property tax levied on our hotels will remain as they presently are. Property tax expenses may increase due to reasons including but not limited to the following: (a) increase in the applicable property tax rate; (b) changes to the Property Tax (Valuation by Gross Receipts for Hotel Premises) Order including but not limited to changes to the basis of assessment and rates of the gross receipts; (c) changes to the basis of assessment for property tax on the other parts of the hotels; and

(d) changes to the property tax legislation/regime including but not limited to changes in the definition of annual value. Any increase in the property tax, could adversely affect our business, financial position and results of operations. 50

RISK FACTORS
Our hotels may be acquired compulsorily The Land Acquisition Act gives the Singapore Government the power to acquire any land in Singapore: (a) for any public purpose; (b) where the acquisition is of public benefit or of public utility or in the public interest; or (c) for any residential, commercial or industrial purpose.

As at the Latest Practicable Date, none of our properties have been designated for compulsory acquisition. The compensation to be awarded pursuant to any compulsory acquisition would be the market value of the land as at the date of its acquisition. Accordingly, if the land over which our hospitality and hospitality-related assets are situated on is compulsorily acquired during a market downturn period when there is a decline in the prices of real estate, the compensation paid in respect of the acquired property may be less than what we would be entitled to otherwise. In such an event, our business, financial position and results of operations could be materially and adversely affected. In addition, any compulsory acquisition may have a material adverse impact on our business continuity which may consequently affect our financial position and/or results of operations. We may acquire hospitality assets located in other countries. The laws of these countries may also provide for a right by the governments of these countries to compulsorily acquire any land or property with no compensation to the owner, or for compensation below market value. Such compulsory acquisitions would have an adverse effect on our business, financial position and results of operations. Our operations and financial performance may be adversely affected by acts of God, wars, terrorist attacks, riots, civil commotions, widespread communicable diseases (such as Influenza A (H1N1), avian influenza, SARS) and other events beyond our control An outbreak of Influenza A (H1N1), avian influenza, SARS and/or other communicable diseases, if uncontrolled, could affect our operations, as well as our guests and suppliers. Any occurrence of a pandemic, an epidemic or outbreak of other disease may have an adverse effect on our business operations. Further, in the event that any of our employees or guests are infected or suspected to be infected with SARS, avian influenza, Influenza A (H1N1) and/or other communicable diseases, we may be required to quarantine some of our guests, employees and/or shut down part of our operations to prevent the spread of the disease. Such events may lead to loss of business or affect our ability to attract new business. An outbreak of SARS, avian influenza, Influenza A (H1N1) and/or other communicable diseases may therefore have an adverse impact on our business, financial position and results of operations. The consequences of any terrorist attacks or armed conflicts are unpredictable and may include the issuance of travel advisories warning people to defer and/or avoid travel to Singapore, as well as a general reluctance of people to travel. Travel advisories or restrictions 51

RISK FACTORS
are likely to have a material adverse effect on the number of international visitor arrivals to Singapore and the corresponding demand for our hotels rooms. If such terrorist incidents and acts of violence were to occur in Singapore, the hospitality industry could experience a downturn and there could be a material adverse effect on our business, financial position and results of operations. We may be affected by uninsured loss to our properties We maintain insurance policies covering certain eventualities arising from our hotel operations. Our insurance policies include public liability insurance, fire insurance and workmens compensation. Further details on our insurance policies are set out in the section entitled General Information of Our Group Insurance of this Prospectus. We believe that the coverage from these insurance policies is adequate and is in accordance with the standard industry practice and government specifications. However, our insurance policies do not cover losses arising from all risks, including, without limitation, losses arising from natural disasters, war, civil disorder and acts of terrorism. Should there be losses arising out of damage to our properties which are not covered by our insurance policies, or should such damage exceed the amount for which we are insured, our business, financial position and results of operations could be materially and adversely affected. With respect to losses which are covered by our policies, it may be difficult and it may take time to recover such losses from insurers. In addition, we may not be able to recover the full amount from the insurers. There can be no assurance that our policies would be sufficient to cover all potential losses, or whether we can recover for such losses, or whether the recovery for such losses will be subject to protracted delays. Our intellectual property rights may be subject to imitation or otherwise infringed Our Fragrance trademarks have become established in Singapore and our trademarks are used in the marketing and promoting of our hotels to the general public. We have registered or are in the process of registering our trademarks to protect our intellectual property rights in Singapore. Please refer to the section entitled General Information of Our Group Intellectual Property of this Prospectus for more details. In the event that our trademarks or other intellectual property rights are imitated or otherwise infringed, our reputation and business may be adversely affected. There can be no assurance that our trademarks or other intellectual property rights will not be susceptible to imitation or other infringement. In the event that we initiate legal or other proceedings to enforce our intellectual property rights, there can be no assurance that we will succeed in such proceedings or be able to obtain favourable outcomes at a reasonable cost or at all. In such an event, our business, financial position and results of operations could be materially and adversely affected. We may face uncertainties associated with the expansion of our business overseas We will be subject to foreign real estate laws, regulations and policies as a result of property investments in foreign countries. There may be a negative impact on any property owned by us in a foreign country as a result of measures and policies adopted by the relevant foreign governments and regulatory authorities at national, provincial or local levels, such as 52

RISK FACTORS
government control over property investments or regulations in relation to foreign exchange. Legal protection and recourse available to us in certain countries may be limited. In addition, the income and gains derived from investments in hospitality and/or hospitalityrelated assets in other countries will be subject to various types of taxes in Singapore and these foreign countries including income tax, withholding tax, capital gains tax, and any other taxes that may be imposed specifically for ownership of real estate. All of these taxes, which are subject to changes in laws and regulations that may lead to an increase in tax rates or the introduction of new taxes, could adversely affect and erode the returns from these hospitality and hospitality-related assets. There is also no assurance that we will be able to repatriate to Singapore the income and gains derived from investments in hospitality and/or hospitalityrelated assets outside Singapore on a timely and regular basis. Accordingly, there is no assurance that we will be able to execute the above growth strategies successfully and as such, the performance of any strategic alliances, acquisitions or hotel investments could fall short of expectations. We may be adversely affected by fire, accidents or other calamities at our hotels The occurrence of fire, accidents or other calamities at any of our hotels could have a material adverse effect on our business, financial position or results of operations. In the event such calamities occur, we are unable to determine the extent of the material adverse effect that it will have on our business and financial position. We have experienced negative cash flow in FY2009 and negative working capital We had negative cash flow from operating activities of $7.9 million for FY2009 and negative working capital of $18.7 million, $23.4 million, $26.6 million, as at 31 December 2008, 31 December 2009 and 31 December 2010 respectively. Our negative cash flow for FY2009 was due to development of a commercial property project which we have since disposed. Our Group will no longer be involved in the development of commercial properties except where ancillary to the Groups hotel operations. Our negative working capital was mainly due to advances from FGL (which were short-term in nature) being used to finance the development of our properties. As such, we are subject to the risk that our current assets will be insufficient to meet our obligations under the current liabilities. In such event, additional capital, debt or other forms of financing may be required for our cash flow and working capital purposes. If we do not have sufficient internal resources and are unable for any reason, to raise additional capital, debt or other financing for our working capital requirements, our business, results of operations, liquidity and financial position will be adversely affected. Please refer to the section entitled Managements Discussion and Analysis of Results of Operations and Financial Position Liquidity and Capital Resources of this Prospectus for more information. We are reliant on certain members of our Board Our success depends largely on the skills, experience and performance of our Board, especially our Non-Executive Director, Mr. Koh Wee Meng, and our Executive Directors, Mr. Lim Chee Chong and Mr. Sim Mong Yeow. There is no assurance that we will continue to have the service of these Directors. We do not maintain significant key-person life insurance on our 53

RISK FACTORS
Directors. If we were to lose one or more of these Directors, our ability to set and implement successfully our strategy could be materially adversely affected. Further, such losses of Directors may adversely affect our business, financial position and results of operations and may also be negatively perceived in the capital markets, which could reduce the value of our Shares. We may not obtain a renewal of the lease of Fragrance Hotel-Elegance We have entered into a lease of two years in respect of Fragrance Hotel-Elegance with an option to renew the lease for a further period of one (1) year upon expiry of the initial term. The revenue and gross profit contribution for Fragrance Hotel-Elegance were $0.3 million and $0.2 million respectively for the period from 16 September 2011 to 31 December 2011. In the event we wish to continue the operations of Fragrance Hotel-Elegance, any failure to obtain a renewal of the lease thereafter or a renewal on less favourable terms could have a adverse impact on our business, financial position and results of operations. We may compete with FGL for acquisition of property for development as well as for potential tenants for our commercial space Our Group or FGL may wish to acquire property which may be designated for mixed-use where one of the permitted uses includes hospitality uses. In the event FGL wishes to acquire such property for non-hospitality uses only and our Group wishes to acquire such property for hospitality use only, there may be a potential conflict of interest arising from the acquisition of such land by either FGL or us (as the case may be), whether in Singapore and/or elsewhere. There can be no assurance that we will be successful in competing with FGL for such acquisitions. Please refer to the section Interested Person Transactions and Conflict of Interests Potential Conflict of Interests of this Prospectus for more information on the potential conflicts of interest arising in respect of a competitive tender for Mixed-Use Development Projects. Further, both FGL and us own commercial space that may be leased out to potential tenants. Tenants for such commercial space, whether in Singapore and/or elsewhere, may prefer space owned by our Group or FGL and there can be no assurance that we will be able to successfully compete with FGL for such tenants. Please refer to the section Interested Person Transactions and Conflict of Interests Potential Conflict of Interests of this Prospectus for more information on the potential conflicts of interest arising in respect of lease of commercial space to tenants. In the event that we are unsuccessful in competing with FGL for tenants, or in an acquisition for property which may be designated for mixed-use, our business, financial position and results of operations could be adversely affected. We face commercial risks in entering into a joint venture with FGL Our Group, together with FGL may also acquire property for development which includes hospitality uses and non-hospitality uses. In such event, our Group and FGL would enter into a joint venture for such development. Please refer to the section Interested Person Transactions and Conflict of Interests Potential Conflict of Interests of this Prospectus for 54

RISK FACTORS
more information on the terms of the joint venture to be entered into between us and FGL for the development of Mixed-Use Development Projects. There can be no assurance that any proposed joint venture entered into between our Group and FGL, in relation to such Mixed-Use Development Projects will be successful. We face risks associated with covenants in our credit facilities making reference to shareholding interest of FGL in our Company Our Subsidiaries, Fragrance Ventures and Fragrance Assets, entered into credit facilities with OCBC Bank and DBS Bank respectively, whereas our subsidiary Fragrance Capital entered into credit facilities with RHB Bank Berhad and CIMB Bank Berhad. The aforementioned credit facilities contain covenants making reference to the minimum shareholding interest of our Controlling Shareholder, FGL, in our Company. The OCBC Bank facility contained a condition requiring FGL to hold not less than 20% of the Shares of our Company until Fragrance Ventures has repaid all outstanding sums owing under the OCBC Bank facility or until the expiry of the loan tenor of 5 years, whichever is earlier. The DBS Bank facility contained a condition requiring FGL to maintain at least 20% shareholding in our Company until Fragrance Assets has repaid all outstanding sums owing under the DBS Bank facility. The RHB Bank Berhad facility contained a condition requiring FGL to retain ownership and control, either directly or indirectly, of not less than 20% of the issued and paid-up share capital of our Company for the period of the loan tenor. The CIMB Bank Berhad facility contained a condition requiring FGL to beneficially own (either directly or indirectly) 20% of the entire issued share capital of our Company for as long as the facility remains outstanding. Please refer to the section entitled Capitalisation and Indebtedness Credit Facilities and Restructuring Exercise Refinancing of this Prospectus for details on the relevant covenants. In the event that FGLs shareholding in our Company falls below the requisite threshold stipulated in the aforementioned credit facilities, we will be in breach of the loan covenants and this may result in our credit facilities (including other credit facilities where repayment is accelerated due to such breach of loan covenant) becoming immediately repayable. In the event we are unable to make the required repayment using internal resources or obtain adequate financing from third parties, our business, financial position and results of operations could be adversely affected. RISKS RELATING TO INVESTMENT IN OUR SHARES Our Controlling Shareholder will retain control over our Group after the Invitation, which will allow them to influence the outcome of matters submitted to Shareholders for approval Upon completion of the Invitation, our Controlling Shareholder, FGL will own approximately 55.0% (assuming the Over-allotment Option is not exercised) of the issued share capital of our Company. As a result, it will be able to exercise influence over matters requiring Shareholders approval, including the election of Directors and approval of significant corporate transactions. Such concentration of ownership will place our Controlling Shareholder in a position to affect our corporate actions such as mergers or takeover attempts (notwithstanding that the same may be synergistic or beneficial to our Group) in a manner that could conflict with the interests of our public Shareholders.

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RISK FACTORS
New investors may experience dilution We intend to grant our employees Award Shares under the Global Premium Hotels PSP. To the extent that such Award Shares are granted and vested, there will be dilution of the equity interest of our Shareholders. Investors may not be able to participate in future issues of our Shares If we offer to our Shareholders rights to subscribe for additional Shares or any rights of any other nature, we will have discretion as to the procedure to be followed in making the rights available to our Shareholders or in disposing of the rights for the benefit of our Shareholders and making the net proceeds available to our Shareholders. We may choose not to offer the rights to our Shareholders having an address outside Singapore. Accordingly, Shareholders who have a registered address outside Singapore may be unable to participate in rights offerings and may experience a dilution in their shareholdings as a result. Additional funds raised through issuances of new Shares for future growth will dilute Shareholders equity interests We may in the future expand our capabilities and business through acquisitions, joint ventures, strategic partnerships and alliances with parties who can add value to our business. We may require additional equity funding after the Invitation to finance future acquisitions, joint ventures and strategic partnerships and alliances which may result in a dilution of the equity interest of our Shareholders. Future sales or issuances of our Shares could adversely affect our Share price Any future sale or issuance of our Shares may have a downward pressure on our Share price. The sale of a significant amount of our Shares in the public market after the Invitation, or the perception that such sale may occur, could materially and adversely affect the market price of our Shares. These factors may also affect our ability to sell or issue additional equity securities. Except as otherwise described under the section entitled Share Capital and Shareholders Moratorium of this Prospectus and subject to applicable laws and regulations, there is currently no restriction on the ability of our Controlling Shareholder to sell Shares, either on the SGX-ST or otherwise. Our Share price may be volatile, which could result in substantial losses for investors acquiring our Shares pursuant to the Invitation The Issue Price was determined through a book-building exercise and arrived at after consultation between our Company, the Issue Manager, Underwriter and Placement Agent and after taking into consideration, inter alia, prevailing market conditions and estimated market demand for the New Shares. The Issue Price may not be indicative of prices which will prevail in the trading market after the Invitation and investors may not be able to resell their Shares at or above the Issue Price. Volatility in the trading price of our Shares may be caused by factors beyond our control and may not correlate with or be proportionate to our operating

56

RISK FACTORS
results. Further, the market price of our Shares may fluctuate significantly and rapidly in response to, inter alia, the following factors, some of which are beyond our control: (a) variations in our operating results; (b) changes in securities analysts estimates of our financial performance; (c) changes in market valuations of similar companies;

(d) announcements by our competitors or ourselves of the gain or loss resulting from significant acquisitions; (e) strategic partnerships, joint ventures or capital commitments; (f) fluctuations in stock market price and volume;

(g) our involvement in litigation; (h) changes in general economic and stock market conditions; (i) (j) additions or departures of key personnel; the perceived prospects of our business and investments and the hospitality real estate market in Singapore and other regions; the market value of our assets; our ability to implement successfully our investment and growth strategies; and

(k) (l)

(m) broad market fluctuations, including weakness of the equity market and increases in interest rates. For these reasons, among others, our Shares may trade at prices that are higher or lower than the NAV per share. To the extent that there is any retention of operating cash for investment purposes, working capital requirements or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of our Shares. Any failure on our part to meet market expectations with regard to future earnings and cash distributions may adversely affect the market price for our Shares. In addition, our Shares are not capital-safe products and there is no guarantee that holders of our Shares can realise a higher amount or even the principal amount of their investment. In case of liquidation of our Company, it is possible that investors may lose all or a part of their investment in our Shares. There has been no prior market for our Shares, and the Invitation may not result in an active or liquid market for our Shares Prior to the Invitation, there has been no public market for our Shares. Therefore, we cannot assure investors that an active public market will develop or be sustained after the Invitation. 57

RISK FACTORS
The Issue Price was determined through a book-building exercise and arrived at after consultation between our Company, and the Issue Manager, Underwriter and Placement Agent and after taking into consideration, inter alia, prevailing market conditions and estimated market demand for the New Shares. The Issue Price may not be indicative of prices which will prevail in the trading market after the Invitation and investors may not be able to resell their Shares at or above the Issue Price. Negative publicity may adversely affect our share price Negative publicity involving our Group, any of our Directors, Key Executives or Controlling Shareholders may adversely affect the market perception or the stock performance of our Company, whether or not it is justified. Some examples of the negative publicity may include, inter alia, unsuccessful attempts in joint ventures, takeovers or involvement in insolvency proceedings. We may not be able to pay dividends to our shareholders Although we currently do not have a formal dividend policy, we intend to distribute at least eighty per cent. (80%) of our net profit after tax to our Shareholders for FY2012, as we wish to reward our Shareholders for participating in our Groups growth. The declaration and payment of future dividends will depend on our operating results, financial position, other cash requirements including capital expenditure, the terms of borrowing arrangements (if any), dividend yield of comparable companies (if any) listed in Singapore and other factors deemed relevant by our Directors. There is no assurance that dividend distributions will be made by our Company in the future. For a description of our dividend policy, please refer to the section entitled Dividend Policy of this Prospectus.

58

EXCHANGE CONTROLS
Exchange Controls Singapore Currently, no foreign exchange control restrictions exist in Singapore.

59

DIVIDEND POLICY
Since incorporation, our Company has not declared any dividends. Although we currently do not have a formal dividend policy, we intend to distribute at least eighty per cent. (80%) of our net profit after tax to our Shareholders for FY2012, as we wish to reward our Shareholders for participating in our Groups growth. The declaration and payment of future dividends will depend on our operating results, financial position, other cash requirements including capital expenditure, the terms of borrowing arrangements (if any), dividend yield of comparable companies (if any) listed in Singapore and other factors deemed relevant by our Directors. There is no assurance that dividend distributions will be made by our Company in the future. Any final dividend paid by us must be approved by an ordinary resolution of our Shareholders at a general meeting and must not exceed the amount recommended by our Board. Our Directors may, without the approval of our Shareholders, also declare an interim dividend. We must pay dividends out of our profits. Information relating to taxes payable on dividends is set out in Appendix G entitled Taxation of this Prospectus.

60

CAPITALISATION AND INDEBTEDNESS

The following table shows our combined cash and cash equivalents, short-term debt, long-term debt and capitalisation of our Group as at 31 January 2012, on an actual basis and as adjusted for the Restructuring Exercise and the issue of New Shares pursuant to the Invitation, the net proceeds from the issue of New Shares (after deducting the estimated expenses in relation to the Invitation) and the application of the net proceeds from the issue of New Shares in the manner described in the section entitled Use of Proceeds and Listing Expenses of this Prospectus. You should read this table in conjunction with: (a) the audited combined financial statements of our Group as set out in Appendix A entitled Independent Auditors Report on the Combined Financial Statements for the Years Ended 31 December 2010, 2009 and 2008, Appendix B entitled Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011 and Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus, the related notes and the other financial information contained elsewhere in those documents; and (b) the sections entitled Managements Discussion and Analysis of Results of Operations and Financial Position and Selected Combined Financial Information of this Prospectus.
As adjusted for the Restructuring Exercise, the net proceeds from the issue of New Shares and the intended use of such proceeds ($000) 58,882

Actual as at 31 January 2012 ($000) Cash and Cash Equivalents Indebtedness Current Term Loans (Secured and Guaranteed)(2) Non-current Term Loans (Secured and Guaranteed)(2) Total Indebtedness Total Shareholders Equity Total Capitalisation and Indebtedness
Note:

17,323

28,602 112,807 141,409 607,543 748,952

20,147(1) 443,035(1) 463,182 299,119 762,301

(1) Adjusted for refinancing of existing term loans and new term loans taken up to finance the Purchase Consideration. (2) The term loans are secured by various security interests comprising, inter alia, mortgages over our hotels, corporate guarantees provided by FGL (to be replaced by corporate guarantees of our Company after the Listing Date), assignment of rental proceeds and debentures over the assets of our hotels.

61

CAPITALISATION AND INDEBTEDNESS

Our Groups indebtedness as at 31 January 2012 would be refinanced pursuant to the Restructuring Exercise with details as set out below. Credit Facilities and Restructuring Exercise Refinancing In connection with the Restructuring Exercise, some of our Subsidiaries entered into refinancing agreements with their respective lenders. The amounts obtained by our Subsidiaries were then advanced to our Company for the purposes of partial payment of the Purchase Consideration. Further details on the Restructuring Exercise can be found in the section entitled General Information of Our Group Restructuring Exercise of this Prospectus. As at the Latest Practicable Date, our total credit facilities were $497.3 million. The following table sets out the details of our credit facilities:
Banks CIMB Bank Berhad DBS Bank Ltd Hong Leong Finance Limited OCBC Bank RHB Bank Berhad Sing Investments & Finance Limited UOB Bank Total Facility Amount ($000) 58,000 64,800 101,077 173,400 55,000 35,300 9,747 497,324

As at the Latest Practicable Date, the Group has utilised $141.6 million of the credit facilities, of which $117.5 million was utilised to repay or refinance existing loans and $24.1 million utilised to finance the purchase of Pasir Panjang Commercial Property and Changi Road Property. As at 13 April 2012, the Group has completed the sale of the Pasir Panjang Commercial Property and Changi Road Property and repaid the credit facilities of $24.1 million obtained in connection with these properties. Upon repayment of the aforesaid, our total credit facilities were $473.2 million. The Group will utilise $345.7 million of the credit facilities to partially repay the Purchase Consideration in connection with the Restructuring Exercise. Upon utilisation of the aforesaid, the balance of $10.0 million of the credit facilities remains unutilised. Immediately upon full payment of the Purchase Consideration, our total borrowings will comprise short-term borrowings of $20.2 million and long-term borrowings of $443.0 million. Short-term borrowings comprised mainly the current portion of interest-bearing loans, while long-term borrowings comprised mainly the long-term portion of interest-bearing loans, ranging in tenure from 5 years to 20 years. The borrowings are subject to applicable interest rates, benchmarked against the swap offer rate, cost of funds rate, base rate, commercial financing rate and commercial property rate. As at 31 January 2012, we had cash and cash equivalents of $17.3 million. 62

CAPITALISATION AND INDEBTEDNESS

Our Group has not been in default of either the principal or interest payments of any of the banking facilities to-date as the current business operations of our Group generates sufficient cash flow for such payments. Our Group is not currently in breach of any of the terms or conditions or covenants associated with any loan agreements or debt issues which could materially affect our Groups financial position or results of operations, or investments by Shareholders in our Company. Save for the scheduled monthly repayments of our borrowings and changes in our retained earnings arising from the day-to-day operations in the ordinary course of our business, there were no material changes in our capitalisation and indebtedness since 1 February 2012 to the Latest Practicable Date. There is no loan agreement entered into by our Group with any financial institutions or debt securities issued by our Group which contains covenants restricting our Groups ability to pay dividends. As at the Latest Practicable Date, save as disclosed below, there is no loan agreement entered into by our Group with any financial institution or debt securities issued by our Group which contains a condition making reference to the shareholding interests of any Controlling Shareholders or places restrictions on any change in control of our Company. The table below sets out the details of our credit facilities obtained in connection with the Restructuring Exercise:
Condition Making Reference to Shareholding Interests of FGL in our Company Nil

Borrowing Subsidiary Fragrance Capital Fragrance Capital

Name of Bank Hong Leong Finance Limited Sing Investments & Finance Limited

Description of Credit Facility Term loan

Tenor 20 years from the date of drawdown(1) 20 years from the first day of the next calendar month following the advance of the loan or any part thereof 20 years from the date of first drawdown(1)

Aggregate Level of Facilities $95.4 million

Term loan

Nil

$35.3 million

Fragrance Capital

RHB Bank Berhad (RHB Bank)

Term loan

FGL to retain ownership and control, either directly or indirectly of not less than 20% of the issued and paid up share capital of the Company for the period of the loan tenor

$55.0 million

63

CAPITALISATION AND INDEBTEDNESS

Condition Making Reference to Shareholding Interests of FGL in our Company FGL to beneficially own (either directly or indirectly), 20% of the entire issued share capital of the Company for as long as the facility remains outstanding FGL to hold not less than 20% of the shares of the Company until Fragrance Ventures has repaid all outstanding sums owing under the facility or until the expiry of the loan tenor of 5 years, whichever is earlier FGL to maintain at least 20% shareholding in the Company until Fragrance Assets has repaid all outstanding sums owing under the facility

Borrowing Subsidiary Fragrance Capital

Name of Bank CIMB Bank Berhad (CIMB Bank)

Description of Credit Facility Revolving credit facility

Tenor Until 31 March 2019 or 84 months from the date of the first drawing, whichever is earlier(1)

Aggregate Level of Facilities $58.0 million

Fragrance Ventures

OCBC Bank

Term loan

5 years from 1 February 2012

$155.0 million

Fragrance Assets

DBS Bank

Term loan

60 months after the drawdown date(1)

$64.8 million

Note: (1) This loan facility will only be drawdown within 30 days of the Listing Date.

Our Controlling Shareholder, FGL, has on 21 March 2012 provided an undertaking to RHB Bank, that it will retain ownership and control, either directly or indirectly, of not less than 20% of the issued and paid up share capital of our Company for the period of the loan tenor under the RHB Bank facility. Additionally, FGL has, on 21 March 2012 provided an undertaking to CIMB Bank that it will beneficially own (either directly or indirectly), 20% of the entire issued share capital of the Company for as long as the CIMB Bank facility remains outstanding and an undertaking to OCBC Bank that it will not, at any time, hold less than 20% of the Shares of our Company until Fragrance Ventures has repaid outstanding sums owed under the OCBC Bank facility. Finally, with respect to the DBS Bank facility, FGL has on 21 March 2012 provided an undertaking to DBS Bank, that it will maintain at least 20% shareholding in our Company until Fragrance Assets has repaid all outstanding sums owing under the DBS Bank facility. Contingent Liabilities As at the Latest Practicable Date, we do not have any contingent liabilities. 64

DILUTION
Dilution results when the amount by which the Issue Price paid by the applicants for our New Shares in this Invitation exceeds our unaudited pro forma NAV per Share immediately after the Invitation. The unaudited pro forma NAV per Share as at 30 September 2011 before adjusting for the estimated net proceeds from the issue of the New Shares and based on the preInvitation issued share capital of 550,000,000 Shares was 32.29 cents per Share. Pursuant to the Invitation in respect of 450,000,000 New Shares at the Issue Price, the unaudited pro forma NAV per Share after adjusting for the estimated net proceeds from the Invitation and based on the post-Invitation issued and paid up share capital of 1,000,000,000 Shares would have been 28.97 cents per Share. This represents an immediate decrease in the unaudited pro forma NAV per Share of 3.32 cents per Share to our existing Shareholders and an immediate increase in the unaudited pro forma NAV per Share of 2.97 cents per Share to new investors. There will be no immediate dilution in the unaudited pro forma NAV per Share to the new investors. The following table illustrates such increase on a per Share basis:
Cents Issue Price Unaudited pro forma NAV per Share before Invitation based on the pre-Invitation share capital of 550,000,000 Shares (as at 30 September 2011) Decrease in unaudited pro forma NAV per Share pursuant to the Invitation attributable to the existing Shareholders Unaudited pro forma NAV per Share after the Invitation based on the post-Invitation share capital of 1,000,000,000 Shares and as adjusted for the estimated net proceeds of the New Shares Increase in unaudited pro forma NAV per Share to new investors 26.0 32.29 3.32

28.97 2.97

The following table summarises the total number of Shares issued by us, the total consideration and the average price per Share held by our Controlling Shareholder (after adjusting for the Restructuring Exercise) and our new investors pursuant to the Invitation:
Number of Shares FGL(1) New investors
Note: (1) The consideration related to the partial Purchase Consideration of approximately $137.5 million which was satisfied by our Company by way of allotment and issuance of 549,999,999 new Shares credited as fully paid-up to FGL. Please refer to the section entitled General Information of our Group Restructuring Exercise of this Prospectus for details.

Total consideration ($) 137,500,000 117,000,000

Average price per Share ($) 0.25 0.26

550,000,000 450,000,000

65

INDUSTRY OVERVIEW
Unless expressly stated below, the information and analysis given in this section are extracted from the industry report, Economy-tier Hotels in Singapore (the Hotels Industry Report) by Euromonitor International Ltd. (Euromonitor) dated 30 November 2011. The Hotels Industry Report was prepared by Euromonitor for the purpose of incorporation in this Prospectus. The following Industry Overview section has been extracted from the Hotel Industry Report. Euromonitor has agreed to the production of these extracts on condition that, save in respect of liability imposed by any applicable law, including, without limitation, the SFA, any and all liability (whether arising in contract, tort or otherwise) for any loss of any nature suffered by any party as a result of a direct or indirect error in or omission in these extracts, as a direct or indirect result of the use of any of these extracts or of making any investment decision, or refraining from making any investment decision, in reliance or based wholly or party on any data, expression of opinion, statement or other information or data contained in these extracts. While our Directors have taken reasonable action to ensure that statements from the Hotels Industry Report have been reproduced in their proper form and context, and that such statements have been extracted accurately and fairly from the Hotels Industry Report, none of the Issue Manager, Underwriter and Placement Agent, or our Company or their respective officers, agents, employees and advisers have conducted an independent review of the content or independently verified the accuracy thereof. You should be aware that since the date of the Hotels Industry Report, there may have been changes in the tourism industry and the various sectors therein which could affect the accuracy or completeness of the information in this section. MACROECONOMIC ENVIRONMENT IN SINGAPORE Overview of the Economy GDP and GDP Per Capita Whilst real GDP experienced a decline of 0.8% in 2009, the broad-based recovery in 2010 pushed real GDP up 14.5% the strongest growth in Singapores history. GDP per capita also declined by 3.4% in 2009 during the recession, but grew by 11.9% in 2010 to reach $59,813. Overall, GDP experienced a robust compound annual growth rate (CAGR) of 7.1% during the years 2006-2010. As one of the most trade-dependent economies in the Asia-Pacific region, Singapore remains vulnerable to uncertainties in global economic conditions. Economic growth was weak in the first half of 2011, reflecting the impact of transitory shocks due to higher oil prices and the Japanese earthquake. Downward GDP data revisions in the US as well as the growth slowdown in the Eurozone also contributed to the modest growth in Singapores economic activity. As such, for the 2011-2015 period, Singapores GDP and GDP per capita are expected to grow at a CAGR of 6.3% and 5.4% to reach $416.5 billion and $78,415 respectively. Whilst manufacturing and trade-related services have been adversely impacted by the global economic conditions, tourism-related services sector continued to expand in 2011 amidst continued resilience in the region. This in turn, contributed to the uptrend of Average Room

66

INDUSTRY OVERVIEW
Rates (ARR) and hotel Average Occupancy Rates (AOR). The regional market, comprising of ASEAN, China, Hong Kong, India, Japan, Korea and Taiwan accounted for more than 70.0% of visitor arrivals into Singapore. Chart 1 Singapores GDP and Annual Growth (2006-2015)

Total GDP ($ billions) Total GDP Growth Real GDP Growth 416.5 392.4 369.2 347.0 325.8 303.7 267.3 230.9 10.6% 14.5% 8.7% 8.8% 0.3% 1.5% 2006 2007 2008 7.3% 6.5% 6.4% 6.3% 6.1% 15.7% 268.0 266.7 13.9%

-0.5% -0.8% 2009 2010

5.2%

4.4%

4.3%

4.2%

4.1%

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

Chart 2

Singapores GDP Per Capita and Annual Growth (2006-2015)

GDP per Capita GDP per Capita Growth

78,415 74,439 70,578 63,418 58,243 52,466 59,813 55,369 53,464 66,893

11.0% 7.2%

11.9%

6.0%

5.5%

5.5%

5.5%

5.3%

-4.9% 2006 2007 2008

-3.4%

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

67

INDUSTRY OVERVIEW
Overview Of Tourism In Singapore Based on the World Economic Forums Travel and Tourism Competitiveness Index 2011 which takes into account the regulatory framework, business environment and infrastructure, and human, cultural and natural resources of participating countries travel and tourism sectors Singapore emerged as the top-ranking country in the Asia-Pacific region for its tourism industry. It is also ranked as the 10th most competitive worldwide. Table 1
Country Singapore Hong Kong Australia New Zealand Japan South Korea Malaysia Taiwan China Thailand

Travel and Tourism Competitiveness Index 2011: Asia Pacific

Regional rank 1 2 3 4 5 6 7 8 9 10 International rank 10 12 13 19 22 32 35 37 39 41

Source: Euromonitor International based on World Economic Forum Travel and Tourism Report 2011

Inbound Tourist Arrivals Constant Uptrend in Inbound Tourist Arrivals Alongside the economic recovery in 2010, consumers regained their confidence in spending and were more willing to take vacations, a trend which favoured Singapore as a preferred tourist destination. Inbound tourist arrivals to Singapore registered 23.0% growth to reach 19.4 million trips in 2010. This strong performance was a major improvement over the marginal growth recorded in 2009. Overall, inbound tourist arrivals are expected to increase by a CAGR of 2.7% during 2011-2015 to reach 21.9 million trips by 2015.

68

INDUSTRY OVERVIEW
Chart 3 Singapores Inbound Tourist Arrivals (2006-2015)

Tourist Arrivals (000 trips) Tourist Arrivals Growth Rate

19,399

19,643

20,372

20,976

21,472

21,869

15,755 14,635

15,759

15,773 23.0%

7.9%

7.7% 3.7% 1.3% 0.0% 0.1% 2009 2010 2011E 2012F 2013F 2014F 2015F 3.0% 2.4% 1.9%

2006

2007

2008

Source: Euromonitor International

Malaysia and Indonesia Remain the Key Source Markets for Inbound Tourism Malaysia remained the key source market for Singapore in 2010, accounting for 7.8 million trips. This is due to the Causeway link between Malaysia and Singapore, which facilitates travel between the two countries at low cost. Indonesia, the second-largest source market for travel to Singapore, registered the fastest growth in terms of number of arrivals. Indonesian tourist trips increased from 1.7 million in 2009 to 2.3 million in 2010, reflecting a 35.3% growth rate. The wide variety of shopping opportunities in Singapore continues to be a key attraction for many Indonesians.

69

INDUSTRY OVERVIEW
Chart 4 Breakdown of Singapores Inbound Tourist Arrivals by Country of Origin in 2010 (Trips)

Other Countries, 7.3 million

Malaysia, 7.8 million

Indonesia, 2.3 million Australia, 0.9 million

China, 1.1 million

Total: 19.4 million trips

Source: Euromonitor International

Innovative Events Lead to Increase in Number of Leisure Tourists Leisure visitor arrivals grew by 17.0% in 2010 to reach 13 million trips. The high growth in leisure visitors was due to the opening of two integrated resorts in 2010, with Universal Studios Singapore and two new casinos proving popular. Singapore is promoted as a short family holiday destination with attractions such as the integrated resorts, Singapore Zoological Gardens and Night Safari catering to family needs. Singapore also hosted the first Youth Olympics in 2010. The Youth Olympics attracted 15,000 visitors and earned incoming tourist receipts of $57 million. In addition, Singapore saw the return of Formula 1 motor racing in September 2010. Economic Recovery Boosts Business Visitor Arrivals Business visitor arrivals represented 5 million trips in 2010, an increase of 13.2% over 2009. This strong growth was due largely to the economic recovery, which saw business performances improve and companies regain their confidence in expansion plans. Importantly, Singapore is seen as a key regional commercial hub. New Tourist Attractions to Spur Tourism Alongside the opening of Marina Bay Sands, the government has revamped the entire Marina Bay area to build Gardens by the Bay, which comprise of three distinctive waterfront gardens. Gardens by the Bay is scheduled to be completed by the end of 2011 and will be officially opened to the public in mid-2012. In 2012, Singapore is also scheduled to open River Safari, Asias first river-themed wildlife park. 70

INDUSTRY OVERVIEW
Low-cost Carriers Gain Prominence Low-cost airlines, namely AirAsia, Jetstar and Tiger Airways, have gained prominence, especially in recent years. Their budget airfares offer attractive alternatives for tourists looking to fly regionally to neighbouring countries. The attractive promotions offered by low-cost carriers appeal to travellers looking for quick and comfortable modes of transport at affordable prices. As a result, there was a marked increase in the number of tourists who visited Singapore in 2010, in particular from neighbouring countries such as Malaysia and Indonesia. Low-cost airlines are also entering into joint ventures with on-line travel websites to offer exclusive on-line third-party distribution rights of holistic holiday packages that include flight tickets and hotel bookings. AirAsia and travel website Expedia have begun such collaborations, offering passengers low-cost travel packages on both AirAsiaGo and Expedia websites as of first quarter 2011. Such developments are likely to increase the number of short-haul trips made by tourists, especially those from neighbouring countries. Singapore Becomes a Regional Cruise Hub through the Construction of New Cruise Terminal The Singapore Cruise Centre estimates the potential market from India and China alone to be 74 million passengers. Singapore, being strategically located at the crossroads of these fast growing markets, coupled with its established reputation as a tourist destination for regional travellers provides a huge draw for regional operators. In 2010, a record 1 million cruise passengers passed through Singapore and number of passengers are expected to increase to 1.5 million by 2015. To further cement its position as Asias regional cruise hub, Singapore is expected to open a new International Cruise Terminal at Marina South in 2012. Incoming Tourism Receipts Tourism Receipts Experienced a Rebound in 2010 Receipts from travel and tourism experienced a rebound following a decline in 2009. Incoming tourism receipts accounted for $19.3 billion in 2010 and contributed approximately 6.0% to Singapores gross domestic product. Given the space and resource constraints faced by the city-state, the Singapore Tourism Board (STB) has shifted its emphasis away from driving an increase in tourist arrivals and towards growing tourism revenue. STB intends to coax higher tourist spending by focusing on more value-added activities such as education, healthcare and expanded tourism offerings through infrastructural investments. Such investments include the International Cruise Terminal (to be ready by 2012), Gardens by the Bay (Bay South to open in 2012), the River Safari (to open in 2012), Mandai Fourth Gate and the Jurong Lake District.

71

INDUSTRY OVERVIEW
Tourism receipts are expected to increase by a CAGR of 7.5% over the years 2011-2015 to $32.0 billion in 2015. Indonesian and Malaysian Tourists Accounted for Greatest Volume of Tourism Receipts Indonesians and Malaysians accounted for the largest spend in 2010, contributing a combined 31.0% share of incoming tourism receipts in current value terms. The wide variety of shopping venues in Singapore has long attracted Indonesians to the country. Meanwhile, Malaysia is by far the biggest source market for Singapore. The close proximity of the two countries encourages many Malaysians to visit Singapore for a weekend getaway. Integrated Resorts Make Significant Contributions to Inbound Tourism Receipts The integrated resorts are estimated to have contributed significantly to the 48.5% current value growth in incoming tourist receipts in 2010, not only from resort revenues but also from the spill-over effect they had on nearby shopping and entertainment areas. Shopping Malls to Offer Innovative Services to Attract Tourists The economic recovery in 2010 saw consumers regain confidence in spending on travel and holidays. Tourism receipts from shopping that accounted for approximately 24.4% of incoming tourism receipts grew from $4.4 billion in 2009 to $4.7 billion in 2010. Seeking to exploit the economic recovery and rising consumer confidence, the Singapore Tourism Board implemented innovative strategies that focused on products and processes targeted at affluent travellers. For instance, ION Orchard and Mandarin Gallery are two key shopping malls at Orchard Road that offer personal concierge services. Strong Growth in Incoming Tourism Receipts from Accommodation Incoming tourism receipts from accommodation1 have increased at a CAGR of 13.2% during the review period of 2006-2010 to $4.1 billion in 2010. The growth in tourism receipts from accommodation is due to the increase in tourist arrival numbers that had outpaced Singapores hotel room supply, resulting in the hike in ARR. With the development of more new hotels during the forecast period 2011-2015 to cope with increasing tourist arrival numbers, incoming tourism receipts from accommodation is expected to grow at a moderate CAGR of 7.6% from $5.0 billion in 2011 to $6.7 billion in 2015.

Note:
1

Incoming tourism receipts from accommodation refer to payments made by international inbound tourists (both business and leisure) for accommodation services in accommodation that include hotels, motels, service apartments and guesthouses.

72

INDUSTRY OVERVIEW
Chart 5 Incoming Tourism Receipts Accommodation (2006-2015)
Incoming Tourism Receipts ($ billions) Incoming Tourism Receipts from Accommodation (S$ billions) 32.0 30.4 28.5 26.4 24.0 19.3 14.6 13.0 15.3 13.0

and

Incoming

Tourism

Receipts

from

2.5

3.1

3.4

2.7

4.1

5.0

5.6

6.0

6.4

6.7

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

HOTELS IN SINGAPORE Overview of Singapores Hotel Industry Hotel Tiers (a) Economy-tier Hotels Includes budget chained and independent outlets, which are classified as 02 stars, and their corresponding sales. The budget classification is also determined by the brands positioning and marketing. The average room rate of a standard twin room for hotels in the economy tier would be below $150 as of 2011. (b) Mid-tier Hotels Includes mid-tier chained and independent hotel outlets, which are classified as 3-stars and their corresponding sales. The mid-priced classification can also be determined by the brands positioning and marketing. The average room rate of a standard twin room for a mid-tier hotel would range between $150-$250 as of 2011. (c) Other Hotels Includes upscale and luxury chained and independent hotel outlets, which are classified as 4-stars and above. The Other Hotels classification can also be determined by the brands positioning and marketing. The average room rate of a standard twin room for Other Hotels would be above $250 as of 2011. 73

INDUSTRY OVERVIEW
Historical Market Performance The total number of hotels in Singapore increased by 5.6% from 268 hotels in 2009 to 283 hotels in 2010. Similarly, the supply of hotel rooms rose by 14.0% from 42,719 rooms in 2009 to 48,682 rooms in 2010. Hotels also recorded a 45.9% increase in retail value of hotel accommodation from 2009 to reach $3.3 billion in 2010. The growth in the number of hotels is largely due to the increase in government land sales sites made available for hotel development in anticipation of the increase in tourist arrivals. Chart 6 Total Number of Hotel Outlets (2006-2015)

Hotel outlets Hotel outlets growth rate

268 243 226 226

283

298

309

320

331

342

10.3% 7.5% 5.6% 0.4% 0.0% 5.3% 3.7% 3.6% 3.4% 3.3%

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

Chart 7

Total Number of Hotel Rooms (2006-2015)

Number of hotel of rooms Number of hotel of rooms growth rate

48,682 42,719 37,198 37,624 39,376 14.0% 8.5% 4.7% 0.8% 1.1%

51,258

52,807

54,356

55,905

57,455

5.3% 3.0% 2.9% 2.8% 2.8%

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

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INDUSTRY OVERVIEW
Chart 8 Retail Value of Hotel Accommodation (2006-2015)

Retail value of hotel accommodation ($ billions) Retail value of hotel accommodation growth rate 5.5 5.0 4.4 4.0 3.3 2.9 2.4 1.9 23.0% 25.2% 18.0% 2.2 45.9% 21.6% 11.6% -21.5% 2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F 11.8% 10.3% 10.2% 6.0

Source: Euromonitor International

The growth for the retail value of hotel accommodation1 is driven by Other Hotels, comprising primarily of luxury hotels. The market share of such hotels by retail value of accommodation ranged from 79.5% to 82.5% over the years 2006-2010. The market share of mid-tier hotels by retail value of hotel accommodation ranged from 12.5% to 13.8% over the review period 2006-2010. The market share of economy-tier hotels ranged from 5.0% to 6.8% over the review period 2006-2010. Chart 9 Market Share of Hotel Tiers by Retail Value of Hotel Accommodation (2006-2010)
Retail value of other hotel accommodation Retail value of economy-tier hotel accommodation 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2006 2007 2008 2009 2010 79.5% 82.0% 81.9% 80.3% 82.5% 6.8% 13.8% 5.4% 12.6% 4.9% 13.2% 6.9% 12.8% 5.0% 12.5% Retail value of mid-tier hotel accommodation

Source: Euromonitor International Note:

1

Retail value of hotel accommodation is classified as room revenue generated from hotel outlets. This includes both room bookings made by international inbound tourists and locals residing in the country.

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INDUSTRY OVERVIEW
Based on data obtained from the STB, the national AOR for gazetted hotels in Singapore had improved from 76.0% in 2009 to 85.0% in 2010. The ARR also improved by 14.5% year-onyear to $217. The growth in both average AOR as well as ARR led to a significant 28.0% increase in Revenue Per Available Room (REVPAR) to $184 over the same period. Chart 10 Performance of Gazetted Hotels in Singapore (2001-2010)
ARR ($) REVPAR (S$) 85% AOR (%) 87% 81% 246 67% 202 176 164 133 101 137 126 116 93 78 122 99 115 139 144 199 76% 217 190 184 85%

81% 76% 74%

84%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: STB, Euromonitor International

Trends and Key Drivers (a) Rebound in Tourist Arrivals Contribute to Increased Demand for Accommodation The global economic recovery following the recession that occurred between the years 2008-2009 saw a rebound in tourist arrivals to Singapore. In 2010, inbound tourist arrivals registered 23.0% year-on year growth to reach 19.4 million trips. Over the review period 2006-2010, the 7.3% CAGR of inbound tourist arrivals to Singapore had outpaced that of hotel outlets (5.8% CAGR) and hotel room stock (7.0% CAGR). The increased demand for accommodation led to higher hotel AORs and increased ARRs. The burgeoning demand for travel by regional tourists as well as the Singapore Tourism Boards constant efforts to refresh Singapores tourism landscape has also enabled the country to absorb unprecedented levels of new hotels during the latter half of the review period from 2006-2010.

76

INDUSTRY OVERVIEW
(b) Opening of Integrated Resorts and Special Events Provide Boost to Sales of Hotels Hotels registered the highest growth in room stock and current value sales growth in 2010 due to the opening of the integrated resorts. The opening of new hotels such as Hard Rock Hotel within Resorts World Sentosa and Marina Bay Sands increased room supply by 2,600 rooms and 1,350 rooms respectively. Special events such as the fireworks display marking Singapores National Day and Formula 1 Grand Prix saw consumers book hotels near to the Marina Bay belt to watch these events. Hotels near the Marina Bay Belt capitalised on these events and launched several packages that catered to consumers who chose to stay the night in order to watch these special events. Such packages boosted the performance of hotels and, as a result, the average sales per outlet increased by 42.0% in value terms from $8.2 million in 2009 to $11.6 million in 2010. (c) Growing On-line Sales for Travel Accommodation On-line sales of travel accommodation grew by 48.8% in retail value terms from $1.1 billion in 2009 to $1.6 billion in 2010 as consumers increasingly took advantage of the convenience and universal accessibility of the Internet to make bookings on-line. Special promotions such as weekend packages also provided a boost to on-line sales. The percentage of hotel accommodation booked through the Internet is expected to continue increasing by a CAGR of 13.1% over the forecast years 2011-2015 to $3.3 billion by 2015. Chart 11 Retail Value of Hotel Accommodation Booked through Internet (2006-2015)

Retail value of hotel accommodation booked through internet ($ billions) Retail value of hotel accommodation booked through internet growth rate 3.3 3.0 2.6 48.8% 27.5% 22.1% 1.1 0.9 -19.9% 23.2% 1.6 1.4 1.1 2.0 24.0% 13.8% 13.9% 12.3% 12.3% 2.3

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

77

INDUSTRY OVERVIEW
Chart 12 % Retail Value of Hotel Accommodation Booked through Internet (2006-2015)
% of Retail value of hotel accommodation booked through other channels % Retail value of hotel accommodation booked through internet

45%

46%

48%

49%

50%

51%

52%

53%

54%

55%

55%

54%

52%

51%

50%

49%

48%

47%

46%

45%

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

(d) More Sites Released for Hotels to Cope with Rising Tourist Arrival Rates With land scarce in Singapore, land usage is heavily regulated by the government through the Urban Redevelopment Authority (URA). However, as Singapore focuses on improving its tourism rates, the need for accommodation to meet the travel requirements of incoming tourists has increased the pressure on the government to release more land for the building of hotels. In June 2011, a hotel site located at the Kallang Riverside was made available for sale under the Reserve List of the Government Land Sales Programme. The land parcel, which can potentially yield approximately 490 hotel rooms, has a maximum permissible gross floor area of about 22,900 square metres and a maximum allowable building height of 16 storeys. In July 2011, the URA released a commercial land parcel in Paya Lebar, for tender. The 2.07 hectare commercial site can generate a gross floor area (GFA) of approximately 87,000 square metres. In November 2011, the URA released yet another hotel site at Rangoon Road/Farrer Park Station Road. The proposed hotel site is expected to generate a gross floor area of about 13,004 square metres. Some hotel owners have also explored the conversion of old sites into boutique hotels. For example, a three-storey shop house in Chinatown has been converted into Hotel 1929, while the Majestic cinema in Chinatown has been converted into New Majestic Hotel. (e) Rising Cost Pressure for Hotels Due to Demand for Qualified Labour The increasing number of new hotels opening in Singapore will result in higher demand for qualified labour. The simultaneous restrictions governing the import of foreign talent to meet the needs of the hospitality sector are likely to push wages up for staff in the hospitality sector, indirectly leading to rising cost pressures for hotels.

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INDUSTRY OVERVIEW
(f) More Diverse Hotel Offerings Available to Cater to Various Tourist Groups Luxury hotels continued to sustain the interest of consumers in 2010. These establishments pride themselves on providing excellent service and offering guests the opportunity to enjoy a wholesome lifestyle experience. On the other hand, economy-tier hotels attracted consumers through low-priced, no-frills accommodation. Economy-tier hotels, including the Fragrance Hotel chain, have started eyeing locations close to key tourist areas in order to offer a convenient alternative to luxury hotels. Thus, the strategic location of Global Premium Hotels Limiteds Viva and Royal branches, which are near Vivo City and Sentosa, enables budget travellers to explore Sentosa and one of the major shopping centres in Singapore while staying at a good-quality, affordable hotel. Future Prospects of Singapores Hotel Industry (a) More Hotels and Room Stock to Accommodate Increased Tourist Arrivals Taking into account the existing hotel room stock in Singapore that is already 85% occupied, there is a balance of only 7,300 rooms that is insufficient to meet the medium to longer term expected increase in tourist arrival figures. With the number of inbound tourists expected to increase during 2011-2015, there will be rising demand for affordable hotels that are close to tourist attractions. Assuming that all projects are completed by 2015, the total number of hotels is expected to increase to 342 whilst the total supply of hotel rooms is estimated to reach 57,455 by 2015. This reflects CAGRs of 3.5% and 2.9%, respectively, for the years 2011-2015. (b) Hotel AOR to Remain Above 80% With the bulk of tourist arrivals originating from Asian countries where economic performance is expected to remain fairly stable coupled with numerous BTMICE events held throughout the year as well as the opening of new attractions, tourist arrival figures are expected to increase during the forecast period, 2011-2015. Tourist arrivals are expected to increase at a CAGR of 2.7% to 21.9 million trips by 2015. Robust levels of tourist arrivals will ensure consistently strong demand for hotel rooms in Singapore. According to statistics compiled by the STB, in spite of the increase in hotel outlets and rooms, hotel AORs had increased from 85.6% for the first eight months of 2010 to 86.1% for the first eight months of 2011. Barring major external shocks, AORs are likely to remain above 80% during the forecast period of 2011-2015.

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INDUSTRY OVERVIEW
(c) ARR and REVPAR to Experience Moderate Growth Robust hotel AORs, indicating strong demand for rooms, had allowed hoteliers to raise room rates in Singapore. The ARR nationwide increased from $209.85 for the first eight months of 2010 to $240.30 for the first eight months of 2011. REVPAR also reflected a similar increase from $179.60 for the first eight months of 2010 to $206.90 for the first eight months of 2011. However, the economic uncertainty as well the increase in hotel room inventory is likely to moderate the growth in room rates from 2012 onwards. Hoteliers are likely to maintain current room rates so as to attract demand in an increasingly competitive environment. Mid-tier Hotels Mid-tier Hotels Experience Robust Growth during 2006-2010 During the historical period 2006-2010, the number of mid-tier hotels in Singapore increased by a CAGR of 7.0% to 63 outlets. In addition, the retail value of accommodation in such hotels increased by 11.3% to $409 million in 2015. Chart 13 Total Number of Mid-tier Hotels (2006-2015)
.5%

Mid-tier hotel outlets Mid-tier hotel outlets growth rate

R CAG 1 201 -201 5:6

94 88

79
CAGR 2006-2 0 % 10 : 7.0

82

73 60 63 15.9%

48

48

52

15.4%

8.3% 5.0% 0.0% 0.0%

8.2% 3.8%

7.3%

6.8%

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

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INDUSTRY OVERVIEW
Chart 14 Retail Value of Mid-tier Hotel Accommodation (2006-2015)

Retail value of mid-tier hotel accommodation ($ millions) Retail value of mid-tier hotel accommodation growth rate 1009 863 732 23.3% 14.7% 6.6% 377 306 267 287 409 42.4% 31.1% 536 15.6% 18.3% 17.9% 17.0% 619

-23.9% 2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F

Source: Euromonitor International

Based on data obtained from the STB, the national AOR for gazetted mid-tier hotels in Singapore had improved from 78.0% in 2009 to 87.0% in 2010. The ARR also improved by 19.0% year-on-year to $169. The growth in both average AOR as well as ARR led to a 24.8% increase in REVPAR to $146 over the same period. Chart 15 Performance of Gazetted Mid-tier Hotels in Singapore (2006-2010)*
Mid-tier hotel ARR ($) 87% 86% Mid-tier hotel RevPAR ($) Mid-tier hotel AOR (%)
87%

192 165 151 129 117 78% 145 168 142 169 146

82%

2006

2007

2008

2009

2010

Source: STB, Euromonitor International *Please note that whilst STBs data for gazetted mid-tier hotels provide a good indication of performance, the definitions used by STB vary from Euromonitors definition of mid-tier hotels used in this study. No distinct price cut-offs are mentioned in STBs definitions. STB also uses location to segment the hotel tier. Mid-tier hotels are generally located in prime commercial zones or immediately outlying areas.

81

INDUSTRY OVERVIEW
Whilst as of 2010 mid-tier hotels accounted for only 22.3% of the total number of hotel outlets, there is much interest in expanding mid-priced properties which are considered the least vulnerable to an economic slowdown in Singapore as business travellers are likely to downgrade in order to cut back on travel spending in anticipation of another global recession. Key Trends and Drivers for Mid-tier Hotels (a) Local and International Players Keen to Enter Mid-tier Segment To date, prominent boutique property developer and hotel operator Global Premium Hotels Limited has developed mid-tier offerings such as Parc Sovereign Hotel to leverage this growing market opportunity. InterContinental Hotels Group (IHG) has also announced the signing of the first Holiday Inn Express Hotel for Singapore, which is set to open on Orchard Road by 2013. (b) Local Authorities Encourage Growth of Mid-tier Hotels In line with STBs master plan to increase inbound tourist arrivals and tourism receipts, the relevant government organisations, namely URA and STB, have been increasing the range of tourist accommodation in Singapore so as to attract a wider variety of tourists to the city-state. As a result, the number of mid-tier hotels in development increased. These hotels bridge the gap between luxury and economy-tier hotels with average room rates generally ranging from more than $150 to $250 a night. They offer limited services and amenities by comparison to luxury hotels and are often conveniently located at the fringe of the city. Their location allows hotels guests to enjoy excellent connectivity to the various shopping districts and major heritage areas such as Little India and Kampong Glam. (c) Strong Performance Expected for Mid-tier Hotels During 2011-2015 With the increase of low-cost carriers making travel more accessible to cost-conscious travellers, more BTMICE business events bringing in regional business travellers and the tightening of travel budgets of multinational corporations, the demand for mid-tier hotels will increase during the forecast period, 2011-2015. Between the years 2011-2105, the number of mid-tier hotels is expected to experience strong CAGR growth of 6.5% to reach 94 outlets by 2015. Retail value of accommodation in mid-tier hotels will also increase by a CAGR of 17.2% to $1.0 billion in 2015. Economy-Tier Hotels Market Size of Economy-tier Hotels During the historical period of 2006-2010, economy-tier hotels registered strong volume and value growth. The total number of hotel outlets increased by a CAGR of 5.8% to 164 in 2010. Hotels in this segment also contributed an additional 9,265 rooms to the total hotel industry. The retail value for economy-tier hotels also increased by a CAGR of 14.7% to reach $340 million in 2010.

82

INDUSTRY OVERVIEW
Chart 16 Total Number of Economy-tier Hotels (2006-2015)

Economy-tier hotel outlets Economy-tier hotel outlets growth rate

164 155 141 131 131

167

170

172

174

176

9.9% 7.6% 5.8% 0.8% 1.8% 0.0% 1.8% 1.2% 1.2% 1.1%

2006

2007

2008

2009

2010

2011E

2012F

2013F

2014F

2015F

Source: Euromonitor International

Chart 17

Retail Value of Economy-tier Hotel Accommodation (2006-2015)

Retail value of economy-tier hotel accommodation ($ millions) Retail value of mid-tier hotel accommodation growth rate 644 580 522 464 31.6% 340 258 403 20.0% 18.7% 14.9% 12.7% 11.1% 11.0% 0.0% 40.0% 60.0%

29.1% 253 196 1.1%

300 18.6%

-14.0% 2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F

-20.0%

Source: Euromonitor International

Based on data obtained from the STB, the national AOR for gazetted economy-tier hotels in Singapore had improved from 74.0% in 2009 to 86.0% in 2010. The ARR also improved by 14.7% year-on-year to $101. The growth in both average AOR as well as ARR led to a 31.8% increase in REVPAR to $87 over the same period.

83

INDUSTRY OVERVIEW
Chart 18 Performance of Gazetted Economy-tier Hotels in Singapore (2006-2010)*
Economy-tier hotel ARR ($) Economy-tier hotel RevPAR ($) 112 82% 90 79 69
66

Economy-tier hotel AOR (%)

87%

89% 100

86% 101 92 88 74% 87

2006

2007

2008

2009

2010

Source: STB, Euromonitor International *Please note that whilst STBs data for gazetted economy-tier hotels provide a good indication of performance, the definitions used by STB vary from Euromonitors definition of economy-tier hotels used in this study. No distinct price cut-offs are mentioned in STBs definitions. STB also uses location to segment the hotel tier. Economy-tier hotels are generally located in outlying areas.

Key Trends and Drivers for Economy-tier Hotels (a) Spill over Effects of Increased Tourist Arrivals The growth of Singapores BTMICE industry as well as the opening of attractions such as integrated resorts will provide a boost to tourist arrivals, leading to higher AORs across all hotels, including the economy-tier segment. (b) Conversion of Shop Houses into Economy-tier Hotels With the number of inbound tourists expected to increase during 2011-2015, there will be increasing demand for affordable hotels that are close to tourist attractions. Due to the scarcity of land in Singapore, there are limitations in the availability of space that can be released for the construction of large hotels. Since 2004, the URA has allowed existing shop houses and shop flats in selected locations to be converted to hotels on a temporary basis for up to 99 years. To date, many of these sites have been refurbished into economy-tier hotels that offer comfortable lodging for cost-conscious travellers. (c) Economy-tier Hotels Appeal to Cost-conscious Travellers The rising popularity of low-cost carriers has enabled more consumers, especially tourists from neighbouring countries, to visit Singapore. As a result of soaring average room rates in the city-state during the review period 2006-2010, cost-conscious travellers have been staying at economy-tier hotels due to their relatively affordable pricing. 84

INDUSTRY OVERVIEW
(d) Economy-tier Hotels are Unlikely to be Affected by Uncertain Economic Conditions Whilst the hospitality industry might experience slower growth in 2012 due to uncertain economic conditions, demand for economy-tier hotels is unlikely to be affected. In the face of adverse economic conditions and tighter budgets, both leisure and business travellers are likely to downgrade to the more affordable accommodation that economy-tier hotels provide. (e) Growth Driven by Expansion of Chain Hotels Chain hotels accounted for 33.0% of the total number of outlets in the economy-tier hotel segment. Expansion of chain hotels will continue to drive growth in the economy-tier sector. Due to economies of scale, they are able to expand operations at a faster pace and lower cost in comparison to independent establishments. COMPETITIVE LANDSCAPE OF ECONOMY-TIER HOTELS Overview of Competitive Landscape Leading Economy-tier Hotels Chains Account for 47.2% Market Share The total retail value of economy-tier hotel accommodation was $340 million as of 2010. The top five economy-tier players collectively accounted for 47.2% market share. With a total of 20 outlets and 1,436 rooms in 2010, the Fragrance Hotel chain is the second largest player in the market with retail value of $41.3 million, accounting for 12.2% market share. In 2011, two additional hotels were opened by the hotel chain. Fragrance HotelElegance is a 31-room establishment located in the Little India conservation district. Fragrance Hotel-Riverside is a 101-room establishment located at Hongkong Street. Table 2 Market Share of Top Five Economy-tier Hotels by Retail Value of Accommodation (2010)
Company Name Hotel 81 Management Pte Ltd Global Premium Hotels Limited Hotel 81 Management Pte Ltd Santa United International Holdings Aqueen Hotels Pte Ltd Hotel Brand Name Hotel 81 Fragrance Hotel Value Hotel Santa Grand Hotels Aqueen Hotels Others Total
Source: Euromonitor International

Rank 1 2 3 4 5

Market Share 21.6% 12.2% 7.6% 3.6% 2.2% 52.8% 100.0%

85

INDUSTRY OVERVIEW
SINGAPORE TOURISM AND HOTEL MARKET OUTLOOK Singapores tourism and hotel industry is expected to remain positive for the forecast period of 2011-2015. Overall, inbound tourist arrivals are expected to increase by a CAGR of 2.7% during 2011-2015 to reach 21.9 million trips by 2015. Tourism receipts are also expected to increase by a CAGR of 5.8% over the years 2011-2015 to $27.6 billion in 2015. Key factors contributing to growth of Singapores tourism and hotel industry include: The global economic recovery following the recession that occurred between the years 2008-2009 saw a rebound in tourist arrivals to Singapore. In 2010, inbound tourist arrivals registered 23.0% year-on year growth to reach 19.4 million trips. Tourists from ASEAN, China, Hong Kong, India, Japan, Korea and Taiwan accounted for the majority of tourist arrivals to Singapore in 2010. The continued resilience of the Asian market despite economic uncertainties in other regions resulted in the continued expansion of tourism-related services. This in turn, contributed to the uptrend of ARRs and hotel AORs. Leisure visitor arrivals grew by 17% in 2010 to reach 13 million trips. The high growth in leisure visitors was due to the opening of two integrated resorts in 2010, with Universal Studios Singapore and two new casinos proving popular. STB intends to increase higher tourist spending by focusing on more value-added activities such as education, healthcare and expanded tourism offerings through infrastructural investments. Such investments include the International Cruise Terminal (to be ready by 2012), Gardens by the Bay (Bay South to open in 2012), the River Safari (to open in 2012), Mandai Fourth Gate and the Jurong Lake. Low-cost airlines have begun offering new-long haul routes, diversifying from an initial concentration of South-East Asian cities to include more cities in China, India, and Australasia. Besides exploring new routes, low-cost carriers continued to introduce airfare promotions regularly during 2010. The expansion of affordable air travel has contributed to the increase in tourist arrival numbers from regional Asian countries.

Robust levels of visitor arrivals will ensure the constant growth of the hotel industry in Singapore. Barring major external shocks, AORs are likely to remain above 80% during the forecast period of 2011-2015. However, the economic uncertainty as well as the increase in hotel room inventory is likely to moderate the growth in room rates from 2012 onwards. Hoteliers are likely to maintain current room rates so as to attract demand in an increasingly competitive environment. Whilst the hospitality industry is expected to experience slower growth in 2012 due to uncertain economic conditions, the demand for mid-tier and economy-tier hotels is unlikely to be affected. In the face of adverse economic conditions and tighter budgets, both leisure and business travellers are likely to downgrade to more affordable accommodation that economy-tier hotels provide.

86

GENERAL INFORMATION OF OUR GROUP

Our History and Development Global Premium Hotels was incorporated in Singapore as a private limited liability company on 19 September 2011 with the sole founding shareholder being FGL. Prior to the Restructuring Exercise and Invitation, the FGL Group comprised two distinct business divisions namely, the property business and the hotel business. Pursuant to the Restructuring Exercise, FGL divested itself of its hotel business and transferred its hotel properties to our Company at market value to unlock value for FGLs shareholders. Subsequently, FGL obtained the approval of its shareholders on 23 March 2012 for the material dilution of its interest in our Company in connection with the Proposed Invitation and the Companys proposed listing. On 29 March 2012, our Company converted to a public company limited by shares and changed its name to Global Premium Hotels Limited. We entered into a Restructuring Agreement on 31 March 2012, pursuant to which our Company acquired the shares of our Subsidiaries from FGL. Upon completion of the Restructuring Exercise on 13 April 2012, our new Group structure comprised our Company and the six (6) Subsidiaries, namely, Fragrance Assets, Fragrance Capital, Fragrance Investment, Fragrance Ventures, Fragrance Hotel Management and Parc Sovereign Hotel Management. Details of our restructuring exercise are set out in the section entitled General Information of Our Group Restructuring Exercise of this Prospectus. Set out below are the major milestones in our corporate history: 1997 We commenced the development of our first hotel in 1995, a 45-room hotel located at 14 Lorong 10 Geylang. That same year, we acquired another plot of land at 9 Lorong 10 Geylang and developed it into a 36-room hotel. Both hotels were completed in 1996 and sold to third parties in 1997. 1998 We leased the first hotel in our Fragrance Chain of Hotels named Fragrance Hotel-Sapphire from our Non-Executive Director, Koh Wee Meng and commenced operations in February 1998. Fragrance Hotel-Sapphire is a 50-room hotel located at 3 Lorong 10 Geylang. We acquired Fragrance Hotel-Sapphire in March 2004. Subsequently, we commenced operations of two more hotels, namely Fragrance Hotel-Ruby and Fragrance Hotel-Emerald. Fragrance Hotel-Ruby is a 168-room hotel located at 10 Lorong 20 Geylang and Fragrance Hotel-Emerald is a 126-room hotel located at 20 Lorong 6 Geylang. We acquired the land parcel over which Fragrance Hotel-Ruby is presently situated, demolished the original building situated thereon and subsequently developed the hotel on the land parcel (Redeveloped Property). Fragrance Hotel-Ruby was acquired in December 1996 and its construction and development works were completed in December 1997.

87

GENERAL INFORMATION OF OUR GROUP

We leased Fragrance Hotel-Emerald from our Non-Executive Director, Koh Wee Meng and commenced operations in July 1998. We acquired the hotel in October 2002. 2001 We leased The Fragrance Hotel, a 82-room hotel located at 219 Joo Chiat Road from James Koh Investment Pte. Ltd. and commenced operations in November 2001. We acquired the hotel in May 2004. In 2009, The Fragrance Hotel underwent major addition and alteration works to increase its total room capacity to 90 rooms. 2002 We commenced operations of three (3) hotels, namely, Fragrance Hotel-Pearl, Fragrance Hotel-Crystal and Fragrance Hotel-Jasper. Fragrance Hotel-Pearl is a 129-room hotel located at 21 Lorong 14 Geylang, Fragrance Hotel-Crystal is a 125-room hotel located at 50 Lorong 18 Geylang and Fragrance Hotel-Jasper is a 56-room hotel located at 44 Lorong 6 Geylang. Fragrance Hotel-Pearl was acquired in September 2001 as a partially constructed hotel building and we completed its construction and development work in December 2001. Fragrance Hotel-Crystal and Fragrance Hotel-Jasper were acquired as fully constructed hotel buildings. Fragrance Hotel-Jasper was subsequently sold to a third party. We built hotels in the Geylang area due to the strong demand for budget accommodation and lower cost of land in the area. 2004 We commenced operations of two (2) hotels, namely, Fragrance Hotel-Balestier and Fragrance Hotel-Classic. Fragrance Hotel-Balestier is a 48-room hotel located at 255 Balestier Road and Fragrance Hotel-Classic is a 48-room hotel located at 418 Balestier Road. Both Fragrance Hotel-Balestier and Fragrance Hotel-Classic are Redeveloped Properties. Fragrance Hotel-Balestier was acquired in March 2003 and its construction and development works were completed in December 2003. Fragrance Hotel-Classic was acquired in March 2003 and its construction and development works were completed in January 2004. 2005 We commenced operations of three (3) hotels, namely, Fragrance Hotel-Rose, Fragrance Hotel-Sunflower and Fragrance Hotel-Selegie. Fragrance Hotel-Rose is a 68-room hotel and is located at 263 Balestier Road. Fragrance Hotel-Sunflower is a 27-room hotel located at 10 Lorong 10 Geylang and was acquired as a fully-constructed hotel building. Fragrance HotelSelegie is a 120-room hotel located at 183 Selegie Road. It was the first of our hotels to be 88

GENERAL INFORMATION OF OUR GROUP

opened and operated in the Central Business District area and was also our flagship hotel. Both Fragrance Hotel-Rose and Fragrance Hotel Selegie are Redeveloped Properties. Fragrance Hotel-Rose was acquired in November 2004 and its construction and development works were completed in April 2005. The land parcels for Fragrance Hotel-Selegie were acquired between December 2003 and August 2004 and the construction and development works for the hotel were completed in December 2005. We commenced operations of our first backpacker hostel named Fragrance Hostel. It has a total of 17 rooms with 102 beds and is located at 63 Dunlop Street. 2006 We commenced operations of Fragrance Hotel-Kovan. Fragrance Hotel-Kovan is a 43-room hotel located at 760 Upper Serangoon Road and is a Redeveloped Property. Fragrance Hotel-Kovan was acquired in October 2005 and its construction and development works were completed in July 2006. 2007 We commenced operations of four (4) hotels, namely, Fragrance Hotel-Viva, Fragrance Hotel-Lavender, Fragrance Hotel-Imperial and Fragrance Hotel-Oasis as we expanded our presence in the city-fringe areas. We built hotels in the city and city-fringe areas because of its convenient location and ease of access to major roads, public buses and the MRT. All these four (4) hotels are Redeveloped Properties. Fragrance Hotel-Viva was acquired in September 2006 and its construction and development works were completed in June 2007. Fragrance Hotel-Lavender was acquired in December 2006 and its construction and development works were completed in September 2007. Fragrance Hotel-Imperial was acquired in January 2007 and its construction and development works were completed in November 2007. Fragrance Hotel-Oasis was acquired in September 2006 and its construction and development works were completed in November 2007. Fragrance Hotel-Viva is a 33-room hotel and is located at 75 Wishart Road. Fragrance Hotel-Lavender is a 35-room hotel and is located at 51 Lavender Street. Fragrance HotelImperial is a 74-room hotel and is located at 28 Penhas Road. Fragrance Hotel-Oasis is a 36-room hotel and is located at 435 Balestier Road.

89

GENERAL INFORMATION OF OUR GROUP

2008 We commenced operations of two (2) hotels, namely, Fragrance Hotel-Waterfront and Fragrance Hotel-Ocean View as we expanded our presence in the western region of Singapore. Both the hotels are Redeveloped Properties. Fragrance Hotel-Waterfront is a 57-room hotel and is located at 418 Pasir Panjang Road and Fragrance Hotel-Ocean View is a 47-room hotel and is located at 432 Pasir Panjang Road. Fragrance Hotel-Waterfront was acquired in September 2007 and its construction and development works were completed in March 2008. Fragrance Hotel-Ocean View was acquired in February 2008 and its construction and development works were completed in September 2008. 2009 We commenced operations of Fragrance Hotel-Royal to tap on the demand for hotels from tourists visiting Sentosa and the surrounding tourist attractions. Fragrance Hotel-Royal is a Redeveloped Property. It is a 32-room hotel and is located at 400 Telok Blangah Road. Fragrance Hotel-Royal was acquired in January 2009 and its construction and development works were completed in June 2009. 2010 We commenced operations of Fragrance Hotel-Bugis. Fragrance Hotel-Bugis is an 80-room hotel and is located at 33 Middle Road. We acquired the hotel as an office building and through major addition and alteration works, the property was converted to a hotel. We obtained approval from URA to convert Fragrance Hostel to a hotel. 2011 We commenced operations of our first premium brand of hotel, Parc Sovereign Hotel, targeting the mid-tier hotel market. Prior to this, all our hotels targeted the economy-tier market. Parc Sovereign Hotel is a 170-room hotel and is located at 175 Albert Street within the Central Business District area of Singapore. We acquired the land parcel from the government land sales programme in 2009 and developed it into a hotel. We successfully converted and renovated a 7-storey office building located at 103 Beach Road to a 96-room hotel through major addition and alteration works. We subsequently sold this hotel to Sky Property Pte. Ltd. for a consideration of $46 million as we received an attractive offer to purchase the hotel from the purchaser. We successfully converted and renovated our Fragrance Hostel into a 31-room hotel named Fragrance Hotel-Elegance through major addition and alteration works. Fragrance HotelElegance was subsequently sold to IPAH Hotels (Pte) Limited for $14.5 million and we have 90

GENERAL INFORMATION OF OUR GROUP

entered into a tenancy agreement with the third party for a two-year period with an option to renew for a further one (1) year period thereafter. Fragrance Hotel-Elegance was sold to a third party to take advantage of the attractive sale price offered by the third party. In 2010, we commenced the development of a 101-room hotel located at 20 Hongkong Street which we acquired through a private offer. This hotel, Fragrance Hotel-Riverside, commenced operations in November 2011. Restructuring Exercise Acquisition of Subsidiaries Prior to the Invitation, we undertook a restructuring exercise to streamline and rationalise our Group structure. Pursuant to the Restructuring Agreement dated 31 March 2012, our Company acquired: (a) the entire issued and paid-up share capital of Fragrance Capital, comprising 20,000,000 ordinary shares in the capital of Fragrance Capital, resulting in Fragrance Capital becoming a wholly-owned subsidiary of our Company for a consideration of $284,517,694 (based on NTA as at 30 September 2011(1) less a discount of $33,111,984 and a dividend of $10,000,000 declared after 30 September 2011). The shares in Fragrance Capital were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (b) the entire issued and paid-up share capital of Fragrance Ventures, comprising 1,000,000 ordinary shares in the capital of Fragrance Ventures, resulting in Fragrance Ventures becoming a wholly-owned subsidiary of our Company for a consideration of $157,637,036 (based on NTA as at 30 September 2011(1) less a discount of $19,784,057). The shares in Fragrance Ventures were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (c) the entire issued and paid-up share capital of Fragrance Assets, comprising 1,000,000 ordinary shares in the capital of Fragrance Assets, resulting in Fragrance Assets becoming a wholly-owned subsidiary of our Company for a consideration of $73,031,920 (based on NTA as at 30 September 2011(1) less a discount of $9,849,600). The shares in Fragrance Assets were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(d) the entire issued and paid-up share capital of Fragrance Investment, comprising 4,000,000 ordinary shares in the capital of Fragrance Investment, resulting in Fragrance Investment becoming a wholly-owned subsidiary of our Company for a consideration of $32,126,729 (based on NTA as at 30 September 2011(1) less a discount of $4,443,264). The shares in Fragrance Investment were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (e) the entire issued and paid-up share capital of Fragrance Hotel Management, comprising 100,000 ordinary shares in the capital of Fragrance Hotel Management, resulting in Fragrance Hotel Management becoming a wholly-owned subsidiary of our Company for a consideration of $9,473,809 (based on NTA as at 30 September 2011(1)). The shares in 91

GENERAL INFORMATION OF OUR GROUP

Fragrance Hotel Management were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (f) the entire issued and paid-up share capital of Parc Sovereign Hotel Management, comprising 1,000,000 ordinary shares in the capital of Parc Sovereign Hotel Management, resulting in Parc Sovereign Hotel Management becoming a wholly-owned subsidiary of our Company for a consideration of $1,212,812 (based on NTA as at 30 September 2011(1) less a discount of $31,545). The shares in Parc Sovereign Hotel Management were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter.

Note: (1) The NTA for each of our Subsidiaries was based on its respective unaudited management accounts as at 30 September 2011, which takes into account the fair value gain arising from market valuation of the hotels owned by our Group as at 30 September 2011 as per the valuers report dated 22 November 2011 prepared by Colliers International Consultancy & Valuation (Singapore) Pte Ltd.

The aggregate discounts were approximately 9.1% of the aggregate adjusted market value of hotels of $736.7 million and were arrived at on a willing buyer willing seller basis. There was no discount agreed for Fragrance Hotel Management. The market value of $747.6 million assumed that the construction of Fragrance Hotel-Riverside was completed as of 30 September 2011. The market value was adjusted to deduct the incomplete portion of the construction costs as the hotel only commenced operations in November 2011 to arrive at a value of $736.7 million. Pursuant to the Restructuring Exercise, we have acquired each of the Subsidiaries listed above and the assets and liabilities of each of these Subsidiaries would form part of the Group. The aggregate unaudited assets and liabilities for the Subsidiaries as at 30 September 2011 were $812.2 million and $177.0 million respectively. The aggregate unaudited NTA of the Subsidiaries as at 30 September 2011 was $635.2 million. The Purchase Consideration is proposed to be paid by our Company to FGL in the following manner: (a) approximately $345.7 million is to be satisfied in cash by way of loans, obtained directly by our Group and/or internally generated funds of our Group, and insofar as it constituted financial assistance under the Companies Act, duly approved by way of a special resolution passed by each of our Subsidiaries in accordance with Section 76(9B) of the Companies Act within thirty (30) days from the date of the Listing Date; (b) approximately $137.5 million was satisfied by our Company by way of allotment and issuance of 549,999,999 new Shares (Consideration Shares) at an effective price of $0.25 each, credited as fully paid-up to FGL; and (c) approximately $74.8 million is to be satisfied by our Company by way of utilisation of part of the proceeds of the Invitation within thirty (30) days from the date of the Listing Date.

The Restructuring Exercise was completed on 13 April 2012, notwithstanding that (a) and (c) have not been paid as at the time of completion. 92

GENERAL INFORMATION OF OUR GROUP

Sale of properties to FGLs subsidiaries On 30 September 2011, we entered into sale and purchase agreements for the sale of Pasir Panjang Commercial Property, Geylang Industrial Property and Changi Road Property to FGLs wholly-owned Subsidiaries, Fragrance Realty and Fragrance Holdings. The sale of these three properties was part of the Restructuring Exercise to dispose of our non-hospitality properties as well as to resolve potential conflict of interests prior to our listing on the Main Board of the SGX-ST. The proceeds since received have been used for repayment of the advances made by FGL and repayment of term loans. The balance of the proceeds would be used for working capital purposes. Further details on the sale of the three properties can be found in the section entitled Interested Person Transactions and Conflict of Interests Past Interested Person Transactions Sale of properties to FGLs Subsidiaries of this Prospectus.

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GENERAL INFORMATION OF OUR GROUP

Our Corporate Structure

Our corporate structure immediately after the Restructuring Exercise is as follows:

Global Premium Hotels

100% 100% 100% 100%

100%

100%

94
Fragrance Investment Fragrance Ventures Fragrance Hotel Management Parc Sovereign Hotel Management 25 sole proprietorships(1) Three (3) sole proprietorships(1)

Fragrance Assets

Fragrance Capital

Note:

(1) The details of the 25 sole proprietorships owned by Fragrance Hotel Management and the three (3) sole proprietorships owned by Parc Sovereign Hotel Management are set out in the section entitled General Information of our Group Our Subsidiaries and sole proprietorships of this Prospectus.

GENERAL INFORMATION OF OUR GROUP

Our Subsidiaries and sole proprietorships The details of our Subsidiaries and sole proprietorships as at the date of this Prospectus are as follows:
Name of Subsidiary/ sole proprietorship Fragrance Assets Date/place of registration 11 December 2008/Singapore Principal business activities Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Hotel Operations Issued and paid-up capital $1,000,000

Details of ownership Subsidiary 100% owned by our Company Subsidiary 100% owned by our Company Subsidiary 100% owned by our Company Subsidiary 100% owned by our Company Subsidiary 100% owned by our Company Subsidiary 100% owned by our Company Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management

Fragrance Capital

28 July 2000/ Singapore

$20,000,000

Fragrance Investment

13 April 1996/ Singapore

$4,000,000

Fragrance Ventures

17 July 2001/ Singapore

$1,000,000

Fragrance Hotel Management

28 June 1996/ Singapore 29 July 2003/ Singapore 15 November 1997/Singapore 5 February 1998/ Singapore 5 February 1998/ Singapore 29 June 2001/ Singapore 26 September 2001/Singapore 28 October 2002/ Singapore 12 November 2003/Singapore

$100,000

Parc Sovereign Hotel Management Fragrance Hotel-Sapphire

Hotel Operations

$1,000,000

Not Applicable(1)

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Fragrance Hotel-Ruby

Not Applicable(1)

Fragrance Hotel-Emerald

Not Applicable(1)

The Fragrance Hotel

Not Applicable(1)

Fragrance Hotel-Pearl

Not Applicable(1)

Fragrance Hotel-Crystal

Not Applicable(1)

Fragrance Hotel-Balestier

Not Applicable(1)

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GENERAL INFORMATION OF OUR GROUP

Name of Subsidiary/ sole proprietorship Fragrance Hotel-Classic Date/place of registration 15 December 2003/Singapore 18 November 2004/Singapore 2 September 2005/ Singapore 11 June 2005/ Singapore 15 June 2006/ Singapore 26 April 2007/ Singapore 18 July 2007/ Singapore 18 July 2007/ Singapore 3 August 2007/ Singapore 15 February 2008/ Singapore 23 April 2008/ Singapore 24 March 2009/ Singapore 16 March 2010/ Singapore 23 April 2008/ Singapore 22 October 2011/ Singapore 26 October 2004/ Singapore Principal business activities Not Applicable
(1)

Issued and paid-up capital Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Details of ownership Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management

Fragrance Hotel-Rose

Not Applicable(1)

Fragrance Hotel-Sunflower

Not Applicable(1)

Fragrance Hotel-Selegie

Not Applicable(1)

Fragrance Hotel-Kovan

Not Applicable(1)

Fragrance Hotel-Viva

Not Applicable(1)

Fragrance Hotel-Lavender

Not Applicable(1)

Fragrance Hotel-Imperial

Not Applicable(1)

Fragrance Hotel-Oasis

Not Applicable(1)

Fragrance Hotel-Waterfront

Not Applicable(1)

Fragrance Hotel-Ocean View

Not Applicable(1)

Fragrance Hotel-Royal

Not Applicable(1)

Fragrance Hotel-Bugis

Not Applicable(1)

Fragrance Hotel-Elegance

Not Applicable(1)

Fragrance Hotel-Riverside

Not Applicable(1)

Fragrance Hotel-Champagne(2)

Not Applicable(1)

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GENERAL INFORMATION OF OUR GROUP

Name of Subsidiary/ sole proprietorship Fragrance Hotel-Esplanade
(2)

Date/place of registration 16 February 2011/ Singapore 11 June 2005/ Singapore 13 January 2009/ Singapore

Principal business activities Not Applicable

(1)

Issued and paid-up capital Not Applicable Not Applicable Not Applicable

Details of ownership Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Fragrance Hotel Management Sole proprietorship owned by Parc Sovereign Hotel Management Sole proprietorship owned by Parc Sovereign Hotel Management Sole proprietorship owned by Parc Sovereign Hotel Management

Fragrance Hostel(2)

Not Applicable(1)

Parc Sovereign Hotel

Not Applicable(1)

Economy Hotel(2)

20 July 2010/ Singapore

Not Applicable(1)

Not Applicable

Premium Hotel(2)

21 July 2010/ Singapore

Not Applicable(1)

Not Applicable

Notes: (1) Each of our sole proprietorship was registered to carry the name of a hotel/hostel and the Group conducts its business under the names of the various hotels we operate. Our sole proprietorships do not have any business operations of their own. All our sole proprietorships that have been registered to carry the names of the Fragrance brand of hotels are owned by Fragrance Hotel Management, whereas the individual hotel properties under the Fragrance brand are owned by their respective hotel-owning companies namely, Fragrance Capital, Fragrance Investments and Fragrance Ventures. Similarly, whilst Parc Sovereign Hotel property is owned by Fragrance Assets, the sole proprietorship registered to carry its name is held by Parc Sovereign Hotel Management. Fragrance Hotel Management and Parc Sovereign Hotel Management are hotel management companies and do not own any hotels. Please refer to the section entitled General Information of Our Group Properties of this Prospectus for details on the hotels and their respective hotel-owning companies. (2) These sole proprietorships are registered but currently not used for any properties of our Group.

All of our Subsidiaries and sole proprietorships operate in Singapore. None of our Subsidiaries are listed on any stock exchange. We do not have any associated company. Our Business General We operate one of Singapores largest chains of hotels with 23 hotels, of which 22 hotels are operated under our Fragrance brand and one hotel under the Parc Sovereign brand. We provide economy-tier and mid-tier class of accommodation with 1,738 rooms in Singapore, as at the Latest Practicable Date. We own all our hotels save for Fragrance Hotel-Elegance. As at 31 October 2011, the Market Value of all the 22 hotels which we own amounted to S$747.6 million based on the valuation carried out by Colliers International Consultancy & Valuation (Singapore) Pte Ltd. Further details relating to the valuation of the hotels we own are set out in Appendix I entitled Valuers Report of this Prospectus. 97

GENERAL INFORMATION OF OUR GROUP

We are principally engaged in the business of developing and operating of economy-tier to mid-tier class of hotels. Our established track record and reputation of providing affordable accommodation has led to our Fragrance brand of hotels becoming well-recognised in the local and regional hospitality industry. Most of our hotel property assets and hotel operations are located in the city or city-fringe areas. Hotel Operations As at the Latest Practicable Date, we operate all the hotels under the Fragrance brand and Parc Sovereign brand. Each brand of hotels is classified differently and targets different customer groups. The Fragrance Chain targets budget travellers which are value-conscious customers. The hotel facilities provided under the Fragrance brand are therefore basic amenities to provide our guests with a comfortable stay at affordable prices. The Parc Sovereign brand targets business and up-market travellers who are more willing to spend on travel accommodation. Therefore, Parc Sovereign Hotel, pitched as a mid-tier hotel, features more facilities such as a swimming pool, gym and restaurant. All our hotels are designed in accordance with our corporate branding requirements, including the prominent display of our trademarks in order to promote our image and enhance our brand recognition among travellers. We place great importance on the quality of the rooms and services offered by our hotels. All our hotel rooms have individually-controlled air-conditioning systems and an attached bathroom. Our hotel rooms also come with facilities such as international direct dialing telephone services, cable television and complimentary beverages. Some of our hotels offer additional facilities and amenities comprising wireless internet connectivity, swimming pools, restaurants and convenience stores. All our hotel operations staff are trained in-house with a focus on providing quality service to our hotel guests. Most of our hotels are strategically located in the city or city-fringe areas and are easily accessible by major roads, public buses and the MRT. Many of our hotels are also situated near major convention centres, tourist attractions and the Integrated Resorts. Details of the hotels that we operate as at the Latest Practicable Date are set out as follows:
No of Rooms 50 168 126 90 129 Year Operations AOR(3) ARR(3) Commenced (%) ($) 1998 1998 1998 2001 2002 93.6 92.1 92.2 90.6 95.0 75.5 56.9 62.9 67.3 56.2

S/No 1. 2. 3. 4. 5.

Hotel Name Fragrance Hotel-Sapphire Fragrance Hotel-Ruby Fragrance Hotel-Emerald The Fragrance Hotel Fragrance Hotel-Pearl

Address 3 Lorong 10 Geylang Singapore 399037 10 Lorong 20 Geylang Singapore 398730 20 Lorong 6 Geylang Singapore 399174 219 Joo Chiat Road Singapore 427485 21 Lorong 14 Geylang Singapore 398961

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GENERAL INFORMATION OF OUR GROUP

No of Rooms 125 48 48 68 27 120 43 33 35 74 36 57 47 32 80 170 31 101 Year Operations AOR(3) ARR(3) Commenced (%) ($) 2002 2004 2004 2005 2005 2005 2006 2007 2007 2007 2007 2008 2008 2009 2010 2011 2011 2011 90.5 84.2 80.5 91.5 89.5 90.6 85.9 74.0 97.5 96.4 94.3 91.6 81.6 92.2 96.8 88.2 90.7 98.3 61.8 146.5 138.4 78.1 65.5 102.6 166.2 265.2 180.6 107.9 76.4 147.4 161.1 129.7 105.2 133.3 89.2 122.3

S/No 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Hotel Name Fragrance Hotel-Crystal Fragrance Hotel-Balestier Fragrance Hotel-Classic Fragrance Hotel-Rose Fragrance Hotel-Sunflower Fragrance Hotel-Selegie Fragrance Hotel-Kovan Fragrance Hotel-Viva Fragrance Hotel-Lavender Fragrance Hotel-Imperial Fragrance Hotel-Oasis Fragrance Hotel-Waterfront Fragrance Hotel-Ocean View Fragrance Hotel-Royal Fragrance Hotel-Bugis Parc Sovereign Hotel Fragrance Hotel-Elegance(1) Fragrance Hotel-Riverside(2)

Address 50 Lorong 18 Geylang Singapore 398824 255 Balestier Road Singapore 329710 418 Balestier Road Singapore 329808 263 Balestier Road Singapore 329715 10 Lorong 10 Geylang Singapore 399043 183 Selegie Road Singapore 188329 760 Upper Serangoon Road Singapore 534629 75 Wishart Road Singapore 098721 51 Lavender Street Singapore 338710 28 Penhas Road Singapore 208187 435 Balestier Road Singapore 329816 418 Pasir Panjang Road Singapore 118759 432 Pasir Panjang Road Singapore 118773 400 Telok Blangah Road Singapore 098838 33 Middle Road Singapore 188942 175 Albert Street Singapore 189970 63 Dunlop Street Singapore 209391 20 Hongkong Street Singapore 059663

Notes:
(1) (2) (3)

We entered into a tenancy agreement in relation to Fragrance Hotel-Elegance in November 2011. Commenced operations on 29 November 2011. The AOR and the ARR was applicable to the period from 1 January 2012 to the Latest Practicable Date.

99

GENERAL INFORMATION OF OUR GROUP

Hotel Development The hotel property development business and the related refurbishment and maintenance works of the hotels operated under the FGL Group prior to the Restructuring Exercise were handled by our Executive Director, Mr. Lim Chee Chong, Ms. Lee Yen Mei and Mr. Calvin Chew. Mr. Lim Chee Chong was responsible for the overall supervision of residential, commercial and hotel development projects of FGL. Ms. Lee Yen Mei was responsible for overseeing daily hotel operations and she was also involved in monitoring renovations and refurbishments works. Mr. Calvin Chew was the maintenance manager responsible for maintenance of our hotel properties. Mr. Lim Chee Chong, Ms. Lee Yen Mei and Mr. Calvin Chew are now employees of our Group and shall provide their expertise to our Group exclusively. Accordingly, our Directors are of the view that we continue to have the necessary expertise for hotel development upon completion of the Restructuring Exercise. We regularly search for hotels to purchase and potential sites for hotel development. Before we acquire any hotel, site or property for development or conversion into a hotel, we will assess the estimated earnings from the gross development value and hotel operations. The evaluation process usually involves the following stages: (a) identification of the potential property or site for hotel development either through a private offer or a government land sales program; (b) market research as well as a feasibility study to evaluate the viability, profitability and the potential risks involved in undertaking the particular hotel development project through capital budgeting and project evaluation processes. Relevant factors taken into consideration include purchase price of the site, availability of financing, restrictions or requirements imposed by the relevant authorities in respect of the site, population density, traffic flows, competition from neighbouring development as well as the profile of potential tourists; and (c) consultation with external specialists, professionals and qualified persons to ascertain the construction cost and maximum realisable potential of the development site.

The aforementioned factors which are specific to the identified land site will be reviewed together with other considerations which may be more broad-based. Such broad-based considerations that may also have an impact on the investment decision include the global economic outlook and business environment in Singapore, the overall travellers patterns and trends of the hospitality and hospitality-related industries. Upon completion of the evaluation process, if the potential property or land site is found to be suitable, we may proceed to tender for such potential property or land site. Once the development of the hotel is completed, we will commence operations upon obtaining the relevant regulatory approvals. We will appoint either Fragrance Hotel Management or Parc Sovereign Hotel Management to be the operator of the hotel depending on the marketing strategy and classification of the hotel according to our initial evaluation. We may also consider disposing of the hotel property as and when the opportunity arises.

100

GENERAL INFORMATION OF OUR GROUP

Apart from hotel development, we actively carry out refurbishment works on our hotels so as to keep them modern and new. This will potentially attract new hotel guests and increase their length of stay. Marketing Our hotel marketing team, led by our Executive Directors, Mr. Lim Chee Chong and Mr. Sim Mong Yeow, are responsible for the marketing of Our Chain of Hotels. The marketing team focuses on promoting our hotels in the Asia-Pacific region. Our marketing channels include the following: (a) Tourism Trade Conventions and Exhibitions We have participated in tourism trade conventions and exhibitions in the Asia-Pacific region such as the China International Trade Mart, ASEAN Tourism Forum and Malaysian Association of Tour and Travel Agents International Travel Exhibition. In addition, we also actively participate in overseas road shows, consumer fairs and product updates organised by the STB. (b) Advertisements and Online Reservations We advertise in trade magazines which are circulated within the tourism industry in the Asia-Pacific region as well as in newspapers, television, buses and cinemas. In addition, we have promotional materials relating to Our Chain of Hotels which are distributed to local and foreign travel agents and hotel guests. Other than traditional forms of advertising, our Group has also used innovative methods to advertise our hotels. In 2008, we embarked on a marketing campaign by adopting a family-friendly theme with our Bear mascot and the advertisement was widely shown on television, public cinemas and public buses. To build upon the success of our Bear mascot marketing campaign, we had in September and December 2009 given out soft toy bears which were dressed in F1 Costume and Christmas Costume respectively to all guests who stayed at our hotels. We accept online hotel reservations through our websites http://www.fragrancehotel.com and http://www.parcsovereign.com. (c) Promotional tie-ups with Tourism-Related Companies We also market our hotels through collaborations with tourism-related companies. For example, certain airlines have offered tour packages which include accommodation at our hotels together with airline tickets. In addition, we also collaborate with local and foreign travel agents who offer customised travel packages. These customised travel packages provide accommodation at discounted rates at selected hotels in Our Chain.

101

GENERAL INFORMATION OF OUR GROUP

Parc Sovereign Hotel, Fragrance Hotel-Ruby and Fragrance Hotel-Sapphire are members of the Singapore Hotel Association. The SHA maintains a list of member hotels at the Changi International Airport hotel reservation bureau at which air travellers may make enquiries and direct reservations for hotel rooms. Fragrance Hotel-Sapphire and Fragrance Hotel-Ruby were the first two hotels which were operated by our Group in 1998. In order to generate awareness of our Fragrance brand and demand for our hotel rooms, these two hotels were registered with SHA. We also registered Parc Sovereign Hotel with SHA as Parc Sovereign Hotel is our first mid-tier hotel in order to further promote the new hotel. (d) Business Partners We have established a good working relationship with more than 900 local and overseas travel agents, who will promote our hotels worldwide with their travel packages, and corporate clients. Besides that, we work closely with various leading on-line travel agents such as Booking.com, AsiaTravel.com and Agoda.com, to promote our hotels through various on-line channels. We have also entered into contractual arrangements with corporate clients such as shipping companies for the provision of accommodation to their staff and crew during their stay in Singapore. Property Management System Our hotel reservations and billing processes rely heavily on the PMS to effectively manage our guests, reservations and billings as well as the billings to our business partners. The PMS allows us to centrally manage all our 23 hotels island-wide so as to maximise hotel occupancy rates and reduce the manpower required for manual updates. By being able to monitor the occupancy status of Our Chain of Hotels in real-time, we are able to increase the overall occupancy and room revenue of our hotels. Staff Training and Development To assist employees in achieving a better quality of work and higher safety standards, we carry out a half-day orientation programme and a two-day in-house induction course for new employees as well as provide on-the-job training. The two-day induction course comprises of training conducted by our general manager on operational matters and training conducted by our information technology manager on operating systems, primarily the operation of our PMS. Room Rates Our room rates depend on a variety of factors such as the location of the hotel, the demand and supply of our hotel rooms, the pricing of hotel accommodation by our competitors, conditions in the hotel industry, and whether there is a pre-existing customer relationship with the hotel guests, or relevant travel agents or other tourism-related companies. Intellectual Property We believe that our trademarks are an integral part of our Groups focus on branding, and play a significant role in creating brand recognition for our hotels. As such, we have registered or are in the process of registering our trademarks in Singapore. 102

GENERAL INFORMATION OF OUR GROUP

As at the Latest Practicable Date, we have registered the following trademarks:
Duration of Right (including expiry date) Ten (10) Years (due for renewal on 13 November 2013)

Nature and Description of Intellectual Property Right Trademark No. T03/18398D in Class 43 in respect of: Provisions of temporary accommodations; Preparation of food and drink

Granted By Registry of Trade Marks, Intellectual Property Office of Singapore

Right of Renewal Registration is for a period of ten (10) years and may be renewed at the expiration of this period and upon the expiration of each succeeding period of ten (10) years

Trademark No. T03/18397F in Class 43 in respect of: Provisions of temporary accommodations; Preparation of food and drink

Registry of Trade Marks, Intellectual Property Office of Singapore

Ten (10) Years (due for renewal on 13 November 2013)

Registration is for a period of ten (10) years and may be renewed at the expiration of this period and upon the expiration of each succeeding period of ten (10) years

As at the Latest Practicable Date, we have applied for the registration of the following trademark:
Trademark Country of Registration Singapore Class Class 43 in respect of: Hotels Status Pending Trade Mark Number T1112196H Date of Application 31 August 2011

Singapore

Class 35 in respect of: business management of hotels, motels and temporary accommodation Class 43 in respect of: Provisions of temporary accommodations; Preparation of food and drink

Pending

TT12103271C 9 March 2012

103

GENERAL INFORMATION OF OUR GROUP

Our Directors are not aware of any reason which would cause or lead to the non-registration of the above-mentioned trademarks. To the best of our Directors knowledge and belief, there is no third party that is currently using a trademark that is similar to the above-mentioned trademarks. Save as disclosed above, our business and profitability are not materially dependent on any registered trademark or trademark pending registration, patent, or other intellectual property right. Insurance As at the Latest Practicable Date, we had taken up insurance policies in respect of the following: (a) work injury compensation insurance; (b) public liability insurance in respect of accidental bodily injury to third parties and accidental loss and/or damage to third parties properties; (c) fidelity guarantee insurance in respect of loss suffered by act of fraud or dishonesty of employee;

(d) money insurance in respect of loss of money; (e) foreign worker medical insurance; (f) fire insurance;

(g) motor vehicle insurance; (h) hospital and surgical insurance for our employees; and (i) group business travel insurance.

Our Directors are of the view that the above insurance policies are adequate for our existing operations. However, significant damage to our operations, whether as a result of fire or other causes, may still have a material adverse effect on our results of operations or financial position. If such events were to occur, our business, results of operations and financial position may be materially or adversely affected. Please refer to the section entitled Risk Factors of this Prospectus for further details. We are not insured against loss of key personnel and business interruption as we understand that such insurance policies are not commonly purchased in the hotel industry. Our Directors will review the adequacy of our insurance coverage in relation to our business annually. Credit Management Credit Policy for Our Customers The credit term granted to selected customers, including selected travel agents, on-line travel agents and corporate customers is typically 30 days and dependent on the following factors: (a) paid-up capital of the customer; (b) date of incorporation of the customer; (c) key management personnel of the customer; 104

GENERAL INFORMATION OF OUR GROUP

(d) background checks on the customer, such as its reputation, industry feedback and market presence; and (e) the customers sales volume with our Group. For customers who have exceeded their credit limit, their accounts will be blocked thus preventing any further bookings. In order to unblock their accounts, either of the following must take place: (a) payment has been made, which will bring the outstanding amount below 85% of the applicable credit limit. If the outstanding amount is still above 85% of the applicable credit limit after payment, management approval will be required to uplift the credit hold; or (b) management has approved a temporary uplifting of the credit hold. We have not experienced any significant bad debts for our trade receivables for the last three (3) financial years ended 31 December 2010 and for 9M2011. Details of the average trade receivables turnover days for FY2008, FY2009, FY2010 and 9M2011 are set out as follows:
FY2008(1) Trade receivables turnover (days)(3)
Notes: (1) Trade receivables turnover (days) = (Average trade receivables divided by total revenue) x 365 days. (2) Trade receivables turnover (days) = (Average trade receivables divided by total revenue) x 273 days. (3) We have excluded GST in the computation of average trade receivables.

FY2009(1) 11.6

FY2010(1) 8.2

9M2011(2) 8.7

11.8

Our trade receivables turnover days ranged between 8.2 to 11.8 days. The decrease in number of trade receivables turnover days from FY2009 to FY2010 was due to more stringent internal controls pertaining to the management of credit limits of customers. Credit Policy from Our Suppliers Our suppliers typically grant us a credit term of about 30 days from the date of invoice. We maintain a good credit track record with our suppliers. Details of the average trade payables turnover days for FY2008, FY2009, FY2010 and 9M2011 are set out as follows:
FY2008(1) Trade payables turnover (days)(3)
Notes: (1) Trade payables turnover (days) = (Average trade payables divided by cost of sales (adjusted to include repair and maintenance costs)) x 365 days. (2) Trade payables turnover (days) = (Average trade payables divided by cost of sales (adjusted to include repair and maintenance costs)) x 273 days. (3) We have excluded GST and retention sum payable in the computation of average trade payables.

FY2009(1) 35.1

FY2010(1) 36.2

9M2011(2) 28.2

34.8

105

GENERAL INFORMATION OF OUR GROUP

Our trade payable turnover days ranged between 28.2 to 36.2 days. The trade payable turnover days declined from 36.2 days in FY2010 to 28.2 days in 9M2011. This can be attributed to the Group adopting a pro-active approach in terms of payment to our suppliers, and in line with the Groups policy of enhancing our business relationships with our suppliers. Major Customers Our customers comprise mainly travel agents, on-line travel portals, business entities and walk-in customers. The breakdown by revenue derived from rental of hotel rooms across the customer groups for FY2008, FY2009, FY2010 and 9M2011 is as follows:
FY2008 % Travel agents On-line travel portals Business entities Walk-in customers Total 14.6 5.4 5.9 74.1 100.0 FY2009 % 7.2 12.0 6.0 74.8 100.0 FY2010 % 16.7 12.4 5.2 65.7 100.0 9M2011 % 25.1 19.0 5.7 50.2 100.0

No single customer contributed 5% or more of our total revenue during FY2008, FY2009, FY2010 and 9M2011. Major Suppliers The following suppliers accounted for 5% or more of our total cost of sales (adjusted to include repair and maintenance costs) in FY2008, FY2009, FY2010 and 9M2011.
% of Cost of Sales FY2009 FY2010 21.9 8.2 7.7 10.9 10.4 6.0 1.0 4.1 27.2 6.9 18.2 9.8 3.4 3.5 5.5

Name of Supplier Seraya Energy Pte Ltd SP Services Ltd Flash Laundry Pte Ltd Zero Spot Laundry Services Pte Ltd iFood Pte Ltd Starhub Cable Vision Ltd Singapore Telecommunications Ltd Fortuna Air-conditioning & Electrical Pte Ltd

FY2008 22.3 14.4 21.0 13.3 5.7 1.1 3.4

9M2011 2.7 36.0 1.0 15.2 9.2 1.8 5.8 4.2

The decrease in percentage of cost of sales from SP Services Ltd from FY2008 to FY2009 was due to five of our hotels, namely Fragrance Hotel-Waterfront, Fragrance Hotel-Ocean View, Fragrance Hotel-Selegie, Fragrance Hotel-Kovan and Fragrance Hotel-Imperial switching to Seraya Energy Pte Ltd with effect from June 2009.

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GENERAL INFORMATION OF OUR GROUP

The increase in percentage of cost of sales from Seraya Energy Pte Ltd from FY2009 to FY2010 was due mainly to higher AORs for our Group in FY2010 compared to FY2009. The decrease in percentage of cost of sales from Seraya Energy Pte Ltd from FY2010 to 9M2011 and the increase in percentage of cost of sales from SP Services Ltd from FY2010 to 9M2011 was due to all our hotels switching from Seraya Energy Pte Ltd to SP Services Ltd from January 2011. The decrease in percentage of cost of sales from Flash Laundry Pte Ltd from FY2008 to FY2009 was due to us partially switching to Zero Spot Laundry Services Pte Ltd for laundry services with effect from May 2009. Thereafter, save for Parc Sovereign Hotel which commenced operations only in 9M2011, all our hotels switched to Zero Spot Laundry Services Pte Ltd in FY2010. iFood Pte Ltd provides breakfast meals for two of our hotels, Fragrance Hotel-Selegie and Fragrance Hotel-Imperial. The percentage of costs of sales from iFood Pte Ltd decreased from FY2008 to FY2009 due to the reduction in cost of meals and occupancy rates at these two hotels. The decrease in percentage of cost of sales from Starhub Cable Vision Ltd from FY2009 to 9M2011 was due to us switching to Singapore Telecommunications Limited for cable services with effect from June 2010. The increase in percentage of cost of sales from Fortuna Air-conditioning & Electrical Pte Ltd from FY2009 to FY2010 was due mainly to additional repairs and replacements of airconditioners carried out in FY2010. Properties As at the Latest Practicable Date, we own the following properties:
Owner of Property Fragrance Assets Name of Hotel/ Location Parc Sovereign Hotel 175 Albert Street Singapore 189970 Fragrance Capital Fragrance Hotel-Sapphire 3 Lorong 10 Geylang Singapore 399037 Fragrance Capital Fragrance Hotel-Emerald 20 Lorong 6 Geylang Singapore 399174 817.5 sq. m. Freehold Estate $36,540,000 Hotel 528.1 sq. m. Area 1,164.6 sq. m. Tenure Leasehold Estate (99 Years with approximately 97 years remaining) Freehold Estate Valuation as at 31 October 2011 $108,000,000 Purpose/Use of Property Hotel

$16,900,000

Hotel

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GENERAL INFORMATION OF OUR GROUP

Owner of Property Fragrance Capital Name of Hotel/ Location Fragrance Hotel-Pearl 21 Lorong 14 Geylang Singapore 398961 Fragrance Capital Fragrance Hotel-Crystal 50 Lorong 18 Geylang Singapore 398824 Fragrance Capital Fragrance Hotel-Balestier 255 Balestier Road Singapore 329710 Fragrance Capital Fragrance Hotel-Classic 418 Balestier Road Singapore 329808 Fragrance Capital Fragrance Hotel-Rose 263 Balestier Road Singapore 329715 Fragrance Capital Fragrance Hotel-Sunflower 10 Lorong 10 Geylang Singapore 399043 Fragrance Capital Fragrance Hotel-Selegie 183 Selegie Road Singapore 188329 Fragrance Capital Fragrance Hotel-Kovan 760 Upper Serangoon Road Singapore 534629 Fragrance Capital Fragrance Hotel-Lavender 51 Lavender Street Singapore 338710 Fragrance Capital Fragrance Hotel-Imperial 28 Penhas Road Singapore 208187 Fragrance Capital Fragrance Hotel-Oasis 435 Balestier Road Singapore 329816 229.3 sq. m. Freehold Estate $15,000,000 Hotel 544.0 sq. m. Freehold Estate $37,000,000 Hotel 219.9 sq. m. Freehold Estate $17,500,000 Hotel 284.2 sq. m. Freehold Estate $20,000,000 Hotel 468.3 sq. m. Freehold Estate $60,000,000 Hotel 322.8 sq. m. Freehold Estate $8,370,000 Hotel 399.9 sq. m. Freehold Estate $31,300,000 Hotel 265.2 sq. m. Freehold Estate $23,800,000 Hotel 244.6 sq. m. Freehold Estate $23,000,000 Hotel 1,051.1 sq. m. Freehold Estate $36,250,000 Hotel Area 843.1 sq. m. Tenure Freehold Estate Valuation as at 31 October 2011 $37,410,000 Purpose/Use of Property Hotel

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GENERAL INFORMATION OF OUR GROUP

Owner of Property Fragrance Investment Name of Hotel/ Location Fragrance Hotel-Ruby 10 Lorong 20 Geylang Singapore 398730 Fragrance Ventures The Fragrance Hotel 219 Joo Chiat Road Singapore 427485 Fragrance Ventures Fragrance Hotel-Viva 75 Wishart Road Singapore 098721 Fragrance Ventures Fragrance Hotel-Waterfront 418 Pasir Panjang Singapore 118759 Fragrance Ventures Fragrance Hotel-Ocean View 432 Pasir Panjang Road Singapore 118773 Fragrance Ventures Fragrance Hotel-Royal 400 Telok Blangah Road Singapore 098838 Fragrance Ventures Fragrance Hotel-Bugis 33 Middle Road Singapore 188942 Fragrance Ventures Fragrance Hotel-Riverside 20 Hongkong Street Singapore 059663 513.3 sq. m. 348.3 sq. m. Leasehold Estate (999 Years with approximately 823 Years remaining) Leasehold Estate (99 Years with approximately 99 Years remaining) $44,000,000 Hotel 278.2 sq. m. Freehold Estate $18,400,000 Hotel 255.5 sq. m. Freehold Estate $26,800,000 Hotel 477.7 sq. m. Freehold Estate $33,000,000 Hotel 300.1 sq. m. Freehold Estate $20,000,000 Hotel 672.1 sq. m. Freehold Estate $27,000,000 Hotel Area 902.1 sq. m. Tenure Freehold Estate Valuation as at 31 October 2011 $48,720,000 Purpose/Use of Property Hotel

$58,600,000

Hotel

As at the Latest Practicable Date, we lease the following properties:

Property leased by Fragrance Hotel Management Registered Owner Chevalier Development (S) Pte. Ltd. Rental (per month) $2,800 Purpose/ Use of Property Warehouse(1)

Location 23 Genting Road #03-03 Singapore 349481

Area 2,200 sq. ft.

Tenure Two Years From 20 April 2010 Till 19 April 2012

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GENERAL INFORMATION OF OUR GROUP

Property leased by Fragrance Hotel Management Registered Owner IPAH Hotels (Pte.) Limited Rental (per month) $70,000 Purpose/ Use of Property Hotel

Location 63 Dunlop Street Singapore 209391

Area 237.5 sq. m.

Tenure Two Years From 26 November 2011 Till 25 November 2013 with an option to renew for further 1 year

Note: (1) For the purposes of storing our consumables, furniture and fittings. We will not be renewing this lease upon its expiry on 19 April 2012. We intend to utilise storage space in our various hotel premises following expiry of the lease for the above purposes.

Permits, Licences, Approvals, Certifications and Government Regulations The following are brief descriptions of the material licences typically obtained for hotel operations: Certificate of Registration & Hotel-keepers Licence Under the Hotels Act, a hotel includes a boarding-house, lodging-house, guest-house and any building or premises not being a public institution and containing not less than four rooms or cubicles in which persons are harboured or lodged for hire or reward of any kind and where any domestic service is provided by the owner, lessee, tenant, occupier or manager for the person so harboured or lodged. Under Section 5(1) of the Hotels Act, any person who wishes to operate a hotel has to apply to the Hotels Licensing Board for a Certificate of Registration to use the premises as a hotel. The Certificate of Registration is only granted if the Hotels Licensing Board is satisfied: (a) that the premises will not be conducted as a disorderly house; (b) that the premises to be registered are structurally adapted for use as a hotel; (c) that proper provision has been made in all respects for the sanitation of the premises;

(d) that the situation of the premises is suitable for the purpose; and (e) that the standard of accommodation provided is adequate for the class within which the applicant desires the premises to be registered as a hotel. We have obtained the Certificate of Registration for each of our 23 hotels from the Hotel Licensing Board. Additionally, under Section 7(1) of the Hotels Act, any person who wishes to operate a hotel also has to apply for a Hotel-keepers Licence to enable the person to keep or manage the 110

GENERAL INFORMATION OF OUR GROUP

hotel. A separate Hotel-keepers Licence is required in respect of each individual hotel. Moreover, under the Hotels Licensing Boards qualification requirements, the proposed Hotelkeeper has to be a person who holds a post equivalent to that of a chief executive officer or general manager of the hotel and must either be a Singaporean, Permanent Resident or an Employment Pass holder. Furthermore, Section 7(6) of the Hotels Act provides that no licence shall be granted by the Hotels Licensing Board unless the person applying satisfies the Hotels Licensing Board that the premises in respect of which the application is made will not be conducted as a disorderly house and he is of good character and a fit and proper person to keep and manage a hotel. A Hotel-keepers Licence is valid for one (1) year and is renewable annually. As at the Latest Practicable Date, we have not had any difficulties renewing the Hotel-keepers Licence for our hotels. All hotel operators must also comply with the Hotels Licensing Regulations which prescribe certain requirements in connection with the control and management of a hotel and the standards of hygiene. For example, the Hotels Licensing Regulations require every licensee to keep displayed in a conspicuous place in the public part of the hotel the certificate of registration of the hotel, the licence to manage the hotel, and the rates charged for rooms in the hotel. In addition, all rooms used for the accommodation of guests must have a minimum floor area of 11.0 square metres and that a double room must have a minimum floor area of 14.5 square metres. The following are the Hotel-keepers Licences held in connection with our hotel operations:
Name of Licensee Mr. Sim Mong Yeow Relevant Hotel Fragrance Hotel-Sapphire Fragrance Hotel-Ruby Fragrance Hotel-Emerald The Fragrance Hotel Fragrance Hotel-Pearl Fragrance Hotel-Crystal Fragrance Hotel-Balestier Fragrance Hotel-Classic Fragrance Hotel-Rose Fragrance Hotel-Sunflower Fragrance Hotel-Selegie Fragrance Hotel-Kovan Fragrance Hotel-Viva Fragrance Hotel-Lavender Fragrance Hotel-Imperial Fragrance Hotel-Oasis Fragrance Hotel-Waterfront Fragrance Hotel-Ocean View Fragrance Hotel-Royal Fragrance Hotel-Bugis Fragrance Hotel-Riverside Regulatory Body Hotels Licensing Board Validity 1 January 2012 to 31 December 2012

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GENERAL INFORMATION OF OUR GROUP

Name of Licensee Mr. Lim Chee Chong Ms. Lee Yen Mei Relevant Hotel Parc Sovereign Hotel Fragrance Hotel-Elegance Regulatory Body Hotels Licensing Board Hotels Licensing Board Validity 1 January 2012 to 31 December 2012 1 January 2012 to 31 December 2012

Liquors Licence The Customs Act requires that a liquor licence be obtained from the Liquors Licensing Board for the sale of intoxicating liquor. The administration and enforcement of the Customs Act falls under the purview of the Liquors Licensing Board of the MHA. The liquors licence is valid for a period of not more than two (2) years. The grant and renewal of the liquors licence is at the discretion of the Liquors Licensing Board, which also has the discretion to suspend or cancel the liquors licence at any time. The following are the Liquor Licences held in connection with our hotel operations:
Name of Licensee Ms. Lee Kay Him Ms. Lee Yen Mei Mr. Sim Mong Yeow Relevant Hotel The Fragrance Hotel Fragrance Hotel-Emerald Fragrance Hotel-Ruby Regulatory Body Liquors Licensing Board Liquors Licensing Board Liquors Licensing Board Validity 1 January 2012 to 31 December 2013 1 January 2012 to 31 December 2013 1 January 2012 to 31 December 2013

Employment of Foreign Workers The availability and the employment cost of skilled and unskilled foreign workers are affected by the Singapore governments policies and regulations on the immigration and employment of foreign workers. The policies and regulations are set out in, inter alia, the Employment of Foreign Manpower Act and the relevant Government Gazettes. The availability of foreign workers for hotel operations is regulated by the MOM through the following: (a) approved source countries; (b) issuance of work permits; (c) the imposition of security bonds and levies; and

(d) set ratios for local to foreign workers. An employer of foreign workers is also subject to, inter alia, the provisions set out in the Employment Act, the Employment of Foreign Manpower Act, the Immigration Act and the Immigration Regulations.

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GENERAL INFORMATION OF OUR GROUP

Electrical Installation Licence Under the Electricity Act, no person shall use, work or operate or permit to be used, worked or operated any electrical installation without an electrical installation licence granted by the EMA. The licensee is required to ensure that the electrical installation is properly maintained and inspected in accordance with the terms of the licence. Any licensee who fails to comply with the terms of such electrical installation licence may be guilty of an offence and may be liable on conviction to monetary fines and/or custodial sentences. An electrical installation licence shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed. As at the Latest Practicable Date, all electrical installation licences for each of our 23 hotels have been obtained and are valid. Fire Certificate Under the Fire Safety Act, the owner of any public building, including a hotel, with an occupant load of more than 200 persons, is required to apply and obtain a fire certificate. The administration and enforcement of the Fire Safety Act falls under the purview of the MHA. Any person who fails to comply with the requirement to apply and obtain a fire certificate shall be guilty of an offence and shall be liable on conviction to monetary fines and/or custodial sentences. The fire certificate is valid for the period stated therein and for a period of not more than one (1) year. The fire certificate may be renewed upon its expiry. As at the Latest Practicable Date, all fire certificates required for our hotel operations have been obtained and are valid. Signboard Licence Under Section 3(1) of the Building Control (Outdoor Advertising) Regulations 2002, a licence is required to be obtained prior to displaying or causing or permitting to be displayed outdoors any single signboard that has an area exceeding five (5) square metres or a series of related signboards that together have an aggregate area exceeding five (5) square metres. Any person who fails to comply with this requirement shall be guilty of an offence and shall be liable on conviction to monetary fines. A signboard licence shall be valid for the period stated therein unless it is revoked before the expiry of that period and will need to be renewed upon its expiry. As at the Latest Practicable Date, all signboard licences for each of our 23 hotels have been obtained and are valid. To the best of our Directors belief and knowledge, we have obtained all material licences, permits, approvals and certifications for our business operations in Singapore and believe we have complied with all relevant laws and regulations that would materially affect our business operations. We will renew our licences, permits, approvals and certifications as and when required. Our Directors are not aware of any reason which would cause or lead to non-renewal of any of the necessary licences, permits, approvals and certifications for our business and operations.

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GENERAL INFORMATION OF OUR GROUP

Fines and Penalties We had, from time to time, incurred fines imposed by regulatory authorities including the MOM, SCDF, NEA, BCA and CPF. The fines generally related to our Groups business operations, such as fines for mosquito breeding and late payment of foreign workers levy. Each of these fines range from $50 to $6,200 during the Period Under Review. The aggregate of such fines imposed by regulatory authorities on our Group for FY2010 and between 1 January 2012 to Latest Practicable Date were $682 and $50 respectively. There were no fines imposed in FY2009. For FY2011, there was an aggregate fine of $6,600 of which $6,200 was imposed in relation to contraventions of the Employment of Foreign Manpower Act for not updating the MOM of certain foreign workers addresses and the use of unsuitable accommodations by certain foreign workers employed by our Group and the balance of $400 was a fine in relation to mosquito breeding. The types of unsuitable accommodation which could lead to a contravention of the Employment of Foreign Manpower Act are not exhaustive. However, we understand from the Ministry of Manpower that to avoid any contravention of this requirement, the following factors must be considered: (i) no over-crowding within the accommodation utilised and (ii) provision of proper sanitation facilities. The fines imposed by the MOM on our Group for the use of unsuitable accommodation were in relation to over-crowding in the accommodation utilised. We also understand from our discussion with MOM that any application for foreign workers work permits for the period of three (3) months from 18 July 2011 to 18 October 2011 by our Group would not likely to have been approved in light of the contraventions discussed above. As at the Latest Practicable Date, we understand that such restriction has been lifted and our applications for foreign workers work permits made after 18 October 2011 have been approved by the MOM. To minimise fines imposed by regulatory authorities, we have put in place the following measures: Mosquito Breeding We have reminded all our staff at our various hotels to be vigilant to ensure that no stagnant water is collected in any part of our hotels and our maintenance team has also been alerted to assist in this area. We have also engaged a professional pest control company to conduct regular monthly inspections of all our hotels. Late Payment Penalty for Foreign Workers Levy Our human resources department will assist to keep our accounts department informed at least fourteen days in advance of the due date for payment of foreign workers levy so as to ensure timely payment of foreign workers levies prior to their due date. Unacceptable Accommodation/Update of Workers Address We had relocated our foreign workers to dormitories approved by the MOM by 15 August 2011 in compliance with the stipulated deadline of 18 August 2011, save where we were satisfied that such foreign workers were staying on their own in proper accommodation complying with 114

GENERAL INFORMATION OF OUR GROUP

relevant MOM regulations. We will continue to impress upon our foreign workers the importance of updating their address details as soon as they have changed their address and we have also instructed our hotel duty managers to ensure this is done. We will also conduct regular checks on the accommodation of those foreign workers who stay on their own. Our Directors will periodically review the adequacy of our Groups operational and compliance controls, including reviewing the list of the fines imposed by regulatory authorities on our Group for each financial year, and provide directions for the implementation of preventive measures as appropriate. Breach of Hotel Licensing Regulations Our Executive Directors, Mr. Lim Chee Chong and Mr. Sim Mong Yeow, the licensees of some of our hotels, previously assisted the police in investigations relating to breach of hotel licensing regulations and some of these investigations resulted in warnings, conditional warnings and a reminder by the police. Mr. Lim assisted the police with investigations relating to vice activities being carried out at Parc Sovereign Hotel. Mr. Sim assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Kovan in May 2011 and September 2010, at Fragrance Hotel-Imperial and Fragrance Hotel-Lavender in September 2010 and December 2010 respectively, at Fragrance Hotel-Balestier in November 2010 and at Fragrance Hotel-Lavender in November 2011 and December 2011. Please refer to the section entitled Directors, Management and Staff Material Background Information on our Directors, Key Executives and Controlling Shareholders of this Prospectus for details on these investigations. In order to prevent any such re-occurrence and as part of our operating procedure, our front desk staff requests for full particulars of guests as required by the Hotels Licensing Regulations on check-in. There are signs at each check-in counter requesting guests to provide us with such information. Our staff shall reject or deny accommodation to any person who refuses to fully furnish his or her particulars to us as required by the Hotels Licensing Regulations. In addition, we will enhance our checks on all guests and/or visitors and reject or deny accommodation to those whom we suspect might be involved in illegal activities. Furthermore, all our staff including those working in the front desk and the room attendants have to report any suspected illegal activities involving any guest or visitor to their respective duty manager on a daily basis. Our duty manager will then investigate and take appropriate actions, including requesting the alleged guest and/or visitor to leave our hotel and/or reporting them to the relevant authorities. In addition, we will continue to evaluate the necessity of installing additional cameras to strengthen our hotels 24 hour surveillance system. We will also rely on our Property Management System to black-list certain guests so as to prevent them from staying in our hotels. Furthermore, we are committed to providing continuous support to the police and other relevant authorities for all necessary investigations as we also hope to deter all illegal activities.

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GENERAL INFORMATION OF OUR GROUP

Competition The operation of hotels in Singapore is highly competitive. The principal factors that affect our business are location, room rate, service, supply and demand for hotel rooms and changes in travel patterns and preferences. We face intense competition from other hotels that may offer more facilities at their premises at similar or more competitive prices. To the best of our knowledge, our key competitors are: (a) Albert Court Village Hotel; (b) Aqueen Hotel; (c) Bayview Hotel;

(d) Grand Chancellor Hotel; (e) Hotel Grand Pacific; (f) Hotel 81 chain;

(g) Ibis Hotel; (h) Strand Hotel; (i) (j) (k) Santa Grand Hotel chain; V Hotel Lavender; and Value Hotel chain.

None of our Directors or Controlling Shareholders or their respective Associates has any interest, direct or indirect, in any of the above-mentioned competitors. Competitive Strengths Our Directors believe that our competitive strengths are as follows: Established and distinctive brand name We have been developing and operating hotels in Singapore since 1995 and as at the Latest Practicable Date, we operate 23 hotels across Singapore with 1,738 rooms. Our established track record and reputation of providing affordable and value-for-money accommodation in terms of price, location, service and cleanliness has led to our Fragrance brand of hotels becoming well-established in the local and regional hospitality industry.

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GENERAL INFORMATION OF OUR GROUP

We believe that our distinctive brand, as well as our value proposition of providing quality accommodation at affordable prices, enables us to differentiate ourselves from our competitors. Dedicated and experienced key management personnel We have an experienced management team who are hands-on, have in-depth knowledge of hotel operations and hotel property development, and have a strong understanding of the local hospitality and property market. Our Directors, Mr. Koh Wee Meng, Mr. Lim Chee Chong and Mr. Sim Mong Yeow collectively have approximately 27 years of experience in hotel operations and hotel property development with approximately 15 years, 5 years and 7 years of experience respectively. We believe that the management teams depth and breadth of experience has enabled us to enjoy considerable success in the development and the operations of our hotels. Our Directors have been successful in implementing the growth strategies of expanding our hotels portfolio which has in turn contributed to an increase in revenue over the years. Further details of our management teams working experience is set out in the section entitled Directors, Management and Staff of this Prospectus. Offering of quality service and affordable hotel rooms at strategic locations We place great importance on the quality of the rooms and services offered by our hotels, with all our hotel rooms furnished with essential amenities to provide our guests with a comfortable stay at affordable prices. We believe strongly in the importance of training our hotel staff. All our hotel staff are trained in-house to enable them to have a concrete foundation in hotel operations so as to maintain a consistent level of service to our guests. Most of our hotels are strategically located either in the city or city-fringe areas and are easily accessible by major roads, public buses and the MRT. Major shopping and convention centres, tourist attractions and the two Integrated Resorts are conveniently accessible from our hotels. We believe that the strategic location of our hotels has enabled us to cater to a variety of guests with varying needs. Our room capacity enables us to accommodate bulk bookings from corporate clients or travel agents which provides us with an edge over other smaller-scale competitors within the economy-tier hotel segment. We believe that a combination of quality service and value-for-money accommodation at strategic locations offers a strong selling proposition to our existing guests and allows us to continue to attract new guests.

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GENERAL INFORMATION OF OUR GROUP

Active development and management of hospitality-related assets to provide value accretion to existing portfolio of hotels We regularly search for hotels to purchase and potential sites for hotel development. As at the Latest Practicable Date, we have successfully developed 20 hotels, renovated four hotels after acquisition and converted three buildings to hotels. Based on our experience in acquiring, developing, converting and renovating hotels, we have established a wide network of contacts and long-standing relationships with professionals, consultants, builders, agents and suppliers. We believe that our ability to capitalise on these relationships allows us to maintain better control over the construction or renovations of our hotels in terms of costs and downtime. Furthermore, as hotel developer and operator, we have the necessary know-how to optimise the design and type of rooms as well as the repair and maintenance of our hotels. In addition, we are more likely, as hotel developers, to be able to identify opportune time to upgrade and refurbish the hotels within our portfolio. We believe that our experience as hotel developers will also enable us to better pinpoint new sites for development of hotels. For example, we are able to better assess the feasibility, time and resources of developing potential properties into hotels which gives us an edge over our competitors who are solely hotel operators. Regular promotional tie-ups with business partners and active participation in tourism trade conventions and exhibitions As at the Latest Practicable Date, we have established a good working relationship with more than 900 local and overseas travel agents, who will promote our hotels worldwide with their travel packages and corporate clients. Besides that, we work closely with various on-line travel agents such as Booking.com, AsiaTravel.com and Agoda.com, who are established players in the market, to promote our hotels through various on-line channels. We have also entered into contractual arrangements with corporate clients such as shipping companies for the provision of accommodation to their staff and crew while in Singapore. Some of our hotels, namely Parc Sovereign Hotel, Fragrance Hotel-Ruby and Fragrance Hotel-Sapphire are members of the SHA which promotes our hotels through the Changi International Airport reservation system. We have participated in tourism trade conventions and exhibitions in the Asia-Pacific region such as the China International Trade Mart, ASEAN Tourism Forum and the Malaysian Association of Tour and Travel Agents International Travel Exhibition. In addition, we also actively participate in overseas road shows, consumer fairs and product updates organised by the STB. We believe our participation in such overseas marketing activities will increase the recognition and acceptance of Our Chain of Hotels amongst international travellers. We also advertise in trade magazines which are circulated within the tourism industry in the Asia-Pacific region as well as in newspapers, television, buses and cinemas. In addition, we have promotional materials relating to Our Chain of Hotels which are distributed to local and foreign travel agents and hotel guests.

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GENERAL INFORMATION OF OUR GROUP

We believe that our marketing activities help us to identify the current market needs and preferences of present-day travellers so that we can adjust our products and service offerings to better suit their needs. These promotional efforts also enable us to raise our profile among potential guests and contribute to the expansion of the number of guests at our hotels. Integrated Property Management System allows us to better manage our hotel operations We have invested in a sophisticated software system that manages our reservation and billing processes centrally through the PMS. The PMS allows us to centrally manage all our 23 hotels island-wide so as to maximise hotel occupancy rates and reduce the manpower required for manual updates. By being able to monitor the occupancy status of Our Chain of Hotels in real-time, we are able to increase the overall occupancy and room revenue of our hotels. Established relationships with our suppliers allows us to better leverage on our economies of scale The bulk purchase of our hotel room supplies and daily necessities centrally, coupled with the good relationship with our suppliers, allows us to obtain such supplies and daily necessities on favourable terms. At the same time, our centralised procurement policy also helps to reduce operating costs such as logistical costs and to monitor the consistency and quality standards of the supplies and daily necessities. Corporate Social Responsibility Our Company is committed to adopting green initiatives and green policies by monitoring and reducing energy consumption in our hotels. This initiative is supported by our employees who will assist in identifying and implementing eco-friendly programs such as: (a) reducing the use of water and materials through awareness programs and through incorporating energy-efficient designs into new buildings, equipment and working practices; (b) setting and meeting targets for the reduction of utilities consumption. Our employees will monitor the targets against actual consumption on a regular basis; (c) using dual flush water closets to save water;

(d) utilising energy-efficient light bulbs; (e) using energy-efficient windows, resulting in less cooling required by the air-conditioners; (f) encouraging our guests to use their bed linens and towels more than once to save water and energy; and

(g) using energy-efficient appliances (such as air-conditioners).

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SELECTED COMBINED FINANCIAL INFORMATION

The following summary financial data should be read in conjunction with the full text of this Prospectus including Appendix A entitled Independent Auditors Report on the Combined Financial Statements for the Years ended 31 December 2010, 2009 and 2008, Appendix B entitled Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011 and Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus. Our financial statements are prepared and presented in accordance with SFRS. Selected Combined Results of Operations of our Group
Audited Unaudited Unaudited Audited Unaudited Pro Pro Forma Forma FY2010 FY2010 9M2010 9M2011 9M2011 ($000) ($000) ($000) ($000) ($000) 44,215 (5,156) 39,059 280 42,465 (5,996) 36,469 264 32,284 (3,867) 28,417 203 38,929 (4,571) 34,358 344 37,860 (5,201) 32,659 308

FY2008 ($000) Revenue Cost of sales Gross profit Other operating income Loss on disposal of property, plant and equipment Administrative expenses Finance costs Profit before income tax Income tax expense Profit for the year/period EPS (cents)(1) 36,893 (4,895) 31,998 196

FY2009 ($000) 34,579 (4,883) 29,696 221

(9,319) (3,239)

(10,355) (3,184)

(12,223) (3,001)

(51) (11,560) (2,052)

(8,754) (2,346)

(11,296) (2,158)

(10,852) (1,712)

19,636 (3,505)

16,378 (2,867)

24,115 (4,260)

23,070 (4,091)

17,520 (3,040)

21,248 (3,930)

20,403 (3,786)

16,131 2.93

13,511 2.46

19,855 3.61

18,979 3.45 Unaudited

14,480 2.63

17,318 3.15

16,617 3.02

EPS as adjusted for the Invitation (cents)(2)

1.61

1.35

1.99

1.90

1.45

1.73

1.66

Notes: (1) For comparative purposes, EPS is calculated based on profit for the year/period and the pre-Invitation Share capital of 550,000,000 Shares. (2) For comparative purposes, EPS as adjusted for the Invitation is calculated based on profit for the year/period and the post-Invitation share capital of 1,000,000,000 Shares.

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SELECTED COMBINED FINANCIAL INFORMATION

Selected Combined Financial Position of our Group
Unaudited Unaudited Pro Pro Forma Audited Forma as at 31 as at 30 as at 30 December September September 2010 2011 2011 ($000) ($000) ($000)

Audited as at 31 December 2008 ($000) Current assets Cash and cash equivalents Trade receivables Other receivables Properties under development Total current assets Non-current assets Property, plant and equipment Total assets Current liabilities Trade payables Other payables Term loans Income tax payable Total current liabilities Non-current liabilities Term loans Deferred tax liability Total non-current liabilities Capital and reserves Share capital Revaluation reserve Merger reserve Retained earnings Total equity Total liabilities and equity

Audited as at 31 December 2009 ($000)

Audited as at 31 December 2010 ($000)

1,923 1,216 15,473 18,612

2,458 985 11,149 23,820 38,412

2,811 1,274 5,982 26,846 36,913

19,143 1,274 46,019 66,436

3,899 1,511 47,443 52,853

11,588 1,511 15,608 28,707

323,412 342,024 1,223 26,067 6,433 3,596 37,319 98,996 3,760 102,756 27,100 157,779 17,070 201,949 342,024

425,284 463,696 1,236 45,515 12,198 2,829 61,778 134,832 4,751 139,583 27,100 213,654 21,581 262,335 463,696

701,942 738,855 1,188 49,986 7,895 4,435 63,504 150,448 23,815 174,263 27,100 451,552 22,436 501,088 738,855

642,606 709,042 1,188 140,893 20,147 8,319 170,547 443,035 19,528 462,563 137,500 427,344 (530,900) 41,988 75,932 709,042

738,718 791,571 1,194 5,584 32,643 8,065 47,486 108,838 26,447 135,285 27,100 511,459 70,241 608,800 791,571

738,718 767,425 1,194 91,082 20,147 7,921 120,344 443,035 26,447 469,482 137,500 511,459 (530,900) 59,540 177,599 767,425

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following discussion and analysis of our results of operations and financial position should be read in conjunction with the full text of this Prospectus, including the section on Independent Auditors Report on the Combined Financial Statements for the Years Ended 31 December 2010, 2009 and 2008 and Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months ended 30 September 2011 as set out in Appendices A and B of this Prospectus. Our combined financial statements have been prepared in accordance with SFRS. The unaudited pro forma group financial information set out in Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus have been prepared for illustrative purposes only and based on certain assumptions after making certain adjustments to show what: (a) the unaudited combined results and cash flows for the year ended 31 December 2010 and the unaudited combined interim results and cash flows for the nine months ended 30 September 2011 of our Group would have been if the significant events including disposal of hotel property, disposal of construction-in-progress, disposal of office premises, disposal of properties under development, restructuring exercise and declaration of interim one-tier exempt dividend stated in the explanatory note 1 of Appendix C, had occurred on 1 January 2010; and (b) the unaudited combined statement of financial position as at 31 December 2010 and the unaudited combined interim statement of financial position as at 30 September 2011 of our Group would have been if the foresaid significant events had occurred on 31 December 2010 and 30 September 2011 respectively. The unaudited pro forma group financial information, because of their nature, may not give a true picture of the Groups actual financial position or results. Please refer to Appendix C entitled Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information of this Prospectus for further details. INTRODUCTION We operate one of Singapores largest chain of hotels with 23 hotels of which 22 hotels are operated under our Fragrance brand and one hotel is operated under the Parc Sovereign brand. We provide economy-tier and mid-tier class of accommodation with 1,738 rooms in Singapore, as at the Latest Practicable Date. We own all our hotels save for Fragrance Hotel-Elegance. We have entered into a tenancy agreement in relation to Fragrance HotelElegance in November 2011. We are principally engaged in the business of developing and operating of economy-tier to mid-tier class of hotels. Our established track record and reputation of providing affordable accommodation has led to our Fragrance brand of hotels becoming well-recognised in the local and regional hospitality industry. Most of our hotel property assets and hotel operations are located in the city or city fringe areas. 122

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS Revenue We invest in, develop and operate hotels. Revenue is mainly derived from the rental of hotel rooms. Our room revenue will be affected by the following factors: 1. Room rates: As at the Latest Practicable Date, our room rates (excluding GST) range from $54.21 to $157.01 for Fragrance Chain of Hotels and from $139.04 to $261.80 for Parc Sovereign Hotel on a daily basis, depending on the room type and the location of the hotel. Room rates will be reviewed by the management on half-yearly basis. If there is a significant change in the market conditions, we will adjust the room rates accordingly. Availability of rooms: Our revenue depends on the number of rooms available to our guests. As we increase the number of hotels we own or operate, we will be in a better position to increase our revenue. Our Group is currently operating 23 hotels. Occupancy rates: Occupancy rates are affected by the general economic environment as well as visitor arrivals to Singapore. With the proliferation of budget airlines, we believe the number of budget travellers from the neighbouring countries will likely increase, and thus, has a positive impact on our hotel operations. Visitors arrivals are also affected by external factors including the outbreak of communicable diseases such as the SARS epidemic in 2003 or Influenza A (H1N1) in 2009 or threat of terrorism. Please refer to the section entitled Risk Factors for details on such external factors.

2.

3.

Cost of sales Our cost of sales comprises mainly costs incurred to provide hotel services, namely utilities charges, laundry charges, hotel consumables, cable services and other related costs. Other related costs relate mainly to telecommunication charges and provision of meals to hotel guests.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth the breakdown for cost of sales for FY2008, FY2009, FY2010, 9M2010 and 9M2011 in absolute terms and expressed as a percentage of total cost of sales:
Audited FY2009 $000 % 2,009 1,124 698 359 693 4,883 41.1 23.0 14.3 7.4 14.2 100.0 Unaudited 9M2010 $000 % 1,715 882 380 295 595 3,867 44.4 22.8 9.8 7.6 15.4 100.0 Audited 9M2011 $000 % 2,129 868 405 278 891 4,571 46.6 19.0 8.9 6.1 19.4 100.0

FY2008 $000 % Utilities charges Laundry charges Hotel consumables Cable services Others Total 2,069 1,168 452 317 889 4,895 42.3 23.9 9.2 6.5 18.1 100.0

FY2010 $000 % 2,241 1,180 526 384 825 5,156 43.5 22.9 10.2 7.4 16.0 100.0

Factors that can materially affect our cost of sales include the following: 1. Changes in utilities charges Our utilities charges are affected by changes to utilities rates, which in turn may be affected by higher crude oil prices. If there is an increase or decrease of utilities charges, there will be a major impact on cost of sales as utilities charges form a major portion of cost of sales. 2. Changes arising from external vendor charges As we are hotel operators, any major change of external vendors charges such as laundry charges, hotel consumables and cable services may affect our cost of sales. Gross profit The gross profit margin of our hotel operations range from 85.9% to 88.3% for FY2008, FY2009, FY2010, 9M2010 and 9M2011. Other operating income Other operating income comprises mainly the following: (a) license fees for installation of telecommunication equipment located at one of our hotels; (b) income from vending machines, internet kiosks and wireless internet; and (c) sale of refreshments.

Other miscellaneous income includes utilities charged to tenants, income derived from rental of counter space to tour agencies, interest income, income derived from carpark charges and insurance claims.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth our other operating income in FY2008, FY2009, FY2010, 9M2010 and 9M2011 in absolute terms and expressed as a percentage of total other operating income:
FY2008 $000 % Licence fees Income from vending machines, internet kiosks and wireless internet Sale of refreshments Others Total 43 21.9 Audited FY2009 $000 % 43 19.5 FY2010 $000 % 46 16.4 Unaudited 9M2010 $000 % 32 15.8 Audited 9M2011 $000 % 46 13.4

88 20 45 196

44.9 10.2 23.0 100.0

98 25 55 221

44.3 11.3 24.9 100.0

150 25 59 280

53.6 8.9 21.1 100.0

103 20 48 203

50.7 9.9 23.6 100.0

200 13 85 344

58.1 3.8 24.7 100.0

Administrative expenses Administrative expenses comprise mainly staff costs, depreciation expenses, property tax and other administrative expenses. The following table sets forth our administrative expenses for FY2008, FY2009, FY2010, 9M2010 and 9M2011 in absolute terms and expressed as a percentage of total administrative expenses:
Audited FY2009 $000 % 5,603 1,685 831 2,236 54.1 16.3 8.0 21.6 Unaudited 9M2010 $000 % 4,543 1,524 755 1,932 8,754 51.9 17.4 8.6 22.1 Audited 9M2011 $000 % 5,996 1,904 852 2,544 53.1 16.9 7.5 22.5

FY2008 $000 % Staff costs Depreciation expenses Property tax Others Total 5,137 1,500 840 1,842 9,319 55.1 16.1 9.0 19.8

FY2010 $000 % 6,463 2,058 981 2,721 52.9 16.8 8.0 22.3

100.0 10,355 100.0 12,223 100.0

100.0 11,296 100.0

Staff costs include employees salaries and bonuses, CPF contribution and other staff benefits as well as directors remuneration. Staff costs are mainly affected by the number of employees within our Group, which is, in turn, dependent on the number of hotels in operation and the occupancy rate. Depreciation expenses were charged for leasehold land, hotel buildings, office premises, motor vehicle, furniture, fixtures and fittings, computers, office equipment, electrical installation, renovations and kitchen equipment on a straight-line basis over their estimated useful lives.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

We are subject to property tax for properties that we own, including land, hotel properties and properties under development. The prevailing property tax rate is 10% of the annual value of the relevant property, which is assessed by IRAS based on the revenue derived from the respective properties. Other administrative expenses mainly consist of repair and maintenance expenses, commission expenses (arising from commission payable to travel agents for referral of guests to our hotels and commission payable to property agent for successful disposal of our property), Network for Electronic Transfers (NETS) and credit card charges, and printing and stationery expenses. Finance cost Finance cost mainly consists of interest expenses on term loans from financial institutions. We utilise bank borrowings to finance acquisitions and development of our hotels. As such, our finance cost is dependent on the amount of borrowings we obtained and the interest rates charged by the financial institutions. Income tax expense Income tax expense for FY2008, FY2009, FY2010, 9M2010 and 9M2011 comprises current and deferred taxes. Current tax is the expected tax payable on the taxable income for FY2008, FY2009, FY2010, 9M2010 and 9M2011, using tax rates enacted or substantially enacted at balance sheet dates, and any adjustment to income tax payable in respect of previous financial years. Deferred tax is provided, using the liability method, for temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is measured using the tax rates expected to be applied to the temporary differences when they are realised or settled, based on tax rates enacted or substantially enacted at the balance sheet dates. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that the related tax benefits will be realised. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity respectively). The statutory tax rates in Singapore for FY2008, FY2009, FY2010, 9M2010 and 9M2011 were 18.0%, 17.0%, 17.0%, 17.0% and 17.0% respectively.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The effective tax rates for FY2008, FY2009, and FY2010 were 17.8%, 17.5% and 17.7% respectively. The effective tax rates for 9M2010 and 9M2011 were 17.4% and 18.5% respectively. UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS FOR FY2010 AND 9M2011 The pro forma combined statement of comprehensive income for FY2010 took into account the following: (a) disposal of the hotel property at 103 Beach Road, Changi Road Property, Geylang Industrial Property and Pasir Panjang Commercial Property assuming they took place on 1 January 2010 which resulted in reversal of $1.8 million revenue in FY2010 and recognition of $0.8 million rental expense for the lease of Fragrance Hotel-Elegance; (b) reversal of administrative expenses, finance costs and income tax expense of approximately $1.8 million relating to the sale of the 4 properties as mentioned above and disposal of Fragrance Hotel-Elegance; (c) transfer of fair value gain and depreciation expense recognised in prior years of approximately $28.5 million to retained earnings, assuming the disposal of Fragrance Hotel-Elegance and the hotel property at 103 Beach Road took place on 1 January 2010; and

(d) transfer of deferred tax of approximately $4.3 million due to the disposal of the hotel property at 103 Beach Road from other comprehensive income to income tax payable. These constitute the major differences between the audited combined statement of comprehensive income and the unaudited pro forma combined statement of comprehensive income for FY2010. The pro forma combined statement of comprehensive income for 9M2011 took into account the following: (a) disposal of Pasir Panjang Commercial Property and Changi Road Property assuming they took place on 1 January 2010 which resulted in reversal of $1.1 million revenue in 9M2011 and recognition of $0.6 million rental expense for lease of Fragrance Hotel-Elegance; and (b) reversal of administrative expenses, finance costs and income tax expense of approximately $1.0 million relating to the 2 properties as mentioned above as well as disposal of Fragrance Hotel-Elegance and the hotel property at 103 Beach Road. These constitute the major differences between the audited combined statement of comprehensive income and the unaudited pro forma combined statement of comprehensive income for 9M2011.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The pro forma combined statement of financial position as at 31 December 2010 took into account the following: (a) disposal of Fragrance Hotel-Elegance, the hotel property at 103 Beach Road and Changi Road Property assuming they took place on 1 January 2010 amounting to $59.3 million and disposal of Pasir Panjang Commercial Property and Geylang Industrial Property which were properties under development amounting to $26.8 million; (b) repayment of existing term loans of $158.3 million; (c) draw-down of term loan facilities of $463.2 million to repay part of the existing term loans and the Purchase Consideration;

(d) increase in share capital of $137.5 million relating to issuance of Shares to FGL as payment for part of the Purchase Consideration; (e) declaration of final dividend of $10.0 million to FGL; (f) recognition of Purchase Consideration due to FGL of $558.0 million; and

(g) payment of part of Purchase Consideration and advances from FGL of $345.1 million. These constitute the major differences between the audited combined statement of financial position and the unaudited pro forma combined statement of financial position as at 31 December 2010. The pro forma combined statement of financial position as at 30 September 2011 took into account the following: (a) repayment of existing term loans of $141.5 million; (b) draw-down of term loan facilities of approximately $463.2 million to repay part of the existing term loans and Purchase Consideration. The gearing of the Group will increase from 0.2 times to 2.6 times as at 30 September 2011 after the Restructuring Exercise. The gearing will decrease to 1.6 times after the Restructuring Exercise and taking into account the net proceeds from the Invitation; (c) receipt of amount due from FGL subsidiaries on disposal of Pasir Panjang Commercial Property, Geylang Industrial Property and Changi Road Property of $31.8 million;

(d) increase in share capital of $137.5 million relating to the issuance of Shares to FGL as payment of part of the Purchase Consideration; (e) declaration of final dividend of $10.0 million to FGL; and (f) recognition of Purchase Consideration due to FGL of $558.0 million offset by payment of part Purchase Consideration due to FGL of $345.7 million.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

These constitute the major differences between the audited combined statement of financial position and the unaudited pro forma combined statement of financial position as at 30 September 2011. The pro forma combined statement of cash flows for FY2010 took into account the following: (a) proceeds from draw-down of term loan facilities of $463.2 million; (b) repayment of existing term loans of $158.3 million; (c) receipt of part of the proceeds from disposal of Fragrance Hotel-Elegance, the hotel property at 103 Beach Road, Pasir Panjang Commercial Property, Geylang Industrial Property and Changi Road Property of $50.1 million; and

(d) payment of part of the Purchase Consideration and repayment of all advances from FGL of $345.1 million. These constitute the major differences between the audited combined statement of cash flows and the unaudited pro forma combined statement of cash flows for FY2010. The pro forma combined statement of cash flows for 9M2011 took into account the following: (a) reversal of advances from FGL and repayment to FGL of $40.8 million assuming that they have been repaid on 1 January 2010; and (b) reversal of part of the proceeds from disposal of Fragrance Hotel-Elegance, the hotel property at 103 Beach Road, Pasir Panjang Commercial Property, Geylang Industrial Property and Changi Road Property which took place in 9M2011 of $50.1 million. These constitute the major differences between the audited combined statement of cash flows and the unaudited pro forma combined statement of cash flows for 9M2011.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

BREAKDOWN BY BUSINESS SEGMENT A breakdown of our revenue, gross profit and gross profit margin by business segments for the years/periods under review is summarised as below: Revenue(1)
Audited FY2009 $000 % Unaudited 9M2010 $000 % Audited 9M2011 $000 % 89.1 10.9

FY2008 $000 % Fragrance Chain of Hotels Parc Sovereign Hotel Total 36,533 360(2)

FY2010 $000 %

99.0 34,579 100.0 44,215 100.0 32,284 100.0 34,692 1.0 4,237

36,893 100.0 34,579 100.0 44,215 100.0 32,284 100.0 38,929 100.0

Gross Profit
Fragrance Chain of Hotels Parc Sovereign Hotel Total
Notes: (1) The revenue information for Fragrance Chain of Hotels and Parc Sovereign Hotel is based on the revenue breakdown for budget hotels operations and boutique hotel operations respectively as disclosed in note 24 of Appendix B entitled Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months ended 30 September 2011. (2) In 2008, the principal activities of Parc Sovereign Hotel related to the provision of hotel management consultancy services and revenue was generated for the provision of such services. In 2009, the principal activity was changed to hotel management services.

31,638 360

98.9 29,696 100.0 39,059 100.0 28,417 100.0 30,689 1.1 3,669

89.3 10.7

31,998 100.0 29,696 100.0 39,059 100.0 28,417 100.0 34,358 100.0

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Gross Profit Margin
FY2008 % Fragrance Chain of Hotels Parc Sovereign Hotel Overall 86.6% 100.0%(1) 86.7% Audited FY2009 % 85.9% 85.9% FY2010 % 88.3% 88.3% Unaudited 9M2010 % 88.0% 88.0% Audited 9M2011 % 88.5% 86.6% 88.3%

In general, Fragrance Chain of Hotels as economy-tier hotels tend to have higher gross profit margins as compared to higher-tier hotels. We believe the higher margin is mainly due to lower utilities costs, lower laundry charges and hotel consumables expenses.
Note: (1) Gross profit margin was 100% due to the operating expenses, which consist mainly of staff costs, has been classified as part of administrative expenses.

REVIEW OF FINANCIAL RESULTS 9M2011 compared to 9M2010 Revenue Our revenue increased by $6.6 million or 20.4%, from $32.3 million in 9M2010 to $38.9 million in 9M2011 mainly attributed to the following factors: (a) Revenue from Fragrance Chain of Hotels increased by $2.4 million mainly due to the following: (i) Fragrance Hotel-Bugis commenced operations in April 2010. The revenue generated from the nine-month operation of this hotel in 9M2011 was $2.2 million as compared to revenue generated in 9M2010 of $1.2 million; the increase in revenue from Fragrance Hotel-Sapphire which re-opened in February 2010 after renovation works. The revenue generated from this hotel was $0.7 million in 9M2010 as compared to $1.0 million in 9M2011;

(ii)

(iii) the increase in revenue from the rest of the hotels from $28.8 million in 9M2010 to $30.1 million in 9M2011. The increase in revenue was mainly due to higher room rates as the result of the increase in the number of visitors entering Singapore after the two Integrated Resorts commenced operations in 2010; (iv) the aforementioned increases in revenue were offset by the decrease in rental income of $0.2 million arising from the disposal of the hotel property at 103 Beach Road; and

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

(b) Revenue from Parc Sovereign Hotel increased by $4.2 million mainly due to Parc Sovereign Hotel commencing operations in February 2011. The Groups AOR remained relatively stable at between 87.2% and 88.9% in 9M2010 and 9M2011 while the Groups ARR increased from $92.20 in 9M2010 to $104.90 in 9M2011. The increase in the Groups ARR was mainly due to the commencement of business of our mid-tier hotel Parc Sovereign Hotel in February 2011. The increase in REVPAR from $82.00 in 9M2010 to $91.50 in 9M2011 was mainly due to the increase in the Groups ARR. Cost of sales Our cost of sales increased by $0.7 million or 17.9%, from $3.9 million in 9M2010 to $4.6 million in 9M2011, mainly due to the commencement of operations of Parc Sovereign Hotel in February 2011. The cost of sales related to Parc Sovereign Hotel for 9M2011 was $0.6 million. The increase in cost of sales for Fragrance Chain of Hotels was mainly attributed to Fragrance Hotel-Bugis which commenced operations in Apr 2010. The cost of sales related to Fragrance Hotel-Bugis increased from $0.2 million in 9M2010 to $0.3 million in 9M2011. Gross profit As a result of the above factors, our gross profit increased by $6.0 million or 21.1%, from $28.4 million in 9M2010 to $34.4 million in 9M2011. Our gross profit margin increased from 88.0% in 9M2010 to 88.3% in 9M2011 as a result of higher room rates charged by our hotels. Other operating income Other operating income increased by $0.1 million, from $0.2 million in 9M2010 to $0.3 million in 9M2011 mainly due to the increase in income from vending machines, internet kiosks and wireless internet. Administrative expenses Our administrative expenses increased by $2.5 million or 28.4%, from $8.8 million in 9M2010 to $11.3 million in 9M2011, mainly due to the increase in staff costs, depreciation expenses and commission expenses. Staff costs increased by $1.5 million or 33.3%, from $4.5 million in 9M2010 to $6.0 million in 9M2011. The increase in staff cost was mainly due to the general increase in wages and additional staff required for Parc Sovereign Hotel which commenced operations in February 2011, and full nine-months operation of Fragrance Hotel-Bugis. The average percentage increase in wages was approximately 5.4%. Depreciation expenses increased by $0.4 million or 26.7%, from $1.5 million in 9M2010 to $1.9 million in 9M2011. The increase in depreciation expenses was mainly due to Parc Sovereign Hotel which commenced operations in February 2011, full nine-months operation of Fragrance Hotel-Bugis and the increase in fair value of leasehold land and hotel buildings. 132

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Commission expenses increased by $0.5 million or 166.7%, from $0.3 million in 9M2010 to $0.8 million in 9M2011, mainly due to the commission paid to property agent in relation to the disposal of the hotel property at 103 Beach Road. Finance cost Our finance cost was relatively stable at $2.3 million and $2.2 million in 9M2010 and 9M2011 respectively. Profit before income tax Our profit before income tax increased by $3.7 million or 21.1%, from $17.5 million in 9M2010 to $21.2 million in 9M2011 due mainly to the increase in gross profit partly offset by the increase in administrative expenses. Income tax expense Income tax expense increased by $0.9 million or 30.0%, from $3.0 million in 9M2010 to $3.9 million in 9M2011 as a result of the increase in profit before income tax. Profit for the year As a result of the foregoing, our profit for the year increased by $2.8 million or 19.3%, from $14.5 million in 9M2010 to $17.3 million in 9M2011. FY2010 compared to FY2009 Revenue Our revenue increased by $9.6 million or 27.7%, from $34.6 million in FY2009 to $44.2 million in FY2010 mainly due to the increase in the Groups AOR and ARR, which is attributed to the following factors: (a) additional revenue of $2.0 million from Fragrance Hotel-Bugis which commenced operations in April 2010; (b) full-year operation of Fragrance Hotel-Royal in FY2010, contributing a revenue of $1.6 million as compared to a revenue of $0.6 million in FY2009. Fragrance Hotel-Royal commenced operations in July 2009; and (c) the increase in revenue from the rest of the hotels, from $32.2 million in FY2009 to $38.4 million in FY2010. The increase in revenue was mainly due to higher occupancy rates and room rates as a result of the increase in the number of visitors entering Singapore after the two Integrated Resorts commenced operations in 2010.

The Groups AOR increased from 83.9% in FY2009 to 89.4% in FY2010 and the Groups ARR increased from $87.40 in FY2009 to $94.30 in FY2010, resulting in the increase in REVPAR from $73.40 in FY2009 to $84.30 in FY2010.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Cost of sales Our cost of sales increased by $0.3 million or 6.1%, from $4.9 million in FY2009 to $5.2 million in FY2010 mainly due to the commencement of hotel operations by Fragrance Hotel-Bugis in April 2010. Gross profit As a result of the above factors, our gross profit increased by $9.4 million or 31.6%, from $29.7 million in FY2009 to $39.1 million in FY2010. Our gross profit margin increased from 85.9% in FY2009 to 88.3% in FY2010 mainly due to higher room and occupancy rates of our hotels. Other operating income Other operating income increased by $0.1 million or 50.0%, from $0.2 million in FY2009 to $0.3 million in FY2010 mainly due to the increase in income from vending machines, internet kiosks and wireless internet. Administrative expenses Our administrative expenses increased by $1.8 million or 17.3%, from $10.4 million in FY2009 to $12.2 million in FY2010, mainly due to the increase in staff costs, depreciation expenses, property tax and repair and maintenance expenses. Staff costs increased by $0.9 million or 16.1% from $5.6 million in FY2009 to $6.5 million in FY2010. The increase was mainly due to the general increase in wages and additional staff required for the new hotel, Fragrance Hotel-Bugis and full-year operation of Fragrance Hotel-Royal. The average percentage increase in wages was approximately 9.5%. Depreciation expenses increased by $0.4 million or 23.5% from $1.7 million in FY2009 to $2.1 million in FY2010. The increase was mainly due to the new hotel, Fragrance Hotel-Bugis which commenced operations in FY2010, full-year operation of Fragrance Hotel-Royal and the increase in fair value of leasehold land and hotel buildings. Property tax increased by $0.2 million or 25.0%, from $0.8 million in FY2009 to $1.0 million in FY2010 mainly due to increase in annual value of our hotel properties. Repair and maintenance expenses increased by $0.2 million or 18.2%, from $1.1 million in FY2009 to $1.3 million in FY2010 mainly due to paintworks, electrical works, air-conditioning maintenance and general repairs. Finance cost Our finance cost decreased by $0.2 million or 6.3%, from $3.2 million in FY2009 to $3.0 million in FY2010. The decrease in finance cost can be attributed to the lower interest rate and lower outstanding balances for existing term loans, and partially offset by higher interest costs 134

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

relating to increased term loan facilities in respect of Fragrance Hotel-Bugis for working capital purposes and bank borrowings to finance the purchase of hotel property at 103 Beach Road and Pasir Panjang Commercial Property. Profit before income tax Our profit before income tax increased by $7.7 million or 47.0%, from $16.4 million in FY2009 to $24.1 million in FY2010 mainly due to the increase in gross profit. Income tax expense In line with the increase in profit before income tax, income tax expense increased by $1.4 million or 48.3%, from $2.9 million in FY2009 to $4.3 million in FY2010. Profit for the year As a result of the foregoing, our profit for the year increased by $6.4 million or 47.4%, from $13.5 million in FY2009 to $19.9 million in FY2010. FY2009 compared to FY2008 Revenue Our revenue decreased by $2.3 million or 6.2%, from $36.9 million in FY2008 to $34.6 million in FY2009. This was mainly due to the decrease in the Groups ARR of $87.40 in FY2009 as compared to $107.40 in FY2008, arising from the recessionary economic conditions which started in August 2008 and lasted till 2009 and the Influenza A (H1N1) epidemic outbreak during this period. The decrease in revenue was partially offset by contribution from the following: (a) additional revenue from Fragrance Hotel-Royal which commenced operations in July 2009. Revenue generated from this hotel was $0.6 million in FY2009; (b) full-year operation of Fragrance Hotel-Waterfront in FY2009 contributing a revenue of $2.6 million as compared to $1.9 million for the 9-month operation in FY2008. Fragrance Hotel-Waterfront commenced operations in April 2008; (c) full-year operation of Fragrance Hotel-Ocean View in FY2009 contributing to a revenue of $2.1 million as compared to $0.5 million for the 3-month operation in FY2008. Fragrance Hotel-Ocean View commenced operations in end-September 2008; and

(d) higher Groups AOR of 83.9% in FY2009 as compared to 76.9% in FY2008, mainly due to lower room rates as shown in the decrease in the Groups ARR. The decline in the Groups ARR and partially offset by the increase in the Groups AOR from FY2008 to FY2009 resulted in the decrease in REVPAR from $82.60 in FY2008 to $73.40 in FY2009.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Cost of sales Our cost of sales remained relatively stable at $4.9 million in FY2009. Gross profit As a result of the above factors, our gross profit decreased by $2.3 million or 7.2%, from $32.0 million in FY2008 to $29.7 million in FY2009. Our gross profit margin decreased marginally from 86.7% in FY2008 to 85.9% in FY2009. Other operating income Other operating income remained relatively stable at $0.2 million in FY2009. Administrative expenses Our administrative expenses increased by $1.1 million or 11.8%, from $9.3 million in FY2008 to $10.4 million in FY2009, mainly due to the increase in staff costs, depreciation expenses and repair and maintenance expenses. Staff costs increased by $0.5 million or 9.8%, from $5.1 million in FY2008 to $5.6 million in FY2009. The increase in staff cost was mainly due to additional staff required for new hotel, Fragrance Hotel-Royal and the full-year operation of two hotels, namely Fragrance HotelWaterfront and Fragrance Hotel-Ocean View which had commenced operations in FY2008. Depreciation expenses increased by $0.2 million or 13.3%, from $1.5 million in FY2008 to $1.7 million in FY2009, mainly due to the additional hotels which commenced operations in FY2009, the full-year depreciation expenses of the new PMS which was acquired in FY2008 and the increase in fair value of leasehold land and hotel buildings. Repair and maintenance expenses increased by $0.4 million or 57.1%, from $0.7 million in FY2008 to $1.1 million in FY2009 mainly due to paintworks, electrical works, air-conditioning maintenance and general repairs. Finance cost Finance cost remained relatively stable at $3.2 million in FY2009. Profit before income tax Our profit before income tax decreased by $3.2 million or 16.3%, from $19.6 million in FY2008 to $16.4 million in FY2009 mainly due to the decrease in gross profit and increase in administrative expenses.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Income tax expense Income tax expense decreased by $0.6 million or 17.1%, from $3.5 million in FY2008 to $2.9 million in FY2009 mainly due to the decrease in profit before income tax and the changes in statutory tax rate from 18.0% in FY2008 to 17.0% in FY2009. Profit for the year As a result of the foregoing, our profit for the year decreased by $2.6 million or 16.1%, from $16.1 million in FY2008 to $13.5 million in FY2009. REVIEW OF FINANCIAL POSITION Non-current assets Non-current assets comprise property, plant and equipment. As at 31 December 2010, our non-current assets had an aggregate carrying value of $701.9 million and accounted for approximately 95.0% of our total assets. Our property, plant and equipment mainly consist of freehold land of $424.5 million, leasehold land of $31.9 million, hotel buildings of $74.8 million, and construction-in-progress of $161.1 million (mainly relating to the construction of Parc Sovereign Hotel, hotel property at 103 Beach Road and Fragrance Hotel-Riverside). As at 30 September 2011, our non-current assets had an aggregate carrying value of $738.7 million and accounted for approximately 93.3% of our total assets. Our property, plant and equipment mainly consist of freehold land of $469.4 million, leasehold land of $135.5 million, hotel buildings of $84.1 million, and construction in-progress of $47.7 million (mainly relating to Fragrance Hotel-Riverside). Our non-current assets increased by 5.2% or $36.8 million from $701.9 million as at 31 December 2010 to $738.7 million as at 30 September 2011. This was attributable to the increase in construction-in-progress relating to Fragrance Hotel-Riverside, Parc Sovereign Hotel, the hotel property at 103 Beach Road and the increase in fair value of freehold land, leasehold land and construction-in-progress which was partially offset by the disposal of the hotel property at 103 Beach Road, Fragrance Hotel-Elegance and Changi Road Property in 9M2011. Current assets Current assets comprise trade and other receivables, properties under development and cash and cash equivalents. Trade and other receivables comprised trade receivables, advances to FGL, other receivables, deposits, prepayments, amounts due from related companies and amounts due from an external party. Our current assets as at 31 December 2010 and 30 September 2011 amounted to $36.9 million or 5.0% of our total assets and $52.9 million or 6.7% of our total assets respectively.

137

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

As at 31 December 2010, our current assets comprised trade and other receivables of $7.3 million (19.8% of total current assets), properties under development of $26.8 million (72.6% of total current assets) and cash and cash equivalents of $2.8 million (7.6% of total current assets). As at 30 September 2011, our current assets comprised trade receivables and other receivables of $49.0 million (92.6% of total current assets), and cash and cash equivalents of $3.9 million (7.4% of total current assets). Our current assets increased by 43.4% or $16.0 million from $36.9 million as at 31 December 2010 to $52.9 million as at 30 September 2011. This was largely attributed to the increase in amounts due from related companies arising from disposal of Geylang Industrial Property and Pasir Panjang Commercial Property and Changi Road Property, and amounts due from an external party arising from the disposal of Fragrance Hotel-Elegance, and offset by the decrease in advances to FGL. Current liabilities Current liabilities comprise trade and other payables, current portion of term loans and income tax payable. Trade and other payables comprise trade payables, advances from FGL, other payables, accrued operating expenses, deposits received in advance and withholding income tax on staff costs. Our current liabilities as at 31 December 2010 and 30 September 2011 amounted to $63.5 million and $47.5 million respectively which are equivalent to 26.7% and 26.0% of our total liabilities respectively. As at 31 December 2010, our current liabilities comprised trade and other payables of $51.2 million (80.6% of total current liabilities), current portion of the term loans of $7.9 million (12.4% of total current liabilities), and income tax payable of $4.4 million (7.0% of total current liabilities). As at 30 September 2011, our current liabilities comprised trade and other payables of $6.8 million (14.3% of total current liabilities), current portion of term loans of $32.6 million (68.6% of total current liabilities), and income tax payable of $8.1 million (17.1% of total current liabilities). Our current liabilities decreased by 25.2% or $16.0 million from $63.5 million as at 31 December 2010 to $47.5 million as at 30 September 2011. This was largely attributable to the repayment of advances from FGL of $44.9 million, which was partially offset by the increase in current portion of term loans. The advances from FGL were for the financing of the development of hotel and commercial properties as well as for working capital purposes. The increase in current portion of term loans was mainly due to the re-classification of non-current portion of term loans to current portion of term loans of $24.0 million arising from the disposal of Fragrance Hotel-Elegance, Pasir Panjang Commercial Property and Changi Road Property. The reclassification was due to the expected settlement of the terms loans within the next 12 months as the financial institutions would have to release the title on property mortgaged upon completion of the disposal of the 3 properties.

138

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Non-current liabilities Non-current liabilities comprise non-current portion of term loans and deferred tax liabilities. Our non-current liabilities as at 31 December 2010 and 30 September 2011 amounted to $174.3 million or 73.3% of our total liabilities and $135.3 million or 74.0% of our total liabilities respectively. Our non-current liabilities decreased by 22.4% or $39.0 million from $174.3 million as at 31 December 2010 to $135.3 million as at 30 September 2011. The decrease was mainly due to the repayment of loans and the re-classification of non-current portion of term loans to current portion of term loans arising from the disposal of Fragrance Hotel-Elegance, Pasir Panjang Commercial Property and Changi Road Property. This decrease was partially offset by the increase in loans relating to Fragrance Hotel-Riverside and Parc Sovereign Hotel. Capital and reserves Capital and reserves comprise share capital, revaluation reserves and retained earnings. Our capital and reserves increased by 21.5% or $107.7 million from $501.1 million as at 31 December 2010 to $608.8 million as at 30 September 2011. The increase was mainly due to increase in our retained earnings of $17.3 million from the day-to-day operations in the ordinary course of our business and fair value gain arising from revaluation of land and hotel buildings (net of income tax effects of $6.7 million) of $90.4 million. LIQUIDITY AND CAPITAL RESOURCES In FY2008, FY2009 and FY2010, 9M2011 and from 1 October 2011 up to the Latest Practicable Date, we have financed our operations through cash flows from our operations and loans from financial institutions. Cash flow As at 30 September 2011, our cash and cash equivalents amounted to approximately $3.9 million. As at the Latest Practicable Date, our cash and cash equivalents were $10.7 million. Our Directors are of the opinion that we have adequate working capital to meet our current requirements, taking into account cash generated from operating activities, unutilised credit facilities and cash and cash equivalents as at the Latest Practicable Date.

139

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth certain information about our cash flows in FY2008, FY2009, FY2010 and 9M2011:
Unaudited Pro Forma FY2010 $000 Unaudited Pro Forma 9M2011 $000

Audited FY2008 $000 Net cash generated from/(used in) operating activities Net cash (used in)/ generated from investing activities Net cash generated from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year/period Cash and cash equivalents at end of year/period

Audited FY2009 $000

Audited FY2010 $000

Audited 9M2011 $000

19,098

(7,856)

19,878

28,823

18,294

19,047

(25,576)

(46,572)

(20,940)

26,672

40,919

(9,262)

6,898

54,963

1,415

(38,810)

(58,125)

(17,340)

420

535

353

16,685

1,088

(7,555)

1,503

1,923

2,458

2,458

2,811

19,143

1,923

2,458

2,811

19,143

3,899

11,588

Negative Working Capital The working capital of our Group as at 31 December 2008, 2009, 2010 and 30 September 2011 was as follows:
Audited 31 December 31 December 2009 2010 $000 $000 38,412 (61,778) (23,366) 36,913 (63,504) (26,591)

31 December 2008 $000 Current assets Current liabilities Net current (liabilities)/assets 18,612 (37,319) (18,707)

30 September 2011 $000 52,853 (47,486) 5,367

140

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The negative working capital as at 31 December 2008, 2009 and 2010 was mainly due to advances from FGL (which were short-term in nature) being used to finance the development of our Groups hotel and commercial properties. The Group recorded positive working capital of $5.4 million as at 30 September 2011 after the Group repaid the advances from FGL of $44.9 million. FY2008 Net cash generated from operating activities In FY2008, the net cash generated from operations of $19.1 million, which comprised operating cash flows before movements in working capital of $24.4 million, working capital outflow of $0.2 million, interest paid of $3.3 million and income taxes paid of $1.8 million. The working capital outflow was mainly due to the decrease in other payables of $0.3 million which related to the decrease in accrual expenses. This was partially offset by the decrease in trade receivables of $0.1 million. Net cash generated from investing activities Net cash used in investing activities amounted to $25.6 million in FY2008. This comprised purchase of property, plant and equipment of $27.3 million, partially offset by the proceeds from the disposal of commercial property at 44 Foch Road of $1.7 million. Additions to property, plant and equipment were mainly attributed to the construction of the following properties amounting to $26.3 million: (a) Changi Road Property of $0.6 million; (b) Fragrance Hotel-Bugis of $17.3 million; and (c) Fragrance Hotel-Waterfront and Fragrance Hotel-Ocean View of $8.4 million.

Net cash generated from financing activities In FY2008, there was a net cash inflow of $6.9 million from financing activities. This was mainly due to advances from FGL of $19.2 million, issuance of new shares of $2.0 million and increase in bank borrowings of $13.6 million which related to loans to part finance the purchase of Fragrance Hotel-Bugis and Fragrance Hotel-Waterfront, which were partially offset by repayment of term loan of $14.1 million, repayment of advances from FGL of $8.4 million and payment of dividend of $5.4 million. FY2009 Net cash generated from operating activities In FY2009, the net cash used in operating activities was $7.9 million and this comprised operating cash flows before movements in working capital of $21.3 million, working capital outflow of $22.4 million, interest paid of $3.2 million and income taxes paid of $3.6 million. 141

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The working capital outflow was mainly due to the increase in properties under development of $23.8 million and this related to Pasir Panjang Commercial Property. This was partially offset by an increase in other payables amounting to $0.7 million. Net cash generated from investing activities Net cash used in investing activities amounted to $46.6 million in FY2009. This comprised mainly purchase of property, plant and equipment. Additions to property, plant and equipment were mainly attributed to the construction of the following properties amounting to $45.7 million: (a) Hotel property at 103 Beach Road of $18.5 million; (b) Fragrance Hotel-Royal of $6.2 million; (c) Parc Sovereign Hotel of $16.7 million;

(d) Fragrance Hotel-Riverside of $3.6 million; and (e) Fragrance Hotel-Bugis of $0.7 million. Net cash generated from financing activities In FY2009, we had a net cash inflow of $55.0 million which was mainly due to advances from FGL of $18.7 million, repayment of our advances to FGL of $3.8 million, and increase in bank borrowings of $63.6 million which related to loans to part finance the purchase of the Pasir Panjang Commercial Property, and loans to finance the purchase of hotel property at 103 Beach Road, land for Parc Sovereign Hotel and land for Fragrance Hotel-Riverside. This was partially offset by repayment of bank borrowings of $22.1 million and payment of dividends of $9.0 million. FY2010 Net cash generated from operating activities In FY2010, we recorded net cash generated from operating activities of $19.9 million which comprised operating cash flows before movements in working capital of $29.2 million, working capital outflow of $2.8 million, interest paid of $3.9 million and income taxes paid of $2.6 million. The working capital outflow arose mainly due to an increase in properties under development of $3.0 million relating to Geylang Industrial Property, and increase in other receivables amounting to $1.7 million, which was partially offset by an increase in other payables of $2.3 million. The increase in other receivables was mainly due to an amount of $1.6 million paid as a deposit for a URA land tender sale. The increase in other payables was mainly due to an increase in accrual expenses related to construction cost of the hotel property at 103 Beach Road, Fragrance Hotel-Riverside and Geylang Industrial Property. 142

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Net cash generated from investing activities Net cash used in investing activities amounted to $20.9 million in FY2010. This comprised the purchase of property, plant and equipment. Additions to property, plant and equipment were mainly attributed to the construction of the following properties amounting to $20.4 million: (a) Hotel property at 103 Beach Road of $2.1 million; (b) Parc Sovereign Hotel of $8.7 million; (c) Fragrance Hotel-Riverside of $7.5 million; and

(d) Fragrance Hotel-Bugis of $2.1 million. Net cash generated from financing activities In FY2010, we had a net cash inflow of $1.4 million arising from advances from FGL of $2.2 million, repayment of our advances to FGL of $6.8 million and proceeds from bank borrowings of $36.5 million related to Fragrance Hotel-Bugis, Parc Sovereign Hotel and Fragrance Hotel-Riverside. These were partially offset by repayment of bank borrowings of $25.1 million and payment of dividends of $19.0 million. 9M2011 Net cash generated from operating activities In 9M2011, we generated net cash from operating activities of $18.3 million, which comprised operating cash flows before movements in working capital of $25.3 million, working capital outflow of $0.2 million, interest paid of $2.4 million and income tax paid of $4.4 million. The working capital outflow arose mainly due to the increase in property under development and offset by the decrease in other receivables. The increase in property under development of $1.6 million was mainly due to the additional cost related to the development of the Geylang Industrial Property. The decrease in other receivables of $1.0 million was mainly due to refund of the deposit for the URA land sale tender to the Group upon finalisation of the tender result. Net cash generated from investing activities Net cash from investing activities amounted to $40.9 million in 9M2011. This was mainly attributed to the proceeds from disposal of hotel property at 103 Beach Road of $46.0 million, and deposits received from disposal of Geylang Industrial Property, Pasir Panjang Commercial Property, Changi Road Property and Fragrance Hotel-Elegance of aggregate $4.1 million which was partially offset by the purchase of property, plant and equipment of $9.2 million.

143

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

Additions to property, plant and equipment were mainly attributed to the construction of the following properties amounting to $7.4 million: (a) Hotel property at 103 Beach Road of $1.5 million; (b) Parc Sovereign Hotel of $1.5 million; and (c) Fragrance Hotel-Riverside of $4.4 million.

Net cash generated from financing activities Net cash used in financing activities of $58.1 million in 9M2011 was mainly due to repayment of advances from FGL of $44.9 million and repayment of bank borrowings of $21.6 million, which were partially offset by proceeds from bank borrowings of $4.2 million related to Parc Sovereign Hotel and Fragrance Hotel-Riverside and advances from FGL of $4.2 million. CAPITAL EXPENDITURES AND DIVESTMENTS The following table sets forth the material capital expenditures for FY2009, FY2010, FY2011 and for period from 1 January 2012 to the Latest Practicable Date:
Period from 1 January 2012 to the Latest Practicable Date $000

FY2009 $000 Acquisition Hotel buildings and leasehold land Construction-in-progress Motor vehicles Furniture, fixtures & fittings Office equipment Computers Electrical installation Renovations Kitchen equipment 45,710 43 113 308 15 612

FY2010 $000

FY2011 $000

94 20,363 44 53 110 121 28 948

12,219 7,888 65 96 192 45 109 64

1,012 83 16 88 32

144

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The construction-in-progress of $45.7 million in FY2009 was mainly related to: (a) Hotel property at 103 Beach Road of $18.5 million; (b) Fragrance Hotel-Royal of $6.2 million; (c) Parc Sovereign Hotel of $16.7 million;

(d) Fragrance Hotel-Riverside of $3.6 million; and (e) Fragrance Hotel-Bugis of $0.7 million. The construction-in-progress of $20.4 million in FY2010 was mainly related to: (a) Hotel property at 103 Beach Road of $2.1 million; (b) Parc Sovereign Hotel of $8.7 million; (c) Fragrance Hotel-Riverside of $7.5 million; and

(d) Fragrance Hotel-Bugis of $2.1 million. The capital expenditure for hotel buildings and leasehold land of $12.2 million in FY2011 was mainly related to: (a) Fragrance Hotel-Elegance of $1.0 million; (b) Parc Sovereign Hotel of $0.5 million; and (c) Fragrance Hotel-Riverside of $10.4 million.

The construction-in-progress of $7.9 million in FY2011 was mainly related to: (a) Hotel property at 103 Beach Road of $1.5 million; (b) Parc Sovereign Hotel of $1.5 million; and (c) Fragrance Hotel-Riverside of $4.9 million.

The capital expenditure for hotel buildings and leasehold land of $1.0 million from 1 January 2012 to Latest Practicable Date were mainly attributed to: (a) Fragrance Hotel-Emerald of $0.6 million; and (b) Fragrance Hotel-Riverside of $0.4 million. The above capital expenditures were financed by internally generated funds and bank borrowings.

145

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth the material divestments for FY2009, FY2010, FY2011, and for period from 1 January 2012 to the Latest Practicable Date:
Period from 1 January 2012 to the Latest Practicable Date $000

FY2009 $000 Divestments Freehold land Hotel buildings Construction-in-progress Office premises Motor vehicles Furniture fixtures and fittings Office equipment Computers Electrical installation Renovation 26 5 94

FY2010 $000 42

FY2011 $000 4,180 2,920 47,379 7,450 170 11 9 220 74

The divestments in FY2011 were mainly attributed to construction-in-progress, office premises, freehold land and hotel buildings. The divestment for construction-in-progress of $47.4 million was mainly related to the disposal of the hotel property at 103 Beach Road. The divestment for office premises of $7.5 million was mainly related to the disposal of the Changi Road Property. The divestment for freehold land and hotel buildings were mainly related to the disposal of Fragrance Hotel-Elegance. There were no material divestments from 1 January 2012 to the Latest Practicable Date. Capital commitments Our Group does not have any other material commitments for capital expenditure as at the Latest Practicable Date. OPERATING LEASE COMMITMENTS As at 31 December 2011, we have operating lease commitments amounting to $1.6 million. As at the Latest Practicable Date, we have operating lease commitments of $1.4 million.

146

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth information regarding our operating lease commitments as at 31 December 2009, 2010, 2011 and as at the Latest Practicable Date:
As at As at As at 31 December 31 December 31 December 2009 2010 2011 $000 $000 $000 Within 1 year After 1 year but within 5 years Total 34 10 44 850 758 1,608 As at Latest Practicable Date $000 843 582 1,425

Operating lease commitments represent rental payable by the Group for the following: (a) 2-year lease of warehouse at 23 Genting Road; and (b) 2-year lease of the premises of Fragrance Hotel-Elegance. Save as disclosed above, our Group does not have any other material operating lease commitments in the last 3 financial years ended 31 December 2009, 2010 and 2011 and 1 January 2012 to the Latest Practicable Date. FOREIGN EXCHANGE EXPOSURE Our financial statements are prepared in Singapore dollars. As all our operations are in Singapore and our sales and purchases are conducted only in Singapore dollars, we are not subject to foreign exchange fluctuation. Similarly, our assets and liabilities are recorded in Singapore dollars, and we are not exposed to foreign exchange translation. In view of the foregoing, we have not purchased any financial instruments for purpose of managing our foreign currency exposure. INFLATION In FY2008, FY2009, FY2010 and 9M2011, inflation did not have a material impact on the performance of our Group. SEASONALITY The Groups operations are usually affected by seasonality as revenue from June to July and from November to December, which are school holiday periods, tend to be higher.

147

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

CHANGES TO ACCOUNTING POLICIES Save as disclosed in the Independent Auditors Report on the Combined Financial Statements for the Years Ended 31 December 2010, 2009, 2008, and the Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011 as set out in Appendix A and Appendix B of this Prospectus respectively, we have not made any significant changes in our accounting policies during the last three financial years ended 31 December 2008, 2009 and 2010 and nine months ended 30 September 2011.

148

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

Our Prospects Moving forward, barring unforeseen circumstances, our Directors believe that the outlook for our business is expected to remain positive, due to the following factors: Development plans for the Singapore tourism industry Given the importance of the tourism sector to Singapores economy, the STB and other government agencies have committed to ensure that the sector remains competitive and continues to be a key contributor going forward. The Singapore governments target is to achieve tourism receipts of $30 billion, increase visitor arrivals to 17 million and create an additional 100,000 jobs in the services sector by 2015.(1) In order to achieve these goals, the STB has identified three (3) key areas of focus: (a) strengthening Singapores position as a leading convention and exhibition city in Asia with a strong and dynamic business environment; (b) developing Singapore as a leading Asian leisure destination; and (c) establishing Singapore as the services centre of Asia, to be a place where visitors come to enjoy high-end quality services such as healthcare and education services.

Some examples of recent tourism-related initiatives and activities driven by the government and the tourism industry include: (a) further development of the Integrated Resorts such as the opening of the ArtScience Museum at Marina Bay Sands and Battlestar Galactica attractions at Universal Studios Singapore(2); (b) development of new facilities at Sentosa island such as the Skyride, the Wave House Sentosa, iFly Singapore and the Sentosa Boardwalk(2)(3); (c) growing the BTMICE sector through the organisation of major events such as the CommunicAsia and BroadcastAsia summits, the Singapore Airshow and Singapore International Water Week, among others(2)(4);

(d) developing Singapore as Asias leading medical and education hub by attracting worldleading educational institutions such as INSEAD and the University of Chicago Graduate School of Business (now known as The University of Chicago Booth School of Business) to set up campuses in Singapore(5), as well as promotion of clinical and healthcare services providers in Singapore as one-stop international patient service centres(6); and (e) organisation of major cultural, arts, sports, food and music events such as the Formula One Singapore Grand Prix, Zoukout, World Gourmet Summit, and the Asia Fashion Exchange.(2) Given the number of new initiatives and upcoming events to develop Singapores tourism industry, the Directors anticipate the outlook for the tourism industry to remain positive. 149

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

Visitor arrivals in Singapore As discussed in the section entitled Industry Overview Inbound Tourist Arrivals, inbound tourist arrivals to Singapore registered 23.0% growth to reach 19.4 million trips in 2010 and inbound tourist arrivals are expected to increase to reach 19.6 million trips and 20.4 million trips in 2011 and 2012 respectively, with an overall CAGR of 2.7% during 20112015 to reach 21.9 million trips in 2015. The strong performance in 2010 was a major improvement over the marginal growth recorded in 2009, as consumers regained their confidence in spending and were more willing to take vacations alongside the economic recovery in 2010. The tourism and hospitality sectors in Singapore were relatively stable in 2011 and are expected to remain so in 2012. We believe that the record number of visitors in 2010, the moderate growth in 2011 and expected stability in 2012 demonstrates the resilience of the tourism industry to rebound from the global financial crisis, and also believe that this is attributed to a multitude of factors, including global economic growth, the advent of budget air-carriers in Asia, as well as increased global propensity for travelling for business and leisure purposes. In addition, the collaborative efforts of government agencies and the tourism industry to promote Singapore as a travel and transit destination and to develop new tourist attractions have also significantly contributed to the increase in visitor arrivals. Furthermore, as discussed in the section entitled Industry Overview Key Trends and Drivers for Economy-tier Hotels, whilst the hospitality industry might experience slower growth in 2012 due to uncertain economic conditions, demand for economy-tier hotels is unlikely to be affected. In the face of adverse economic conditions and tighter budgets, both leisure and business travellers are likely to downgrade to the more affordable accommodation that economy-tier hotels provide. We believe that if such a trend occurs, our Group would be in a position to benefit from it. Improvements in ARR, AOR and REVPAR for the hotel industry in Singapore in 2010 and first eight months of 2011 As discussed in the section entitled Industry Overview Overview of Singapores Hotel Industry, the national AOR for gazetted hotels in Singapore improved from 76.0% in 2009 to 85.0% in 2010. The ARR has also improved by 14.5% year-on-year to $217.00 in 2010. The growth in both the AOR and ARR led to a 28.0% increase in the REVPAR to $184.00 in 2010. As also discussed in the section entitled Industry Overview Future Prospects of Singapores Hotel Industry, in spite of STBs plans to increase the number of hotel outlets and hotel rooms, the AOR for gazetted hotels increased from 85.6% for the first eight months of 2010 to 86.1% for the first eight months of 2011; and barring any major external shocks, AORs are likely to remain above 80% during the forecast period of 20112015. In addition, the following were also discussed in the section entitled Industry Overview Future Prospects of Singapores Hotel Industry, (i) the ARR nationwide increased from $209.85 for the first eight months of 2010 to $240.30 for the first eight months of 2011; (ii) REVPAR also reflected a similar increase from $179.60 for the first eight months of 2010 to $206.90 for the first eight months of 2011; (iii) economic uncertainty as well as increase in hotel 150

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

room inventory is likely to moderate the growth in ARR from 2012 onwards; and (iv) hoteliers are likely to maintain current room rates so as to attract demand in an increasingly competitive environment.
Sources: (1) STB media release entitled, Singapore Sets Out To Triple Tourism Receipts To $30 Billion by 2015, 11 January 2005 (2) STB presentation, entitled Sustaining the Momentum: Creating Value, 22 March 2011 (3) Sentosa Leisure Group website, http://www.sentosa.com.sg, as at 21 September 2011 (4) Singapore Association of Convention and Exhibition Organisers and Suppliers (SACEOS) website, http://www.saceos.org.sg, as at 21 September 2011 and CommunicAsia and BroadcastAsia press release entitled CommunicAsia2011 and BroadcastAsia2011 Close With Strong Results, 24 June 2011 (5) Singapore Education website http://www.singaporeedu.gov.sg, as at 21 September 2011 (6) Singapore Medicine website, http://www.singaporemedicine.com as at 21 September 2011. Singapore Medicine is a multi-government agency comprising the Economic Development Board, IE Singapore and STB

The STB, Sentosa Leisure Group, SACEOS, CommunicAsia, BroadcastAsia, Singapore Education, Singapore Medicine, the Economic Development Board and International Enterprise Singapore have not consented to the inclusion of the relevant information for the purposes of Section 249 of the SFA and are therefore not liable for the relevant statements(s) under Sections 253 and 254 of the SFA. While we have taken reasonable steps to ensure that the relevant statement(s) have been included in its proper context and form, we have not independently verified the accuracy of the relevant information. Trend Information On the bases and assumptions below and based on the unaudited financial statements of our Group for the financial year ended 31 December 2011, we estimate as follows (profit estimate): (i) (ii) the net asset value of our Group as at 31 December 2011 is $605.2 million; and the profit before income tax of our Group for FY2011 is $27.9 million.

Investors should be aware that there is no assurance that the profit estimate set out above can be achieved, as there are risks and uncertainties that may cause our actual results and performance (after completion of the entire audit process and the adoption of our financial statements for FY2011) to be materially different from the profit estimate set out above. The factors that may affect our business and operations are mainly set out in the section entitled Risk Factors of this Prospectus. The profit estimate, for which our Directors are solely responsible, has been prepared on the bases consistent with the accounting policies normally adopted by our Group in the preparation of our financial statements.

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PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

The general principal assumptions underlying the profit estimate are set out below: (a) there will be no material change in the valuation of our hotel properties as at 31 December 2011; (b) there will be no material adverse changes in the prevailing interest rates; and (c) there will be no exceptional circumstances, which will require provisions to be made by our Group in respect of any contingent liability, bad debts and other assets.

For the current financial year and barring unforeseen circumstances, our Directors have observed the following trends: (a) We expect the occupancy rates for our hotels to remain fairly stable or increase due to the expected increase in visitor arrivals. (b) We expect our operating expenses to increase due to the full-year operations of Fragrance Hotel-Riverside, Fragrance Hotel-Elegance and Parc Sovereign Hotel, compliance costs as a listed company as well as the impact of the Service Agreements entered into with our Executive Directors. Further details are set out in the section entitled Directors, Management and Staff Service Agreements of this Prospectus. (c) Some of our suppliers or contractors may increase the selling prices of their products or services in response to an increase in raw material, labour and transportation costs.

(d) We expect the labour cost to increase due to the increasing demand for hospitality-related jobs and any change in government policies for hiring foreigners. (e) We expect our financing cost to increase and our liquidity to decrease as we will be financing the acquisition of our hotel properties pursuant to the Restructuring Exercise using bank loans. Please refer to the section entitled General Information of Our Group Restructuring Exercise of this Prospectus for further details on the Restructuring Exercise. There is however no assurance that the growth pattern as reflected in the past financial years will continue. Save as disclosed above and under the sections entitled Risk Factors, Managements Discussion and Analysis of Results of Operations and Financial Position and Prospects, Business Strategies and Future Plans of this Prospectus, and barring any unforeseen circumstances, our Directors are not aware of any other known recent trends, uncertainties, demands, commitments or events that are reasonably likely to have a material and adverse effect on our revenue, profitability, liquidity or capital resources, or that would cause financial information disclosed in this Prospectus to be not necessarily indicative of our future operating results or financial position. Please also refer to the section entitled Cautionary Note Regarding Forward-Looking Statements of this Prospectus.

152

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

Our Business Strategies and Future Plans We intend to implement the following business strategies and future plans: Expansion of our Fragrance and Parc Sovereign brands of hotels We plan to increase the number of hotel properties we operate under the Fragrance and Parc Sovereign brands of hotels. We believe that such expansion plans will allow us to capitalise on our experience in conceptualising and operating economy-tier to mid-tier hotels. In doing so, we hope to meet the increase in demand for affordable hotel stays by tourists from the Asia-Pacific region due to the popularity of the Integrated Resorts and the attractive offerings from the budget airlines. We are in the process of identifying potential sites for hotel development and expect to pursue one or more of these opportunities within one year from the Listing Date. We intend to add 200 to 300 rooms to our economy-tier and/or mid-tier hotels within one to two years after successful acquisition of the development site. The actual opportunities pursued will depend on, among other things, whether the Company is successful in any private or government land sales programs or bidding processes (where applicable) and the final pricing of the sites or projects involved. We also plan to increase the number of hotel properties we operate under the Fragrance and Parc Sovereign brands of hotels by entering into hotel management agreements with third parties to manage and operate hotels that are owned by the third parties, under the Fragrance and/or Parc Sovereign brands. This will enable us to take advantage of commercial opportunities in the market which may make it more advantageous for us to manage and operate the hotel rather than acquiring the hotel. We also plan to expand into the Asia-Pacific region, particularly in countries such as Malaysia, Indonesia and the Philippines, with focus on the economy-tier hotel market segment, as and when the opportunity arises through setting up of new subsidiaries, establishment of joint venture with local partners and/or acquisitions of business or assets. Should such opportunity arise, we will seek approval where necessary, from our shareholders and the relevant authorities as required by the relevant laws and regulations. We have earmarked $30.0 million of our net proceeds from the issue of New Shares for our expansion plans. We may also finance such expansion plans by way of internal resources and/or through new debt or equity financing. Upgrading our existing hotels In order to stay competitive in the market and enhance the value of our hotels, the Group intends to upgrade and refurbish our current portfolio of hotels. The Group believes that the refurbished hotels will be able to command higher room rates and improve occupancy rates, which would then increase our Groups revenue and profits.

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PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

We plan to renovate Fragrance Hotel-Ruby over the course of 2012 at an approximate cost of $2.0 million. There are presently no definite plans to upgrade any of our other hotels, though we may do so as and when the need arises. We intend to finance refurbishment of our hotels with internally generated funds. Launching of more aggressive marketing strategies The increasing popularity of booking hotels on-line through e-commerce or social media has changed the way tourists currently search and book their hotel rooms. Moving forward, this trend will likely continue and hence, we plan to increase our collaborations with the on-line travel agents to engage our customers globally and through multiple platforms. In addition, we plan to launch a new interactive booking engine in 2012 (at an approximate cost of $60,000) as well as review existing portal design so as to facilitate the booking process for persons seeking accommodation with us. Furthermore, we plan to strengthen our collaborations with the budget airlines to promote our hotels in order to capitalise on the affordable air fares offered by them. With the expansion of the BTMICE market in Singapore, we plan to increase our presence in the BTMICE market through our close relationships with the STB and the SHA to promote our economy-tier and mid-tier hotels. We intend to finance implementation of these plans with internally generated funds. Lowering the cost of operations We will review the energy efficiency of the electrical appliances and sanitary fittings in our hotels and where economically feasible, upgrade such appliances and fittings so as to be more energy efficient. In addition, we will continue to educate all our operating staff on energy conservation so as to achieve the dual aims of environmental conservation and costs savings. We currently outsource our laundry services to third parties. We will explore the feasibility of establishing our own laundry service to reduce the outsourcing costs and operating expenses. We intend to finance implementation of these plans with internally generated funds.

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SHARE CAPITAL AND SHAREHOLDERS

SHARE CAPITAL Our Company was incorporated in Singapore on 19 September 2011 under the Companies Act as a private company limited by shares, under the name of Global Hotels Pte. Ltd.. We changed our name to Global Premium Hotels Pte. Ltd. on 21 February 2012. On 29 March 2012 our Company further changed its name to Global Premium Hotels Limited in connection with its conversion to a public company limited by shares. As at the date of incorporation, the issued and paid-up share capital of our Company was $1 comprising one Share. As at the Latest Practicable Date, the issued and paid-up share capital of our Company was $1 comprising one Share. At the extraordinary general meetings deemed to be held on 21 March 2012 and 23 March 2012, our Controlling Shareholder, FGL approved, inter alia, the following: (a) the conversion of our Company into a public company limited by shares and the consequential change of name to Global Premium Hotels Limited; (b) the adoption of the Memorandum and Articles of Association; (c) the issue of the New Shares pursuant to the Invitation, which when allotted, issued and fully paid, will rank pari passu in all respects with our existing issued Shares;

(d) that authority be given to our Directors, pursuant to Section 161 of the Companies Act, to: (i) (aa) issue Shares whether by way of rights, bonus or otherwise; and/or (bb) make or grant offers, agreements or options (collectively, Instruments) that might or would require Shares to be issued during the continuance of this authority or thereafter, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as our Directors may, in their absolute discretion, deem fit; and (ii) issue Shares in pursuance of any Instruments made or granted by our Directors while such authority was in force (notwithstanding that such issue of Shares pursuant to the Instruments may occur after the expiration of the authority contained in this resolution),

Provided that: (iii) the aggregate number of Shares issued pursuant to such authority (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority), does not exceed 50.0% of the Post-Invitation Issued Share Capital, and provided further that where Shareholders with registered addresses in Singapore are not given the opportunity to participate in the same on a pro-rata basis (non pro-rata 155

SHARE CAPITAL AND SHAREHOLDERS

basis), then the Shares to be issued under such circumstances (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority) shall not exceed 20.0% of the Post-Invitation Issued Share Capital; (iv) (unless revoked or varied by our Company in general meeting) the authority so conferred shall continue in force until the conclusion of the next annual general meeting of our Company or the date by which the next annual general meeting of our Company is required by law to be held, whichever is the earlier. For the purposes of this resolution, the Post-Invitation Issued Share Capital shall mean the total number of issued Shares of our Company (excluding treasury shares) immediately after this Invitation, after adjusting for: (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided the options or awards were granted in compliance with the Listing Manual; and (iii) any subsequent bonus issue, consolidation or sub-division of Shares; and (e) The adoption of the Global Premium Hotels PSP, the rules of which are set out in Appendix H of this Prospectus and that our Directors be authorised to allot and issue Award Shares upon the vesting of the Awards granted under the Global Premium Hotels PSP. As at the date of this Prospectus, our Company has only one (1) class of shares, being ordinary shares. The rights and privileges of our Shares are stated in our Articles of Association. Save for the Award Shares, there is no founder, management, deferred or unissued shares reserved for issuance for any purpose. There are no Shares that are held by or on behalf of our Company or by any of our Subsidiaries.

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SHARE CAPITAL AND SHAREHOLDERS

Details of the changes in the issued and paid-up share capital of our Company since incorporation is set out as follows:
Resultant Issued and Paid-up Share Capital ($) 1 549,999,999 550,000,000 450,000,000 1,000,000,000 1 137,499,999 137,500,000 113,541,000(1) 251,041,000(1)

Number of Shares Issued and fully paid-up Shares as at incorporation Issuance of Consideration Shares pursuant to the Restructuring Exercise Pre-Invitation issued and paid-up share capital Issue of New Shares pursuant to this Invitation Post-Invitation issued and paid-up share capital
Note:

(1) This amount assumes the setting-off against share capital estimated expenses incurred in connection with the Invitation of approximately $3.4 million, and excludes estimated expenses incurred in connection with the Invitation of approximately $1.5 million to be charged directly to the combined statements of comprehensive income.

Shareholders Our Directors and Shareholders and their respective equity interests in our Company as at the Latest Practicable Date and immediately after the Invitation are set out below:
After the Invitation (assuming the Over-allotment Option is not exercised) Direct Interest Deemed Interest No. of Shares % No. of Shares %

As at the Latest Practicable Date Direct Interest Deemed Interest No. of Shares % No. of Shares % Directors Koh Wee Meng(1) Lim Chee Chong Sim Mong Yeow Kau Jee Chu Kwan Chee Wai Woo Peng Kong Shareholders FGL Lim Wan Looi Public Total Notes:
(2)

100.0

550,000,000

55.0

1 1

100.0 100.0

1 -

100.0

550,000,000 450,000,000

55.0 45.0

550,000,000 -

55.0

1,000,000,000 100.0

(1) Mr. Koh Wee Meng has a direct 73.24% shareholding interest in FGL. Accordingly, Mr. Koh Wee Meng is deemed to be interested in the Shares held by FGL by virtue of Section 4 of the SFA. (2) Ms. Lim Wan Looi is the spouse of Mr. Koh Wee Meng. Accordingly, Ms. Lim Wan Looi is deemed to be interested in Shares held by FGL by virtue of section 4 of the SFA.

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Save as disclosed in the section entitled Restructuring Exercise of this Prospectus, there has been no change in the percentage ownership of Shares by our Controlling Shareholder in the past three (3) years prior to the Latest Practicable Date. The Shares held by our Controlling Shareholder does not carry different voting rights from the New Shares. Our Directors are not aware of any arrangement, the operation of which may, at a subsequent date, result in a change in control of our Company. Save as disclosed in this Prospectus, our Company is not directly or indirectly owned or controlled by another corporation, any government or other natural or legal person whether severally or jointly. Moratorium To demonstrate their commitment to our Group, our Controlling Shareholder, FGL, which holds 550,000,000 Shares, representing approximately 55.0% of our enlarged issued and paid-up share capital after this Invitation (assuming that the Over-allotment Option is not exercised), has undertaken to the Issue Manager and our Company that, for a period of six (6) months commencing from the date of admission of our Company to the Official List of SGX-ST, it will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant to purchase, lend, enter into any contract that will directly or indirectly constitute or will be deemed as a disposal of, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, any part of its interests in our Company. In connection with the Share Lending Agreement, FGL may lend up to 67,500,000 Shares to the Issue Manager. The restrictions above do not apply to the Shares lent to the Issue Manager pursuant to the Share Lending Agreement, provided that these restrictions shall apply to the Shares returned to FGL pursuant to the Share Lending Agreement. Please refer to the section entitled The Invitation Plan of Distribution of this Prospectus for further details. Our Non-Executive Director, Mr. Koh Wee Meng, who directly owns 73.24% of the issued and paid-up share capital of FGL, has undertaken to the Issue Manager and our Company that for a period of six (6) months commencing from the date of admission of our Company to the Official List of SGX-ST, he will not, offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant to purchase, lend, enter into any contract that will directly or indirectly constitute or will be deemed as a disposal of, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, any part of his interests in FGL. Ms. Lim Wan Looi, the spouse of Mr. Koh Wee Meng, directly owns 10.94% of the issued and paid-up share capital of FGL, has undertaken to the Issue Manager and our Company that for a period of six (6) months commencing from the date of admission of our Company to the Official List of SGX-ST, she will not, offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant to purchase, lend, enter into any contract that will directly or indirectly constitute or will be deemed as a disposal of, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, any part of her interests in FGL.

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Management Reporting Structure

Our management reporting structure as at the date of lodgement of this Prospectus is as follows:

Board

Audit Committee

Chief Executive Officer Lim Chee Chong Chief Operating Officer Sim Mong Yeow

159
Vice President, Business Development Lim Hwee Leng Chief Financial Officer Chen Loong Mey Financial Controller Liu Xiaojing

Vice President, Human Resources Wong Ping Ping

Vice President, Hotel Operations Lee Yen Mei

Vice President, Sales Yong Cheong Beng

Vice President, Information Technology Chew Boon Seng

Vice President, Corporate Affairs Neo En Liang

DIRECTORS, MANAGEMENT AND STAFF

Directors Our board of Directors is entrusted with the responsibility for the overall management of our Company. The particulars of our Directors as at the date of lodgement of this Prospectus are as follows: Name Koh Wee Meng Lim Chee Chong Age 48 36 Address 20 Cove Grove Singapore 098131 Blk 567 Hougang Street 51 #06-69 Singapore 530567 35 Joo Chiat Avenue Singapore 428150 5 Jalan Bahasa Singapore 299261 66 Elias Road #08-11 Oasis @ Elias Singapore 519941 33 Soo Chow View Singapore 575425 Principal Occupation Non-Executive Chairman Chief Executive Officer and Executive Director Chief Operating Officer and Executive Director Independent Director of Aspial Corporation Limited Accounting and Finance Lecturer Executive Director of Viking Offshore & Marine Limited

Sim Mong Yeow Kau Jee Chu Kwan Chee Wai

59 73 41

Woo Peng Kong

59

Information on the business and working experience, education and professional qualifications, if any, and areas of responsibilities of each of our Directors are set out below: Mr. Koh Wee Meng is our Non-Executive Chairman. Mr. Koh founded the FGL Group in the early 1990s. He is the Executive Chairman and Chief Executive Officer of our Controlling Shareholder, FGL. Mr. Koh is responsible for the overall strategy, management and operations of the FGL Group. His responsibilities include overseeing all aspects of the property development business of the FGL Group. Mr. Koh has approximately 25 years of experience in property development. Prior to founding the FGL Group, Mr. Koh was a director of Menglee & Wheeseng Investment (1983) Pte. Ltd. (now known as Fragrance Land) since 1983 where he was responsible for its property development projects. Mr. Koh was awarded an honourary Doctorate of Philosophy in Entrepreneurship from Wisconsin International University in 2004. Mr. Koh Wee Meng is the brother-in-law of our Executive Director, Mr. Lim Chee Chong. Mr. Lim Chee Chong is our Chief Executive Officer and is responsible for overseeing our operations, setting directions for new growth areas and developing business strategies. Mr. Lim manages our day-to-day operations, including overseeing the development of our hotel 160

DIRECTORS, MANAGEMENT AND STAFF

projects from inception to completion. Mr. Lim is involved in the conceptualisation of the design, operating functions and property enhancements of our Groups new and existing hotel buildings. He spearheaded the launch of our Groups premium brand hotel, Parc Sovereign Hotel. Mr. Lim served as an executive director of our Controlling Shareholder, FGL, from April 2010 to March 2012. Prior to that, Mr. Lim was the director of property development of FGL from 2007 to 2010 and was responsible for the overall supervision of the residential, commercial and hotel development projects of FGL. From 2005 to 2006, Mr. Lim was hired as a project manager of SLF Management Services Pte. Ltd. and was responsible for managing the residential development projects of NTUC Choice Home from inception to completion. From 2004 to 2005, Mr. Lim worked as a project director of Fragrance Project Management Pte. Ltd., a wholly-owned Subsidiary of our Controlling Shareholder, FGL. As a project director, his responsibilities included management of the project team and the customer service team. From 2000 to 2003, Mr. Lim was the project manager of World Class Land Pte. Ltd., a wholly-owned Subsidiary of Aspial Corporation Limited, a company listed on the Main Board of the SGX-ST. Mr. Lim was responsible for managing the residential development projects of World Class Land Pte. Ltd. Mr. Lim earned a Bachelors degree in Engineering (Electrical & Electronic Engineering) from the Nanyang Technological University, Singapore in 2000. Mr. Lim Chee Chong is the brother-in-law of our Non-Executive Director, Mr. Koh Wee Meng. Mr. Sim Mong Yeow is our Chief Operating Officer and is responsible for overseeing the entire business operations of our Group, including the management of hotel operations, sales and marketing and human resources. Mr. Sim has been instrumental in our Groups growth and has been leading the expansion of our business and operations since he joined our Controlling Shareholder, FGL as an executive director from October 2005 to March 2012. Prior to that, Mr. Sim served as the independent director of FGL from December 2004 to October 2005. From 2004 to 2005, Mr. Sim worked as a manager of Singpost Retail Services Pte Ltd. where he assisted in the setting up and management of a pawnshop. From 2002 to 2004, Mr. Sim worked at OCBC Bank as their vice president of business development and was responsible for marketing business credit schemes and wealth management products to small and mediumsized enterprises. From 2000 to 2002, Mr. Sim was the vice president and team leader at Keppel Tatlee Bank Ltd where he was in charge of the overall operations of a single branch and was also responsible for overseeing the performance of several branches. From 1981 to 1999, Mr. Sim worked his way up from a credit and marketing officer to the position of branch manager and team leader at Asia Commercial Bank Ltd and Keppel Bank Ltd. Mr. Sim began his career in Industrial and Commercial Finance Ltd as a credit and operations officer and worked there from 1976 to 1981. Mr. Sim was responsible for, inter alia, the marketing and sales of various retail and commercial loans. Mr. Sim attained the Singapore-Cambridge General Certificate of Education Advanced Level Examination Pass. Mr. Sim is an associate of the Chartered Institute of Bankers since 1981 and an associate of the Institute of Chartered Secretaries and Administrators since 1983. Mr. Kau Jee Chu is our Independent Director. Mr. Kau is currently an independent director of Aspial Corporation Limited, a company listed on the Main Board of the SGX-ST. Mr. Kau is a 161

DIRECTORS, MANAGEMENT AND STAFF

member of the audit committee of Aspial Corporation Limited and is responsible for overseeing the internal controls and auditing functions of the company. Mr. Kau has over twenty-seven (27) years of experience in the banking and finance industry and has held senior management roles in various financial institutions. From December 2002 to March 2009, Mr. Kau was an independent director of Hiap Moh Corporation Limited where he was a member of the audit committee and remuneration committee. From 2003 to 2005, Mr. Kau was an independent director and a member of the audit committee and remuneration committee of CAM International Corporation Limited. From 1988 to 2003, Mr. Kau was an independent director and a member of the audit committee and nominating committee of Hotel Negara Limited. Prior to that, from 1992 to 2002, Mr. Kau was the chairman of OUB Securities Pte. Ltd. where he was responsible for overseeing the stock broking business carried out by the company. From 1985 to 2002, Mr. Kau was the chief executive officer and executive director of Overseas Union Trust Limited where he was responsible for the general management of the company. From 1975 to 1982, Mr. Kau was the general manager of Singapura Building Society Limited (now known as Singapura Finance Limited) where he was also responsible for the general management of the company. Mr. Kau earned a Bachelor of Accountancy degree from the University of Singapore (now known as the National University of Singapore) in 1972. He is a member in retirement of the Institute of Certified Public Accountants of Singapore and is a Fellow Chartered and Certified Accountant of the Association of Chartered Certified Accountants since 2006. Mr. Kau is also an adjudicator at the Financial Industry Disputes Resolution Centre Ltd. Mr. Kwan Chee Wai is our Independent Director. Mr. Kwan is currently an accounting and finance lecturer at the SAA Global Education, the training arm of the Institute of Certified Public Accountants of Singapore. He also lectures in accounting and finance at the Singapore Institute of Management, Kaplan Higher Education and LMC Pte. Ltd. Mr. Kwan has over fifteen (15) years of experience in teaching accounting and finance at various institutions of higher learning. Mr. Kwan has held various teaching positions at Raffles Campus Pte. Ltd., Sumbershire Business School, Times Management Institute, Management Development Institute of Singapore, Nanyang Polytechnic, Midland School of Commerce and Yishun Commercial School in the past fifteen (15) years. Mr. Kwan worked as a management accountant with Rothmans of Pall Mall (S) Pte. Ltd. from May 1997 to October 1999. From May 1995 to April 1997, Mr. Kwan worked as an assistant accountant with Sembawang Capital Pte. Ltd. Mr. Kwan earned a Masters of Business Research from the University of Western Australia in 2008. He also earned a Masters of Business Administration (Investment and Finance) degree from the University of Hull in 2002, a Masters of Business Administration degree from the University of Strathclyde in 2000 and a Bachelor of Accountancy degree from the Nanyang Technological University in 1995. Mr. Kwan is a Fellow Certified Public Accountant of the Institute of Certified Public Accountants of Singapore, an Associate Management Accountant of the Institute of Certified Management Accountants of Australia, an ordinary member of the Singapore Institute of Management, a fellow of the Association of International Accountants United Kingdom, a fellow of the International Academy of Financial Management United States of America and a Fellow Certified Public Accountant of the Certified Public Accountants of Australia. 162

DIRECTORS, MANAGEMENT AND STAFF

Mr. Woo Peng Kong is our lead Independent Director. Mr. Woo has over thirty (30) years of experience in the oil and gas and marine and offshore industries. He has held a diverse range of senior management roles in various private and public listed companies. Mr. Woo is currently the executive director of Viking Offshore & Marine Limited, a company listed on the Catalist Board of the SGX-ST. Mr. Woo is responsible for the business operations and financial management of the company and its Subsidiaries. Previously, between 2010 to 2011, Mr. Woo was the chief executive officer and executive director of Renewable Energy Asia Group Limited, a company listed on the Catalist Board of the SGX-ST. Between 2004 and 2010, Mr. Woo served as an executive director and chief operating officer of KS Energy Services Limited (now known as KS Energy Limited), a company listed on the Main Board of SGX-ST. Prior to that, Mr. Woo was the founder and managing director of GlobalTech Offshore & Marine Pte. Ltd. and co-founder and managing director of GlobalTech Systems Engineering Pte. Ltd. from 2002 to 2010. From 2001 to 2002, Mr. Woo was the chief executive officer of Van der Horst Engineering Services Pte. Ltd. Between 1984 to 2001, Mr. Woo co-founded and was the general manager of Oakwell Engineering Limited, a company listed on the Catalist Board of the SGX-ST. Mr. Woo was also a director and general manager of Oakwell Engineering International Pte. Ltd. from 1991 to 2001 and a director of Oakwell-Breen Pte. Ltd. from 1995 to 2001. Mr. Woo earned a Bachelors degree in Engineering (Mechanical) (Hons) from the University of Singapore (now known as the National University of Singapore) in 1977 and a certified diploma in Accounting and Finance from the Chartered Association of Certified Accountants, United Kingdom in 1987. Mr. Woo was awarded the Esso Asia Services Inc. scholarship in 1976. He is a member of the Institution of Engineers since 1979 and the Singapore Institute of Directors since 2009. Pursuant to Rule 210(5)(a) of the Listing Manual, all our Directors save for Mr. Kwan Chee Wai have prior experience as directors of public listed companies in Singapore. Mr. Kwan has undertaken to undergo relevant training in Singapore to familiarise himself with the rules and responsibilities of a director of a public listed company in Singapore. Save as disclosed in the section entitled Interested Person Transactions and Conflict of Interests, our Group does not have any existing business or professional relationships with our Non-Executive Director and Independent Directors.

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The present and past directorships for companies, of each of our Directors held in the five (5) years preceding the date of lodgement of this Prospectus, excluding that held in our Company, are set out below:
Name Koh Wee Meng Present Directorships Group companies or entities Fragrance Assets Fragrance Capital Fragrance Investment Fragrance Ventures Parc Sovereign Hotel Management Other companies or entities FGL Fragrance Biz Space Fragrance Holdings Fragrance Heritage Fragrance Homes Fragrance Land Fragrance Properties Fragrance Realty James Koh Investment Pte. Ltd. JK Auto Restoration Hub Pte. Ltd. JK Assets Pte. Ltd. JK Land Pte. Ltd. Kensington Land MLHS Holdings Pte. Ltd. Kensington Village Pte. Ltd. Lim Chee Chong Group companies or entities Fragrance Assets Fragrance Capital Fragrance Investment Fragrance Ventures Parc Sovereign Hotel Management Fragrance Hotel Management Other companies or entities FGL Sim Mong Yeow Group companies or entities Fragrance Hotel Management Other companies or entities FGL Kau Jee Chu Group companies or entities Other companies or entities Aspial Corporation Limited Kwan Chee Wai Group companies or entities Other companies or entities Past Directorships Group companies or entities Fragrance Hotel Management

Other companies or entities

Group companies or entities

Other companies or entities Group companies or entities Other companies or entities Group companies or entities Other companies or entities Hiap Moh Corporation Limited H P Y Holdings Pte Ltd Group companies or entities Other companies or entities

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Name Woo Peng Kong Present Directorships Group companies or entities Other companies or entities Promoter Hydraulics Pte. Ltd. Viking Facilities Management & Operations Pte. Ltd. Viking Offshore and Marine Limited Past Directorships Group companies or entities Other companies or entities Atlantic Esbjerg Limited Atlantic Marine Services B.V. Atlantic Marine Services (Cyprus) Group Limited Atlantic Marine Services Denmark B.V. Atlantic Marine Service Egypt Atlantic Oilfield Services Ltd. Atlantic Onshore Services B.V. Blue Ocean Explorer Ltd. Casadilla Group Pte. Ltd. Girdnal Oilfield Services Inc. Global Oilfield Services Pte Ltd. GlobalTech Offshore & Marine Pte. Ltd. GlobalTech Systems Engineering Pte. Ltd. Harta Holding Pte. Ltd. Harta Offshore & Marine Services Pte. Ltd. KS Capital Equipment (HK) Limited KS Discoverer 2 (HK) Limited KS Discoverer 2 Pte. Ltd. KS Discoverer 3 (HK) Limited KS Discoverer 4 (HK) Limited KS Discoverer 4 Pte. Ltd. KS Discovery (HK) Limited KS Discovery Limited KS Drilling Pte. Ltd. KS Energy Services Limited (now known as KS Energy Limited) KS Fabrication and Engineering Pte. Ltd. KS Offshore & Marine Services Inc. KS Oil Rig Services Inc. KS Oilfield Equipment Pte. Ltd. KS Oilfield Services Limited KS Oilfield Support Limited KS Technical Resources (HK) Limited KS Venture Pte. Ltd. KSAM2 Petrodrill Offshore Inc KT Lion Oilfield Services Ltd. PNT (Asia Pacific) Limited QIM Ventures Limited Renewable Energy Asia Group Limited REA Power Pte. Ltd. Sphinx Frontier Ltd. United Oilfield Services Pte. Ltd. Yakki International Pte. Ltd.

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Key Executives Our Directors are assisted by a team of experienced and qualified Key Executives who are responsible for the various functions of our Company. The particulars of our Key Executives as of the Latest Practicable Date are as follows: Name Chen Loong Mey Neo En Liang Liu Xiaojing Wong Ping Ping Yong Cheong Beng Lee Yen Mei Lim Hwee Leng Chew Boon Seng Age 35 39 31 38 51 42 39 46 Principal Occupation Chief Financial Officer Vice President, Corporate Affairs Financial Controller Vice President, Human Resources Vice President, Sales Vice President, Hotel Operations Vice President, Business Development Vice President, Information Technology

The correspondence address for all our Key Executives is 168 Changi Road #04-01 Fragrance Building Singapore 419730. Information on the business and working experience, education and professional qualifications, if any, and areas of responsibilities of each of our Key Executives are set out below: Ms. Chen Loong Mey is our Chief Financial Officer. She joined us in November 2011 and is responsible for overseeing the finance and accounting functions, cash management, strategic planning and budgets, tax management, corporate governance and internal controls of our Group. Prior to joining us from June 2008 to November 2011, Ms. Chen was the finance manager of CapitaMalls Asia Limited, a company listed on the Main Board of the SGX-ST, where she was responsible for the overall finance and accounting function of CapitaRetail China Trust, a real estate investment trust listed on the Main Board of the SGX-ST, and its Subsidiaries. From July 2007 to May 2008, Ms. Chen was the group management accountant of CitySpring Infrastructure Management Pte. Ltd., the trustee manager of CitySpring Infrastructure Trust, a business trust listed on the Main Board of the SGX-ST, where she was responsible for reviewing the accounts of CitySpring Infrastructure Trust as well as its sub-trust accounts. From February 2004 to August 2006, Ms. Chen was an accountant at FGL where she was responsible for managing and reviewing the full set of accounts of FGL and its Subsidiaries. From August 2002 to January 2004, Ms. Chen was an audit assistant at MGI Ma & Mah Pte. Ltd. Ms. Chen earned a Bachelor of Science in Applied Accounting from Oxford Brookes University in 2002 and a professional certificate in finance and accountancy from the Association of 166

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Chartered Certified Accountants in 2006. She is a member of the Association of Chartered Certified Accountants since 2006 and a Certified Public Accountant of the Institute of Certified Public Accountants of Singapore since 2008. Mr. Neo En Liang is our Vice President, Corporate Affairs. He joined us in June 2009, and his responsibilities include monitoring daily revenue reports of the Group as well as liaising with government authorities, regulatory compliance, corporate social responsibility and monitoring workplace safety and health. Prior to joining us, from August 2008 to March 2009, Mr. Neo was the finance executive of SetClear Pte. Ltd., a wholly-owned subsidiary of CLSA Singapore Pte. Ltd., where he was responsible for preparing the daily accounting reports and managing clients accounts across markets in Asia, Europe and the United States. From October 2004 to August 2008, Mr. Neo worked in the group finance, management information systems department of OCBC Bank where he was responsible for the data quality assurance and the production of management information systems reports. Mr. Neo earned a Bachelor of Business (Accounting) degree from Monash University, Australia in 2003. Ms. Liu Xiaojing is our Financial Controller. Ms. Liu joined us in April 2010, and assists our Chief Financial Officer in the preparation of the financial statements of our Group as well as our Subsidiaries, cash management, corporate governance and internal controls. Prior to joining us, Ms. Liu worked as an audit supervisor at MGI Singapore PAC from March 2007 to March 2010. Ms. Liu was responsible for leading a team of audit associates to conduct internal and external audit. She also provided financial and strategic risk management advice to clients from a wide range of industries. Ms. Liu earned a Bachelor of Science in Applied Accounting from the Oxford Brookes University in 2008 and a diploma in Electronics, Computer and Communication Engineering from the Singapore Polytechnic in 2003. She is a Certified Public Accountant of the Institute of Certified Public Accountants of Singapore since 2011 and an affiliate of the Association of Chartered Certified Accountants since 2008. Ms. Wong Ping Ping is our Vice President, Human Resources. She joined us in January 2009 and her responsibilities include managing all aspects of staff recruitment and selection and overseeing all issues relating to employees relations, compensation and benefits. Prior to joining us, from November 2007 to June 2008, Ms Wong was the group human resources manager at Technics Oil & Gas Ltd., a company listed on the SGX-ST, where she was responsible for managing all aspects of human resource management. From September 2005 to November 2007, Ms. Wong was the human resources manager at Lum Chang Building Contractors Pte. Ltd. where she was responsible for recruitment and selection and training and development. From March 2004 to September 2005, Ms. Wong was the human resources senior executive at National Healthcare Group Polyclinics where she was responsible for managing all aspects of human resource management. From May 2002 to March 2004, Ms.

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Wong was the human resources executive at Luxasia Pte. Ltd. where she assisted in compensation and benefits matters and human resource policy and reporting. Ms. Wong earned a Bachelor of Commerce degree from the Curtin University of Technology, Australia in 2004. She earned a professional certificate in compensation and benefits management from the Singapore Human Resource Institute in 2001. She also holds a Diploma in Human Resource Management since 1999 and a Certificate in Human Resource Management from the Singapore Human Resource Institute since 1997. Mr. Yong Cheong Beng is our Vice President, Sales. He joined us on 2 June 2010 and his responsibilities include managing the local and foreign travel agents, marine companies customer accounts and carrying out marketing activities at regional travel fairs. Prior to joining us, from August 2004 to May 2010, Mr. Yong was the sales and marketing manager of Metropolitan YMCA Singapore where he was responsible for the regional markets and managed the local travel agents, corporate accounts, internet portal sales and internet agents. From January 1999 to July 2004, Mr. Yong was the sales and marketing manager at Online Technology Pte. Ltd. where he was responsible for managing the online portal. From February 1997 to December 1998, Mr. Yong was a sales and marketing executive at Pasta Fresca De Salvatore Pte. Ltd. where he was responsible for managing the banquet sales. From January 1986 to January 1997, Mr. Yong was the sales and marketing manager at Initial Services Pte. Ltd. where he was responsible for managing a sales team and attending to trade fair enquiries. Mr. Yong earned a Diploma in Marketing from the Chartered Institute of Marketing in 1989. He also holds a Diploma in Sales and Marketing since 1988 and a Certificate in Sales and Marketing from the Marketing Institute of Singapore since 1985. Ms. Lee Yen Mei is our Vice President, Hotel Operations. She joined us in 2005 and is responsible for overseeing the daily hotel operations for the Fragrance Chain of Hotels. Prior to joining us, from 2000 to 2005, Ms. Lee was the senior accounts officer of ISK Singapore Pte. Ltd. where she was responsible for managing the accounts receivables, accounts payables and the generation of monthly statements for financial closure. From 1994 to 2000, Ms. Lee was the senior officer at the Singapore branch office of Ishihara Sangyo Kaisha Ltd. where she was responsible for handling the branch office accounts and liaising with the major customers in Singapore. From 1991 to 1994, Ms. Lee was the executive officer in the general administration department of UOB Life Assurance where she was responsible for a range of administrative duties including recruitment and staff training. Ms. Lee earned a Diploma in Human Resource Management from the PSB Academy in 2004 and a Diploma in Accountancy from Ngee Ann Polytechnic in 1991. In August 2010, Ms. Lee was awarded the Ministers Award for public spiritedness from the Ministry of Home Affairs.

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Ms. Lim Hwee Leng is our Vice President, Business Development. She joined us in February 2009 and is responsible for the marketing and sales of our hotel rooms. From February 2002 to January 2009, Ms. Lim was the business development manager of DSL Design & Contracts Pte. Ltd. and Shwee Realty Pte. Ltd. where she was responsible for its business development and client servicing. From March 2001 to February 2002, Ms. Lim worked as an air-traffic control officer for the Civil and Aviation Authority of Singapore. From June 2000 to February 2001, Ms. Lim was the senior visual merchandiser for OG Pte. Ltd. where she was responsible for planning and implementing effective visual merchandising strategies for the stores that she was in charge of. From February 1997 to June 2000, Ms. Lim was the senior visual merchandiser of Lee Hwa Jewellery where she was responsible for conceptualising and implementing visual ideas into effective window and in-store displays and decorations for all the island-wide outlets. From November 1995 to February 1997, Ms. Lim worked as a visual merchandiser of Takashimaya Singapore Ltd. where she was responsible for planning, developing and implementing the display and visual merchandising strategies for Takashimaya-Ngee Ann City Shopping Centre. Ms. Lim holds a Bachelor of Arts (Honours) in Graphic Design degree from The London Institute Camberwell College of Arts in 1995 and a Diploma in Graphic Design from Temasek Polytechnic of Singapore in 1993. Ms. Lim is the sister-in-law of our Executive Director, Mr. Lim Chee Chong, who as set out above, is the brother-in-law of our Non-Executive Director, Mr. Koh Wee Meng. Mr. Chew Boon Seng is our Vice President, Information Technology. He joined us in 2008 and his responsibilities include managing and supporting the information technology network infrastructure and application systems of our Group. Prior to joining us, Mr. Chew was an information technology manager at Suntec Singapore International Convention & Exhibition Centre from 2000 to 2008 where he was responsible for the information technology needs of the company. From 1998 to 2000, Mr. Chew was the assistant information technology manager of Aspial Corporation Limited where he was responsible for assisting the director of information technology to manage the information technology department. From 1996 to 1998, Mr. Chew was a information technology specialist in Shimano Singapore Private Limited where he was responsible for system study, analysis and design as well as application system development. From 1994 to 1996, Mr. Chew was a computer operator of The Kwangtung Provincial Bank where he was responsible for providing technical support and assisting programmers in simple database programming. From 1992 to 1994, Mr. Chew was the system controller of DBS Bank Ltd. where he was responsible for ensuring that the daily data processing was done properly. Mr. Chew earned a Bachelor of Science degree from the University of West London in 1995. Mr. Chew is a member of the Information Systems Audit & Control Association since 2005, International Information Systems Security Certification Consortium since 2004 and Singapore Computer Society since 2004. Save as disclosed below, none of our Key Executives has any present or past directorships over the five (5) years preceding the date of lodgement of this Prospectus: 169

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Name Chen Loong Mey Present Directorships Group companies Other companies Name Neo En Liang Present Directorships Group companies Other companies Liu Xiaojing Group companies Other companies Lee Yen Mei Group companies Other companies Yong Cheong Beng Group companies Other companies Wong Ping Ping Group companies Other companies Lim Hwee Leng Group companies Other companies DSL Design & Contracts Pte. Ltd. Shwee Realty Pte. Ltd. Machuan Development Pte. Ltd. Chew Boon Seng Group companies Other companies Past Directorships Group companies Other companies Past Directorships Group companies Other companies Group companies Other companies Group companies Other companies Group companies Other companies Group companies Other companies Group companies Other companies

Group companies Other companies

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Material Background Information on our Directors, Key Executives and Controlling Shareholders 1. Save as disclosed below, none of our Directors, Key Executives or Controlling Shareholders: (a) has, at any time during the last ten (10) years, had an application or a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within two (2) years from the date he ceased to be a partner; (b) has, at any time during the last ten (10) years, had an application or a petition under any law of any jurisdiction filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within two (2) years from the date he ceased to be a director or any equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, on the ground of insolvency; (c) has any unsatisfied judgment against him;

(d) has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose; (e) has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach; (f) has, at any time during the last ten (10) years, had judgment entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, nor has he been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part;

(g) has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust; (h) has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust; (i) has ever been the subject of any order, judgement or ruling of any court, tribunal or governmental body permanently or temporarily enjoining him from engaging in any type of business practice or activity;

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(j) has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of: (i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere;

(ii)

(iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or (iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, in connection with any matter occurring or arising during the period when he was so concerned with the entity or business trust;or (k) has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Authority or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere.

Mr. Sim Mong Yeow In August 2011, our Executive Director, Mr. Sim Mong Yeow, the licensee of Fragrance Hotel-Kovan, was charged in court for failing to require two guests allegedly engaged in vice activities being carried out at Fragrance Hotel-Kovan in May 2011 to fully furnish their particulars as required by Regulation 27(1) of the Hotels Licensing Regulations. These particulars related to, inter alia, the nationality, occupation and place of employment of the guests in question. All charges against Mr. Sim were dropped in September 2011 and he was issued with a conditional warning by the police against committing any offence in the next twelve months. The condition imposed in connection with the conditional warning was that Mr. Sim is not to commit any offence in the next twelve months from the date of the notice. In the event that the condition is not complied with and another offence is committed, he would be liable to be prosecuted not only for the subsequent offence but also for the original offences in respect of which he was given the conditional warning. As the licensee of Fragrance Hotel-Kovan, Mr. Sim assisted the police with investigations relating to the failure to register certain guests allegedly engaged in vice activities being carried out at Fragrance Hotel-Kovan in September 2010 in contravention of the Hotels Licensing Regulations. The investigations against Mr. Sim were completed in November 2010 and he was issued with a warning by the police. As the licensee of Fragrance Hotel-Imperial and Fragrance Hotel-Lavender, Mr. Sim assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Imperial and Fragrance Hotel-Lavender in September 2010 and 172

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December 2010 in contravention of the Hotels Licensing Regulations. The investigations against Mr. Sim were completed on December 2010 and he was issued with a conditional warning by the police against committing any offence in the next twelve months. As the licensee of Fragrance Hotel-Balestier, Mr. Sim assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Balestier in November 2010 in contravention of the Hotels Licensing Regulations. The investigations against Mr. Sim were completed in January 2011 and he was issued with a reminder by the police with regards to the prohibition against vice activities being carried out in the hotels pursuant to Regulation 24 of the Hotels Licensing Regulations. As the licensee of Fragrance Hotel-Lavender, Mr. Sim assisted the police with investigations relating to vice activities being carried out at Fragrance Hotel-Lavender in November 2011 and December 2011 in contravention of the Hotels Licensing Regulations. As at the Latest Practicable Date, no further action has been taken against Mr. Sim in relation to the December 2011 incident. In relation to the November 2011 incident, Mr. Sim was informed by the police that the case has now been closed. Pursuant to Section 43 of the Hotels Licensing Regulations, the Court may, in addition to levying fines, cancel or suspend any certificate of registration and any license granted under the Hotels Act if any person is convicted as a result of contravening any of the provisions of the Hotels Licensing Regulations. Furthermore, Section 8 of the Hotels Act of Singapore provides that the Hotels Licensing Board may either cancel the certificate of registration of the hotel, cancel the licence granted to the Hotel-keeper in respect of the hotel or cancel both the certificate and licence if it appears to it that a hotel is being conducted in an improper or unsatisfactory manner. Although Mr. Sim has been issued with the aforementioned warnings and a reminder in relation to the vice activities carried out at Fragrance Hotel-Kovan, Fragrance HotelImperial, Fragrance Hotel-Balestier and Fragrance Hotel-Lavender, he has never been convicted of an offence under either the Hotels Act or the Hotels Licensing Regulations. As at the Latest Practicable Date and to the best of the knowledge of our Directors, we are not aware of any precedent cases of cancellation of certificates of registration or hotelkeepers licences save for the cancellation of the Hotel-keepers licence in the following case. In November 2010, the Hotel-keepers licence holder of Shing Hotel located in Kitchener Road in Little India, pleaded guilty to a charge of allowing vice activities on the hotel premises(1). Although the charge followed a stern police warning for a similar offence committed less than six days after the administration of the police warning, the Court did not cancel the hotels certificate of registration but fined the Hotel-keepers licence holder $800 and cancelled his Hotel-keepers licence(1).

Note:
(1)

Extracted from on-line Straits Times media report dated 10 November 2010 entitled Hookers cost hotel owner his licence obtained from Property Edge. The Property Edge and the Straits Times have not consented to the inclusion of the relevant information for the purposes of Section 249 of the SFA and are therefore not liable for the relevant statements(s) under Sections 253 and 254 of the SFA. While we have taken reasonable steps to ensure that the relevant statement(s) have been included in its proper context and form, we have not independently verified the accuracy of the relevant information.

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In the event that the Hotels Licensing Board deem that the hotel is conducted in an improper or unsatisfactory manner upon Mr. Sim being charged for vice activities carried out at any of our hotels, the Hotels Licensing Board may, pursuant to Section 8 of the Hotels Act, cancel both the certificate of registration of the hotel as well as Mr. Sims Hotel-keepers licence for that particular hotel. However, this would not affect the other Hotel-keepers licences held by Mr. Sim. As at the Latest Practicable Date, we have not received any notification letter or any other form of communication from the Hotels Licensing Board informing us that any of the hotels for which Mr. Sim holds a hotelkeepers licence is being conducted in an improper or unsatisfactory manner in breach of Section 8 of the Hotels Act. In the event that the Hotels Licensing Board determines that Mr. Sim does not satisfy the fit and proper criteria, the Hotels Licensing Board may decline to renew Mr. Sims Hotel-keepers licence when the licences expires. As at the Latest Practicable Date, our Group has not had any difficulties renewing the Hotel-keepers licences held by the licence holders. At present, Mr. Sim is the Hotel-keeper for all our Groups hotels apart from Parc Sovereign Hotel and Fragrance Hotel-Elegance. The Hotel-keepers licence holders for the aforementioned hotels are Mr. Lim Chee Chong and Ms. Lee Yen Mei respectively. In the event that there are any issues with Mr. Sims eligibility as Hotelkeeper, the aforementioned personnel are eligible to be appointed in his place. As such, our Directors are of the view that should Mr. Sims Hotel-keepers licence not be renewed, it is unlikely to have a material adverse effect on our Groups operations. Please refer to the section entitled General Information of Our Group Permits, Licences, Approvals, Certifications and Government Regulations Breach of Hotel Licensing Regulations of this Prospectus for details on remedial measures taken by our Company to prevent similar re-occurences. Mr. Lim Chee Chong Our Executive Director, Mr. Lim Chee Chong, the licensee of Parc Sovereign Hotel, assisted the police with investigations relating to vice activities being carried out at Parc Sovereign Hotel in contravention of the Hotels Licensing Regulations. The investigations against Mr. Lim were completed in September 2011 and no further action was taken against him. Please refer to the section entitled General Information of Our Group Permits, Licences, Approvals, Certifications and Government Regulations Breach of Hotel Licensing Regulations of this Prospectus for details on remedial measures taken by our Company to prevent similar re-occurences. Mr. Koh Wee Meng In FY2003 and FY2004, our Non-Executive Director, Mr. Koh Wee Meng, was a director of various Subsidiaries of FGL which were fined for late payment on property tax, late payment on income tax and late filing of income tax. The fines amounted to $23,363 in FY2003 and $62,157 in FY2004. The relevant FGL Subsidiaries have paid the relevant taxes and fines and the matter is concluded. 174

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Separately, on 7 January 2004, Mr. Koh was a director of Fragrance Land, a wholly-owned subsidiary of FGL, when Fragrance Land was fined $600 by the Land Transport Authority for unauthorised display of two signages on Balestier Road and Moulmein Road, which were used to direct potential purchasers to its property development project known as Treasure Loft. Fragrance Land has paid the fine and the matter was concluded. 2. Save to the extent disclosed in the section entitled Share Capital and Shareholders of this Prospectus, none of our Directors or Key Executives has any equity interests in our Company as at the date of lodgement of this Prospectus. No option to subscribe for securities of our Company has been granted to, or was exercised by, any Director or Key Executive within the two (2) financial years preceding the date of lodgement of this Prospectus. Save as disclosed in the section entitled Directors, Management and Staff Service Agreements of this Prospectus, there are no existing or proposed service contracts between our Directors and our Company. There are no shareholding qualifications for Directors in the Articles of Association. Save as disclosed in the section entitled Interested Person Transactions and Conflict of Interests of this Prospectus, none of our Directors is interested, whether directly or indirectly, in the promotion of, or in any assets acquired or disposed of by, or leased to, our Company within the two (2) years preceding the date of lodgement of this Prospectus, or in any proposal for such acquisition or disposal or lease as aforesaid. Save as disclosed in the section entitled Interested Person Transactions and Conflict of Interests of this Prospectus, none of our Directors or Key Executives has any interest, whether direct or indirect, in any company carrying on the same trade as our Company. No sum or benefit has been paid or has been agreed to be paid to any Director or to any firm in which a Director is a partner or corporation in which such Director holds shares or debentures, in cash or in shares or otherwise by any person to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or such firm or corporation in connection with the promotion or formation of our Company. Save as disclosed in the section entitled Interested Person Transactions and Conflict of Interests of this Prospectus, none of our Directors has any interest in any existing contract or arrangement subsisting at the date of lodgement of this Prospectus which is significant in relation to the business of our Company.

3.

4.

5. 6.

7.

8.

9.

10. Save as disclosed in the section entitled Directors, Management and Staff of this Prospectus and the section entitled Share Capital and Shareholders Shareholders of this Prospectus, there is no family relationship between any of our Directors and/or Key Executives, or between any of our Directors, Key Executives and Substantial Shareholders.

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11. There is no arrangement or understanding with any of our Substantial Shareholders, customers, suppliers or any other person pursuant to which any of our Directors or Key Executives were selected as Director or Key Executive. Service Agreements Our Company has entered into separate Service Agreements with our Executive Directors, Mr. Lim Chee Chong and Mr. Sim Mong Yeow (collectively, the Appointees). Each Service Agreement is valid for an initial period of three (3) years with effect from the date of admission of our Company to the Official List of the SGX-ST. Upon the expiry of the initial period of three (3) years, the employment of each Appointee shall be automatically renewed on a year-to-year basis. During the initial period of three (3) years, either party may terminate the Service Agreement by giving to the other party not less than two (2) months notice in writing, or the Company can give the Appointee, in lieu of notice, payment of an amount equivalent to two (2) months salary based on the Appointees last drawn monthly salary. Our Company may also terminate the employment of the Appointee without notice or payment in lieu of notice under, inter alia, the following circumstances: (a) if the Appointee is guilty of any grave misconduct or unlawful neglect in the discharge of his duties in connection with or affecting the business of our Company; (b) in the event of any serious or repeated breach or non-observance by the Appointee of any of the stipulations contained in the Service Agreement; (c) if the Appointee becomes bankrupt or makes any composition or enters into any deed of arrangement with his creditors; or

(d) if the Appointee shall become of unsound mind. Pursuant to the terms of the respective Service Agreements, Mr. Lim Chee Chong and Mr. Sim Mong Yeow are entitled to receive monthly salaries of $25,000 and $15,000, respectively. Each of them is entitled to receive a fixed bonus of two months salary per annum and an annual performance bonus of a sum calculated based on the audited consolidated profit before income tax of our Group (Performance Bonus). The Performance Bonus shall be paid to the Appointee within one (1) month of the approval by the Board of the audited consolidated accounts of the Group for the relevant financial year. Mr. Lim Chee Chong and Mr. Sim Mong Yeow are also entitled to receive monthly transport allowances of $2,000 and $1,600 respectively.

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The respective entitlements of the Executive Directors to the Performance Bonus are set out below:
Performance Bonus Lim Chee Chong Sim Mong Yeow (1) % of NPBT % of NPBT(1) $5.0 million $15.0 million $25.0 million $30.0 million NPBT < $15.0 million NPBT < $25.0 million NPBT < $30.0 million NPBT < $35.0 million 1.00% 1.50% 1.75% 2.25% 2.50% 0.35% 0.50% 0.65% 0.70% 0.75%

$35.0 million and above

Under the Service Agreements, each Appointee has covenanted that, except with the written consent of our Company, he shall not, inter alia, within the Territory(2), carry on or be engaged, concerned or interested directly or indirectly in any business carried on by our Group, entice away any of our customers or entice away any of our employees for twelve (12) months after ceasing his employment under his Service Agreement. Had the Service Agreements been in place with effect from 1 January 2010, the aggregate remuneration paid to the Appointees for FY2010 would have been approximately $1.1 million instead of approximately $0.4 million and our profit before tax for FY2010 would have decreased from approximately $24.1 million to approximately $23.4 million. There is no existing or proposed service contract entered or to be entered into by our Directors with our Company or any of our Subsidiaries which provides for benefits upon termination of employment or severance payments. Save as disclosed above, there are no other existing or proposed service agreements or service contracts between our Company or our Subsidiaries and any of our Directors. Our Remuneration Committee has considered the framework of remuneration for Executive Directors for FY2011 and is of the view that the framework is fair and reasonable in light of the past remuneration for our Executive Directors, as well as their respective roles, responsibilities, and past and future contributions, and general market practices. Directors and Key Executives Remuneration The compensation (which includes benefits-in-kind, directors fees and bonuses) paid to our Directors and our Key Executives for services rendered to our Group on an aggregate basis and in remuneration bands are as follows:

Notes: (1) NPBT means net profit before tax of our Group after excluding any profits arising from the disposal of hotels. (2) Territory shall be interpreted as referring to any country where our Group has a direct presence (including but not limited to, Singapore) and any country where our Board has approved the setting up of operations, at the time of the cessation of employment of the Appointee with our Company.

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FY2010 Directors Koh Wee Meng Lim Chee Chong Sim Mong Yeow Kau Jee Chu Kwan Chee Wai Woo Peng Kong Key Executives Chen Loong Mey Neo En Liang Liu Xiaojing Wong Ping Ping Yong Cheong Beng Lee Yen Mei Lim Hwee Leng Chew Boon Seng
Remuneration bands: A: Remuneration below $250,000 per annum B: Remuneration between $250,001 and $500,000 per annum C: Remuneration between $500,001 and $750,000 per annum D: Remuneration between $750,001 and $1,000,000 per annum Notes: (1) The estimated remuneration for FY2012 does not include any performance bonus that our Executive Directors are entitled to under their respective service agreements, the details of which are set out in the section entitled Directors, Management and Staff Service Agreements of this Prospectus. In addition, all our Independent Directors will be paid with effect from FY2012. (2) Koh Wee Meng is an executive director of FGL and his service agreement is with FGL.

FY2011 Nil(2) A B Nil Nil Nil

FY2012(1) (Estimated) A B A A A A

Nil(2) Nil B Nil Nil Nil

Nil A A A A A A A

A A A A A A A A

A A A A A A A A

Save for contributions made for our employees by our Subsidiaries for the Central Provident Fund, no amounts have been set aside or accrued by our Company or our Subsidiaries to provide for pension, retirement or similar benefits for our Directors and Key Executives. Employees As at 31 December 2011, we have 273 full-time employees. We do not employ any part-time staff. We do not experience any significant seasonal fluctuations in our number of employees. Our employees are not unionised. There has not been any incidence of work stoppages or labour disputes that affected our business. Accordingly, we consider our relationship with our employees to be good. 178

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The functional distribution of our employees as at 31 December 2009, 31 December 2010 and 31 December 2011 are as follows:
As at 31 December 2009 Function Management Administration Hotel Operations Total 10 17 199 226 11 17 199 227 16 27 230 273 As at 31 December 2010 As at 31 December 2011

The increase in the total number of staff from 227 as at 31 December 2010 to 273 as at 31 December 2011 was mainly due to the opening of our new hotels, Parc Sovereign Hotel in February 2011 and Fragrance Hotel-Riverside in November 2011. Global Premium Hotels Performance Share Plan On 23 March 2012, our Controlling Shareholder, FGL, approved an employee share award scheme known as the Global Premium Hotels Performance Share Plan (the Global Premium Hotels PSP), the rules of which are set out in Appendix H of this Prospectus. The Global Premium Hotels PSP complies with the relevant rules of Chapter 8 of the Listing Manual. As at the Latest Practicable Date, no Awards (as defined below) have been granted under the Global Premium Hotels PSP. Objectives of the Global Premium Hotels PSP The purpose of adopting the Global Premium Hotels PSP is to give our Company greater flexibility to align the interests of its employees, especially key executives, with those of Shareholders. It is also intended that the Global Premium Hotels PSP will complement each other in our Companys continuing efforts to reward, retain and motivate employees to achieve superior performance. The Global Premium Hotels PSP will further strengthen our Companys competitiveness in attracting and retaining employees, especially employees who have the requisite knowledge, technical skills and experience whom our Company believes could contribute to the development and growth of the Group. Our Company believes that with the Global Premium Hotels PSP in place, they will strengthen and enhance our Companys ability to attract and retain suitable talent. The objectives of the Global Premium Hotels PSP are as follows: (a) to motivate the participants to optimise performance standards and efficiency and to maintain a high-level of contribution to our Group; (b) to retain key employees whose contributions are important to the long-term growth and prosperity of our Group; 179

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(c) to instill loyalty and a stronger sense of identification by the participants with the long-term prosperity of our Group;

(d) to attract potential employees with relevant skills to contribute to our Group and to create value for Shareholders; and (e) to align the interests of the participants with the interests of Shareholders. Summary of the Global Premium Hotels PSP The defined terms in this summary shall, unless otherwise defined, bear the meanings stated in Appendix H entitled Rules of the Global Premium Hotels Performance Share Plan. A summary of the rules of the Global Premium Hotels PSP is set out as follows: (a) Participants Subject to the absolute discretion of the committee tasked with the management of the Global Premium Hotels PSP (the Committee), the following persons shall be eligible to participate in the Global Premium Hotels PSP: (i) (ii) Group Employees; Group Executive Directors; and

(iii) Group Non-Executive Directors, provided that, as of the date of grant of Award, such persons have attained the age of twenty-one (21) years, are not undischarged bankrupts and have not entered into any composition(s) with their respective creditors, and in the case of Group Employees and Group Executive Directors, have been in the employment of the Group for at least twelve (12) months, or such shorter period as the Committee may determine. The Committee shall be constituted by our Remuneration Committee comprising our Independent Director, Mr. Woo Peng Kong, our Non-Executive Director, Mr. Koh Wee Meng and our Independent Director, Mr. Kwan Chee Wai. A member of the Committee who is also a participant of the Global Premium Hotels PSP must not be involved in its deliberation in respect of Awards to be granted to him. Controlling Shareholders and their Associates will not be eligible to participate in the Global Premium Hotels PSP. Mr. Koh Wee Meng, our Non-Executive Director who is also a Controlling Shareholder of our Company, is not eligible to participate in the Global Premium Hotels PSP. (b) Scheme Administration The Global Premium Hotels PSP shall be administered by the Committee with powers to determine, inter alia, the following:

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(i) the date on which a contingent award of Shares is granted pursuant to the Global Premium Hotels PSP (Award); the number of Shares or cash equivalent or both which are the subject of the Award;

(ii)

(iii) the Performance Target for the participant; and (iv) the Performance Period for the participant. Awards are personal to the participant to whom it is given and shall not be transferred (other than to a participants personal representative on the death of the former), charged, assigned, pledged or otherwise disposed of, unless with the prior approval of the Committee. (c) Size of the Global Premium Hotels PSP In compliance with the requirements of the Listing Manual, the aggregate number of Shares for which an Award may be granted on any date under the Global Premium Hotels PSP, when added to the number of Shares issued and/or issuable in respect of: (i) (ii) all Awards granted under the Global Premium Hotels PSP; and all Shares, options or awards granted under any other share option or share scheme of our Company then in force,

shall not exceed 15.0% of the total issued Shares of our Company (excluding treasury shares) on the day preceding that date. The Global Premium Hotels PSP shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten (10) years commencing on the date on which the Global Premium Hotels PSP is adopted by Shareholders in a general meeting, provided that the Global Premium Hotels PSP may continue beyond the aforesaid period of time with the approval of Shareholders in a general meeting and of any relevant authority which may then be required. We believe that the 15.0% limit set by the SGX-ST gives our Company sufficient flexibility to decide the number of Award Shares to offer to our existing and new employees. 15.0% of the post-Invitation issued shares of our Company constitutes 67.5 million Shares. The number of eligible participants is expected to grow over the years. Our Company, in line with its goal of ensuring sustainable growth, is constantly reviewing our position and considering the expansion of its talent pool which may involve employing new employees. The employee base, and thus the number of eligible participants will increase as a result. If the number of Award Shares available under the Global Premium Hotels PSP is limited, our Company may only be able to grant a small number of Awards to each eligible participant which may not be a sufficiently attractive incentive. Our Company is of the opinion that it should have sufficient number of Award Shares to offer to existing employees as well as to new employees. The number of Award Shares offered must also be significant to serve as a meaningful reward for contributions to our Company and/or our subsidiaries. However, it does not necessarily mean that our Committee will grant Awards 181

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up to the prescribed limit. The Committee shall exercise its discretion in deciding the number of Award Shares to be granted to each employee which will depend on, inter alia, the performance of our Company, our Subsidiaries, the years of service and individual performance of the employee, the contribution of the employee to the success and development of our Company and/or our Subsidiaries and the prevailing market conditions. (d) Vesting of Awards Notwithstanding that a participant may have met his performance target, no Award Shares shall be vested in the event of: (i) the decision of the Committee, in its absolute discretion, to revoke or annul such Award; the cessation of employment of a participant;

(ii)

(iii) the bankruptcy of a participant; (iv) the misconduct of a participant; or (v) a take-over, winding-up or reconstruction of our Company.

Upon the occurrence of any of the events specified in paragraphs (i), (ii), (iii) and (iv) above, an Award then held by a participant shall immediately lapse without any claim whatsoever against our Company and/or our Group. Upon the occurrence of any of the events specified in paragraph (v) above, the Committee will consider, at its discretion, whether or not to release any Award, and will take into account all circumstances on a case-by-case basis, including (but not limited to) the contributions made by that participant. (e) Operation of the Global Premium Hotels PSP Subject to prevailing legislation and guidelines issued by the SGX-ST, our Company shall, on the release date, do any one or more of the following as it deems fit in its sole and absolute discretion: (i) (ii) allot and issue the relevant Shares to the participant; deliver existing Shares to the participant, whether such existing Shares are acquired pursuant to a share purchase mandate or (to the extent permitted by law) held as treasury shares; and/or

(iii) subject to the prior approval of the Committee and at the Committees absolute discretion, pay the Equivalent Value in Cash (after deduction of any applicable taxes) to the participant, in lieu of issuing or delivering all or some of the Shares to be issued or delivered to the participant. The Committee, in exercising such discretion, will

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consider each Award on a case-by-case basis and will decide, taking into account all and any relevant factors including but not limited to the present shareholdings of the relevant Participant. (f) Modification or Alteration of the Global Premium Hotels PSP Any or all the provisions of the Global Premium Hotels PSP may be modified and/or altered at any time and from time to time by resolution of the Committee, except that: (i) any modification or alteration which would be to the advantage of the holders of the Awards shall be subject to the prior approval of Shareholders in a general meeting; and no modification or alteration shall be made without the prior approval of the SGX-ST and such other regulatory authorities as may be necessary.

(ii)

However, no modification or alteration shall adversely affect the rights attached to Awards granted prior to such modification or alteration except with the written consent of such number of participants who, if their Awards were released to them, would thereby become entitled to not less than three quarters in number of all the Shares which would be issued or delivered, as the case may be, upon the release in full of all outstanding Awards under the Global Premium Hotels PSP. (g) Rights and Entitlements of the Award Shares Shares issued and allotted upon the vesting of an Award shall be subject to all the provisions of the Memorandum and Articles of Association, and shall rank in full for all entitlements, excluding dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date (defined below) for which falls on or before the relevant vesting date of the Award, and shall in all other respects rank pari passu with other existing Shares then in issue. Record Date means the date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to or rights of holders of Shares. (h) Abstention from Voting Shareholders who are eligible to participate in the Global Premium Hotels PSP are to abstain from voting on any resolution of Shareholders relating to the Global Premium Hotels PSP. In particular, all Shareholders who are eligible to participate in the Global Premium Hotels PSP shall abstain from voting on resolutions of the Shareholders relating to the implementation of the Global Premium Hotels PSP. Notwithstanding the foregoing, participants of the Global Premium Hotels PSP may act as proxies, but such participants who are appointed as proxies will not vote on the aforementioned resolutions unless specific instructions have been given in the proxy instrument on how the Shareholders wish their votes to be cast for the said resolutions.

183

DIRECTORS, MANAGEMENT AND STAFF

Rationale for participation of Non-Executive Directors Our Non-Executive Directors (including our Independent Directors) come from different professions and backgrounds and bring to our Group a wealth of experience in corporate governance and business management. They also provide invaluable guidance in relation to the strategic issues and development of our Group. Our Non-Executive Directors therefore provide our Group with a multi-disciplinary approach in evaluating and considering business issues and opportunities. Although they are not specifically involved in the day-to-day management of the Group, our Non-Executive Directors are frequently consulted on various matters in relation to the business of our Group. Our Company therefore regards these persons as an additional resource pool and values their contributions greatly. The extension of the Global Premium Hotels PSP to our Non-Executive Directors is thus in recognition of their services and contributions to the growth and development of our Group. Before granting any Award to a Non-Executive Director, the Committee will take into consideration, inter alia, his performance and contributions to the success and development of our Group as well as the requirements of applicable laws in relation to grant of awards. In assessing the performance of our Non-Executive Directors, the Committee will take into account their attendance at meetings, their membership in various committees in our Group as well as their contributions, which includes contributing their experience to our Group in the areas of overall business strategies, risk management and investment decisions. Our NonExecutive Directors may be appointed as members of the Committee. However, the rules of the Global Premium Hotels PSP provide that no member of the Committee shall be involved in any deliberation in respect of Awards to be granted to him. In order to minimise any potential conflict of interests, our Company does not intend to grant Awards of significant sizes to our Non-Executive Directors. In particular, in the event that any Awards are granted to our Independent Directors, the quantum of such Awards will not be of such significance as to affect or compromise the independence of such Directors. In addition, in the event that any conflict of interests arise in any matter to be decided upon by the Board, our Company will request that the relevant Non-Executive Director abstain from voting on such matter. Mr. Koh Wee Meng, our Non-Executive Director who is also a Controlling Shareholder of our Company, is not eligible to participate in the Global Premium Hotels PSP. The participation in the Global Premium Hotels PSP by the participants will take place only after the listing of our Company on the SGX-ST. By subscribing for the New Shares, investors shall be deemed to have acknowledged and approved the participation by each of the participants in the Global Premium Hotels PSP. Participants holding share awards granted by FGL will not be granted further awards by FGL following the Listing of our Company.

184

DIRECTORS, MANAGEMENT AND STAFF

Disclosures in Annual Reports Our Company will make such disclosures in its annual report for so long as the Global Premium Hotels PSP continues in operation, as from time to time required by the Listing Manual. Cost of Awards Made Under The Global Premium Hotels PSP to Our Company As the participants are not required to pay for the grant of the Awards, such grant of Awards will have a financial effect on our Company. The Singapore Financial Reporting Standards (FRS) 102 Share-based Payment, which is effective for the financial periods beginning on or after 1 January 2005, requires the recognition of an expense in respect of Awards granted under the Global Premium Hotels PSP. The expenses will be based on the fair value of the Awards at the date of the grant and will be recognised over the expected vesting period. However, no expense will ultimately be recognised for any Awards granted that do not vest because of failure to satisfy the vesting conditions. Our Company is required to account for the grant of Awards during the vesting period, with a corresponding increase in equity. On a cumulative basis, no amount is recognized for services received if the equity instruments granted do not vest because of failure to satisfy a vesting condition. Our Company shall recognise an amount for the services received during the vesting period based on the best available estimate of the number of equity instruments expected to vest and shall revise that estimate, if necessary. Therefore, the grant of Awards is recognised in the statement of comprehensive income over the expected vesting period. If an employee leaves before the end of vesting period, our Company should revise the estimated number of equity instruments expected to vest. The Global Premium Hotels PSP will result in an increase in our Companys issued share capital only if new Shares are issued to the participants. The number of new Shares issued will depend on, inter alia, the size of the Awards granted under the Global Premium Hotels PSP. However, if existing Shares are purchased by our Company for delivery to participants in lieu of issuing new shares to the participants, the Global Premium Hotels PSP will have no impact on our Companys issued share capital. The amount charged to our Companys statement of comprehensive income would be the same whether our Company settles the Awards by issuing new Shares or by purchasing existing Shares. If new Shares are issued under the Global Premium Hotels PSP, there will be no effect on the NTA of our Company. If existing Shares are purchased for delivery to participants, the NTA of our Company will be impacted by the cost of the Shares purchased. Although the Global Premium Hotels PSP will result in a charge to the statement of comprehensive income of our Company, it should be noted that Awards are granted only on a selective basis and will be granted to the participants whom our Company believes would have contributed or will contribute significant value in its success including financial performance. In particular, the grant of Awards and delivery of Shares to the participants are contingent upon the participants meeting prescribed performance targets and conditions. Therefore, the participants would have contributed to or will contribute significant value add to the NTA of our Company before the Awards are granted and Shares delivered. 185

DIRECTORS, MANAGEMENT AND STAFF

The Global Premium Hotels PSP will result in a charge to earnings equivalent to the market value at which the existing Shares are purchased or the market value on the date at which new Shares are issued under the Awards. Although the Global Premium Hotels PSP will have a dilutive impact (to the extent that new Shares are issued pursuant to the Global Premium Hotels PSP) on the EPS of our Company, the delivery of Shares to the participants in respect of Awards granted under the Global Premium Hotels PSP is contingent upon the participants meeting prescribed conditions. Accordingly, the earnings of our Company and our Group should have grown before the Awards are granted and the Shares delivered. It is expected that the dilutive impact of the Global Premium Hotels PSP on the NTA per Share and EPS of our Company will not be significant.

186

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

In general, transactions between our Group and any of its Interested Persons (namely, our Directors, or Controlling Shareholders of our Company and/or any of their Associates) are known as Interested Person Transactions. The following discussion on Interested Person Transactions (as defined in Chapter 9 of the Listing Manual) for FY2009, FY2010 and FY2011 and for the period commencing 1 January 2012 up to the Latest Practicable Date is based on each member of our Group (namely, our Company and our Subsidiaries) being an entity at risk and with Interested Persons being construed accordingly. In line with the rules set out in Chapter 9 of the Listing Manual, a transaction which value is less than $100,000 is not considered material in the context of the Invitation and is not taken into account for the purposes of aggregation in this section. Save as disclosed below and in the section entitled General Information of our Group Restructuring Exercise of this Prospectus, our Group does not have any material transactions with any Interested Person for FY2009, FY2010 and FY2011 and for the period commencing 1 January 2012 up to the Latest Practicable Date. Interested Persons Our Controlling Shareholder, FGL, is incorporated in Singapore and listed on the Main Board of the SGX-ST. FGL is engaged in the property development business, with focus on the development of residential, commercial and industrial properties. As at the date of this Prospectus, FGL has six wholly-owned subsidiaries, Fragrance Land, Fragrance Properties, Fragrance Realty, Fragrance Homes, Fragrance Heritage and Fragrance Holdings. FGL also has another two Subsidiaries, Kensington Land and Kensington Village, in which it has a 60% shareholding interest of such Subsidiary. Accordingly, FGL and its Subsidiaries are Interested Persons of our Group. Past Interested Person Transactions Advances to the Group FGL had advanced the following amounts to our Group which were unsecured, interest-free and repayable on demand:
From 1 January 2012 to the Latest Practicable Date ($000)

FY2009 ($000) FGL 58,388

FY2010 ($000) 60,943

FY2011 ($000) 36,732

Largest amount Outstanding for Period Under Review ($000) 50,124

187

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

The above amounts were advanced by FGL to our Group to finance the development of hotel and commercial properties as well as for working capital purposes. As at the Latest Practicable Date, all the advances owing by our Group had been fully settled and there were no outstanding amounts due from our Group. The advances were repaid using sale proceeds from the sale of Pasir Panjang Commercial Property, Geylang Industrial Property, Changi Road Property, hotel property at 103 Beach Road and Fragrance HotelElegance. Our Directors are of the view that the above advances were not carried out on an arms length basis and were not based on normal commercial terms as no interest was charged. We do not intend to enter into such transactions after our listing on the Main Board of the SGX-ST. Advances by our Group We had advanced the following amounts to FGL which were unsecured, interest-free and repayable on demand:
From 1 January 2012 to the Latest Practicable Date ($000)

FY2009 ($000) FGL 34,885

FY2010 ($000) 52,937

FY2011 ($000) 77,259

Largest Amount Outstanding for Period Under Review ($000) 19,605

The amounts were advanced by our Group to FGL for their cash management purposes. As at the Latest Practicable Date, all the advances owing to our Group had been fully settled and there were no outstanding amounts due to our Group. Our Directors are of the view that the above advances were not carried out on an arms length basis and were not based on normal commercial terms as no interest was charged. We do not intend to enter into such transactions after our listing on the Main Board of the SGX-ST. Sale of properties to FGLs Subsidiaries On 30 September 2011, we entered into sale and purchase agreements for the sale of three (3) properties to FGLs wholly-owned Subsidiaries, Fragrance Realty and Fragrance Holdings. The sale of these three properties was part of the Restructuring Exercise to dispose of our non-hospitality properties as well as to resolve potential conflict of interests prior to our listing on the Main Board of the SGX-ST.

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INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

The details of such transactions are as follows:
Date of Sale and Purchase Agreement 30 September 2011 30 September 2011 30 September 2011 Property Pasir Panjang Commercial Property Geylang Industrial Property Changi Road Property Purchase Price ($000) 23,820
(1)

Purchaser Fragrance Realty Fragrance Realty Fragrance Holdings

4,589(1) 7,273(1)

Note: (1) The purchase price represents the acquisition cost of the respective property after deducting accumulated depreciation (if applicable).

Our Directors are of the view that the transactions were not carried out on an arms length basis and were not based on normal commercial terms, as the above-mentioned properties were disposed as part of the Restructuring Exercise to Fragrance Realty and Fragrance Holdings at their respective book values as at 30 September 2011. We do not intend to enter into such transactions after our listing on the Main Board of the SGX-ST. As at the Latest Practicable Date, there is an amount owing of $28.2 million which will be repaid by FGL subsidiaries to our Group on the completion of the sale of the Pasir Panjang Commercial Property and the Changi Road Property. As at 13 April 2012, the sale of all three properties has been completed and as at the date of this Prospectus, the amount owing has been repaid to our Group. Provision of corporate guarantee by an Interested Person Our Controlling Shareholder, FGL, had provided the following corporate guarantees to secure banking and trade facilities granted to our Group, which have since been terminated:
Amount of Facilities ($000) 18,808 Largest Amount Outstanding for Period Under Review ($000) 18,070

Financial Institution/Lender Hong Leong Finance Limited

Type of Facilities Term Loan

Facilities Granted to Fragrance Assets Fragrance Capital Fragrance Capital Fragrance Ventures Fragrance Ventures

UOB Group

Term Loan

48,466

45,977

Hong Leong Finance Limited

Term Loan

32,490

25,221

Hong Leong Finance Limited

Term Loan

47,864

42,441

Sing Investments & Finance Limited

Land and Construction Loan

16,328

12,582

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INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

The interest rates for the above-mentioned facilities were between approximately 2% to 3% per annum. No consideration was paid to FGL for the provision of the aforesaid corporate guarantees. As such, our Directors believe that the above transactions were not entered into on an arms length basis or on normal commercial terms but were not prejudicial to the interests of our Group and/or minority shareholders. Partial occupation of Changi Road Property by the FGL Group for no consideration FGL Group occupied part of the Changi Road Property for use as their corporate headquarters. No consideration was paid by the FGL Group for such occupation. Our Directors are of the view that the above transaction was not carried out on an arms length basis and was not based on normal commercial terms as no consideration was paid by the FGL Group for their occupation. The Changi Road Property has since been disposed and accordingly, such transactions will not occur after our listing on the Main Board of the SGX-ST. On-going Interested Person Transactions Provision of corporate guarantee by an Interested Person As at the Latest Practicable Date, our Controlling Shareholder, FGL, provided the following corporate guarantees to secure banking and trade facilities granted to our Group:
Largest Amount Amount Outstanding Outstanding as at the for Period Latest Under Practicable Review Date ($000) ($000) 5,300 127,472 13,430 4,194 126,901 9,614

Financial Institution/Lender Hong Leong Finance Limited OCBC Bank UOB Group

Type of Facilities Term Loan Term Loan Term Loan

Amount of Facilities ($000) 5,695 173,400 15,200

Facilities Granted to Fragrance Capital Fragrance Ventures Fragrance Investment

190

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

The interest rates for the above-mentioned facilities were approximately between 2% to 3% per annum. No consideration was paid to FGL for the provision of the aforesaid corporate guarantees. As such, our Directors believe that the above transactions were not entered into on an arms length basis or on normal commercial terms but were not prejudicial to the interests of our Group and/or minority shareholders. As at 13 April 2012, the Hong Leong Finance Limited facility has been repaid. Subsequent to the Invitation OCBC Bank and the UOB Group have agreed to discharge the above guarantees provided by FGL and substitute the same with guaranteies to be furnished by our Company. Lease of properties to our Group On 23 March 2012, we entered into two lease agreements with Fragrance Holdings pursuant to which our Subsidiary, Fragrance Hotel Management, leased 2 floors of the Changi Road Property, at an aggregate monthly rental of $21,000 for two (2) years from 1 May 2012. We occupied the above-mentioned premises rent-free from 13 April 2012 to 30 April 2012. Mr. Koh Wee Meng abstained from all board decisions taken in relation to the lease agreements. The details of the two lease agreements are as follows:
Properties Leased by Fragrance Hotel Management Registered Owner Fragrance Holdings Rental (per month) $10,500 Purpose/ Use of Property Office

Location 168 Changi Road #03-01 Singapore 419730

Area 268.0 sq. m.

Tenure Two years from 1 May 2012 with option to renew for further two years Two years from 1 May 2012 with option to renew for further two years

Fragrance Hotel Management

168 Changi Road #04-01 Singapore 419730

268.0 sq. m.

Fragrance Holdings

$10,500

Office

Our Directors are of the view that the rental rates were derived at on an arms length basis and on normal commercial terms as it was supported by an independent valuation report. Future renewal of the lease shall be subject to the review procedures set out in the section entitled Interested Person Transactions Review Procedures for Interested Person Transactions of this Prospectus. The lease, is not more than three (3) years and is supported by independent valuation. Accordingly, pursuant to the exemption granted under Rule 916(1) of the Listing Manual, no shareholders approval will be required in the future for the lease of the properties even if the rental should exceed the applicable threshold set out in Rule 906 of the Listing Manual. 191

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

Review Procedures for Interested Person Transactions Our Audit Committee, which comprises our Independent Directors, will review all Interested Person Transactions on a quarterly basis to ensure that they are on normal commercial terms and are not prejudicial to the interests of our Group and/or our minority Shareholders. To ensure that all future Interested Person Transactions are carried out on normal commercial terms and will not be prejudicial to the interests of our Group and/or our minority Shareholders, the following procedures will be implemented by our Group: (a) in the case of renting properties from or to an Interested Person, appropriate steps will be taken to ensure that such rent is matched with prevailing market rates, including adopting measures such as making relevant enquiries with landlords of similar properties and obtaining suitable valuations, reports or reviews published by property agents (where necessary). The rent payable shall be based on the most competitive market rental rates of similar properties in terms of size and location, based on the results of the relevant enquiries; (b) in the case of selling any products or supplying any services to an Interested Person, the price or fee and terms of two (2) other successful transactions of a similar nature with non-interested persons shall be used as comparison to ensure that the interests of Shareholders are not disadvantaged. The price or fee for the supply of products or services shall not be lower than the lowest price or fee of the two (2) other successful transactions with non-interested persons; (c) in the case of purchasing any products or engaging any services from an Interested Person, two (2) other quotations from non-interested persons will be obtained for comparison to ensure that the interests of Shareholders are not disadvantaged. The purchase price or fee for services shall not be higher than the most competitive price or fee of the two (2) other quotations from non-interested persons. In determining the most competitive price or fee, all pertinent factors, including but not limited to quality, requirements, specifications, delivery time and track record will be taken into consideration;

(d) where it is not possible to compare against the terms of other transactions with unrelated third parties and given that the products and/or services may be purchased only from an Interested Person, the Interested Person Transaction will be approved by our Audit Committee, in accordance with our Groups usual business practices and policies. In determining the transaction price payable to the Interested Person for such products and/or service, factors such as, but not limited to, quantity, requirements and specifications will be taken into account; and (e) in addition, we shall monitor all Interested Person Transactions entered into by us and categorise these transactions as follows: (i) a Category 1 Interested Person Transaction is one where the value thereof is in excess of or equal to 3.0% of the NTA of our Group; and

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INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

(ii) a Category 2 Interested Person Transaction is one where the value thereof is below 3.0% of the NTA of our Group.

All Category 1 Interested Person Transactions must be approved by our Audit Committee prior to entry whereas Category 2 Interested Person Transactions need not be approved by our Audit Committee prior to entry but shall be reviewed on a quarterly basis by our Audit Committee. Our Audit Committee will review all Interested Person Transactions, if any, on a quarterly basis to ensure that they are carried out on normal commercial terms, are not prejudicial to the interests of our Group and/or our minority Shareholders and in accordance with the procedures outlined above. It will take into account all relevant non-quantitative factors. In the event that a member of our Audit Committee is interested in any such transaction, he will abstain from participating in the review and approval process in relation to that particular transaction. Our Company shall prepare all the relevant information to assist our Audit Committee in its review and will keep a register to record all Interested Persons Transactions. The register shall also record the basis for entry into the transactions, including the quotations and other evidence obtained to support such basis and the procedures used to determine the terms of the transactions and whether the terms are normal commercial terms and not prejudicial to the interests of our minority Shareholders. Disclosure will be made in our Companys annual report of the aggregate value of Interested Person Transactions during the financial year under review and in the annual reports for the subsequent financial years of our Company. In addition, our Audit Committee will include the review of Interested Person Transactions as part of the standard procedures while examining the adequacy of our internal controls. Our Board will also comply with the provisions in Chapter 9 of the Listing Manual in respect of all on-going and future Interested Person Transactions, and if required under the Listing Manual, the Companies Act or the Securities and Futures Act, we will seek our Shareholders approval for such transactions. Potential Conflict of Interests We summarise below the potential conflict of interests which may arise between us and the FGL Group. Non-competition Deed FGL is a company incorporated under the laws of Singapore and is listed on the Main Board of the SGX-ST. Upon completion of the Restructuring Exercise, the FGL Group will continue to be engaged in property development business, focusing on the development of residential, commercial and industrial properties. As our Group is currently involved in hotel property development, there may be circumstances where any proposed hospitality property development business (including hotels and serviced apartments) may be in competition with the FGL Groups property development business.

193

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

To mitigate the potential conflicts of interest arising from competition between FGL Groups property development business and our involvement in hospitality property development and/or hospitality operations, our Company has entered into a non-competition deed (Noncompetition Deed) with FGL whereby our Company has undertaken to FGL that, from the Listing Date and for the duration of the Non-competition Deed, our Company shall not, and shall procure our Subsidiaries to not, whether directly or indirectly, engage in, carry on (whether alone or in partnership or joint venture with anyone else) or otherwise be interested in (whether as trustee, principal, agent, shareholder, unitholder or in any other capacity) non-hospitality property development projects. In addition, FGL has pursuant to the Non-competition Deed undertaken to us that, from the Listing Date and for the duration of the Non-competition Deed, FGL shall not, and shall procure its Subsidiaries to not, whether directly or indirectly, engage in, carry on (whether alone or in partnership or joint venture with anyone else) or otherwise be interested in (whether as trustee, principal, agent, shareholder, unitholder or in any other capacity) hospitality property development projects and/or hospitality operations. FGL and our Company have undertaken to each other that should either party wish to directly or indirectly develop Mixed-Use Development Projects they can only do so jointly with each other and not with any third party. The development of such Mixed-Use Development Project may be on sites where the permitted use specified by the landowner includes both hospitality property development and non-hospitality property development, or on sites where the developer is free to determine the use of the site (White Site). Any joint venture entered into by the parties in respect of the Mixed-Use Development Project shall be on the following terms (Joint Venture Terms): (a) the joint venture shall be entered into by way of a contractual joint venture arrangement between the parties or such other arrangement as may be agreed between the parties; (b) all financial and commercial risks and rewards deriving from the hospitality property development operations shall be solely borne and enjoyed by our Group; and (c) all financial and commercial risks and rewards deriving from the non-hospitality property development operations shall be solely borne and enjoyed by FGL Group.

The Non-competition Deed shall commence on the Listing Date and be effective for so long as (i) our Company remains listed on the SGX-ST and (ii) FGL continues to hold 15.0% or more, directly or indirectly, of the total number of issued Shares of our Company. Competition for White Sites to be developed exclusively for non-hospitality property development or hospitality property development As developers are free to determine the use of White Sites, FGL or our Company may choose to develop the site exclusively for non-hospitality property development or hospitality property development respectively. In such event, each party tenders for the White Site separately on the basis of developing the White Site exclusively for its respective business and no joint venture would be formed.

194

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

Our Directors are of the view that there is no material conflict of interests as our Non-Executive Director, Mr. Koh Wee Meng who is also the Controlling Shareholder of FGL, will refrain from participating in all matters in connection with any competition with FGL for White Sites to be developed exclusively for hospitality property development. In addition, our Directors are under a fiduciary duty to act in the best interests of our Company. Lease of commercial and retail space We currently have an ancillary business of leasing out part of our hotel properties for commercial and retail use. The Groups revenue derived from the ancillary business contributed 5% or less of the total Groups revenue in FY2008, FY2009, FY2010 and 9M2011. The FGL Group similarly leases out some of its commercial properties for such purposes. Our Directors are of the view that since the leasing of hotel properties for commercial and retail use forms an ancillary part of our business, there is no material conflict of interests. Relationship between our Director and the Controlling Shareholders and Directors of Aspial Corporation Limited (Aspial) Our Non-Executive Director Mr. Koh Wee Mengs siblings, namely Mr. Koh Wee Seng, Ms. Koh Lee Hwee and Ms. Ko Lee Meng are also controlling shareholders and directors of Aspial and its Subsidiaries. Aspial is a company listed on the SGX-ST and is also involved in property development business. Our Directors are of the view that there is no conflict of interests as Mr. Koh Wee Meng is not a Substantial Shareholder of Aspial and is not involved in the management of Aspial. In addition, Aspial and our Company are separate legal entities. Transfer of Non-hospitality Properties As at the Latest Practicable Date, we own two non-hospitality related properties, namely the Pasir Panjang Commercial Property and the Changi Road Property. We used to own the Geylang Industrial Property, another non-hospitality related property (the abovementioned shall be collectively known as, the Non-hospitality Properties). As at 13 April 2012, all Non-hospitality Properties have been transferred to the FGL Group. Please refer to the section entitled Interested Person Transactions Past Interested Person Transaction of this Prospectus for details on the transfers of the Non-hospitality Properties. Our Directors are of the view that the conflict of interest situation arising from the ownership of the Non-hospitality Properties by our Group has been resolved and as at the Latest Practicable Date, there is no further material conflict of interest. Save as disclosed above and in this section entitled Interested Person Transactions and Conflict of Interests of this Prospectus: (a) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has had any interest, direct or indirect, in any material transactions to which our Company was or is to be a party;

195

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

(b) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest, direct or indirect, in any company carrying on the same business or a similar trade which competes materially and directly with the existing business of our Group; and (c) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest, direct or indirect, in any company that is our customer or supplier of goods and services.

Save as disclosed in this Prospectus, none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest in any existing contract or arrangement which is significant in relation to the business of our Company and our Subsidiaries, taken as a whole.

196

CORPORATE GOVERNANCE
Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to our Shareholders. Our Board of Directors has formed three committees: (i) the Audit Committee, (ii) the Remuneration Committee and (iii) the Nominating Committee. Our lead Independent Director is Mr. Woo Peng Kong. Audit Committee Our Audit Committee comprises our Independent Directors, Mr. Kau Jee Chu, Mr. Kwan Chee Wai and Mr. Woo Peng Kong. The chairman of the Audit Committee is Mr. Kau Jee Chu. Our Audit Committee will assist our Board in discharging its responsibility to safeguard our assets, maintain adequate accounting records, and develop and maintain effective systems of internal control, with the overall objective of ensuring that our management creates and maintains an effective control environment in our Group. Our Audit Committee will provide a channel of communication between our Board, our management and our external auditors on matters relating to audit. Our Audit Committee will meet periodically to perform the following functions: (a) review with the external auditors and the internal auditors their audit plans including the results of the external auditors and internal auditors review and evaluation of our system of internal accounting controls; (b) review the half yearly and annual, and quarterly if applicable, financial statements and results announcements before submission to our Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards and compliance with the Listing Manual and any other relevant statutory or regulatory requirements; (c) review the effectiveness and adequacy of the internal control procedures addressing financial, operational and compliance risks including procedures for entering into hedging transactions;

(d) review the assistance given by our management to the auditors, and discuss problems and concerns, if any, arising from audits, and any matters which the auditors may wish to discuss (in the absence of our management, where necessary); (e) review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our Groups operating results or financial position; (f) consider and recommend the appointment or re-appointment of the external and internal auditors and matters relating to the resignation or dismissal of the auditors;

(g) review any Interested Persons Transactions and/or potential conflict of interests, and review the guidelines and review procedures set out under the sections entitled Interested Person Transactions of this Prospectus and future interested person transactions, if any; 197

CORPORATE GOVERNANCE
(h) monitor the undertakings described under the section entitled Potential Conflict of Interests of this Prospectus and review potential conflict of interest, if any; (i) review the suitability of the Chief Financial Officer and the adequacy of the finance team on an on-going basis; review the appointments of persons occupying managerial positions who are related to a director or a Substantial Shareholder of our Company; undertake such other reviews and projects as may be requested by our Board, and report to our Board its findings from time to time on matters arising and requiring the attention of our Audit Committee; review the Companys key financial risk areas and disclose the outcome of their reviews in the Annual Report, or when the findings are material, immediately announce via SGXNET; and

(j)

(k)

(l)

(m) generally undertake such other functions and duties as may be required by statute or the Listing Manual. Our Audit Committee will meet, as a minimum, on a quarterly basis. Apart from the duties listed above, our Audit Committee shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on our operating results and/or financial position. In the event that a member of our Audit Committee is interested in any matter being considered by our Audit Committee, he will abstain from reviewing that particular transaction or voting on that particular resolution. Our Audit Committee shall engage a third party professional firm to carry out our internal audit functions once every two (2) years or more regularly if required, after our Company is listed on the Official List of the SGX-ST. Our Directors, with the concurrence of the Audit Committee, are of the view that, as of the Latest Practicable Date, our internal controls addressing financial, operational and compliance risks are sufficiently adequate. Pursuant to the Eligibility-to-list Letter from the SGX-ST dated 17 February 2012, we will commission an annual internal controls audit (Annual Internal Controls Audit) that will continue until such time that the Audit Committee is satisfied that the Groups internal controls, including those put in place to monitor and check against vice-related violations at our hotels, are robust and effective enough to mitigate the Groups internal control weaknesses. Prior to the decommissioning of the Annual Internal Controls Audit, the Board will report to the SGX-ST on how the key internal control weaknesses have been rectified, and the basis for the decision to decommission the Annual Internal Controls Audit. Thereafter, such audits may be initiated by the Audit Committee as and when it deems fit to satisfy itself that the Groups internal controls remain robust and effective. Upon completion of the Annual Internal Controls Audit, we shall make appropriate disclosure via SGXNET on any material, pricesensitive internal control weaknesses and any follow-up actions to be taken by the Board.

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CORPORATE GOVERNANCE
Our Audit Committees views on Chen Loong Meys suitability as Chief Financial Officer Our Audit Committee has interviewed Ms. Chen Loong Mey and reviewed her educational and professional qualifications, as well as her previous working experience. Our Audit Committee noted Ms. Chens working experience at two listed entities in the real estate and utilities sectors and her previous employment with FGL where she managed the full set of its accounts. Hence, our Audit Committee is of the view that Ms. Chen is familiar with the finance and accounting functions of the hotel division of FGL. Ms. Chen has also been a member of the Institute of Certified Public Accountants of Singapore since May 2008. In addition, our Audit Committee has also considered input from a senior officer of FGL, who previously supervised Ms. Chen for a period of two and a half years during her employment as accountant of FGL. Our Audit Committee is satisfied and of the opinion that Ms. Chen is suitable to be appointed as the Chief Financial Officer of our Group. After making all reasonable enquiries, and to the best of their knowledge and belief, nothing has come to the attention of our Audit Committee members to cause them to believe that Ms. Chen does not have the competence, character and integrity expected of a Chief Financial Officer of our Group. Remuneration Committee Our Remuneration Committee comprises our Non-Executive Director, Mr. Koh Wee Meng and our Independent Directors, Mr. Kwan Chee Wai and Mr. Woo Peng Kong. The chairman of the Remuneration Committee is Mr. Woo Peng Kong. Our Remuneration Committee will recommend to our Board a framework of remuneration for the Directors and Key Executives, and determine specific remuneration packages for each Executive Director. The recommendations of our Remuneration Committee shall be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to directors fees, salaries, allowances, bonuses, Award Shares, options and benefits-in-kind shall be covered by our Remuneration Committee. In addition, our Remuneration Committee will perform an annual review of the remuneration of employees related to our Directors and Substantial Shareholders to ensure that their remuneration packages are in line with our staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities. They will also review and approve any bonuses, pay increases and/or promotions for these employees. Each member of the Remuneration Committee shall abstain from voting on any resolutions in respect of his remuneration package or that of employees related to him. Nominating Committee Our Nominating Committee comprises our Non-Executive Director, Mr. Koh Wee Meng and our Independent Directors, Mr. Kau Jee Chu and Mr. Kwan Chee Wai. The chairman of the Nominating Committee is Mr. Kwan Chee Wai.

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CORPORATE GOVERNANCE
Our Nominating Committee will be responsible for: (a) reviewing and recommending the nomination or re-nomination of our Directors having regard to the Directors contribution and performance; (b) determining on an annual basis whether or not a Director is independent; (c) assessing the performance of the Board and contribution of each Director to the effectiveness of the Board; and

(d) reviewing and approving any employment of persons related to our Directors and Substantial Shareholders and the proposed terms of their employment. Our Nominating Committee will recommend a framework for the evaluation of the Boards and individual Directors performance for the approval of the Board. Each member of our Nominating Committee shall abstain from voting on any resolutions in respect of the assessment of his performance or re-nomination as director. Term of Office Our Articles of Association provide that the quorum necessary for transaction of business of our Directors may be fixed by them, and unless so fixed shall be two. Save for our Executive Directors, who have Service Agreements with us (please refer to the section entitled Directors, Management and Staff Service Agreements of this Prospectus for more details), none of our Directors are appointed for any fixed terms. The tenure of our Executive Directors are subject to the terms of their respective Service Agreements and to being re-elected as directors of our Company at general meetings of our Company. Our Directors are appointed by our Shareholders at general meeting, and an election of Directors takes place annually. One-third (or the nearest number larger than one-third) of our Directors, are required to retire from office at each annual general meeting. Every Director must retire from office at least once every three (3) years. However, a retiring Director is eligible for re-election at the meeting at which he retires.

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OTHER GENERAL INFORMATION

SHARE CAPITAL 1. As at the date of this Prospectus, there is only one (1) class of shares in the capital of our Company, being ordinary shares. There are no founder, management, deferred or unissued shares. Our existing Shares do not carry voting rights which are different from the New Shares. The rights of and privileges attached to the Shares are stated in the Articles of Association. Save as disclosed in the section entitled Share Capital and Shareholders of this Prospectus, there were no changes in the issued and paid-up share capital of our Company or our Subsidiaries within the three (3) years preceding the Latest Practicable Date. Save as disclosed in paragraph 2 above and in the section entitled General Information of our Group Restructuring Exercise of this Prospectus, no shares in or debentures of our Company or our Subsidiaries has been issued, or is proposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash, during the three (3) years preceding the Latest Practicable Date. No person has been granted, or is entitled to be granted, an option to subscribe for shares in, or debentures of our Company or our Subsidiaries.

2.

3.

4.

MEMORANDUM AND ARTICLES OF ASSOCIATION 5. An extract of our Articles of Association relating to, inter alia, the transferability of shares, Directors voting rights, borrowing powers of Directors and dividend rights are set out in Appendix D entitled Summary of Memorandum and Articles of Association of our Company of this Prospectus. The Memorandum and Articles of Association of our Company are available for inspection at our registered office in accordance with the section entitled Other General Information Documents for Inspection in this section of this Prospectus.

MATERIAL CONTRACTS 6. The following contracts, not being contracts entered into in the ordinary course of business, to which our Company or any member of our Group is a party, for the period of two (2) years before the date of lodgement of this Prospectus with the Authority, are or may be material: (a) the sale and purchase agreement for the sale of the Pasir Panjang Commercial Property. Please refer to the section entitled Interested Persons Transactions and Conflicts of Interests Past Interested Person Transactions Sale of Properties to FGLs Subsidiaries of this Prospectus for further details; (b) the sale and purchase agreement for the sale of the Geylang Industrial Property. Please refer to the section entitled Interested Persons Transactions and Conflicts of Interests Past Interested Person Transactions Sale of Properties to FGLs Subsidiaries of this Prospectus for further details; 201

OTHER GENERAL INFORMATION

(c) the sale and purchase agreement for the sale of the Changi Road Property. Please refer to the section entitled Interested Persons Transactions and Conflicts of Interests Past Interested Person Transactions Sale of Properties to FGLs Subsidiaries of this Prospectus for further details;

(d) the sale and purchase agreement for the sale of Fragrance Hotel-Elegance. Please refer to the section entitled General Information of Our Group Our History and Development of this Prospectus for further details. (e) the tenancy agreement in relation to Fragrance Hotel-Elegance. Please refer to the section entitled General Information of Our Group Properties of this Prospectus for further details; (f) the Restructuring Agreement. Please refer to the section entitled General Information of Our Group Restructuring Exercise of this Prospectus for further details; and

(g) the sale and purchase agreement for the sale of the property at 103 Beach Road. Please refer to the section entitled General Information of Our Group Our History and Development of this Prospectus for further details. FINANCIAL POSITION AND OPERATIONS OF OUR GROUP 7. Save as disclosed in this Prospectus, our Directors are not aware of any event which has occurred between 1 October 2011 and the Latest Practicable Date, which may have a material effect on the financial position and results of operations of our Group. Save as disclosed in this Prospectus, our financial position and results of operations are not likely to be affected by any of the following: (a) known trends, uncertainties, demands, commitments or events that will result or are reasonably likely to result in our Groups liquidity increasing or decreasing in any material way; (b) material commitments for capital expenditure; (c) unusual or infrequent events or transactions or any significant economic changes that materially affect the amount of reported income from operations; and

8.

(d) known trends, uncertainties, demands, commitments or events that have had or that our Group expects to have a material favourable or unfavourable impact on revenues or operating income. ORDER BOOK 9. Due to the nature of our business, we do not maintain an order book.

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OTHER GENERAL INFORMATION

LITIGATION 10. To the best of our knowledge and belief, having made all reasonable enquiries, neither our Company nor our Subsidiaries is engaged in any litigation or arbitration either as plaintiff or defendant and our Directors have no knowledge and are not aware of any litigation or arbitration which are pending or threatened against our Company or our Subsidiaries or of any facts likely to give rise to any such litigation or arbitration, in respect of any claims or amounts which may have or had during the 12 months immediately before the date of lodgement of this Prospectus, a material effect on our Groups results of operations or financial position. GENERAL 11. No Shares will be allotted or issued on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus. 12. The time of opening of the Invitation is stated in the section entitled Details of the Invitation of this Prospectus. 13. The amount payable on application is $0.26 for each New Share. 14. In the opinion of our Directors, there are no minimum amounts which must be raised by the issue of the New Shares. Although no minimum amount must be raised by the Invitation, such amounts which are proposed to be provided out of the proceeds of the New Shares shall, in the event the Invitation is cancelled, be provided out of the existing banking facilities and/or internal funds generated from operations. 15. No amount of cash or securities or benefit has been or is intended to be paid or given to any promoter within the two (2) years preceding the date of lodgement of this Prospectus or is proposed or intended to be paid or given to any promoter at any time in respect of this Invitation. 16. Application monies received by our Company in respect of successful applications (including successfully balloted applications which are subsequently rejected) will be placed in a separate non-interest bearing account with the Receiving Bank. In the ordinary course of its business, the Receiving Banker will deploy these monies in the interbank money market. Our Company and the Receiving Banker have agreed that our Company will not receive any revenue earned by the Receiving Banker from the deployment of such monies in the interbank money market. Any refund of all or part of the application monies to unsuccessful or partially successful applicants will be made without any interest or any share of revenue or any other benefit arising therefrom. 17. Details, including the names, addresses and professional qualifications (including membership in a professional body) of the auditors of our Company since the incorporation of our Company are as follows:

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OTHER GENERAL INFORMATION

Name, Membership and Address Deloitte & Touche LLP Certified Public Accountants 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 Partner-in-charge/ Professional Qualification Leow Chung Chong Yam Soon/Certified Public Accountant

Professional Body Institute of Certified Public Accountants of Singapore

18. We currently have no intention of changing our auditors after the admission of our Company to the Official List of the SGX-ST. 19. There was no public take-over, by a third party in respect of our Shares or by the Company in respect of the shares of another corporation or the units of a business trust, which occurred between 1 January 2011 and the Latest Practicable Date. MANAGEMENT AND UNDERWRITING AGREEMENT AND PLACEMENT AGREEMENT 20. Pursuant to the management and underwriting agreement (the Management and Underwriting Agreement) dated 18 April 2012 entered into between our Company, the Issue Manager and Underwriter, our Company appointed the Issue Manager to manage the Invitation. The Issue Manager will receive a management fee from our Company for its services rendered in connection with the Invitation. 21. Pursuant to the Management and Underwriting Agreement, the Underwriter has agreed to underwrite the Public Offer Shares for a commission of 2.0% of the Issue Price for each Public Offer Share, payable by our Company, for subscribing or for procuring subscribers for any Public Offer Shares. Our Company may, at our sole discretion, pay to the Underwriter an additional incentive fee of 0.25% of the aggregate Issue Price for the Public Offer Shares. The Underwriter may, at its absolute discretion, appoint one (1) or more sub-underwriters for the Public Offer Shares. 22. Pursuant to the Management and Underwriting Agreement, our Company has agreed to pay the Stabilising Manager a commission of 2.0% of the Issue Price for each Overallotment Share for which the Over-allotment Option has been exercised. Our Company may, at our sole discretion, pay to the Stabilising Manager an additional incentive fee of 0.25% of the aggregate Issue Price for the Over-allotment Shares for which the Overallotment Option has been exercised. 23. Brokerage payable for the Public Offer Shares will be paid by our Company to members of the SGX-ST, merchant banks and members of the Association of Banks in Singapore in respect of accepted applications made on Application Forms bearing their respective stamps, or to Participating Banks in respect of successful applications made through Electronic Applications at the rate of 0.25% (and in the case of DBS Bank, 0.5%) of the Issue Price for each Public Offer Share. In addition, DBS Bank levies a minimum brokerage of $10,000 that will be paid by our Company. 24. Pursuant to the placement agreement (the Placement Agreement) dated 18 April 2012 between our Company and the Placement Agent, the Placement Agent has agreed to 204

OTHER GENERAL INFORMATION

subscribe for and/or procure subscribers for the Placement Shares for a placement commission of 2.0% of the Issue Price for each Placement Share, payable by our Company pursuant to the Invitation. Our Company may, at our sole discretion, pay to the Placement Agent an additional incentive fee of 0.25% of the aggregate Issue Price for the Placement Shares payable by us. The Placement Agent may, at its absolute discretion, appoint one (1) or more sub-placement agents for the Placement Shares. 25. Subscribers of the Placement Shares may be required to pay a commission of up to 1.0% of the Issue Price to the Placement Agent or its sub-placement agents (including the relevant Goods and Services Tax, if applicable). 26. The Management and Underwriting Agreement may be terminated by the Issue Manager and Underwriter at any time on or before the close of the Invitation on the occurrence of certain events. These events include any changes in national or international monetary, financial, political or economic conditions which result or are likely to result in, inter alia, the conditions in the Singapore stock market being materially and adversely affected or the success of the Invitation being materially prejudiced. 27. The Placement Agreement is conditional upon the Management and Underwriting Agreement not having been terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement and may be terminated on the occurrence of certain events, including those specified in the foregoing paragraph. 28. In the event that the Management and Underwriting Agreement is terminated, our Company reserves the right, at our absolute discretion, to cancel the Invitation. 29. Subject to certain conditions, the Company has agreed to indemnify the Issue Manager, Underwriter and Placement Agent against certain liabilities (including liabilities under the Securities and Futures Act) incurred in connection with the Invitation. Such indemnity is provided on a full and effective basis and does not provide for any exclusions to the liability of our Company vis-a-vis the Issue Manager, Underwriter and Placement Agent. ` 30. Save as disclosed in this section, no commission, discount or brokerage has been paid or other special terms granted within the preceding two (2) years or is payable to any Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe or procuring or agreeing to procure subscription for any Shares in or debentures of our Company. 31. Other than the Management and Underwriting Agreement and the Placement Agreement, where OCBC Bank was appointed as the Issue Manager, Underwriter and Placement Agent, and save as disclosed in the section entitled Other General Information Interests of Experts and Underwriters of this Prospectus, we do not have any material relationship with the Issue Manager, Underwriter and Placement Agent. INTERESTS OF EXPERTS AND UNDERWRITERS 32. Interests of Experts No expert is employed on a contingent basis by our Company or our Subsidiaries, has a material interest, whether direct or indirect, in the shares of our Company or our Subsidiaries, or has a material economic interest, whether direct or indirect, in our Company, including in the success of the Invitation. 205

OTHER GENERAL INFORMATION

33. Interests of Underwriters In the reasonable opinion of our Directors, the Underwriter, OCBC Bank, does not have a material relationship with our Company save as below: (a) OCBC Bank is the Issue Manager, Underwriter and the Placement Agent of the Invitation; (b) OCBC Bank is the Receiving Banker of the Invitation; and (c) OCBC Bank is one of the Principal Bankers of the Group.

CONSENTS 34. (a) The Auditors and Reporting Accountants of the Company, Deloitte & Touche LLP, have given and have not withdrawn their written consent to the issue of this Prospectus with the inclusion herein of (i) the Independent Auditors Report on the Combined Financial Statements for the Years ended 31 December 2010, 2009 and 2008 as set out in Appendix A of this Prospectus; (ii) the Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011 as set out in Appendix B of this Prospectus; and (iii) the Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information as set out in Appendix C of this Prospectus in the form and context in which they appear in this Prospectus and to act in such capacity in relation to this Prospectus. (b) The Issue Manager, Underwriter and Placement Agent, has given and not withdrawn its written consent to the issue of this Prospectus with the inclusion of its name in the form and context in which it appears in the Prospectus and to act in such capacity in relation to this Prospectus. (c) Euromonitor International Ltd. has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of the statements in the section entitled Industry Overview of this Prospectus, and references to its name in the form and context in which they appear in this Prospectus, and to act in such capacity in relation to this Prospectus.

(d) Colliers International Consultancy & Valuation (Singapore) Pte Ltd has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of its name and all references thereto, the valuation date and the valuation quantum of the relevant property set out against its name in the section entitled General Information of Our Group Properties of this Prospectus, and its valuation report set out in Appendix I entitled Valuers Report of this Prospectus, in the form and context in which they appear in this Prospectus and to act in such capacity in relation to this Prospectus. The valuation date, valuation quantum and valuation report were prepared for the purpose of incorporation in this Prospectus.

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OTHER GENERAL INFORMATION

RESPONSIBILITY STATEMENT BY OUR DIRECTORS 35. The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Prospectus and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Prospectus constitutes full and true disclosure of all material facts about the Invitation and our Group, and the Directors are not aware of any fact the omission of which would make any statement in this Prospectus misleading. Where information in this Prospectus has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Prospectus in its proper form and context. DOCUMENTS FOR INSPECTION 36. The following documents may be inspected at our registered office at 168 Changi Road, #04-01, Singapore 419730 during normal business hours for a period of six (6) months from the date of registration of this Prospectus: (a) the Memorandum and Articles of Association of our Company; (b) the Independent Auditors Report on the Combined Financial Statements for the Years Ended 31 December 2010, 2009 and 2008; (c) the Independent Auditors Report on the Combined Interim Condensed Financial Statements for the Nine Months Ended 30 September 2011;

(d) the Independent Auditors Report on the Unaudited Pro Forma Combined Financial Information; (e) the material contracts referred to in the section entitled Other General Information Material Contracts of this Prospectus; (f) the letters of consent referred to in the section entitled Other General Information Consents of this Prospectus;

(g) the Hotels Industry Report referred to in the section entitled Industry Overview of this Prospectus; (h) the Valuers Report referred to in the section entitled General Information of our Group Our Business of this Prospectus; (i) the Service Agreements referred to in the section entitled Directors, Management and Staff Service Agreements of this Prospectus; and the audited financial statements of our Subsidiaries for the financial years ended 31 December 2008, 2009 and 2010.

(j)

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
18 April 2012 The Board of Directors Global Premium Hotels Limited 168 Changi Road #04-01 Fragrance Building Singapore 419730 Dear Sirs Report on the Combined Financial Statements We have audited the accompanying combined financial statements of Global Premium Hotels Limited (the Company) and its subsidiaries (the Group). The combined financial statements comprise the combined statements of financial position as at 31 December 2010, 2009 and 2008, and the related combined statements of comprehensive income, combined statements of changes in equity and combined statements of cash flows of the Group for the years ended 31 December 2010, 2009 and 2008 (the Relevant Periods), and a summary of significant accounting policies and other explanatory notes, as set out on pages A-3 to A-45. Managements Responsibility for the Combined Financial Statements Management is responsible for the preparation of these combined financial statements that give a true and fair view in accordance with the provisions of the Singapore Financial Reporting Standards and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors Responsibility Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with the Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

A-1

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of combined financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined financial statements of the Group are properly drawn up in accordance with Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group as at 31 December 2010, 2009 and 2008 and of the results, changes in equity and cash flows of the Group for the Relevant Periods. Restriction on Distribution and Use These combined financial statements have been prepared solely in connection with the proposed listing of Global Premium Hotels Limited on the Singapore Exchange Securities Trading Limited for inclusion in the prospectus. This report is made solely to you, as a body and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Yours faithfully

Deloitte & Touche LLP Public Accountants and Certified Public Accountants Singapore Leow Chung Chong Yam Soon Partner

A-2

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENTS OF FINANCIAL POSITION As at 31 December 2010, 2009 and 2008
Note ASSETS Current assets Cash and cash equivalents Trade receivables Other receivables Properties under development Total current assets Non-current asset Property, plant and equipment Total assets LIABILITIES AND EQUITY Current liabilities Trade payables Other payables Term loans Income tax payable Total current liabilities Non-current liabilities Term loans Deferred tax liability Total non-current liabilities Capital and reserves Share capital Revaluation reserve Retained earnings Total equity Total liabilities and equity 16 17 27,100 451,552 22,436 501,088 738,855 27,100 213,654 21,581 262,335 463,696 27,100 157,779 17,070 201,949 342,024 14 15 150,448 23,815 174,263 134,832 4,751 139,583 98,996 3,760 102,756 12 13 14 1,188 49,986 7,895 4,435 63,504 1,236 45,515 12,198 2,829 61,778 1,223 26,067 6,433 3,596 37,319 11 701,942 738,855 425,284 463,696 323,412 342,024 7 8 9 10 2,811 1,274 5,982 26,846 36,913 2,458 985 11,149 23,820 38,412 1,923 1,216 15,473 18,612 2010 $000 2009 $000 2008 $000

See accompanying notes to combined financial statements. A-3

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENTS OF COMPREHENSIVE INCOME For the financial years ended 31 December 2010, 2009 and 2008
Note Revenue Cost of sales Gross profit Other operating income Administrative expenses Finance costs Profit before income tax Income tax expense Profit for the year Other comprehensive income: Revaluation of land and hotel buildings Income tax effects Net other comprehensive income Total comprehensive income for the year Basic and diluted earnings per share (cents) 24 256,957 (19,059) 237,898 257,753 3.61 56,843 (968) 55,875 69,386 2.46 25,106 3 25,109 41,240 2.93 21 22 20 19 18 2010 $000 44,215 (5,156) 39,059 280 (12,223) (3,001) 24,115 (4,260) 19,855 2009 $000 34,579 (4,883) 29,696 221 (10,355) (3,184) 16,378 (2,867) 13,511 2008 $000 36,893 (4,895) 31,998 196 (9,319) (3,239) 19,636 (3,505) 16,131

See accompanying notes to combined financial statements. A-4

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENTS OF CHANGES IN EQUITY For the financial years ended 31 December 2010, 2009 and 2008
Share capital $000 25,100 17 2,000 23 27,100 23 27,100 23 27,100 Revaluation reserve $000 132,857 (187) 25,109 157,779 55,875 213,654 237,898 451,552 Retained earnings $000 6,138 187 16,131 (5,386) 17,070 13,511 (9,000) 21,581 19,855 (19,000) 22,436

Note Balance at 1 January 2008 Transfer on sale of land and hotel building Issue of shares Total comprehensive income for the year Dividends paid Balance at 31 December 2008 Total comprehensive income for the year Dividends paid Balance at 31 December 2009 Total comprehensive income for the year Dividends paid Balance at 31 December 2010

Total $000 164,095 2,000 41,240 (5,386) 201,949 69,386 (9,000) 262,335 257,753 (19,000) 501,088

See accompanying notes to combined financial statements. A-5

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENTS OF CASH FLOWS For the financial years ended 31 December 2010, 2009 and 2008
2010 $000 Operating activities Profit before income tax Adjustments for: Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment Interest expense Operating cash flows before movements in working capital Trade receivables Other receivables Trade payables Other payables Properties under development Cash generated from (used in) operations Interest paid (Note A) Income taxes paid Net cash from (used in) operating activities Investing activities Purchase of property, plant and equipment (Note A) Proceeds from disposal of property, plant and equipment Net cash used in investing activities Financing activities Advances from ultimate holding company Repayments from (to) ultimate holding company Proceeds from term loans Repayment of term loans Proceeds from issuance of new shares Dividends paid Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
Note A Included in the interest paid is $821,000 (2009: $169,000; 2008: $68,000) which has been capitalised under property, plant and equipment (Note 11).

2009 $000 16,378 1,685 27 3,184 21,274 231 524 13 741 (23,820) (1,037) (3,208) (3,611) (7,856) (46,579) 7 (46,572) 18,707 3,800 63,608 (22,152) (9,000) 54,963 535 1,923 2,458

2008 $000 19,636 1,500 2 3,239 24,377 142 49 (38) (328) 24,202 (3,307) (1,797) 19,098 (27,326) 1,750 (25,576) 19,169 (8,414) 13,654 (14,125) 2,000 (5,386) 6,898 420 1,503 1,923

24,115 2,058 1 3,001 29,175 (289) (1,662) (48) 2,293 (3,026) 26,443 (3,917) (2,648) 19,878 (20,940) (20,940) 2,178 6,828 36,499 (25,090) (19,000) 1,415 353 2,458 2,811

See accompanying notes to combined financial statements. A-6

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
NOTES TO COMBINED FINANCIAL STATEMENTS For the financial years ended 31 December 2010, 2009 and 2008 1 GENERAL The Company (Registration No. 201128650E) is incorporated in Singapore on 19 September 2011 with its principal place of business and registered office at 168 Changi Road, #04-01 Fragrance Building, Singapore 419730. The combined financial statements are expressed in Singapore dollars, which is also the functional currency of the Company. The combined financial statements have been prepared solely in connection with the proposed listing of Global Premium Hotels Limited on the Singapore Exchange Securities Trading Limited. The Directors have considered the Groups cash flow and future estimates and projections taking into account possible fluctuations arising from the principal risks and uncertainties and other factors, and in particular the current and expected debt leverage, net current liability position, liquidity and funding position of the Group and the ability to meet finance charges, scheduled debt repayments and financial covenant reporting requirements. After making enquiries, and in consideration of the foregoing, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis has been adopted in preparing the combined financial statements. The principal activities of the Company are to carry on the business of operating hotels and investment holding. Restructuring Exercise In preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited, the Company undertook a restructuring exercise to streamline and rationalise the Group structure. Pursuant to the Restructuring Agreement dated 31 March 2012 (the Restructuring Agreement), the Company acquired: (i) the entire issued and paid-up share capital of Fragrance Capital Pte Ltd, comprising 20,000,000 ordinary shares in the capital of Fragrance Capital Pte Ltd, resulting in Fragrance Capital Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $284,517,694 (based on NTA as at 30 September 2011 less a discount of $33,111,984 and a dividend of $10,000,000 declared after 30 September 2011). The shares in Fragrance Capital Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; A-7

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
1 GENERAL (continued) (ii) the entire issued and paid-up share capital of Fragrance Ventures Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Ventures Pte Ltd, resulting in Fragrance Ventures Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $157,637,036 (based on NTA as at 30 September 2011 less a discount of $19,784,057). The shares in Fragrance Ventures Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(iii) the entire issued and paid-up share capital of Fragrance Assets Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Assets Pte Ltd, resulting in Fragrance Assets Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $73,031,920 (based on NTA as at 30 September 2011 less a discount of $9,849,600). The shares in Fragrance Assets Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (iv) the entire issued and paid-up share capital of Fragrance Investment Pte Ltd, comprising 4,000,000 ordinary shares in the capital of Fragrance Investment Pte Ltd, resulting in Fragrance Investment Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $32,126,729 (based on NTA as at 30 September 2011 less a discount of $4,443,264). The shares in Fragrance Investment Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (v) the entire issued and paid-up share capital of Fragrance Hotel Management Pte Ltd, comprising 100,000 ordinary shares in the capital of Fragrance Hotel Management Pte Ltd, resulting in Fragrance Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $9,473,809 (based on the NTA as at 30 September 2011). The shares in Fragrance Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(vi) the entire issued and paid-up share capital of Parc Sovereign Hotel Management Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Parc Sovereign Hotel Management Pte Ltd, resulting in Parc Sovereign Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $1,212,812 (based on NTA as at 30 September 2011 less a discount of $31,545). The shares in Parc Sovereign Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
1 GENERAL (continued) The Purchase Consideration was paid by the Company to Fragrance Group Limited in the following manner: (a) approximately $345.7 million was satisfied in cash by way of loans, obtained directly by the Group and/or internally generated funds of the Group and insofar as it constituted financial assistance under the Companies Act, duly approved by way of a special resolution passed by each of our Subsidiaries in accordance with Section 76(9B) of the Companies Act within thirty (30) days from the date of the Listing Date; (b) approximately $137.5 million was satisfied by the Company by way of allotment and issuance of 549,999,999 new Shares (Consideration Shares) credited as fully paid-up to Fragrance Group Limited; (c) approximately $74.8 million is to be satisfied by the Company by way of utilisation of part of the proceeds of the Invitation within thirty (30) days from the date of the Listing Date; and

The Restructuring Exercise was completed on 13 April 2012, notwithstanding that (a) and (c) have not been paid as at the time of completion. At the completion of the Restructuring Exercise and at the date of this report, the Company has the following subsidiaries:
Country of incorporation and operations Singapore Attributable equity interest of the Group % 100

Name of subsidiaries Fragrance Investment Pte Ltd Fragrance Ventures Pte Ltd Fragrance Capital Pte Ltd

Principal activity Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Investment holding and investing in properties for long term holding purposes Hotel operations

Singapore

100

Singapore

100

Fragrance Assets Pte Ltd

Singapore

100

Fragrance Hotel Management Pte Ltd

Singapore

100

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
1 GENERAL (continued)
Country of incorporation and operations Singapore Attributable equity interest of the Group % 100

Name of subsidiaries Parc Sovereign Hotel Management Pte Ltd

Principal activity Hotel operations

Basis of preparation of the combined financial statements For the purpose of preparing this set of combined financial statements for the years ended 31 December 2010, 2009 and 2008 (the Relevant Periods), the combined financial statements have been prepared on a combined basis and include the financial information of the companies now comprising the Group as if the current Group structure had been in existence throughout the Relevant Periods. The combined statements of financial position of the Group as at 31 December 2010, 2009 and 2008 have been prepared to present the assets and liabilities of the Group as at those dates as if the current Group structure had been in existence at these dates. The combined financial statements of the Group for the years ended 31 December 2010, 2009 and 2008 were authorised for issue by the Board of Directors on 18 April 2012. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The combined financial statements are prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below, and are drawn up in accordance with Singapore Financial Reporting Standards (FRS). ADOPTION OF NEW AND REVISED STANDARDS The Group has adopted all the new and revised FRSs and Interpretations of FRS (INT FRS) and amendments to FRS that are relevant to the Group since the beginning of the earliest Relevant Periods presented. At the date of authorisation of these combined financial statements, the following FRS and amendments to FRSs that are relevant to the Group were issued but not effective: FRS 24 (Revised) FRS 27 (Revised) FRS 110 FRS 112 Related Party Disclosures Separate Financial Statements Consolidated Financial Statements Disclosure of Interests in Other Entities

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) FRS 113 Amendments to FRS 1 Amendments to FRS 1 Fair Value Measurement Presentation of Financial Statements (as part of Improvements to FRSs issued in 2010) Presentation of Financial Statements Amendments relating to Presentation of Items of Other Comprehensive Income Financial Instruments: Disclosures (as part of Improvements to FRSs issued in 2010) Financial Instruments: Disclosures Transfer of Financial Assets

Amendments to FRS 107 Amendments to FRS 107

FRS 24 (Revised) Related Party Disclosures FRS 24 (Revised) is effective for annual periods beginning on or after 1 January 2011. The revised Standard clarifies the definition of a related party and consequently additional parties may be identified as related to the reporting entity. In addition, the revised Standard provides partial exemption for government-related entities, in relation to the disclosure of transactions, outstanding balances and commitments. Where such exemptions apply, the reporting entity has to make additional disclosures, including the nature of the governments relationship with the reporting entity and information on significant transactions or group of transactions involved. In the period of initial adoption, the changes to related party disclosures, if any, will be applied retrospectively with restatement of the comparative information. FRS 27 (Revised) Separate Financial Statements and FRS 110 Consolidated Financial Statements FRS 110 replaces the control assessment criteria and consolidation requirements currently in FRS 27 and INT FRS 12 Consolidation -Special Purpose Entities. FRS 110 defines the principle of control and establishes control as the basis for determining which entities are consolidated in the consolidated financial statements. It also provides more extensive application guidance on assessing control based on voting rights or other contractual rights. Under FRS 110, control assessment will be based on whether an investor has (i) power over the investee; (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect the amount of the returns. FRS 27 remains as a standard applicable only to separate financial statements. FRS 110 will take effect from financial years beginning on or after 1 January 2013, with full retrospective application.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Group is currently estimating the effects of FRS 110 on its investments in the period of initial adoption. FRS 112 Disclosure of Interests in Other Entities FRS 112 requires an entity to provide more extensive disclosures regarding the nature of and risks associated with its interest in subsidiaries and unconsolidated structured entities. FRS 112 will take effect from financial years beginning on or after 1 January 2013, and the Group is currently estimating extent of additional disclosures needed. FRS 113 Fair Value Measurement FRS 113 is a single new Standard that applies to both financial and non-financial items. It replaces the guidance on fair value measurement and related disclosures in other Standards, with the exception of measurement dealt with under FRS 102 Share-based Payment, FRS 17 Leases, net realisable value in FRS 2 Inventories and value-in-use in FRS 36 Impairment of Assets. FRS 113 provides a common fair value definition and hierarchy applicable to the fair value measurement of assets, liabilities, and an entitys own equity instruments within its scope, but does not change the requirements in other Standards regarding which items should be measured or disclosed at fair value. FRS 113 will be effective prospectively from annual periods beginning on or after 1 January 2013. Comparative information is not required for periods before initial application. The Group is currently estimating the effects of FRS 113 in the period of initial adoption. Amendments to FRS 1 Presentation of Financial Statements (as part of Improvements to FRSs issued in 2010) The amendments to FRS 1 clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. Amendments to FRS 1 will be effective for annual periods beginning on or after 1 January 2011.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Amendments to FRS 1 Presentation of Financial Statements: Amendments relating to Presentation of Items of Other Comprehensive Income (OCI) The amendment on Other Comprehensive Income (OCI) presentation will require the Group to present in separate groupings, OCI items that might be recycled i.e., reclassified to profit or loss (e.g., those arising from cash flow hedging, foreign currency translation) and those items that would not be recycled (e.g. revaluation gains on property, plant and equipment under the revaluation model). The tax effects recognised for the OCI items would also be captured in the respective grouping, although there is a choice to present OCI items before tax or net of tax. Changes arising from these amendments to FRS 1 will take effect from financial years beginning on or after 1 July 2012, with full retrospective application. When the Group adopts the amendments, it will have to present revaluation gains on property, plant and equipment and the corresponding tax effects separately from other OCI items that might be recycled to profit or loss. Amendments to FRS 107 Financial Instruments: Disclosures (as part of Improvements to FRSs issued in 2010) The amendments to FRS 107 clarify the required level of disclosures about credit risk and collateral held and provide relief from disclosures previously required regarding renegotiated loans. Amendments to FRS 107 will be effective for annual periods beginning on or after 1 January 2011. Amendments to FRS 107 Financial Instruments: Disclosures: Transfers of Financial Assets The amendments to FRS 107 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. The amendments also require disclosures where transfers of financial assets are not evenly distributed throughout the period. The Group does not anticipate that these amendments to FRS 107 will have a significant effect on the Groups disclosures regarding its existing arrangements for transfers of trade receivables. However, if the Group enters into other types of transfers of financial assets in the future, disclosures regarding those transfers may be affected.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Amendments to FRS 107 will be effective for annual periods beginning on or after 1 July 2011. Except as disclosed above, the management anticipates that the adoption of the above FRS and amendments to FRSs that were in issue but not yet effective at the date of authorisation of these combined financial statements will not have a material impact on the combined financial statements of the Group in the period of their initial adoption. BASIS OF COMBINATIONS The combined financial statements incorporate the financial statements of the Company and its subsidiaries and had been prepared using the principles of merger accounting and on the assumption that the re-organisation of entities under common control has been effected as at the beginning of the Relevant Periods presented in these combined financial statements. Where necessary, adjustments are made to the combined financial statements of the Group entities to bring their accounting policies in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on combination. FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised on the Groups combined statements of financial position when the Group becomes a party to the contractual provisions of the instrument. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability, or where appropriate, a shorter period. Financial assets All financial assets are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value plus transaction costs.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Trade and other receivables Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest is immaterial. Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each Relevant Period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the assets carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collaterialised borrowing for the proceeds received. Financial liabilities and equity instruments Classification as debt or equity Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Other financial liabilities Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis. Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Groups accounting policy for borrowing costs (see below). Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Groups obligations are discharged, cancelled or they expire. PROPERTIES UNDER DEVELOPMENT Development properties are stated at the lower of cost and net realisable value. Cost comprises the payment made for acquisition of land, development costs, finance costs and other related expenditure which are capitalised as and when activities that are necessary to get the asset ready for its intended use until such time that the properties are substantially completed. Foreseeable losses, if any, are provided as soon as they become known based on the managements estimates of net realisable value and estimates of cost to complete. A-16

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) PROPERTY, PLANT AND EQUIPMENT Freehold and leasehold land and hotel buildings including those under construction, held for use in the operation of hotels are stated in the combined statements of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not materially differ from that which would be determined using fair values as at the end of the relevant periods. Any revaluation increase arising on such freehold and leasehold land and hotel buildings is credited to the property revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such freehold and leasehold land and hotel buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the property revaluation reserve relating to a previous revaluation of that asset. Office premises and plant and equipment are carried at cost, less accumulated depreciation and any impairment losses. Depreciation is charged so as to write off the cost or valuation of assets, other than freehold land and construction-in-progress, over their estimated useful lives, using the straight-line method, on the following bases: Leasehold land Hotel buildings Office premises Motor vehicles Furniture, fixtures and fittings Office equipment Computers Electrical installation Renovations over the remaining lease period of 39 years to 824 years over the remaining useful life of 48 years to 60 years 2% 20% 20% 20% 20% to 3313% 20% 20%

The estimated useful lives, residual values and depreciation method are reviewed each year end, with the effect of any changes in estimate accounted for on a prospective basis. Fully depreciated assets are retained in the financial statements until they are no longer in use. A-17

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained earnings. No transfer is made from the revaluation reserve to retained earnings except when an asset is derecognised. LEASES Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Group as lessor Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are recognised on a straight-line basis over the lease term. IMPAIRMENT OF TANGIBLE ASSETS At the end of each Relevant Period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cashgenerating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. A-18

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) PROVISIONS Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the Relevant Periods, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. REVENUE RECOGNITION Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes. Hotel room revenue is recognised based on room occupancy. Revenue from vending machines is recognised when goods are dispensed. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. BORROWING COSTS Borrowing costs directly attributable to the acquisition and construction of properties, 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. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. RETIREMENT BENEFIT COSTS Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) as payments to defined contribution plans where the Groups obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan. EMPLOYEE LEAVE ENTITLEMENT Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the Relevant Periods. INCOME TAX Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the combined statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Groups liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively by the end of the Relevant Periods. Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each Relevant Period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the Relevant Period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity respectively). A-20

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) SEGMENT An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups other components. The Group determines and presents operating segments based on information that internally is provided to the Chief Executive Officer (CEO), who is the Groups chief operating decision maker. All operating segments results are reviewed regularly by the Groups CEO for the purpose of monitoring segment performance and allocating resources. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash on hand and bank balances that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. 3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Groups accounting policies, which are described in Note 2 above, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgements in applying the Groups accounting policies Management is of the opinion that there are no critical judgements involved that have a significant effect on the amounts recognised in the financial statements. Key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the Relevant Periods that have significant effects on the amounts of assets and liabilities within the next year as discussed below.

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) Valuation of freehold and leasehold land and hotel buildings Freehold and leasehold land and hotel buildings including those under construction are stated at fair value based on independent professional valuations. In determining the fair value, the valuer has used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value include market-corroborated capitalisation yield, terminal yield and discount rate. The valuer has considered valuation techniques including the direct comparison method, capitalisation approach and/or discounted cash flows in arriving at the open market value as at the end of each Relevant Periods. The direct comparison method involves the analysis of hotels property transactions and adjusting the transacted prices to that reflective of the entitys hotel properties. The capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value. The fair values of the hotel buildings have been estimated based on construction costs as at the end of each Relevant Periods and adjusting for the condition of the buildings and their expected remaining useful lives. In relying on the valuation reports, management has exercised its judgement and is satisfied that the independent valuer has appropriate recognised professional qualifications and their estimates are reflective of current market conditions at the end of each Relevant Periods. Please see Note 11 for the fair value of the freehold and leasehold land, hotel buildings and construction-in-progress at the end of each Relevant Periods. 4 FINANCIAL INSTRUMENTS, MANAGEMENT FINANCIAL RISKS AND CAPITAL RISKS

(a) Categories of financial instruments The following table sets out the financial instruments as at the end of the Relevant Periods:
2010 $000 Financial assets Loans and receivables (including cash and cash equivalents) Financial liabilities Amortised cost 208,809 193,219 132,501 10,023 14,563 18,611 2009 $000 2008 $000

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APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
4 FINANCIAL INSTRUMENTS, MANAGEMENT (continued) FINANCIAL RISKS AND CAPITAL RISKS

(b) Financial risk management policies and objectives The Group is exposed to various financial risks arising in the normal course of business. It has adopted risk management policies and utilises a variety of techniques to manage its exposure to these risks. There has been no change to the Groups exposure to these financial risks or the manner in which it manages and measures the risks. Market risk exposures are measured using sensitivity analysis indicated below. (i) Foreign exchange risk management The Group is not exposed to any significant foreign currency risk as the Groups transactions are mainly denominated in Singapore dollars. (ii) Interest rate risk management The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and liabilities. The Group manages its interest rate exposure by actively reviewing its debt portfolio and switching to cheaper sources of funding to achieve a certain level of protection against interest hikes. Summary quantitative data of the Groups interest-bearing financial instruments can be found in Section (iv) of this Note. Interest Rate Sensitivity The sensitivity analyses below have been determined based on the exposure to interest rates for the Groups term loans at the end of the Relevant Period and the stipulated change taking place at the beginning of each of the Relevant Period and held constant throughout the Relevant Periods in the case of instruments that have floating rates. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents managements assessment of the possible change in interest rates. If interest rates had been 50 basis points higher or lower and all other basis points held constant: The Groups profit for the year ended 31 December 2010 would decrease/ increase by approximately $573,000 (2009: decrease/increase by $538,000; 2008: decrease/increase by $339,000). This is mainly attributable to the Groups exposure to interest rates on its variable rate borrowings. A-23

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
4 FINANCIAL INSTRUMENTS, MANAGEMENT (continued) (iii) Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of obtaining customer deposits to mitigate credit risk. The Groups financial assets are cash and cash equivalents, and trade and other receivables. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group has no significant concentration of credit risk. Cash is held with creditworthy financial institutions. The carrying amounts of financial assets recorded in the combined financial statements, net of any allowances for losses, represent the Groups maximum exposure to credit risk. (iv) Liquidity risk management The Group maintains sufficient cash and cash equivalents, and internally generated cash flows to finance its activities. The Group finances its liquidity needs through internally generated cash flows and external financing, and minimises liquidity risk by keeping committed credit lines available. The Directors have considered the Groups cash flow and future estimates and projections taking into account possible fluctuations arising from the principal risks and uncertainties and other factors, and in particular the current and expected debt leverage, net current liability position, liquidity and funding position of the Group and the ability to meet finance charges, scheduled debt repayments and financial covenant reporting requirements. Liquidity and interest risk analyses Non-derivative financial liabilities The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. The adjustments column represents the estimated future interest attributable to A-24 FINANCIAL RISKS AND CAPITAL RISKS

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
4 FINANCIAL INSTRUMENTS, MANAGEMENT (continued) FINANCIAL RISKS AND CAPITAL RISKS

the instrument included in the maturity analysis which is not included in the carrying amount of the financial liabilities on the combined statements of financial position.
Weighted average effective interest rate % 2010 Non-interest bearing Variable interest rate instruments Total 2009 Non-interest bearing Variable interest rate instruments Total 2008 Non-interest bearing Variable interest rate instruments Total NA 2.18 27,072 9,626 36,698 43,016 43,016 84,768 84,768 (31,981) (31,981) 27,072 105,429 132,501 NA 2.55 46,189 15,907 62,096 61,322 61,322 108,600 108,600 (38,799) (38,799) 46,189 147,030 193,219 NA 2.34 50,466 19,774 70,240 60,536 60,536 115,980 115,980 (37,947) (37,947) 50,466 158,343 208,809 On demand or within 1 year $000 Within 2 to 5 years $000

After 5 years $000

Adjustments $000

Total $000

The non-derivative financial assets of the Group are due on demand or within one year. (v) Fair value of financial assets and financial liabilities The carrying amounts of cash and cash equivalents, trade and other current receivables and payables and other liabilities and amounts payable approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to the combined financial statements. A-25

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
4 FINANCIAL INSTRUMENTS, MANAGEMENT (continued) FINANCIAL RISKS AND CAPITAL RISKS

(c) Capital risk management policies and objectives The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance and to ensure that all externally imposed capital requirements are complied with. The capital structure of the Group consists debts which include the advances from the ultimate holding company and borrowings as disclosed in Notes 13 to 14 and equity attributable to equity holder of the Company, comprising issued capital as disclosed in Note 16 and retained earnings. The Group is required to maintain maximum gearing in order to comply with covenants in loan agreements with banks and finance companies. The management reviews the capital structure on a semi-annual basis. As a part of the review, the management consider the cost of capital and the risks associated with each class of capital. The management also ensures that the Group maintains certain security ratios of outstanding term loans over the value of the properties in order to comply with the loan covenants imposed by banks and financial institutions. Based on the review, the Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debt or the redemption of existing debts. The Groups overall strategy remains unchanged during the Relevant Periods. The Group is in compliance with externally imposed capital requirements for the financial years ended 31 December 2010, 2009 and 2008. 5 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS The Company is a wholly-owned subsidiary of Fragrance Group Limited, incorporated in Singapore which is also the Companys ultimate holding company. Related companies in these financial statements refer to members of the ultimate holding companys group of companies. Some of the Companys transactions and arrangements are between members of the Group and the effect of these on the basis determined between the parties is reflected in these combined financial statements. The intercompany balances are unsecured, interest-free and repayable on demand.

A-26

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
5 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS (continued) During the Relevant Periods, the Group entered into the following transactions with related companies:
2010 $000 Dividends paid to the ultimate holding company 19,000 2009 $000 9,000 2008 $000 5,386

OTHER RELATED PARTY TRANSACTIONS Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Some of the Groups transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these combined financial statements. The balances are unsecured, interest-free and repayable on demand. During the year, the Group entered into the following transactions with related parties:
2010 $000 Salaries and related costs paid to key management personnel and relatives of a director 897 2009 $000 817 2008 $000 621

Compensation of directors and key management personnel The remuneration of directors and other members of key management are as follows:
2010 $000 Short-term benefits Post-employment benefits 689 18 707 2009 $000 637 28 665 2008 $000 356 10 366

A-27

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
7 CASH AND CASH EQUIVALENTS
2010 $000 Cash on hand Cash at bank 28 2,783 2,811 2009 $000 34 2,424 2,458 2008 $000 27 1,896 1,923

Cash and cash equivalents comprise cash held by the Group and bank balances. 8 TRADE RECEIVABLES
2010 $000 External parties 1,274 2009 $000 985 2008 $000 1,216

Certain customers are granted a credit period on the rental of hotel room of 30 days (2009: 30 days; 2008: 30 days). In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the end of the Relevant Period. The concentration of credit risk is limited due to the customer base being large and unrelated. All trade receivables are neither past due nor impaired and management has considered the quality of the debts and determined that no allowance is required. 9 OTHER RECEIVABLES
2010 $000 Prepayments Deposits
(1)

2009 $000 29 92 10,983 45 11,149

2008 $000 1 682 14,783 7 15,473

44 1,699 4,155 84 5,982

Advances to the ultimate holding company (Note 5) Others

(1) An amount of $1,581,000 was paid as a deposit for a tender in a land sale from Urban Redevelopment Authority (URA) as at the reporting period ended 31 December 2010. This amount was subsequently refunded to the Group upon finalisation of the result of the tender.

A-28

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
10 PROPERTIES UNDER DEVELOPMENT
2010 $000 Land cost and other related costs Development costs Property taxes and other overhead expenses 25,690 247 909 26,846 2009 $000 23,000 820 23,820 2008 $000

Certain properties are mortgaged to the banks to secure credit facilities of the subsidiaries (Note 14). These properties are acquired with the intention of using for hotel related activities upon approval from the Urban Redevelopment Authority (URA). In the event that no approval is received from URA, these properties are expected to be sold after redevelopment. Subsequent to 31 December 2010, approval is not obtained from URA and these properties have been sold to related companies (Note 5). The properties under development as at 31 December 2010, 2009 and 2008 are as follows:
Property and address 2010 Lots 99033X & 99035C MK 03 at Pasir Panjang Road(1) Conservation of existing 2-storey shop houses with rear extension for a residential and commercial development Development of 9-storey building Freehold 2,056 Description Tenure Land area (sq m)

Lots 97061A, 97064X, and 97065L MK 24 at Lorong 19 Geylang(2)

Freehold

390

(1) The property is currently undergoing development works, additions and alterations work as at 31 December 2010. The expected date of completion is 31 December 2015. (2) The property is currently undergoing development works, additions and alterations work as at 31 December 2010. The expected date of completion is 31 December 2011.

Property and address 2009 Lots 99033X & 99035C MK 03 at Pasir Panjang Road

Description

Tenure

Land area (sq m)

Conservation of existing 2-storey shop houses with rear extension for a residential and commercial development

Freehold

2,056

A-29

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008

11
Furniture fixtures and Office fittings equipment Computers $000 264 141 (31) 374 308 494 15 291 203 $000 Electrical installation $000 184 3 187 612 Renovations $000 609 175 (13) 771 43 814 53 867 (5) 434 110 544 326 113 (1) 225 102 $000

PROPERTY, PLANT AND EQUIPMENT

Freehold land $000 70,430 94 3,207 1,079 74,810 7,450 184 7,450 140 44 (314) (26) 69,210 (53) 1,587 7,450 166 (565) (420) 65,280 342 4,573 7,450 70 96 $000 $000 $000

Leasehold land

Hotel Office buildings premises

Motor vehicles

Constructionin-progress $000 13,207 26,332 (22,230) 691 18,000 45,710 (6,150)

Total $000 275,250 27,394 24,139 (2,045) 324,738 46,801 (53)

$000

Cost or valuation: At 1 January 2008 Additions Transfer Revaluation Increase/(Decrease) Disposals

195,120 10,207

24,013 (1,580)

A-30
(94) 588 121 (42) 667 7,115

At 31 December 2008 Additions Adjustment Transfer Revaluation Increase/(Decrease) Disposals

227,760 4,563

48,687

509 28 537

799 948 1,747

7,200 64,760 20,363 (27,962) 103,918 161,079

55,573 (125) 426,934 21,761 255,622 (42) 704,275

At 31 December 2009 Addition Transfer Revaluation Increase/ (Decrease) Disposals

281,010

24,755

143,510

At 31 December 2010

424,520

31,870

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008

11
Furniture fixtures and Office fittings equipment Computers $000 $000 Electrical installation $000 Renovations $000 $000

PROPERTY, PLANT AND EQUIPMENT (continued)

Freehold land $000 $000 $000 $000

Leasehold land

Hotel Office buildings premises

Motor vehicles

Constructionin-progress $000

Total $000

$000

Comprising: December 31, 2008 At cost At valuation 69,210 7,450 166 771 326 374 69,210 7,450 166 771 326 374 494 494

227,760

187 187

18,000 18,000

9,768 314,970 324,738

227,760

A-31
70,430 7,450 140 814 434 70,430 7,450 140 814 434 588 588 74,810 74,810 7,450 184 867 7,450 184 867 544 544 667 667

December 31, 2009 At cost At valuation

281,010

509 509

799 799

64,760 64,760

10,734 416,200 426,934

281,010

December 31, 2010 At cost At valuation

424,520

31,870

537 537

1,747 1,747

161,079 161,079

11,996 692,279 704,275

424,520

31,870

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008

11
Furniture fixtures and Office fittings equipment Computers $000 $000 Electrical installation $000 Renovations $000 $000

PROPERTY, PLANT AND EQUIPMENT (continued)

Freehold land $000 $000 $000 $000

Leasehold land

Hotel Office buildings premises

Motor vehicles

Constructionin-progress $000

Total $000

$000

Accumulated depreciation: At 1 January 2008 Depreciation Eliminated on revaluation Disposals 20 (20) 140 82 699 (1,314) 1,314 89 51 49 33 633 66 254 61 315 (1,270) (20) (3) 1,270 38 51 41 28 575 58 219 38 167 116 (68) 215 108 (41) 282 (1,215) (2) (8) (1) (27) 1,217 38 15 26 541 42 200 20 147 47 98 78 176 92 268 91 359

78 32 110 32 142 314 456

1,079 1,500 (1,215) (38) 1,326 1,685 (1,270) (91) 1,650 2,058 (1,334) (41) 2,333

A-32
74,810 7,310 70,430 7,361 69,210 7,412 125 91 102 196 181 168 107 180 229 207 373 385

At 31 December 2008 Depreciation Eliminated on revaluation Disposals

At 31 December 2009 Depreciation Eliminated on revaluation Disposals

At 31 December 2010

Carrying amount: At 31 December 2008

227,760

318 241 178

77 657 1,291

18,000 64,760 161,079

323,412 425,284 701,942

At 31 December 2009

281,010

At 31 December 2010

424,520

31,870

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
11 PROPERTY, PLANT AND EQUIPMENT (continued) Interest capitalised for hotel buildings under construction during the year was $821,000 (2009: $169,000; 2008: $68,000) at interest rates from 2.7% to 3.2% (2009: 3.00% to 4.00%; 2008: 2.53% to 4.75%) per annum (Note 14). Most of the freehold and leasehold land, hotel buildings, office premises and constructionin-progress are mortgaged to banks and finance companies to secure credit facilities for the Company and its subsidiaries (Note 14). Had the freehold and leasehold land, hotel buildings and construction-in-progress been carried at historical cost less accumulated depreciation and accumulated impairment losses, their carrying amounts would be as followed:
2010 $000 Freehold land Leasehold land Hotel buildings Construction-in-progress 95,433 13,898 51,317 57,163 2009 $000 95,433 46,211 56,818 2008 $000 90,870 45,629 17,309

Details of properties held by the Group are as follows:

Land area (sq m) 672 Number of rooms 90

Properties and addresses The Fragrance Hotel 219 Joo Chiat Road Singapore 427485 Fragrance Hotel Balestier 255 Balestier Road Singapore 329710 Fragrance Hotel Bugis 33 Middle Road Singapore 188942 Fragrance Hotel Classic 418 Balestier Road Singapore 329808 Fragrance Hotel Crystal 50 Lorong 18 Geylang Singapore 398824 Fragrance Hotel Emerald 20 Lorong 6 Geylang Singapore 399174

Tenure Freehold

Freehold

245

48

999 years Leasehold Freehold

348

80

265

48

Freehold

1,051

125

Freehold

818

126

A-33

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
11 PROPERTY, PLANT AND EQUIPMENT (continued)
Land area (sq m) 544 Number of rooms 74

Properties and addresses Fragrance Hotel Imperial 28 Penhas Road Singapore 208187 Fragrance Hotel Kovan 760 Upper Serangoon Road Singapore 534629 Fragrance Hotel Lavender 51 Lavender Street Singapore 338710 Fragrance Hotel Oasis 435 Balestier Road Singapore 329816 Fragrance Hotel Ocean View 432 Pasir Panjang Road Singapore 118773 Fragrance Hotel Pearl 21 Lorong 14 Geylang Singapore 398961 Fragrance Hotel Rose 263 Balestier Road Singapore 329715 Fragrance Hotel Royal 400 Telok Blangah Road Singapore 098838 Fragrance Hotel Ruby 10 Lorong 20 Geylang Singapore 398730 Fragrance Hotel Sapphire 3 Lorong 10 Geylang Singapore 399037 Fragrance Hotel Selegie 183 Selegie Road Singapore 188329 Fragrance Hotel Sunflower 10 Lorong 10 Geylang Singapore 399043 Fragrance Hotel Viva 75 Wishart Road Singapore 098721

Tenure Freehold

Freehold

284

43

Freehold

220

35

Freehold

229

36

Freehold

256

47

Freehold

843

129

Freehold

400

68

Freehold

278

32

Freehold

902

168

Freehold

528

50

Freehold

468

120

Freehold

323

27

Freehold

300

33

A-34

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
11 PROPERTY, PLANT AND EQUIPMENT (continued)
Land area (sq m) 478 Number of rooms 57

Properties and addresses Fragrance Hotel Waterfront 418 Pasir Panjang Road Singapore 118759 63 Dunlop Street Singapore 209391(1) 175 Albert Street Singapore 189970(1) 103 Beach Road Singapore 189704(1) Lot 99797C, 99803K & 99799W TS 07 Singapore(1) Fragrance Building 168 Changi Road Singapore 419730

Tenure Freehold

Freehold 99 years Leasehold 999 years Leasehold 99 years Leasehold Freehold

238 1,165 333 513

31 170

680

(1) These properties are undergoing development works, additions and alteration works as at 31 December 2010.

12

TRADE PAYABLES
2010 $000 External parties 1,188 2009 $000 1,236 2008 $000 1,223

The average credit period for trade payables is 14 to 30 days (2009: 14 to 30 days; 2008: 14 to 30 days). The Group has financial risk management policies in place to ensure that all payables are within the credit time frame specified by the suppliers. 13 OTHER PAYABLES
2010 $000 Accruals Withholding income tax on staff costs Advances from the ultimate holding company (Note 5) Deposits received in advance Others 4,070 118 45,064 708 26 49,986 2009 $000 1,926 130 42,886 562 11 45,515 2008 $000 1,533 132 24,179 218 5 26,067

A-35

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
14 TERM LOANS
2010 $000 Term loan Less: Amount due for settlement within 12 months (shown under current liabilities) Amount due for settlement after 12 months 158,343 (7,895) 150,448 2009 $000 147,030 (12,198) 134,832 2008 $000 105,429 (6,433) 98,996

As the interest rates of the term loans are at floating rates which are pegged to the commercial financing rates of the banks and finance companies, the management is of the opinion that the carrying values of the term loans approximate their fair values. The Groups term loans from banks and finance companies bear effective interest rates from 1.88% to 3.21% (2009: 1.47% to 3.21%; 2008: 1.69% to 4.50%) per annum. The term loans are secured against the properties of the Group with a fair value of $654,079,000 (2009: $388,100,000; 2008: $300,870,000) (Note 11). 15 DEFERRED TAX LIABILITY The movement for the year in the deferred tax position was as follows:
Revaluation of leasehold land and hotel buildings including constructionin-progress $000 3,653 (3) 3,650 1,005 (37) 4,618 19,059 23,677

At 1 January 2008 Credit to other comprehensive income for the year Charge to profit or loss for the year (Note 21) At 31 December 2008 Charge to other comprehensive income for the year Charge to profit or loss for the year (Note 21) Effect of change in tax rate At 31 December 2009 Charge to other comprehensive income for the year Charge to profit or loss for the year (Note 21) At 31 December 2010

Accelerated tax depreciation $000 55 55 110 29 (6) 133 5 138

Total $000 3,708 (3) 55 3,760 1,005 29 (43) 4,751 19,059 5 23,815

A-36

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
16 SHARE CAPITAL The Company has one class of ordinary shares which have no par value, carry one vote per share and carry no right to fixed income. The Company was incorporated on 19 September 2011. Accordingly, the share capital in the combined statements of financial position as at 31 December 2010, 2009 and 2008 represent the Groups share of the paid-up capital of the subsidiaries as at the respective dates. 17 REVALUATION RESERVE The revaluation reserve arise on the revaluation of land and hotel buildings including those under construction. Where revalued land and buildings are sold, the portion of the property revaluation reserve that relates to that asset, and is effectively realised, is transferred directly to retained earnings. The revaluation reserve is not available for distribution to Companys shareholder. 18 REVENUE
2010 $000 Hotel room revenue Rental revenue Others 42,018 2,197 44,215 2009 $000 32,870 1,709 34,579 2008 $000 35,564 969 360 36,893

Rental revenue is derived from the leasing of shop space to third parties of certain hotel buildings, office premises and properties under development. 19 OTHER OPERATING INCOME
2010 $000 Income from vending machines and internet services Others 150 130 280 2009 $000 98 123 221 2008 $000 88 108 196

A-37

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
20 FINANCE COSTS
2010 $000 Interest on term loans 3,001 2009 $000 3,184 2008 $000 3,239

21

INCOME TAX EXPENSE

2010 $000 Current tax Deferred tax (Over) Under provision in prior years current tax Effect of change in tax rate Income tax expense for the year 4,310 5 (55) 4,260 2009 $000 2,835 29 9 (6) 2,867 2008 $000 3,596 55 (146) 3,505

The income tax varied from the income tax expense determined by applying the Singapore income tax rate of 17% (2009: 17%; 2008: 18%) to profit before income tax as a result of the following differences:
2010 $000 Profit before income tax Income tax expense at the statutory rate Tax effect of items that are not deductible in determining taxable profit (Over) Under provision in prior year current tax Tax exempt profit Effect due to change in tax rates Others Net 24,115 4,100 245 (55) (104) 74 4,260 2009 $000 16,378 2,784 222 9 (104) (6) (38) 2,867 2008 $000 19,636 3,534 239 (146) (114) (8) 3,505

A-38

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
22 PROFIT FOR THE YEAR Profit for the year has been arrived at after charging:
2010 $000 Directors remuneration Costs of defined contribution plans included in staff costs Staff costs 340 634 6,407 2009 $000 209 543 5,574 2008 $000 462 5,126

23

DIVIDENDS PAID During the year ended 31 December 2010, a subsidiary declared and paid an interim tax-exempt (one-tier) dividend of $190 per ordinary share of the subsidiary to its shareholder prior to the completion of the Restructuring Exercise, totalling $19,000,000 in respect of the financial year ended 31 December 2010. During the year ended 31 December 2009, a subsidiary declared and paid an interim tax-exempt (one-tier) dividend of $90 per ordinary share of the subsidiary to its shareholder prior to the completion of the Restructuring Exercise, totalling $9,000,000 in respect of the financial year ended 31 December 2009. During the year ended 31 December 2008, two subsidiaries declared and paid an interim tax-exempt (one-tier) dividend to its shareholders prior to the completion of the Restructuring Exercise, totalling $5,386,000 in respect of the financial year ended 31 December 2008.

24

EARNINGS PER SHARE For illustrative purposes, earnings per share for the Relevant Periods have been calculated based on the profit attributable to the equity holders of the Company for each of the Relevant Periods and pre- invitational share capital of 550,000,000 shares. The diluted earnings per share is the same as basic earnings per share as there are no effect of dilutive potential ordinary shares.

25

SEGMENT INFORMATION For the purposes of the resource allocation and assessment of segment performance, the Groups chief operating decision maker focus on the business operating units which in turn, are segregated based on the services provided by the Group. The Groups principal business operating units are operations for budget hotels and boutique hotel. The accounting policies of the reportable segments are as described in Note 2. A-39

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
25 SEGMENT INFORMATION (continued) For the purpose of monitoring segment performance and allocating resources, the chief operating decision maker monitors the tangible and financial assets attributable to each segment. All assets and liabilities are allocated to reportable segments on a reasonable basis. Business segments The Group comprises the two main business segments which are budget hotels operations and boutique hotel operations.
Boutique hotel operations $000

Budget hotel operations $000 2010 Segment assets Assets: Segment assets Segment liabilities Liabilities: Segment liabilities 2009 Segment assets Assets: Segment assets Segment liabilities Liabilities: Segment liabilities 2008 Segment assets Assets: Segment assets Segment liabilities Liabilities: Segment liabilities 140,058 340,007 185,640 446,004 199,550 640,600

Total $000

98,255

738,855

38,217

237,767

17,692

463,696

15,721

201,361

2,017

342,024

17

140,075

A-40

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
25 SEGMENT INFORMATION (continued) Segmental results for the Relevant Periods are not disclosed as the Group has not commenced the operations for the boutique hotel and management deemed the results for the Relevant Periods are largely from the budget hotels operations. Geographical information and information about major customers The Group operates solely in Singapore and revenue is spread over a broad base of customers. 26 OPERATING LEASE ARRANGEMENTS At the end of the Relevant Periods, the Group has contracted with tenants for the following future minimum lease income:
2010 $000 Within one year In the second to fifth year inclusive 1,864 700 2,564 2009 $000 1,667 745 2,412 2008 $000 1,263 296 1,559

27

COMMITMENTS
2010 $000 Estimated amounts committed/contracted but not provided for in the financial statements 6,577 2009 $000 9,897 2008 $000 4,299

Pending the expiry of the existing lease agreements that existed at the time of the purchase of the properties under development and the application of the relevant licenses in converting the properties under development into hotel operations, the Group rents out its properties under development. Rental income earned during the year amounted to $1,185,000 (2009: $274,000; 2008: $Nil). 28 SUBSEQUENT EVENTS (a) On 24 March 2011, the Group contracted to sell a property that was undergoing major additions and alteration works, which is located at 103 Beach Road, Singapore 189704 for a consideration of $46,000,000, which was received during the financial period ended 30 September 2011.

A-41

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
28 SUBSEQUENT EVENTS (continued) (b) On 30 September 2011, the Group contracted to sell 2 properties that were undergoing major additions and alteration works, which are located at 216 - 242 Pasir Panjang Singapore 118577118597 and 72 Lorong 19 Geylang Road Singapore 388510 for a consideration of $28,409,000 to Fragrance Realty Pte Ltd, a related company of the Group. An amount of $2,000,000 was received from Fragrance Realty Pte Ltd during the financial period ended 30 September 2011 in relation to the sales of properties under development. (c) On 30 September 2011, the Group contracted to sell the property that is located at 168 Changi Road Singapore 419730 for a consideration of $7,390,000 to Fragrance Global Pte Ltd, a related company of the Group. An amount of $2,000,000 was received from Fragrance Global Pte Ltd during the financial period ended 30 September 2011 in relation to the sale of office premises.

(d) On 26 August 2011, the Group contracted to sell the property located at 63 Dunlop Street Singapore 209391 for a consideration of $14,500,000. The Group subsequently entered into a tenancy agreement with the buyer for a monthly rental of $70,000 for 2 years. An amount of $145,000 was received from the buyer during the financial period ended 30 September 2011. (e) An interim one-tier dividend of $0.50 per ordinary share of Fragrance Capital Pte Ltd totalling $10,000,000 for the year ended 31 December 2011 was declared on 22 November 2011. (f) Restructuring exercise In preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited, the Company undertook a restructuring exercise to streamline and rationalise the Group structure. Pursuant to the Restructuring Agreement dated 31 March 2012 (the Restructuring Agreement), the Company acquired: (i) the entire issued and paid-up share capital of Fragrance Capital Pte Ltd, comprising 20,000,000 ordinary shares in the capital of Fragrance Capital Pte Ltd, resulting in Fragrance Capital Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $284,517,694 (based on NTA as at 30 September 2011 less a discount of $33,111,984 and a dividend of $10,000,000 declared after 30 September 2011). The shares in Fragrance Capital Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; the entire issued and paid-up share capital of Fragrance Ventures Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Ventures Pte Ltd, resulting in Fragrance Ventures Pte Ltd becoming a wholly-owned A-42

(ii)

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
28 SUBSEQUENT EVENTS (continued) subsidiary of the Company for a consideration of $157,637,036 (based on NTA as at 30 September 2011 less a discount of $19,784,057). The shares in Fragrance Ventures Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (iii) the entire issued and paid-up share capital of Fragrance Assets Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Assets Pte Ltd, resulting in Fragrance Assets Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $73,031,920 (based on NTA as at 30 September 2011 less a discount of $9,849,600). The shares in Fragrance Assets Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (iv) the entire issued and paid-up share capital of Fragrance Investment Pte Ltd, comprising 4,000,000 ordinary shares in the capital of Fragrance Investment Pte Ltd, resulting in Fragrance Investment Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $32,126,729 (based on NTA as at 30 September 2011 less a discount of $4,443,264). The shares in Fragrance Investment Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (v) the entire issued and paid-up share capital of Fragrance Hotel Management Pte Ltd, comprising 100,000 ordinary shares in the capital of Fragrance Hotel Management Pte Ltd, resulting in Fragrance Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $9,473,809 (based on the NTA as at 30 September 2011. The shares in Fragrance Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(vi) the entire issued and paid-up share capital of Parc Sovereign Hotel Management Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Parc Sovereign Hotel Management Pte Ltd, resulting in Parc Sovereign Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $1,212,812 (based on NTA as at 30 September 2011 less a discount of $31,545). The shares in Parc Sovereign Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter. The Purchase Consideration was paid by the Company to Fragrance Group Limited in the following manner: (a) approximately $345.7 million was satisfied in cash by way of loans, obtained directly by the Group and/or internally generated funds of the Group and insofar as it constituted financial assistance under the Companies Act, duly approved A-43

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
28 SUBSEQUENT EVENTS (continued) by way of a special resolution passed by each of the Subsidiaries in accordance with Section 76(9B) of the Companies Act within thirty (30) days from the date of the Listing Date; (b) approximately $137.5 million was satisfied by the Company by way of allotment and issuance of 549,999,999 new Shares (Consideration Shares) credited as fully paid-up to Fragrance Group Limited; (c) approximately $74.8 million is to be satisfied by the Company by way of utilisation of part of the proceeds of the Invitation within thirty (30) days from the date of the Listing Date; and

The Restructuring Exercise was completed on 13 April 2012, notwithstanding that (a) and (c) have not been paid as at the time of completion. (g) At the extraordinary general meetings deemed to be held on 21 March 2012 and 23 March 2012, the Controlling Shareholder, FGL approved, inter alia, the following: (1) the conversion of the Company into a public company limited by shares and the consequential change of name to Global Premium Hotels Limited; (2) the adoption of the Memorandum and Articles of Association; (3) the issue of the New Shares pursuant to the Invitation, which when allotted, issued and fully paid, will rank pari passu in all respects with the existing issued Shares; (4) that authority be given to the Directors, pursuant to Section 161 of the Companies Act, to: (i) (aa) issue Shares whether by way of rights, bonus or otherwise; and/or (bb) make or grant offers, agreements or options (collectively, Instruments) that might or would require Shares to be issued during the continuance of this authority or thereafter, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute discretion, deem fit; and (ii) issue Shares in pursuance of any Instruments made or granted by the Directors while such authority was in force (notwithstanding that such issue A-44

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
28 SUBSEQUENT EVENTS (continued) of Shares pursuant to the Instruments may occur after the expiration of the authority contained in this resolution), provided that: (iii) the aggregate number of Shares issued pursuant to such authority (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority), does not exceed 50.0% of the PostInvitation Issued Share Capital, and provided further that where Shareholders with registered addresses in Singapore are not given the opportunity to participate in the same on a pro-rata basis (non pro- rata basis), then the Shares to be issued under such circumstances (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority) shall not exceed 20.0% of the Post- Invitation Issued Share Capital; (iv) (unless revoked or varied by the Company in general meeting) the authority so conferred shall continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. For the purposes of this resolution, the Post-Invitation Issued Share Capital shall mean the total number of issued Shares of the Company (excluding treasury shares) immediately after this Invitation, after adjusting for: (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided the options or awards were granted in compliance with the Listing Manual; and (iii) any subsequent bonus issue, consolidation or sub-division of Shares; and (5) The adoption of the Global Premium Hotels Performance Share Plan (PSP), the rules of which are set out in Appendix H of the Prospectus and that the Directors be authorised to allot and issue Award Shares upon the vesting of the Awards granted under the Global Premium Hotels PSP. (h) Subsequent to the end of the reporting period, the Group entered into a financing arrangement with a commercial bank for a five year term loan of $155,000,000. Part of the term loan was used to repay existing term loans of the Group amounting to $106,263,000 at the redemption dates.

A-45

APPENDIX A INDEPENDENT AUDITORS REPORT ON THE COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010, 2009 AND 2008
GLOBAL PREMIUM HOTELS LIMITED
STATEMENT OF DIRECTORS In the opinion of the directors, the combined financial statements set up on pages A-3 to A-45 are drawn up so as to give a true and fair view of the state of affairs of the Group as at 31 December 2010, 2009 and 2008, and of the results, changes in equity and cash flows of the Group for the years ended 31 December 2010, 2009 and 2008 and at the date of this statement, there are reasonable grounds to believe that the Group will be able to pay its debts when they fall due.

ON BEHALF OF THE DIRECTORS

...................................... Koh Wee Meng

...................................... Lim Chee Chong 18 April 2012

A-46

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
18 April 2012 The Board of Directors Global Premium Hotels Limited 168 Changi Road #04-01, Fragrance Building Singapore 419730 Dear Sirs Report on the Financial Statements We have audited the accompanying combined interim condensed financial statements of Global Premium Hotels Limited and its subsidiaries (the Group) which comprise the combined statement of financial position as at 30 September 2011, and the related combined statement of comprehensive income, combined statement of changes in equity and combined statement of cash flows of the Group for the nine months period from 1 January 2011 to 30 September 2011, and selected explanatory notes as set out on pages B-3 to B-21. Managements Responsibility for the Combined Interim Condensed Financial Statements Management is responsible for the preparation and presentation of the combined interim condensed financial statements in accordance with the Singapore Financial Reporting Standard 34, Interim Financial Reporting (FRS 34), and for such internal control as management determines is necessary to enable the preparation of the financial statements that is free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on the combined interim condensed financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing applicable to special purpose audit engagements. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the combined interim condensed financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined interim condensed financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the combined interim condensed financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of combined interim condensed financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes B-1

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the combined interim condensed financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined interim condensed financial statements of the Group is prepared, in all material respects, in accordance with Singapore Financial Reporting Standard 34, Interim Financial Reporting. Other Matters We have not carried out an audit or review in accordance with Singapore Standards on Auditing on the financial information for the nine months period ended 30 September 2010 included as comparatives in the combined interim condensed financial statements for the nine months period ended 30 September 2011 and, accordingly, we do not express any assurance on the comparative financial information. Restriction on Distribution and Use This report has been prepared solely in connection with the proposed listing of Global Premium Hotels Limited on the Singapore Exchange Securities Trading Limited for inclusion in the prospectus. This report is made solely to you, as a body for this purpose and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Yours faithfully Deloitte & Touche LLP Public Accountants and Certified Public Accountants Singapore Leow Chung Chong Yam Soon Partner

B-2

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENT OF FINANCIAL POSITION As at 30 September 2011
As at 30 September 2011 (Audited) $000 As at 31 December 2010 (Audited) $000

Note

ASSETS Current assets Cash and cash equivalents Trade receivables Other receivables Properties under development Total current assets Non-current asset Property, plant and equipment Total assets LIABILITIES AND EQUITY Current liabilities Trade payables Other payables Term loans Income tax payable Total current liabilities Non-current liabilities Term loans Deferred tax liabilities Total non-current liabilities Capital and reserves Share capital Revaluation reserve Retained earnings Total equity Total liabilities and equity 17 18 27,100 511,459 70,241 608,800 791,571 27,100 451,552 22,436 501,088 738,855 15 16 108,838 26,447 135,285 150,448 23,815 174,263 13 14 15 1,194 5,584 32,643 8,065 47,486 1,188 49,986 7,895 4,435 63,504 12 738,718 791,571 701,942 738,855 9 10 11 3,899 1,511 47,443 52,853 2,811 1,274 5,982 26,846 36,913

See accompanying notes to combined interim condensed financial statements. B-3

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENT OF COMPREHENSIVE INCOME For the nine months ended 30 September 2011
1 January 2011 to 30 September 2011 $000 (Audited) 38,929 (4,571) 34,358 20 344 (11,296) 21 (2,158) 21,248 22 (3,930) 17,318 1 January 2010 to 30 September 2010 $000 (Unaudited) 32,284 (3,867) 28,417 203 (8,754) (2,346) 17,520 (3,040) 14,480

Note

Revenue Cost of sales Gross profit Other operating income Administrative expenses Finance costs Profit before income tax Income tax expense Profit for the period Other comprehensive income: Revaluation of land and hotel buildings Income tax effects Net other comprehensive income Total comprehensive income for the period Basic and diluted earnings per share (cents)

19

97,083 (6,689) 90,394 107,712 23 3.15

209,715 (11,086) 198,629 213,109 2.63

See accompanying notes to combined interim condensed financial statements. B-4

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENT OF CHANGES IN EQUITY For the nine months ended 30 September 2011
Share capital $000 Audited Balance at 1 January 2011 Transfer on sale of land, hotel buildings and construction-in-progress Total comprehensive income for the period Balance at 30 September 2011 Unaudited Balance at 1 January 2010 Total comprehensive income for the period Dividends paid Balance at 30 September 2010 27,100 27,100 213,654 198,629 412,283 21,581 14,480 (10,000) 26,061 262,335 213,109 (10,000) 465,444 27,100 27,100 451,552 (30,487) 90,394 511,459 22,436 30,487 17,318 70,241 501,088 107,712 608,800 Revaluation reserve $000 Retained earnings $000

Total $000

See accompanying notes to combined interim condensed financial statements. B-5

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
COMBINED STATEMENTS OF CASH FLOWS For the nine months ended 30 September 2011
1 January 2011 to 30 September 2011 $000 (Audited) Operating activities Profit before income tax Adjustments for: Depreciation of property, plant and equipment Interest expense Interest income Operating cash flows before movements in working capital Trade receivables Other receivables (Note A) Property under development Trade payables Other payables Cash generated from operations Interest paid Income tax paid Net cash from operating activities Investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Note A) Interest received Net cash from (used in) investing activities (9,262) 50,145 36 40,919 (15,035) (15,035) 1,904 2,158 (36) 25,274 (237) 1,017 (1,563) 6 537 25,034 (2,383) (4,357) 18,294 1,524 2,346 21,390 (247) (170) (2,769) 53 1,202 19,459 (2,880) (2,647) 13,932 21,248 17,520 1 January 2010 to 30 September 2010 $000 (Unaudited)

B-6

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
1 January 2011 to 30 September 2011 $000 (Audited) Financing activities Advances from (to) ultimate holding company Repayments (to) from ultimate holding company Proceeds from borrowings Repayment of borrowings Dividend paid Net cash (used in) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 4,154 (44,939) 4,233 (21,573) (58,125) 1,088 2,811 3,899 (1,072) 2,028 33,313 (24,200) (10,000) 69 (1,034) 2,458 1,424 1 January 2010 to 30 September 2010 $000 (Unaudited)

Note A: During the nine months period ended 30 September 2011, the Group disposed of certain hotel properties, its office premises and properties under development for $96,299,000 out of which cash of $50,145,000 was received and $46,154,000 remains unpaid as at 30 September 2011.

See accompanying notes to combined interim condensed financial statements. B-7

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
NOTES TO COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS For the nine months ended 30 September 2011 1 GENERAL The Company (Registration No. 201128650E) is incorporated in Singapore on 19 September 2011 with its registered office at 168 Changi Road, #04-01 Fragrance Building, Singapore 419730. The financial statements are expressed in Singapore dollars, which is also the functional currency of the Company. The combined interim condensed financial statements have been prepared solely in connection with the proposed listing of Global Premium Hotels Limited on the Singapore Exchange Securities Trading Limited. The principal activities of the Group are to carry on the business of operating hotels and investment holding. In preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited, the Company undertook a restructuring exercise to streamline and rationalise the Group structure which are disclosed in the audited Combined Financial Statements for the years ended 31 December 2010, 2009 and 2008. The combined interim condensed financial statements of the Group for the nine months ended 30 September 2011 were authorised for issue by the Board of Directors on 18 April 2012. 2 BASIS OF PREPARATION The combined interim condensed financial statements for the nine months period ended 30 September 2011 have been prepared in accordance with Singapore Financial Reporting Standard 34, Interim Financial Reporting (FRS 34). 3 SIGNIFICANT ACCOUNTING POLICIES The combined interim condensed financial statements have been prepared using accounting policies consistent with the Singapore Financial Reporting Standards in accordance with the historical cost convention except as disclosed in the accounting policies in the audited combined financial statements for the years ended 31 December 2010, 2009 and 2008. The accounting policies adopted are consistent with those followed in the preparation of the Groups combined financial statements for the latest annual period ended 31 December 2010. B-8

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
4 OPERATIONS IN THE INTERIM PERIOD The Groups operations are affected by seasonality as revenue from June to July and from November to December of each reporting period, which are school holiday periods, tend to be higher The Group uses the revaluation model under FRS 16, Property, plant and equipment, to account for its hotel properties. During the period ended 30 September 2010, the directors estimate that the gross fair value recorded in other comprehensive income was $209,715,000 compared to $97,083,000 in the period ended 30 September 2011. Future valuation of hotel properties would be influenced by the economic and market conditions at the time when future valuation would be performed. 5 FINANCIAL RISK MANAGEMENT POLICIES There have been no changes in the financial risk management of the Group and the Groups overall capital risk management remains unchanged and have been disclosed in the audited combined financial statements for the years ended 31 December 2010, 2009 and 2008. The working capital has improved as the Group has repaid certain loans and amount due to ultimate holding company using the proceeds from the sale of hotel properties as disclosed in Note 12 of the combined interim condensed financial statements. 6 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The critical judgments and key sources of estimation uncertainty made by the management remain unchanged from the last audited financial year except as disclosed in Notes 11 and 12 of the combined interim condensed financial statements where the Group disposed of certain properties under development and office premises to related companies at their carrying values. Management is of the opinion that these disposals are as a result from a restructuring exercise to streamline and rationalise the Group structure, and accordingly these transactions would not have any tax consequences. 7 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS The Company is a wholly-owned subsidiary of Fragrance Group Limited, incorporated in Singapore which is also the Companys ultimate holding company. Related companies in these financial statements refer to members of the ultimate holding companys group of companies. Some of the Companys transactions and arrangements are between members of the Group and the effect of these on the basis determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand. B-9

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
7 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS (continued) During the period, the Group entered into the following transactions with related companies:
1 January 2011 to 30 September 2011 $000 Sale of office premises and properties under development 35,799 1 January 2010 to 30 September 2010 $000

RELATED PARTY TRANSACTIONS Some of the Groups transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these combined interim condensed financial statements. The balances are unsecured, interest-free and repayable on demand. During the period, the Group entered into the following transactions with related parties:
1 January 2011 to 30 September 2011 $000 Salaries and related costs paid to key management personnel and relatives of a director 520 1 January 2010 to 30 September 2010 $000 468

Compensation of directors and key management personnel The remuneration of directors and other members of key management are as follows:
1 January 2011 to 30 September 2011 $000 Short-term benefits Post-employment benefits 484 20 504 1 January 2010 to 30 September 2010 $000 337 15 352

B-10

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
9 TRADE RECEIVABLES
As at 30 September 2011 $000 External parties 1,511 As at 31 December 2010 $000 1,274

Certain customers are granted a credit period on the rental of hotel room of 30 days (2010: 30 days). In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. All trade receivables are neither past due nor impaired and management has considered the quality of the debts and determined that no allowance is required. 10 OTHER RECEIVABLES AND DEPOSITS
As at 30 September 2011 $000 Prepayments Deposits Advances to the ultimate holding company (Note 7) Amount due from related companies (Note 7) Amount due from an external party Others 596 420 31,799 14,355 273 47,443 As at 31 December 2010 $000 44 1,699 4,155 84 5,982

The amount due from related companies amounting to $31,799,000 and amount due from an external party amounting to $14,355,000 represents proceeds from disposal of hotel properties, office premises and properties under development.

B-11

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
11 PROPERTIES UNDER DEVELOPMENT
As at 30 September 2011 $000 Land cost and other related costs Development costs Property taxes and other overhead expenses As at 31 December 2010 $000 25,690 247 909 26,846

Certain properties are mortgaged to the banks to secure credit facilities (Note 15). During the nine months ended 30 September 2011, the Group disposed of its properties under development to its related companies (Note 7). 12 PROPERTY, PLANT AND EQUIPMENT During the nine months period ended 30 September 2011, the Group incurred approximately $9,486,000 mainly on renovation expenditure to certain existing hotel buildings and a new hotel building under construction. The Group disposed of certain hotel properties for $60,500,000. There was no profit or loss arising from the sale as the sales consideration represents their fair values. The Group also disposed of its office premises for $7,390,000 to a related company (Note 7). The sales consideration is based on its carrying value resulting in no gain or loss. An amount of $97,083,000 was recorded in other comprehensive income as a fair value gain from the revaluation of the freehold and leasehold land and hotel buildings including those under construction. 13 TRADE PAYABLES
As at 30 September 2011 $000 External parties 1,194 As at 31 December 2010 $000 1,188

The average credit period for trade payables is 14 to 30 days (2010: 14 to 30 days). The Group has financial risk management policies in place to ensure that all payables are within the credit time frame specified by the suppliers. B-12

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
14 OTHER PAYABLES
As at 30 September 2011 $000 Accruals Withholding income tax on staff costs Advances from the ultimate holding company (Note 7) Deposits received in advance Others 4,367 105 125 957 30 5,584 As at 31 December 2010 $000 4,070 118 45,064 708 26 49,986

15

TERM LOANS
As at 30 September 2011 $000 Term loan Less: Amount due for settlement within 12 months (shown under current liabilities) Amount due for settlement after 12 months 141,481 (32,643) 108,838 As at 31 December 2010 $000 158,343 (7,895) 150,448

16

DEFERRED TAX LIABILITIES The movement in deferred tax liabilities position during the period is as follows:
Revaluation of leasehold land and hotel buildings including constructionin-progress $000 23,677 6,689 (4,053) 26,313

Accelerated tax depreciation $000 At 1 January 2011 Charge to other comprehensive income for the year Credit to equity upon disposal Credit to profit or loss for the period At 30 September 2011 138 (4) 134

Total $000 23,815 6,689 (4,053) (4) 26,447

B-13

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
17 SHARE CAPITAL The Company has one class of ordinary share which has no par value carries one vote per share and carries no right to fixed income. The Company was incorporated on 19 September 2011. Accordingly, the share capital in the combined statements of financial position as at 30 September 2011 and 31 December 2010 represent the share of the paid-up capital of the subsidiaries and the Company. 18 REVALUATION RESERVE The revaluation reserve arise on the revaluation of land and hotel buildings including those under construction. Where revalued land and buildings are sold, the portion of the property revaluation reserve that relates to that asset, and is effectively realised, is transferred directly to retained earnings. The revaluation reserve is not available for distribution to Companys shareholder. 19 REVENUE
1 January 2011 to 30 September 2011 $000 Hotel room revenue Rental revenue 37,272 1,657 38,929 1 January 2010 to 30 September 2010 $000 30,592 1,692 32,284

Rental revenue is derived from the leasing of shop spaces to third parties of certain office premises, hotel buildings and properties under development. 20 OTHER OPERATING INCOME
1 January 2011 to 30 September 2011 $000 Interest income Income from vending machines and internet services Others 36 200 108 344 1 January 2010 to 30 September 2010 $000 103 100 203

B-14

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
21 FINANCE COSTS
1 January 2011 to 30 September 2011 $000 Interest on term loans 2,158 1 January 2010 to 30 September 2010 $000 2,346

22

INCOME TAX EXPENSE The interim period income tax expense is accrued based on the estimated average annual effective income tax rate of the respective entities.

23

EARNINGS PER SHARE The calculation of basic and diluted earnings per share is based on the profit attributable to the equity holders of the Company for each of the periods ended 30 September 2011 and 2010 and the pre-invitational share capital of 550,000,000 shares.

24

SEGMENT INFORMATION For the purposes of the resource allocation and assessment of segment performance, the Groups chief operating decision maker focus on the business operating units which in turn, are segregated based on the services of the Group. The Groups principal business operating units are operations for budget hotels and boutique hotel. Segment revenue represents revenue generated from external customers. Segment profit represents the profit earned by each segment after allocating central administrative costs and finance costs. This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance. For the purpose of monitoring segment performance and allocating resources, the chief operating decision maker monitor the tangible and financial assets attributable to each segment. All assets and liabilities are allocated to reportable segments on a reasonable basis.

B-15

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
24 SEGMENT INFORMATION (continued) Business segments The Group comprises the two main business segments which are budget hotels operations and boutique hotel operations.
Budget hotels Operations $000 Nine months ended 30 September 2011 REVENUE RESULT Segment result Other operating income Other operating expenses Finance costs Profit before income tax Income tax Profit after income tax As at 30 September 2011 Segment assets Assets: Segment assets Segment liabilities Liabilities: Segment liabilities 149,271 33,500 182,771 687,616 103,955 791,571 30,688 318 (9,765) (1,826) 19,415 (3,625) 15,790 3,670 26 (1,531) (332) 1,833 (304) 1,529 34,358 344 (11,296) (2,158) 21,248 (3,930) 17,318 34,692 4,237 38,929 Boutique hotel operations $000

Total $000

B-16

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
24 SEGMENT INFORMATION (continued)
Budget hotels Operations $000 Nine months ended 30 September 2010 REVENUE RESULT Segment result Other operating income Other operating expenses Finance costs Profit before income tax Income tax Profit after income tax As at 31 December 2010 Segment assets Assets: Segment assets Segment liabilities Liabilities: Segment liabilities 199,550 38,217 237,767 640,600 98,255 738,855 28,417 203 (8,740) (2,346) 17,534 (3,040) 14,494 (14) (14) (14) 28,417 203 (8,754) (2,346) 17,520 (3,040) 14,480 32,284 32,284 Boutique hotel operations $000

Total $000

Geographical information and information about major customers The Group operates solely in Singapore and revenue is spread over a broad base of customers. 25 COMMITMENTS
As at 30 September 2011 $000 Estimated amounts committed/contracted but not provided for in the financial statements 348 As at 30 September 2010 $000 5,276

B-17

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
25 COMMITMENTS (continued) Pending the expiry of the existing lease agreements that existed at the time of the purchase of the properties under development and the application of the relevant licenses in converting the properties under development into hotel operations, the Group rents out its properties under development. Rental income earned during the period amounted to $825,000 (2010: $890,000). 26 SUBSEQUENT EVENTS Subsequent to 30 September 2011, except as disclosed in other notes to the financial statements, the subsequent events of the Group are as follows: (a) At the extraordinary general meetings deemed to be held on 21 March 2012 and 23 March 2012, the Controlling Shareholder, FGL approved, inter alia, the following: (1) the conversion of the Company into a public company limited by shares and the consequential change of name to Global Premium Hotels Limited; (2) the adoption of the Memorandum and Articles of Association; (3) the issue of the New Shares pursuant to the Invitation, which when allotted, issued and fully paid, will rank pari passu in all respects with the existing issued Shares; (4) that authority be given to the Directors, pursuant to Section 161 of the Companies Act, to: (i) (aa) issue Shares whether by way of rights, bonus or otherwise; and/or (bb) make or grant offers, agreements or options (collectively, Instruments) that might or would require Shares to be issued during the continuance of this authority or thereafter, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute discretion, deem fit; and (ii) issue Shares in pursuance of any Instruments made or granted by the Directors while such authority was in force (notwithstanding that such issue of Shares pursuant to the Instruments may occur after the expiration of the authority contained in this resolution), provided that:

B-18

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
26 SUBSEQUENT EVENTS (continued) (iii) the aggregate number of Shares issued pursuant to such authority (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority), does not exceed 50.0% of the PostInvitation Issued Share Capital, and provided further that where Shareholders with registered addresses in Singapore are not given the opportunity to participate in the same on a pro-rata basis (non pro-rata basis), then the Shares to be issued under such circumstances (including the Shares to be issued in pursuance of Instruments made or granted pursuant to such authority) shall not exceed 20.0% of the Post- Invitation Issued Share Capital; (iv) (unless revoked or varied by the Company in general meeting) the authority so conferred shall continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. For the purposes of this resolution, the Post-Invitation Issued Share Capital shall mean the total number of issued Shares of the Company (excluding treasury shares) immediately after this Invitation, after adjusting for: (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided the options or awards were granted in compliance with the Listing Manual; and (iii) any subsequent bonus issue, consolidation or sub-division of Shares; and

B-19

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
26 SUBSEQUENT EVENTS (continued) (5) The adoption of the Global Premium Hotels Performance Share Plan (PSP), the rules of which are set out in Appendix H of the Prospectus and that the Directors be authorised to allot and issue Award Shares upon the vesting of the Awards granted under the Global Premium Hotels PSP. (b) Restructuring exercise In preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited, the Company undertook a restructuring exercise to streamline and rationalise the Group structure. Pursuant to the Restructuring Agreement dated 31 March 2012 (the Restructuring Agreement), the Company acquired: (i) the entire issued and paid-up share capital of Fragrance Capital Pte Ltd, comprising 20,000,000 ordinary shares in the capital of Fragrance Capital Pte Ltd, resulting in Fragrance Capital Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $284,517,694 (based on NTA as at 30 September 2011 less a discount of $33,111,984 and a dividend of $10,000,000 declared after 30 September 2011). The shares in Fragrance Capital Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; the entire issued and paid-up share capital of Fragrance Ventures Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Ventures Pte Ltd, resulting in Fragrance Ventures Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $157,637,036 (based on NTA as at 30 September 2011 less a discount of $19,784,057). The shares in Fragrance Ventures Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(ii)

(iii) the entire issued and paid-up share capital of Fragrance Assets Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Assets Pte Ltd, resulting in Fragrance Assets Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $73,031,920 (based on NTA as at 30 September 2011 less a discount of $9,849,600). The shares in Fragrance Assets Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (iv) the entire issued and paid-up share capital of Fragrance Investment Pte Ltd, comprising 4,000,000 ordinary shares in the capital of Fragrance Investment Pte Ltd, resulting in Fragrance Investment Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $32,126,729 (based on NTA as at 30 September 2011 less a discount of $4,443,264). The shares in Fragrance Investment Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; B-20

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
26 SUBSEQUENT EVENTS (continued) (v) the entire issued and paid-up share capital of Fragrance Hotel Management Pte Ltd, comprising 100,000 ordinary shares in the capital of Fragrance Hotel Management Pte Ltd, resulting in Fragrance Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $9,473,809 (based on the NTA as at 30 September 2011. The shares in Fragrance Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(vi) the entire issued and paid-up share capital of Parc Sovereign Hotel Management Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Parc Sovereign Hotel Management Pte Ltd, resulting in Parc Sovereign Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $1,212,812 (based on NTA as at 30 September 2011 less a discount of $31,545). The shares in Parc Sovereign Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter. The Purchase Consideration was paid by the Company to Fragrance Group Limited in the following manner: (a) approximately $345.7 million was satisfied in cash by way of loans, obtained directly by the Group and/or internally generated funds of the Group and insofar as it constituted financial assistance under the Companies Act, duly approved by way of a special resolution passed by each of the Subsidiaries in accordance with Section 76(9B) of the Companies Act within thirty (30) days from the date of the Listing Date; (b) approximately $137.5 million was satisfied by the Company by way of allotment and issuance of 549,999,999 new Shares (Consideration Shares) credited as fully paid-up to Fragrance Group Limited; (c) approximately $74.8 million is to be satisfied by the Company by way of utilisation of part of the proceeds of the Invitation within thirty (30) days from the date of the Listing Date; and

The Restructuring Exercise was completed on 13 April 2012, notwithstanding that (a) and (c) have not been paid as at time of completion. (c) Subsequent to the end of the reporting period, the Group entered into a financing arrangement with a commercial bank for a five year term loan of $155,000,000. Part of the term loan was used to repay existing term loans of the Group amounting to $106,263,000 at the redemption dates.

B-21

APPENDIX B INDEPENDENT AUDITORS REPORT ON THE COMBINED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011
GLOBAL PREMIUM HOTELS LIMITED
STATEMENT OF DIRECTORS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011 In the opinion of the directors, the combined interim condensed financial statements of the Group set out on pages B-3 to B-21 are prepared in accordance with Singapore Financial Reporting Standard 34, Interim Financial Reporting as at 30 September 2011 and of the results, changes in equity and cash flows of the Group for the nine months from 1 January 2011 to 30 September 2011 and at the date of this statement, there are reasonable grounds to believe that the Group will be able to pay its debts when they fall due.

ON BEHALF OF THE DIRECTORS

...................................... Koh Wee Meng

...................................... Lim Chee Chong 18 April 2012

B-22

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
18 April 2012 The Board of Directors Global Premium Hotels Limited 168 Changi Road #04-01 Fragrance Building Singapore 419730 Dear Sirs This report has been prepared for inclusion in the Prospectus dated 18 April 2012 (the Prospectus) in respect of initial public offering of shares of Global Premium Hotels Limited (the Company). The unaudited Pro Forma Group financial information comprises the unaudited Pro Forma combined statements of financial position as at 31 December 2010 and 30 September 2011, and the unaudited Pro Forma combined statements of comprehensive income and statements of cash flows for the year ended 31 December 2010 and for the nine months ended 30 September 2011 (collectively the unaudited Pro Forma Group financial information). We report on the unaudited Pro Forma Group financial information set out on pages C-3 to C-22 which have been prepared for illustrative purposes only and based on certain assumptions after making certain adjustments to show what: (i) the unaudited combined results and cash flows for the year ended 31 December 2010 and the unaudited combined interim results and cash flows for the nine months ended 30 September 2011 of the Company and its subsidiaries (the Group) would have been if the Significant Events stated in the Explanatory Note 1 of the unaudited Pro Forma Group financial information had occurred on 1 January 2010; and the unaudited combined statement of financial position as at 31 December 2010 and the unaudited combined interim statement of financial position as at 30 September 2011 of the Group would have been if the foresaid Significant Events had occurred on 31 December 2010 and 30 September 2011 respectively.

(ii)

The unaudited Pro Forma Group financial information, because of their nature, may not give a true picture of the Groups actual financial position or results. The unaudited Pro Forma Group financial information is the responsibility of the management of the Company. Our responsibility is to express an opinion on the unaudited Pro Forma Group financial information based on our work. We carried out procedures in accordance with Singapore Statement of Auditing Practice 24: Auditors and Public Offering Documents. Our work, which involved no independent examination of the unaudited Pro Forma Group financial information, consisted primarily of comparing the unaudited Pro Forma Group financial information to the audited combined financial statements of the Group for the year ended 31 December 2010 and the unaudited combined interim condensed financial statements of the Group for the nine months ended 30 C-1

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
September 2011, considering the evidence supporting the adjustments and discussing the unaudited Pro Forma Group financial information with the management of the Company. In our opinion: (a) the unaudited Pro Forma Group financial information have been properly prepared: (i) on the basis stated in the Explanatory Note 2 of the unaudited Pro Forma Group financial information; such basis is consistent with the accounting policies adopted by the Group for its latest audited combined financial statements, which are drawn up in accordance with the Singapore Financial Reporting Standards; and

(ii)

(b) each material adjustment made to the information used in the preparation of the unaudited Pro Forma Group financial information is appropriate for the purpose of preparing such unaudited Pro Forma Group financial information.

Yours faithfully

Deloitte & Touche LLP Public Accountants and Certified Public Accountants Singapore Leow Chung Chong Yam Soon Partner

C-2

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION As at 31 December 2010
Audited combined statement of financial position $000 Unaudited Pro Forma combined statement of financial position $000

Explanatory note ASSETS Current assets Cash and cash equivalents Trade receivables Other receivables

Unaudited Pro Forma adjustments $000

2(e) 2(a), 2(b), 2(c), 2(d), 2(e) 2(d)

2,811 1,274 5,982

16,332 40,037

19,143 1,274 46,019

Properties under development Total current assets Non-current asset Property, plant and equipment Total assets LIABILITIES AND EQUITY Current liabilities Trade payables Other payables

26,846 36,913

(26,846) 29,523

66,436

2(a), 2(b), 2(c)

701,942 738,855

(59,336) (29,813)

642,606 709,042

Term loans Income tax payable Total current liabilities Non-current liabilities Term loans

2(a), 2(b), 2(d), 2(e), 2(f) 2(a), 2(c), 2(d), 2(e) 2(a), 2(b), 2(c), 2(d)

1,188 49,986

90,907

1,188 140,893

7,895 4,435 63,504

12,252 3,884 107,043

20,147 8,319 170,547

Deferred tax liabilities Total non-current liabilities

2(a), 2(b), 2(c), 2(d), 2(e) 2(a), 2(b)

150,448

292,587

443,035

23,815 174,263

(4,287) 288,300

19,528 462,563

C-3

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma combined statement of financial position $000 137,500 427,344 (530,900) 41,988

Explanatory note Capital and reserves Share capital Revaluation reserve Merger reserve Retained earnings

Audited combined statement of financial position $000 27,100 451,552 22,436

Unaudited Pro Forma adjustments $000 110,400 (24,208) (530,900) 19,552

2(e) 2(a), 2(b) 2(e) 2(a), 2(b), 2(c), 2(d), 2(f)

Total equity Total liabilities and equity

501,088 738,855

(425,156) (29,813)

75,932 709,042

C-4

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2010
Audited combined statement of Explanatory comprehensive note income $000 Revenue Cost of services Gross profit Other operating income Loss on disposal of property, plant and equipment Administration expenses Finance costs 2(a), 2(b) 2(c) 2(a), 2(b), 2(c), 2(d) 2(a), 2(b), 2(c), 2(d) 2(b), 2(c), 2(d) 2(a) 44,215 (5,156) 39,059 280 (12,223) (3,001) Unaudited Pro Forma combined Unaudited statement of Pro Forma comprehensive adjustments income $000 $000 (1,750) (840) (2,590) (16) (51) 663 949 42,465 (5,996) 36,469 264 (51) (11,560) (2,052)

Profit before income tax Income tax expense 2(a), 2(b), 2(c), 2(d)

24,115 (4,260)

(1,045) 169

23,070 (4,091)

Profit for the year Other comprehensive income Revaluation of land and hotel buildings Income tax effects Net other comprehensive income Total comprehensive income Basic and diluted earnings per share (cents) 2(a), 2(b) 2(b)

19,855

(876)

18,979

256,957 (19,059) 237,898 257,753 3.61

(28,494) 4,286 (24,208) (25,084)

228,463 (14,773) 213,690 232,669 3.45

C-5

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF CASH FLOWS For the year ended 31 December 2010
Unaudited Audited Pro Forma combined Unaudited combined Explanatory statement of Pro Forma statement of note cash flows adjustments cash flows $000 $000 $000 Operating activities Profit before income tax Adjustments for: Depreciation of property, plant and equipment Loss (Gain) on disposal of property, plant and equipment Interest expense Operating cash flows before movements in working capital Trade receivables Other receivables 2(a), 2(b), 2(c), 2(d), 2(e) 2(a), 2(b), 2(d) 2(d) 2(a), 2(c) 2(c) 2(a), 2(b), 2(c), 2(d) 2,058 1 3,001 29,175 (289) (1,662) (86) 51 (949) (2,029) (22,292) 1,972 52 2,052 27,146 (289) (23,954) 2(a), 2(b), 2(c), 2(d) 24,115 (1,045) 23,070

Trade payables Other payables Properties under development Cash generated from (used in) operations Interest paid Income tax paid Net cash from (used in) operating activities Investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash (used in) from investing activities 2(a), 2(b) 2(a), 2(b), 2(c), 2(d) 2(a), 2(b), 2(c), 2(d)

(48) 2,293 (3,026) 26,443 (3,917) (2,648) 19,878

5,471 26,846 7,996 949 8,945

(48) 7,764 23,820 34,439 (2,968) (2,648) 28,823

(20,940) (20,940)

(2,533) 50,145 47,612

(23,473) 50,145 26,672

C-6

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Audited Pro Forma combined Unaudited combined Explanatory statement of Pro Forma statement of note cash flows adjustments cash flows $000 $000 $000 Financing activities Advances from (to) ultimate holding company Repayments from ultimate holding company Proceeds from term loans Repayment of term loans 2(e) 2(a), 2(b), 2(c), 2(d), 2(e) 2(e) 2,178 6,828 36,499 (25,090) (345,064) 463,182 (158,343) (342,886) 6,828 499,681 (183,433)

Dividend paid Net cash from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

(19,000) 1,415 353 2,458 2,811

(40,225) 16,332 16,332

(19,000) (38,810) 16,685 2,458 19,143

C-7

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION As at 30 September 2011
Audited combined statement of financial position $000 Unaudited Pro Forma combined statement of financial position $000

Explanatory note ASSETS Current assets Cash and cash equivalents Trade receivables Other receivables Total current assets Non-current asset Property, plant and equipment Total assets LIABILITIES AND EQUITY Current liabilities Trade payables Other payables

Unaudited Pro Forma adjustments $000

2(e) 2(b), 2(e)

3,899 1,511 47,443 52,853 738,718 791,571

7,689 (31,835) (24,146) (24,146)

11,588 1,511 15,608 28,707 738,718 767,425

Term loans Income tax payable Total current liabilities Non-current liabilities Term loans Deferred tax liabilities Total non-current liabilities Capital and reserves Share capital Revaluation reserve Merger reserve Retained earnings

2(a), 2(b), 2(c), 2(d), 2(e), 2(f) 2(e) 2(a), 2(b), 2(c), 2(d)

1,194 5,584

85,498

1,194 91,082

32,643 8,065 47,486

(12,496) (144) 72,858 334,197 334,197 110,400 (530,900) (10,701)

20,147 7,921 120,344 443,035 26,447 469,482 137,500 511,459 (530,900) 59,540

2(e)

108,838 26,447 135,285

2(e) 2(e) 2(a), 2(b), 2(c), 2(d), 2(f)

27,100 511,459 70,241

Total equity Total liabilities and equity

608,800 791,571

(431,201) (24,146)

177,599 767,425

C-8

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF COMPREHENSIVE INCOME For the nine months ended 30 September 2011
Audited combined statement of comprehensive income $000 38,929 (4,571) 34,358 2(b) 2(a), 2(b), 2(c), 2(d) 2(b), 2(c), 2(d) 344 (11,296) (2,158) Unaudited Pro Forma combined statement of comprehensive income $000 37,860 (5,201) 32,659 308 (10,852) (1,712)

Explanatory note Revenue Cost of services Gross profit Other operating income Administration expenses Finance costs 2(c), 2(d) 2(a)

Unaudited Pro Forma adjustments $000 (1,069) (630) (1,699) (36) 444 446

Profit before income tax Income tax expense 2(a), 2(b), 2(c), 2(d)

21,248 (3,930)

(845) 144

20,403 (3,786)

Profit for the period Other comprehensive income Revaluation of land and hotel buildings Income tax effects Net comprehensive income Total comprehensive income for the year Basic and diluted earnings per share (cents)

17,318

(701)

16,617

97,083 (6,689) 90,394 107,712

(701)

97,083 (6,689) 90,394 107,011

3.15

3.02

C-9

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF CASH FLOWS For the nine months ended 30 September 2011
Audited combined statement of cash flows $000 21,248 1,904 2,158 (36) 25,274 (237) 1,017 6 537 (1,563) 2(a), 2(c), 2(d) 25,034 (2,383) (4,357) 18,294 2(b) 2(a), 2(b), 2(c), 2(d) 36 (9,262) 50,145 40,919 Unaudited Pro Forma adjustments $000 (845) (62) (446) 36 (1,317) 41,195 (39,571) 307 446 753 (36) (50,145) (50,181) Unaudited Pro Forma combined statement of cash flows $000 20,403 1,842 1,712 23,957 (237) 42,212 6 (39,034) (1,563) 25,341 (1,937) (4,357) 19,047 (9,262) (9,262)

Explanatory note Operating activities Profit before income tax Adjustments for: Depreciation of property, plant and equipment Interest expense Interest income Operating cash flows before movements in working capital Trade receivables Other receivables Trade payables Other payables Properties under development Cash generated from operations Interest paid Income tax paid Net cash from operating activities Investing activities Interest received Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash from (used in) investing activities Financing activities Advances from (to) ultimate holding company Repayment to ultimate holding company Proceeds from borrowings Repayment of borrowings Net cash used in financing activities 2(e) 2(e)

2(a), 2(b), 2(c), 2(d) 2(a), 2(c) 2(a), 2(c), 2(d) 2(b)

2(a), 2(b), 2(c), 2(d), 2(e) 2(a), 2(b), 2(c), 2(d), 2(e)

4,154 (44,939) 4,233 (21,573) (58,125)

(4,154) 44,939 40,785

4,233 (21,573) (17,340)

C-10

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Audited combined statement of cash flows $000 1,088 2,811 3,899 Unaudited Pro Forma combined statement of cash flows $000 (7,555) 19,143 11,588

Explanatory note Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Unaudited Pro Forma adjustments $000 (8,643) 16,332 7,689

Explanatory Notes: 1. Significant Events Save for the following significant events relating to the disposal of hotel properties, office premises and properties under development of the Group, and changes to the capital structure (the Significant Events) discussed below, the directors, as at the date of this report, are not aware of other significant disposal of assets subsequent to 31 December 2009 and significant changes made to the capital structure of the Group subsequent to 31 December 2010. (a) Disposal of hotel property On 26 August 2011, the Group contracted to sell the hotel property located at 63 Dunlop Street Singapore 209391 for a consideration of $14,500,000. The hotel property was subsequently leased back to the Group for a monthly rental of $70,000 for 2 years. An amount of $145,000 was received from the buyer during the financial period ended 30 September 2011. (b) Disposal of construction-in-progress On 24 March 2011, the Group contracted to sell a property that was undergoing major additions and alteration works, which is located at 103 Beach Road, Singapore 189704 for a consideration of $46,000,000, which was received during the financial period ended 30 September 2011. (c) Disposal of office premises On 30 September 2011, the Group contracted to sell the office premises located at 168 Changi Road Singapore 419730 for a consideration of $7,390,000 to Fragrance Global Pte Ltd, a related company of the Group. An amount of $2,000,000 was received from Fragrance Global Pte Ltd during the financial period ended 30 September 2011 in relation to the sale of office premises.

C-11

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(d) Disposal of properties under development On 30 September 2011, the Group contracted to sell 2 properties which are located at 216 242 Pasir Panjang Singapore 118577118597 and 72 Lorong 19 Geylang Road Singapore 388510 for a consideration of $28,409,000 to Fragrance Realty Pte Ltd, a related company of the Group. An amount of $2,000,000 was received from Fragrance Realty Pte Ltd during the financial period ended 30 September 2011 in relation to the sales of properties under development. (e) Restructuring exercise In preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited, the Company undertook a restructuring exercise to streamline and rationalise the Group structure. Pursuant to the Restructuring Agreement dated 31 March 2012 (the Restructuring Agreement), the Company acquired: (i) the entire issued and paid-up share capital of Fragrance Capital Pte Ltd, comprising 20,000,000 ordinary shares in the capital of Fragrance Capital Pte Ltd, resulting in Fragrance Capital Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $284,517,694 (based on NTA as at 30 September 2011 less a discount of $33,111,984 and a dividend of $10,000,000 declared after 30 September 2011). The shares in Fragrance Capital Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; the entire issued and paid-up share capital of Fragrance Ventures Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Ventures Pte Ltd, resulting in Fragrance Ventures Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $157,637,036 (based on NTA as at 30 September 2011 less a discount of $19,784,057). The shares in Fragrance Ventures Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(ii)

(iii) the entire issued and paid-up share capital of Fragrance Assets Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Fragrance Assets Pte Ltd, resulting in Fragrance Assets Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $73,031,920 (based on NTA as at 30 September 2011 less a discount of $9,849,600). The shares in Fragrance Assets Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (iv) the entire issued and paid-up share capital of Fragrance Investment Pte Ltd, comprising 4,000,000 ordinary shares in the capital of Fragrance Investment Pte Ltd, resulting in Fragrance Investment Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $32,126,729 (based on NTA C-12

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
as at 30 September 2011 less a discount of $4,443,264). The shares in Fragrance Investment Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter; (v) the entire issued and paid-up share capital of Fragrance Hotel Management Pte Ltd, comprising 100,000 ordinary shares in the capital of Fragrance Hotel Management Pte Ltd, resulting in Fragrance Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $9,473,809 (based on the NTA as at 30 September 2011. The shares in Fragrance Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter;

(vi) the entire issued and paid-up share capital of Parc Sovereign Hotel Management Pte Ltd, comprising 1,000,000 ordinary shares in the capital of Parc Sovereign Hotel Management Pte Ltd, resulting in Parc Sovereign Hotel Management Pte Ltd becoming a wholly-owned subsidiary of the Company for a consideration of $1,212,812 (based on NTA as at 30 September 2011 less a discount of $31,545). The shares in Parc Sovereign Hotel Management Pte Ltd were transferred with all rights, benefits and interests in and to the shares as at 13 April 2012 and thereafter. The Purchase Consideration was paid by the Company to Fragrance Group Limited in the following manner: (a) approximately $345.7 million was satisfied in cash by way of loans, obtained directly by our Group and/or internally generated funds of the Group and insofar as it constituted financial assistance under the Companies Act, duly approved by way of a special resolution passed by each of the Subsidiaries in accordance with Section 76(9B) of the Companies Act within thirty (30) days from the date of the Listing Date; (b) approximately $137.5 million was satisfied by the Company by way of allotment and issuance of 549,999,999 new Shares (Consideration Shares) credited as fully paid-up to Fragrance Group Limited; (c) approximately $74.8 million is to be satisfied by the Company by way of utilisation of part of the proceeds of the Invitation within thirty (30) days from the date of the Listing Date; and

The Restructuring Exercise was completed on 13 April 2012, notwithstanding that (a) and (c) have not been paid as at the time of completion. (f) Declaration of interim one-tier exempt dividend On 22 November 2011, a subsidiary, Fragrance Capital Pte Ltd declared an interim one-tier exempt dividend of $0.50 per ordinary share totalling $10,000,000 in respect for the year ending 31 December 2011. C-13

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
2. Basis of preparation of the unaudited Pro Forma Group financial information The Unaudited Pro Forma Group financial information for the year ended 31 December 2010 and the nine months ended 30 September 2011 have been prepared for inclusion in the Prospectus in connection with the invitation of shares of Global Premium Hotels Limited and should be read in conjunction with the audited combined financial statements of Global Premium Hotels Limited for the year ended 31 December 2010, 2009 and 2008 and the audited combined interim condensed financial statements of Global Premium Hotels Limited for the nine months ended 30 September 2011. The unaudited Pro Forma Group financial information has been prepared based on the following: Audited combined financial statements of Global Premium Hotels Limited for the year ended 31 December 2010 which were prepared by management in accordance with the Singapore Financial Reporting Standards (FRS) and audited by Deloitte & Touche LLP, Singapore, in accordance with Singapore Standards on Auditing. The auditors report on these financial statements was not qualified. Audited combined interim condensed financial statements of Global Premium Hotels Limited for the nine months ended 30 September 2011 which were prepared by management in accordance with FRS 34 Interim Financial Reporting and audited by Deloitte & Touche LLP, Singapore, in accordance with Singapore Standards on Auditing. The auditors report on these financial statements was not qualified.

The unaudited Pro Forma Group financial information for the year ended 31 December 2010 and the nine months ended 30 September 2011 are prepared for illustrative purposes only. These are prepared based on certain assumptions and after making certain adjustments to show what: (i) the unaudited combined results and cash flows of the Group for the year ended 31 December 2010 and for the nine months ended 30 September 2011 would have been if the Significant Events discussed above had occurred on 1 January 2010; and the unaudited combined statement of financial positions of the Group as at 31 December 2010 and 30 September 2011 would have been if the Significant Events had occurred on 31 December 2010 and 30 September 2011 respectively.

(ii)

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APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Based on the assumptions discussed above, the following material adjustments have been made to the audited combined financial statements of Global Premium Hotels Limited for the year ended 31 December 2010 and audited combined interim condensed financial statements for the nine months ended 30 September 2011, in arriving at the unaudited Pro Forma Group financial information included herein: (a) Disposal of hotel property Effect of disposal of hotel property located at 63 Dunlop Street Singapore 209391 subsequent to 1 January 2010 and adjusted as appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Other receivables Property, plant and equipment Other payables Term loans (Current) Term loans (Non-current) Income tax payable Deferred tax liabilities Revaluation reserve Retained earnings 12,334 (6,100) 1,787 (180) (1,986) (127) (1) (3,279) 10,020 As at 30 September 2011 $000 566 (97) (469)

Unaudited Pro Forma combined statement of comprehensive income

Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Cost of sales Other operating income Administrative expenses Finance costs Income tax expense 840 (2) (51) (39) (128) 1 January 2011 to 30 September 2011 $000 630 (36) (28) (97)

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APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma combined statement of cash flows
Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Operating activities Profit before income tax Depreciation Interest expense Other receivables Other payables Interest paid Investing activities Proceeds from disposal of property, plant and equipment Additions to property, plant and equipment Financing activity Repayment of term loans (2,166) 145 (1,000) (145) (752) (35) (39) 2,021 1,787 (39) (566) (24) (28) 145 590 (28) 1 January 2011 to 30 September 2011 $000

(b) Disposal of construction-in-progress Effect of disposal of construction-in-progress located at 103 Beach Road Singapore 189704 subsequent to 1 January 2010 and adjusted as appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Other receivables Property, plant and equipment Other payables Term loans (Non-current) Income tax payable 31,775 (45,846) 1,533 (14,437) 4,088 As at 30 September 2011 $000 (36) (58) 4

C-16

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Increase (Decrease) As at 31 December 2010 $000 Deferred tax liabilities Revaluation reserve Retained earnings (4,286) (20,929) 19,960 As at 30 September 2011 $000 18

Unaudited Pro Forma combined statement of comprehensive income

Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Revenue Other operating income Administrative expenses Finance costs Income tax expense (266) (14) (204) (288) 36 1 January 2011 to 30 September 2011 $000 (36) (58) 4

Unaudited Pro Forma combined statement of cash flows

Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Operating activities Profit before income tax Interest expense Interest income Other receivables Other payables Interest paid 212 (288) (31,775) 1,533 (288) 22 36 46,036 (58) 1 January 2011 to 30 September 2011 $000

C-17

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Investing activities Interest received Proceeds from disposal of property, plant and equipment Additions to property, plant and equipment Financing activity Repayment of term loans (14,437) 46,000 (1,533) (36) (46,000) 1 January 2011 to 30 September 2011 $000

(c) Disposal of office premises Effect of disposal of office premises located at 168 Changi Road Singapore 419730 subsequent to 1 January 2010 and adjusted as appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Other receivables Property, plant and equipment Other payables Term loans (Current) Term loans (Non-current) Income tax payable Retained earnings 2,870 (7,390) (326) (4,277) 23 60 As at 30 September 2011 $000 (35) 6 29

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APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma combined statement of comprehensive income
Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Revenue Loss on disposal of property, plant and equipment Administrative expenses Finance costs Income tax expense (298) 51 (292) (140) 23 1 January 2011 to 30 September 2011 $000 (244) (203) (76) 6

Unaudited Pro Forma combined statement of cash flows

Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Operating activities Profit before income tax Depreciation Loss on disposal of property, plant and equipment Interest expense Other receivables Other payables Interest paid Investing activity Proceeds from disposal of property, plant and equipment Financing activity Repayment of term loans (4,603) 2,000 (2,000) 83 (51) 51 (140) 2,520 (140) 35 (38) (76) 2,000 3 (76) 1 January 2011 to 30 September 2011 $000

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APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(d) Disposal of properties under development Effect of disposal of properties under development located at 72 Lorong 19 Geylang Singapore 388510 and 216242 Pasir Panjang Singapore 118577 118597 subsequent to 1 January 2010 and adjusted as appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Other receivables Properties under development Other payables Term loans (Current) Term loans (Non-current) Income tax payable Retained earnings 10,460 (26,846) 2,151 (420) (17,529) (100) (488) As at 30 September 2011 $000 336 (57) (279)

Unaudited Pro Forma combined statement of comprehensive income

Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Revenue Administrative expenses Finance costs Income tax expense (1,186) (116) (482) (100) 1 January 2011 to 30 September 2011 $000 (825) (147) (342) (57)

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APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma combined statement of cash flows
Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Operating activities Profit before income tax Interest expense Other receivables Other payables Properties under development Interest paid Investing activity Proceeds from disposal of property, plant and equipment Financing activity Repayment of term loans (17,949) 2,000 (2,000) (588) (482) (12,460) 2,151 26,846 (482) (336) (342) 2,000 336 (342) 1 January 2011 to 30 September 2011 $000

(e) Restructuring exercise Effect of restructuring exercise and adjusted appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Cash and cash equivalents Other receivables Other payables Term loans (Current) Term loans (Non-current) Share capital Merger reserve 16,332 (17,402) 75,436 13,178 330,816 110,400 (530,900) As at 30 September 2011 $000 7,689 (31,799) 74,689 (12,496) 334,197 110,400 (530,900)

C-21

APPENDIX C INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma combined statement of cash flows
Increase (Decrease) 1 January 2010 to 31 December 2010 $000 Operating activities Other receivables Other payables Financing activities Advances (to) from ultimate holding company Proceeds from borrowings Repayment of term loans Repayments (to) from ultimate holding company (345,064) 463,182 (119,188) (4,154) 44,939 17,402 (8,986) (40,442) 1 January 2011 to 30 September 2011 $000

(f)

Declaration of interim one-tier exempt dividend Effect of declaration of interim one-tier exempt dividend of $10,000,000 subsequent to 31 December 2010 and adjusted appropriate for the following: Unaudited Pro Forma combined statement of financial position
Increase (Decrease) As at 31 December 2010 $000 Other payables Retained earnings 10,000 (10,000) As at 30 September 2011 $000 10,000 (10,000)

The unaudited Pro Forma Group financial information, because of their nature, are not necessarily indicative of the results of the operations, cash flows and financial position would have been attained had the Significant Events actually occurred earlier. Save as disclosed in the Explanatory Notes, the management, for the purpose of preparing this set of unaudited Pro Forma Group financial information, have not considered the effects of other events.

C-22

APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

The discussion below provides a summary of the principal objects of our Company as set out in our Memorandum of Association and certain provisions of our Articles of Association and the laws of Singapore. This discussion is only a summary and is qualified by reference to Singapore law and our Memorandum and Articles of Association. Memorandum of Association and Registration Number We are registered in Singapore with the Registrar of Companies and Businesses. Our Company registration number is 201128650E. Our Memorandum of Association sets out the objects for which our Company was formed, including carrying on business as, inter alia, an investment holding company. Summary of our Articles of Association 1. Directors (a) Ability of interested directors to vote Article 87(2) A Director shall not vote in respect of any contract or proposed contract or arrangement in which he has directly or indirectly a personal material interest and if he shall do so his vote shall not be counted. Notwithstanding his interest, a Director may be counted in the quorum present at any meeting of the Directors.

(b) Remuneration Article 84 The remuneration of the Directors shall from time to time be determined by the Company in general meeting. Such remuneration shall not be increased except pursuant to an ordinary resolution passed at a general meeting where notice of the proposed increase shall have been given in the notice convening the meeting. Such remuneration shall be divided amongst the Directors in such proportions and in such manner as they may agree and in default of agreement, equally, except that in the latter event any Director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled to rank in such division for the proportion of the remuneration related to the period during which he has held office. Any Director who is appointed to any executive office or serves on any committee or who otherwise performs or renders services which, in the opinion of the Directors, are outside his ordinary duties as a Director, may be paid such remuneration as the Directors may determine but such remuneration shall not include D-1

Article 86

APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

a commission on or a percentage of turnover. Fees payable to a non-executive Director shall be by a fixed sum and not by a commission on or percentage of profits or turnover. No Director shall be remunerated by a commission on or percentage of turnover. (c) Borrowing Article 101 The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures and other securities whether outright or as security for any debt, liability, or obligation of the Company or of any third party.

2.

Share rights and restrictions We currently have one class of shares namely, ordinary shares. Article 5(3) Without prejudice to any special rights or privileges attached to any then existing shares in the capital of the Company, any shares may be issued upon such terms and conditions, and with such rights and privileges attached thereto, as the Company by special resolution may direct or, if no such direction be given, as the Directors shall determine, and in particular such shares may be issued with preferential, qualified or deferred right to dividends and in the distribution of assets of the Company, and with a special or restricted right of voting, and any preference share may be issued on the terms that it is, or at the option of the Company, liable to be redeemed. Subject to Article 7 and such limitation thereof as may be prescribed by the Stock Exchange, further preference shares ranking equally with, or in priority to preference shares already issued may be issued by the Company. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the Company. The repayment of preference capital other than redeemable preference capital, or alteration of preference shareholders rights, may only be made pursuant to a special resolution of the preference shareholders concerned, provided always that where the necessary majority for such a special resolution is not obtainable at the meeting, consent in writing if obtained from the holders of three-fourths of the issued shares of the class concerned within two months of the meeting shall be as valid and effectual as a special resolution carried at D-2

Article 8

APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

the meeting. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the capital, or winding up, or sanctioning a sale of the undertaking of the Company, or where the proposition to be submitted to the meeting directly affects their rights and privileges, or when the dividend on the preference shares is in arrears for more than six months. Article 26 No member shall be entitled to receive any dividend or to be present or vote at any meeting or upon a poll, or to exercise any privilege as a member until he shall have paid all calls for the time being due and payable on every share held by him, whether alone or jointly with any other person, together with interest and expenses (if any). Transferability of Our Shares Article 29 Subject to these Articles, any member may transfer all or any of his shares. Every transfer must be in writing and in the usual form or in any form approved by the Directors and by the Stock Exchange. The instrument of transfer of a share shall be signed by or on behalf of both the transferor and the transferee, and by the witness or witnesses thereto, provided that an instrument of transfer in respect of which the transferee is the Depository shall be effective although not signed or witnessed by or on behalf of the Depository. 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 thereof. Shares of different classes shall not be comprised in the same instrument of transfer. The Directors may decline to register any transfer of shares not being fully paid shares to a person not approved by them and may also decline to register any transfer of shares on which the Company has a lien. Save as aforesaid or where required by law or by the rules, bye-laws or listing rules of the Stock Exchange, there shall be no restriction on the transfer of fully paid-up shares. The Directors may decline to accept any instrument of transfer unless: (a) such fee not exceeding $2.00 as the Directors may from time to time determine is paid to the Company in respect thereof;

Article 31

Article 32

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APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

(b) the instrument of transfer is duly stamped in accordance with any law for the time being in force relating to stamp duty; (c) the instrument of transfer is deposited at the office or at such other place (if any) as the Directors may appoint accompanied by a certificate of payment of stamp duty (if any), the certificates of the shares to which the transfer relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person so to do; and

(d) such fee not exceeding $2.00 as the Directors may from time to time determine is paid to the Company in respect of the registration of any probate, letters of administration, certificate of marriage or death, power of attorney or any document relating to or affecting the title to the shares. Article 34 The Directors shall refuse to register the transfer of any share: (a) if the share has not been fully paid or is subject to a lien; or (b) if the provisions of these Articles relating to the transfer of shares have not been complied with. Voting Rights Article 72 Every member (other than a holder of treasury shares) shall be entitled to be present and to vote at any general meeting either personally or by proxy in respect of any shares upon which all calls due to the Company have been paid. Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a meeting of members or classes of members each member entitled to vote may vote in person or by proxy or by attorney. On a show of hands every member present in person or by proxy shall have one vote. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a poll every member present in person or by proxy shall have one vote for each share he holds. For the purpose of determining the number of votes which a member, being a Depositor, or his proxy may cast at any general meeting on a poll, the reference to shares held or represented D-4

Article 73

APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

shall, in relation to shares of that Depositor, be the number of shares entered against his name in the Depository Register as at 48 hours before the time of the relevant general meeting as supplied by the Depository to the Company. Article 75 In the case of joint holders, any one of such persons may vote, but if more than one of such persons shall be present at a meeting, the person whose name stands first on the Register of Members (as the case may be) the Depository Register shall alone be entitled to vote. Variation of Rights of Existing Shares or Classes of Shares Article 6 Subject to Article 8, if at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of threefourths 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 the class. To every such separate general meeting the provisions of these Articles relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxy may demand a poll. Provided always that where the necessary majority for such a special resolution is not obtained at the meeting, consent in writing if obtained from the holders of three-fourths of the issued shares of the class concerned within two months of the meeting shall be as valid and effectual as a special resolution carried at the meeting. The rights conferred upon the holder of the shares of any class issued with preferred or other rights shall, so far as they are not expressed in these Articles, be expressed with necessary amendments to these Articles. Furthermore, unless otherwise expressly provided by the terms of issue of the shares of that class, those aforesaid rights shall be deemed to be varied by the creation or issue of further shares ranking equally with, or in priority to such shares.

Article 7

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APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

Limitations on the Right to Own Shares Article 13 Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or unit of a share or (except only as by these Articles or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder thereof or (as the case may be) the person whose name is entered in the Depository Register in respect of that share.

(a) Dividends and distribution Dividend Entitlements Article 133 The Company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the Directors. The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company. The dividends, interest and bonuses and any other benefits and advantages in the nature of income receivable in respect of the Companys investments, and any commissions, trusteeship, agency, transfer and other fees and current receipts of the Company shall, subject to the payment thereout of the expenses of management, interest upon borrowed money and other expenses which in the opinion of the Directors are of a revenue nature, constitute the profits of the Company available for dividend. Appreciations of capital assets, investments and realised profits resulting in a sale of capital assets or investments (except so far as representing interest or dividend accrued and unpaid) shall either be carried to the credit of capital reserve or shall be applied in providing for depreciation or contingencies or for writing down the value of the assets. It is expressly declared that in ascertaining the profits of the Company available for dividend it shall not be necessary to make good any losses or depreciation in value of any of the Companys investments or any other assets of the Company except circulating capital.

Article 134

Article 135(1)

Article 135(2)

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APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

Article 136 The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied. The Directors may divide the reserve into such special funds as they think fit and may consolidate into one fund any special funds or any part of any special funds into which the reserve may have been divided. The Directors may also, without placing the same to reserve, carry forward any profits. In carrying sums to reserve and in applying the same, the Directors shall comply with the provisions of the Statutes. Subject to the rights or restrictions attached to any shares or class of shares and except as otherwise permitted under the Act: (a) all dividends in respect of shares shall be declared and paid according to the number of shares held by a member but where shares are partly paid all dividends must be apportioned and paid proportionately to the amounts paid or credited as paid on the partly paid shares; and (b) all dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that it shall rank for dividend as from a particular date that share shall rank for dividend accordingly. For the purposes of this Article, an amount paid or credited as paid on a share in advance of a call is to be ignored. Article 139 Any general meeting declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and in particular of paid-up shares, debentures or debenture stock of any other company or in any one or more of such ways and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient, and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Directors.

Article 137

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APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

Article 141 A transfer of a share shall not pass the right to any dividend declared in respect thereof before the transfer has been registered.

3.

Change in capital Article 53 The Company may from time to time by ordinary resolution do one or more of the following: (a) increase the share capital by such sum to be divided into shares of such amount as the resolution shall prescribe; (b) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; (c) subdivide its shares or any of them into shares of a smaller amount than is fixed by the Memorandum provided that the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;

(d) subject to the provisions of these Articles and the Act, convert any class of shares into any other class of shares; and (e) cancel shares which at the date of the passing of the resolutions in that behalf have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the amount of the shares so cancelled. Article 54 Subject to any direction to the contrary that may be given by the Company in the general meeting or except as permitted under the listing rules of the Stock Exchange, all new shares shall, before issue, be offered to such persons who as at the date of the offer are entitled to receive notices from the Company of general meetings in proportion, as far as the circumstances admit, to the amount of the existing shares to which they are entitled. The offer shall be made by notice specifying the number of shares offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined. After the expiration of the aforesaid time or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares offered, the Directors may dispose of those shares in a manner as they think most beneficial to the Company. The Directors may likewise dispose of any new shares which (by reason of the ratio which D-8

APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

the new shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion of the Directors, be conveniently offered in accordance with this Article. Article 55 Notwithstanding Article 54 above, the Company may by ordinary resolution in a general meeting, give to the Directors a general mandate, either conditionally or unconditionally to issue: (a) shares in the capital of the Company (whether by way of bonus, rights or otherwise); (b) convertible securities; (c) additional convertible securities arising from adjustments made to the number of convertible securities previously issued in the event of rights, bonus or capitalisation issues; or

(d) shares arising from the conversion of convertible securities, at any time and upon such terms and conditions and for such purpose as the Directors may in their absolute discretion deem fit provided that: (a) the aggregate number of shares and convertible securities that may be issued shall not be more than 50.0% of the issued share capital of the Company as at the date the general mandate is passed or such other limit as may be prescribed by the Stock Exchange; (b) the aggregate number of shares and convertible securities to be issued other than on a pro-rata basis to existing shareholders shall be not more than 20.0% of the issued share capital of the Company as at the date the general mandate is passed or such other limit as may be prescribed by the Stock Exchange; (c) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraphs (a) and (b) above, the percentage of issued share capital shall be calculated based on the issued share capital of the Company as at the date the general mandate is passed after adjusting for new shares arising from the conversion of any convertible securities or exercise of any employee options in issue as at the date the general mandate is passed and any subsequent consolidation or subdivision of the Companys shares; and

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APPENDIX D SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

(d) unless earlier revoked or varied by the Company in general meeting, such authority shall continue in force only until the next annual general meeting or the date by which the next annual general meeting is required by law to be held, whichever is earlier. Article 9 Subject to and in accordance with the provisions of the Act, the Company may purchase or otherwise acquire shares issued by it on such terms as the Company may think fit and in the manner prescribed by the Act. Unless as permitted under Article 10 hereof, all shares repurchased by the Company shall be deemed to be cancelled on purchase or acquisition by the Company. In the cancellation of any share as aforesaid, the rights and privileges attached to that share shall expire. In any other instance, the Company may hold or deal with any such share so purchased or acquired by it in such manner as may be permitted by, and in accordance with, the Act. The Company may hold or deal with its treasury shares in the manner authorised by, or prescribed pursuant to, the Act. The treasury shares shall have no voting rights and shall not be entitled to any dividend or other distribution (whether in cash or otherwise) of the Companys assets (including any distribution of assets to members on a winding up) that may be made by the Company. The Company may by special resolution reduce its share capital in any manner and subject to, any incident authorised, and consent required by law.

Article 10

Article 56

There are no limitations imposed by Singapore law or by our Articles of Association on the rights of our shareholders who are regarded as non-residents of Singapore, to hold or vote their shares. There is no shareholding qualification for Directors in our Articles of Association. There is no retirement age limit for Directors under our Articles of Association. Section 153(1) of the Act, however, provides that no person of or over the age of 70 years shall be appointed or act as a director of a public company, unless he is appointed or reappointed as a director or authorised to continue in office as a director by way of an ordinary resolution passed at an annual general meeting. There is no provision in our Articles of Association which provides for any time limit after which a dividend entitlement will lapse.

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APPENDIX E DESCRIPTION OF OUR SHARES

The following statements are brief summaries of the rights and privileges of our Shareholders conferred by the laws of Singapore, the Listing Manual and our Articles of Association as at the Latest Practicable Date. These statements summarise the material provisions of our Articles but are qualified in entirety by reference to our Articles, a copy of which is available for inspection at our registered office during normal business hours for a period of six months from the date of this Prospectus. Ordinary Shares All of our Shares are in registered form. We may, subject to the provisions of the Companies Act and the rules of the SGX-ST, purchase our Shares. However, we may not, except in circumstances permitted by the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our Shares. New Shares New Shares may only be issued with the prior approval of our Shareholders in a general meeting. The aggregate number of Shares to be issued pursuant to such approval may not exceed 50.0% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital, of which the aggregate number of Shares to be issued other than on a pro rata basis to our Shareholders may not exceed 20.0% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital (the percentage of issued share capital being based on our Companys issued share capital at the time such authority is given after adjusting for new shares arising from the conversion of convertible securities or employee share options on issue at the time such authority is given and any subsequent consolidation or subdivision of Shares). The approval, if granted, will lapse at the conclusion of the annual general meeting following the date on which the approval was granted or the date by which the annual general meeting is required by law to be held, whichever is the earlier. Subject to the foregoing, the provisions of the Companies Act and any special rights attached to any class of shares currently issued, all new Shares are under the control of our Board of Directors who may allot and issue the same with such rights and restrictions as it may think fit. Shareholders Only persons who are registered in our Register of Shareholders and, in cases in which the person so registered is CDP, the persons named as the Depositors in the Depository Register maintained by CDP for the Shares, are recognised as our Shareholders. We will not, except as required by law, recognise any equitable, contingent, future or partial interest in any Share or other rights for any Share other than the absolute right thereto of the registered holder of that Share or of the person whose name is entered in the Depository Register for that Share. We may close our Register of Shareholders for any time or times if we provide the Registrar of Companies and Businesses with at least 14 days notice and the SGX-ST at least ten clear Market Days notice. However, the Register of Shareholders may not be closed for more than 30 days in aggregate in any calendar year. We typically close our Register of Shareholders to determine Shareholders entitlement to receive dividends and other distributions. E-1

APPENDIX E DESCRIPTION OF OUR SHARES

Transfer of Shares There is no restriction on the transfer of fully paid Shares except where required by law or the Listing Manual or the rules or by-laws of any stock exchange on which our Company is listed. Our Board of Directors may decline to register any transfer of Shares which are not fully paid Shares or Shares on which we have a lien. Our Shares may be transferred by a duly signed instrument of transfer in a form approved by the SGX-ST. Our Board of Directors may also decline to register any instrument of transfer unless, among other things, it has been duly stamped and is presented for registration together with the share certificate and such other evidence of title as they may require. We will replace lost or destroyed certificates for Shares if it is properly notified and if the applicant pays a fee which will not exceed $2.00 and furnishes any evidence and indemnity that our Board of Directors may require. General Meetings of Shareholders We are required to hold an annual general meeting every year. Our Board of Directors may convene an Extraordinary General Meeting whenever it thinks fit and must do so if Shareholders representing not less than 10.0% of the total voting rights of all Shareholders request in writing that such a meeting be held. In addition, two or more shareholders holding not less than 10.0% of our issued share capital may call a meeting. Unless otherwise required by law or by our Articles of Association, voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at the meeting. An ordinary resolution suffices, for example, for the appointment of directors. A special resolution, requiring the affirmative vote of at least 75.0% of the votes cast at the meeting, is necessary for certain matters under Singapore law, including voluntary winding up, amendments to the Memorandum and Articles of Association, a change of our corporate name and a reduction in our share capital. We must give at least 21 days notice in writing for every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions generally require at least 14 days notice in writing. The notice must be given to each of our Shareholders and must set forth the place, the day and the hour of the meeting and, in the case of special business, the general nature of that business. Voting Rights A holder of our Shares is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxies need not be Shareholders. A person who holds Shares through the SGX-ST book- entry settlement system will only be entitled to vote at a general meeting as a Shareholder if his name appears on the Depository Register maintained by CDP 48 hours before the general meeting. Except as otherwise provided in our Articles of Association, two or more Shareholders must be present in person or by proxy to constitute a quorum at any general meeting. Under our Articles of Association, on a show of hands, every Shareholder present in person and by proxy shall have one vote (provided that in the case of a Shareholder who is represented by two proxies, the chairman of the meeting shall be entitled to treat the first named proxy as the authorised representative to vote on a show of hands), and on a poll, every Shareholder present in person or by proxy shall have one vote for each Share which he holds or represents. A poll may be demanded in certain circumstances, including by the chairman of the meeting or by any Shareholder present in person or by proxy and representing not less than E-2

APPENDIX E DESCRIPTION OF OUR SHARES

10.0% of the total voting rights of all Shareholders having the right to attend and vote at the meeting or by any two Shareholders present in person or by proxy and entitled to vote. In the case of an equality of votes, whether on a show of hands or a poll, the chairman of the meeting shall be entitled to a casting vote. Dividends We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we may not pay dividends in excess of the amount recommended by our Board of Directors. We must pay all dividends out of our profits. See Bonus and Rights Issue below. All dividends are paid pro rata among our Shareholders in proportion to the amount paid-up on each Shareholders Shares, unless the rights attaching to an issue of any Share provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to each Shareholder at his registered address. Notwithstanding the foregoing, the payment by us to CDP of any dividend payable to a Shareholder whose name is entered in the Depository Register shall, to the extent of payment made to CDP, discharge us from any liability to that Shareholder in respect of that payment. Bonus and Rights Issue Our Board of Directors may, with approval of our Shareholders at a general meeting, capitalise any sum standing to the credit of any of our reserve accounts (including any undistributable reserve) or any sum standing to the credit of our profit and loss account and distribute the same as bonus Shares credited as paid-up to our Shareholders in proportion to their shareholdings. Our Board of Directors may also issue rights to take up additional Shares to Shareholders in proportion to their Shareholdings. Such rights are subject to any conditions attached to such issue and the regulations of any stock exchange on which we are listed. Takeovers Under the Singapore Code on Take-overs and Mergers (Singapore Take-over Code), issued by the Authority pursuant to Section 321 of the SFA, any person acquiring an interest, either on his own or together with parties acting in concert with him, in 30.0% or more of the voting Shares must extend a takeover offer for the remaining voting Shares in accordance with the provisions of the Singapore Take-over Code. In addition, a mandatory takeover offer is also required to be made if a person holding, either on his own or together with parties acting in concert with him, between 30.0% and 50.0% of the voting Shares acquires additional voting Shares representing more than 1.0% of the voting Shares in any six(6) month period. Under the Singapore Take-over Code, the following individuals and companies will be presumed to be persons acting in concert with each other unless the contrary is established: (a) the following companies: (i) (ii) a company; the parent company of (i);

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APPENDIX E DESCRIPTION OF OUR SHARES

(iii) the subsidiaries of (i); (iv) the fellow subsidiaries of (i); (v) the associated companies of (i), (ii), (iii) or (iv); and

(vi) companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); (b) a company with any of its directors (together with their close relatives, related trusts as well as companies controlled by any of the directors, their close relatives and related trusts); (c) a company with any of its pension funds and employee share schemes;

(d) a person with any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, but only in respect of the investment account which such person manages; (e) a financial or other professional adviser, including a stockbroker, with its customer in respect of the shareholdings of: (i) the adviser and persons controlling, controlled by or under the same control as the adviser; and all the funds which the adviser manages on a discretionary basis, where the shareholdings of the adviser and any of those funds in the customer total 10.0% or more of the customers equity share capital;

(ii)

(f)

directors of a company (together with their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent;

(g) partners; and (h) the following persons and entities: (i) (ii) an individual; the close relatives of (i);

(iii) the related trusts of (i); (iv) any person who is accustomed to act in accordance with the instructions of (i); and (v) companies controlled by any of (i), (ii), (iii) or (iv).

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APPENDIX E DESCRIPTION OF OUR SHARES

Under the Singapore Take-over Code, a mandatory offer made with consideration other than cash must be accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert within the preceding six(6) months. Liquidation or Other Return of Capital If we liquidate or in the event of any other return of capital, holders of our Shares will be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special rights attaching to any other class of shares. Indemnity As permitted by Singapore law, our Articles of Association provide that, subject to the Companies Act, our Board of Directors and officers shall be entitled to be indemnified by us against any liability incurred in defending any proceedings, whether civil or criminal, which relate to anything done or omitted to have been done as an officer, director or employee and in which judgment is given in their favour or in which they are acquitted or in connection with any application under any statute for relief from liability in respect thereof in which relief is granted by the court. We may not indemnify our Directors and officers against any liability which by law would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust of which they may be guilty in relation to us. Limitations on Rights to Hold or Vote Shares Except as described in Voting Rights and Takeovers above, there are no limitations imposed by Singapore law or by our Articles of Association on the rights of non-resident shareholders to hold or vote in respect of our Shares. Minority Rights The rights of minority Shareholders of Singapore-incorporated companies are protected under Section 216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon application by any of our shareholders, as they think fit to remedy any of the following situations where: (a) our affairs are being conducted or the powers of our Board of Directors are being exercised in a manner oppressive to, or in disregard of the interests of, one or more of our Shareholders; or (b) we take an action, or threaten to take an action, or our Shareholders pass a resolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more of our Shareholders, including the applicant.

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APPENDIX E DESCRIPTION OF OUR SHARES

Singapore courts have a wide discretion as to the reliefs they may grant and those reliefs are in no way limited to those listed in the Companies Act itself. Without prejudice to the foregoing, the Singapore courts may: (a) direct or prohibit any act or cancel or vary any transaction or resolution; (b) regulate the conduct of our affairs in the future; (c) authorise civil proceedings to be brought in our name of, or on behalf of, by a person or persons and on such terms as the court may direct;

(d) provide for the purchase of a minority Shareholders Shares by our other Shareholders or by us and, in the case of a purchase of Shares by us, a corresponding reduction of our share capital; or (e) provide that we be wound up.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Applications are invited for the subscription of the New Shares at the Issue Price subject to the following terms and conditions: 1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES OR HIGHER INTEGRAL MULTIPLES THEREOF. APPLICATIONS FOR ANY OTHER NUMBER OF NEW SHARES WILL BE REJECTED. Your application for Public Offer Shares may be made by way of the printed White Offer Shares Application Forms or by way of Electronic Applications through the ATMs of the Participating Banks (ATM Electronic Applications) or by way of Electronic Applications through the Internet Banking (IB) websites of the relevant Participating Banks (Internet Electronic Applications) (which together with ATM Electronic Applications shall be referred to as Electronic Applications). Applications for the Placement Shares may only be made by way of the printed Blue Placement Shares Application Forms. Application Form shall mean either Public Offer Shares Application Form or Placement Shares Application Form, as the context so requires. YOU MAY NOT USE YOUR CPF FUNDS TO APPLY FOR THE NEW SHARES. You are allowed to submit only one (1) application in your own name for either the Public Offer Shares or the Placement Shares. You may not submit multiple applications for the Public Offer Shares via the Application Forms, ATM Electronic Applications or Internet Electronic Applications. A person who is submitting an application for the Public Offer Shares by way of an Application Form may not submit another application for the Public Offer Shares by way of an ATM Electronic Application or Internet Electronic Application and vice versa. If you (not being an approved nominee company) have submitted an application in your own name, you confirm that such application is the only application made by you as a beneficial owner and you should not submit any other application whether by way of an Application Form or by way of an Electronic Application, for any other person. Such separate applications shall be deemed to be multiple applications and will be liable to be rejected at the discretion of our Company. If you have made an application for Placement Shares, you should not make any application for Public Offer Shares by way of an Application Form or by way of an ATM Electronic Application or Internet Electronic Application. If you have made an application for Public Offer Shares, you should not make any application for Placement Shares. Such separate applications shall be deemed to be multiple applications and will be liable to be rejected at the discretion of our Company. Joint or multiple applications shall be rejected. If you submit or procure submissions of multiple share applications (whether for Public Offer Shares, Placement Shares or both Public Offer Shares and Placement Shares), you may be deemed to have committed an offence under the Penal Code Chapter 224 of Singapore and the Securities and Futures Act, and your applications may be referred to the relevant authorities for investigation. Multiple applications or those F-1

2.

3.

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

appearing to be or suspected of being multiple applications will be liable to be rejected at the discretion of our Company. 4. Our Company will not accept applications from any person under the age of 18 years, undischarged bankrupt, sole proprietorship, partnership, non-corporate body, joint Securities Account holder and applicant whose address (furnished in his Application Form or, in the case of Electronic Application, contained in the records of the relevant Participating Bank, as the case may be) bear post office box number. No person acting or purporting to act on behalf of a deceased person is allowed to apply under the deceaseds Securities Account at the time of application. Our Company will not recognise the existence of a trust. Any application by a trustee must be made in his own name and without qualification. OUR COMPANY WILL ONLY ACCEPT NOMINEE APPLICATIONS FROM APPROVED NOMINEE COMPANIES. Approved nominee companies are defined as banks, merchant banks, finance companies, insurance companies, licensed securities dealers in Singapore and nominee companies controlled by them. Applications made by persons acting as nominees other than approved nominee companies shall be rejected. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES ACCOUNT IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do not have an existing Securities Account in your own name at the time of your application, your application will be rejected (if your application is by way of an Application Form), or you will not be able to complete your Electronic Application (if your application is by way of an Electronic Application). If you have an existing Securities Account but fail to provide your Securities Account number, your application is liable to be rejected. Your application shall be rejected if your particulars such as name, NRIC/ passport number, nationality, permanent residence status and Securities Account number, provided in your Application Form or in the case of an Electronic Application, contained in the records of the relevant Participating Bank, differ from those particulars in your Securities Account as maintained with CDP. If you possess more than one (1) individual direct Securities Account with CDP, your application shall be rejected. Notwithstanding paragraph 7, if your address stated in the Application Form or, in the case of an Electronic Application, in the records of the relevant Participating Bank is different from the address registered with CDP, you must inform CDP of your updated address promptly, failing which the notification letter on successful allotment and other correspondence from the CDP will be sent to your address last registered with CDP. Our Company reserves the right to reject any application which does not conform strictly to the instructions set out in the Application Forms and this Prospectus or which does not comply with the instructions for Electronic Applications or with the terms and conditions of this Prospectus or, in the case of an application by way of an Application Form, which is illegible, incomplete, incorrectly completed or which is accompanied by an improperly drawn or improper form of remittance. Our F-2

5.

6.

7.

8.

9.

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Company further reserves the right to treat as valid any application not completed or submitted or effected in all respects in accordance with the terms and conditions of this Prospectus, the instructions set out in the Application Forms or the instructions for the Electronic Applications and also to present for payment or other processes all remittances at any time after receipt and to have full access to all information relating to, or deriving from, such remittances or the processing thereof. 10. Our Company reserves the right to reject or accept any application in whole or in part, or to scale down or ballot any application, without assigning any reason therefore, and no enquiry and/or correspondence on the decision will be entertained. This right applies to applications made by way of Application Forms and by way of Electronic Applications. In deciding the basis of allotment, which will be at the discretion of our Company, due consideration will be given to the desirability of allotting the New Shares to a reasonable number of applicants with a view to establishing an adequate and orderly market for our Shares. 11. Share certificates will be registered in the name of CDP or its nominee and will be forwarded only to CDP by ordinary post, at your own risk. If your application is successful, it is expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the Invitation, a statement of account stating that your Securities Account has been credited with the number of New Shares allotted to you. You irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue of the New Shares allotted to you. This authorisation applies to applications made by way of Application Forms and by way of Electronic Applications. 12. In the event that our Company lodges a supplementary or replacement prospectus (Relevant Document) pursuant to the Securities and Futures Act or any applicable legislation in force from time to time prior to the close of the Invitation, and the New Shares have not been issued, we will (as required by law) at the sole and absolute discretion of our Company either: (a) within two days (excluding any Saturday, Sunday or public holiday) from the date of the lodgment of the Relevant Document give you notice in writing of how to obtain, or arrange to receive, a copy of the same and provide you with an option to withdraw your application and take all reasonable steps to make available within a reasonable period the Relevant Document to you if you have indicated that you wish to obtain, or have arranged to receive, a copy of the Relevant Document; (b) within seven days of the lodgment of the Relevant Document give you a copy of the Relevant Document and provide you with an option to withdraw your application; or (c) deem your application as withdrawn and cancelled and refund your application monies to you within seven days from the lodgment of the Relevant Document.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Any applicant who wishes to exercise his option under paragraphs 12(a) and (b) above to withdraw his application for the New Shares shall, within 14 days from the date of lodgment of the Relevant Document, notify us whereupon we shall, within seven days from the receipt of such notification, return all monies in respect of such application to him and at his own risk. In the event that at the time of the lodgment of the Relevant Document, the New Shares have already been issued but trading has not commenced, we will (as required by law), at the sole and absolute discretion of our Company, either: (d) within two days (excluding Saturday, Sunday or public holiday) from the date of the lodgment of the Relevant Document, give you notice in writing of how to obtain, or arrange to receive, a copy of the same and provide you with an option to return to our Company the New Shares which you do not wish to retain title in and take all reasonable steps to make available within a reasonable period the Relevant Document to you if you have indicated that you wish to obtain, or have arranged to receive, a copy of the Relevant Document; (e) within seven days of the lodgment of the Relevant Document give you a copy of the Relevant Document and provide you with an option to return the New Shares; or (f) deem the issue as void and refund your payment for the New Shares within seven days from the lodgment of the Relevant Document.

Any applicant who wishes to exercise his option under paragraphs 12(d) and (e) above to return the New Shares issued to him shall, within 14 days from the date of lodgment of the Relevant Document, notify us of this and return all documents, if any, purporting to be evidence of title of those New Shares, whereupon we shall, within seven days from the receipt of such notification and documents, pay to him all monies paid by him for the New Shares, and the New Shares issued to him shall be void. Additional terms and instructions applicable upon the lodgment of the Relevant Document, including instructions on how you can exercise the option to withdraw your application or return the New Shares allotted to you, may be found in such Relevant Document. 13. By completing and delivering an Application Form or, in the case of an ATM Electronic Application, by pressing the Enter or OK or Confirm or Yes or any other relevant key on the ATM (as the case may be), or in the case of an Internet Electronic Application, by clicking Submit or Continue or Yes or Confirm or any other relevant button on the IB website screen (as the case may be), in accordance with the provisions herein, you: (a) irrevocably offer, agree and undertake to subscribe for the number of New Shares specified in your application (or such smaller number for which the application is accepted) at the Issue Price and agree that you will accept such New Shares as may be allotted to you, in each case on the terms of, and subject to the conditions set out

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

in, this Prospectus and you agree to be bound by the Memorandum of Association and Articles of Association of our Company; (b) agree that in the event of any inconsistency between the terms and conditions for application set out in this Prospectus (including its accompanying Application Form) and those set out in the ATMs or IB websites of the Participating Banks, the terms and conditions set out in this Prospectus (including its accompanying Application Form) shall prevail; (c) agree that the aggregate Issue Price for the New Shares applied for is due and payable to our Company upon application;

(d) warrant the truth and accuracy of the information contained, and representations and declarations made, in your application, and acknowledge and agree that such information, representations and declarations will be relied on by our Company in determining whether to accept your application and/or whether to allot any New Shares to you; and (e) agree and warrant that if the laws of any jurisdiction outside Singapore are applicable to your application, you have complied with such laws and none of our Company, the Issue Manager, Underwriter and Placement Agent will infringe any such laws as a result of the acceptance of your application. 14. In the event of an under-subscription for the Public Offer Shares as at the close of the Invitation, that number of Public Offer Shares not subscribed for shall be made available to satisfy applications for Placement Shares to the extent that there is an over-subscription for Placement Shares as at the close of the Invitation. In the event of an under-subscription for the Placement Shares as at the close of the Invitation, that number of Placement Shares not subscribed for shall be made available to satisfy excess applications for Public Offer Shares to the extent that there is an oversubscription for Public Offer Shares as at the close of the Invitation. In the event of an over-subscription for the Public Offer Shares as at the close of the Invitation and/or Placement Shares are fully subscribed as at the close of the Invitation, the successful applications for Public Offer Shares will be determined by ballot or otherwise as determined by our Directors, after consultation with the Issue Manager, Underwriter and Placement Agent, and approved by the SGX-ST. In the event of an under-subscription for Public Offer Shares and/or Placement Shares as at the close of the Invitation, the number of Public Offer Shares and/or Placement Shares under-subscribed shall be subscribed for by the Underwriter and the Placement Agent. In all the above instances, the basis of allotment of the New Shares as may be decided by our Company, after consultation with the Issue Manager, Underwriter and Placement Agent, and approved by the SGX-ST, in ensuring a reasonable spread of the shareholders

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

of our Company, shall be made public, as soon as practicable, via an announcement through the SGX-ST and by advertisement in a generally circulating daily press. 15. You consent to the disclosure of your name, NRIC/Passport number, address, nationality, permanent resident status, Securities Account number, CPF Investment Account number (if applicable) and share application amount from your account with the relevant Participating Bank to the Share Registrar for the Invitation and Singapore Share Transfer Agent, SCCS, SGX-ST, CDP, our Company, and the Issue Manager, the Underwriter and the Placement Agent. You irrevocably authorise CDP to disclose the outcome of your application, including the number of New Shares allotted to you pursuant to your application, to our Company, the Issue Manager, Underwriter and Placement Agent and/or any other parties so authorised by CDP, our Company and the Issue Manager, Underwriter and Placement Agent. CDP shall not be liable for any delays, failures or inaccuracies in the recording, storage or transmission or delivery of data relating to Electronic Applications. 16. Acceptance of applications will be conditional upon, inter alia, our Company being satisfied that: (a) permission has been granted by the SGX-ST to deal in and for quotation of all our existing Shares and the New Shares on the Official List of the Main Board of the SGX-ST; (b) no Stop Order has been issued by the Authority under the Securities and Futures Act; and (c) the Management and Underwriting Agreement and the Placement Agreement referred to in the section entitled, Other General Information Management and Underwriting Agreement and Placement Agreement of the Prospectus, have become unconditional and have not been terminated.

17. Any reference to you or the applicant in this Annexure shall include an individual, a corporation and an approved nominee company applying for the Public Offer Shares by way of Public Offer Shares Application Form or by way of an Electronic Application or applying for Placement Shares by way of a Placement Shares Application Form or such other forms of applications as the Issue Manager, Underwriter and Placement Agent deem appropriate. 18. In the event that a Stop Order in respect of the New Shares is served by the Authority or other competent authority, and: (a) the New Shares have not been issued, we will (as required by law) deem all applications withdrawn and cancelled and our Company shall refund the application monies to you within 14 days of the date of the Stop Order; or

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

(b) if the New Shares have already been issued but trading has not commenced, the issue will (as required by law) be deemed void, and our Company will refund the application monies to you within 14 days from the date of the Stop Order. This shall not apply where only an interim Stop Order has been served. 19. In the event that an interim Stop Order in respect of the New Shares is served by the Authority or other competent authority, no New Shares shall be issued to you until the Authority revokes the interim Stop Order. 20. The Authority is not able to serve a Stop Order in respect of the New Shares if the New Shares have been issued and listed on a securities exchange and trading in them has commenced. 21. All payments in respect of any application for New Shares and any refunds, shall be made in Singapore dollars. 22. Where monies are to be returned to you for the New Shares, it shall be paid to you without any interest or share of revenue or other benefit arising therefrom at your own risk, and you will not have any claim against us, the Issue Manager, Underwriter and Placement Agent. 23. No person in any jurisdiction outside Singapore receiving this Prospectus or its accompanying documents (including the Application Form) may treat the same as an offer or invitation to subscribe for any New Shares unless such offer or invitation could lawfully be made without compliance with any regulatory or legal requirements in those jurisdiction. 24. In the event of any changes in the closure of the Invitation or the time period during which the Invitation is open, we will publicly announce the same through a SGXNET announcement to be posted on the Internet at the SGX-ST website http://www.sgx.com and through a paid advertisement in a local English newspaper(s). 25. We will not hold any application in reserve. 26. We will not allot New Shares on the basis of this Prospectus later than six months after the date of registration of this Prospectus. 27. Additional terms and conditions for applications by way of Application Forms are set out on pages F-8 to F-12 of this Prospectus. 28. Additional terms and conditions for applications by way of Electronic Applications are set out on pages F-12 to F-21 of this Prospectus.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION FORMS You shall make an application by way of an Application Form on the terms and subject to conditions of this Prospectus including but not limited to the terms and conditions appearing below as well as those set out under this Annexure, TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE on pages F-1 to F-21 of this Prospectus, as well as the Memorandum of Association and Articles of Association of our Company. 1. Your application for Public Offer Shares must be made using the WHITE Public Offer Shares Application Form and WHITE official envelopes A and B for Public Offer Shares accompanying and forming part of this Prospectus. Application for Placement Shares must be made using the BLUE Placement Shares Application Forms accompanying and forming part of this Prospectus or such other forms of applications as the Issue Manager, Underwriter and Placement Agent deem appropriate. Without prejudice to the rights of our Company, the Issue Manager, Underwriter and Placement Agent, as agents of our Company have been authorised to accept for and on behalf of our Company, such other forms of application, as the Issue Manager, Underwriter and Placement Agent may (in consultation with our Company) deem appropriate. Please note and carefully follow the detailed instructions contained in the respective Application Forms and this Prospectus. We reserve the right to reject applications which do not conform strictly to the instructions set out in the Application Forms and this Prospectus or to the terms and conditions of this Prospectus or which are illegible, incomplete, incorrectly completed or which are accompanied by improperly drawn or improper forms of remittance. 2. Your Application Forms must be completed in English. Please type or write clearly in ink using BLOCK LETTERS. All spaces in the Application Forms except those under the heading FOR OFFICIAL USE ONLY must be completed and the words NOT APPLICABLE or N.A. should be written in any space that is not applicable. Individuals, corporations and approved nominee companies must give their names in full. If you are an individual, you must make your application using your full name as it appears in your identity card (if you have such an identification document) or in your passport and, in the case of a corporation, in your full name as registered with a competent authority. If you are not an individual and you are completing the Application Form under the hand of an official, you must state the name and capacity in which that official signs. If you are a corporation completing the Application Form, you are required to affix your Common Seal (if any) in accordance with your memorandum and articles of association or equivalent constitutive documents. If you are a corporate applicant and your application is successful, a copy of your memorandum and articles of association or equivalent F-8

3.

4.

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

constitutional documents must be lodged with our Share Registrar and Share Transfer Agent. We reserve the right to require you to produce documentary proof of identification for verification purposes. (a) You must complete Sections A and B and sign page 1 of the Application Form. (b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form. Where paragraph 7(a) is deleted, you must also complete Section C of the Application form with particulars of the beneficial owners. (c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on page 1 of the Application Form, your application is liable to be rejected.

6.

Your application must be accompanied by a remittance in Singapore currency for the full amount payable, in respect of the number of New Shares applied for, in the form of a BANKERS DRAFT or CASHIERS ORDER drawn on a bank in Singapore, made out in favour of GPH SHARE ISSUE ACCOUNT crossed A/C PAYEE ONLY, with your name, CDP Securities Account Number and address written clearly on the reverse side. WE WILL NOT ACCEPT APPLICATIONS NOT ACCOMPANIED BY ANY PAYMENT OR ACCOMPANIED BY ANY OTHER FORM OF PAYMENT. WE WILL REJECT REMITTANCES BEARING NOT TRANSFERABLE or NON TRANSFERABLE CROSSINGS. Our Company reserves the right to reject any application which are accompanied by combined Bankers Draft or Cashiers Order for different CDP Securities Accounts. No acknowledgement of receipt will be issued by our Company for applications and application monies received. Monies in respect of unsuccessful applications are expected to be returned to you by ordinary post (without interest or any share of revenue or other benefit arising therefrom) within 24 hours of balloting at your own risk. Where your application is accepted in part only, the balance of the application monies, will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within 14 days after the close of the Invitation, provided that the remittance accompanying such application has been presented for payment or other processes has been honoured and the application monies have been received in the designated share issue account. If the completion of the Invitation does not occur for any other reason, monies paid in respect of any application accepted will be returned to you at your own risk (without interest or any share of revenue or other benefit arising therefrom). In the event that the Invitation is cancelled by us following the termination of the Management and Underwriting Agreement and/or the Placement Agreement, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within five (5) Market Days of the termination of the Invitation. In the event that the Invitation is cancelled by us following the issuance of a Stop Order by the Authority or any competent authority, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within 14 days from the date of the Stop Order. F-9

7.

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

8. In consideration of us having distributed the Application Form to you and agreeing to close the Invitation at 12.00 noon on 24 April 2012 or such other time or date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide and by completing and delivering the Application Form, you agree that: (a) your application is irrevocable; (b) your remittance will be honoured on first presentation and that any application monies returnable may be held pending clearance of your payment without interest or any share of revenue or other benefit arising therefrom; (c) all applications, acceptances and contracts resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and that you irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;

(d) in respect of New Shares for which your application has been received and not rejected, acceptance of your application shall be constituted by allotment of the New Shares and not otherwise, notwithstanding any remittance being presented for payment by us; (e) you will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of your application; (f) in making your application, reliance is placed solely on the information contained in the Prospectus and that none of our Company, the Issue Manager, the Underwriter, the Placement Agent or any other person involved in the Invitation shall have any liability for any information not so contained; and

(g) you undertake to subscribe for the number of New Shares applied for as stated in the Application Form or any smaller number of such New Shares that may be allotted to you in respect of your application. In the event that our Company decides to allot a smaller number of New Shares or not to allot any New Shares to you, you agree to accept such decision as final.

F-10

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

A. 1. Applications for Public Offer Shares Your application for Public Offer Shares MUST be made using the WHITE Public Offer Shares Application Form and WHITE official envelopes A and B. ONLY ONE APPLICATION should be enclosed in each envelope. You must: (a) enclose the WHITE Public Offer Shares Application Form, duly completed and signed, together with the correct remittance in accordance with the terms and conditions of this Prospectus in the WHITE envelope A provided; (b) in the appropriate spaces on WHITE envelope A: (i) (ii) write your name and address; state the number of Public Offer Shares applied for;

2.

(iii) tick the relevant box to indicate the form of payment; and (iv) affix adequate Singapore postage; (c) SEAL WHITE envelope A;

(d) write, in the special box provided on the larger WHITE envelope B addressed to GLOBAL PREMIUM HOTELS LIMITED., c/o Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.), 80 Robinson Road, #02-00, Singapore 068898, the number of Public Offer Shares for which the application is made and tick the relevant box to indicate the form of payment; and (e) insert WHITE envelope A into WHITE envelope B, seal WHITE envelope B, affix adequate Singapore postage on WHITE envelope B (if despatching by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your own risk to GLOBAL PREMIUM HOTELS LIMITED., c/o Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.), 80 Robinson Road, #02-00, Singapore 068898, so as to arrive by 12.00 noon on 24 April 2012 or such other time and date as we may, in consultation with the Issue Manager, decide. Local Urgent Mail or Registered Post must NOT be used. 3. No acknowledgement of receipt will be issued for any application or remittance received.

F-11

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

B. 1. Applications for Placement Shares Your application for Placement Shares MUST be made using the BLUE Placement Shares Application Form or in any other form of application as may be deemed appropriate by OCBC Bank. ONLY ONE APPLICATION should be enclosed in each envelope. The completed BLUE Placement Shares Application Form and your remittance in accordance with the terms and conditions of this Prospectus for the full amount payable in respect of the number of Placement Shares applied for, with your name, Securities Account and address written clearly on the reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix adequate Singapore postage (if despatching by ordinary post) and thereafter, the sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at your own risk to OCBC BANK, 63 CHULIA STREET, OCBC CENTRE EAST #03-02, SINGAPORE 049514, so as to arrive by 12.00 noon on 24 April 2012 or such other time and date as we may, in consultation with the Issue Manager, Underwriter and the Placement Agent, decide. Local Urgent Mail or Registered Post must NOT be used. No acknowledgement of receipt will be issued for any application or remittance received. Additional Terms and Conditions for Electronic Applications The procedures for Electronic Applications are set out on the ATM screens (in the case of ATM Electronic Applications) and the IB websites (in the case of Internet Electronic Applications) of the relevant Participating Banks (the Steps). For illustration purposes, the procedures for Electronic Applications at ATMs and the IB website of OCBC Bank are set out in the sections Steps for ATM Electronic Applications through ATMs of OCBC Bank and Steps for Internet Electronic Applications through the IB website of OCBC Bank respectively appearing on pages F-19 to F-21. For ATM Electronic Applications, the actions that you must take at ATMs of other Participating Banks are set out on the ATM screens of the relevant Participating Banks while for Internet Electronic Applications, the actions that you must take for other Participating Banks are set out on the IB websites of the relevant Participant Banks. Applicants applying for the Public Offer Shares by way of Electronic Applications may incur an administrative fee and/or such related charges as stipulated by the respective Participating Banks from time to time. Please read carefully the terms of this Prospectus, the Steps and the terms and conditions for Electronic Applications set out below before making an Electronic Application. Any reference to you or the applicant in the Additional Terms and Conditions for Electronic Applications and the Steps shall refer to you making an application for Public Offer Shares through an ATM or the IB website of a Participating Bank.

2.

3. C.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

You must have an existing bank account with and be an ATM cardholder of one of the Participating Banks before you can make an Electronic Application at the ATMs of that Participating Bank. An ATM card issued by one Participating Bank cannot be used to apply for Public Offer Shares at an ATM belonging to other Participating Banks. For Internet Electronic Applications, you must have an existing bank account with and an IB user identification (User ID) and a personal identification number/password (PIN) given by the relevant Participating Bank. The Steps set out the actions that you must take at ATMs or the IB website of OCBC Bank to complete an Electronic Application. The actions that you must take at ATMs or the IB websites of other Participating Banks are set out on the ATM screens or the IB websites of the relevant Participating Banks. Upon the completion of your ATM Electronic Application transaction, you will receive an ATM transaction slip (the Transaction Record), confirming the details of your ATM Electronic Application. Upon completion of your Internet Electronic Application through the IB website of OCBC Bank, there will be an on-screen confirmation (Confirmation Screen) of the application which can be printed for your record. The Transaction Record or your printed record of the Confirmation Screen is for retention by you and should not be submitted with any printed Application Form. For ATM Electronic Applications, you must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. If you fail to use an ATM card issued in your own name or do not key in your own Securities Account number, your application will be rejected. If you operate a joint bank account with any of the Participating Banks, you must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. Using your own Securities Account number with an ATM card which is not issued to you in your own name will render your Electronic Application liable to be rejected. For Internet Electronic Applications, you must ensure that your mailing address for the account selected for the application is in Singapore, and the application is being made in Singapore and you will be asked to declare accordingly. Otherwise your application is liable to be rejected. Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectus including but not limited to the terms and conditions appearing below and those set out under this Annexure on TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE on pages F-1 to F-21 as well as our Memorandum of Association and Articles of Association.

F-13

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

1. In connection with your Electronic Application, you are required to confirm statements to the following effect in the course of activating your Electronic Application: (a) that you have received a copy of this Prospectus and have read, understood and agreed to all the terms and conditions of application for Public Offer Shares in this Prospectus prior to effecting the Electronic Application and agree to be bound by the same; (b) that you consent to the disclosure of your name, NRIC/passport number, address, nationality, permanent resident status, Securities Account number, CPF Investment Account number (if applicable) and share application amount (the Relevant Particulars) from your account with that Participating Bank to the Share Registrar for the Invitation, CDP, CPF, SCCS, the SGX-ST, our Company and the Issue Manager (the Relevant Parties); and (c) that the Electronic Application made is your only application for Public Offer Shares and it is made in your own name and at your own risk. Your application will not be successfully completed and cannot be recorded as a completed transaction in the ATM or on the IB website unless you press the Enter or OK or Confirm or Yes key or any other relevant key in the ATM (as the case may be) (in the case of ATM Electronic Applications) or click Submit or Continue or Yes or Confirm or any other relevant button on the IB website screen (as the case may be) (in the case of Internet Electronic Applications). By doing so, you shall be treated as signifying your confirmation of each of the three (3) statements. In respect of statement 1(b) above, your confirmation, shall signify and shall be treated as your written permission, given in accordance with the relevant laws of Singapore including Section 47(2) of the Singapore Banking Act (Chapter 19) to the disclosure by that Participating Bank of the Relevant Particulars to the Relevant Parties. 2. You must have sufficient funds in your bank account with your Participating Bank at the time you make your Electronic Application, failing which your Electronic Application will not be completed. Any Electronic Application which does not conform strictly to the instructions set out in this Prospectus or on the screens of the ATMs or the IB websites of the relevant Participating Banks through which the Electronic Application is being made shall be liable to being rejected. By making an Electronic Application, you further confirm that you are not under 18 years of age or (an) undischarged bankrupt, sole-proprietorship, partnership, non-corporate body, joint Securities Account holder and an applicant whose address as stated in the Electronic Application bear a post office box number. You also confirm that you do not possess more than one individual direct Securities Account with CDP. Where your Electronic Application is unsuccessful, the full amount of the application monies will be refunded in Singapore dollars (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with

3.

4.

F-14

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

your Participating Bank within 24 hours of balloting of the applications provided that the application monies have been received in the designated share issue account. Where your Electronic Application is accepted in part only, the the balance of the application monies will be refunded in Singapore dollars (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with your Participating Bank within 14 days after the close of the Invitation provided that the application monies have been received in the designated share issue account. If the completion of the Invitation does not occur for any other reason, monies paid in respect of any application accepted will be returned to you at your own risk (without interest or any share of revenue or other benefit arising therefrom). In the event that the Invitation is cancelled by us following the termination of the Management and Underwriting Agreement and/or the Placement Agreement, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by automatically crediting your account with your Participating Bank at your own risk within five (5) Market Days of the termination of the Invitation. In the event that the Invitation is cancelled by us following the issuance of a Stop Order by the Authority or any competent authority, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by automatically crediting your account with your Participating Bank at your own risk within 14 days from the date of the Stop Order. Responsibility for timely refund of application monies lies solely with the respective Participating Banks. Therefore, you are strongly advised to consult your Participating Bank as to the status of your Electronic Application and/or the refund of any monies to you from an unsuccessful or partially successful Electronic Application, to determine the exact number of Public Offer Shares allotted to you, if any, before trading Public Offer Shares on the SGX-ST. Neither the SGX-ST, CDP, SCCS, the Participating Banks, we nor the Issue Manager, Underwriter and Placement Agent assume any responsibility for any loss that may be incurred as a result of your having to cover any net sell positions or from buy-in procedures activated by the SGX-ST. 5. If your Electronic Application is unsuccessful, no notification will be sent by the Participating Banks. If your Electronic Application is made through an ATM or IB website of one of the following Participating Banks, you may check the provisional results of your Electronic Application as follows:
Bank Telephone ATM/Internet Operating Hours Service Expected from

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Operating Hours 24 hours Service Expected from Evening of the balloting day Evening of the balloting day

Bank OCBC Bank

Telephone 1 800 363 3333

ATM/Internet ATM/Phone Banking/ Internet Banking/ www.ocbc.com(1) Internet Banking www.dbs.com(2)

DBS Bank

1 800 339 6666 (POSB account holders) 1 800 111 1111 (DBS Bank account holders)

24 hours

UOB Group

1 800 222 2121

ATM (Other Transactions IPO Results Enquiry)/ Phone Banking www.uobgroup.com

24 hours

Evening of the balloting day

Notes: (1) If you have made your Electronic Application through the ATMs or IB website of OCBC Bank, you may check the results of your application through OCBC Personal Internet Banking, OCBC Banks ATMs and OCBC Phone Banking Services. (2) If you have made Internet Electronic Applications through the IB website of DBS Bank, you may also check the results of your application through the same channels listed above in relation to ATM Electronic Applications made at the ATMs of DBS Bank.

6.

Electronic Applications shall close at 12.00 noon on 24 April 2012 or such other time and date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide. Subject to the paragraph above, an Internet Electronic Application is deemed to be received only upon its completion, that is, when there is an on-screen confirmation of the application. You are deemed to have requested and authorised us to: (a) register Public Offer Shares allotted to you in the name of the CDP for deposit into your Securities Account; (b) send the relevant share certificate(s) to the CDP by ordinary post, at your own risk; (c) return or refund (without interest or any share of revenue or other benefit arising therefrom) the application monies in Singapore currency, should your Electronic Application be rejected, by automatically crediting your bank account with your Participating Bank with the relevant amount within 24 hours of balloting;

7.

(d) return or refund (without interest or any share of revenue or other benefit arising therefrom) the balance of the application monies in Singapore dollars, should your

F-16

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Electronic Application be accepted in part only, by automatically crediting your bank account with your Participating Bank with the relevant amount within 14 days after the close of the Invitation; (e) return or refund (without interest or any share of revenue or other benefit arising therefrom) the application monies in Singapore dollars should the Invitation be cancelled following the termination of the Management and Underwriting Agreement and/or Placement Agreement, by automatically crediting your bank account with your Participating Bank with the relevant amount within 5 Market Days of the termination of the Invitation; and (f) return or refund (without interest or any share of revenue or other benefit arising therefrom) the application monies in Singapore dollars should the Invitation be cancelled following the issuance of a Stop Order by the Authority or any competent authority, by automatically crediting your bank account with your Participating Bank with the relevant amount within 14 days from the date of the Stop Order.

8.

You irrevocably agree and acknowledge that your Electronic Application is subject to risks of electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God and other events beyond the control of the Participating Banks, our Company, and the Issue Manager, Underwriter and Placement Agent and if, in any such event, we, the Issue Manager, Underwriter and Placement Agent and/or the relevant Participating Bank do not record or receive your Electronic Application, or data relating to your Electronic Application or the tape containing such data is lost, corrupted, destroyed or not otherwise accessible, whether wholly or partially for whatever reason, you shall be deemed not to have made an Electronic Application and you shall have no claim whatsoever against us, the Issue Manager, Underwriter and Placement Agent and/or the relevant Participating Bank for Public Offer Shares applied for or for any compensation, loss or damage. We do not recognise the existence of a trust. Any Electronic Application by a trustee must be made in his own name(s) and without qualification. Our Company will reject any Electronic Application by any person acting as nominee except those made by approved nominee companies only.

9.

10. All particulars in the records of your Participating Bank at the time you make your Electronic Application shall be deemed to be true and correct and your Participating Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your particulars after making your Electronic Application, you shall promptly notify your Participating Bank. 11. You should ensure that your personal particulars as recorded by both CDP and the relevant Participating Bank are correct and identical, otherwise, your Electronic Application is liable to be rejected. You should promptly inform CDP of any change in address, failing which the notification letter on successful allotment and other correspondence from the CDP will be sent to your address last registered with CDP.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

12. In consideration of our Company making available the Electronic Application facility through the ATMs and IB websites of the Participating Banks and agreeing to close the Invitation at 12.00 noon on 24 April 2012 or such other time or date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide, and by making and completing an Electronic Application, you agree that: (a) your Electronic Application is irrevocable; (b) your Electronic Application, the acceptance by our Company, and the contract resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and you irrevocably submit to the nonexclusive jurisdiction of the Singapore courts; (c) neither our Company, the Issue Manager, Underwriter and Placement Agent, the Participating Banks nor CDP shall be liable for any delays, failures or inaccuracies in the recording, storage or in the transmission or delivery of data relating to your Electronic Application to us or CDP due to a breakdown or failure of transmission, delivery or communication facilities or any risks referred to in paragraph 9 above or to any cause beyond their respective controls;

(d) in respect of Public Offer Shares for which your Electronic Application has been successfully completed and not rejected, acceptance of your Electronic Application shall be constituted by allotment of the New Shares not otherwise, notwithstanding any payment received by or on behalf of our Company; (e) you will not be entitled to exercise any remedy of rescission or misrepresentation at any time after acceptance of your application; (f) in making your application, reliance is placed solely on the information contained in the Prospectus and none of our Company, the Issue Manager, Underwriter and Placement Agent or any other person involved in the Invitation shall have any liability for information not so contained; and

(g) you undertake to subscribe for the number of Public Offer Shares applied for as stated in your Electronic Application or any smaller number of such Public Offer Shares that may be alloted to you in respect of your Electronic Application. In the event we decide to allot any smaller number of Public Offer Shares or not to allot any Public Offer Shares to you, you agree to accept such decision as final. D. Steps for Electronic Applications Instructions for Electronic Applications will appear on the ATM screens or IB website screens of the Participating Banks. For illustration purposes, the steps for making an Electronic Application through an OCBC Bank ATM or through the IB website of OCBC are shown below. Certain words appearing on the screen are in abbreviated form (a/c, appln, ESA, no. and & refer to account, application, electronic share application, number and and, respectively). Instructions for Electronic Applications F-18

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

appearing on the ATM screens or IB website screens of the other Participating Banks may differ from those represented below. Steps for ATM Electronic Applications through ATMs of OCBC Bank Step 1 2 3 4 5 6 7 : Insert your personal OCBC ATM card : Enter your Personal Identification Number : Select More Services : Select Investment Services : Select Electronic Share Appln : Select GPH : For an applicant making an Electronic Application at the ATM for the first time (a) For non-Singaporean Press the Yes key if you are a permanent resident of Singapore, otherwise, press the No key. (b) Enter your own Securities Account number (12 digits) e.g. 168101234567 and press Yes key to confirm that the Securities Account number you have entered is correct 8 : Check your particulars appearing on the screen and press the Correct key to confirm that your particulars are correct. : Press the Confirm key to confirm that you have read the following messages: Where applicable, a copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore and/or SGXST, which assumes no responsibility for its contents Where applicable, the Participating Banks Prospectus is available at various

10 : Press the Confirm key again to confirm that you have read the following messages: Anyone who intends to submit an application for these securities should read the Prospectus before submitting his/her application in the manner set out in the Prospectus You have read, understood and agreed to all terms of application set out in the Prospectus F-19

APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

11 : Press the Confirm key again to confirm that you have read the following messages: You consent to the disclosure of your NRIC/Passport No., address, nationality, securities a/c no., qty of securities applied for and CPF investment a/c no. to share registrar, CDP, CPF, SCCS, Issuer & Vendor(s) This application is made in your own name & at your own risk

12 : Select the number of Shares you wish to apply for: For fixed price ESA, this is the only application submitted Price: $0.26

13 : Select the type of bank account to debit your application monies. 14 : Check the details of your application appearing on the screen and press the Confirm key to confirm your application.

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APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

Steps for Internet Electronic Applications through the IB website of OCBC Bank Step 1 2 3 4 5 6 : Connect to OCBC Bank website at http://www.ocbc.com. : Locate the Logon to Internet Banking link on the left hand side. : Select the relevant country Singapore and relevant service Personal Banking from the drop lists and click on GO to proceed. : Enter your Access Code and PIN and click on LOGIN. Thereafter, enter the One-Time password (OTP) and click Submit. : Select the tab Investment & Trading and click on Initial public offering. You will be directed to the Apply for IPO page. : Answer the five questions under the section entitled Fill In Details by selecting Yes or No and selecting the relevant country of residence (you must be residing in Singapore to apply). : Read the important information on Electronic Security Application (ESA) on the screen and click on the check box to acknowledge that you have read and understood the declaration. Click on Confirm on the lower right hand corner. For first-time Electronic Security Application (ESA) applicants, you will be prompted to fill in your CDP Account number. After filling in the CDP Account number, click on Next. 8 : Under section 1. Select Securities, check the details of the share counter that you wish to apply for and if there is more than one share counter on the screen, select the relevant counter by clicking on the appropriate radio button. : Upon selection of the share counter, the prospectus and prospectus terms and conditions will be loaded. Read the important information on the screen and click on the check box at the bottom of the screen to acknowledge that you have read and understood the declaration. Click on Next. 10 : Under section 2. Investment Details, click on the checkbox next to Apply using cash if you are applying for the shares using cash and key in the number of units you intend to apply for. Click on Next. 11 : Under Review Application, check your personal details, details of the share counter you wish to apply for, payment mode and account to debit. Click on Submit. 12 : Print the Confirmation Screen (optional) for your reference and retention only. You can also check the application status by clicking Application Status. F-21

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APPENDIX G TAXATION
Singapore Taxation The following is a discussion of certain tax matters arising under the current tax laws of Singapore and is not intended to be and does not constitute legal or tax advice. While this discussion is considered to be a correct interpretation of existing laws in force as at the date of this Prospectus, no assurance can be given that courts or fiscal authorities responsible for the administration of such laws will agree with this interpretation or that changes in such laws will not occur, changes which could be retrospective in effect. The discussion is limited to a summary of certain tax considerations in Singapore with respect to the subscription, purchase, ownership and disposal of our Shares by investors (either individuals or corporations), and does not purport to be a comprehensive nor exhaustive description of all of the tax considerations that may be relevant to a decision to subscribe to, purchase, own or dispose of the Shares and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities) may be subject to special rules. Prospective investors are advised to consult their tax advisors regarding the overall tax consequences of subscription, purchase, ownership and disposal of our Shares. It is emphasised that neither our Company, our Directors nor any other persons involved in the Invitation accepts responsibility for any tax effects or liabilities resulting from the subscription, purchase, ownership and disposal of our Shares. Income Tax Individual Income Tax Individuals, both resident and non-resident for Singapore tax purposes, subject to certain specific exemptions provided for under the Singapore tax laws, are subject to income tax on income accrued in or derived from Singapore. All foreign-sourced income received in Singapore by individuals, regardless of whether they are tax residents of Singapore or otherwise, are generally exempt from Singapore income tax, except where such income is received through a partnership in Singapore. Certain Singapore-sourced investment income received or deemed received by individuals is also exempt from income tax in Singapore. To be considered a tax resident of Singapore in a year of assessment, the individual has to be physically present in Singapore or exercise an employment in Singapore (other than as a director of a company) for 183 days or more, or reside in Singapore in the year preceding the year of assessment except for such temporary absences that may be reasonable and not inconsistent with his claim to be resident in Singapore. As such, a Singapore citizen is generally considered a tax resident of Singapore.

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APPENDIX G TAXATION
The current rates of tax for a tax resident of Singapore vary according to the individuals chargeable income, ranging from 0% to 20%. A non-resident of Singapore is generally taxed at the 20%, except for employment income which is taxed at the higher of 15% or tax resident rates. Corporate Income Tax Corporates, both resident and non-resident for Singapore tax purposes, subject to certain exemptions, are subject to tax on the following: Income accruing in or derived from Singapore; and Foreign income received or deemed received in Singapore.

Under the tax laws, foreign-sourced service income, foreign-sourced branch profits and foreign-sourced dividend income received by a corporate tax resident in Singapore are exempt from Singapore income tax if the following conditions are all met: (i) Such income was subject to income tax in the foreign jurisdiction from which the said income is received, unless the income is exempted from tax in the foreign jurisdiction as a direct consequence of that foreign jurisdiction granting a tax incentive for carrying out substantive business activities in that jurisdiction; The highest rate of tax in the foreign jurisdiction from which such income is received is at least 15%; and

(ii)

(iii) The IRAS is satisfied that the tax exemption granted is beneficial to the recipient of such income. To be considered a tax resident of Singapore, generally, a corporate must demonstrate that its control and management of the business is carried out in Singapore. The prevailing corporate tax rate in Singapore is currently 17% for the year of assessment 2010. In addition, 75% of up to the first $10,000, and 50% of up to the next $290,000 of a companys chargeable income is exempt from Singapore income tax. Dividend Distributions Singapore adopts the one-tier corporate tax system. Under the one-tier corporate tax system, the Singapore income tax payable on normal chargeable income by Singapore companies, whether tax resident in Singapore or not, would constitute a final Singapore income tax. Dividends payable by Singapore companies on the one-tier corporate tax system would be tax exempt from Singapore income tax in the hands of their shareholders. Such dividends are referred to as tax exempt (one-tier) dividends. Dividend payments made to non-tax residents are not subject to withholding tax in Singapore. Foreign shareholders are advised to consult their own tax advisors in respect of the tax laws of their respective countries of residence and the applicability of any Avoidance of Double Taxation Agreement that their country of residence may have with Singapore.

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APPENDIX G TAXATION
Gain on Disposal of Our Shares Singapore currently does not impose tax on capital gains. However, there are no specific laws or regulations which deal with the characterisation of whether a gain is income or capital in nature. Generally, gains arising from the disposal of our shares are not taxable in Singapore unless the seller is regarded as having derived gains of an income nature in Singapore, in which case, the disposal profits would be taxable as trading income in the hands of the seller. Stamp Duty No stamp duty is payable on the subscription of our Shares. Stamp duty is payable on the instrument of transfer of our Shares at the rate of $0.20 for every $100 or any part thereof, computed on the higher of the consideration of the transfer or market value of our Shares. However, stamp duty is not applicable to electronic transfers of our Shares through the CDP system. The purchaser would be liable for stamp duty, unless otherwise agreed by the relevant parties. No stamp duty is levied if no instrument of transfer is executed or the instrument of transfer is executed outside Singapore. However, stamp duty would be payable if the instrument of transfer which is executed outside Singapore is received in Singapore. Goods and Services Tax (GST) The issue or transfer of ownership of an equity security in Singapore is exempt from GST. Hence, investors would not incur any GST on the subscription of our Shares. Where the investors are GST registered persons, any GST on expenses (e.g. legal fees) incurred in connection with the subscription or acquisition of our Shares is generally not recoverable as input tax credit from the IRAS unless certain conditions are satisfied. The investors should consult their tax consultants on these conditions. The subsequent disposal of our Shares by the investors belonging in Singapore is also exempt from GST. Any GST incurred by a GST-registered investor in the making of this exempt supply is generally not recoverable as input tax credit from the IRAS unless certain conditions are satisfied. Generally, services such as brokerage, handling and clearing charges rendered by a GSTregistered person to an investor belonging in Singapore in connection with the investors purchase and sale of shares will be subject to GST at the prevailing standard-rate of 7%. Similar services rendered to an investor belonging outside Singapore would generally be subject to GST at zero-rate. Estate duty Estate duty has been abolished, as announced by the Singapore Government, with effect from 15 February 2008.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

1. NAME OF THE GLOBAL PREMIUM HOTELS PSP This performance share plan shall be called the Global Premium Hotels Performance Share Plan. 2. 2.1 DEFINITIONS Unless the context otherwise requires, the following words and expressions shall have the following meanings: Act or Companies Act : The Companies Act, Chapter 50 of Singapore, as amended, modified or supplemented from time to time The articles of association of the Company, as amended, modified or supplemented from time to time (a) In relation to any Director, chief executive officer, Substantial Shareholder or Controlling Shareholder (being an individual) means: (i) (ii) his immediate family; the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and

Articles of Association

Associate

(iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more; and (b) In relation to a Substantial Shareholder or a Controlling Shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more Auditors Award : : The auditors of the Company for the time being A contingent award of Shares granted pursuant to the rules of the Global Premium Hotels PSP

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

Award Date : In relation to an Award, the date on which the Award is granted pursuant to the rules of the Global Premium Hotels PSP A letter in such form as the Committee shall approve, confirming an Award granted to a Participant by the Committee The board of Directors of the Company for the time being The Central Depository (Pte) Limited A committee comprising Directors as may be duly authorised and appointed by the Board from time to time to administer the Global Premium Hotels PSP The Singapore Code on Take-overs and Mergers, as amended, modified or supplemented from time to time Global Premium Hotels Limited, a company incorporated in Singapore A person who: (a) holds directly or indirectly 15% or more of the total number of issued Shares excluding Treasury Shares (the SGX-ST may determine that a person who satisfies the above is not a Controlling Shareholder); or (b) in fact exercises control over the Company CPF Directors : : Central Provident Fund The directors of the Company, including alternate directors of the Company (if any), as at the date of this Circular Earnings per Share The financial year ended 31 December The Company and its subsidiaries Any confirmed employee of the Group selected by the Committee to participate in the Global Premium Hotels PSP in accordance with the rules thereof

Award Letter

Board CDP Committee

: : :

Code

Company Controlling Shareholder

: :

EPS FY Group Group Employee

: : : :

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

Group Executive Director : A director of the Company and/or its subsidiaries (excluding Directors who are Controlling Shareholders and Directors who are Associates of Controlling Shareholders), as the case may be, who performs an executive function A director of the Company and/or its subsidiaries (excluding Directors who are Controlling Shareholders and Directors who are Associates of Controlling Shareholders), as the case may be, other than a Group Executive Director but including an Independent Director In relation to a person, means the persons spouse, child, adopted child, step-child, sibling and parent An independent director of the Company who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the directors independent business judgment with the best interests of the Company Shareholders other than Shareholders who are Participants and Shareholders who are Associates of the Participants The Listing Manual of the SGX-ST, as amended, modified or supplemented from time to time A day on which the SGX-ST is open for trading in securities The price equal to the average of the last dealt prices for a Share, as determined by reference to the daily official list or other publication published by the SGX-ST for five (5) consecutive Market Days immediately preceding the Offer Date, rounded up to the nearest whole cent in the event of fractional prices The memorandum of association of the Company, as amended, modified or supplemented from time to time The date on which an offer to grant an Award is made

Group Non-Executive Director

Immediate Family Independent Director

: :

Independent Shareholders Listing Manual Market Day Market Price

: : :

Memorandum

Offer Date

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

Participant : A Group Employee, a Group Executive Director or a Group Non-Executive Director who has been granted an Award pursuant to the Global Premium Hotels PSP The performance period during which Performance Targets shall be satisfied the

Performance Period Performance Target

: :

The performance target prescribed by the Committee to be fulfilled by a Participant for any particular period under the Global Premium Hotels PSP The proposed performance share plan to be adopted by the Company The rules of the Global Premium Hotels PSP, as they may be modified or altered from time to time Singapore Exchange Securities Trading Limited Ordinary shares in the capital of the Company Registered holders of Shares, except where the registered holder is CDP, the term Shareholders shall, in relation to such Shares and where the context admits, mean the Depositors who have Shares entered against their names in the Depository Register A person who has an interest or interests in one or more voting Shares in the Company and the total votes attached to that Share, or those Shares, is not less than 5% of the total votes attached to all the voting Shares of the Company The period of three (3) years (or such other period as the Committee may decide in its sole and absolute discretion) commencing on the Award Date Per centum or percentage

Global Premium Hotels PSP Rules SGX-ST Shares Shareholders

: : : : :

Substantial Shareholder

Vesting Period

% or per cent. 2.2 2.3

The terms Depositor, Depository Register and Depository Agent shall have the meanings ascribed to them respectively by Section 130A of the Companies Act. The term subsidiary and related companies shall have the meaning ascribed to it by Section 5 and Section 6 of the Act respectively.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

2.4 Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter gender and vice versa. References to persons shall include corporations. Any reference in the Global Premium Hotels PSP to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act or any statutory modification thereof and used in the Global Premium Hotels PSP shall, where applicable, have the same meaning assigned to it under the Companies Act. Any reference in the Global Premium Hotels PSP to a time of day shall be a reference to Singapore time. OBJECTIVES OF THE GLOBAL PREMIUM HOTELS PSP The objectives of the Global Premium Hotels PSP are as follows: (a) to motivate the Participants to optimise performance standards and efficiency and to maintain a high level of contribution to the Group; (b) to retain key employees whose contributions are important to the long term growth and prosperity of the Group; (c) to instill loyalty and a stronger sense of identification by the Participants with the long-term prosperity of the Group;

2.5

2.6

3.

(d) to attract potential employees with relevant skills to contribute to the Group and to create value for Shareholders; and (e) to align the interests of the Participants with the interests of Shareholders. 4. 4.1 ELIGIBILITY OF PARTICIPANTS Subject to the absolute discretion of the Committee, the following persons shall be eligible to participate in the Global Premium Hotels PSP: (a) Group Employees; (b) Group Executive Directors; and (c) Group Non-Executive Directors,

provided that, as of the Offer Date, such persons have attained the age of twenty-one (21) years, are not undischarged bankrupts and have not entered into any composition(s) with their respective creditors, and in the case of Group Employees and Group Executive Directors, have been in the employment of the Group for at least twelve (12) months, or such shorter period as the Committee may determine. H-5

APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

Controlling Shareholders and their Associates will not be eligible to participate in the Global Premium Hotels PSP. Mr. Koh Wee Meng, our Non-Executive Director who is also a Controlling Shareholder of our Company, is not eligible to participate in the Global Premium Hotels PSP. 4.2 There shall be no restriction on the eligibility of any Participant to participate in any other share option or share incentive scheme implemented by the Company or any other company within the Group. Subject to the Companies Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted from time to time (if applicable), the terms of eligibility for participation in the Global Premium Hotels PSP may be amended from time to time at the absolute discretion of the Committee. LIMITATIONS UNDER THE GLOBAL PREMIUM HOTELS PSP The aggregate number of Shares for which an Award may be granted on any date under the Global Premium Hotels PSP, when added to the number of Shares issued and/or issuable in respect of: (a) all Awards granted under the Global Premium Hotels PSP; and (b) all Shares, options or awards granted under any other share option or share scheme of the Company then in force, shall not exceed 15% of the total issued Shares of the Company (excluding Treasury Shares) on the day preceding that date. 6. DATE OF GRANT The Committee may grant Awards at any time, provided that in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, Awards may only be vested, and hence any Shares or cash equivalent or both comprised in such Awards may only be delivered, on or after the second Market Day from the date on which the aforesaid announcement is made. 7. 7.1 GRANT OF AWARDS Subject to Rules 4 and 5, the number of Shares or cash equivalent or both which are the subject of each Award to be granted to a Participant under the Global Premium Hotels PSP shall be determined at the absolute discretion of the Committee, which shall take into consideration, where applicable, factors such as the Participants rank, past performance, length of service, contribution to the success and development of the Group, potential for future development of the Participant and the prevailing market and economic conditions.

4.3

5.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

7.2 The Committee shall, in its absolute discretion, determine in relation to an Award: (a) the Award Date; (b) the number of Shares or cash equivalent or both which are the subject of the Award; (c) the Performance Target for the Participant;

(d) the Performance Period for the Participant; (e) the extent to which the prescribed Performance Target has been satisfied (whether fully or partially) or been exceeded, as the case may be, and the extent to which the Shares, which are the subject of that Award, shall be released at the end of the Performance Period on satisfaction of the prescribed Performance Target; (f) the vesting schedule (if any), pursuant to which an Award shall vest at the end of each Performance Period (if there is more than one Performance Period), provided the Performance Target for the period has been achieved;

(g) the Vesting Period; and (h) any other condition which the Committee may decide in relation to that Award. Upon its decision to grant the Award, the Committee shall as soon as practicable send to the Participant an Award Letter confirming such Award and specifying the above. 7.3 An Award is personal to the Participant to whom it is given and shall not be transferred (other than to a Participants personal representative on the death of the Participant), charged, assigned, pledged or otherwise disposed of, unless with the prior approval of the Committee. VESTING OF AWARDS Awards may only be vested, and consequently any Shares or cash equivalent or both comprised in such Awards shall only be delivered, upon the Committee being satisfied at its absolute discretion that the Participant has achieved the Performance Target, performance conditions, service conditions and/or such other conditions such as Vesting Period(s) or vesting schedules applicable for the release of the Award and/or all or any of the Shares or cash equivalent or both to which that Award relates, and/or upon the Committee being satisfied that due recognition should be given for good work performance and/or significant contribution to the Company. Notwithstanding that a Participant may have met his Performance Target, no Awards shall be vested in the event of: (a) the decision of the Committee, in its absolute discretion, to revoke or annul such Award; H-7

8. 8.1

8.2

APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

(b) the cessation of employment of a Participant; (c) the bankruptcy of a Participant;

(d) the misconduct of a Participant; or (e) a take-over, winding-up or reconstruction of the Company. 8.3 In general, upon the cessation of employment of a Participant, an Award then held by such Participant shall immediately lapse without any claim whatsoever against the Company and/or the Group. If the cessation is due to certain specified reasons (for example, ill health, injury, disability, redundancy, retirement or death), the Committee may, in its absolute discretion, preserve all or any part of any Award and decide either to vest some or all of the Award or to preserve all or part of any Award until the end of the relevant Vesting Period. In exercising its discretion, the Committee will have regard to all circumstances on a case-by-case basis, including (but not limited to) the contributions made by that Participant and the extent to which the applicable performance conditions and targets have been satisfied. Upon the occurrence of any of the events specified in Rule 8.2 (a), (b), (c) and (d), an Award then held by a Participant shall immediately lapse without any claim whatsoever against the Company and/or the Group. Upon the occurrence of any of the events specified in Rule 8.2(e), the Committee will consider, at its discretion, whether or not to release any Award, and will take into account all circumstances on a case-by-case basis, including (but not limited to) the contributions made by that Participant. Save as provided and for the avoidance of doubt, the Shares or cash equivalent or both under an Award shall nevertheless be released to a Participant for as long as he has fulfilled his Performance Target and notwithstanding a transfer of his employment within any company in the Group or any apportionment of Performance Target within any company within the Group. If a Participant has fulfilled his Performance Target but dies before the Shares or cash equivalent or both under an Award are released, the Shares or cash equivalent or both under the Award shall in such circumstances be given to the personal representatives of the Participant. TAKE-OVER AND WINDING UP OF THE COMPANY Notwithstanding Rule 8 but subject to Rule 9.5, in the event of a take-over being made for the Shares, a Participant shall be entitled to the Shares or cash equivalent or both under

8.4

8.5

8.6

8.7

8.8

9. 9.1

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

the Awards if he has met the Performance Targets for the corresponding Performance Period. For the avoidance of doubt, the vesting of such Awards will not be affected by the take-over offer. 9.2 If under any applicable laws, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies, each Participant who has fulfilled his Performance Target shall be entitled, notwithstanding the provisions under this Rule 9 but subject to Rule 9.5, to any Shares or cash equivalent or both under the Awards so determined by the Committee to be released to him during the period commencing on the date upon which the compromise or arrangement is sanctioned by the court and ending either on the expiry of sixty (60) days thereafter or the date upon which the compromise or arrangement becomes effective, whichever is later. If an order is made for the winding-up of the Company on the basis of its insolvency, all Awards, notwithstanding that Shares or cash equivalent or both may have not been released to the Participants, shall be deemed or become null and void. In the event of a members voluntary winding-up (other than for amalgamation or reconstruction), the Shares or cash equivalent or both under the Awards shall be released to the Participant for so long as, in the absolute determination by the Committee, the Participant has met the Performance Targets prior to the date on which the members voluntary winding-up is deemed to have commenced or is effective in law. If in connection with the making of a general offer referred to in Rule 9.1 or the scheme referred to in Rule 9.2 or the voluntary winding-up referred to in Rule 9.4, arrangements are made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable) for the compensation of the Participants, whether by the payment of cash or by any other form of benefit, no release of Shares or cash equivalent or both under the Award shall be made in such circumstances. ALLOTMENT AND LISTING OF SHARES

9.3

9.4

9.5

10.

10.1 Subject to such consents or other required action of any competent authority under any regulations or enactments for the time being in force as may be necessary and subject to the compliance with the terms of the Global Premium Hotels PSP and the Memorandum and Articles of Association, the Company shall within one (1) month after the vesting of an Award, allot the relevant Shares and despatch to CDP the relevant share certificates by ordinary post or such other mode as the Committee may deem fit. 10.2 Subject to prevailing legislation and guidelines issued by the SGX-ST, the Company shall, on the Release Date, do any one or more of the following as it deems fit in its sole and absolute discretion: (a) allot and issue the relevant Shares to the Participant, and apply to the SGX-ST, for permission to deal in and for quotation of such Shares; and/or

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

(b) deliver existing Shares to the Participant, whether such existing Shares are acquired pursuant to a share purchase mandate or (to the extent permitted by law) held as Treasury Shares; and/or (c) subject to the prior approval of the Committee and at the Committees absolute discretion, pay the Equivalent Value in Cash (as defined below) (after deduction of any applicable taxes) to the Participant, in lieu of issuing or delivering all or some of the Shares to be issued or delivered to the Participant. The Committee, in exercising such discretion, will consider each Award on a case-by-case basis and will decide, taking into account all and any relevant factors including but not limited to the present shareholdings of the relevant Participant.

For the purpose of this Rule 10.2: Equivalent Value in Cash to be paid to a Participant in lieu of the Shares to be issued or delivered upon vesting of an Award, shall be calculated in accordance with the following formula: A=BxC Where: A is the Equivalent Value in Cash to be paid to the Participant in lieu of all or some of the Shares to be issued or delivered upon the vesting of an Award; B is equal to the average of the last dealt prices for a Share, as determined by reference to the daily official list or other publication published by the SGX-ST for the five (5) Market Days on which there were transactions done for the Shares on the SGX-ST immediately preceding the Release Date; and C is such number of Shares (as determined by the Company in its sole and absolute discretion) in respect of which cash will be paid to a Participant in lieu of Shares to be issued or delivered to the Participant upon the vesting of an Award. 10.3 Shares which are the subject of an Award shall be issued in the name of CDP to the credit of the securities account of that Participant maintained with CDP, the securities subaccount maintained with a Depository Agent or the CPF investment account maintained with a CPF agent bank. 10.4 Shares issued and allotted upon the vesting of an Award shall be subject to all the provisions of the Memorandum and Articles of Association, and shall rank in full for all entitlements, excluding dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date for which falls on or before the relevant vesting date of the Award, and shall in all other respects rank pari passu with other existing Shares then in issue. Record Date means the date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to or rights of holders of Shares.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

10.5 The Company shall keep available sufficient unissued Shares to satisfy the delivery of the Shares pursuant to the vesting of the Awards. 11. VARIATION OF CAPITAL

11.1 If a variation in the issued share capital of the Company (whether by way of a capitalisation of profits or reserves or rights issue or reduction (including any reduction arising by reason of the Company purchasing or acquiring its issued Shares), subdivision, consolidation or distribution, or issues for cash or for shares or otherwise howsoever) shall take place, then: (a) the class and/or number of Shares which are the subject of an Award to the extent not yet vested; and/or (b) the class and/or number of Shares over which future Awards may be granted under the Global Premium Hotels PSP, may, at the option of the Committee, be adjusted in such manner as the Committee may determine to be appropriate. 11.2 Unless the Committee considers an adjustment to be appropriate: (a) the issue of securities as consideration for an acquisition or a private placement of securities; or (b) the cancellation of issued Shares purchased or acquired by the Company by way of a market purchase of such Shares undertaken by the Company on the SGX-ST during the period when a share purchase mandate granted by Shareholders (including any renewal of such mandate) is in force, shall not normally be regarded as a circumstance requiring adjustment. 11.3 Notwithstanding the provisions of Rule 11.1: (a) no such adjustment shall be made if as a result, the Participant receives a benefit that a Shareholder does not receive; and (b) any determination by the Committee as to whether to make any adjustment and if so, the manner in which such adjustment should be made, must (except in relation to a capitalisation issue) be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable. 11.4 Any increase in the issued share capital of the Company as a consequence of the delivery of Shares pursuant to the vesting of Awards from time to time by the Company or through any other share-based incentive schemes implemented by the Company will also not be regarded as a circumstance requiring adjustment.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

11.5 Upon any adjustment required to be made pursuant to this Rule 11, the Company shall notify the Participant (or his duly appointed personal representatives where applicable) in writing and deliver to him (or his duly appointed personal representatives where applicable) a statement setting forth the class and/or number of Shares thereafter to be issued pursuant to the grant of an Award. Any adjustment shall take effect upon such written notification being given. 12. ADMINISTRATION OF THE GLOBAL PREMIUM HOTELS PSP

12.1 The Global Premium Hotels PSP shall be administered by the Committee duly authorised and appointed by the Board, in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of Awards granted or to be granted to him. 12.2 The Committee shall have the power, from time to time, to make and vary such rules (not being inconsistent with the Global Premium Hotels PSP) for the implementation and administration of the Global Premium Hotels PSP as they think fit including, but not limited to: (a) imposing restrictions on the number of Awards that may be vested within each FY; and (b) amending Performance Targets if, by so doing, it would be a fairer measure of performance for a Participant or for the Global Premium Hotels PSP as a whole. 12.3 Any decision of the Committee made pursuant to any provision of the Global Premium Hotels PSP (other than a matter to be certified by the Auditors) shall be final and binding, including but not limited to any decision pertaining to the number of Shares to be vested, or to disputes as to the interpretation of the Global Premium Hotels PSP or any rule, regulation, procedure thereunder or as to any right under the Global Premium Hotels PSP. 13. NOTICES AND DISCLOSURE IN ANNUAL REPORT The following disclosures (as applicable) will be made by the Company in its annual report for so long as the Global Premium Hotels PSP continues in operation: (a) the names of the members of the Committee; (b) in respect of the following Participants: (i) (ii) Participants who are Directors of the Company; and Participants, other than those in (i) above, who have received 5% or more of the total number of Shares available under the Global Premium Hotels PSP;

the following information: H-12

APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

(aa) the name of the Participant; and (bb) the following particulars relating to the Awards released under the Global Premium Hotels PSP: (A) the number of Award Shares issued to such Participant during the FY under review; (B) the number of existing Shares transferred to such Participant during the FY under review; (C) the number of Award Shares issued to such Participant since the commencement of the Global Premium Hotels PSP to the end of the FY under review; and (D) the number of existing Shares transferred to such Participant since the commencement of the Global Premium Hotels PSP to the end of the FY under review. (c) in relation to the Global Premium Hotels PSP the following particulars: (i) the aggregate number of Shares comprised in Awards granted since the commencement of the Global Premium Hotels PSP to the end of the financial year under review; the aggregate number of Shares comprised in Awards which have vested during the financial year under review; and

(ii)

(iii) the aggregate number of Shares comprised in Awards which have not been released as at the end of the financial year under review; and (d) An appropriate negative statement will be included in the annual report in respect of the requirements in Rule 852(1) of the Listing Manual that are not applicable. 14. MODIFICATIONS AND ALTERATIONS OF THE GLOBAL PREMIUM HOTELS PSP

14.1 Any or all the provisions of the Global Premium Hotels PSP may be modified and/or altered at any time and from time to time by resolution of the Committee, except that: (a) any modification or alteration which would be to the advantage of the holders of the Awards shall be subject to the prior approval of Shareholders in a general meeting; and (b) no modification or alteration shall be made without the prior approval of the SGX-ST and such other regulatory authorities as may be necessary. 14.2 However, no modification or alteration shall adversely affect the rights attached to Awards granted prior to such modification or alteration except with the written consent of such number of participants who, if their Awards were released to them, would thereby become entitled to not less than three quarters in number of all the Shares which would be issued or delivered, as the case may be, upon the release in full of all outstanding Awards under the Global Premium Hotels PSP.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

14.3 The Committee may at any time by resolution (and without other formality, save for the prior approval of the SGX-ST) modify or alter the rules or provisions of the Global Premium Hotels PSP in any way to the extent necessary to cause the Global Premium Hotels PSP to comply with any statutory provision or the provision or the regulations of any regulatory or other relevant authority or body (including the SGX-ST). 14.4 Written notice of any modification or alteration made in accordance with this Rule 14 shall be given to all Participants. 15. TERMS OF EMPLOYMENT UNAFFECTED The Global Premium Hotels PSP or any Award shall not form part of any contract of employment between the Company or any subsidiary (as the case may be) and any Participant and the rights and obligations of any individual under the terms of office or employment with such company within the Group shall not be affected by his participation in the Global Premium Hotels PSP or any right which he may have to participate in it or any Award which he may hold and the Global Premium Hotels PSP or any Award shall afford such an individual no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever. 16. DURATION OF THE GLOBAL PREMIUM HOTELS PSP

16.1 The Global Premium Hotels PSP shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten (10) years from the date the Global Premium Hotels PSP is adopted by the Company in a general meeting, provided always that the Global Premium Hotels PSP may continue beyond the above stipulated period with the approval of Shareholders by ordinary resolution in a general meeting and of any relevant authority which may then be required. 16.2 The termination of the Global Premium Hotels PSP shall not affect (including potential vesting) any Award(s) which have been made to the Participants. 16.3 The Global Premium Hotels PSP may be terminated at any time by the Committee or by resolution of the Company in a general meeting subject to all relevant approvals which may be required and if the Global Premium Hotels PSP is so terminated, no further Awards shall be made by the Company thereunder. 17. TAXES All taxes (including income tax) arising from the grant and/or disposal of Shares pursuant to the Awards granted to any Participant under the Global Premium Hotels PSP shall be borne by that Participant.

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APPENDIX H RULES OF THE GLOBAL PREMIUM HOTELS PERFORMANCE SHARE PLAN

18. COSTS AND EXPENSES

18.1 Each Participant shall be responsible for all fees of CDP (if any) relating to or in connection with the issue and allotment of any Shares pursuant to the Awards in CDPs name, the deposit of share certificate(s) with CDP, the Participants securities account with CDP, or the Participants securities sub-account with a CDP Depository Agent or CPF investment account with a CPF agent bank and all taxes referred to in Rule 17 which shall be payable by the relevant Participant. 18.2 Save for the taxes referred to in Rule 17 and such other costs and expenses expressly provided in the Global Premium Hotels PSP to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the Global Premium Hotels PSP including but not limited to the fees, costs and expenses relating to the allotment, issue and/or delivery of Shares pursuant to the Awards shall be borne by the Company. 19. DISCLAIMER OF LIABILITY Notwithstanding any provision herein contained, the Board, the Committee and the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, including but not limited to the Companys delay in issuing the Shares or applying for or procuring the listing of the Shares on the SGX-ST in accordance with Rule 10.2. 20. DISPUTES Any dispute or differences of any nature arising hereunder shall be referred to the Committee and its decision shall be final and binding in all respects. 21. CONDITION OF AWARDS Every Award shall be subject to the condition that no Shares would be issued pursuant to the vesting of any Award(s) if such issue would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore or any other relevant country having jurisdiction in relation to the issue of Shares hereto. 22. ABSTENTION FROM VOTING Shareholders who are eligible to participate in the Global Premium Hotels PSP shall abstain from voting on any resolution(s) relating to the Global Premium Hotels PSP. 23. GOVERNING LAW The Global Premium Hotels PSP shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting Awards in accordance with the Global Premium Hotels PSP, and the Company irrevocably submit to the exclusive jurisdiction of the courts of the Republic of Singapore. H-15

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APPENDIX I VALUERS REPORT

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VALUATION CERTIFICATE
Address of Property : THE FRAGRANCE HOTEL 219 Joo Chiat Road Singapore 427485 2011/210(A) Lot 9276L Mukim 26 Freehold Fragrance Ventures Pte Ltd The subject property comprises accommodating 90 guest rooms. a 4-storey hotel with attic

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

It is located on the north-eastern side of Joo Chiat Road, between Joo Chiat Place and Koon Seng Road, and approximately 8.5 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 672.1 sqm or thereabouts Approximately 2,104.5 sqm (as provided and subject to final survey) Circa 2001 & 2009 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$27,000,000/(Singapore Dollars Twenty-Seven Million Only)

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DA/CN/ct This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - EMERALD 20 Lorong 6 Geylang Singapore 399174 2011/210 (B) Lot 5535M Mukim 25 Freehold Fragrance Capital Pte Ltd The subject property comprises a 8-storey hotel with 126 guest rooms. It is located on the western side of Lorong 6 Geylang, off Geylang Road, and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 817.5 sqm or thereabouts Approximately 2,676.7 sqm (as provided and subject to final survey) Circa 1998 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$36,540,000/(Singapore Dollars Thirty-Six Million Five Hundred And Forty Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - SAPPHIRE 3 Lorong 10 Geylang Singapore 399037 2011/210 (C) Lot 4997W Mukim 25 Freehold Fragrance Capital Pte Ltd The subject property comprises a 7-storey hotel with 50 guest rooms. It is located on the eastern side of Lorong 10 Geylang, between its junction with Talma Road and Geylang Road, and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 528.1 sqm or thereabouts Approximately 1,524 sqm (as provided and subject to final survey) Circa 1996 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$16,900,000/(Singapore Dollars Sixteen Million And Nine Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - PEARL 21 Lorong 14 Geylang Singapore 398961 2011/210 (D) Lot 6181X Mukim 25 Freehold Fragrance Capital Pte Ltd The subject property comprises an 8-storey hotel with 129 guest rooms. It is located on the eastern side of Lorong 14 Geylang, off Geylang Road, near to its junction with Talma Road and approximately 5.5 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 843.1 sqm or thereabouts Approximately 2,582 sqm (as provided and subject to final survey) Circa 2001 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$37,410,000/(Singapore Dollars Thirty-Seven Million Four Hundred And Ten Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - CRYSTAL 50 Lorong 18 Geylang Singapore 398824 2011/210 (E) Lot 5438K Mukim 25 Freehold Fragrance Capital Pte Ltd The subject property comprises a part 4-/ part 8-storey hotel with 125 guest rooms. It is located on the western side of Lorong 18 Geylang, between its junction with Westerhout Road and Guillemard Road, and approximately 5.5 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 1,051.1 sqm or thereabouts Approximately 3,360.3 sqm (as provided and subject to final survey) Circa 2002 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$36,250,000/(Singapore Dollars Thirty-Six Million Two Hundred And Fifty Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - RUBY 10 Lorong 20 Geylang Singapore 398730 2011/210 (F) Lot 5450W Mukim 25 Freehold Fragrance Investment Pte Ltd The subject property comprises an 8-storey hotel with 168 guest rooms. It is located on the western side of Lorong 20 Geylang, near to its junction with Geylang Road, and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 902.1 sqm or thereabouts Approximately 2,918.6 sqm (as provided and subject to final survey) Circa 1997 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$48,720,000/(Singapore Dollars Forty-Eight Million Seven Hundred And Twenty Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - SUNFLOWER 10 Lorong 10 Geylang Singapore 399043 2011/210 (G) Lot 5603N Mukim 25 Freehold Fragrance Capital Pte Ltd The subject property comprises a 4-storey hotel with 27 guest rooms. It is located on the western side of Lorong 10 Geylang, off Geylang Road, and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 322.8 sqm or thereabouts Approximately 733 sqm (as provided and subject to final survey) Circa 2005 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$8,370,000/(Singapore Dollars Eight Million Three Hundred And Seventy Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

TT/CN/ha This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL- LAVENDER 51 Lavender Street Singapore 338710 2011/210(H) Lots 2667L & 2668C Town Subdivision 17 Freehold Fragrance Capital Pte Ltd The subject property is a 6-storey budget hotel with 35 guest rooms It is located on the western side of Lavender Street at its junction with Penhas Road, off Lavender Street, and approximately 4 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 219.9 sqm or thereabouts Approximately 658 sqm (as provided and subject to final survey) Circa 2007 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$17,500,000/(Singapore Dollars Seventeen Million And Five Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

JL/CN/tc This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL- IMPERIAL 28 Penhas Road Singapore 208187 2011/210(I) Lot 2657V Town Subdivision 17 Freehold Fragrance Capital Pte Ltd The subject property is a 4-storey hotel with 74 guest rooms comprising a cafe and a shop on the 1st storey. It is located on the north-western side of Penhas Road, off Kallang Road/ Lavender Street, and approximately 4 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 544 sqm or thereabouts Approximately 1,714.2 sqm (as provided and subject to final survey) Circa 2007 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$37,000,000/(Singapore Dollars Thirty-Seven Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

JL/CN/tc This valuation certificate is subject to the attached Limiting Conditions

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VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - BALESTIER 255 Balestier Road Singapore 329710 2011/210(J) Lot 914T Town Subdivision 29 Freehold Fragrance Capital Pte Ltd The subject property comprises accommodating 48 guest rooms. a 4-storey hotel with attic,

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

It is located on the western side of Balestier Road, near to its junction with Ava Road, and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 244.6 sqm or thereabouts Approximately 890 sqm (as provided and subject to final survey) Circa 2003 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$23,000,000/(Singapore Dollars Twenty-Three Million Only)

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DA/CN/ct This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - ROSE 263 Balestier Road Singapore 329715 2011/210(K) Lot 919L Town Subdivision 29 Freehold Fragrance Capital Pte Ltd The subject property comprises a part 2/part 6-storey hotel with 68 guest rooms. It is located on the western side of Balestier Road, near to its junction with Ava Road and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 399.9 sqm or thereabouts Approximately 1,179.2 sqm (as extracted from floor plans prepared by Architects Associates) Circa 2005 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$31,300,000/(Singapore Dollars Thirty-One Million And Three Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DA/CN/ct This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - OASIS 435 Balestier Road Singapore 329816 2011/210(L) Lot 975P Town Subdivision 29 Estate In Fee Simple Fragrance Capital Pte Ltd The subject property comprises a part 2-/part 6-storey hotel with 36 guest rooms. It is located on the south-western side of Balestier Road, between Shan Road and Prome Road, and approximately 6.5 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 229.3 sqm or thereabouts Approximately 687.4 sqm (as extracted from H.U.A.Y Architects drawings) Circa 2007 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$15,000,000/(Singapore Dollars Fifteen Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DA/CN/ct This valuation certificate is subject to the attached Limiting Conditions

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VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - CLASSIC 418 Balestier Road Singapore 329808 2011/210(M) Lot 9245N Mukim 17 Freehold Fragrance Capital Pte Ltd The subject property comprises a part 2/part 6-storey hotel with 48 guest rooms and a convenience store. It is located on the north-eastern side of Balestier Road, between Boon Teck Road and Jalan Kemaman, and approximately 6.5 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 265.2 sqm or thereabouts Approximately 840.9 sqm (as provided and subject to final survey) Circa 2004 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$23,800,000/(Singapore Dollars Twenty-Three Million And Eight Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DA/CN/ct This valuation certificate is subject to the attached Limiting Conditions

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VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - SELEGIE 183 Selegie Road Singapore 188329 2011/210(N) Lot 666P Town Subdivision 19 Freehold Fragrance Capital Pte Ltd Subject property is a part 2-/part 10-storey hotel with rear extension comprising a total of 120 guest rooms. There are 4 shops on the 1st storey and a caf on the 2nd storey. A roof top swimming pool is located on the 10th storey. It is located on the western side of Selegie Road, near its junction with Mackenzie Road, and approximately 3 km from the City Centre. The Little India MRT Station is just a few minutes walk away. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 468.3 sqm or thereabouts Approximately 2,128.1 sqm (as provided and subject to final survey) Circa 2005 Good As Is Basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$60,000,000/(Singapore Dollars Sixty Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

CN/CYC/ct This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - BUGIS 33 Middle Road Singapore 188942 2011/210(O) Lot 533N Town Subdivision 11 Leasehold 999 years commencing from 30 January 1835 Fragrance Ventures Pte Ltd Subject property is a 5-storey hotel with 80 guest rooms comprising a shop and a restaurant on the 1st storey. It is located on the south-western side of Middle Road, between Beach Road and North Bridge Road, and approximately 2.5 km from the City Centre. The Bugis MRT Station is just a few minutes walk away. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 348.3 sqm or thereabouts Approximately 1,575 sqm (as provided and subject to final survey) Circa 2010 Good As Is Basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$44,000,000/(Singapore Dollars Forty-Four Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

CN/CYC/ct This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - VIVA 75 Wishart Road Singapore 098721 2011/210 (P) Lot 3680C Mukim 1 Freehold Fragrance Ventures Pte Ltd Subject property is a 2-storey with attic budget hotel comprising 33 guest rooms located at the foot of Mount Faber Park. It is sited at the south-western junction of Wishart Road and Morse Road, off Telok Blangah Road and approximately 6 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 300.1 sqm or thereabouts Approximately 668 sqm (as provided and subject to final survey) Circa 2007 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$20,000,000/(Singapore Dollars Twenty Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DN/CN/ds This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL- KOVAN 760 Upper Serangoon Road Singapore 534629 2011/210(Q) Lots 99873K & 99874N Mukim 22 Freehold Fragrance Capital Pte Ltd The subject property is a 4-storey hotel with 43 guest rooms and a shop on the 1st storey. It is located on the south-eastern side of Upper Serangoon Road, near its junction with Kampong Sireh and approximately 10 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 284.2 sqm or thereabouts Approximately 850.2 sqm (as provided and subject to final survey) Circa 2006 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$20,000,000/(Singapore Dollars Twenty Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

JL/CN/tc This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE Address of Property : FRAGRANCE HOTEL - WATERFRONT 418 Pasir Panjang Road Singapore 118759 2011/210 (R) Lot 4580V Mukim 3 Freehold Fragrance Ventures Pte Ltd Subject property is a 4-storey with attic budget hotel comprising 57 guest rooms and a shop on the 1st storey. It is located on the north-eastern side of Pasir Panjang Road, near its junction with Clementi Road, and approximately 11 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 477.7 sqm or thereabouts Approximately 1,024.1 sqm (as provided and subject to final survey) Circa 2008 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$33,000,000/(Singapore Dollars Thirty-Three Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DN/CN/ds This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - OCEAN VIEW 432 Pasir Panjang Road Singapore 118773 2011/210 (S) Lot 4664M Mukim 3 Freehold Fragrance Ventures Pte Ltd Subject property is a 4-storey with attic budget hotel comprising 47 guest rooms located on the north-eastern side of Pasir Panjang Road, near its junction with Clementi Road, and approximately 11 km from the City Centre. 255.5 sqm or thereabouts Approximately 875.0 sqm (as provided and subject to final survey) Circa 2008 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$26,800,000/(Singapore Dollars Twenty-Six Million And Eight Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value

: : : : : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DN/CN/ds This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - ROYAL 400 Telok Blangah Road Singapore 098838 2011/210 (T) Lot 3865K Mukim 1 Freehold Fragrance Ventures Pte Ltd Subject property is a 3-storey with attic budget hotel comprising 32 guest rooms, comprising a shop on the 1st storey. It is situated on the north-western side of Morse Road, off Telok Blangah Road and approximately 6 km from the City Centre. Site Area Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 278.2 sqm or thereabouts Approximately 656.3 sqm (as provided and subject to final survey) Circa 2009 Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$18,400,000/(Singapore Dollars Eighteen Million And Four Hundred Thousand Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

DN/CN/ds This valuation certificate is subject to the attached Limiting Conditions.

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : PARC SOVEREIGN HOTEL 175 Albert Street Singapore 189970 2011/210(U) Lot 1004W Town Subdivision 12 Leasehold interest for 99-years commencing from 14 September 2009 Fragrance Assets Pte Ltd Subject property is a newly completed 10-storey hotel with 170 guest rooms comprising a restaurant and a shop on the 1st storey, carpark on the 2nd and 3rd storeys, and swimming pool, gymnasium and sauna on the 4th storey. It is located on the north-western side of Short Street, at its junction with Albert Street, off Selegie Road/ Rochor Road, and approximately 3 km from the City Centre. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 1,164.6 sqm or thereabouts, subject to governments re-survey Approximately 4,074.8 sqm (as extracted from H.U.A.Y Architects drawings provided, subject to final survey) Temporary Occupation Permit was issued in January 2011. Good As-Is basis, subject to vacant possession and free from all encumbrances Direct Comparison Method/ Investment Method 31 October 2011 S$108,000,000/(Singapore Dollars One Hundred And Eight Million Only)

Our Reference Legal Description Tenure Registered Owner Brief Description

: : : : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

CN/CYC/ct This valuation certificate is subject to the attached Limiting Conditions

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APPENDIX I VALUERS REPORT

VALUATION CERTIFICATE
Address of Property : FRAGRANCE HOTEL - RIVERSIDE 20 Hong Kong Street Singapore 059663 2011/210(V) Lots 99797C, 99803K and 99799W Town Subdivision 7 Leasehold interest for 99-years commencing from 1 May 1951 (No. 20), 26 November 1928 (No. 21), and 7 October 1929 (No. 22) We understand that a fresh 99-year lease will be issued soon. Registered Owner Brief Description : : Fragrance Ventures Pte Ltd Subject property is a proposed part 4-/ part 6-storey hotel with 101 guest rooms comprising a restaurant and a shop on the 1st storey. Mechanical carpark system and swimming pool will be provided. It is located on the northern side of Hong Kong Street, near New Bridge Road junction, and approximately 2 km from the City Centre. The Clarke Quay MRT Station is just a few minutes walk away. Site Area Gross Floor Area Year of Completion Condition Basis of Valuation Methods of Valuation Date of Valuation Market Value : : : : : : : : 513.3 sqm or thereabouts, subject to governments re-survey Approximately 2,155.9 sqm (as provided and subject to final survey) Temporary Occupation Permit is expected to issue by November 2011. At its final stage of construction Upon completion basis, subject to vacant possession and free from all encumbrances, and payment of differential premium Direct Comparison Method/ Investment Method 31 October 2011 S$58,600,000/(Singapore Dollars Fifty-Eight Million And Six Hundred Thousand Only)
Subject To Satisfactory Completion And Issuance Of Temporary Occupation Permit And Certificate Of Statutory Completion

Our Reference Legal Description Tenure

: : :

Colliers International Consultancy & Valuation (Singapore) Pte Ltd

CN/CYC/ct This valuation certificate is subject to the attached Limiting Conditions

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GLOBAL PREMIUM HOTELS LIMITED

168 Changi Road #04-01 Fragrance Building Singapore 419730 Tel: +65 6348 7888 Fax: +65 6345 5951