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As filed with the Securities and Exchange Commission on September 7, 2021.

Registration No. 333-        

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

TDCX Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Cayman Islands   7373   Not Applicable
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer Identification Number)

750D Chai Chee Road,

#06-01/06 ESR BizPark @ Chai Chee

Singapore 469004

(65) 6309 1688

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

(800) 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

Rajeev P. Duggal, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

6 Battery Road

Suite 23-02

Singapore 049909

(65) 6434-2900

 

Sharon Lau, Esq.

Latham & Watkins LLP

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

(65) 6536-1161

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of
Securities to be Registered(1)(2)
 

Proposed

Maximum Aggregate Offering Price(2)(3)

  Amount of
Registration Fee
Class A ordinary shares, par value US$0.0001 per share   US$400,000,000   US$43,640

 

 

(1)

American depositary shares issuable upon deposit of ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No.     ). Each American depositary share represents Class A ordinary shares.

(2)

Includes (a) Class A ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of the distribution or within 40 days after the later of the effective date of this registration statement and the date the securities are first bona fide offered to the public, and (b) additional Class A ordinary shares that are issuable upon the exercise of the underwriters’ option to purchase additional shares to cover over-allotments, if any.

(3)

Estimated solely for the purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a) may determine.

 

 

 


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS (Subject to Completion)

            , 2021

 

LOGO

TDCX Inc.

American Depositary Shares

Representing              Class A Ordinary Shares

 

 

This is the initial public offering of TDCX Inc. We are offering              American Depositary Shares, or ADSs.

Prior to this offering, there has been no public market for our ADSs or ordinary shares. Each ADS represents              of our Class A ordinary shares, par value US$0.0001 per ordinary share, and the ADSs may be evidenced by American Depositary Receipts, or ADRs. It is currently estimated that the initial public offering price per ADS will be between US$             and US$            . We intend to apply for listing of our ADSs on the              under the symbol “TDCX.”

We are a “controlled company” under the corporate governance rules of the New York Stock Exchange.

We are an “emerging growth company” under the U.S. federal securities laws and have elected to comply with certain reduced public reporting requirements.

 

 

Investing in our ADSs involves risks. See “Risk Factors” beginning on page 22.

 

 

 

     Per ADS      Total  

Public offering price

   US$                    US$                

Underwriting discount and commission(1)

   US$                    US$                

Proceeds, before expenses, to TDCX Inc.

   US$                    US$                

 

(1)

See “Underwriting—Conflict of Interest” for a description of compensation and other items of value payable to the underwriters. We have granted the underwriters the right to purchase up to an additional              ADSs to cover over-allotments within 30 days after the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission or any other regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Immediately prior to the completion of this offering, our issued and outstanding share capital will be re-designated into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share. Holders of Class A ordinary shares and Class B ordinary shares will vote together as one class on all matters that require a shareholders’ vote. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstance. Upon the completion of this offering, assuming the underwriters do not exercise their over-allotment option to purchase additional ADSs, Mr. Laurent Junique, our Founder, Executive Chairman and Chief Executive Officer, will beneficially own an aggregate of              Class B ordinary shares, which will represent         % of the then total issued and outstanding ordinary shares and         % of total voting power of our issued and outstanding shares (assuming the underwriters do not exercise their over-allotment option).

The underwriters expect to deliver the ADSs against payment to purchasers on or about             , 2021.

 

 

 

Goldman Sachs

 

Credit Suisse

            , 2021


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You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. We are offering to sell ADSs and seeking offers to buy ADSs, only in jurisdictions where offers and sales are permitted. Unless otherwise noted, the information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ADSs.

We have not taken any action to permit a public offering of the ADSs outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of the ADSs and the distribution of this prospectus outside of the United States.

Until and including             , 2021 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Market, Industry and Other Data

This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms or other independent sources and our own estimates based on our management’s knowledge of and experience in the market sectors in which we compete. Certain information in this prospectus is based on a report on the outsourced business support services industry prepared by Frost & Sullivan Limited, or Frost & Sullivan, which was commissioned by us.

 

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Trademarks and Intellectual Property

We own or otherwise have rights to the service mark “TDCX” mentioned in this prospectus that we use in conjunction with the marketing and sale of our services. This service mark is the property of TDCX Holdings Pte. Ltd. and it will eventually be licensed for use by us and our subsidiaries. This prospectus also mentions and cites trademarks, service marks, copyrights and trade names of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by any other companies. Solely for convenience, our trademark and trade name referred to in this prospectus may appear without the ® roundel or TM symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to those trademarks and trade names.

Conventions that Apply to this Prospectus

Unless the context provides otherwise, for the purposes of this prospectus:

 

   

“ADR” means American Depositary Receipt;

 

   

“ADS” means American Depositary Shares;

 

   

“agent” means an FTE, as classified under our employee classification system;

 

   

“AI” means artificial intelligence;

 

   

“B2B” means business-to-business;

 

   

“B2C” means business-to-consumer;

 

   

“Class A ordinary share” means our Class A ordinary shares of par value US$0.0001 per share;

 

   

“Class B ordinary share” means our Class B ordinary shares of par value US$0.0001 per share;

 

   

“clients” means our corporate clients with whom we have entered into contractual arrangements;

 

   

“CRM” means customer relationship management;

 

   

“customers” means the parties with whom we have customer interactions on behalf of our clients;

 

   

“CX” means customer experience;

 

   

“Founder” means Mr. Laurent Junique, our founder, Executive Chairman and Chief Executive Officer;

 

   

“FTE” means full-time equivalent employee;

 

   

“KPI” means key performance indicator;

 

   

“MSA” means master services agreement;

 

   

“new economy” means high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth;

 

   

“NYSE” means the New York Stock Exchange;

 

   

“Principal Shareholder” means Transformative Investments Pte Ltd;

 

   

“SOW” means statements of work;

 

   

“TDCX HPL” means TDCX Holdings Pte. Ltd. (formerly Agorae Pte Ltd);

 

   

“TDCX KY” means TDCX (KY) PTE LTD;

 

   

“TDCX SG” means TDCX (SG) Pte. Ltd. (formerly Teledirect Pte Ltd);

 

   

“U.S.” and “United States” means the United States of America; and

 

   

“We,” “us,” “our”, “our Company” and “TDCX” mean TDCX Inc. and its subsidiaries and associated companies, collectively.

 

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Certain metrics presented in this prospectus, which include the annual voluntary attrition rate of our employees and our employee satisfaction scores, are calculated using internal company data. While we believe these metrics to be reasonable estimates for the applicable period of measurement, collected through our internal employee surveys and human resources management systems, there are inherent challenges in measuring employee satisfaction and similar metrics. In addition, we are continually seeking to improve the estimation and evaluation criteria that we use to calculate our annual voluntary attrition rate and employee satisfaction, and such estimates may change due to improvements or changes in our methodology. References to the average number of agents and average number of employees are an average of headcount at end of each month over the course of the given period.

We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or make adjustments to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics. In addition, our estimates may not be comparable to estimates of similar metrics published by third parties, such as research analysts, due to differences in methodology.

Basis of Presentation

TDCX was incorporated in the Cayman Island on April 16, 2020 and is wholly-owned by Transformative Investments Pte Ltd. The entire interest of Transformative Investments Pte Ltd is held by a trust that was established for the benefit of its founder (the “Founder”) and his family. TDCX was incorporated to acquire our Founder’s shareholder’s interest in TDCX KY. On December 22, 2020, TDCX KY acquired our Founder’s 100% interest in TDCX HPL. Prior to September 2018, TDCX SG, was 60% owned by our Founder and 40% owned by a third party. In September 2018, the remaining 40% of TDCX SG was acquired by TDCX HPL by paying cash in an amount of S$38 million. In January 2019, our Founder reduced his 60% equity interest in TDCX SG through cancellation of his shares in TDCX SG, and TDCX SG became a wholly owned subsidiary of TDCX HPL. On March 23, 2021, TDCX acquired 100% of TDCX KY from our Founder. As TDCX, TDCX KY, TDCX HPL and TDCX SG were under common control of the Founder during all the periods presented, the acquisitions of TDCX SG and TDCX HPL by TDCX KY as well as the acquisition of TDCX KY by TDCX were accounted for in a manner similar to a pooling of interest with assets and liabilities all reflected at their historical amounts in our consolidated financial statements as if the reorganization had always been in place. As such, the consolidated financial statements were prepared as if TDCX had control over TDCX KY, TDCX HPL and TDCX SG for all periods presented. For more information, see Note 1 to our audited consolidated financial statements included elsewhere in this prospectus.

When we refer to “U.S. dollars” and “US$” in this prospectus, we are referring to United States dollars, the legal currency of the United States. When we refer to “S$”, we are referring to Singapore dollars, the legal currency of Singapore. When we refer to “IFRS”, we are referring to International Financial Reporting standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

Unless otherwise noted, all translations from Singapore dollars to U.S. dollars and from U.S. dollars to Singapore dollars in this prospectus were made at a rate of S$1.344 to US$1.00, being the rate in effect as of June 30, 2021. We make no representation that any Singapore dollar or U.S. dollar amount could have been, or could be, converted into U.S. dollars or Singapore dollar, as the case may be, at any particular rate, the rates stated below, or at all. On September 6, 2021, the rate was S$1.342 to US$1.00.

Certain amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them, and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

 

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LETTER FROM MR. LAURENT JUNIQUE, OUR FOUNDER, EXECUTIVE CHAIRMAN AND CHIEF EXECUTIVE OFFICER

I founded TDCX in 1995 with a vision of a better way to deliver customer experience services. The flagship office in Singapore had its roots as a compact space with two staff. Those early days taught me that a team of tight-knit, talented and dedicated employees that can tackle the most complex challenges would set us apart. This formula of quality people and enterprising work culture drives everything we do.

The sun does not set on TDCX. I attribute our success to our ability to anticipate seismic shifts in the customer experience market and our agility to respond to our clients’ changing needs.

Today, TDCX has a presence in 10 geographies around the world and I believe a spectacular management team who drives our business day and night, ensuring that we keep the customers that have been entrusted to us satisfied. I would like to thank my management team for embarking on this journey with me.

TDCX and the Digital Economy in Asia and Beyond – A Symbiotic Partnership

The 2008 global recession provided an important lesson. We saw a significant growth in the number of digital companies, including many of the fastest-growing companies, arriving in Asia to capitalize on the region’s dynamic recovery. Those were the fledgling days of the smartphone and e-commerce industries.

These companies, many of which quickly established themselves as new economy brands, rapidly attracted customers in Asia, by tailoring their products and offerings for the region. However, they did not have the local market knowledge or resources needed to support their growth. This is where TDCX came in with our customer experience services as we aimed to complete the picture.

We believe that we brought our deep understanding of what customers want, complex problem-solving skills and technology solutions to offer them customized customer experience solutions. As a result, these growing businesses in the new world of the digital economy became our clients. Our lean, agile and technology-enabled business model, coupled with our strong employer brand, enabled us to attract the talent required to scale quickly and keep pace with our clients’ growth.

A client once told me: “In a fast-moving economy, we need a fast-moving and innovative partner.” That’s TDCX! I believe that we are widely recognized as a high-growth, digital complex customer experience solutions provider for technology and blue-chip companies in Asia that even our competitors publicly talk about.

The Future Beckons

TDCX is a specialist partner to fast-growing new economy companies that are redefining digital advertising, e-commerce, online travel and hospitality, consumer electronics, fintech and other technology-enabled sectors in Asia.

We believe that our clients trust us with their most pressing customer interactions. We are now approximately 13,000 strong, handling complex assignments in more than 20 languages daily. These cut across digital advertising, online bookings, troubleshooting customer issues and moderating content, as we strive to keep the Internet a safe environment for the next generation.

As we live more and more of our lives online, we expect to be able to get things done simply, conveniently and on-demand. This transformational shift has upended traditional interaction between brands and their customers, and propelled customer expectations to a new level.

Today, while technology, such as artificial intelligence, is leveraged to resolve straightforward enquiries swiftly, customer needs continue to evolve. Their questions are becoming more complex and sophisticated, while their

 

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expectations for speed and accuracy in problem solving are also likewise increasing. Faced with such customer demands, the experience customers have with a brand, particularly in their times of need, will be the key to building their loyalty.

As such, we envision a future where highly capable specialists, equipped with the tools to work from home or at workspaces, solve increasingly complex problems for new economy brands. These companies, which are experiencing unprecedented growth and fierce competition, require agile, flexible and effective customer experience capabilities in order to stand out from the pack.

According to Frost and Sullivan, the global customer experience market is expected to grow from US$80 billion in 2020 to US$100 billion in 2025. In Southeast Asia alone, the customer experience market for the new economy sector is expected to grow at 19 per cent CAGR between 2016 and 2025.

As TDCX’s innovative new economy clients develop their next “game-changing” products, services or applications, we aspire to be there to serve their customers with our suite of innovative customer experience solutions.

TDCX Strives to Win

Our greatest advantage is our people. We hire and develop the right people, provide them with attractive work locations and equip them with technology to carry out their tasks to the best of their abilities.

Our proprietary technology platform provides the multiplier effect to extract the best from our team. It starts with “Flash Hire,” our customizable, automated video-based recruitment platform that learns about the characteristics of our best performers and applies those insights in our recruitment process. We believe that this improves our ability to hire the right people, while significantly reducing our recruitment time and costs.

We develop our talent through “Flash Coach” and “Flash Learn,” where we roll out online learning and training programs. To determine our developmental priorities, we draw insights from our data as we aim to approach this clearly and systematically.

In addition, we use advanced analytics, artificial intelligence and a real-time decision support system to understand our employees’ performance. This helps us to make rapid operational changes and to take pre-emptive steps such as additional training and resources so as to achieve better client outcomes.

We strive to create workspaces that are welcoming, productive and inspiring. The office environment is our employees’ home-away-from-home, where they hike the extra mile.

During the COVID-19 pandemic, our resilience and agility were tested. Employee safety was our top priority and everyone at TDCX banded together to address the challenge. Through our technological capabilities, we were able to transition our people to a work-from-home arrangement quickly and seamlessly while maintaining the security, efficiency and ease that we offer in our offices. As a result, we were able to ensure the safety of our employees without compromising on our service standards.

These factors, in combination, lead to us having employee satisfaction scores that are consistently high. As such, we are able to expand at scale quickly and efficiently to meet the demands of our global clients, while maintaining the collaborative, people-focused culture that is at the heart of TDCX. We believe that our expertise in the art and science of employee recruitment and talent development leads to us having a team of motivated, high-performing people who bond with TDCX.

Caring for the Community and our Environment

Corporate Social Responsibility (“CSR”) is deeply rooted in TDCX’s culture. We are committed to driving initiatives that help to empower our people, uplift local communities and promote environmental sustainability.

 

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In the second quarter of 2021, we conducted 39 CSR activities, contributed 241 volunteer hours, and raised more than US$11,000 to benefit more than 14,500 beneficiaries.

One of those efforts is our ongoing support for frontline medical teams as we battle the COVID-19 pandemic. We supported medical teams through the 4F, or Friday Food for Frontliners Programme, which is a global initiative that provides meals to such frontline workers. Our most recent efforts were in support of frontline medical teams in Colombia and the Philippines, where hundreds of meals were donated to hospitals.

Given the far-reaching impact of climate change, we have made it a priority to reduce our carbon footprint across our operations globally. To date, we have offset 38,770 tonnes of carbon dioxide, which is the equivalent of a reduction in carbon emissions from more than 8,400 passenger vehicles over one year.

Our Eyes are Set Firmly on the Future

Our revenues have increased by 140% from 2018 to 2020, and we opened new offices in six geographies during that time. As of June 30, 2021, we had 13,308 employees.

As we step forward as a global public company, our focus remains on our people, our culture and our growth. We remain steadfast in our long-term vision and our disciplined decision-making for the benefit of our clients, employees and shareholders.

We aim to achieve growth by:

 

  1.

Expanding our network: We believe that we have first mover advantage in Southeast Asia with a unique footprint. Our established positions in key markets allow us to onboard new clients that expand our fast-growing network and provide a strong platform for our geographic reach. We plan to continue to carefully expand our global footprint without losing sight of where our center of gravity is: Asia!

 

  2.

Investing in people and technology: Our commitment to attracting the best talent to join us on this exciting journey will remain an important tenet in our strategy. This is expected to be catalyzed by our new status as a public company, which we believe will enhance our employee value proposition. We also expect to continue to create new digital tools and solutions through our dedicated digital innovation team, Digital Lab, to drive the insights and efficiencies that our clients are reputed for.

We believe that our proven business model, coupled with our team of talented individuals, put us in a strong position to capitalize on future growth opportunities. We look forward to scaling new heights with you, our new investors.

Laurent Junique

Founder, Executive Chairman and Chief Executive Officer

 

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PROSPECTUS SUMMARY

The following is a summary of material information discussed in this prospectus. This summary may not contain all the details concerning our business, our ADSs or other information that may be important to you. You should carefully review this entire prospectus, including the “Risk Factors” section and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision.

Overview

We are a high-growth digital customer experience solutions provider for innovative technology and other blue-chip companies. We offer omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services. We have specific expertise in providing tailored digital customer experience solutions to manage complex customer interactions that go beyond providing boilerplate responses and which require a highly trained workforce capable of effectively delivering our differentiated services and solutions to our clients and their customers. Our focus on complex digital solutions enables us to provide higher value services and solutions for our clients. Our strategy has resulted in a highly attractive financial profile. We have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively. In the years ended December 31, 2018, 2019 and 2020, we recorded revenue of S$181.2 million, S$330.3 million and S$434.7 million (US$323.3 million), profit for the year of S$38.1 million, S$73.5 million and S$86.1 million (US$64.0 million) and EBITDA of S$55.4 million, S$108.1 million and S$142.9 million (US$106.0 million), respectively. For the same periods, we recorded net profit margins of 21.0%, 22.2% and 19.8%, respectively, and EBITDA margins of 30.6%, 32.7% and 32.9%, respectively. In the six months ended June 30, 2020 and 2021, we recorded revenue of S$209.3 million and S$251.6 million (US$187.2 million), profit for the period of S$38.5 million and S$44.8 million (US$33.3 million) and EBITDA of S$65.2 million and S$78.2 million (US$58.2 million), respectively. For the same six month periods, we recorded net profit margins of 18.4% and 17.8%, respectively, and EBITDA margins of 31.1% and 31.1%, respectively.

We believe our employees and our distinctive corporate culture are key enablers of our success, a core strength and part of our competitive advantage. Our corporate culture is designed to foster a work environment that attracts, develops and retains a highly skilled workforce that can effectively engage in complex customer interactions. We focus on reinforcing a culture that emphasizes a sustainable and collaborative approach while being fully committed to our clients’ requirements. We strive to ensure that our distinctive culture is incorporated within all the relationships and processes of our organization and fits within our values and goals.

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages. This international footprint is supported by 13,308 employees as of June 30, 2021, who are located in offices in ten geographies: Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia and Romania.

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; and (3) content monitoring and moderation services. We also offer services consisting of miscellaneous activities, such as providing workspaces to existing clients and providing human resource and administration services to clients. We help our clients manage relationships with their customers by providing digital customer experience solutions, such as after-sales service and customer support across ten industry verticals, including travel and hospitality, digital advertising and media and fast-moving consumer goods. Our sales and digital marketing services offering helps our clients market their products and services to potential customers in both the business-to-consumer, or B2C, and the business-to-business, or B2B, markets. Our content


 

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monitoring and moderation services offering helps our clients create a safe and secure online environment for social media platforms by providing a human touch to content monitoring and moderation services.

Our competitive strengths

Digital customer experience solutions provider for high-growth technology disruptors

We provide a high value-added service platform to market-leading clients in the new economy sectors and traditional blue-chip clients who are undergoing digital transformation across their organizations. Frost & Sullivan defines the “new economy” as the high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth. These industries are seen as an evolution of the existing traditional economy aided by technological advancements and innovation. Our services provide synergies with our clients’ digital economy value chains and enable our clients to grow and transform their businesses’ consumer experience. We offer customized and differentiated customer contact solutions and possess the ability to handle complex and mission-critical digital customer experience interactions. These offerings are enhanced by our ability to solve problems for our clients by leveraging customer interaction data analytics to allow our clients to access real-time data which gives them valuable insights on their end-customers, allows them to improve business processes and make more prompt business decisions to resolve problems in a more timely manner.

We have leveraged our integrated omnichannel and multimodal solutions to shape user experiences in a world of evolving and proliferating digital communication and technology platforms from traditional channels, such as voice and email, to advanced technology driven channels, ranging from messaging and social media to AI-powered chat bots and in-app interactions. We are also able to synergize our in-house developed technology with third-party technology and platforms to solve operational issues which our clients are facing.

We have an international footprint with offices in ten geographies across Asia, Europe and Latin America, which provides us with access to a broad talent pool and equips us with multilingual capabilities to serve a global customer base, including English and key Asian languages, such as Mandarin, Thai, Korean, Malay (Malaysia and Indonesia), Vietnamese and Japanese.

Strong focus on human capital development to deliver superior customer experiences

We believe the quality of our employees is a key differentiator in winning and retaining business, as well as in delivering a superior customer experience. Through our structured recruitment process and strong emphasis on career development, we strive to attract, develop and retain the industry’s high caliber talent who possess deep knowledge of local customs and cultural sensitivities. As of June 30, 2021, we had 13,308 employees of which more than 60% are college or university graduates, including employees with master’s degrees and/or doctorates, which helps us handle complex campaigns. Our employees have access to ongoing internally and externally developed supplementary training and certifications in a number of areas, such as COPC, a standard certification, which is a widely recognized standard across the customer experience industry.

In the years ended December 31, 2018, 2019 and 2020, our annual voluntary attrition rate, measured by the number of employees that voluntarily left us in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in the Asia Pacific region, according to Frost & Sullivan. Consistent with our relatively low attrition rates, employee satisfaction surveys have demonstrated a high degree of satisfaction. Our company-wide employee satisfaction scores were at 87%, 91%, 87% and 89% in our annual internal employee engagement surveys in 2018, 2019 and 2020, including most recently in July 2021. We believe that our strong focus on human capital has been critical to our ability to minimize business disruptions and rehiring and training costs, resulting in high service quality for our clients.


 

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Our commitment to the development of our people is reflected in the multiple awards we have received, including the Best Companies to Work for In Asia 2020 (both our Thailand and Philippines office), the Top 100 Asia’s Best Employer Brands 2019 from Employer Branding Awards (our Malaysia office) from the HR Asia Awards, the Great Place to Learn Certification from the Great Place to Work Institute & SkillsFuture Singapore in 2019 and 2020 (our Singapore office), and Asia’s Best Employer Brand Award from the World HRD Congress in 2018 (our Singapore office).

Well-positioned to capitalize on positive “digital economy” trends and increasing demand for our services

We believe favorable underlying industry trends continue to fuel the growth of our clients. According to Frost & Sullivan, there are a plethora of internet-based technology offshoots driving the new economy growth, including companies in the e-commerce, digital advertising, fintech, online gaming and sharing economy industries. Driven by fundamental shifts in consumer behavior and increased adoption of internet and mobile usage, the global market sizes of retail e-commerce sales, digital advertising spend, sharing economy and online gaming (by transaction value) are estimated to grow at CAGRs of 14.5%, 15.3%, 18.2% and 9.3% from 2021 through 2025, respectively, as reported by Frost & Sullivan.

We believe our clients view their relationship with us as strategically important. New economy clients increasingly seek customized solutions in an evolving digital business services market that is increasingly becoming more complex. We believe the trend will continue as new economy clients rely on us to perform omnichannel CX solutions so that they can maintain their employee-lite, nimble business models, while we provide a service framework that can scale along with their growth. Furthermore, given their relative lack of physical touchpoints with their end-users, new economy clients tend to place a greater emphasis on the quality of customer experience service providers, where we believe we are strongly positioned. Our digital hiring platform, Flash Hire, enables us to remain agile and keep up with the growth of our high-growth clients by allowing us to rapidly identify, evaluate and hire candidates as needed.

Attractive client base of some of the largest and most disruptive companies in fast-growing industries and markets along with traditional blue-chip companies which are undergoing digital transformations

Our client base consists of some of the leading names in their respective industries, such as Facebook and Airbnb, other fast-growing, new economy companies for which we can scale up projects as they grow, as well as traditional blue-chip companies that rely on us to partner in their digital transformation journey. In the past few years, we have proactively increased our new economy client base, which provides strong growth opportunities for us. As of June 30, 2021, 92.7% of our agents, which are the customer facing employees that work on our campaigns, were staffed on campaigns for new economy clients.

We seek to forge partnerships and create long-term relationships with our clients, where they view us as an integral part of their organization through the solutions we offer. By growing and partnering with them over the long term, we have expanded the scope of our services and solutions and have become seamlessly integrated into our clients’ operations, while helping them deliver on their brand promise. On a combined basis, Facebook and Airbnb accounted for a total of 52.0%, 65.9%, 60.4%, 62.3% and 62.3% of our revenue for the years ended December 31, 2018, 2019 and 2020, and the six months ended June 30, 2020 and 2021, respectively. From January 1, 2018 to June 30, 2021, we have acquired 32 new clients. Our new clients are high-growth, new economy disruptors and traditional blue-chip companies engaged in businesses across multiple jurisdictions. For example, since 2018, we have grown relationships with a global payments platform provider, a leading social network, a leading consumer electronics company, a leading regional e-commerce platform and a leading video game developer.


 

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Track record of high-growth financial performance

We focus on providing our clients with a differentiated level of service, which we believe enables us to grow our business together with the growth of our clients’ businesses as well as grow our share of our client’s budget. Due to a combination of an increase in the amount of work for existing clients as well as attracting work from new clients, we increased the average number of our agents by 118% from 3,701 for 2018 to 8,070 for 2020. During this period, we have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively.

Our ability to provide a differentiated level of service and higher valued and more sophisticated services, while efficiently increasing the scale of our business has resulted in our net profit margin of 21.0%, 22.2%, 19.8%, 18.4% and 17.8% for the years ended December 31, 2018, 2019 and 2020, and the six months ended June 30, 2020 and 2021, respectively. It also resulted in our EBITDA margin of 30.6%, 32.7%, 32.9%, 31.1% and 31.1% for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our EBITDA margin for 2020 is the highest among CX-centric outsourced service providers, according to Frost & Sullivan.

We have also managed our growth while maintaining a low debt profile. As of December 31, 2018, 2019 and 2020, we had a total debt to EBITDA ratio of 0.6, 0.3 and 0.3, respectively. We also intend to use a portion of the proceeds from our offering to repay the Credit Suisse Facility, which represents a significant portion of our debt that is outstanding as of the date of this prospectus. Our strong balance sheet, combined with our ability to grow our business and generate cash flows, gives us a strong foundation for focused investments and further business expansion.

Dynamic and highly experienced management team

We have an experienced, hands-on and savvy management team who combine global expertise with local insights. Our Founder, Executive Chairman and Chief Executive Officer, Mr. Laurent Junique, has over 25 years of industry experience and has won numerous awards, including the “Ernst & Young Entrepreneur of the Year in the Outsourced Solutions category” for Singapore in 2018. Our management team has an average of over 15 years of relevant industry experience and most of our senior management have worked with us for over five years, which has allowed us to accumulate valuable operational experience and deep vertical expertise, while building and maintaining close relationships with our key clients. Our management team has been a champion in promoting a vibrant and distinctive culture that emphasizes teamwork, a high degree of flexibility, dedication to the client and alignment with client goals. Under the leadership of our management, we have been able to grow our Company from 1,400 employees as of December 31, 2012, the year we commenced servicing new economy clients, to 13,308 employees as of June 30, 2021.

Our growth strategy

Leverage network effects to expand client coverage and service offerings globally

Our growth strategy is to create a significant network in each of our markets so that we can gain local insights, on-the-ground capabilities and operational experience to expand our client coverage and digital offerings. We intend to achieve this through (i) deepening our relationships with our existing clients, (ii) growing our client base and (iii) extending and “future-proofing” our omnichannel capabilities. We expect the learning and insights from each client will enable us to deepen our expertise in key verticals and further expand our capabilities across service offerings, industries and regions, thereby creating network effects. As we scale and grow our expertise, we expect to penetrate more markets as the impact from our network effects increase.


 

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Deepening our relationships with our existing clients

Our relationships with our new economy clients offer significant opportunities for growth. As we demonstrate the value that we provide, we are frequently able to expand the scale and scope of our services in a variety of ways and grow our wallet share. With our new economy clients’ strong business model scalability, we are well-positioned to ride their growth. We also find opportunities to cross-sell different types of digital offerings and use data analytics to provide integrated insight-driven strategies to help clients improve their business outcomes. In the past, clients who have engaged us for our services have been willing to turn over additional and more critical processes to us as we demonstrate our capabilities over time. As we become more intricately knowledgeable of our clients’ businesses and processes, we find opportunities to expand across the value chain and provide new and increasingly complex digital offerings to them via multiple channels to improve their processes. This in turn encourages client “stickiness” and is a factor that discourages our clients from turning to other providers.

Growing our client base

We seek to develop long-term client relationships with new clients, especially with clients who (i) require similarly complex services as our existing clients, (ii) provide opportunities for us to deliver a wider range of capabilities and meaningful impact to their businesses, and (iii) facilitate robust pipeline development and a strong win-rate of new top-tier clients. We use a multifaceted, technology driven strategy to attract new economy clients.

Extending and “future-proofing” our omnichannel capabilities

We seek to improve our capabilities through continued investments in digital technology and use of third-party technology. We strive to grow our capabilities in future technologies and channels and to continuously evolve with new technology offerings, such as Internet of Things, or IoT, products, wearables and apps, among other areas.

Enhance our human capital and reinforce our distinct corporate culture

Our people are critical to our success. Our ability to grow will depend on our ability to continue to attract, train, and retain large numbers of talented individuals. We continue to focus on maintaining a work environment that would make TDCX an “employer of choice.” We intend to achieve this through various initiatives, including:

 

   

working with new economy digital disruptor clients that are the companies of the future;

 

   

utilizing innovative recruiting techniques that will appeal to potential employees including young talent;

 

   

providing training and development throughout the tenure of an employee’s career, such that our employees remain educated and agile to meet our clients’ evolving requirements;

 

   

providing compensation with appropriate incentives that rewards employee commitment, resulting in high standards of customer experience and support for our clients;

 

   

supporting our employees in work from home situations with the technology ecosystem that enables them to remain productive and connected to training opportunities;

 

   

fostering a healthy work environment where employees work hard but have fun; and

 

   

having office locations in areas that are accessible and appealing, with office interior designs that are contemporary, collaborative and inspiring.

We believe that maintaining a vibrant and distinctive culture is critical to growing our business.


 

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Prudent expansion into new geographic markets

We have a wide footprint of delivery centers in a number of locations across Asia, Europe and Latin America to serve domestic, regional and global markets and we plan to expand our coverage. As of the date of this prospectus, we had offices in a total of ten geographies, including newly opened offices in Beijing in 2017; Barcelona in 2018; Cebu and Yokohama in 2019; Bogota, Hyderabad and Shanghai in 2020 and Bucharest in 2021. The expansion into new locations was driven by our strategy of growing to meet the needs of our existing clients, such as our clients expanding into new markets or seeking to replace their existing service providers. Since adding offices in these locations, we have also added new clients based in these countries, as well as internationally who have been attracted by our increased geographical capacities. We intend to continue to expand our footprint prudently, but rapidly, to ensure we can meet the evolving needs of our clients, including processes requiring multi-jurisdictional and multi-lingual capabilities, and better position ourselves to win new engagements from our existing clients and attract new clients.

In addition to expansion in recently entered markets, we have identified Korea and other Chinese regional markets where we do not currently operate as potential new markets for entry. In 2020, we established a new office in Hyderabad, India as an entry point to the Indian market and to serve as our hub for digital innovation and the global English market, established an office in Bogota, Colombia as an initial office marking our entrance into the Latin America market, and grew our China presence by establishing an office in Shanghai. We established an office in Romania in 2021 to address other opportunities, and we expect it to begin operations in the second half of 2021. We also intend to open an office in the Republic of Korea by 2022.

Key location criteria for setting up new offices include (i) the ability to tap a wide talent pool that has the desired skills to better cater to client requirements, (ii) minimal time zone difference with, and proximity to, existing and potential clients, and (iii) cost competitiveness.

Maintain operational efficiencies through streamlined operations

We strive to be a productive and efficient operator. For example, we utilize digital recruiting techniques, such as our Flash Hire platform, to minimize recruiting costs and improve candidate selection accuracy. We are also adept at educating and developing our employees, through our Flash Learn platform of online courses and learning opportunities, which is a fast and flexible way to train our workforce across multiple geographies. Our innovative digital operating platform, Flash, which we had implemented prior to the COVID-19 pandemic, has enabled us to continue to implement our growth strategy in new markets despite social distancing restrictions on in-person meetings and training sessions. We have business excellence teams that review our standard operating procedures, design customer interaction playbooks and gather and implement best practices across the organization. Larger campaigns also have campaign-specific materials developed to meet specific client needs. In addition, insights gained through our data analytics capabilities also help us optimize staffing levels, track key performance indicators and employee engagement, and enhance workforce management to realize operational efficiencies. As we grow in scale, we intend to further centralize our procurement processes for our infrastructure, technology, telecommunication equipment and professional services in order to lower costs and streamline supplier relationships.

Prudent strategic acquisitions and opportunistic partnerships

We plan to continue to expand our capabilities globally as well as across industry verticals and service offerings. While we expect this will primarily occur through organic growth, from time to time, we expect to selectively evaluate strategic partnerships, alliances and acquisitions to develop or acquire:

 

   

new clients within our existing client verticals, with minimal overlap with existing clients;


 

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new client verticals with high growth potential, such as industries where demand exceeds our ability to scale our business organically and other industries such as in financial technology, digital marketing and gaming;

 

   

new language capabilities to enter into new, large and diverse markets such as Europe and Latin America; and

 

   

new operational capabilities which can improve our efficiencies and complement our existing offerings, including the ability to introduce new offerings.

We believe that our strong balance sheet combined with our ability to grow our business and generate cash flows gives us a strong foundation for focused investments and further business expansion.

The chart below sets out our corporate structure as of the date of this prospectus.

 

LOGO

 

(1)

Effective ownership (voting powers).

(2)

Dormant entity.

Risks Related to Our Business and Industry

Below are certain risks associated with our business and industry. These risks are described in the section titled “Risk Factors”. These risks include the following:

 

   

Our largest clients account for a significant portion of our total revenue and any loss of a large portion of business from any of those large clients could have a material adverse effect on our business, financial condition and results of operations;

 

   

Our failure to successfully implement our business strategy and global, growth-oriented business model and sustain our growth rate and financial performance could harm our business;


 

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We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability;

 

   

Our profitability will suffer if we are not able to maintain our pricing, control costs or continue to grow our business through higher value campaigns;

 

   

Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results;

 

   

Our success depends on the continued service of our Founder and certain of our key employees and management;

 

   

We may fail to attract and retain enough highly trained employees to support our operations;

 

   

A substantial portion of our operations and investments are located in Southeast Asia and we are therefore exposed to various risks inherent in operating and investing in the region;

 

   

Our key clients have significant leverage over our contractual terms and may terminate such contracts on short notice or require us to accept contractual terms that are more favorable to them;

 

   

Spending on omnichannel CX solutions by our clients and prospective clients is subject to fluctuations depending on many factors, including both the economic and regulatory environments in the markets in which they operate;

 

   

Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business;

 

   

We may be involved in disputes, legal, regulatory, and other proceedings arising out of our business operations, and may incur costs arising therefrom and may be affected by negative publicity which may have an adverse impact on our reputation and goodwill;

 

   

We may enter into contracts with significant fixed price elements or solely fixed price contracts with our clients and any failure to accurately price these arrangements may affect our profitability;

 

   

If our services do not comply with the service level and performance requirements required by our clients or we are in breach of our obligations under our contracts with our clients, it may result in reduced payments or the termination of our client agreements;

 

   

We are subject to risks associated with operating in the rapidly evolving new economy sectors;

 

   

We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate; and

 

   

Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability.

Corporate Information

We were incorporated in the Cayman Islands on April 16, 2020 as TDCX Capital Pte Ltd and subsequently changed our name to TDCX Inc. on January 29, 2021. Our registered office in the Cayman Islands is at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our principal executive office is at 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore, Singapore 469004. Our telephone number at this location is +65 6309 1688. Our principal website address is www.tdcx.com. The information contained on our website does not form part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.


 

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Because we are incorporated under the laws of the Cayman Islands, you may encounter difficulty protecting your interests as shareholder, and your ability to protect your rights through the U.S. federal court system may be limited. Please refer to the sections entitled “Risk Factors” and “Enforceability of Civil Liabilities” for more information.

Implications of Being a “Controlled Company”

Upon the completion of this offering, Mr. Laurent Junique, our Founder, Executive Chairman and Chief Executive Officer, will be the beneficial owner of an aggregate of              Class B ordinary shares, which will represent         % of the then total issued and outstanding ordinary shares and         % of the total voting power of our outstanding ordinary shares (or         % of the then total issued and outstanding ordinary shares and         % of the total voting power of our issued and outstanding ordinary shares if the underwriters exercise their option to purchase additional ADSs in full). As a result, we will remain a “controlled company” within the meaning of the NYSE listing rules and therefore we are eligible for, and, in the event we no longer qualify as a foreign private issuer, we intend to rely on, certain exemptions from the corporate governance listing requirements of the NYSE.

Implications of Being an Emerging Growth Company

As a company with less than US$1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

 

   

being permitted to provide only two years of selected financial information (rather than five years) and only two years of audited financial statements (rather than three years), in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; and

 

   

an exemption from compliance with the auditor attestation requirement of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, on the effectiveness of our internal control over financial reporting.

We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year in which the fifth anniversary of the completion of this offering occurs, (2) the last day of the fiscal year in which we have total annual gross revenue of at least US$1.07 billion, (3) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which means the market value of our ordinary shares that is held by non-affiliates exceeds US$700.0 million as of the prior June 30, and (4) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have included three years of selected financial data in this prospectus in reliance on the first exemption described above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

Implications of Being a Foreign Private Issuer

Upon completion of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;


 

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the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

   

the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission, or the SEC, of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.

In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the corporate governance listing requirements of the NYSE. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing requirements of the NYSE. Following this offering, we will rely on home country practice to be exempted from certain of the corporate governance requirements of the NYSE, such that a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members, and neither our compensation committee nor our nominating and corporate governance committee is required to be comprised entirely of independent directors.


 

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The Offering

 

Offering price

We currently estimate that the initial public offering price will be between US$             and US$             per ADS.

 

ADSs offered by us

             ADSs (or              ADSs if the underwriters exercise the over-allotment option in full).

 

ADSs outstanding immediately after this offering

             ADSs (or              ADSs if the underwriters exercise the over-allotment option in full).

 

Ordinary shares issued and outstanding immediately after this offering (includes Class A ordinary shares represented by ADSs)

             ordinary shares (or              ordinary shares if the underwriters exercise the over-allotment option in full), comprising              Class A ordinary shares (or              Class A ordinary shares if the underwriters exercise the over-allotment option in full) and              Class B ordinary shares.

 

  Class B ordinary shares issued and outstanding immediately after the completion of the offering will represent         % of our total issued and outstanding ordinary shares and         % of the then total voting power (or         % of our total issued and outstanding ordinary shares and         % of the then total voting power if the underwriters exercise the over-allotment option in full).

 

The ADSs

Each ADS represents              Class A ordinary shares.

 

  The depositary or its nominee will hold Class A ordinary shares underlying your ADSs. You will have rights as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time.

 

  We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our Class A ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our Class A ordinary shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.

 

  You may surrender your ADSs to the depositary in exchange for Class A ordinary shares in accordance with the terms of the deposit agreement. The depositary will charge you fees for any exchange.

 

  We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended.

 

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  To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

 

Ordinary shares

Our ordinary shares will consist of Class A ordinary shares and Class B ordinary shares immediately prior to the completion of this offering. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote; each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder to any person who is not an affiliate of such shareholder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not an affiliate of the registered shareholder of such Class B ordinary share, such Class B ordinary share will automatically and immediately convert into one Class A ordinary share. Each of our Class B ordinary shares is convertible into one Class A ordinary share at any time and will convert automatically upon the earlier of (i) the date that is 15 years from the date of effectiveness of the registration statement of which this prospectus forms a part or (ii) nine months after the death or permanent disability of Mr. Junique. For a description of Class A ordinary shares and Class B ordinary shares, see “Description of Share Capital.”

 

Over-allotment option

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of              additional ADSs at the initial public offering price, less underwriting discounts and commissions, solely for the purpose of covering over-allotments.

 

Use of proceeds

We expect that we will receive net proceeds from this offering of approximately US$             million, or approximately US$             million if the underwriters exercise their option to purchase              additional ADSs from us in full, assuming an initial public offering price of US$             per ADS, the mid-point of the estimated range of the initial public offering price set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 

 

We plan to use the net proceeds of this offering as follows: to repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the Credit Suisse Facility, and the remainder to enable us to expand our business into new markets, which would include costs for premises, technology and systems and other infrastructure as well as for hiring of personnel


 

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and other expansion related expenses, and for general corporate purposes, including working capital needs and potential acquisitions.

 

Conflict of Interest

Because an affiliate of Credit Suisse Securities (USA) LLC, which is an underwriter in this offering, is the lender under the Credit Suisse Facility and will receive 5% or more of the net proceeds from this offering due to the repayment of the Credit Suisse Facility, Credit Suisse Securities (USA) LLC is deemed to have a conflict of interest within the meaning of Rule 5121 of the Financial Industry Regulatory Authority, Inc., or FINRA. Therefore, this offering will be conducted in accordance with FINRA Rule 5121, which requires, among other things, that a qualified independent underwriter has participated in the preparation of, and has exercised the usual standards of ‘‘due diligence’’ with respect to, this prospectus and the registration statement of which this prospectus forms a part. Goldman Sachs & Co. LLC has agreed to act as qualified independent underwriter for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including those inherent in Section 11 of the Securities Act. We have agreed to indemnify Goldman Sachs & Co. LLC against liabilities incurred in connection with acting as qualified independent underwriter, including liabilities under the Securities Act. See “Use of Proceeds” and “Underwriting—Conflict of Interest.”

 

Dividend policy

We do not intend to pay any dividends on our ordinary shares or ADSs for the foreseeable future. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business. See “Dividends and Dividend Policy” for more information.

 

Lock-up

We and each of our directors, executive officers and Principal Shareholder have agreed, subject to certain exceptions, for a period of 180 days after the date of this prospectus, not to, except in connection with this offering, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any ADSs or ordinary shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or ordinary shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or ordinary shares. See “Shares Eligible for Future Sale” and “Underwriting—Conflict of Interest.”

 

Risk factors

See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ADSs.

 

Payment and settlement

The ADSs are expected to be delivered against payment on             , 2021. The ADSs will be deposited with a custodian as agent of the depositary in New York, New York. In general, beneficial interests in


 

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the ADSs will be shown on, and transfers of those beneficial interests will be effected only through, records maintained by JPMorgan Chase Bank, N.A. and its direct and indirect participants.

 

Listing

We will apply to list our ADSs on the NYSE.

 

Proposed trading symbol

“TDCX”

 

Depositary

JPMorgan Chase Bank, N.A.

 

(1)

As of             , 2021, there were              Class A ordinary shares issued and outstanding.

(2)

Except as otherwise indicated, all information in this prospectus assumes:

   

the adoption and effectiveness of our amended and restated memorandum and articles of association, which will occur immediately prior to the completion of this offering; and

   

no exercise by the underwriters of the over-allotment option to purchase up to an additional              ADSs representing Class A ordinary shares from us.


 

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Summary Consolidated Financial and Other Data

The following summary consolidated financial data as of December 31, 2019 and 2020 and for the years ended December 31, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary financial data as of December 31, 2018 is derived from audited financial statements not included herein. The consolidated financial data as of June 30, 2021 and for the six months ended June 30, 2020 and 2021 have been derived from our unaudited condensed interim consolidated financial statements included elsewhere in this prospectus. The summary financial data set forth below should be read in conjunction with, and are qualified by reference to, “Selected Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with IFRS as issued by the IASB. Our historical results do not necessarily indicate results expected for any future period.

Summary Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

     For the Six Months Ended June 30,     For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
     (in thousands except per share amounts)  

Revenue

     187,174       251,637       209,280       323,358       434,723       330,265       181,233  

Employee benefits expense

     (115,610     (155,426     (126,167     (191,896     (257,985     (189,912     (109,373

Depreciation expense

     (14,757     (19,839     (15,633     (24,595     (33,065     (24,599     (12,908

Rental and maintenance expense

     (4,223     (5,677     (5,856     (7,887     (10,603     (9,220     (2,623

Recruitment expense

     (3,358     (4,515     (3,942     (5,954     (8,005     (6,680     (3,792

Transport and travelling expense

     (396     (533     (670     (1,119     (1,504     (2,083     (1,358

Telecommunication and technology expense

     (2,916     (3,920     (3,013     (4,690     (6,305     (4,522     (2,385

Interest expense

     (2,787     (3,747     (1,496     (2,275     (3,058     (2,893     (1,128

Other operating expense

     (4,569     (6,144     (9,052     (11,779     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

                 731       544       731              

Share of profit from an associate

     32       43             146       196              

Interest income

     129       174       245       443       594       465       268  

Other operating income

     2,041       2,744       3,866       5,590       7,514       717       546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

     40,760       54,797       48,293       79,885       107,397       81,060       41,608  

Income tax expenses

     (7,464     (10,034     (9,769     (15,846     (21,303     (7,524     (3,520
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period/year

     33,296       44,763       38,524       64,039       86,094       73,536       38,088  

Other comprehensive income (loss)(1)

     (858     (1,153     1,344       398       536       840       (71
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period/year

     32,438       43,610       39,868       64,437       86,630       74,376       38,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

     0.27       0.36       0.31       0.52       0.70       0.60       0.31  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma basic and diluted earnings per share(2) (in US$ or S$)

                                                                                                                                     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Notes:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

(2)

Unaudited basic and diluted pro forma net income (loss) per share data assumes that an additional              of our shares were issued and outstanding for the six months period ended June 30, 2021, which represents the number of shares of common stock that we expect to be issued to fund the debt repayment with the net proceeds of this offering as described in “Use of Proceeds.” The number of shares of common stock that we expect to be issued to fund the debt repayment was calculated in accordance with Staff Accounting Bulletin Topic 3.A. by dividing $             million, which is the estimated cost to repay indebtedness with the proceeds of this offering as described in “Use of Proceeds,” by $             per share, the low end of the initial public offering price range included on the cover of this prospectus less underwriting discounts and commissions.


 

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Summary Consolidated Statement of Financial Position

 

                                                                                   
     As of June 30,     As of December 31,  
     2021     2020     2019     2018  
     US$     S$     US$     S$     S$     S$  
     (in thousands)  

ASSETS

            

Current assets

            

Cash and cash equivalents

     60,370       81,162       44,486       59,807       35,920       23,973  

Fixed deposits

     5,655       7,602       5,748       7,727       837        

Trade receivables

     34,816       46,806       27,461       36,919       55,278       27,605  

Contract assets

     37,858       50,897       34,842       46,842       26,523       18,605  

Other receivables

     8,985       12,080       9,117       12,257       9,210       5,392  

Tax recoverable

                                   350  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     147,684       198,547       121,654       163,552       127,768       75,925  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current assets

            

Pledged deposits

     1,766       2,374       1,768       2,377       2,110       2,096  

Other receivables

     3,389       4,558       4,369       5,874       3,708       2,931  

Plant and equipment

     35,344       47,516       30,185       40,581       40,730       24,911  

Right-of-use assets

     21,024       28,265       21,736       29,221       22,840       18,586  

Loan to an associate

                             784        

Deferred tax assets

     1,810       2,433       1,175       1,580       1,197       329  

Investment in an associate

     193       260       170       229       33       33  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     63,526       85,406       59,403       79,862       71,402       48,886  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND (CAPITAL DEFICIENCY)/ NET EQUITY

            

Current liabilities

            

Other payables

     28,111       37,794       27,671       37,200       26,926       15,870  

Amount due to founder

                                   10,469  

Bank loans

     18,703       25,144       17,978       24,170       34,421       6,374  

Lease liabilities

     10,512       14,132       10,907       14,664       10,963       7,634  

Provision for reinstatement cost

     2,767       3,720       336       452              

Income tax payable

     9,209       12,381       9,861       13,257       6,956       3,229  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     69,302       93,171       66,753       89,743       79,266       43,575  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities

            

Bank loans

     196,303       263,910       12,002       16,136             24,174  

Lease liabilities

     12,822       17,238       13,257       17,823       14,498       12,495  

Provision for reinstatement cost

     3,374       4,536       4,178       5,617       4,955       1,817  

Defined benefit obligation

     1,282       1,723       1,067       1,435       769       315  

Deferred tax liabilities

     105       141       96       129       236       365  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     213,886       287,548       30,600       41,140       20,458       39,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interest

            

Share capital

     12       16       *       *       *       *  

Reserves

     (203,616     (273,741     (14,760     (19,843     (20,650     (21,604

Retained earnings

     131,756       177,133       98,462       132,371       120,094       63,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Deficit)/Equity attributable to owners of the Group

     (71,848     (96,592     83,702       112,528       99,444       42,069  

Non-controlling interests

     (130     (174     2       3       2       1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Capital deficiency)/ Net equity

     (71,978 )      (96,766 )      83,704       112,531       99,446       42,070  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and (capital deficiency)/ net equity

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000


 

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Summary Consolidated Statement of Cash Flows

 

                                                                                          
     For the Six Months Ended
June 30,
    For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
                                         (Restated)  
     (in thousands)  

Net cash from operating activities

     39,798       53,505       83,944       97,057       130,484       76,044       37,320  

Net cash used in investing activities

     (11,906     (16,006     (7,228     (17,615     (23,682     (27,627     (20,863

Net cash used in financing activities

     (11,559     (15,540     (1,962     (61,941     (83,274     (36,655     (10,680
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,333       21,959       74,754       17,501       23,528       11,762       5,777  

Effect of exchange rate changes on balance of cash held in foreign currencies

     (449     (604     736       267       359       185       (71

Cash and cash equivalents at the beginning of the period/year

     44,486       59,807       35,920       26,718       35,920       23,973       18,267  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period/year

     60,370       81,162       111,410       44,486       59,807       35,920       23,973  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other Financial and Operating Data

 

                                                                     
     Six Months Ended
June 30,
     Year Ended
December 31,
 
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,177        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We define EBITDA as profit for the year/period before interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational


 

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Metrics—Non-IFRS Financial Measures” for information regarding the limitations of using EBITDA, EBITDA margin and Debt/EBITDA Ratio as financial measures.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
     For the Year Ended December 31,  
     2020     2019     2018  
     US$     S$     Margin     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

     64,039       86,094       19.8     73,536       22.2     38,088       21.0

Adjustments:

              

Depreciation expense

     24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

     15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

     2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

     (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     106,313       142,926       32.9     108,087       32.7     55,376       30.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Six Months Ended June 30,  
     2021     2020  
     US$     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     187,174       251,637             209,280        

Profit for the period and net profit margin

     33,296       44,763       17.8     38,524       18.4

Adjustments:

          

Depreciation expense

     14,757       19,839       7.9     15,633       7.5

Income tax expenses

     7,464       10,034       4.0     9,769       4.7

Interest expense

     2,787       3,747       1.5     1,496       0.7

Interest income

     (129     (174     (0.1 %)      (245     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     58,175       78,209       31.1 %      65,177       31.1 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(2)

The number of clients and number of agents are calculated as of December 31 of the year indicated or as of June 30 of the period indicated.

(3)

Revenue per agent is calculated as revenue for a period divided by the average of the number of agents at the end of each month during such period. We monitor our revenue per agent because we believe it measures our success in expanding our client relationships higher up the value chain. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, an FTE is classified as an “agent.”


 

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RISK FACTORS

This offering and an investment in the ADSs involve a significant degree of risk. Prospective investors should carefully consider the risks described below, together with the financial and other information contained in this Prospectus before deciding to purchase the ADSs. There may be additional risks not presently known to us or that we currently believe to be immaterial, which could turn out to be material. Our business, financial condition and results of operations could be adversely affected by any of these risks, should they occur, and turn out to be material. If any of the following risks actually occurs, our business, financial condition and results of operations could be adversely affected and, as a result, the trading price of our Shares could decline and you could lose all or part of your investment in the ADSs.

This Prospectus also contains forward-looking statements which involve risks and uncertainties. Our actual results of operations could differ materially from those anticipated in these forward-looking statements due to a variety of factors, including the risks described below and those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Prospectus. See the section entitled “Special Note Regarding Forward-Looking Statements” of this Prospectus.

Before deciding to invest in the ADSs, prospective investors should seek professional advice from their advisors about their particular circumstances.

Risks Related to Our Business and Industry

Our largest clients account for a significant portion of our total revenue and any loss of a large portion of business from any of those large clients could have a material adverse effect on our business, financial condition and results of operations.

We are dependent upon the business relationships we have developed with our largest clients, including our ability to retain our clients. In the past we have derived and, as of the date of this prospectus, we believe that we will continue to derive, a significant portion of our revenue from our two largest clients, Facebook and Airbnb. On a combined basis these two clients accounted for a total of 52.0%, 65.9%, 60.4%, 62.3% and 62.3% of our revenue for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our top five clients for each of 2018, 2019 and 2020, on a consolidated basis, accounted for a total of 83.4%, 88.9% and 83.8% of our total revenues in the years ended December 31, 2018, 2019 and 2020, respectively. Our top five clients for each of the six months ended June 30, 2020 and 2021, on a consolidated basis, accounted for a total of 87.0% and 84.6% of our total revenues in the six months ended June 30, 2020 and 2021, respectively.

In addition, there can be no assurance that the volume of work to be performed by us for our largest clients will not vary significantly from year to year in the aggregate, particularly since we are not the exclusive service provider for our clients generally. Furthermore, one of the key services we provide to one of our largest clients is content monitoring and moderation, which has become a growth business for us. There can be no assurance that current trends related to content monitoring and moderation will not reverse. A number of factors other than the price and quality of the services we provide, such as a change in the financial profile of a client, change of leadership or strategy within a client’s senior management, or a corporate reorganization, merger or other acquisition involving a client, could result in the loss or reduction of business from any of our clients, including our largest clients, and we cannot predict the timing or occurrence of any such event. The loss of revenue from our largest clients may have an adverse effect on our business, financial condition and results of operations.

Our failure to successfully implement our business strategy and global, growth-oriented business model and sustain our growth rate and financial performance could harm our business.

We are a high-growth digital customer experience solutions provider for technology disruptors and other blue-chip companies and provide omnichannel CX solutions, sales and digital marketing services, content

 

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monitoring and moderation services and other services. The execution of our business strategy is critical in order for our overall business to achieve economies of scale and increase our profitability.

Our business strategy involves hiring, training and retaining skilled personnel, developing or acquiring technology solutions that we incorporate in our services and maintaining and growing a globally oriented expertise in the industries that comprise the new economy. Our business strategy may strain our existing management resources, operational, financial and management information systems and IT solutions to the point that they may no longer be adequate to support our operations, requiring us to incur significant expenditures in these areas. We expect that we will need to develop further financial, operational and management controls, reporting systems and procedures to accommodate future growth. We cannot assure you that we will be able to develop these controls, systems or procedures on a timely basis, or at all.

Our success in implementing our business strategy and global, growth-oriented business model may be adversely affected by other factors within and outside of our control, including the following:

 

   

size, timing and profitability of significant campaigns or engagements with current or new clients;

 

   

changes in the volume of work we receive on a full-time equivalent basis from campaigns;

 

   

the inability to accurately predict and in a timely manner fulfill FTE requirements on our campaigns;

 

   

changes in global business services demand due to any reason, including changes in laws, regulations or perceptions of outsourcing operations to offshore service providers;

 

   

the inability to continually improve or adapt to rapid technology changes;

 

   

adverse changes to our cost structure;

 

   

our inability to operate and manage a larger operation as we grow our market share and enter into international markets;

 

   

existing or potential clients’ decisions to stay with existing service providers or move services we provide in-house;

 

   

the inability to win new campaigns through competitive bidding processes;

 

   

the inability to attract qualified employees;

 

   

the inability to manage foreign exchange fluctuations;

 

   

operational, financial and legal challenges (including compliance with foreign laws);

 

   

costs associated with entering new and unfamiliar geographies or commencing significant new campaigns for our current and future clients; and

 

   

negative press and reputational risks that adversely affect our brand, including similar risks to our industry.

Our failure to successfully execute our business strategy and global, growth-oriented business model could also adversely affect our future operating performance and cash flow, which in turn could restrict our ability to source high quality human capital and talent, innovate new tools and services offerings, make our operations more efficient and grow our business. We cannot assure you that we will be able to successfully execute our growth strategy or implement our planned business strategy and failure to do so could have an adverse effect on our business, financial condition and results of operations.

We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability.

Our industry is very competitive. We primarily compete on the basis of the quality of the services we provide and expertise in tailored services for our clients. We believe that the other principal competitive factors in the

 

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markets in which we operate are price, value proposition to clients, breadth of geographical reach and industry expertise. We primarily face competition from other customer experience business services providers as well as firms specializing in customer relationship management consulting, customer engagement solution providers and in-house customer engagement operations. We typically are not an exclusive service provider for our clients as they usually prefer to engage more than one provider in each customer region to reduce their provider concentration risk. See “Business—Competition.”

According to Frost & Sullivan, the growing impetus for modernizing the customer experience to maintain competitive differentiation, rising usage for non-voice channels in addition to other channels of communication, and building of efficient customer experience centers through the use of machine learning and artificial intelligence technologies are driving the demand for outsourced customer experience, or CX, services in the new economy industry. This trend may result in new and different competitors entering our markets. These competitors may include entrants from the telecommunications, IT, software and data networking industries or entrants in geographical locations with lower costs than those in which we operate.

Some of these competitors have and in the future may continue to have greater financial, human and other resources, longer operating histories in particular regions, greater geographical reach, greater technological expertise and more established relationships with particular clients and prospective clients. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address customer and client needs and reduce operating costs, or enter into similar arrangements with potential clients. Further, trends of consolidation in our industry and among business services competitors may result in new competitors with greater scale, a broader footprint, better technologies and price efficiencies attractive to our clients.

We also may face competition from our clients if they decide to bring the services we provide in-house or consolidate the number of vendors they use for the services we provide. Increased competition, our inability to compete successfully, pricing pressures or loss of market share could result in reduced operating profit margins which could have a material adverse effect on our business, financial condition and results of operations.

Our profitability will suffer if we are not able to maintain our pricing, control costs or continue to grow our business through higher value campaigns.

Our profit margin, and therefore our profitability, is largely a function of our level of activity and the rates we are able to charge for our services. If we are unable to maintain the pricing for our services without corresponding cost reductions, our profitability will suffer. The pricing and levels of activity we are able to achieve are affected by a number of factors, including our clients’ perceptions of our ability to add value through our services, the length of time it takes to on-board new employees on any new or current campaigns, the volume of work for new clients or new campaigns with current clients, competition, the introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenue from client contracts and general economic conditions.

Our profitability is also a function of our ability to control our costs and improve our efficiency and productivity. As we increase the number of our employees and locations at which we operate and execute our global growth strategy, we may not be able to manage the significantly larger and more geographically diverse workforce that may result, which could adversely affect our ability to control our costs or improve our efficiency. Further, because there can be no assurance that our business will grow at the rate that we anticipate or that we will be successful in growing our business in new geographies and markets that we enter, we may incur expenses for the increased capacity for a significant period of time without a corresponding growth in our revenues.

Our agreements with our clients are typically for one to three year terms and many of our agreements have automatic renewal terms or renewal terms to be entered into at the election of our clients. Accordingly, we may be bound by pricing and other established terms during the renewal periods and so we may not be able to revise pricing or other terms to take account for market conditions, including changes in labor costs.

 

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We may be unable to reduce our capacity if demand for our services decreases or if we overestimate the future demand for our current clients. In the case where demand for our services decreases, we may have lower capacity utilization rates until we can decrease our labor capacity to meet any such decrease in demand.

Any failure by us to maintain our pricing, control or adjust costs to the level of activity or adjust the pricing and terms of our client agreements to market conditions could adversely affect our business, financial condition and results of operations.

Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results.

Contagious diseases have spread throughout the world, including in certain parts of Asia where the majority of our operations are located. Most recently, the global outbreak of the COVID-19 pandemic has created significant volatility and uncertainty and economic disruption. The COVID-19 pandemic is ongoing with new variants believed to be spreading across the world, and has caused adverse effects on our and our clients’ operations during 2020 and 2021. For example, as each jurisdiction in which we operate imposed social distancing measures and we were required to either partially or completely reduce physical headcount in our offices, we implemented a work from home strategy in order to comply with such measures. In many cases, this involved a certain period of transition while we worked with our employees to ensure adequate work from home working conditions, which resulted in temporary periods of lower productivity, and additional costs incurred as we worked to ensure that our employees have adequate equipment and systems to support their work from home arrangements. Work from home arrangements also present other issues, such as potential cybersecurity risks and there can be no assurance that the systems we have in place will be effective at preventing cybersecurity threats or that we and our clients would agree on an acceptable work from home arrangement or that we would be able to comply with the conditions of any agreed upon work from home plan. There can also be no assurance that we will be able to meet all local guidelines as we transition personnel back to the office and as local social distancing rules and regulations change in the jurisdictions in which we operate. Additionally, our delivery centers typically seat hundreds of employees in one location. An outbreak of COVID-19 or similar contagious infection in one or more markets in which we do business may result in disruptions or restrictions on our ability to continue operations without interruption, such as significant worker absenteeism, lower seat utilization rates, lower productivity, as well as temporary closures of our delivery centers or the facilities of our clients, which could adversely affect our ability to deliver our services. We could also see an increase in health care costs for employees due to emerging regulations regarding COVID-19 testing, telemedicine, and in the future, coverage for any vaccine. The spread or resurgence of COVID-19 in any country where we have operations could impair our day-to-day service delivery from our affected offices and client campaigns and result in, among other things, losses of revenue and cause us to fail to meet certain KPIs in our client contracts.

In addition, the effects of COVID-19 have adversely affected certain of our clients’ businesses, particularly our clients in or exposed to travel and hospitality industries. This effect on our clients’ businesses has, in turn, resulted in decreased demand for our services from our clients in those affected industries, including some of our largest clients on whom we are significantly dependent. In response to this decreased demand, we have reduced the number of employees dedicated to these campaigns and either re-allocated them to other campaigns or, if necessary, terminated their employment with us. There can be no assurance that our clients will not decide to further reduce their demand for our services due to COVID-19-related effects on their business and that we will not have to reduce headcount in response. Furthermore, our results of operations have been materially adversely impacted as a result of COVID-19 and there can be no assurance that we would not be materially and adversely impacted in the future from the effects of COVID-19 or another pandemic, including from any loss of business, if any of our clients face significant business disruptions or demand for our clients’ services falls as a result of COVID-19 (or any disease outbreak that results in a health pandemic). As our agreements typically have payment terms of 30 to 90 days, any change in our clients’ cash flows that restrict their ability to make payments for services we have rendered may adversely affect our cash flows and results of operations. Our clients have delayed, and may in the future delay, planned engagements or choose to terminate existing agreements prior to the end of any term for convenience or decide not to renew their agreements with us.

 

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Finally, COVID-19 or any other pandemic may result in difficulty accessing the capital markets on attractive terms, or at all, and a severe disruption and instability in the global financial markets, or deterioration in credit and financing conditions which could adversely affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis or at all.

Any outbreak of a contagious disease in Asia or elsewhere (including the recent COVID-19 coronavirus or other diseases in the future), or fear or public perception of an outbreak, could have a negative impact on the economy and business activity in the markets in which we and/or our clients operate, thereby adversely impacting our operations and business. Any outbreak of disease or prolonged epidemic in the geographies in which we or our clients operate could severely disrupt our business operations and have an adverse effect on our business, financial condition and results of operations. See “Business—COVID-19 Risk Mitigation and Continuity of Operations.”

Our success depends on the continued service of our Founder and certain of our key employees and management.

Our operational business model is focused on the empowerment of our country directors and our success (including maintaining our corporate culture) depends on the continued service and performance of our country directors as well as our executive officers and other key personnel. There is competition for experienced senior management and personnel with expertise in our industry, and we may not be able to retain our key personnel or recruit skilled personnel with appropriate qualifications and experience.

Furthermore, our Founder also serves as our Executive Chairman and Chief Executive Officer and his involvement in our Company is essential to the success of our Company. Our Founder plays a central role in the development and implementation of our business strategies and initiatives. At the time of this prospectus, we have not procured any “key person” insurance policy which covers our Founder.

Any decrease in the involvement of our Founder in our business or loss of key members of our personnel, particularly to competitors, could have an adverse effect on our business, financial condition and results of operations.

We may fail to attract and retain enough highly trained employees to support our operations.

The outsourced business support services industry relies on large numbers of highly trained employees at delivery centers. The demand for talent is even more important for business services companies, such as our Company, that provide complex and high-value services, including content moderation and digital services support. Therefore, our success depends to a significant extent on our ability to attract, hire, train and retain talented and skilled employees. Our industry is prone to high employee attrition, which requires us to continuously hire and train new employees. According to Frost & Sullivan, our industry has had an average annual attrition rate of 30% to 34% in the Asia Pacific region. There is significant competition for trained employees with the skills necessary to perform the services we offer to our clients, including employees that are proficient in certain high-demand languages. In addition, we compete for employees, not only with other companies in our industry, but also with companies in other industries and in many locations where we operate, there may be a limited number of highly trained employees for a number of reasons, including government-imposed regulations and policies related to expatriate and foreign permitting that could limit the number and availability of foreign workers in certain jurisdictions. We often rely on expatriate employees to fill roles that cannot be performed by locally-hired agents due to combination of specialized skillset, native languages and cultural skills. If qualified personnel cannot immigrate to or obtain work visas in a country where we require their services, we may have difficulty hiring the requisite number of local workers with the requisite skills for our campaigns, or we may exceed our budgets in order to do so. In particular, in Thailand, our subsidiary, Teledirect Telecommerce (Thailand) Limited, has been granted certain privileges by the Board of Investment of Thailand, or the BOI, which are comprised of incentives for business development in Thailand and includes, among other

 

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things, certain exceptions allowing us to hire foreign technicians and experts to work on promoted projects and the ability to secure visas for foreign employees with a faster approval time than is otherwise available for non-promoted businesses in Thailand. However, these privileges are subject to a number of conditions (as amended from time to time) including the requirement to have no later than August 23, 2021, which was later extended to August 23, 2022 as approved by the BOI, and maintain through the promotion period, a ratio of domestic to foreign employee of at least three to one. As of June 30, 2021, our ratio of domestic to foreign employees in Thailand was approximately 2.8 to 1. Although we are actively managing our headcount in Thailand for compliance with the BOI’s domestic employee requirement, there can be no assurance that we will reach the requisite ratio by the current deadline, in which case the BOI could revoke our privileges and incentives, which could cause our foreign employees to lose their employment visas, which could materially affect our operations in Thailand.

Increased competition for qualified personnel could also have an adverse effect on our business. Additionally, a significant increase in the attrition rate among trained employees could result in increased costs, disrupted revenue streams and decreased profit margins.

In addition, our ability to maintain and renew existing engagements, obtain new business and increase our margins will depend, in large part, on our ability to attract, hire, train and retain skilled employees that enable us to keep pace with the growing demand for business services, evolving industry standards, new technology applications and changing client preferences. Our failure to attract, hire, train and retain personnel with the experience and skills necessary to fulfill the needs of our existing and future clients or to assimilate new employees successfully into our culture and our operations could have an adverse effect on our business, financial condition and results of operations.

A substantial portion of our operations and investments are located in Southeast Asia and we are therefore exposed to various risks inherent in operating and investing in the region.

For the year ended December 31, 2020 and the six months ended June 30, 2021, we derived 91.4% and 91.0%, respectively, of our revenue from our operations in countries located in Southeast Asia. We intend to continue to develop and expand our business and capacity in Asia with our current and potential clients. Our operations and investments in Southeast Asia are subject to various risks related to the economic, political and social conditions of the countries in which we operate, including risks related to the following:

 

   

inconsistent regulations, licensing and legal requirements may increase our cost of operations among the countries in Southeast Asia in which we operate;

 

   

currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may be imposed;

 

   

the effects of inflation within Southeast Asia generally and/or within any specific country in which we operate in Southeast Asia;

 

   

governments may impose new or more burdensome regulations, taxes or tariffs;

 

   

political changes may lead to changes in the business environments in which we operate;

 

   

economic downturns, political instability, civil disturbances, military conflict, terrorism and general security concerns in the countries that either we or our clients operate may negatively affect our operations;

 

   

enactment or any increase in the enforcement of regulations related to personal data protection in the areas in which we operate that may incur compliance costs;

 

   

health epidemics (including the COVID-19 outbreak) may affect our operations and demand for our services; and

 

   

natural disasters like volcano and earthquakes may impact our operational sites severely.

 

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Additionally, the laws in the countries we operate may change and their interpretation and enforcement may involve significant uncertainties that could limit the reliability of the legal protections available to us. We cannot predict the effects of future developments in the legal regimes in the countries we operate.

Any of the foregoing risks may adversely affect our business, financial condition and results of operations.

Our key clients have significant leverage over our contractual terms and may terminate such contracts on short notice or require us to accept contractual terms that are more favorable to them.

Our relationships with our clients are governed by master services agreements, or MSA, and a number of statements of work, or SOWs, which set out the details of our services we provide to our clients. Our current MSA with Facebook has a primary term of 12 months and automatic 12-month renewal periods thereafter (unless terminated by Facebook). On August 1, 2021, we entered into a new MSA with Airbnb for an initial term as well as two extension options (unless terminated by Airbnb). While our MSAs have traditionally been renewed and have not been terminated by our largest clients as of the date of this prospectus, there can be no assurance that our agreements with any of our clients, will be renewed upon their expiration on commercially favorable terms or at all or will not be terminated early pursuant to their respective terms.

A contract termination, non-renewal of a contract when it expires, or significant reduction in the use and number of services under our contracts with our key clients could result in a lower utilization rate, which would result in decreased operating margins and profitability. We may not be able to replace any key clients that elect to terminate, scale back, or not renew its contract with us, which would have an adverse effect on our business, financial condition and results of operations.

Our key clients may require us to accept contractual terms that are less favorable to us. For example, if our key clients require us to extend the payment periods beyond the current 30 to 90 day typical range, our working capital levels and overall financial position could be adversely affected, which may make it more difficult to finance our capital expenditures or increase our borrowing costs. In addition, our two largest clients require us to include staffing related restrictions. For example, if certain project team members, such as senior project managers and certain other employees with access to sensitive client information, leave the relevant client’s project, we must wait a certain period of time before we can staff that employee on a project for a different client in the same industry. These restrictions do not restrict our ability to transfer agents, who comprise the vast majority of our staff, among competing clients or otherwise restrict us from servicing or acquiring clients within the same industries as, or who are direct competitors to, our existing clients. In addition, we may from time to time enter into exclusivity arrangements with our clients which may prohibit us from working with identified competitors or with businesses operating in the same industries as our clients.

The anticipated strategic and financial benefits of our relationship with Airbnb may not be realized.

Pursuant to our arrangements with Airbnb, we are currently in the process of negotiating with Airbnb the potential issuance of warrants to acquire some of our ordinary shares. We expect, subject to negotiation and agreement on terms and conditions, that we would grant Airbnb a warrant on the basis that the warrant would result in a growth in revenues. In the event that we are unable to agree to the terms of such warrant and such warrant is not issued, it could negatively affect our business relationship with Airbnb, which could result in a reduced volumes of work and lower revenues, or at least, lower growth than we otherwise anticipated. In addition, even if such warrant is issued, achieving the anticipated benefit from the warrant is subject to a number of challenges and uncertainties. If we are unable to achieve our objectives or if we experience delays, the expected benefits may be only partially realized or not at all, or may take longer to realize than expected, which could adversely impact our financial condition and results of operations.

 

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Spending on omnichannel CX solutions by our clients and prospective clients is subject to fluctuations depending on many factors, including both the economic and regulatory environments in the markets in which they operate.

Our clients’ budgets for our services and reductions in client spending arising from or related to economic slowdown in the markets in which our clients operate have in the past adversely impacted our revenues, gross profits, operating margins and results of operations. Certain events outside of the control of our clients, such as regulatory and political developments, may occur and adversely affect our revenues, gross profits, operating margins and results of operations. These economic conditions can occur abruptly. For example, the recent COVID-19 outbreak has caused volatility and uncertainty in the global economy. COVID-19 has adversely impacted us and many of our clients, and the extent to which COVID-19 may continue to impact our financial condition or results of operations in the future is uncertain and will depend in part on its impact on our clients and prospective clients and their customers. See “—Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results.”

Increased regulation, changes in existing regulation or increased government intervention in the industries in which our clients operate may adversely affect the growth of their respective businesses, which in turn may reduce demand for our services or cause us to incur additional costs in our processes or personnel, thereby negatively affecting our business, results of operations and financial condition. For example, our clients may be subject to stringent compliance requirements, including privacy and security standards for handling data, which could impact the manner in which we provide our services. Further, regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions. See also “—Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.”

Reduced or delayed spending by our clients may also lead to our clients cancelling ongoing projects with us, requesting pricing reductions or consolidating the service providers that they partner with. In the past, such events have adversely impacted our utilization rates, monthly revenue per FTE, the competitiveness of our proposals and our gross margins.

The business challenges and pressures resulting from economic slowdown in the markets in which our clients operate could also affect their credit ratings and our credit terms with them, leading to adverse impact on our cash flow and results of operations. Any of the foregoing could adversely affect our business, financial condition and results of operations.

Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business.

Employee benefits expenses were S$109.4 million, S$189.9 million, S$258.0 million, S$126.2 million and S$155.4 million in the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, representing 78.5%, 76.7%, 77.4%, 76.8% and 79.3% of our total operating expenses in each period, respectively.

Employee salaries and benefits expenses in all of the countries in which we operate have increased over recent years as a result of economic growth, increased demand for business services and increased competition for trained and talented employees and we cannot assure that they will not continue to rise. Our expenses may also increase if we implement employment compensation schemes, such as an employee stock option plan, to attract talent.

We attempt to control our costs as we grow our capacity in existing locations or enter into new geographies. We may need to increase salaries more significantly and rapidly than in previous periods as part of our efforts to

 

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remain competitive or meet the demand for our services, which may cause our labor costs to increase. In addition, depending on the state of the labor market for our employees at any given time, we may need to increase employee compensation more than in previous periods to remain competitive in attracting the quantity and quality of employees that our business requires. Wage increases may reduce our operating margins and adversely affect our profitability if our revenue remains stagnant or if we face price pressure from competition.

If we expand our operations into new geographies within which prospective employee pool have higher average wages and compensation expectations, our average or overall labor costs may increase which will reduce our margins and profitability, especially when we enter into new markets and seek to grow our business in new geographies where we have no track record.

Furthermore, most of the countries in which we operate have labor laws which protect the interests of workers, including statutorily mandated minimum wage increases, legislation that imposes financial obligations on employers and laws governing the employment of workers. We are also required to provide employee retirement by law in certain countries, such as the Philippines and Thailand, where we have made provisions for such retirement plans in our financial statements. Certain jurisdictions, such as Thailand and Singapore, also have laws that restrict our ability to hire foreign workers by setting caps on the proportion of foreign workers in the workforce of the applicable jurisdictions. In Thailand, we have received certain incentives issued by the Board of Investment of Thailand. See “—We may fail to attract and retain enough highly trained employees to support our operations.”

These labor laws in one or more of the key jurisdictions in which we operate, including Singapore and the Philippines, may be modified in the future in a way that causes our costs to increase and any such changes may be detrimental to the business that we operate in such jurisdiction. The implementation or increase of additional labor laws in the countries we operate may reduce our profit margins and have an adverse effect on our business, financial condition and results of operations.

We may be involved in disputes, legal, regulatory, and other proceedings arising out of our business operations, and may incur costs arising therefrom and may be affected by negative publicity which may have an adverse impact on our reputation and goodwill.

From time to time we are, and in the future may continue to be, involved in disputes with various parties in the course of our business including clients, employees and ex-employees. Such disputes may involve various matters such as business disputes, employment matters and regulatory compliance.

In particular, from time to time, we have been the subject of complaints and claims made by our ex-employees in relation to, for instance, claims of unfair dismissal and disputes over employment contracts and terms. These disputes may lead to legal or other proceedings and may result in costs, negative publicity, and the diversion of resources and management’s attention regardless of the outcome. Any negative publicity arising from such disputes or complaints against our Company, whether founded or unfounded, may tarnish our reputation and goodwill and could cause our clients or future clients to not use our services.

In particular, the business practices of companies that offer content moderation and curation services have been subject to increasing scrutiny over their business practices and the treatment and wellbeing of the employees who work in these areas. Several other companies operating in other countries offering these services have been subject to lawsuits by their employees and ex-employees relating to allegations of post-traumatic stress disorder and related trauma. While we work diligently to ensure that our work practices and work culture support healthy employee well-being and we operate in countries with different legal regimes than other cases, there can be no assurances that we will not also be subject to similar legal actions. In addition, many of the services we provide our clients are complex, such as trust and safety verification and quality and compliance audits, we may face potential liability if we do not perform in accordance with the requirements of our agreements.

In addition, we may become involved in disputes, legal, regulatory, and other proceedings between our clients and third parties, such as our clients’ customers, in connection with the services that we provide. Some of our

 

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clients, and in particular our top clients, are larger than we are and may be more likely to become involved in such matters given the scale of their businesses. If we become involved in such matters, we may be required to expend significant resources, including our management’s time, and incur significant expenses in defending against such actions. There can be no assurance that an adverse judgment or decision against us will not be significant. Our clients do not indemnify us for these types of costs, and there can be no assurance that such costs will be covered, in whole or in part, by our insurance policies.

Negative publicity or announcements may also include, amongst others, our involvement in litigation or regulatory investigations, online complaints or negative reviews of our business (anonymous or otherwise), or unfavorable third-party research reports on us. We cannot assure you that attempts to resolve any outstanding disputes would not be protracted or that similar claims would not be asserted. If we were to fail to win these disputes, we may incur losses and face liabilities. Further, even if we were to win these disputes, we may incur costs in mounting our defense and loss of business.

Responding to disputes and/or negative publicity arising from any of the above circumstances, regardless of their ultimate outcomes and notwithstanding that they may be baseless, frivolous or vexatious, can divert the time and effort of our management from our business. Claims and complaints that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, may further result in negative publicity, lawsuits, or investigations by regulators. Any unfavorable decisions by regulators may result in regulatory sanctions against us and other person(s) responsible for the breach, including the imposition of fines and/or term of imprisonment, where applicable.

Further, we cannot assure you that the public perception of our business and our brands would not be materially affected in the event of such disputes or that we will be successful in defending such claims. Any negative impact on our reputation could materially and adversely affect our business, financial condition and results of operations.

We may enter into contracts with significant fixed price elements or solely fixed price contracts with our clients and any failure to accurately price these arrangements may affect our profitability.

Many of our client contracts have significant fixed price elements. If we underestimate our project costs in tendering and bidding for a project from our clients, we may incur unanticipated costs that would reduce our profits or incur losses. Any failure by us to inaccurately evaluate our expected costs for a fixed-price contract may result in the decreased profitability of any such project and may have an adverse effect on our business, financial condition and results of operations. To address this risk, we try to incorporate pricing adjustments in our contracts in the event that there is a change in scope of work that can be activated under reasonable circumstances that are beyond assumptions made by us during our initial pricing (e.g., expanded work scope, foreign exchange volatility). There can be no assurance that such price adjustments will fully cover the actual costs to provide such services, which could have an adverse effect on our business, financial condition and results of operations.

If our services do not comply with the service level and performance requirements required by our clients or we are in breach of our obligations under our contracts with our clients, it may result in reduced payments or the termination of our client agreements.

Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to our end-customer based on certain key performance indicators, such as the time it takes for a customer experience matter to be closed out, customer satisfaction score and forecast accuracy. In some cases, the quality of services that we provide is measured by quality assurance indicators and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and our clients’ end-customers. Failure to consistently meet service requirements of such end-customers or errors made by our employees in the course of delivering services

 

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to such end-customers could disrupt our clients’ businesses and result in a reduction in revenue or a claim against us for damages. For example, our agreements generally stipulate standards of service that, if not met by us, would result in lower payments to us. A failure or inability to meet these requirements of such representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for damages against us, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to risks associated with operating in the rapidly evolving new economy sectors.

As a new economy business services provider dedicated to serving new economy participants internationally, we are subject to risks associated with the rapidly evolving nature of new economy sectors, including but not limited to the technology, consumer and retail, and hospitality sectors. Our future business, financial condition, and results of operations will largely depend on the development of the new economy sectors and their participants in the markets that we operate and target for future expansion.

According to Frost & Sullivan, as the outsourcing market in the traditional economy industry matures, service providers are now expanding their presence in the new economy high growth industries. New economy companies are investing in creating differentiated customer experiences and providing end-to-end customer engagement that can differentiate them from their competitors. However, there are significant uncertainties with respect to the growth and sustained profitability of new economy sectors in Asia and throughout the world, including changes in general economic conditions, market trends and regulatory environment. Most of these factors are beyond our control. For example, any adverse regulatory developments in new economy sectors in the countries in which we or our clients operate, such as new or more restrictive industry policies, could materially affect the results of operations and financial conditions of our clients participating in such industries, which may in turn reduce their demand for our services. As a result, our business, financial condition and results of operations could be adversely affected.

We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate.

We are typically required to collect and store sensitive data in connection with our services, including account access credentials, credit and debit card numbers, bank account numbers, social security numbers, names and addresses and other types of sensitive business or personal information. In many cases, customer information is stored in our client’s proprietary systems to which our employees have user access. Although we have employed measures to protect against unauthorized access of such personal, confidential and proprietary information, as the complexity of information infrastructure continues to grow, the potential risk of security breaches and cyber-attacks increases. Such breaches can lead to shutdowns or system interruptions, and potential unauthorized disclosure of sensitive or confidential information which may result in potentially costly litigation. If any person, including any of our employees, penetrates our network security or otherwise mismanages or misappropriates sensitive or confidential client or customer data, we could be subject to significant fines for violating privacy or data protection and consumer laws or lawsuits from our clients or their customers for breaching contractual confidentiality provisions which could result in negative publicity, legal liability, loss of clients and damage to our reputation. We may be liable for any misappropriation of customers’ personal information which could also harm our relationship with our clients, and/or cause us to suffer financial losses and/or reputational harm. We may also be liable for damages in the case of such a security or network breach that results in an unauthorized or impermissible disclosure of client or customer data and information. Moreover, our insurance coverage for breaches or mismanagement of such data may not be sufficient to cover one or more large claims against us and our insurers may disclaim coverage as to any future claims.

Under data protection and personal information laws, we are typically required to manage, utilize and store sensitive or confidential client and customer data in connection with the services we provide. In Singapore, under the Personal Data Protection Act 2012, No. 26 of 2012 of Singapore, we are also required to, among others,

 

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notify individuals of: the purposes for the collection, use or disclosure of their personal data prior to such collection, use or disclosure and obtain the consent of individuals for any collection, use or disclosure of their personal data. In the People’s Republic of China (the “PRC”), the PRC Personal Information Protection Law (the “PRC PIPL”), promulgated on August 20, 2021 and taking effect on November 1, 2021, requires us to notify and obtain consents prior to collection, storage, use, processing, transmission, provision, disclosure, or deletion of personal information (being all kinds of information related to identified or identifiable individuals) and to provide individuals with the right to withdraw their consent and to access, copy and correct their own personal information. The PRC PIPL also imposes various baseline obligations on personal data processors in connection with permitted uses of, accountability for, the protection of, the retention of, and overseas transfers of, personal data. In addition, under the European General Data Protection Regulation that took effect in May 2018, we must obtain consent and/or offer new controls to existing and new users in Europe before processing data for certain aspects of our service and are also subject to various regulations, including those that govern the storage and transfer of personal data.

Furthermore, we are subject to local data protection laws, consumer laws and/or “do not call list” regulations in most of the countries in which we operate, all of which may require us to make additional expenditures to ensure compliance with these regulations or future additional regulations. We also believe that we will be subject to additional such laws and regulations in the future that may be stricter than those currently in force. Although we take extensive efforts to comply with such applicable laws and regulations, failure or perceived failure by us to comply with rapidly evolving privacy and security laws, policies (including our own policies, which we may update from time to time), legal obligations or industry standards may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity, could require us or our clients to change our or their business practices and could cause our clients to lose trust in us.

We seek to implement measures to protect sensitive and confidential client and customer data in accordance with client contracts and data protection laws and consumer laws. If any person, including any of our employees, penetrates our network security or otherwise mismanages or misappropriates sensitive or confidential client or customer data, we could be subject to significant fines for violating privacy or data protection and consumer laws or lawsuits from our clients or their customers for breaching contractual confidentiality provisions which could result in negative publicity, legal liability, loss of clients and damage to our reputation. We may be liable for any misappropriation of customers’ personal information which could also harm our relationship with our clients, and/or cause us to suffer financial losses and/or reputational harm.

We may also be subject to laws and regulations that restrict the flow of personal data across countries; such laws may constrain our activities and have an adverse impact on our business. Laws and regulations that impact our business, and particularly laws, regulations and other measures governments may take based on privacy and data protection concerns, are increasing in complexity, change frequently and at times conflict among the various jurisdictions where we do business. For instance, recent legal developments in Europe have created complexity and uncertainty regarding overseas transfers of personal data outside of the European Economic Area. In addition, on July 10, 2021, the Cyberspace Administration of the PRC (the “CAC”), published a draft amendment to the Cybersecurity Review Measures (the “Draft Amendment”) for public comments. Pursuant to the Draft Amendment, if any critical information infrastructure operator possesses personal information of more than one million Chinese users, it needs to file with the CAC for a cybersecurity review prior to the listing of its securities in any foreign stock exchange. When the Draft Amendment will be enacted, whether this requirement will maintain in the final effective version, and to what extent, if at all, this requirement applies to us, is unclear. However, if the cybersecurity review requirement will apply to us, we cannot guarantee we will be able to obtain the approval or if there will be any other impact on our operation.

We may also be liable for damages in the case of such a security or network breach that results in an unauthorized or impermissible disclosure of client or customer data and information. Moreover, our insurance coverage for breaches or mismanagement of such data may not be sufficient to cover one or more large claims against us and our insurers may disclaim coverage as to any future claims. Any of the foregoing could adversely affect our business, financial condition and results of operations.

 

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Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability.

In conducting our business, we process, transmit sensitive business information and personal information about our clients, their customers and other parties. We have certain responsibilities to card networks and their member financial institutions for any failure, including the failure of our associated third parties, to protect this information.

We have been a target of malicious third-party attempts to identify and exploit system vulnerabilities and penetrate or bypass our security measures in order to gain unauthorized access to our networks and systems or those of our associated third parties. A successful attempt could lead to the compromise of sensitive, business, personal or confidential information. As a result, we proactively employ multiple barriers and controls at different layers of our systems to defend our systems against intrusion and attack and to protect the data we collect. However, we cannot be certain that these measures will continue to successfully counter all current and emerging technology threats that are designed to breach our systems in order to gain access to confidential information. We also rely on third party vendors for aspects of our cybersecurity strategy, such as to conduct security reviews and penetration tests, and there can be no assurance that the tests conducted by these vendors, or measures we take in response to such tests, will be effective at identifying or preventing any cybersecurity threat.

Our computer systems and the computer systems of our clients, which we rely on, could be in the future subject to breach, and our data protection measures may not prevent unauthorized access. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect. Threats to our systems and our associated third parties’ systems can derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Computer viruses and other malware can be distributed and could infiltrate our systems or those of our associated third parties. In addition, denial of service or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities. Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data. While we maintain cyber errors and omissions insurance coverage that may cover certain aspects of cyber risks, our insurance coverage may be insufficient to cover all losses. Further, while we carefully select third parties with which we associate, we do not control their actions. Any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our clients or their customers or otherwise conduct our business.

We could also be subject to liability for claims relating to misuse of personal information, such as unauthorized marketing purposes and violation of data privacy laws. We cannot provide assurance that the contractual requirements related to security and privacy that we impose on our employees who have access to client and customer data will be followed or will be adequate to prevent the unauthorized use or disclosure of data. In addition, we have agreed in certain agreements to take certain protective measures to ensure the confidentiality of client and customer data. Our clients are located in numerous jurisdictions around the world, and our clients may ask for broad undertaking from us pursuant to the privacy laws applicable to them and may decide not to do business with us if we do not agree to their privacy terms. Furthermore, the costs of systems and procedures associated with any protective measures that we are required to take by our clients may increase and could adversely affect our ability to compete effectively. Any failure to adequately enforce or provide these protective measures could result in liability, protracted and costly litigation, governmental and card network intervention and fines and, with respect to misuse of our clients’ and customers’ information, lost revenue and reputational harm.

Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective clients from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unbudgeted or uninsured liability, disrupt our operations (including potential

 

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service interruptions), distract our management, increase our risk of regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws. If we were to be removed from networks’ lists of Payment Card Industry Data Security Standard (PCI DSS) compliant service providers, our existing clients or other third parties may cease using our services. Also, prospective clients may choose to terminate their relationship with us, or delay or choose not to consider us. Any of the foregoing could adversely affect our business, financial condition and results of operations.

We may be unable to obtain future financing on favorable terms, or at all, to fund expected capital expenditure, potential opportunistic acquisitions and working capital requirements.

Our industry is characterized by high working capital requirements primarily relating to new investments in operating sites and employee resources to meet the requirements of our clients. We incur significant start-up costs related to investments in infrastructure to provide our services, including costs of establishing our delivery centers in accordance with our clients’ preferred specifications and hiring and training of employees, with such expenses being historically incurred before revenue is generated. There are also often additional start-up costs associated with entering new geographic markets, including expenses for establishing new operational centers as we grow our business and developing the infrastructure for engagements with clients in these new geographies.

We may, at some stage in the future, require funding for capital expenditures, potential opportunistic, strategic acquisitions or working capital. Our sources of additional funding, if required, may include the incurrence of debt or the issue of equity or debt securities or a combination of both. If we decide to raise additional funds through the incurrence of debt, our interest and debt repayment obligations will increase, and this could have a significant effect on our profitability and cash flows and we may be subject to additional covenants that could affect our business. Furthermore, in the event that we do decide to incur additional debt in the future, there can be no assurance that we will be successful in securing such additional financing on commercially reasonable terms, or at all. Any failure to obtain debt financing in the future could limit our ability to implement our growth strategy and could limit our ability to access cash flows from operations.

Any of the foregoing could have an adverse effect on our business, financial condition and results of operations.

We may be adversely affected by any failure to grow or protect our brand.

We believe the “TDCX” brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and contribute to our efforts in recruiting and retaining talented personnel.

In November 2019, we rebranded ourselves as “TDCX” and began providing services using our “TDCX” trademark. There are trademark registrations in eleven jurisdictions in the name of TDCX Holdings Pte. Ltd.: Singapore, Malaysia, Hong Kong, the Philippines, China, the European Union, the United Kingdom, Japan, India, Colombia, and the Cayman Islands. There are pending applications for trademark registration in three jurisdictions: Thailand, the United States and South Korea. While we believe that our prior brand, “Teledirect,” had a positive reputation, we created the “TDCX” brand to more clearly establish our brand identity in our industry. There is a risk that if we fail to establish or grow our brand or if negative information about us adversely affects our brand, even if false, our business could be adversely affected. In particular, damage to our reputation could be difficult and time-consuming to repair, could make potential or existing clients reluctant to select us for new engagements and could materially adversely affect our recruitment and retention efforts. Any failure to grow our brand or damage to our reputation could also reduce the value and effectiveness of the “TDCX” brand name and/or reduce investor confidence in us, and have an adverse effect on our business, financial condition and results of operations.

 

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We may seek to acquire companies in the future and if we cannot find suitable targets or cannot integrate these companies properly into our business after acquiring them, it could adversely affect our business, financial condition and results of operations.

While we have grown organically almost exclusively, we may in the future as part of our global growth strategy pursue acquisitions of complementary businesses in certain geographies or exposure to certain industries, and acquisitions of companies with technologies that we can incorporate into our tailored client solutions. These transactions could be material to our financial condition and results of operations. Additionally, the inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our ability to implement our growth strategy. Furthermore, we may not be able to integrate effectively such future acquisitions into our operations or our corporate culture and may not achieve the profitability we expect from such acquisitions. Even if we identify and pursue acquisitions, we may not complete future transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the expected benefits of any acquisition or investments. Other companies may compete with us for these strategic opportunities.

We also could experience negative effects on our results of operations and financial condition from acquisition-related charges, amortization of intangible assets and asset impairment charges, and other issues that could arise in connection with, or as a result of, the acquisition of the acquired company, including regulatory or compliance issues that could exist for an acquired company or business and potential adverse effects on results of operations through increased costs or otherwise. These effects, individually or in the aggregate, could cause a deterioration of our credit profile and result in reduced availability of credit to us or increased borrowing costs and interest expense in the future. Any such risks relating to future acquisitions could have a material adverse effect on our business, financial condition and results of operations.

Tax matters, including any reduction or withholding of tax benefits and other incentives we receive, new legislation and actions by taxing authorities may have an adverse effect on our operations, effective tax rate and financial condition.

We may not be able to predict our future tax liabilities due to the international nature of our operations, as we are subject to the complex and varying tax laws and rules of several foreign jurisdictions, including, as of the date of this prospectus, certain tax concessions and benefits from such local jurisdictions. For example, our subsidiary in Malaysia was awarded Multimedia Super Corridor status in 2005 by the Ministry of Finance and Ministry of International Trade and Industry Malaysia, which entitled the subsidiary to enjoy tax incentives under Malaysia’s Customized Incentive scheme. The scheme allows partial tax exemption for the subsidiary on the statutory income earned from its core operations for a certain period. However, these benefits expired on January 18, 2020. We have initiated discussions with relevant governmental agency authorities to renew such benefits on a retrospective basis. In the Philippines, we have benefited from an income tax holiday through our registration with the Philippine Economic Zone Authority, or PEZA. Our income tax holiday from PEZA will eventually expire, subject to a limited number of renewals and PEZA’s full discretion. There can be no assurances that our application to extend any of these tax benefit schemes will be approved on a timely basis or at all. Our business, results of operations and financial condition could be adversely affected if tax contingencies are resolved adversely or if we become subject to increased levels of taxation.

We are also subject to income taxes in numerous jurisdictions. Our tax expense and cash tax liability in the future could be adversely affected by numerous factors, including changes in tax laws, regulations, accounting principles or interpretations and the potential adverse outcome of tax examinations and pending tax-related litigation. Changes in the valuation of deferred tax assets and liabilities, which may result from a decline in our profitability or changes in tax rates or legislation, could have a material adverse effect on our tax expense. Certain tax-related judgements or conclusions that we make are based on our interpretation or understanding of tax laws in the countries in which we operate. Therefore, there can be no assurance that we will not undergo tax assessments and/or audits and that such proceedings will not result in further payments for taxes and tax-related costs and expenses for previous tax years, our current tax year, or tax years in the future. We are also subject to periodic tax audits by the relevant authorities in the jurisdictions in which we operate and, as of the date of this

 

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prospectus, are subject to ongoing tax audits. As tax exposures can involve technical interpretations of issues, it may require an extended period to resolve tax disputes. Many tax authorities have significant backlogs of other cases that may also result in extended periods to achieve resolution on open issues. The governments of foreign jurisdictions from which we deliver services may assert that we are not in compliance with the terms of any tax concession or benefit we currently receive or decide to change its laws with respect to such concessions and benefits.

Transfer pricing regulations to which we are subject require that any transaction among us and our subsidiaries be on arm’s-length terms. If the applicable tax authorities were to determine that the transactions among us and our subsidiaries do not meet arms’ length criteria, we may incur increased tax liability, including accrued interest and penalties. Such increase on our tax expenses would adversely affect our business, financial condition and results of operations.

Our business depends in part on our capacity to invest in technology as it develops and substantial increases in the costs of technology and telecommunications services that we rely on from third parties that could have a material adverse effect on our business, financial condition, results of operations and prospects.

The outsourced business support services industry is subject to the periodic introduction of new technology, which often can enable us to service our clients more efficiently and cost effectively. Our business is partly linked to our ability to recognize these new technological innovations and to apply these technological innovations to our business by incorporating them into our tailored solutions for our clients. See “Business—Information Technology and Management Information Systems.” If we do not recognize the importance of a particular new technology to our business in a timely manner or are not committed to investing in and developing such new technology and applying these technologies to our business, our current services may be less attractive to existing and potential clients, and we may lose market share to competitors who have recognized these trends and invested in such technology. Certain emerging technologies, such as artificial intelligence, may be disruptive to our industry, and our ability to identify, predict the outcomes of and incorporate disruptive technologies is key to our sustained business success. We will also be required to provide adequately trained personnel to address the increasingly sophisticated and tech savvy clients whose needs are constantly evolving. Furthermore, if we obtain access to an emerging technology through an acquisition, there can be no assurance that we will be successful in integrating that technology into our operations or business. Any such failure to recognize the importance of such technology or a decision not to invest and develop such technology that keeps pace with evolving industry standards and changing client demands could have a material adverse effect on our business, financial condition and results of operations.

Our operating results may fluctuate from one quarter to the next due to client and service mix and other factors.

Our operating results may differ significantly from quarter to quarter and our business may be affected by factors such as client losses, the timing of new contracts and of new product or service offerings, termination of existing contracts, variations in the volume of business from clients due to seasonal trends, the business decisions of our clients regarding the use of our services, start-up costs as we begin new campaigns for current or new clients, delays or difficulties in expanding our operational facilities or opening new operational facilities, changes to our revenue mix or to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing campaigns, currency fluctuations and general economic conditions. In addition, while our business generally is not seasonal, our results may fluctuate because our clients’ businesses are impacted by seasonal effects that affect their use of our services, such as high travel seasons for our clients in the travel and hospitality industries or the winter holiday shopping season for consumer electronics clients.

In addition, the demand cycle for our services, typically from three to nine months (from the date the contract is entered into until the beginning of the provision of services), and the internal budget and approval processes of our prospective clients, make it difficult to predict the timing and success of new engagements with current or new clients. The demand cycle for a specific campaign depends on the campaign size, complexity and urgency of

 

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the client need. Also, we recognize revenue as and when the performance obligations set out in each campaign are satisfied and when the criteria for recognition are achieved. The financial benefit of gaining a new client may not be realized at the intended time due to delays in the implementation of our services or due to an increase in the start-up costs required in building our infrastructure to meet our current or future clients’ specifications with respect to any engagement. These factors may make it difficult for us to prepare accurate internal financial forecasts or replace anticipated revenue that is not received as a result of these delays. Any failure by us to predict and plan demand for our services for any of the foregoing reasons, including due to the effects of seasonality trends in the businesses of the clients, could adversely affect our business, financial condition and results of operations.

If we experience challenges with respect to labor relations, our overall operating costs and profitability could be adversely affected and our reputation could be harmed.

While we believe we have good relations with our employees, any work disruptions or collective labor actions may have an adverse impact on our services. While we do not have collective bargaining arrangements in most of the current jurisdictions in which we operate, our global growth strategy may involve our entrance into geographies where unions and collective bargaining agreements are more prevalent. As of June 30, 2021, only our workforce in Spain was subject to a collective bargaining agreement, namely, the nationwide collective bargaining agreement for all employers and employees in the Spanish telemarketing industry. If labor negotiations are not successful in Spain or any other geography we may enter into, where we become subject to a collective bargaining agreement, or we otherwise fail to maintain good relations with employees in any jurisdiction in which we operate, we could suffer a strike, work stoppage or other form of labor disruption. Any of the foregoing could harm our reputation and adversely affect our business, financial condition and results of operations.

Our business operations are subject to various regulations and changes in these regulations or enforcement thereof, could require us to make additional expenditures, restrict our business operations or expose us to certain costs related to non-compliance with such regulations.

Any changes in the enforcement of, or enactment of additional, regulations or laws in the jurisdictions in which we operate may subject us to additional expenses related to compliance with such laws or regulations or otherwise affect our business and operations. For example, stricter enforcement of the Indian Companies Act between 2015 and 2017 resulted in many Indian companies, including a dormant subsidiary of ours that has since been dissolved, being removed from the register of companies for various forms of corporate inactivity, and the directors of those companies, including our Founder and our current Chief Financial Officer, being disqualified from holding directorships in Indian companies for periods of five years (until October 31, 2021). Although this particular example of regulatory enforcement change has not and is not expected to impact our operations, it serves as an example of unanticipated regulatory risks that we are exposed to. Furthermore, if we are deemed to have violated any regulation or law in a jurisdiction in which we operate and/or where a delivery center is located, then we may be subject to fines and other expenses related to non-compliance thereof. Our business operations must be conducted in accordance with a number of sometimes conflicting government regulations in the various jurisdictions in which we operate, including consumer laws, as well as trade restrictions and sanctions, tariffs and labor relations. We are also subject to work permit, visa and immigration and other laws, regulations and requirements with respect to our employees in the countries in which we operate. We have in the past failed to comply with and may in the future fail to comply with such laws and regulations due to timing constraints and other reasons, which could subject us and our officers, directors and employees to liability and otherwise adversely impact our business. Any of the foregoing risks could have an adverse effect on our business, financial condition and results of operations. See also, “Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business” and “We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate.”

 

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Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.

The practice of outsourcing services to organizations operating in other countries is a topic of political discussion, including in the United States, which is our largest market in terms of location of our clients’ end-customers, as well as other regions in which we have clients or where their customers are located. For example, measures aimed at limiting or restricting outsourcing by U.S. companies may be put forward for consideration by the U.S. Congress and in state legislatures to address concerns over the perceived association between offshore outsourcing and the loss of jobs in the U.S. If any such measure is enacted, our ability to provide services to our clients could be impaired.

In addition, from time to time there has been publicity about purported negative experiences associated with offshore outsourcing, such as alleged domestic job loss and theft and misappropriation of sensitive client or customer data, particularly involving service providers in Asia. Current or prospective clients may elect to perform certain services themselves or may be discouraged from utilizing customer experience solutions providers like us due to negative perceptions that may be associated with us, our business model or our industry. Any slowdown or reversal of existing industry trends toward utilizing customer experience solutions providers would seriously harm our ability to compete effectively with competitors that provide the majority of their services from within the country in which our clients operate.

Our project start-up and implementation cycles require significant resource commitments.

From our initial business development engagement for a prospective project with either a new or existing client to our operational performance with respect to such a project, we are often required to invest significant capital, resources and time. Before committing to use our services for any specific new project, potential or current clients require us to expend substantial time and resources educating them as to the value proposition of our platform and assessing the feasibility of integrating our people, systems and processes with their operations. Our clients then evaluate our services before deciding whether to use them and, if they do decide to enter into an arrangement with us, we would then negotiate the requisite documentation, implement their specifications in our tailored solution (including establishing our delivery centers to our clients’ preferred specifications) and train our team leaders and other personnel that will be dedicated to the project. Therefore, our business prospecting and closure cycle, which generally ranges from six to 12 months, is subject to many risks and delays over which we have little or no control, including our clients’ decision to choose alternatives to our services (such as other providers or in-house offshore resources), the timing of our clients’ budget cycles and approval processes and the fluidity of our clients’ requirements and specifications for a given engagement. For further information related to risks from competition, see “—We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability.”

Implementing our services involves a significant commitment of resources over an extended period of time from both our clients and us. The period in which we train the personnel that will be dedicated to any specific client project generally ranges from two weeks to over two months. Our clients may also experience delays in obtaining internal approvals or delays associated with technology or system implementations, thereby further delaying the implementation process. Our current and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to enter into arrangements for our services with potential clients to which we have devoted significant time and resources, which could have an adverse effect on our business, financial condition and results of operations.

While managing our growth, we may have difficulty updating our internal operational and financial systems as well as our existing internal accounting, financial and cost control systems.

Since our founding in 1995, and particularly from 2012, we have experienced rapid growth and significantly expanded our operations in key regions and client industries, especially with our clients involved in innovative

 

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businesses engaged in the new economy. For years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, our number of agents was 4,608, 7,213, 9,128, 7,473 and 10,020, respectively. In the years ended December 31, 2018, 2019 and 2020 and in the six months ended June 30, 2020 and 2021, we generated revenue of S$181.2 million, S$330.3 million, S$434.7 million, S$209.3 million and S$251.6 million, respectively.

The rapid growth which we have experienced requires us to constantly monitor, evaluate and, if appropriate, reallocate our management and financial and operational resources. In order to manage growth effectively, we must recruit new employees, including employees in middle-management positions such as team leader roles, and implement and improve operational systems, procedures and internal controls on a timely basis.

In addition, we need to update our existing internal accounting, financial and cost control systems to ensure that we can access all necessary financial information in line with the increasing demands of our business. Any internal and disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of the control system are met. The design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by individuals acting alone or in collusion with others to override controls, which may also include controls implemented by our clients. If we are unable to assert that our internal controls over financial reporting are effective now or in the future, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports.

If we fail to implement these systems, procedures and controls or update these systems on a timely basis, we may not be able to service our clients’ needs, hire and retain new employees, pursue new business, complete future acquisitions or operate our business effectively. Failure to effectively transfer new client business to our delivery centers, properly budget transfer costs, accurately estimate operational costs associated with new contracts or access financial, accounting or cost control information in a timely fashion could result in delays in executing client contracts, trigger service level penalties or cause our profit margins not to meet our expectations. Any of the foregoing factors could adversely affect our business, financial condition and results of operations.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.

Prior to this offering, we were a private company with limited accounting personnel resources. Furthermore, prior to this offering, our management has not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.

Our internal controls relating to financial reporting have not kept pace with the expansion of our business. Our financial reporting function and system of internal controls may be less developed in certain respects than those of similar companies that operate in fewer or more developed markets and may not provide our management with as much or as accurate or timely information. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

In the course of auditing our consolidated financial statements as of and for the years ended December 31, 2018, 2019 and 2020, we and our independent registered public accounting firm identified three material weaknesses in

 

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our internal control over financial reporting as of December 31, 2018, 2019 and 2020, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States. The material weaknesses identified related to (i) inappropriate segregation on several control processes, which includes the review and approval of journal accounting entries; (ii) lack of adequate controls over access rights to several IT systems, which includes excessive and conflicting rights granted to several accounting personnel; and (iii) insufficient financial reporting and accounting personnel with appropriate IFRS knowledge to prepare and review statement of cash flows relating to acquisition transaction in accordance with IFRS. There can be no assurance that any remediation actions we have undertaken will be effective or that other similar issues may not arise in the future.

As a result of the identification of these material weaknesses, we plan to take measures to remedy these control deficiencies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Control over Financial Reporting.” However, we can give no assurance that our planned remediation will be properly implemented or will be sufficient to eliminate such material weaknesses or that material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of the ADSs.

Upon the completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2021. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under securities laws and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

 

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Our ability to provide our services depends in part upon the quality and reliability of the facilities and equipment provided by our technology, digital services and telecommunications providers, our reliance on a limited number of suppliers of such technology and the services and products of our clients.

The success of our business depends in part on our ability to provide high quality and reliable services, which in part depends upon the proper functioning of facilities and equipment (including appropriate hardware and software and technological applications) provided by third parties and our reliance on a limited number of suppliers of such technology, and is, therefore, beyond our control. As we lease our facilities from third parties, our ability to provide high quality and reliable services depends, in part, on our ability to maintain existing leases and accurately project our facility capacity requirements. Any early termination of a lease or failure to accurately predict facility requirements may cause us to have to relocate and cause disruptions to our services and business. When we enter new geographies, we often enter into shorter term arrangements with co-working space providers and these arrangements may be subject to more frequent changes or less intermediate term predictability.

We also depend on the telecommunication services provided by local telecommunication companies in the countries in which we operate, and any significant disruptions in these services would adversely affect our business. If these or other third party providers fail to maintain their equipment properly or fail to provide proper services in a timely or reliable manner, our clients may experience service interruptions. If interruptions adversely affect our services or the perceived quality and reliability of our services, we may lose client relationships or be forced to make significant unplanned investments in the purchase of additional equipment from other providers to ensure that we can continue to provide high quality and reliable services to our clients. In addition, if one or more of the limited number of suppliers of our technology cannot deliver or provide us with the requisite technology on a timely basis, our clients could suffer further interruptions. Any such interruptions may have a material adverse effect on our business, financial condition and results of operations.

Our key technology systems and facilities may be damaged in natural disasters such as earthquakes or fires or subject to damage or compromise from human error, technical disruptions, power failure, computer glitches and viruses, telecommunications and digital services failures, adverse weather conditions and other unforeseen events, all of which are beyond our control. Such events may cause disruptions to information systems, electrical power and telephone and digital service for sustained periods. Any significant failure, damage or destruction of our equipment or systems, or any major disruptions to basic infrastructure such as power and telecommunications and digital systems in the locations in which we operate, could impede our ability to provide services to our clients and thus adversely affect their businesses, which may have a negative impact on our reputation and may cause us to incur substantial additional expenses to repair or replace damaged equipment or facilities.

While we currently have property damage and comprehensive general liability insurance in force, our insurance coverage may not be sufficient to compensate for the costs of repairing the damage caused by such disruptive events and such events may not be covered under our policies. With respect to losses which are covered by our policies and subject to deductibles, exclusions, and/or limitations, it may be difficult and time-consuming to recover such losses from insurers. In addition, we may not be able to recover the full amount of losses incurred from the insurers. Prolonged disruption of our services, even if due to events beyond our control could also cause our clients to terminate their contracts with us, which would have a material adverse effect on our business, financial condition and results of operations.

In addition, in some areas of our business, we depend upon the quality and reliability of the services of our clients, which we help to sell to their end-customers. If the services we provide to our clients are disrupted due to technical difficulties or if there is any disruption to our services based on the foregoing factors, then the result may have an adverse effect on our business, financial condition and results of operations.

In addition, any increases in the cost of telecommunications and digital services and products provided by third parties, including equipment, software, information technology products and related services and workstations have a direct effect on our operating costs. In addition, our clients may impose certain technological requirements or additional requirements beyond those implemented upon the initial project set up that may not be included in

 

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our current fee arrangements. In such cases, we may not be compensated for these additional costs and have to absorb such costs. The cost of telecommunications and digital services is subject to a number of factors, including changes in regulations and the market as well as competitive factors such as the concentration and bargaining power of technology and telecommunications and digital services providers and suppliers, most of which are beyond our control or which we cannot predict. The increase in the costs of these essential services and products could have an adverse effect on our business, financial condition and results of operations.

Our debt service requirements and restrictive covenants limit our ability to borrow more money, to make distributions to our shareholders and to engage in other activities.

Our existing credit agreements contain a number of covenants that limit our ability and our subsidiaries’ ability to, among other things, transfer or dispose of assets, pay dividends or make distributions, incur additional indebtedness, create liens, make investments, loans and acquisitions, engage in transactions with affiliates, merge or consolidate with other companies or sell substantially all of our assets. Our credit agreements are guaranteed by us and certain of our subsidiaries and secured by substantially all of our and the assets of our borrower subsidiary and the guarantor subsidiaries. The terms of our credit agreements may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs or to execute preferred business strategies. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions. Additionally, our obligations to repay principal and interest on our indebtedness make us vulnerable to economic or market downturns. If we are unable to comply with our payment requirements, our lenders may accelerate our obligations under our credit agreement and foreclose upon the collateral, or we may be forced to sell assets, restructure our indebtedness or seek additional equity capital, which would dilute our shareholders’ interests. Our failure to comply with any covenant could result in an event of default under the agreement and the lenders (or any subsequent lender) could make the entire debt immediately due and payable. If this occurs, we might not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be on terms that are acceptable to us. These events could cause us to cease operations. For further details, see “Description of Certain Indebtedness.”

We may face difficulties as we expand our operations into countries in which we have no prior operating experience.

Our growth strategy relies on our global expansion in order to provide geographic breadth for our current and future clients. This may involve expanding into countries and regions other than those in which we currently operate and where we have less familiarity with local regulations, environment and procedures. It involves expanding our operations in recently entered markets such as Latin America, Europe and India, or entering into new countries and regions, such as in Korea and other Chinese regional markets where we do not currently operate, which have different cost structures, labor conditions, regulations and socioeconomic dynamics that may affect our results of operations. As we expand our business into new countries and regions, we may encounter economic, regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries. Any difficulty in the implementation of our global growth strategy may adversely affect our business, financial condition and results of operations.

We are exposed to currency fluctuations in the countries in which we operate against the U.S. dollar and Singapore dollar and any volatility in these currencies could adversely affect our business, financial condition and results of operations.

We earn revenue primarily denominated in U.S. dollars and Singapore dollars (which is our reporting currency). We make rental payments and incur expenses for employee compensation and other operating expenses in the local currencies in the jurisdictions in which we operate. There can be no assurance, however, that we will not take campaigns, in the future, that result in more exposure to local currencies. While inflation may have a lesser effect on the profit and loss of a local subsidiary itself, depreciation of the local currency against the U.S. dollar

 

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and/or Singapore dollar would reduce the value of the dividends payable to us from our operating companies. We present our financial results in Singapore dollars and our results of operations would be adversely affected if other currencies (including the U.S. dollar) depreciate significantly against the Singapore dollar. In addition, the majority of our indebtedness, in particular the Credit Suisse Facility, is denominated in U.S. dollars. Furthermore, fluctuations in currency exchange rates may also affect the comparability of our financial results from period to period, as we convert our subsidiaries’ statement of financial position into Singapore dollars from other currencies at the period-end exchange rate, and income and cash flow statements at average exchange rates for the year.

The imposition of barriers to trade or escalation of trade disputes could materially and adversely affect demand for our services.

There has been a global escalation of barriers to trade in recent years, including with respect to the United States and China imposing tariffs and trade barriers on trade with each other. Any imposition of new tariffs or other trade barriers, or the escalation of any trade dispute, may adversely affect the global economy and businesses of our clients, which, in turn, would also adversely affect demand for our services. A downturn in the global economy or the economies of countries in which we or our clients operate as a result of any trade dispute could adversely affect our business, financial condition and results of operations.

In addition, current government actions undertaken by various governments to stimulate their respective economies and future government action, including interest rate decreases, changes in monetary policy or intervention in the exchange markets and other government action to adjust the value of the local currency, may trigger inflation. For example, governmental measures to control inflation may include maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and reducing economic growth. As a result, interest rates may fluctuate significantly. Furthermore, losses incurred based on the exchange rate used may be exacerbated if regulatory restrictions are imposed when these currencies are converted into U.S. dollars.

The occurrence of such fluctuations, devaluations or other currency risks could have a material adverse effect on our business, financial condition and results of operations.

The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.

The United Kingdom formally withdrew from the European Union on January 31, 2020 and entered into a transition period, which ended on December 31, 2020. While the United Kingdom and the European Union entered into a trade and cooperation agreement that went into effect provisionally from January 1, 2021, significant political and economic uncertainty remains about whether the terms of the relationship will differ materially from the terms before withdrawal, including with respect to any possible trade deals with the European Union and measures related to mobility between the United Kingdom and the European Union.

These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our ADSs.

If our current insurance coverage is or becomes insufficient to protect against losses incurred, our business, financial condition, results of operations and prospects may be adversely affected.

We maintain some insurance coverage, including professional liability insurance and property insurance coverage for certain of our facilities and equipment for certain of our operations; however, we do not insure for

 

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all risks in our operations. In addition, we intend to maintain some level of self-insurance coverage in the future through the establishment of a captive insurance subsidiary. The reserves of such a captive insurance subsidiary will be subject to periodic adjustments based upon actuarial evaluations, which adjustments could impact our overall results of operations, and such periodic adjustments may be favorable or unfavorable. If any claims for injury are brought against us, or if we experience any business disruption, litigation or natural disaster, we might incur substantial costs and diversion of resources.

We provide services that are integral to our clients’ businesses. If we were to default in the provision of any contractually agreed-upon services, our clients could suffer significant damages and make claims against us for those damages. Although we believe that we maintain sufficient insurance coverage comparable to other service providers in our industry, the occurrence of an event that causes losses in excess of our self-insurance estimates or the limits specified in our policies, or losses arising from events not covered by insurance policies (including any deductibles, exclusions or limitations), could materially harm our business, financial condition, results of operations and prospects. Moreover, we cannot give any assurance that insurance will continue to be available to us on economically reasonable terms or that we would not be required to increase our self-insurance amounts. Additionally, we do not maintain “key person” insurance policies on any of our directors, officers or other personnel. There can be no assurance that any claims filed will be honored fully or timely under our insurance policies. Also, our financial condition may be affected to the extent we suffer any loss or damage that is not covered by insurance or which exceeds our insurance coverage.

Risks Related to Countries Where We Operate

Developments in the social, political, regulatory and economic environment in the countries where we operate, may have a material and adverse impact on us.

Our business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in countries in which we operate. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation. For example, we have considerable operations in Singapore, and negative developments in Singapore’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. Although the overall economic environment in Singapore and other countries where we operate appears to be positive, there can be no assurance that this will continue to prevail in the future.

Disruptions in the international trading environment may seriously decrease our international sales.

The success and profitability of our international activities depend on certain factors beyond our control, such as general economic conditions, labor conditions, political stability, macro-economic regulating measures, tax laws, import and export duties, transportation difficulties, fluctuation of local currency and foreign exchange controls of the countries in which we sell our services, as well as the political and economic relationships among the jurisdictions where we source products and jurisdictions where our clients’ customers are located. As a result, our services will continue to be vulnerable to disruptions in the international trading environment, including adverse changes in foreign government regulations, political unrest and international economic downturns. Any disruptions in the international trading environment may affect the demand for our services, which could impact our business, financial condition and results of operations.

Natural events, wars, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.

Natural disaster events (such as volcanos, floods and earthquakes), terrorist attacks and other acts of violence or war may adversely disrupt our operations, lead to economic weakness in the countries in which they occur and affect worldwide financial markets, and could potentially lead to economic recession, which could have an adverse effect on our business, financial condition and results of operations. These events could adversely affect

 

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our clients’ levels of business activity and precipitate sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our people and to our business operations around the world.

Our subsidiaries in Thailand are subject to restrictions on foreign ownership of their shares under Thai law.

We have two subsidiaries in Thailand, namely, Teledirect Telecommerce (Thailand) Limited, or TDTH, in which TDCX SG owns 49% and two Thai shareholders own 51%, and Comparexpress Insurance Broker (Thailand) Ltd., or Comparexpress, in which TDTH, TDCX SG and our Founder hold 60%, 39.999% and 0.001%, respectively, of the total share capital. With respect to TDTH, the shareholders have agreed on certain arrangements, whereby (i) TDCX SG provided the Thai shareholders with interest-free loans for the payment for their shares in TDTH; (ii) such shares are pledged in favor of TDCX SG as security for repayment of such loans; (iii) so long as any amount relating to their respective loan remains unpaid, the Thai shareholders must, at TDCX SG’s demand, assign to TDCX SG or its designee all of their voting rights pertaining to such shares in respect of any meeting of shareholders; and (iv) the Thai shareholders shall, upon notice from TDCX SG, sell and transfer such shares to TDCX SG or its designee. In addition, pursuant to the articles of association of TDTH, if and to the extent that it declares dividends, the Thai shareholders, as holders of preference shares, are entitled to receive preferential dividends in an amount of 10% of the par value of those preference shares (such par value being 100 Thai baht per preference share) before distribution of any dividends to the holders of ordinary shares.

Pursuant to the Thai Foreign Business Act B.E. 2542 (1999), or the FBA, a person or entity that is “Non-Thai” (as defined in the FBA and described in “Regulatory Environment — Thailand”) cannot conduct certain restricted businesses in Thailand, including the businesses that our subsidiaries in Thailand operate, unless an appropriate license is obtained. As our subsidiaries in Thailand are more than 50% owned by Thai persons or entities, our Thai subsidiaries are not required by the FBA to obtain the license prescribed thereunder. Under the FBA, it is also unlawful for a Thai national or entity to hold shares in a Thai company as a nominee for or on behalf of a foreigner in order to circumvent the foreign ownership restrictions. While there are no prescribed requirements or criteria under the FBA or promulgated by the Ministry of Commerce of Thailand for determining whether a Thai national or entity is holding shares in a Thai company with his or her own genuine investment intent or as a nominee for or on behalf of a foreigner, the investigation manual published in 2015 by the Department of Special Investigation, a government authority which is authorized to conduct investigations on potential violations of the FBA, indicates that the following factors, will be taken into account in an investigation: (i) the intention of the parties, (ii) the source of funds of both shareholders and the company and source of the company’s working capital, (iii) the shareholding structure, types of shares, voting rights and control of the Thai and foreign shareholders in the Thai company and (iv) the distribution of dividends by the Thai company to the Thai and foreign shareholders.

In addition, the Civil and Commercial Code of Thailand (as amended) requires a private company to have a minimum number of three shareholders. Failure to comply with such minimum shareholder requirement are grounds on which a Thai court could order dissolution of the company.

Our Thai counsel, Thanathip & Partners Legal Counsellors Limited, is of the opinion that the ownership structure of each of our Thai subsidiaries is in compliance with the FBA based on, among other things, the fact that a majority of the share capital of each Thai subsidiary is held by Thai nationals or entities for their own benefit. The opinion of Thanathip & Partners Legal Counsellors Limited is filed as an exhibit to the registration statement of which this prospectus forms a part. There can be no assurance that the Ministry of Commerce of Thailand will not interpret the FBA or evaluate the shareholding structures or shareholding arrangements of our Thai subsidiaries differently and hence reach a different conclusion, which could lead to an action being brought in the Thai court. In the event of such action and if the Thai court determines that the ownership structure of any of our subsidiaries in Thailand for any reason constitute an illegal nominee arrangement, it may order sanctions, which may include criminal sanctions against us and the Thai shareholders of such subsidiaries in Thailand, and such subsidiaries may be ordered to cease operations in Thailand. If the ownership structure of our Thai subsidiaries is

 

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found to be invalid, existing arrangements permit TDCX SG to repurchase the relevant shareholder’s shares in order to sell them to a suitable third party or take other steps to comply with the FBA. Under such circumstances and despite potential sanctions with respect to past non-compliance, we would inform the Ministry of our intent and efforts to remedy any determination of non-compliance and seek possible relief from sanctions with an aim at enabling each of our Thai subsidiaries to continue its business operations going forward. There can be no assurance that the Ministry would grant us such relief or that we would be able to complete any sales of shares to a suitable third party in a timely manner.

If the PRC government deems that Agorae Beijing’s contractual arrangements do not comply with PRC regulatory restrictions on foreign investment or VATS License requirements, we could be subject to adverse consequences.

Agorae Beijing, our wholly owned subsidiary incorporated in the PRC, provides consulting services to Beijing Rongma Tiancheng Information Technology Co. Ltd., or RMTC, a third party domestically owned PRC company with relevant PRC call center licenses, to support RMTC’s provision of call center services to customers in China. Agorae Beijing’s arrangements with RMTC include a revenue sharing agreement, pursuant to which substantially all of the proceeds from operations of RMTC are received by us.

Under the Foreign Investment Law of the People’s Republic of China, or the PRC Foreign Investment Law, which came into effect as of January 1, 2020, businesses operating in industries on the “negative list” are subject to restrictions on foreign ownership. Call center services are a sub-segment of the value-added telecommunications sector, which was included on the negative list until July 2019 (pursuant to the Special Management Measures for the Market Entry of Foreign Investment (Negative List) (2018 Version) and its previous versions). As a result, prior to July 2019, a foreign owned entity, such as Agorae Beijing, could provide call center services in the PRC only through a joint venture with a PRC partner, and the foreign entity was able to hold no more than 50% of the equity in the joint venture. This restriction has been lifted pursuant to the Special Management Measures for the Market Entry of Foreign Investment (Negative List) (2019 Version) which came into effect on July 30, 2019. The Telecommunication Regulation of the People’s Republic of China, or the PRC Telecommunication Regulation, which was enacted on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, and the Measures on Administration of Licensing for Telecommunication Operation, or Measures on Administration of Licensing for Telecommunication Operation, which came into effect as of September 1, 2017, require that a call center operator in the value-added telecommunications industry obtain a value-added telecommunication service license, or VATS License. Although the restriction on foreign shareholding in call center services businesses has now been lifted, the national implementation rules on how a foreign owned entity can apply for the VATS License have not been promulgated, and it is unclear whether or when the national implementation rules will be enacted.

Agorae Beijing, notwithstanding its arrangements with RMTC, could be deemed to be engaging in a call center business in the PRC in contravention of the negative list and relevant regulations and be required to obtain a VATS License. In such circumstances, the PRC Ministry of Industry and Information Technology (or its local counterparts) could impose sanctions against Agorae Beijing for engaging in a call center business without obtaining a VATS License, including confiscating illegal income, imposing a penalty of three to five times of the entity’s illegal income, ordering the entity to suspend its operations, invalidating relevant agreements and prohibiting the entity from obtaining a VATS License in the future. In addition, historical practices in contravention of relevant rules might have an adverse impact on our ability to obtain a VATS License in the future through Agorae Beijing. While TDCX Shanghai, our another wholly owned subsidiary incorporated in the PRC, has obtained a VATS License, the coverage of this license is limited to the Shanghai Free Trade Zone and does not include the business of Agorae Beijing. There can be no assurances that Agorae Beijing would be able to obtain a VATS License if we decided to apply for such a license or that, if we were able to obtain such a license, that we would not incur transition expenses and/or be able to directly hire employees on commercially reasonable terms or at all. Any of the foregoing could have an adverse effect on our business, financial condition, results of operations, prospects and reputation.

 

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Risks Relating to Investments in Cayman Companies

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law, we conduct substantially all of our operations and all of our directors and executive officers reside outside of the United States.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised), as amended from time to time, of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association, the register of mortgages and charges and special resolutions of the shareholders) or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. Most of our current operations are conducted in Asia. In addition, our current directors and executive officers are not United States nationals or residents. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the jurisdictions that comprise the Asia region may render you unable to enforce a judgment against us, our assets, our directors and executive officers or the assets of our directors and executive officers. For more information regarding the relevant laws of the Cayman Islands and the Asia markets, see “Enforceability of Civil Liabilities.”

 

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Risks Relating to our Initial Public Offering and the ADSs

Our Founder, Executive Chairman and Chief Executive Officer, Mr. Laurent Junique, has considerable influence over important shareholder matters due to his significant voting power over our shares. Our dual-class voting structure will, among other things, limit Class A ordinary shareholders’ ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial.

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares are different only with respect to voting, conversion and transfer rights. Holders of Class A ordinary shares are entitled to one vote per share in respect of matters requiring the votes of shareholders, while holders of Class B ordinary shares are entitled to ten votes per share, subject to certain exceptions. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder to any person who is not an affiliate of such shareholder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not an affiliate of the registered shareholder of such Class B ordinary share, such Class B ordinary share will automatically and immediately convert into one Class A ordinary share. Each of our Class B ordinary shares is convertible into one Class A ordinary share at any time and will convert automatically upon the earlier of (i) the date that is 15 years from the date of effectiveness of the registration statement of which this prospectus forms a part or (ii) nine months after the death or permanent disability of Mr. Junique. Due to the disparate voting powers associated with our two classes of ordinary shares, Mr. Junique will hold approximately         % of the aggregate voting power of our Company immediately following the completion of this offering (assuming no exercise by the underwriters of their option to purchase additional ADSs in full). As a result, Mr. Junique has considerable influence over matters such as electing or removing directors, approving any amendments to our constitution and approving material mergers, acquisitions or other business combination transactions. Furthermore, Mr. Junique has no obligation to guarantee our debt in the future and it may not be in his interest to do so. If Mr. Junique decides not to guarantee any future debt of the Company, it may adversely affect our ability to incur debt, or the terms of any debt we incur, in the future.

For the foreseeable future, investors in this offering and holders of our Class A ordinary shares and ADSs will not have a meaningful voice in our corporate affairs and that the control of our Company will be concentrated with Laurent Junique. This concentrated control will, among other things, limit your ability to influence corporate matters and could also discourage others from pursuing any potential merger, takeover or other change of control transactions, which could have the effect of depriving the holders of our Class A ordinary shares and ADSs of the opportunity to sell their shares at a premium over the prevailing market price. For a description of the dual-class structure, see “Description of Share Capital.”

An active trading market for the ADSs may not develop, and you may not be able to sell your ADSs at or above the offering price.

Prior to the completion of this offering, there has been no public market for the ADSs or our Class A ordinary shares. An active trading market for the ADSs may never develop or be sustained following this offering. If an active trading market does not develop, you may have difficulty selling your ADSs at an attractive price, or at all. The price for the ADSs in this offering will be determined by negotiations among us and representatives of the underwriters, and it may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell the ADSs at or above the offering price or at any other price or at the time that you would like to sell. An inactive market may also impair our ability to raise capital by selling the ADSs, and it may impair our ability to attract and motivate our personnel through equity incentive awards.

 

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The trading price of the ADSs may be volatile in the future.

The ADSs may trade at prices significantly below the offering price and the price of the ADSs after this offering may fluctuate widely, depending on many factors, including:

 

   

variations in our results of operations;

 

   

perceived prospects for our business and operations and for omnichannel CX solutions and business services in general, differences between our actual financial and operating results and those expected by investors and analysts;

 

   

business or prospects of our clients and specifically new economy companies;

 

   

changes in analysts’ recommendations or perceptions;

 

   

changes in conditions affecting the outsourced business support services industry;

 

   

changes in market valuations and share prices of publicly listed companies with businesses similar to us;

 

   

broad stock market price fluctuations;

 

   

changes in general economic conditions;

 

   

the announcement of acquisitions by us, our clients or our competitors;

 

   

passage of legislation or changes in regulations;

 

   

the addition or departure of key personnel;

 

   

actions taken by our shareholders;

 

   

competition;

 

   

negative publicity about us, our shareholders, affiliates, directors, officers or employees, our content offerings, our business model, our services or our industry;

 

   

release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

 

   

potential litigation or regulatory investigations; or

 

   

other developments affecting us, our clients or our competitors.

Furthermore, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our and related industries. The volatility frequently appears to occur without regard to the operating performance of the affected companies. As a result, the price of the ADSs could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce our share price.

Future sales of the ADSs, the Class A ordinary shares or our other equity securities, and the availability of a large number of such securities for sale, could depress the price of the ADSs.

The sale of a significant number of the ADSs, Class A ordinary shares or our other equity securities in the public market after this offering, or the perception that such sales may occur, could materially and adversely affect the market price of the ADSs. These factors could also materially impair our ability to raise capital through equity offerings in the future. See “Shares Eligible for Future Sale” for a discussion of possible future sales of the ADSs.

Upon completion of this offering, we will have              ADSs outstanding (representing              Class A ordinary shares), assuming no exercise by the underwriters of their option to purchase additional ADSs. The ADSs sold in this offering will be freely tradable without restriction under the Securities Act, except for any shares purchased

 

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by any of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act. Shares held by our existing shareholders may also be sold in the public market in the future, subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. Although our executive officers, directors, our Principal Shareholder and certain holders of our capital stock, who will hold in aggregate Class A ordinary shares and Class B ordinary shares representing         % of our issued share capital immediately following the completion of this offering (assuming no exercise by the underwriters of their option to purchase additional ADSs shares), will be subject to a lock-up, any substantial sale or perceived substantial sale of the ADSs, Class A ordinary shares or the Class B ordinary shares over a short period of time after the expiration of the lock-up period could cause the price of the ADSs to fall. In addition, certain representatives of the underwriters, on behalf of the underwriters, may release all or some portion of the shares subject to the lock-up agreements prior to the expiration of the lock-up period.

Similar sales of Class A ordinary shares or Class B ordinary shares by holders after vesting of awards or holders of options who have exercised their options under any incentive plan that we intend to implement could also cause the price of the Class A ordinary shares to fall.

You will experience substantial dilution as a result of this offering and future equity issuances.

Purchasers of the ADSs will experience immediate and substantial dilution. After giving effect to the sale of the ADSs offered by this prospectus (assuming no exercise by the underwriters of their option to purchase additional ADSs), and after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us in this offering, our net tangible book value as of             , 2021, would have been S$             million, or S$             per share. This represents an immediate dilution of S$             per share to investors in this offering, based on an assumed offering price of S$             per share, which is the midpoint of the price range set forth on the cover page of this prospectus. For a calculation of the dilution purchasers in this offering will incur, see “Dilution.”

In addition, on August 26, 2021, we adopted the TDCX Performance Share Plan (the “PSP”), which allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. Pursuant to the PSP, the aggregate nominal number of shares over which our board of directors may award is 5.0% of our total issued and outstanding shares on a fully diluted as-converted basis, which is                 shares immediately following the offering. We may also implement other employee equity participation programs, such as employee stock option programs.

Pursuant to our arrangements with Airbnb, we are currently in the process of negotiating with Airbnb the potential issuance of warrants to acquire some of our ordinary shares. While there has been no agreement to date on the terms and conditions of such warrants, including with respect to pricing, number of shares subject to issuance, strike-price or expiration, the grant of warrants to Airbnb, if exercised, will cause immediate dilution to our shareholders, and if we issue such warrants with an exercise price less than the price of our ADS pursuant to this offering (or the ADS price paid by future purchasers of our ADSs), such holders of our ADSs will experience immediate economic dilution upon the exercise of such warrants.

If we issue additional equity securities, whether pursuant the warrants issued to Airbnb, the PSP or for any other reason, you will experience additional dilution and our earnings per share will be reduced. In addition, any sales in the public market of any common shares issuable upon the exercise of a warrant could adversely affect the market price of our equity shares or ADS.

Our future earnings could be adversely impacted by any warrants that may be granted to Airbnb.

It is possible that any warrants that may be issued to Airbnb will be presented as a liability in our audited consolidated balance sheet and be subject to fair value measurement adjustments during the periods that it is outstanding. Accordingly, in such a case, future fluctuations in the fair value of the warrant could adversely impact our results of operations.

 

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We have broad discretion in the use of the net proceeds received by us from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds received by us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of the ADSs and our Class A ordinary shares. Although we have not yet determined with certainty the manner and specific amounts in which we will allocate the net proceeds of this offering, we expect to use the net proceeds from this offering to repay amounts outstanding under the Credit Suisse Facility, and the remaining to enable us to expand our business into new markets, for working capital, to fund growth and for other general corporate purposes, which may include future acquisitions and potential repayment of other indebtedness. However, our use of these proceeds may differ substantially from our current plans. The failure by our management to apply these funds effectively could result in financial losses that could adversely affect our business and cause the price of our ADSs to decline. Pending their use, we may invest the net proceeds received by us from this offering in a manner that does not produce income or that loses value.

The depositary for the ADSs will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings if you do not give voting instructions to the depositary, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings if you do not give voting instructions to the depositary, unless:

 

   

we have failed to timely provide the depositary with our notice of meeting and related voting materials;

 

   

we have instructed the depositary that we do not wish a discretionary proxy to be given;

 

   

we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

 

   

a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

 

   

voting at the meeting is made on a show of hands.

The effect of this discretionary proxy is that, if you fail to give voting instructions to the depositary, you cannot prevent our ordinary shares underlying your ADSs from being voted, absent the situations described above, and it may make it more difficult for shareholders to influence our management. Holders of our ordinary shares are not subject to this discretionary proxy.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your ordinary shares.

As a holder of ADSs, you will only be able to exercise the voting rights with respect to the underlying ordinary shares represented by your ADSs in accordance with the provisions of the deposit agreement. You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote. Under the deposit agreement, you must vote by giving voting instructions to the depositary. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will try to vote the underlying ordinary shares represented by your ADSs in accordance with these instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise your right to vote with respect to the underlying ordinary shares represented by your ADSs unless you withdraw the underlying ordinary shares represented by your ADSs from the depositary and become a registered holder of such ordinary shares. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the underlying ordinary shares represented by your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our

 

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voting materials to you. We have agreed to give the depositary prior notice of shareholder meetings as far in advance of the meeting date as practicable. Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the ordinary shares underlying your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the underlying ordinary shares represented by your ADSs are not voted as you requested.

You may be subject to limitations on the transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADSs on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

Forum selection provisions in our post-offering memorandum and articles of association and our deposit agreement with the depositary bank could limit the ability of holders of our Class A ordinary shares, ADSs or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, the depositary bank, and potentially others.

Our post-offering memorandum and articles of association provide that the United States District Court for the Southern District of New York is the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than our company. Our deposit agreement provides that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall have exclusive jurisdiction over any suit, action or proceeding against or involving us or the depositary, arising out of or relating in any way to the deposit agreement or the transactions contemplated thereby or by virtue of owning the ADSs or ADRs. However, the enforceability of similar federal court choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings in the United States, and it is possible that a court could find this type of provision to be inapplicable, unenforceable, or inconsistent with other documents that are relevant to the filing of such lawsuits. If a court were to find the federal choice of forum provision contained in our post-offering memorandum and articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. If upheld, the forum selection clause in our post-offering memorandum and articles of association, as well as the forum selection provision in the deposit agreement, may limit a security-holder’s ability to bring a claim against us, our directors and officers, the depositary bank, and potentially others in his or her preferred judicial forum, and this limitation may discourage such lawsuits. In addition, the Securities Act provides that both federal and state courts have jurisdiction over suits brought to enforce any duty or liability under the Securities Act or the rules and regulations thereunder. Accepting or consent to this forum selection provision does not represent you are waiving compliance with federal securities laws and the rules and regulations thereunder. The exclusive forum provision in our post-offering memorandum and articles of association will not operate so as to deprive the courts of the Cayman Islands from having jurisdiction over matters relating to our internal affairs.

 

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Because we do not expect to pay cash dividends in the foreseeable future after this offering, you must rely on a price appreciation of the ADSs for a return on your investment.

We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the Company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.

Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value after this offering or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

You may experience dilution of your holdings due to an inability to participate in rights offerings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for the ADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act, or exempt from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from registration under the Securities Act. Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.

Although we have paid dividends in the past, our ability to pay dividends in the future depends on many factors and we cannot guarantee you that we will continue to pay dividends in the future.

Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions (including in the agreements governing our credit facilities or other debt instruments), capital requirements, business prospects and other factors our board of directors may deem relevant. In addition, pursuant to the Cayman Islands laws, no dividends may be paid except out of profits or share premium. Furthermore, existing and future financing arrangements may contain covenants that impose restrictions on our business and on our ability to pay dividends under certain circumstances.

We cannot provide assurances regarding the amount or timing of any potential future dividend payments and may decide not to pay dividends in the future. As a result, you should not rely on an investment in the ADSs to provide dividend income and if we do not pay dividends, capital appreciation, if any, of our ordinary shares will be a shareholder’s sole source of gain for the foreseeable future. See “Dividends and Dividend Policy.”

 

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As a foreign private issuer and “controlled company” within the meaning of the NYSE rules, we are permitted to, and we will, rely on exemptions from certain corporate governance standards, including the requirement that a majority of our board of directors consist of independent directors. Our reliance on such exemptions may afford less protection to holders of the ADSs.

The NYSE corporate governance rules require listed companies to have, among other things, a majority of independent board members, a minimum of three members on our audit committee, and independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer under the securities laws of the United States and “controlled company” within the meaning of the NYSE corporate governance standards, we are permitted to rely on exemptions from certain NYSE corporate governance practices.

A foreign private issuer must disclose in its annual reports filed with the SEC, each NYSE requirement with which it does not comply followed by a description of its applicable home country practice. As an exempted company incorporated in the Cayman Islands and listed on the NYSE, we expect to follow our home country practice with respect to the composition of our board of directors and we do not expect a majority of our directors to be independent. The Companies Act (As Revised) of the Cayman Islands and our post-offering second amended and restated memorandum and articles of association do not require for a majority of our directors to be independent. As such, unlike the position if we were required to comply with the requirements of the NYSE, we do not need to maintain a board comprising a majority of independent directors. As a result, non-independent directors, may, among other things, resolve governance issues regarding our Company.

As long as we rely on the foreign private issuer exemption to certain of the NYSE corporate governance standards, a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members, and neither our compensation committee nor our nominating and corporate governance committee is required to be comprised entirely of independent directors. Therefore, our board of directors’ approach to governance may be different from that of a board of directors consisting of a majority of independent directors, and, as a result, the management oversight of our Company may be more limited than if we were subject to all of the NYSE corporate governance standards.

In the event we no longer qualify as a foreign private issuer, we intend to rely on the “controlled company” exemption under the NYSE corporate governance rules. A “controlled company” under the NYSE corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group or another company. Following this offering, our Founder, Executive Chairman and Chief Executive Officer, will control a majority of the voting power of our issued and outstanding ordinary shares, making us a “controlled company” within the meaning of the NYSE corporate governance rules. As a controlled company, we would be eligible to, and, in the event we no longer qualify as a foreign private issuer, we intend to elect not to comply with certain of the NYSE corporate governance standards, including the requirement that a majority of directors on our board of directors are independent directors and the requirement that our compensation committee and our nominating and corporate governance committee consist entirely of independent directors.

Accordingly, in the future you may not have the same protections afforded to holders of securities of companies that are subject to all of the requirements under United States federal securities laws and the NYSE corporate governance standards.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, our management will have additional obligations that will require their attention and we will incur additional legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules implemented or to be implemented by the SEC and the rules of the NYSE. The expenses

 

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incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers and will require our management and personnel to devote a substantial amount of time to comply with these rules and regulations. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the ADSs and/or ordinary shares, fines, sanctions and other regulatory action and potentially civil litigation.

If, in the future, we are deemed not to be an emerging growth company, then under Section 404 of the Sarbanes-Oxley Act, we will be required to furnish a report by our management on our internal control over financial reporting. To achieve compliance with Section 404 within the prescribed period, we would become engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we would need to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite any future efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we were to identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

You must rely on the judgment of our management as to the use of the net proceeds from this offering, and such use may not produce income which could result in a decrease in our ADS price.

We will retain broad flexibility and discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not produce income or increase the ADS price. A portion of the net proceeds from our initial public offering is allocated for general corporate purposes. Shareholders will not have the opportunity to influence our management’s decisions on how to use the net proceeds, even if the eventual use of proceeds deviates from the planned use of proceeds described in the section entitled “Use of Proceeds.” The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain profitability or increase the ADS price, and the net proceeds may be utilized in ways that do not produce income or that lose value and such utilization may cause losses. Our failure to apply these funds effectively could have a material and adverse effect on our business and financial condition.

We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

We are a foreign private issuer and therefore we are not required to comply with certain reporting requirements of the Exchange Act applicable to US domestic issuers, including:

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

 

   

the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

 

   

the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events;

 

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Regulation FD, which regulates selective disclosure of material information by issuers; and

 

   

certain more stringent executive compensation disclosure rules.

In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each fiscal year, while US domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. As a result of the above, you may not have the same protections afforded to shareholders of public companies that are not foreign private issuers.

In order to maintain our current status as a foreign private issuer, either (a) a majority of our shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to US domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and NYSE rules. The regulatory and compliance costs to us under US securities laws if we are required to comply with the reporting requirements applicable to a US domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to US domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make the ADSs less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:

 

   

the ability to present more limited financial data for this offering, including presenting only two years of audited financial statements and only two years of selected financial data, as well as only two years of related management’s discussion and analysis of financial condition and results of operations disclosure;

 

   

an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; and

 

   

to the extent that we no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (2) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, including golden parachute compensation.

We may take advantage of certain of these provisions for up to five years after the date of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of the above-described provisions. For example, we have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies.

 

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We cannot predict if investors will find the ADSs less attractive as a result of our reliance on exemptions under the JOBS Act. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and our share price may be more volatile.

If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the price of our ADSs and trading volume could decline.

The trading market for the ADSs will depend, in part, on the research reports that securities or industry analysts publish about us or our business. We may be unable to sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities or industry analysts maintain coverage of our Company, or if these securities or industry analysts are not widely respected within the general investment community, the trading price for the ADSs would be negatively impacted. In the event that we obtain securities or industry analyst coverage, if one or more of the analysts who cover us downgrade the ADSs or publish inaccurate or unfavorable research about our business, the price per ADS would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for the ADSs could decrease, which might cause the price per ADS and trading volume to decline.

We may be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes, which could subject U.S. Holders of the ADSs or ordinary shares to significant adverse United States income tax consequences.

For United States federal income tax purposes, a non-United States corporation, such as our Company, will be treated as a “passive foreign investment company,” or “PFIC” if, in the case of any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Based upon our current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and the expected market price of our ADSs following this offering, we do not expect to be a PFIC for the current taxable year or the foreseeable future.

However, while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a fact-intensive inquiry made annually that depends, in part, upon the composition and classification of our income and assets. Fluctuations in the market price of our ADSs may cause us to be or become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our ADSs (which may be volatile). The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. It is also possible that the Internal Revenue Service may challenge our classification of certain income or assets or the valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or future taxable years.

If we were to be or become a PFIC for any taxable year during which a U.S. Holder (as defined in “Material Tax Considerations—United States Federal Income Tax Considerations”) holds our ADSs or ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “Material Tax Considerations—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “believe”, “plan”, “expect”, “intend”, “should”, “seek”, “estimate”, “will”, “aim” and “anticipate”, or other similar expressions, but these are not the exclusive means of identifying such statements. All statements other than statements of historical facts included in this document, including those regarding future financial position and results, business strategy, plans and objectives of management for future operations (including development plans and dividends) and statements on future industry growth are forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we will file with the SEC, other information sent to our shareholders and other written materials.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

 

   

Changes in the laws, regulations, policies and guidelines in the jurisdictions in which we operate;

 

   

The regulatory environment in the jurisdictions in which we operate;

 

   

Competition in the outsourced business support services industry in the jurisdictions in which we operate;

 

   

Reliance on certain clients for a significant portion of our revenue;

 

   

Developments related to the COVID-19 pandemic, including with respect to the success of any vaccines and the ability of economies and our clients to recover from the economic effects of the pandemic;

 

   

Political instability in the jurisdictions in which we operate;

 

   

Breaches of laws or regulations in the operation and management of our current and future businesses and assets;

 

   

The overall economic environment and general market and economic conditions in the jurisdictions in which we operate;

 

   

Our ability to execute our strategies;

 

   

Changes in the need for capital and the availability of financing and capital to fund these needs;

 

   

Our ability to anticipate and respond to changes in the outsourced business support services industry, the markets in which we operate, and in client demands, trends and preferences;

 

   

Man-made or natural disasters, including war, acts of international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God such as floods, earthquakes, typhoons and other adverse weather and natural conditions that affect our business or assets;

 

   

The loss of key personnel and the inability to replace such personnel on a timely basis or on terms acceptable to us;

 

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Exchange rate fluctuations, including fluctuations in the exchange rates of currencies that are used in our business;

 

   

Changes in interest rates or rates of inflation; and

 

   

Legal, regulatory and other proceedings arising out of our operations.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

This prospectus contains certain data and information that we obtained from various government and private publications; including industry data and information from Frost & Sullivan. Statistical data in these publications also include projections based on a number of assumptions. The market for outsourced business support services may not grow at the rate projected by such market data, or at all. Failure of this industry to grow at the projected rate may have a material and adverse effect on our business and the market price of our ADSs. In addition, the rapidly changing nature of the market for outsourced business support services results in significant uncertainties for any projections or estimates relating to growth prospects or future conditions. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

 

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ENFORCEABILITY OF CIVIL LIABILITIES

Our company is an exempted company incorporated with limited liability under the laws of the Cayman Islands. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman Islands companies may not have standing to sue before the U.S. federal courts.

All of our current operations are conducted outside of the United States and all of our current assets are located outside of the United States, with the majority of our operations and current assets being located in Singapore, the Philippines, Malaysia and Thailand. All of the directors and executive officers of our Company and the auditors of our Company reside outside the United States and substantially all of their assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or any such persons, or to enforce in the United States any judgment obtained in the U.S. courts against us or any of such persons, including judgments based upon the civil liability provisions of the U.S. securities laws or any U.S. state or territory.

We have appointed Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Cayman Islands

Maples and Calder (Hong Kong) LLP, or Maples, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of the U.S. courts obtained against us or our directors or executive officers that are predicated upon the civil liability provisions of the U.S. securities laws or any U.S. state, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or executive officers that are predicated upon the U.S. securities laws or any U.S. state.

We have been advised by Maples that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is a judgment in personam rather than in rem, (a) is given by foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given or, subject to judicial discretion, a non-monetary judgment in personam, (c) is final and conclusive, (d) is not in respect of taxes, a fine or a penalty or an attempt by a foreign state to act in excess of its jurisdiction by enforcing sovereign acts of that state outside of its own territory, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from the U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 

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Singapore

There is uncertainty as to whether judgments of courts in the United States based upon the civil liability provisions of the securities laws of the United States or any state or territory of the United States will be recognized or enforced by the Singapore courts, and there is doubt as to whether the Singapore courts will enter judgments in original actions brought in the Singapore courts based solely on the civil liability provisions of these securities laws. An in personam final and conclusive judgment in the federal or state courts of the United States under which a fixed or ascertainable sum of money is payable may generally be enforced as a debt in the Singapore courts under the common law as long as it is established that the Singapore courts have jurisdiction over the judgment debtor. However, the Singapore courts are unlikely to enforce a foreign judgment if (a) the foreign judgment is inconsistent with a prior local judgment that is binding on the same parties; (b) the enforcement of the foreign judgment would contravene the public policy of Singapore; (c) the proceedings in which the foreign judgment was obtained were contrary to principles of natural justice; (d) the foreign judgment was obtained by fraud; or (e) the enforcement of the foreign judgment amounts to the direct or indirect enforcement of a foreign penal, revenue or other public law.

In particular, the Singapore Courts may potentially not allow the enforcement of any foreign judgment for a sum payable in respect of taxes, fines, penalties or other similar charges, including the judgments of courts in the United States based upon the civil liability provisions of the securities laws of the United States or any state or territory of the United States. In respect of civil liability provisions of the United States federal and state securities law which permit punitive damages against us and our directors or executive officers, we are unaware of any decision by the Singapore courts which has considered the specific issue of whether a judgment of a United States court based on such civil liability provisions of the securities laws of the United States or any state or territory of the United States is enforceable in Singapore.

Philippines

The Philippines is a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, but it is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. However, generally accepted principles of international law, by virtue of its incorporation in the Philippine Constitution, form part of Philippine law even if its authority is not derived from treaty obligations. It is by virtue of the recognition by Philippine courts as a generally accepted principle of international law the widespread recognition and enforcement of foreign judgments, that Philippine law recognizes and enforces foreign judgments.

The enforceability of foreign judgments in the Philippines is specifically provided for in the 1997 Rules of Civil Procedure. Section 48 of Rule 39 of the Rules of Civil Procedure provides that a judgment or final order of a tribunal of a foreign country having jurisdiction to give the judgment or final order (a) in the case of a judgment or final order upon specific property, is conclusive upon the title to that property; and (b) in the case of a judgment or final order against a person, is presumptive evidence of a right between the parties and their successors in interest by a subsequent title.

A judgment of final order rendered by a foreign court may, however, be repelled by evidence that: (i) the court rendering such judgment had jurisdiction in accordance with its jurisdictional rules, (ii) the other party had notice of the proceedings, (iii) such judgment was not obtained by collusion or fraud or based on a clear mistake of fact or law, and (iv) such judgment was not contrary to public policy or good morals in the Philippines. Moreover, the Philippines enacted Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, to facilitate the enforcement of arbitral awards in the Philippines. In addition, Article 17 of the Civil Code of the Philippines provides that the judgment must not be contrary to laws that have for their object public order, public policy and good customs in the Philippines. Furthermore, Philippine courts have held that a foreign judgment is presumed to be valid and binding in the country from which it issues, until the contrary is shown, and the party contesting the foreign judgment has the burden of overcoming the presumption of its validity.

 

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Malaysia

The United States is not one of the reciprocating countries under the Reciprocal Enforcement of Foreign Judgments Act 1958 of Malaysia, or REJA, and as such any foreign judgment obtained in the U.S. courts will not be registerable in the courts of Malaysia in accordance with the provisions of REJA. Nevertheless, an action can be commenced in the courts of Malaysia based on the final and conclusive monetary judgment for a definite sum obtained from the U.S. courts as a common law claim for debt. Such judgment would, upon an action on the judgment at common law, be recognized and enforced by the courts of Malaysia, provided that (a) the judgment was not obtained by fraud or in breach of the principles of natural justice, (b) such judgment is not contrary to Malaysian public policy, and (c) the court giving such judgment had jurisdiction to do so according to Malaysian conflict of laws rules.

Thailand

Our Thai counsel, Thanathip & Partners Legal Counsellors Limited, has advised us that Thai courts will not enforce any judgment or order obtained outside Thailand, but that a judgment or order from a foreign court may, if duly authenticated and translated into Thai and in the discretion of a court in Thailand, be admitted as evidence of an obligation in a new proceeding instituted in that court, which would consider the issue on the evidence before it.

China

There is uncertainty as to whether the courts of the PRC would enforce judgments of United States courts obtained against us or these persons predicated upon the civil liability provisions of the United States federal and state securities laws. The recognition and enforcement of foreign judgments are provided for under the Civil Procedures Law of the People’s Republic of China, or the PRC Civil Procedures Law, which was adopted on April 9, 1991, and amended on October 28, 2007, August 31, 2012 and June 27, 2017. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

 

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USE OF PROCEEDS

We expect that we will receive net proceeds from this offering of approximately US$            , based on an assumed initial public offering price of US$             per ADS, the mid-point of the estimated range of the initial public offering price set forth on the cover of this prospectus, after deducting the underwriting discounts and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional ADSs from us in full, we expect that we will receive additional net proceeds of US$             after deducting the underwriting discounts and estimated offering expenses payable by us.

A US$1.00 increase/(decrease) in the assumed initial public offer price of US$             per ADS would increase/(decrease) the net proceeds to us from this offering by approximately US$            , or approximately US$             if the underwriters exercise their option to purchase additional ADSs in full, assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and estimated offering expenses payable by us.

The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, obtain additional capital and enhance our brand recognition. We plan to use the net proceeds of this offering as follows:

 

   

to repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the term loan credit facility, or the Credit Suisse Facility, entered with Credit Suisse AG, Singapore Branch, or Credit Suisse AG, on March 16, 2021, including accrued and unpaid interest and premium (if any). See “Description of Certain Indebtedness—Credit Suisse Facility”; and

 

   

the remainder to enable us to expand our business into new markets, which would include costs for premises, technology and systems and other infrastructure as well as for hiring of personnel and other expansion related expenses, and for general corporate purposes, including working capital needs and potential acquisitions.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. See “Risk Factors—Risks Related to our Initial Public Offering and the ADSs—We have broad discretion in the use of the net proceeds received by us from this offering and may not use them effectively.”

Pending any use described above, we plan to invest the net proceeds in short-term, interest bearing obligations, investment-grade instruments or certificates of deposit.

 

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2021:

 

   

on an actual basis;

 

   

on a pro forma basis to reflect the automatic conversion of all of the shares held by our Principal Shareholder into Class B ordinary shares on a one-for-one basis immediately prior to the completion of this offering; and

 

   

on a pro forma as adjusted basis to reflect (i) the above, (ii) the issuance and sale of              Class A ordinary shares in the form of ADSs by us in this offering at an assumed initial public offering price of US$             per ADS, which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deducting the underwriting discounts and estimated offering expenses payable by us, assuming the underwriters do not exercise the over-allotment option, and (iii) the application of the net proceeds of the offering to fully repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the Credit Suisse Facility.

The pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering to be determined at pricing. You should read this table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

 

     As of June 30, 2021  
     Actual     Pro Forma     Pro Forma
as Adjusted
 
     (S$ in thousands)  

Non-current liabilities

                                                

Bank loans

     263,910       263,910                     
  

 

 

   

 

 

   

 

 

 

Long-term debt

     263,910       263,910                     

Equity:

      

Ordinary shares (par value US$0.0001 per share; 500,000,000 ordinary shares authorized; 123,500,000 ordinary share issued and outstanding on an actual basis)

     16                           

Class A ordinary shares (par value US$0.0001 per share; 50,000,000 shares authorized; nil shares issued and out-standing on a pro forma basis; shares issued and outstanding on a pro forma as adjusted basis)

                               

Class B ordinary shares (par value US$0.0001 per share; 200,000,000 shares authorized; 123,500,000 shares issued and outstanding on a pro forma basis; shares issued and outstanding on a pro forma as adjusted basis)

           16                     

Undesignated shares (par value US$0.0001 per share; 250,000,000 shares authorized; nil shares issued and outstanding on a pro forma as adjusted basis)

              

Reserves

     (273,741     (273,741                   

Retained earnings

     177,133       177,133                     

Non-controlling interests

     (174     (174                   

Total capital deficiency

     (96,766     (96,766 )                    
  

 

 

   

 

 

   

 

 

 

Total capitalization

     167,144       167,144                     
  

 

 

   

 

 

   

 

 

 

 

Notes:

*

Amount is less than S$1,000

 

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On March 16, 2021, we entered into the Credit Suisse Facility. The credit facility provides for borrowings in an aggregate amount of S$252.0 million (US$188.0 million). Contemporaneous with TDCX’s acquisition of our Founder’s shareholder interests in TDCX KY, we drew upon the credit facility on March 23, 2021. Subsequently, we paid the proceeds of S$252.0 million from the Credit Suisse Facility to our Founder for the purchase of his interests in TDCX KY. As described in Note 1 of our unaudited condensed interim consolidated financial statements, the acquisition of TDCX KY by us was accounted for in a manner similar to a pooling of interest with assets and liabilities reflected at their historical amounts in the Group’s consolidated financial statements. The payment of the S$252.0 million of proceeds from the Credit Suisse Facility to our Founder is accounted as a deemed distribution to our Founder in our unaudited condensed interim consolidated financial statements as of June 30, 2021. As of the date of this prospectus, the outstanding principal balance is S$252.7 million (US$188.0 million). Further see “Use of Proceeds” and “Description of Certain Indebtedness — Credit Suisse Facility.”

On August 6, 2021, we utilized S$13.7 million of the multi-currency advance facility that is available pursuant to our facility with OCBC to pay off S$13.7 million of indebtedness outstanding under our refinancing facility that is also available pursuant to our facility with OCBC and which was subsequently extinguished.

 

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DIVIDENDS AND DIVIDEND POLICY

We do not intend to pay any dividends on our ordinary shares or ADSs for the foreseeable future. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business.

We do not have a fixed dividend policy. Any future determination to declare cash dividends would be subject to the discretion of our board of directors and would depend upon various factors, including our results of operations, financial condition and liquidity requirements, restrictions that may be imposed by applicable law and our contracts and other factors deemed relevant by our board of directors. Our Class B ordinary shares have the same general rights to dividends and other distributions as our Class A ordinary shares and no dividends or distributions may be declared on other classes of our shares without also being paid in the same manner to our Class B ordinary shares.

In the event we decide to pay dividends in the future, subject to the Companies Act of the Cayman Islands, our board of directors may from time to time declare dividends in any currency to be paid on our ordinary shares, and our shareholders may by ordinary resolution declare a dividend, but no dividend shall be declared in excess of the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profits (including retained earnings) or share premium, provided that in no circumstances may a dividend be paid if this would result in our Company being unable to pay its debts as they fall due in the ordinary course of its business.

Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. In addition, we are a holding company and depend on the receipt of dividends and other distributions from our subsidiaries to pay dividends on our ordinary shares. When making recommendations on the timing, amount and form of future dividends, if any, our board of directors will consider, among other things:

 

   

our results of operations and cash flow;

 

   

our expected financial performance and working capital needs;

 

   

our future prospects;

 

   

our capital expenditures and other investment plans;

 

   

other investment and growth plans;

 

   

dividend yields of comparable companies globally;

 

   

restrictions on payment of dividend that may be imposed on us by our financing arrangements; and

 

   

the general economic and business conditions and other factors deemed relevant by our board of directors and statutory restrictions on the payment of dividends.

If we pay any dividends on our shares, we will pay those dividends which are payable in respect of the underlying Class A ordinary shares represented by our ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to the underlying Class A ordinary shares represented by the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares.” Cash dividends on our Class A ordinary shares, if any, will be paid in U.S. dollars.

We are a holding company and depend on the receipt of dividends and other distributions from our subsidiaries to pay dividends on our ordinary shares. With the exception of Thailand, Malaysia, the Philippines and the PRC, there are no foreign exchange controls or foreign exchange regulations under current applicable laws of the various places of incorporation of our significant subsidiaries that would affect the payment or remittance of

 

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dividends. With respect to Thailand, while Thai laws allow the outward remittance from Thailand of dividends, it is required that the dividend payment in Baht currency (after payment of applicable Thai taxes) must be converted into foreign currency prior to the outward remittance from Thailand as the bank of Thailand has a policy not to allow any person to bring Baht currency out of Thailand.

In Malaysia, the current foreign exchange administration rules allow non-residents to freely repatriate, in a foreign currency, profits and dividends arising from investments or proceeds from divestment of Malaysian Ringgit assets. Dividends are freely transferable out of the country and no exchange controls or approvals are required subject to applicable reporting requirements and withholding tax. However, prior permission from the Controller of Foreign Exchange of Malaysia is required for any person to undertake or engage in any dealing or transaction with the State of Israel or its residents, any entity owned or controlled, directly or indirectly, by the State of Israel or its residents, including any authority or agency of the State of Israel, or any dealing or transaction using or involving the currency of the State of Israel. Furthermore, the Malaysia Companies Act 2016 also provides that (a) generally, a company may only make a distribution to shareholders out of the profits of the company if the company is solvent; (b) before a distribution is paid by a company to a shareholder, such distribution shall be duly authorized by the directors of the company; and (c) unless provided in the constitution of the company, a company may reduce its share capital by a special resolution and either confirmation by a court or a solvency statement by the company.

In the People’s Republic of China, the core regulations governing foreign currency exchange are the Foreign Exchange Administration Regulations of People’s Republic of China, or the PRC Foreign Exchange Administration Regulations, promulgated on January 29, 1996, and amended on January 14, 1997 and August 1, 2008. Certain organizations in the PRC, including foreign invested enterprises, may purchase, sell and/or remit foreign currencies at certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. Under the PRC Foreign Exchange Administration Regulations, overseas payment of dividends does not require regulatory approval or review.

According to the Company Law of the People’s Republic of China, which came into effective on January 1, 2006 and was last amended on October 26, 2018, when a company distributes its profits of the current year, 10% of the profits shall be allocated to its statutory reserve fund. A company is not required to allocate to the statutory reserve fund once the cumulative amount of the statutory reserve fund reaches 50% or more of the company’s registered capital. The statutory reserve fund can be used to cover the losses of a company. If there is any loss of a company accrued in previous years, the company shall use its profits from the current year to cover the losses before accruing the statutory reserve fund. After a company has accrued the statutory reserve fund from its profits, it may, upon a resolution of the shareholder(s), accrue a discretionary reserve fund from the profits. After losses of a company have been made up and allocation to the reserve fund has been made, the remaining profits from either the current year or previous years can be distributed to its shareholder(s). A company shall not make distribution to its holdings of its own equity interests. Under the laws of the People’s Republic of China, dividends paid from our subsidiary located in Beijing are subject to a 10% withholding tax since its shareholder is a non-resident enterprise.

With respect to the Philippines, the board of directors of a Philippine company may only declare dividends out of unrestricted retained earnings. In the case of the payment of stock dividends, the same should be approved by stockholders holding or representing at least two-thirds (2/3) of the outstanding capital stock of the Philippine company. A holder of the shares of a Philippine company shall be entitled to full and immediate repatriation of capital and remittance of dividends, profits and earnings and such holders of shares of the Philippine company shall be entitled to source the foreign exchange necessary for such purposes from the Philippine banking system provided such foreign investment in the shares of the Philippine company has been registered with the Bangko Sentral ng Pilipinas, the central bank of the Philippines. Transfers of the assets of a Philippine company used in relation to its PEZA-registered business require the consent or approval of PEZA. In addition, the transfer/sale of all or substantially all of the assets of a Philippine company shall be subject to the requirements of Act No. 3952, as amended, otherwise known as the “Bulk Sales Law” and the Revised Corporation Code of the Philippines.

 

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DILUTION

If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per ADS is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

Our net tangible book value as of June 30, 2021 was a deficit of approximately S$96.8 million (US$72.0 million), or US$0.58 per ordinary share as of that date. Our net tangible book value is determined by subtracting the value of our intangible assets and total liabilities from our total assets. Dilution is determined by subtracting net tangible book value per ordinary share, after giving effect to the additional proceeds we will receive from this offering, from the assumed initial public offering price of US$             per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) adjusted to reflect the ADS-to-ordinary share ratio, and after deducting underwriting discounts and estimated offering expenses payable by us. Because the Class A ordinary shares and Class B ordinary shares have the same dividend and other rights, except for voting and conversion rights, the dilution is presented based on all issued and outstanding ordinary shares, including Class A ordinary shares and Class B ordinary shares.

Without taking into account any other changes in net tangible book value after June 30, 2021, other than to give effect to (i) our sale by us of              Class A ordinary shares in the form of the ADSs in this offering at the assumed initial public offering price of US$             per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) after deducting underwriting discounts and estimated offering expenses payable by us and assuming no exercise of the underwriters’ option to purchase additional ordinary shares, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been US$            , or US$             per ordinary share and US$             per ADS. This represents an immediate increase in net tangible book value of US$             per ordinary share and US$             per ADS to the existing shareholders and an immediate dilution in net tangible book value of US$             per ordinary share and US$             per ADS to new investors purchasing ADSs in this offering.

The following table illustrates such dilution:

 

     Per Ordinary
Share
    Per ADS  

Assumed initial public offering price

   US$           US$            

Deficit net tangible book value as of June 30, 2021

   US$ 0.58     US$            

Amount of dilution in net tangible book value to new investors in this offering

   US$           US$            

Percentage of dilution in net tangible book value to new investors in this offering

                      

A US$1.00 increase/(decrease) in the assumed initial public offering price of US$             per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) would increase/(decrease) our pro forma as adjusted net tangible book value after giving effect to this offering by US$             per share and US$             per ADS and the dilution in net tangible book value per ordinary share to new investors in this offering by US$             per ordinary share and US$             per ADS, assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus, and after deducting the underwriting discounts and estimated offering expenses payable by us.

Assuming the underwriters’ over-allotment option is exercised in full, our net tangible book value as of June 30, 2021 (after giving effect to this offering) would have been US$             million and US$             per outstanding ordinary share. This represents an immediate dilution in as adjusted net tangible book value of US$             per ordinary share to new investors in this offering.

 

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The as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ordinary shares and other terms of this offering determined at pricing.

The following table summarizes, on a pro forma as adjusted basis as of June 30, 2021, the differences between existing shareholders and the new investors with respect to the number of ordinary shares (in the form of ADSs or shares) purchased from us, the total consideration paid and the average price per ordinary share and per ADS paid before deducting the underwriting discounts and estimated offering expenses payable by us. The total number of ordinary shares does not include Class A ordinary shares underlying the ADSs issuable upon the exercise of the overallotment option granted to the underwriters.

 

     Ordinary Shares
Purchased
     Total Consideration      Average Price
per Ordinary
Share
     Average Price
per ADS
 
     Number      Percent      Amount      Percent  

Existing shareholders

         US$                   US$                US$            

New investors

         US$                   US$                US$            

Total

        100.0      US$                  100.0      US$                US$            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

If the underwriters were to fully exercise the over-allotment option to purchase              additional shares of our Class A ordinary shares from us, the percentage of shares of our shares held by existing shareholders would be         %, and the percentage of shares of our common stock held by new investors would be         %.

The pro forma information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

 

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following selected consolidated financial data as of December 31, 2019 and 2020 and for the years ended December 31, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected financial data as of December 31, 2018 is derived from audited financial statement not included herein. The consolidated financial data as of June 30, 2021 and for the six months ended June 30, 2020 and 2021 have been derived from our unaudited condensed interim consolidated financial statements included elsewhere in this prospectus. The selected financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with IFRS as issued by the IASB. Our historical results do not necessarily indicate results expected for any future period.

Selected Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

     For the Six Months Ended June 30,     For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
     (in thousands except per share amounts)  

Revenue

     187,174       251,637       209,280       323,358       434,723       330,265       181,233  

Employee benefits expense

     (115,610     (155,426     (126,167     (191,896     (257,985     (189,912     (109,373

Depreciation expense

     (14,757     (19,839     (15,633     (24,595     (33,065     (24,599     (12,908

Rental and maintenance expense

     (4,223     (5,677     (5,856     (7,887     (10,603     (9,220     (2,623

Recruitment expense

     (3,358     (4,515     (3,942     (5,954     (8,005     (6,680     (3,792

Transport and travelling expense

     (396     (533     (670     (1,119     (1,504     (2,083     (1,358

Telecommunication and technology expense

     (2,916     (3,920     (3,013     (4,690     (6,305     (4,522     (2,385

Interest expense

     (2,787     (3,747     (1,496     (2,275     (3,058     (2,893     (1,128

Other operating expense

     (4,569     (6,144     (9,052     (11,779     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

                 731       544       731              

Share of profit from an associate

     32       43             146       196              

Interest income

     129       174       245       443       594       465       268  

Other operating income

     2,041       2,744       3,866       5,590       7,514       717       546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

     40,760       54,797       48,293       79,885       107,397       81,060       41,608  

Income tax expenses

     (7,464     (10,034     (9,769     (15,846     (21,303     (7,524     (3,520
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

     33,296       44,763       38,524       64,039       86,094       73,536       38,088  

Other comprehensive income (loss)(1)

     (858     (1,153     1,344       398       536       840       (71
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period/year

     32,438       43,610       39,868       64,437       86,630       74,376       38,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

     0.27       0.36       0.31       0.52       0.70       0.60       0.31  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma basic and diluted earnings per share(2) (in US$ or S$)

                                                                                                         
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

71


Table of Contents

 

Notes:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

(2)

Unaudited basic and diluted pro forma net income (loss) per share data assumes that an additional              of our shares of common stock were outstanding for the six months period ended June 30, 2021, which represents the number of shares of common stock that we expect to be issued to fund the debt repayment with the net proceeds of this offering as described in “Use of Proceeds.” The number of shares of common stock that we expect to be issued to fund the debt repayment was calculated in accordance with Staff Accounting Bulletin Topic 3.A. by dividing $             million, which is the estimated cost to repay indebtedness with the proceeds of this offering as described in “Use of Proceeds,” by $             per share, the low end of the initial public offering price range included on the cover of this prospectus less underwriting discounts and commissions.

Selected Consolidated Statement of Financial Position

 

                                                                                   
     As of June 30,      As of December 31,  
     2021      2020      2019      2018  
     US$      S$      US$      S$      S$      S$  
     (in thousands)  

ASSETS

                 

Current assets

                 

Cash and cash equivalents

     60,370        81,162        44,486        59,807        35,920        23,973  

Fixed deposits

     5,655        7,602        5,748        7,727        837         

Trade receivables

     34,816        46,806        27,461        36,919        55,278        27,605  

Contract assets

     37,858        50,897        34,842        46,842        26,523        18,605  

Other receivables

     8,985        12,080        9,117        12,257        9,210        5,392  

Tax recoverable

                                        350  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     147,684        198,547        121,654        163,552        127,768        75,925  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

                 

Pledged deposits

     1,766        2,374        1,768        2,377        2,110        2,096  

Other receivables

     3,389        4,558        4,369        5,874        3,708        2,931  

Plant and equipment

     35,344        47,516        30,185        40,581        40,730        24,911  

Right-of-use assets

     21,024        28,265        21,736        29,221        22,840        18,586  

Loan to an associate

                                 784         

Deferred tax assets

     1,810        2,433        1,175        1,580        1,197        329  

Investment in an associate

     193        260        170        229        33        33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total non-current assets

     63,526        85,406        59,403        79,862        71,402        48,886  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

     211,210        283,953        181,057        243,414        199,170        124,811  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND (CAPITAL DEFICIENCY)/NET EQUITY

                 

Current liabilities

                 

Other payables

     28,111        37,794        27,671        37,200        26,926        15,870  

Amount due to founder

                                        10,469  

Bank loans

     18,703        25,144        17,978        24,170        34,421        6,374  

Lease liabilities

     10,512        14,132        10,907        14,664        10,963        7,634  

Provision for reinstatement cost

     2,767        3,720        336        452                

Income tax payable

     9,209        12,381        9,861        13,257        6,956        3,229  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     69,302        93,171        66,753        89,743        79,266        43,575  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

72


Table of Contents
                                                                                   
     As of June 30,     As of December 31,  
     2021     2020     2019     2018  
     US$     S$     US$     S$     S$     S$  
     (in thousands)  

Non-current liabilities

            

Bank loans

     196,303       263,910       12,002       16,136             24,174  

Lease liabilities

     12,822       17,238       13,257       17,823       14,498       12,495  

Provision for reinstatement cost

     3,374       4,536       4,178       5,617       4,955       1,817  

Defined benefit obligation

     1,282       1,723       1,067       1,435       769       315  

Deferred tax liabilities

     105       141       96       129       236       365  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     213,886       287,548       30,600       41,140       20,458       39,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interest

            

Share capital

     12       16       *       *       *       *  

Reserves

     (203,616     (273,741     (14,760     (19,843     (20,650     (21,604

Retained earnings

     131,756       177,133       98,462       132,371       120,094       63,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Deficit)/ Equity attributable to owners of the Group

     (71,848     (96,592     83,702       112,528       99,444       42,069  

Non-controlling interests

     (130     (174     2       3       2       1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Capital deficiency)/ Net equity

     (71,978 )      (96,766 )      83,704       112,531       99,446       42,070  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and (capital deficiency)/ net equity

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

Selected Consolidated Statement of Cash Flows

 

                                                                                          
     For the Six Months Ended
June 30,
    For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
                                         (Restated)  
     (in thousands)  

Net cash from operating activities

     39,798       53,505       83,944       97,057       130,484       76,044       37,320  

Net cash used in investing activities

     (11,906     (16,006     (7,228     (17,615     (23,682     (27,627     (20,863

Net cash used in financing activities

     (11,559     (15,540     (1,962     (61,941     (83,274     (36,655     (10,680
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,333       21,959       74,754       17,501       23,528       11,762       5,777  

Effect of exchange rate changes on balance of cash held in foreign currencies

     (449     (604     736       267       359       185       (71

Cash and cash equivalents at the beginning of the period/year

     44,486       59,807       35,920       26,718       35,920       23,973       18,267  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period/year

     60,370       81,162       111,410       44,486       59,807       35,920       23,973  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Other Financial and Operating Data

 

                                                                     
     Six Months Ended
June 30,
     Year Ended December 31,  
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,177        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We define EBITDA as profit for the year/period before interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational Metrics—Non-IFRS Financial Measures” for information regarding the limitations of using EBITDA, EBITDA margin and Debt/EBITDA Ratio as financial measures.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
     For the Year Ended December 31,  
     2020     2019     2018  
     US$     S$     Margin     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

     64,039       86,094       19.8     73,536       22.2 %      38,088       21.0

Adjustments:

              

Depreciation expense

     24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

     15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

     2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

     (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     106,313       142,926       32.9     108,087       32.7 %      55,376       30.6
  

 

 

   

&n