Frasers Centrepoint : Letter to Shareholders

LETTER TO SHAREHOLDERS FRASERS CENTREPOINT LIMITED

(Incorporated in Singapore) Company Registration No. 196300440G

Directors: Registered Office:

Mr Charoen Sirivadhanabhakdi

(Non-executive and non-independent Chairman)

Khunying Wanna Sirivadhanabhakdi

(Non-executive and non-independent Vice Chairman)

Mr Panote Sirivadhanabhakdi

(Group Chief Executive Officer and executive Director)

Mr Charles Mak Ming Ying (Non-executive and lead independent Director) Mr Chan Heng Wing (Non-executive and independent Director)

Mr Philip Eng Heng Nee (Non-executive and independent Director) Mr Wee Joo Yeow (Non-executive and independent Director)

Mr Weerawong Chittmittrapap (Non-executive and independent Director) Mr Chotiphat Bijananda (Non-executive and non-independent Director) Mr Sithichai Chaikriangkrai (Non-executive and non-independent Director)

438 Alexandra Road

#21-00 Alexandra Point

Singapore 119958

5 January 2017

To: The Shareholders of Frasers Centrepoint Limited (the "Company") Dear Sir/Madam

1. INTRODUCTION
2. Background. We refer to:

3. the Notice of the 53rd Annual General Meeting ("AGM") of the Company dated 5 January 2017 (the "Notice"), accompanying the Annual Report for the financial year ended 30 September 2016, convening the 53rd AGM of the Company to be held on 24 January 2017 (the "2017 AGM");

4. Ordinary Resolution No. (8) relating to the proposed renewal of the IPT Mandate (as defined in paragraph 2.1 below), as proposed in the Notice; and

   (d) Ordinary Resolution No. (9) relating to the proposed renewal of the Share Purchase Mandate (as defined in paragraph 3.1 below), as proposed in the Notice.

5. Letter to Shareholders. The purpose of this Letter is to provide shareholders of the Company ("Shareholders") with information relating to Ordinary Resolution Nos. (8) and (9) proposed in the Notice (collectively, the "Proposals").
6. SGX-ST. The Singapore Exchange Securities Trading Limited (the "SGX-ST") takes no responsibility for the accuracy of any statements or opinions made or reports contained in this Letter.
7. Advice to Shareholders. Shareholders who are in any doubt as to the course of action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.
8. THE PROPOSED RENEWAL OF THE IPT MANDATE

9. IPT Mandate. At the 52nd AGM of the Company held on 29 January 2016 (the "2016 AGM"), Shareholders approved the renewal of a mandate (the "IPT Mandate") to enable the Company, its subsidiaries and associated companies that are considered to be "entities at risk" under Chapter 9 of the Listing Manual of the SGX-ST (the "Listing Manual"), or any of them, to enter into certain interested person transactions with specified classes of interested persons, provided that such transactions are made on normal commercial terms and in accordance with the review procedures for such interested person transactions. Particulars of the IPT Mandate are set out in Appendix 2 to the Letter to Shareholders dated 5 January 2016.

10. Proposed Renewal of IPT Mandate. The IPT Mandate was expressed to take effect until the conclusion of the next AGM of the Company, being the 2017 AGM which is scheduled to be held on 24 January 2017. Accordingly, the Directors of the Company (the "Directors") propose that the IPT Mandate be renewed at the 2017 AGM, to take effect until the 54th AGM of the Company.

11. Particulars of IPT Mandate. The nature of the interested person transactions and the classes of interested persons in respect of which the IPT Mandate is sought to be renewed remains unchanged. As at 13 December 2016, being the latest practicable date prior to the printing of this Letter (the "Latest Practicable Date"), each of Thai Beverage Public Company Limited, TCC Assets Limited, Fraser and Neave, Limited ("F&N"), Frasers Hospitality Trust ("FHT") (which comprises Frasers Hospitality Real Estate Investment Trust ("FH-REIT") and Frasers Hospitality Business Trust ("FH-BT")), the Directors and their respective associates (but excluding the Company and its subsidiaries), are regarded as "interested persons" of the Company for the purposes of Chapter 9 of the Listing Manual.

    Particulars of the IPT Mandate, including the rationale for the IPT Mandate, the benefits to be derived by the Company, as well as the review procedures for determining transaction prices with the specified classes of interested persons (including the persons who shall abstain from participating in the Audit Committee's review and approval process of the interested person transactions1), are set out in Appendix 1 to this Letter.

    General information on the listing rules relating to interested person transactions, including the meanings of terms such as "associate", "entity at risk", "interested person", "same interested person" and "interested person transaction" used in Chapter 9 of the Listing Manual, is set out in Appendix 2 to this Letter.

12. Audit Committee Confirmation. The Audit Committee, comprising Mr Charles Mak Ming Ying, Mr Philip Eng Heng Nee, Mr Wee Joo Yeow and Mr Sithichai Chaikriangkrai as at the Latest Practicable Date, confirms (with Mr Sithichai Chaikriangkrai abstaining) that:

13. the methods or procedures for determining the transaction prices under the IPT Mandate have not changed since the 2016 AGM; and

14. the methods or procedures referred to in sub-paragraph (a) above are sufficient to ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders.

15. Rationale. The IPT Mandate and its subsequent renewal on an annual basis would eliminate the need to convene separate general meetings from time to time to seek Shareholders' approval as and when potential interested person transactions with a specific class of Mandated Interested Persons (as defined in paragraph 4 of Appendix 1 to this Letter) arise, thereby reducing substantially administrative time and expenses in convening such meetings, without compromising the corporate objectives and adversely affecting the business opportunities available to the Group (as defined in paragraph 3 of Appendix 1 to this Letter). The IPT Mandate is intended to facilitate transactions in the normal course of the Group's business which are transacted from time to time with the specified classes of Mandated Interested Persons, provided that they are carried out on normal commercial terms and are not prejudicial to the Company and its minority Shareholders.

    1 In particular, if a member of the Audit Committee has an interest in a transaction or is a nominee for the time being of an interested person (as described in paragraph 4 of Appendix 1 to this Letter), he shall abstain from participating in the review and approval process of the Audit Committee in relation to that transaction.

16. Additional Information. As part of the review and approval procedures under the IPT Mandate, transactions equal to or exceeding S$100,000 but below the Financial Limit (as defined in paragraph 6(b) of Appendix 1 to this Letter) each in value are to be reviewed and approved by the Chief Executive Officer for the time being of the Company or such other senior executive(s) of the Company designated by the Audit Committee from time to time for such purpose, and tabled for review by the Audit Committee on a quarterly basis. As Mr Panote Sirivadhanabhakdi, who is a Mandated Interested Person (as defined in paragraph 4 of Appendix 1 to this Letter), has been appointed as Group Chief Executive Officer with effect from 1 October 2016, the Audit Committee has designated the Chief Financial Officer as the senior executive who will review and approve such transactions.
17. THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE
18. Share Purchase Mandate. At the 2016 AGM, Shareholders approved the renewal of a mandate (the "Share Purchase Mandate") to enable the Company to purchase or otherwise acquire issued ordinary shares of the Company ("Shares"). The rationale for, the authority and limitations on, and the financial effects of, the Share Purchase Mandate were set out in the Company's Letter to Shareholders dated 5 January 2016.

    The Share Purchase Mandate was expressed to take effect on the date of the passing of Ordinary Resolution No. (9) at the 2016 AGM and will expire on the date of the forthcoming 2017 AGM which is scheduled to be held on 24 January 2017. Accordingly, Shareholders' approval is being sought for the renewal of the Share Purchase Mandate at the 2017 AGM.

19. Rationale. The rationale for the Company to undertake the purchase or acquisition of its Shares is as follows:

20. In managing the business of the Company and its subsidiaries (the "Group"), management will strive to increase Shareholders' value by improving, inter alia, the return on equity ("ROE") of the Company. In addition to growth and expansion of the business, share purchases may be considered as one of the ways through which the ROE of the Company may be enhanced.

21. In line with international practice, the Share Purchase Mandate will provide the Company with greater flexibility in managing its capital and maximising returns to its Shareholders.

    To the extent that the Company has capital and surplus funds which are in excess of its financial needs, taking into account its growth and expansion plans, the Share Purchase Mandate will facilitate the return of excess cash and surplus funds to Shareholders in an expedient, effective and cost-efficient manner.

22. The Share Purchase Mandate will provide the Company the flexibility to undertake share repurchases at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force.

23. Shares which are purchased by the Company pursuant to the Share Purchase Mandate and held in treasury may be transferred for the purposes of employee share schemes implemented by the Company, to enable the Company to take advantage of tax deductions under the current taxation regime. The use of treasury shares in lieu of issuing new Shares would also mitigate the dilution impact on existing Shareholders.

    The purchase or acquisition of Shares will only be undertaken if it can benefit the Company and Shareholders. Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Purchase Mandate may not be carried out to the full limit as authorised. No purchase or acquisition of Shares will be made in circumstances which would have or may have a material adverse effect on the financial condition of the Group as a whole and/or affect the listing status of the Company on the SGX-ST.

24. Authority and Limits. The authority and limitations placed on the Share Purchase Mandate, if approved at the 2017 AGM, are the same as previously approved by Shareholders at the 2016 AGM. These are summarised below:

1. Maximum Number of Shares

   The total number of Shares which may be purchased or acquired by the Company is limited to that number of Shares representing not more than 2% of the issued Shares as at the date of the 2017 AGM at which the renewal of the Share Purchase Mandate is approved. Any Shares which are held as treasury shares will be disregarded for purposes of computing the 2% limit.

   Purely for illustrative purposes, on the basis of 2,899,996,444 Shares in issue as at the Latest Practicable Date and assuming that:

2. no further Shares are issued;

3. no Shares are purchased or acquired by the Company; and

4. no Shares are held by the Company as treasury shares,

   on or prior to the 2017 AGM, the purchase or acquisition by the Company of up to the maximum limit of 2% of its issued Shares will result in the purchase or acquisition of 57,999,928 Shares. However, as stated in paragraph 3.2 above and paragraph 3.8 below, purchases or acquisitions pursuant to the Share Purchase Mandate need not be carried out to the full extent mandated, and, in any case, would not be carried out to such an extent that would result in the Company being delisted from the SGX-ST. The public float in respect of the issued Shares as at the Latest Practicable Date is disclosed in paragraph 3.8 below.

5. Duration of Authority

   Purchases or acquisitions of Shares may be made, at any time and from time to time, on and from the date of the 2017 AGM, at which the renewal of the Share Purchase Mandate is approved, up to:

6. the date on which the next annual general meeting of the Company is held or required by law to be held;

7. the date on which the authority conferred by the Share Purchase Mandate is revoked or varied; or

8. the date on which purchases and acquisitions of Shares pursuant to the Share Purchase Mandate are carried out to the full extent mandated,

   whichever is the earliest.

9. Manner of Purchases or Acquisitions of Shares

   Purchases or acquisitions of Shares may be made by way of:

10. on-market purchases ("Market Purchases"), transacted through the SGX-ST's trading system or on any other securities exchange on which the Shares may for the time being be listed and quoted, through one or more duly licensed dealers appointed by the Company for the purpose; and/or

11. off-market purchases ("Off-Market Purchases"), otherwise than on a securities exchange, in accordance with an equal access scheme.

The Directors may impose such terms and conditions which are not inconsistent with the Share Purchase Mandate, the Listing Manual and the Companies Act, Chapter 50 (the "Companies Act") as they consider fit in the interests of the Company in connection with or in relation to any equal access scheme or schemes. An equal access scheme must, however, satisfy all the following conditions: