MORT.L Regulatory News (MORT)

Mortice Limited

("Mortice" or the "Company")

Proposed Cancellation of Admission to Trading on AIM

Proposed Share Buyback

and

Publication of Circular and Notice of Extraordinary General Meeting

Mortice Limited (AIM: MORT), announces that, having carefully considered whether Mortice should remain a quoted company, the Board has concluded that the cancellation of admission of its ordinary shares of nil par value ("Ordinary Shares") to trading on AIM ("Cancellation") is in the best interests of the Company and its Shareholders as a whole.

The Company will therefore seek Shareholders' approval for the Cancellation at an Extraordinary General Meeting of the Company ("EGM"). An explanatory circular will be posted to Shareholders today (the "Circular") setting out the background to and reasons for the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the resolution to approve the Cancellation ("Resolution 1").

The EGM has been convened for 5.30 p.m. (Singapore Time) / 10.30.a.m. (UK Time) on 7 August 2019 at the Company's Registered office, 38 Beach Road, #29-11 South Beach Tower 189767, Singapore. Cancellation is conditional upon Resolution 1 becoming effective by way of approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the EGM.

If Resolution 1 is passed at the EGM, the expected last day of dealings in Ordinary Shares on AIM will be 23 August 2019 and the Cancellation will become effective at 7.00 a.m. (UK Time) on 27 August 2019.

Pursuant to Rule 41 of the AIM Rules, the Company, through its Nominated Adviser, finnCap, has notified the London Stock Exchange of the proposed Cancellation.

Exit Facility

The Board is aware that Shareholders may be either unable to hold unquoted shares or are unwilling to continue to hold such shares with the reduced level of marketability that is likely to ensue following Cancellation. Therefore, if the Resolutions are passed at the EGM, on the 7 August 2019, the Company will place an order with finnCap Ltd, the Company's broker, to purchase in the market any Ordinary Shares offered for sale at a price of 12 pence per Ordinary Share ("Share Buy-Back Price") from 8 August 2019 to 21 August 2019 ("Exit Facility").

The Share Buy Back Price represents a premium of 9.1% over the closing mid market price on the 12 July 2019, the last practicable date before the release of this announcement. The Exit Facility will enable such Shareholders to sell their shares immediately following the EGM and ahead of Cancellation. The Exit Facility is conditional on the approval by Shareholders of Resolution 1, the Cancellation, and subject to the passing of resolution 2 at the EGM authorising the Directors to implement the Exit Facility by way of a share buy-back.

The Major Shareholder and the Directors, who collectively hold, in total, 78.68 per cent of the Ordinary Shares, have undertaken to and agreed with the Company that they shall not participate in the Share Buy-Back and acknowledge that the Company will not be purchasing any Ordinary Shares held by them, and that they will not sell, transfer or otherwise dispose of their Ordinary Shares until after the expiry of the Share Buy-Back Mandate.

The above summary should be read in conjunction with the full text of this announcement and Circular. Extracts of the Circular, which sets out the background to and reasons for the Company seeking Cancellation are set out below and a copy of the Circular will shortly be available on the Company's website:

https://tenonworld.com/mortice/about-us/documents/

A notice convening the Extraordinary General Meeting is set out in the Circular to be sent to Shareholders today.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

1. Introduction

1.1 As announced by the Company today, the Directors have concluded that it is in the best interests of the Company and its Shareholders to cancel the admission of the Ordinary Shares to trading on AIM. Pursuant to Rule 41 of the AIM Rules, the Company (through its nominated adviser, finnCap Ltd) has notified the London Stock Exchange of the date of the proposed Cancellation.

1.2 The Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than seventy-five per cent (75%) of the votes cast by Shareholders (whether present in person or by proxy) at the Extraordinary General Meeting, notice of which is set out in Part II of the Circular.

1.3 In connection with the proposed Cancellation, the Company also wishes to put in place the Exit Facility to enable the Shareholders who are either unable to hold unquoted shares or unwilling to continue holding such shares to sell their Ordinary Shares immediately following the Extraordinary General Meeting.

1.4 Due to the limited number of existing Shareholders and the illiquidity of the Ordinary Shares prior to Cancellation the Company will not maintain the Depositary Interest facility following Cancellation and the Depositary Interests facility will be cancelled. Depositary Interest holders will receive a share certificate for their cancelled Depositary Interest holding. Shareholders will be able to continue to trade their Ordinary Shares in certificated form.

1.5 The Company is therefore seeking Shareholders' approval of the Cancellation and the Exit Facility at the Extraordinary General Meeting, which has been convened for 5:30 p.m. (Singapore Time) on 7 August 2019 at 38 Beach Road, #29-11 South Beach Tower 189767, Singapore. If Resolution 1 is passed at the Extraordinary General Meeting, it is anticipated that the Cancellation will become effective at 7.00 a.m. on 27 August 2019.

1.6 The purpose of the Circular is to seek Shareholders' approval for the Resolutions, to provide you with the information on the background and reasons for Cancellation and the Exit Facility and to explain the consequences of the Cancellation and the Exit Facility and why the Directors unanimously consider the Cancellation and the Exit Facility to be in the best interests of the Company and its Shareholders as a whole.

1.7 The Notice of the Extraordinary General Meeting is set out in Part II of the Circular.

2. Background and reasons for Cancellation

2.1 The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders in retaining its quotation on AIM, and believe that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors:

· the considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, disproportionate to the benefits to the Company;

· the Directors and the Major Shareholder hold, in total, 78.68% of the Company's current issued share capital, resulting in a limited free float and liquidity in the Ordinary Shares with the consequence that the AIM listing of the Ordinary Shares does not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency within an active market;

· despite attempts to broaden the liquidity in the Company's Ordinary Shares, including through a placing of Ordinary Shares in 2016, success in this regard has been limited;

· during the last twelve months, the price of the Company's Ordinary Shares has substantially fallen, which the Board believes has led to a significant undervaluation of the Company's Ordinary Shares by the public market;

· the Company remains acquisitive and has certain obligations due to vendors from previous acquisitions made by the Company and, as such, may require a significant injection of capital to finance these. It is the Directors' view that, given the price of the Company's Ordinary Shares, the continued admission to AIM is unlikely to provide the Company with access to equity capital, if required, at a price that would be in the interest of the Company or its Shareholder and that funding at a fair value could be secured more easily if it is no longer admitted to AIM; and

· due to the Company's limited liquidity in its shares and modest market capitalisation, continuing admission to trading on AIM no longer enables the Ordinary Shares to be used to effect acquisitions.

2.2 Following careful consideration, the Directors believe that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity.

3. Process for, and principal effects of, the Cancellation

3.1 The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective and in deciding whether to sell their Ordinary Shares through the Exit Facility.

3.2 Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of Resolution 1. If Resolution 1 is passed at the Extraordinary General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be 23 August 2019 and that the Cancellation will take effect at 7.00 a.m. on 27 August 2019.

3.3 The principal effects of the Cancellation will be that:

· there will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares.

· while the Ordinary Shares will remain freely transferrable, it is possible that the liquidity and marketability of the Ordinary

 Shares will, in the future, be even more constrained than at present and the value of such shares may be adversely affected as a consequence;

· in the absence of a formal market and quote, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

· the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

· Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events and the requirement that the Company seek shareholder approval for certain corporate actions, where applicable, including substantial transactions, financing transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals;

· the levels of transparency and corporate governance within the Company may not be as stringent as for a company quoted on AIM;

· the Company will cease to have an independent nominated adviser and broker; and

· the Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

3.4 The Company will remain registered with the Accounting and Corporate Regulatory Authority of Singapore in accordance with and subject to the Companies Act, notwithstanding the Cancellation. 

3.5 The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

3.6 The Company currently intends that it will continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. The Company will:

· continue to hold annual general meetings; and

· continue, for at least 12 months following the Cancellation, to maintain its website, https://tenonworld.com/mortice and to post updates on the website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules.

3.7 In addition, the Company confirms that there is currently no intention to change the existing Directors following the Cancellation.

4. Exit Facility - Proposed Share Buy-Back

4.1 The Board is aware that Shareholders may be either unable to hold unquoted shares or are unwilling to continue to hold such shares with the reduced level of marketability that is likely to ensue following Cancellation. Therefore, the Exit Facility is being put in place to enable such Shareholders to sell their Ordinary Shares immediately following the Extraordinary General Meeting.

4.2 The Exit Facility is by way of the Company buying back up to a maximum 15.22% of total issued and paid-up the Ordinary Shares as at the date of the last Annual General Meeting of the Company held on 24 September 2018, subject to the passing of the Resolutions.

4.3 The Cancellation is not conditional on any minimum number of Ordinary Shares being purchased or acquired by the Company pursuant to the Share Buy-Back Mandate. In the event that the Cancellation is not approved by the requisite majority of Shareholders at the Extraordinary General Meeting, the Share Buy-Back Mandate shall automatically lapse.

4.4 All Shareholders, save those detailed in 4.7 below, who wish to sell their Ordinary Shares in the market at the Share Buy-Back Price will therefore have the opportunity to do so. Shareholders should consult with their own independent financial adviser and/or broker should they wish to consider selling their interests in the market prior to the Cancellation becoming effective, as it will be necessary to instruct a broker to place an order in the market for the sale of the relevant shares.

4.5 Rationale for the Share Buy-Back Mandate

The rationale for the adoption of the Share Buy-Back Mandate is to allow the Company to purchase Ordinary Shares held by those Shareholders who do not wish to remain as Shareholders in view of the Cancellation.

4.6 Authority and Limits of the Share Buy-Back Mandate

The authority and limits on the purchases of Ordinary Shares by the Company under the Share Buy-Back Mandate, for which the approval is sought, are as follows;

(a) Maximum Number of Shares

As at the date of the last Annual General Meeting (the "AGM") held on 24 September 2018, the total number of issued Ordinary Shares in the share capital of the Company was 53,417,440. The total number of Ordinary Shares which may be purchased by the Company is limited to the number of Ordinary Shares representing not more than 20% of the issued Ordinary Shares as at the date of the last AGM.

At an extraordinary general meeting held on 24 September 2018 (the "September EGM"), approval was obtained from Shareholders for the Company to purchase 1,094,400 issued Ordinary Shares from Grae Mcintosh Scott (627,640 Ordinary Shares) and Jonathan Smith (466,760 Ordinary Shares) by way of a share buy-back mandate in accordance with the terms of the sale and purchase agreement and the share buy-back mandate.

The Company, on 1 November 2018, announced the buy-back of 1,094,400 Ordinary Shares comprising 2.05% of the issued share capital as at the date of the last AGM.

At an extraordinary general meeting held on 17 May 2019 (the "May EGM"), approval was obtained from Shareholders for the Company to purchase 1,458,333 issued Ordinary Shares from Gerard Peter McGrath (875,000 Ordinary Shares) and Kathleen Theresa Bernadette McGrath (583,333 Ordinary Shares) by way of a share buy-back mandate in accordance with the terms of the sale and purchase agreement and the share buy-back mandate.

The Company, on 8 July 2019, announced the buy-back of 1,458,333 Ordinary Shares comprising 2.73% of the issued share capital as at the date of the last AGM.

The total number of Ordinary Shares which may be purchased by the Company pursuant to the Share Buy Back Mandate is therefore limited to 15.22% of the issued share capital as at the date of the last AGM, representing a maximum number of 8,130,755 Ordinary Shares.

(b) Duration of Authority

Pursuant to the proposed Share Buy-Back Mandate, the Company may buy back Ordinary Shares at any time and from time to time on and from the day after the forthcoming Extraordinary General Meeting up to the earliest of:

(i) The date on which the next Annual General Meeting of the Company is held or required by law to be held;

(ii) The date on which the authority conferred by the Share Buy-Back Mandate is revoked or varied by the Shareholders in a general meeting;

(iii) The date falling two (2) weeks from the date the Share Buy-Back Mandate is approved by the Shareholders; and

(iv) The date on which the Share Buy-Back is fulfilled up to the full extent of the Share Buy-Back Mandate.

(c) Maximum Price to be paid for the Ordinary Shares

The purchase price (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) to be paid for each Ordinary Share will be the Share Buy-Back Price.

(d) Manner of Share Buy-Back

In this instance, if the Resolutions are passed at the EGM, on the 7 August 2019, the Company will place an order with finnCap Ltd, the Company's broker, to purchase in the market any Ordinary Shares offered for sale at a price of 12 pence per Ordinary Share from 8 August 2019 to 21 August 2019.

(e) Source of Funds

Under the Companies Act, any purchase of shares pursuant to the Share Buy-Back Mandate may be made out of the Company's capital and/or distributable profits that are available for payment as dividends. In addition, the Companies Act permits the Company to purchase its own shares out of capital, as well as from its distributable profits, so long as the Company is solvent.

The Company may use internal sources of funds (comprising cash, liquidation of investments and fixed deposits) or borrowings or a combination of both to finance the purchases of its Ordinary Shares.

Where the consideration paid by the Company for the Share Buy-Back is made out of profits, such consideration will correspondingly reduce the amount of profits available for the distribution of cash dividends by the Company. However, where the consideration paid by the Company for the Share Buy-Back is made out of capital, the amount of profits available for the distribution of cash dividends by the Company will not be reduced.

4.7 Shareholders Undertakings

The Major Shareholder and the Directors, who collectively hold, in total, 78.68 per cent of the Ordinary Shares, have undertaken to and agreed with the Company that, among others, they shall not participate in the Share Buy-Back and acknowledge that the Company will not be purchasing any Ordinary Shares held by them, and that they will not sell, transfer or otherwise dispose of their Ordinary Shares until after the expiry of the Share Buy-Back Mandate.

Such undertakings shall lapse upon the earlier of the expiry of the Share Buy-Back Mandate or the termination of the Cancellation (for whatever reason, including failure to obtain Shareholders' approval).

4.8 Right of Compulsory Acquisition

The Cancellation will not result in any right of compulsory acquisition or squeeze-out of any minority Shareholders.

4.9 Intention to Privatise

While the Cancellation is not a privatization exercise, it is the intention of the Company, following the Cancellation, to take necessary steps to privatize the Company (including, without limitation, the amendment of the Constitution of the Company to be commensurate with its status as a private limited company, and reducing the number of Shareholders to not more than 50).

4.10 Status of purchased Ordinary Shares

(a) Any Ordinary Share which is purchased or acquired by the Company under the Share Buy-Back Mandate shall be treated as cancelled immediately on purchase, and all rights and privileges attached to that Ordinary Share will expire upon cancellation.

(b) All Ordinary Shares purchased by the Company (other than treasury shares held by the Company to the extent permitted under the Companies Act) will be automatically cancelled following settlement of any such purchase or acquisition.

4.11 Takeover Obligations pursuant to the Takeover Code

Appendix 2 to the Takeover Code contains the Share Buy-Back Guidance Note applicable as at the Latest Practicable Date. The take-over implications arising from any purchase or acquisition by the Company of its Ordinary Shares are set out below:

(a) Obligation to Make a Takeover Offer

If, as a result of any purchase or acquisition by the Company of its Ordinary Shares, the percentage voting rights held by a Shareholder and persons acting in concert with him increases, such increase will be treated as an acquisition for the purposes of Rule 14 of the Takeover Code. If such increase results in a change of effective control, or, as a result of such increase, a Shareholder or group of Shareholders acting in concert obtains or consolidates effective control of the Company, such Shareholder or group of Shareholders acting in concert could become obliged to make a mandatory take-over offer for the Company under Rule 14 of the Takeover Code.

(b) Persons Acting in Concert

Under the Takeover Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal), cooperate, through the acquisition by any of them of shares in a company, to obtain or consolidate effective control of that company.

Unless the contrary is established, the following persons will be presumed to be acting in concert:

(a) The following companies:

(i) a company;

(ii) the parent company of (i);

(iii) the subsidiaries of (i);

(iv) the fellow subsidiaries of (i);

(v) the associated companies of any of (i), (ii), (iii) or (iv);

(vi) companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); and

(vii) any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights;

(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 client in respect of the shareholdings of the adviser and the persons controlling, controlled by or under the same control as the adviser;

(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) an individual;

(ii) 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);

(v) companies controlled by any of (i), (ii), (iii) or (iv); and

(vi) any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights.

For this purpose, ownership or control of at least 20% but not more than 50% of the voting rights of a company will be regarded as the test of associated company status.

The circumstances under which Shareholders, including Directors and persons acting in concert with them respectively, will incur an obligation to make a takeover offer under Rule 14 after a purchase or acquisition of Ordinary Shares by the Company are set out in Appendix 2 to the Takeover Code.

(c) Effect and Application of Rule 14 and Appendix 2 to the Takeover Code

In general terms, the effect of Rule 14 and Appendix 2 to the Takeover Code is that, unless exempted, Directors and persons acting in concert with them will incur an obligation to make a takeover offer for the Company under Rule 14 of the Takeover Code if, as a result of the Company purchasing or acquiring its Ordinary Shares, the voting rights of such Directors and their concert parties, being in aggregate less than 30% before such purchase or acquisition, would increase to 30% or more, or if the voting rights of such Directors and their concert parties fall between 30% and 50% of the Company's voting rights, the voting rights of such Directors and their concert parties would increase by more than 1% in any period of six (6) months.

Under Appendix 2 to the Takeover Code, a Shareholder not acting in concert with the Directors of the Company will not be required to make a takeover offer under Rule 14 of the Takeover Code if, as a result of the Company purchasing or acquiring its Ordinary Shares, the voting rights of such Shareholder in the Company would increase to 30% or more, or, if such Shareholder holds between 30% and 50% of the Company's voting rights, the voting rights of such Shareholder would increase by more than 1% in any period of six (6) months. Such Shareholder need not abstain from voting in respect of the resolution authorising the Share Buy-Back Mandate.

Based on the information set out in paragraph 4.12 and assuming that there is no change in the shareholding interests of the Directors and the Substantial Shareholders in Ordinary Shares recorded in the Register of Directors' Shareholdings and Register of Substantial Shareholders maintained by the Company as at the Latest Practicable Date, none of the Directors and the Substantial Shareholders would become obliged to make a takeover offer for the Company under Rule 14 of the Takeover Code as a result of any purchase or acquisition of Ordinary Shares by the Company pursuant to the Share Buy-Back Mandate of the maximum limit of 15.22% of its total number of issued Ordinary Shares (excluding treasury shares and subsidiary holdings) as at the date of the May EGM.

Shareholders who are in doubt as to their obligations, if any, to make a mandatory takeover offer under the Takeover Code as a result of any purchase or acquisition of Ordinary Shares by the Company should consult the Securities Industry Council and/or their professional advisers at the earliest opportunity.

4.12 Interests of Directors and Substantial Shareholders

The interests of the Directors and Substantial Shareholders of the Company as at the Latest Practicable Date, as recorded in the Company's Register of Directors' Shareholdings and Register of Substantial Shareholders, respectively, were as follows:-

4.13 Previous Purchases of Ordinary Shares by the Company 

As at the Latest Practicable Date, the Company had purchased or acquired an aggregate of 2,552,733 Ordinary Shares in the twelve (12) months preceding the Latest Practicable Date, pursuant to the share buy-back mandate approved by the Shareholders at the May EGM.

The 2,552,773 Ordinary Shares had been purchased or acquired by the Company by way of a selective off-market purchase, details of which are as set out below:

4.14 Reporting Requirements

Within thirty (30) days of the passing of a Shareholders' resolution to approve the Share Buy-Back Mandate, the Company shall lodge a copy of such resolution with ACRA. The Company shall also lodge a notice with ACRA within thirty (30) days of a Share Buy-Back. Such notification is to include details such as the date of the Share Buy-Back; the number of Ordinary Shares purchased or acquired by the Company; the number of Ordinary Shares cancelled; the number of Ordinary Shares held as treasury shares; the Company's issued share capital before and after the Share Buy-Back; the amount of consideration paid by the Company for the Share Buy-Back; whether the Ordinary Shares were purchased out of the profits or the capital of the Company; and such other particulars that might be prescribed.

5. Impact of Share Buy-Back Mandate on Company's Financial Position

5.1 The financial effects on the Company and the Group arising from the Share Buy-Back will depend on, inter alia, the number of Ordinary Shares purchased or acquired, whether such purchase or acquisition is made out of capital and/or profits of the Company, the amount (if any) borrowed by the Company to fund the purchases or acquisitions and whether the Ordinary Shares purchased or acquired are cancelled or held as treasury shares.

5.2 The financial effects on the Company and the Group arising from the proposed Share Buy-Back pursuant to the Share Buy-Back Mandate based on the audited financial statements of the Group for the financial year ended 31 March 2018 (the "Audited Financial Statements"), are based on the following principal assumptions:

(a) Purchase or acquisition out of capital and/or profits

Under the Companies Act, purchases or acquisitions of Ordinary Shares by the Company may be made out of the Company's capital and/or profits so long as the Company is solvent.

Where the consideration paid by the Company for the purchase or acquisition of Ordinary Shares is made out of capital and from liquidation of investments. the amount available for the distribution of cash dividends by the Company will not be reduced.

Where the consideration paid by the Company for the purchase or acquisition of Ordinary Shares is made out of profits, such consideration will correspondingly reduce the amount available for the distribution of cash dividends by the Company.

(b) Maximum Price paid for Ordinary Shares purchased or acquired

Based on 52,417,440 issued Ordinary Shares (excluding treasury shares and subsidiary holdings) as at the date of the last AGM, the purchase or acquisition by the Company of 15.22% of such Ordinary Shares will result in the purchase or acquisition of 8,130,755 Ordinary Shares.

Assuming that the Company purchases or acquires the 8,130,755 Ordinary Shares at the Exit Facility Price for each Ordinary Share, the maximum amount of funds required is approximately £1.0 million pound.

5.3 For illustrative purposes only, on the basis of the assumptions set out above as well as the following:

(A) the Share Buy-Back had taken place on 8 August 2019;

(B) there was no issuance of Ordinary Shares after the Latest Practicable Date;

(C) the Share Buy-Back are assumed to be financed by internal and external funding of the Group; and

(D) related expenses incurred for the Share Buy-Back are assumed to be insignificant and have been disregarded for the purpose of computing the financial effects,

the financial effects on the Audited Financial Statements are set out below.

5.4 Shareholders should note that the proforma financial effects set out above are for illustrative purposes only (based on the aforementioned assumptions). In particular, it is important to note that the above pro-forma financial analysis is based on the historical numbers for the financial period ended 31 March 2018, and is not necessarily representative of future financial performance.

6. Tax Implications

Shareholders who are in doubt as to their respective tax positions or the tax implications of a Share Buy-Back by the Company and the Exist Facility or who may be subject to tax, whether in our outside Singapore, should consult their own professional advisers.

7. WARNINGS

7.1 The Share Buy-Back Price is final and will not be further increased or revised.

7.2 As the Cancellation is subject to the fulfilment of conditions stipulated herein, it may not become unconditional and the Cancellation and the Share Buy-Back may or may not proceed. Dealings in the Ordinary Shares will continue notwithstanding the Cancellation has not become unconditional. During such period, persons dealing in the Ordinary Shares will bear the risk that the Cancellation may not proceed.

8. Transaction following Cancellation

8.1 Ordinary Shares

The proposed Cancellation, should it be approved by Shareholders at the Extraordinary General Meeting, would make it more difficult for Shareholders to buy and sell Ordinary Shares should they wish to do so.

The Exit Facility provides the majority of Shareholders the opportunity to sell their Ordinary Shares before Cancellation becomes effective, save those who have provided a commitment not to do so. Should any Shareholders wish to sell their Ordinary Shares following Cancellation, they should contact the Company directly who will consider alternative arrangements such as putting in place a matched bargain facility. The Company will consider this following the close of the Exit Facility and will depend on take up under the Exit Facility.

8.2 Depositary Interests

Due to the limited number of existing Shareholders and the illiquidity of the Ordinary Shares prior to Cancellation the Company will not maintain the Depositary Interest facility following Cancellation and the Depositary Interests facility will be cancelled. Depositary Interest holders will receive a share certificate for their cancelled Depositary Interest holding. Shareholders will be able to continue to trade their Ordinary Shares in certificated form.

Computershare Investor Services PLC (the 'Depositary) hereby gives 32 days' notice of termination under clause 14.1 of the Deed dated 6rd May 2008 in respect of Mortice Limited Depositary Interests. Accordingly, Computershare Investor Services PLC shall cease to act as depositary for the purpose of issuing Mortice Limited Depositary Interests with effect from the close of business on 23 August 2019 (the 'Effective Date').

On the Effective Date the Depositary Interest facility shall terminate and Depositary Interests will be cancelled in accordance with the terms of the Deed.

All Depositary Interests remaining as at the Effective Date will be cancelled, and DI holders will be entered as shareholders, in the same name as they were recorded on the DI records, on the Company's share register.

9. Current Trading, Strategy and Prospects

The Company expects to report revenue of approximately $228 million for the year ended 31 March 2019.

The Company strategy remains to create a global facilities management and security business.

10. Shareholder's Undertakings

The Company has received undertakings from all Directors and from the Major Shareholder, to vote in favour of the Resolutions, in respect of all Ordinary Shares held by each of them on the date of the Extraordinary General Meeting that currently amounting to 40,020,001 Ordinary Shares in aggregate, representing approximately 78.68% of the issued share capital of the Company. 

Accordingly, the Directors believe it is likely that the Resolution will be passed at the Extraordinary General Meeting.

11. Process for Cancellation

11.1 Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75% of votes cast by Shareholders at an Extraordinary General Meeting. Accordingly the Notice of Extraordinary General Meeting set out in Part II of the Circular contains a special resolution to approve the Cancellation.

11.2 Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have, on 10 July 2019, notified the London Stock Exchange of the Company's intention, subject to the Resolution being passed at the Extraordinary General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM. Accordingly, if Resolution 1 is passed the Cancellation will become effective at 7.00 a.m. on 27 August 2019. If the Cancellation becomes effective, finnCap Ltd will cease to be nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules.

12. Extraordinary General Meeting

The Extraordinary General Meeting will be held on Wednesday, 7 August 2019 commencing at 5:30 p.m. (Singapore Time)

13. Action to be taken by Shareholders

You will find enclosed with the Circular a Form of Proxy for use at the Extraordinary General Meeting. Whether or not you propose to attend the Extraordinary General Meeting in person, you are requested to complete and return the Form of Proxy to 38 Beach Road, #29-11 South Beach Tower 189767, Singapore, in accordance with the instructions printed thereon as soon as possible but, in any event, to be received no later than 5:30 p.m. (Singapore Time) on 5 August 2019. Completion and return of a Form of Proxy will not preclude you from attending and voting at the Extraordinary General Meeting in person if you so wish.

14. Recommendation

14.1 The Directors consider that the Cancellation is in the best interests of the Company and its Shareholders as a whole and therefore unanimously recommend that you vote in favour of the Resolution.

14.2 In light of the proposed Cancellation, the Directors are of the opinion that the Shareholders who are unable or unwilling to hold Ordinary Shares in the Company following the Cancellation should be given an opportunity to realise their investment under the Exit Facility, and that providing the opportunity to participate in the Exit Facility via the Share Buy-Back is in the best interests of the Shareholders and recommend that Shareholders vote in favour of the Share Buy-Back. However, the Directors make no recommendation to the Shareholders in relation to their participation in the Share Buy-Back and recommend that all Shareholders consult their duly authorized independent advisers before they make a decision as to whether to tender some, all or none of their Ordinary Shares for the Share Buy-Back, in order to obtain advice relevant to their particular circumstances.

14.3 The Directors, in rendering their recommendations, have not had regard to the specific investment objectives, financial situation, tax position or unique needs and constraints of any individual Shareholder. As different Shareholders may have different investment objectives and profiles, the Directors recommend that any individual Shareholder who may require advice in the context of his specific investment portfolio consult his stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS(1)

Notes:

(1) All of the times referred to in the Circular refer to London time, unless otherwise stated.

(2) See paragraph 4 of Part I of this Circular for further information

(3) Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

(4) The Cancellation requires the approval of not less than 75% of the votes cast by Shareholders at the Extraordinary General Meeting.

DEFINITIONS

The following definitions apply throughout the announcement, unless the context requires otherwise:

"AIM" AIM, the market operated by the London Stock Exchange

"AIM Rules" the rules and guidance for companies whose shares are admitted to trading on AIM entitled "AIM Rules for Companies" published by the London Stock Exchange, as amended from time to time

"Board" the Board of Directors of the Company

"Business Day" a day (excluding Saturday, Sunday and public holidays in England and Wales) on which banks are generally open for business in London for the transaction of normal banking business

"Cancellation" the cancellation of admission of the Ordinary Shares to trading on AIM, subject to passing of Resolution 1 and in accordance with Rule 41 of the AIM Rules

"Circular" the circular sent to Shareholders on 15 July 2019, containing information about the Cancellation, the Share Buy-Back and the Extraordinary General Meeting

"Companies Act" the Companies Act (Cap. 50) of Singapore, as amended and modified from time to time

"Company" or "Mortice" Mortice Limited, a public limited company incorporated on 9 January 2008 and registered in Singapore

"Constitution" Constitution of the Company, as amended from time to time

 "CREST" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations)

"CREST Regulations" the Uncertificated Securities Regulations 2006 of the Isle of Man

(Statutory Document Number 743/06) including any modifications or any regulations made in substitution under sections 48 and 215 of the IoM 2006 Act and for the time being in force

"Depositary Interests" Mortice depositary interests issued in uncertificated form from time to time by the Depositary on the terms and conditions of the Deed in respect of Depositary Interests entered into between the Company and Computershare Investor Services PLC, such depositary interests representing shares of Mortice held by participants in CREST;

"Directors" or "Board" the directors of the Company, whose names are set out on page 6 of the Circular. The Board comprises the directors at any time or the directors present at a duly convened meeting at which a quorum is present or, as the case may be, the directors assembled as a committee of such Board

"Exit Facility" the facility to be provided by the Company for Shareholders to sell their Ordinary Shares before the delisting by way of on-market Share Buy-Back Scheme, as described in paragraph 4 of Part 1 of the Circular

 "Extraordinary General Meeting" the Extraordinary General Meeting of the Company convened for

5:30 p.m. (Singapore Time) on 7 August 2019 and any adjournment thereof, notice of which is set out at the end of the Circular

"Form of Proxy" the form of proxy enclosed with the Circular for use at the Extraordinary General Meeting or at any adjournment thereof

"Group" the Company and its subsidiaries

"Latest Practicable Date" 12 July 2019 being the latest practicable date prior to the printing of this Circular

"London Stock Exchange" London Stock Exchange plc

"Major Shareholder" Mancom Singapore Pte. Limited, a company controlled by the Executive Chairman and registered in Singapore with company number 201706444Z

"Notice of Extraordinary the notice of Extraordinary General Meeting which is set out in General Meeting" or "Notice" Part II of the Circular

"Ordinary Shares" ordinary shares of no par value in the capital of the Company, and "Ordinary Share" means any one of them

"Registrars" Computershare Investor Services (Channel Islands) Limited

"Regulatory Information Service" has the meaning given to it in the AIM Rules any of the services

approved by the London Stock Exchange for the distribution of AIM announcements and included within the list maintained on the website of the London Stock Exchange

"Resolutions" the resolutions to be proposed at the Extraordinary General Meeting in the form set out in the Notice of Extraordinary General Meeting

"Shareholders" holders of Ordinary Shares from time to time and "Shareholder" means any one of them

"Share Buy-Back" the purchase or acquisition of Ordinary Shares by the Company pursuant to the Share Buy-Back Mandate

"Share Buy-Back Mandate" the general and unconditional mandate given by the Shareholders to authorize the Directors to purchase, on behalf of the Company, Ordinary Shares in accordance with the terms of the Notice and this Circular as well as the rules and regulations set forth in the Companies Act and the AIM Rules

"Share Buy-Back Price" 12 pence per Ordinary Share

"Substantial Shareholder" A Shareholder who has an interest in not less than 5% of the Ordinary Shares of the Company

"Takeover Code" the Singapore Code on Takeovers and Mergers

"United Kingdom" the United Kingdom of Great Britain and Northern Ireland

A reference to "£" is to pounds sterling, being the lawful currency of the UK. A reference to "€" is to the euro, being the official currency of the Eurozone.