Singapore Exchange : 2023 Letter to Shareholders

SINGAPORE EXCHANGE LIMITED

Company Registration No. 199904940D

(Incorporated in the Republic of Singapore)

LETTER TO SHAREHOLDERS

Directors:	Registered Office:
Mr Koh Boon Hwee (Chairman, Non-Executive and Independent)	2 Shenton Way #02-02
Mr Loh Boon Chye (Chief Executive Officer and Non-Independent)	SGX Centre 1
Dr Beh Swan Gin (Non-Executive and Independent)	Singapore 068804
Ms Chew Gek Khim (Non-Executive and Non-Independent)
Ms Julie Gao (Non-Executive and Independent)
Mr Lim Chin Hu (Non-Executive and Independent)
Ms Lim Sok Hui (Mrs Chng) (Non-Executive and Non-Independent)
Ms Lin Huey Ru (Non-Executive and Independent)
Mr Mark Makepeace (Non-Executive and Non-Independent)
Prof Subra Suresh (Non-Executive and Independent)
Mr Tsien Samuel Nag (Non-Executive and Independent)
Mr Yeoh Oon Jin (Non-Executive and Independent)
		11 September 2023
To:	The Shareholders of Singapore Exchange Limited
Dear Sir/Madam

1. Introduction

1. Notice of 2023 AGM. We refer to:
2. 1. the Notice of Annual General Meeting of Singapore Exchange Limited (the "Company") dated 11 September 2023, accompanying the Annual Report of the Company for the financial year ended 30 June 2023 ("Annual Report 2023"), convening the Twenty-Fourth Annual General Meeting of the Company to be held on 5 October 2023 (the "2023 AGM"); and
   2. Ordinary Resolution 11 relating to the proposed renewal of the Share Purchase Mandate (as defined below).
3. LettertoShareholders. The purpose of this Letter is to provide shareholders of the Company ("Shareholders") with information relating to the proposed renewal of the Share Purchase Mandate.
4. MAS. The Monetary Authority of Singapore ("MAS") takes no responsibility for the accuracy of any statements or opinions made or reports contained in this Letter.
5. Legal Adviser. Allen & Gledhill LLP is the legal adviser to the Company in relation to the proposed renewal of the Share Purchase Mandate.
6. Advice to Shareholders. If a Shareholder is in any doubt as to the course of action he should take, he should consult his stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.

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2. The Proposed Renewal of the Share Purchase Mandate

1. Background. Shareholders approved the renewal of the mandate (the "Share Purchase Mandate") to enable the Company to purchase or otherwise acquire issued ordinary shares of the Company ("Shares") at the Annual General Meeting of the Company held on 6 October 2022 (the "2022 AGM"). The authority and limitations on the Share Purchase Mandate were set out in the Letter to Shareholders dated 12 September 2022 (the "2022 Letter") and Ordinary Resolution 10 set out in the Notice of the 2022 AGM.
   The Share Purchase Mandate was expressed to take effect on the date of the passing of Ordinary Resolution 10 at the 2022 AGM and will expire on the date of the forthcoming 2023 AGM. Accordingly, Shareholders' approval is being sought for the renewal of the Share Purchase Mandate at the 2023 AGM.
2. Rationale. The approval of the renewal of the Share Purchase Mandate authorising the Company to purchase or acquire its Shares would give the Company flexibility to undertake share purchases or acquisitions up to the 10% limit described in paragraph 2.3.1 below at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force.
   The rationale for the Company to undertake the purchase or acquisition of its Shares is as follows:
3. 1. 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.
   2. 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.
   3. A share repurchase programme will also allow management to effectively manage and minimise the dilution impact (if any) associated with share schemes.

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.

2.3 Authority and Limits. The authority and limitations placed on the Share Purchase Mandate, if renewed at the 2023 AGM, are substantially the same as previously approved by Shareholders at the 2022 AGM. The authority and limits on the Share Purchase Mandate are as follows:

2.3.1 Maximum number of Shares

Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. 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 10% of the issued Shares as at the date of the 2023 AGM at which the renewal of the Share Purchase Mandate is approved. Treasury shares and subsidiary holdings (as defined in the Listing Manual of the Singapore Exchange Securities Trading Limited ("SGX-ST") (the "Listing Manual"))1 will be disregarded for purposes of computing the 10% limit.

As at 15 August 2023 (the "Latest Practicable Date"), the Company had 3,654,841 treasury shares and no subsidiary holdings.

1 "Subsidiary holdings" is defined in the Listing Manual to mean shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies Act 1967.

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2.3.2 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 2023 AGM, at which the renewal of the Share Purchase Mandate is approved, up to:

1. the date on which the next Annual General Meeting of the Company is held or required by law to be held;
2. the date on which the authority conferred by the Share Purchase Mandate is revoked or varied; or
3. 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.

2.3.3 Manner of purchases or acquisitions of Shares

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

1. on-marketpurchases ("Market Purchases"), transacted through the trading system of the SGX-ST 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
2. off-marketpurchases ("Off-MarketPurchases"), otherwise than on a securities exchange, in accordance with an equal access scheme ("Equal Access Scheme") pursuant to Section 76C of the Companies Act 1967 (the "Companies Act").

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

1. offers for the purchase or acquisition of Shares shall be made to every person who holds Shares to purchase or acquire the same percentage of their Shares;
2. all of those persons shall be given a reasonable opportunity to accept the offers made; and
3. the terms of all the offers are the same, except that there shall be disregarded (1) differences in consideration attributable to the fact that offers may relate to Shares with different accrued dividend entitlements and (2) differences in the offers introduced solely to ensure that each person is left with a whole number of Shares.

If the Company wishes to make an Off-Market Purchase in accordance with an Equal Access Scheme, it will issue an offer document containing at least the following information:

1. the terms and conditions of the offer;

1. the period and procedures for acceptances; and

1. the information required under Rules 883(2), (3), (4), (5) and (6) of the Listing Manual.

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1. 1. Purchase price
      The purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) to be paid for a Share will be determined by the Directors. The purchase price to be paid for the Shares as determined by the Directors must not exceed, in the case of both Market Purchases and Off-Market Purchases, 105% of the Average Closing Price of the Shares, excluding related expenses of the purchase or acquisition (the "Maximum Price").
      For the above purposes:
      "Average Closing Price" means the average of the closing market prices of a Share over the five consecutive trading days on which the Shares are transacted on the SGX-ST or, as the case may be, such securities exchange on which the Shares are listed or quoted, immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted, in accordance with the rules of the SGX-ST, for any corporate action that occurs during the relevant five-day period and the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase; and
      "date of the making of the offer" means the date on which the Company makes an offer for the purchase or acquisition of Shares from holders of Shares, stating therein the relevant terms of the Equal Access Scheme for effecting the Off-Market Purchase.
2. Source of Funds. The Company may use internal or external sources of funds or a combination of both to finance its purchase or acquisition of the Shares. The Directors do not propose to exercise the Share Purchase Mandate in a manner and to such extent that the financial condition of the Group would be materially and adversely affected.
3. Status of Purchased Shares. Shares purchased or acquired by the Company are deemed cancelled immediately on purchase or acquisition (and all rights and privileges attached to the Shares will expire on such cancellation) unless such Shares are held by the Company as treasury shares. The total number of issued Shares will be diminished by the number of Shares purchased or acquired by the Company and which are not held as treasury shares.
4. Treasury Shares. Under the Companies Act, Shares purchased or acquired by the Company may be held or dealt with as treasury shares. Some of the provisions on treasury shares under the Companies Act are summarised below:
5. 1. Maximum holdings
      The number of Shares held as treasury shares2 cannot at any time exceed 10% of the total number of issued Shares.
   2. Voting and other rights
      The Company cannot exercise any right in respect of treasury shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Companies Act, the Company shall be treated as having no right to vote and the treasury shares shall be treated as having no voting rights.
      In addition, no dividend may be paid, and no other distribution of the Company's assets may be made, to the Company in respect of treasury shares. However, the allotment of shares as fully paid bonus shares in respect of treasury shares is allowed. A subdivision or consolidation of any treasury share is also allowed so long as the total value of the treasury shares after the subdivision or consolidation is the same as before.

2 For these purposes, "treasury shares" shall be read as including shares held by a subsidiary under Sections 21(4B) or 21(6C) of the Companies Act 1967.

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2.6.3 Disposal and cancellation

Where Shares are held as treasury shares, the Company may at any time (but subject always to the Singapore Code on Take-overs and Mergers (the "Take-overCode")):

1. sell the treasury shares for cash;
2. transfer the treasury shares for the purposes of or pursuant to any share scheme, whether for employees, directors or other persons;
3. transfer the treasury shares as consideration for the acquisition of shares in or assets of another company or assets of a person;
4. cancel the treasury shares; or
5. sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for Finance.

In addition, under the Listing Manual, an immediate announcement must be made of any sale, transfer, cancellation and/or use of treasury shares. Such announcement must include details such as the date of the sale, transfer, cancellation and/or use of such treasury shares, the purpose of such sale, transfer, cancellation and/or use of such treasury shares, the number of treasury shares which have been sold, transferred, cancelled and/or used, the number of treasury shares before and after such sale, transfer, cancellation and/or use, the percentage of the number of treasury shares against the total number of issued shares (of the same class as the treasury shares) which are listed before and after such sale, transfer, cancellation and/or use and the value of the treasury shares if they are used for a sale or transfer, or cancelled.

2.7 Financial Effects. The financial effects on the Company and the Group arising from the purchases or acquisitions of Shares which may be made pursuant to the Share Purchase Mandate will depend on, inter alia, whether the Shares are purchased or acquired out of capital and/or retained profits of the Company, the number of Shares purchased or acquired, the consideration paid for such Shares and whether the Shares purchased or acquired are held as treasury shares or cancelled.

1. Purchase or acquisition out of capital and/or profits
   Under the Companies Act, purchases or acquisitions of Shares by the Company may be made out of the capital and/or retained profits of the Company so long as the Company is solvent.
   Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, such consideration will not affect the amount available for distribution in the form of cash dividends by the Company.
   Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of retained profits, such consideration will correspondingly reduce the amount available for distribution in the form of cash dividends by the Company.
2. Number of Shares purchased or acquired
   Purely for illustrative purposes, on the basis of 1,071,642,400 issued and paid-up Shares as at the Latest Practicable Date (out of which 3,654,841 Shares were held in treasury as at that date), and assuming that on or prior to the 2023 AGM (i) no further Shares are issued or repurchased, or held by the Company as treasury shares, and (ii) no Shares are held as subsidiary holdings, the purchase or acquisition by the Company of up to the maximum limit of 10% of its issued Shares (excluding the 3,654,841 Shares held in treasury) will entail a purchase or acquisition of 106,798,755 Shares.

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