Cayman Islands | 8200 | Not Applicable | ||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queens Road, Central Hong Kong +852 3740 4700 |
Alan Seem, Esq.
Shearman & Sterling LLP 12th Floor, East Tower, Twin Towers B-12 Jianguomenwai Dajie, Beijing 100022 Peoples Republic of China +86 (10) 5922 8000 |
Proposed maximum
|
||||||||||||
Title of each class of
|
Amount to be
|
Proposed Maximum
|
aggregate
|
Amount of
|
||||||||
securities to be registered | Registered (1)(2) | Offering Price Per Share (2) | offering price (2) | registration fee | ||||||||
Class A common shares, par value $0.001 per
share
(1)(3)
|
27,600,000 | $5.00 | $138,000,000 | $9,839.00 (4) | ||||||||
(1) | Includes 3,600,000 Class A common shares that may be purchased by the underwriters to cover over-allotments, if any. Also includes Class A common 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 their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public. These Class A common shares are not being registered for the purpose of sales outside the United States. |
(2) | Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933. |
(3) | American depositary shares issuable upon deposit of the Class A common shares registered hereby have been registered under a separate registration statement on Form F-6 (Registration No. 333-169777). Each American depositary share represents two Class A common shares. |
(4) | Of this amount, $7,130.00 was previously paid. |
The information in
this preliminary prospectus is not complete and may be changed.
These securities may not be sold 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 is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
Underwriting
|
||||||||||||
discounts and
|
Proceeds
|
|||||||||||
Price to public | commissions | before expenses | ||||||||||
Per ADS
|
$ | $ | $ | |||||||||
Total
|
$ | $ | $ |
Credit Suisse | Morgan Stanley |
Piper Jaffray | Oppenheimer & Co. |
1
12
40
41
42
43
44
46
47
49
55
58
85
90
103
113
119
121
122
130
140
142
149
155
156
157
158
F-1
EX-1.1
EX-3.2
EX-4.3
EX-8.1
EX-23.1
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largest K-12 after-school tutoring service provider in China;
brand strength;
outstanding student performance;
high teaching quality, strong content development and efficient
education management system;
largest Internet education platform in China; and
innovative and entrepreneurial management team with a passion
for education.
further penetrate our existing markets;
extend our geographic network into attractive new markets;
2
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expand our personalized premium services; and
further develop our online course offerings.
our ability to continue to attract students to enroll in our
courses;
our ability to continue to recruit, train and retain qualified
teachers;
our ability to improve the content of our existing course
offerings and to develop new courses in a timely and
cost-effective manner;
our ability to maintain and enhance our brand;
our historical financial and operating results, growth rates and
profitability may not serve as an adequate basis to judge our
future prospects and results of operations;
our ability to maintain and continue to improve our teaching
results in terms of student performance and the level of
satisfaction with our services; and
our ability to compete effectively against our competitors.
risks associated with our control of our variable interest
entities, which control is based upon contractual arrangements
rather than equity ownership;
risks associated with our ability to fund our expansion plan due
to PRC legal restrictions on foreign currency conversion and
restrictions on distribution of school profits, among others;
uncertainties with respect to PRC regulatory restrictions on
after-school tutoring services, including regulations issued by
certain provincial governmental authorities prohibiting private
schools from offering after-school tutoring classes to primary
and secondary school students; and
risks associated with our ability to obtain various operating
licenses and permits and to make registrations and filings for
all of our learning centers in China.
3
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(1)
Each person is an ultimate
beneficial owner and also a director or executive officer of TAL
Group.
exercise effective control over Xueersi Education, Xueersi
Network and their respective subsidiaries;
receive substantially all of the economic benefits of Xueersi
Education, Xueersi Network and their respective subsidiaries in
consideration for the services provided by us; and
have an exclusive option to purchase all of the equity interests
in Xueersi Education and Xueersi Network when and to the extent
permitted under PRC law.
4
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5
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we, us, our company, or
our refers to TAL Education Group, its subsidiaries
and its affiliated entities;
common shares refers to our Class A and
Class B common shares, par value US$0.001 per share;
preferred shares or Series A preferred
shares refers to our Series A convertible redeemable
preferred shares, par value US$0.001 per share;
ADSs refers to American depositary shares, each of
which representing two Class A common shares;
variable interest entities, or VIEs,
refers to Beijing Xueersi Network Technology Co., Ltd. and
Beijing Xueersi Education Technology Co., Ltd., which are
domestic PRC companies in which we do not have equity interests
but whose financial results have been consolidated into our
consolidated financial statements in accordance with
U.S. GAAP due to our having effective control over, and our
being the primary beneficiary of, these companies; and
affiliated entities refers to our VIEs and the
VIEs direct and indirect subsidiaries and schools;
student enrollments refers to the cumulative total
number of courses enrolled in and paid for by our students,
including multiple courses enrolled in and paid for by the same
student;
annual retention rate refers to the percentage of
our students who subsequently enroll in one or more of our
courses after enrolling in at least one course in the previous
fiscal year;
China or PRC refers to the Peoples
Republic of China, excluding for purposes of this prospectus
only, Taiwan, Hong Kong and Macau;
K-12 refers to the year before the first grade
through the last year of high school;
Renminbi or RMB refers to the legal
currency of China; and
$, dollars or
U.S. dollars refers to the legal currency of
the United States.
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Offering price
We currently expect that the initial public offering price will
be between $8.00 and $10.00 per ADS.
ADSs offered by us
12,000,000 ADSs.
12,000,000 ADSs.
149,000,000 shares, par value $0.001 per share, comprised of
(i) 24,000,000 Class A common shares, and
(ii) 125,000,000 Class B common shares.
ADS to Class A common share ratio
1:2
XRS.
Common shares
Our common shares are divided into Class A common shares
and Class B common shares. Holders of Class A common
shares and Class B common shares have the same rights
except for voting and conversion rights. In respect of matters
requiring shareholders vote, each Class A common
share is entitled to one vote, and each Class B common
share is entitled to ten votes. Each Class B common share
is convertible into one Class A common share at any time by
the holder thereof. Class A common shares are not
convertible into Class B common shares under any
circumstances. Upon any transfer of Class B common shares
by a holder thereof to any person or entity which is not an
affiliate of such holder, such Class B common shares shall
be automatically and immediately converted into the equal number
of Class A common shares.
Depositary
JPMorgan Chase Bank, N.A.
Over-allotment option
The underwriters have a
30-day
option to purchase up to 1,800,000 additional ADSs from us at
the initial public offering price less underwriting discounts
and commissions.
Reserved ADSs
At our request, the underwriters have reserved for sale, at the
initial public offering price, up to 5% of the total number of
ADSs offered in this offering (assuming no exercise of the
over-allotment option) to some of our directors, officers,
employees, business associates and related persons through a
directed share program.
Use of proceeds
We plan to use the net proceeds received from this offering to
expand our network of learning centers and service centers,
build a national training center, pay a declared cash dividend
in the amount of $30.0 million to our shareholders of
record as of the dividend declaration date conditional upon the
completion of this offering, improve our existing facilities,
and for other general corporate purposes, including strategic
investments in and acquisitions of complementary businesses,
although we are not currently negotiating any such investment or
acquisition. See Use of Proceeds for more
information.
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Lock-up
We, our directors and executive officers and all of our existing
shareholders have agreed with the underwriters, subject to
certain exceptions, not to sell, transfer or dispose of any
ADSs, common shares or similar securities for a period of
180 days after the date this prospectus. See
Underwriting for more information.
Risk factors
See Risk Factors and other information included in
this prospectus for a discussion of risks you should carefully
consider before investing in the ADSs.
assumes that the underwriters do not exercise their
over-allotment option to purchase 1,800,000 additional ADSs;
reflects the conversion of all outstanding Series A
preferred shares into 5,000,000 Class B common shares
immediately prior to the completion of this offering;
excludes 5,419,500 Class A common shares issuable upon the
vesting of restricted shares issued under our 2010 share
incentive plan that are outstanding as of the date of this
prospectus; and
excludes Class A common shares reserved for future grants
under our 2010 share incentive plan.
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10
For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $, except for shares,
per share and per ADS data)
$
8,882
$
37,476
$
69,594
$
32,983
$
53,022
(4,367
)
(18,554
)
(37,649
)
(16,068
)
(26,255
)
(1)
4,515
18,922
31,945
16,915
26,767
(370
)
(2,353
)
(5,608
)
(1,958
)
(4,184
)
(2)
(2,478
)
(5,890
)
(10,872
)
(4,602
)
(7,808
)
(3)
(1,615
)
(2,848
)
(9,858
)
(16,480
)
(6,560
)
(11,992
)
1,667
9,064
15,465
10,355
14,775
11
77
283
103
162
(210
)
(124
)
(119
)
(27
)
(363
)
6
731
1,678
9,299
15,624
10,339
14,916
(165
)
(2,018
)
(1,379
)
(912
)
(1,670
)
$
1,513
$
7,281
$
14,245
$
9,427
$
13,246
(4,113
)
$
1,513
$
3,168
$
14,245
$
9,427
$
13,246
$
0.01
$
0.03
$
0.11
$
0.08
$
0.11
$
0.01
$
0.03
$
0.11
$
0.08
$
0.11
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For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $, except for shares,
per share and per ADS data)
$
17.69
$
0.11
$
0.08
$
0.11
$
0.03
$
0.05
$
0.23
$
0.15
$
0.22
$
0.03
$
0.05
$
0.23
$
0.15
$
0.22
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
125,000,000
125,000,000
125,193,360
$
0.11
$
0.10
$
0.11
$
0.10
$
0.22
$
0.21
$
0.22
$
0.21
123,501,120
123,723,146
128,501,120
128,723,146
Notes:
(1)
Includes share-based compensation
expenses of $110 thousand.
(2)
Includes share-based compensation
expenses of $163 thousand.
(3)
Includes share-based compensation
expenses of $647 thousand.
(4)
Unaudited pro forma net income per
common share is computed by dividing net income attributable to
common shareholders by the sum of (i) the weighted average
number of common shares outstanding and (ii) the number of
common shares whose proceeds, calculated using the share price
at the midpoint of the price range shown on the face of this
prospectus, would be necessary to pay the amount by which the
conditional $30.0 million cash dividend exceeds our
earnings for the fiscal year ended February 28, 2010.
(5)
Each ADS represents two
Class A common shares.
As of February 29/28,
As of August 31,
2008
2009
2010
2010
Actual
Pro
Forma
(1)
(in thousands of $)
$
5,704
$
29,693
$
50,752
$
81,495
$
81,495
8,131
38,553
65,504
97,515
97,515
5,714
18,023
29,408
42,101
42,101
500
500
500
7,012
26,198
38,578
56,234
86,234
1,119
12,355
26,926
41,281
11,281
9,000
9,000
9,000
1,119
3,355
17,926
32,281
11,281
Note:
(1)
Reflects the automatic conversion
of all of our Series A preferred shares into 5,000,000
Class B common shares immediately prior to the completion
of this offering and the accrual of a $30.0 million cash
dividend declared to our shareholders of record as of the
dividend declaration date and payable upon the completion of
this offering.
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For the Year Ended February 29/28,
For the Six-Month Period Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $)
$
6,324
$
23,468
$
27,175
16,198
30,955
(1,470
)
(5,116
)
(5,250
)
(696
)
(214
)
132
5,252
(903
)
(1,622
)
(163
)
As of and for the
As of and for the Year Ended February 29/28,
Six Months Ended August 31,
2008
2009
2010
2009
2010
67,996
215,080
382,505
175,638
236,919
30
73
98
83
108
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we may fail to identify new cities with sufficient growth
potential into which to expand our network;
it may be difficult to increase the number of learning centers
in more developed cities;
we may fail to effectively market our services in new markets or
promote new courses in existing markets;
we may not be able to replicate our successful growth model in
Beijing and Shanghai to other geographic markets;
our analysis for selecting suitable new locations may not be
accurate and the demand for our services at such new locations
may not materialize or increase as rapidly as we expect;
we may fail to obtain the requisite licenses and permits
necessary to open learning centers at our desired locations from
local authorities;
we may not be able to continue to enhance our online course
offerings, generate profits from online courses, or adapt online
courses to changing student needs and technological
advances; and
we may fail to achieve the benefits we expect from our expansion.
15
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revoking the business and operating licenses of our PRC
subsidiaries and affiliated entities;
restricting or prohibiting related party transactions between
our PRC subsidiaries and affiliated entities;
imposing fines or other requirements with which we or our PRC
subsidiaries and affiliated entities may find difficult or
impossible to comply;
22
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requiring us or our PRC subsidiaries and affiliated entities to
restructure the relevant ownership structure or
operations; and
restricting or prohibiting the use of any proceeds from our
additional public offering to finance our business and
operations in China.
23
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25
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26
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degree of government involvement;
level of development;
27
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rate of economic growth;
control of foreign exchange rates and currency conversion;
access to financing; and
allocation of resources.
28
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capital contributions to our subsidiaries in China, whether
existing ones or newly established ones, must be approved by the
PRC Ministry of Commerce or its local bureaus;
loans by us to our subsidiaries in China, each of which is a
foreign-invested enterprise, to finance their activities cannot
exceed statutory limits and must be registered with the PRC
State Administration of Foreign Exchange, or SAFE, or its local
bureaus;
loans by us to our VIEs and their respective subsidiaries, which
are domestic PRC entities, must be approved by the National
Development and Reform Commission and must also be registered
with SAFE or its local bureaus.
29
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actual or anticipated fluctuations in our operating results,
changes in financial estimates by securities research analysts,
changes in the economic performance or market valuation of other
education companies,
announcements by us or our competitors of material acquisitions,
strategic partnerships, joint ventures or capital commitments,
addition or departure of our executive officers and key
personnel,
intellectual property litigation,
release or expiration of
lock-up
or
other transfer restrictions on our outstanding Class B
common shares or ADSs, and
economic, regulatory or political conditions in China.
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our anticipated growth strategies;
competition in the K-12 after-school tutoring market;
our future business development, results of operations and
financial condition;
expected changes in our revenues and certain cost and expense
items;
our ability to increase student enrollments and course fees and
expand course offerings;
risks associated with the expansion of our geographic reach;
the expected increase in spending on private education in
China; and
PRC laws, regulations and policies relating to private education
and providers of after-school tutoring services.
40
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approximately $30.0 million to expand our network of
learning centers and service centers;
approximately $15.0 million to build a national training
center;
$30.0 million to pay a declared dividend conditional upon
the completion of this offering (see Dividend
Policy);
approximately $10.0 million to improve our existing
facilities; and
the balance for general corporate purposes, including strategic
investments in and acquisitions of complementary businesses,
although we have not identified any near-term investment or
acquisition targets.
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on an actual basis;
on a pro forma basis to reflect (i) the automatic
conversion of all of our Series A preferred shares into
5,000,000 Class B common shares immediately upon the
completion of this offering and (ii) the accrual of a
$30.0 million cash dividend declared to our existing
shareholders as of September 29, 2010 and payable upon the
completion of this offering; and
on a pro forma as adjusted basis to reflect (i) the pro
forma adjustments above and (ii) the sale of 24,000,000
Class A common shares in the form of ADSs by us in this
offering at an assumed initial public offering price of
$9.00 per ADS, the midpoint of the estimated range of our
initial public offering price, after deducting the underwriting
discounts and commissions and the estimated offering expenses
payable by us.
As of August 31, 2010
Pro forma as
Actual
Pro forma
adjusted
30,000,000
9,000,000
24,000
120,000
125,000
125,000
1,699,503
(19,305,497
)
78,931,364
30,173,018
30,173,018
30,173,018
288,226
288,226
288,226
32,280,747
11,280,747
109,541,608
32,280,747
11,280,747
109,541,608
Notes:
(1)
Effective September 29, 2010,
our share capital was re-designated into Class A and
Class B common shares under our third amended and restated
memorandum and articles of association.
(2)
A $1.00 increase (decrease) in the
assumed initial public offering price of $9.00 per ADS would
increase (decrease) each of additional paid-in capital, total
shareholders equity and total capitalization by
$11.2 million.
(3)
Includes $4.9 million in
statutory reserves that are not available for distribution
pursuant to PRC laws.
43
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Per Common
Share
Per ADS
$
4.50
$
9.00
$
0.25
$
0.51
$
0.08
$
0.15
$
0.72
$
1.45
$
3.78
$
7.55
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Average
Price Per
Average
Common shares
Total
Common
Price Per
Purchased
Consideration
Share
ADS
Number
Percent
Amount
Percent
125,000,000
84
%
$
9,899,641
8.4
%
$
0.08
$
0.16
24,000,000
16
%
$
108,000,000
91.6
%
$
4.50
$
9.00
149,000,000
100
%
$
117,899,641
100
%
45
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Exchange Rate
Period End
Average
(1)
Low
High
(RMB per $1.00)
8.0702
8.1826
8.2765
8.0702
7.8041
7.9579
8.0702
7.8041
7.2946
7.5806
7.8127
7.2946
6.8225
6.9193
7.2946
6.7800
6.8259
6.8295
6.8470
6.8176
6.8258
6.8262
6.8270
6.8254
6.8247
6.8256
6.8275
6.8229
6.8305
6.8275
6.8310
6.8245
6.7815
6.8184
6.8323
6.7815
6.7735
6.7762
6.7807
6.7709
6.8069
6.7873
6.8069
6.7670
6.6905
6.7396
6.8102
6.6869
Source: Federal Reserve
Statistical Release
(1)
Annual averages were calculated by
using the average of the exchange rates on the last day of each
month during the relevant year. Monthly averages are calculated
by using the average of the daily rates during the relevant
month.
46
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recognize or enforce judgments of United States courts obtained
against us or our directors or officers predicated upon the
civil liability provisions of the securities laws of the United
States or any state in the United States; or
entertain original actions brought in each respective
jurisdiction against us or our directors or officers predicated
upon the securities laws of the United States or any state in
the United States.
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(1)
Each person is an ultimate
beneficial owner and also a director or executive officer of TAL
Group.
exercise effective control over Xueersi Education, Xueersi
Network and their respective subsidiaries;
receive substantially all of the economic benefits of Xueersi
Education, Xueersi Network and their respective subsidiaries in
consideration for the services provided by us; and
have an exclusive option to purchase all of the equity interests
in Xueersi Education and Xueersi Network when and to the extent
permitted under PRC law.
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the ownership structures of our affiliated entities and wholly
owned subsidiaries in China, both currently and after giving
effect to this offering, are in compliance with existing PRC
laws and regulations; and
the contractual arrangements among our wholly owned subsidiaries
in China, our affiliated entities, the shareholders of Xueersi
Education and the shareholders of Xueersi Network are valid,
binding and enforceable under, and will not result in any
violation of, PRC laws or regulations currently in effect.
revoking the business and operating licenses of our PRC
subsidiaries and affiliated entities;
restricting or prohibiting related party transactions between
our PRC subsidiaries and affiliated entities;
imposing fines or other requirements with which we or our PRC
subsidiaries and affiliated entities may find difficult or
impossible to comply;
requiring us or our PRC subsidiaries and affiliated entities to
restructure the relevant ownership structure or
operations; and
restricting or prohibiting the use of any proceeds from our
additional public offering to finance our business and
operations in China.
capital contributions to our subsidiaries in China, whether
existing ones or newly established ones, must be approved by the
PRC Ministry of Commerce or its local bureaus;
53
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loans by us to our subsidiaries in China, each of which is a
foreign-invested enterprise, to finance their activities cannot
exceed statutory limits and must be registered with the PRC
State Administration of Foreign Exchange, or SAFE, or its local
bureaus; and
loans by us to our affiliated entities, which are domestic PRC
entities, must be approved by the relevant government
authorities and must also be registered with SAFE or its local
bureaus.
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56
57
For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $, except for shares, per share and per ADS
data)
$
8,882
$
37,476
$
69,594
$
32,983
$
53,022
(4,367
)
(18,554
)
(37,649
)
(16,068
)
(26,255
)
(1)
4,515
18,922
31,945
16,915
26,767
(370
)
(2,353
)
(5,608
)
(1,958
)
(4,184
)
(2)
(2,478
)
(5,890
)
(10,872
)
(4,602
)
(7,808
)
(3)
(1,615
)
(2,848
)
(9,858
)
(16,480
)
(6,560
)
(11,992
)
1,667
9,064
15,465
10,355
14,775
11
77
283
103
162
(210
)
(124
)
(119
)
(27
)
(363
)
55
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For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $, except for shares, per share and per ADS
data)
6
731
1,678
9,299
15,624
10,339
14,916
(165
)
(2,018
)
(1,379
)
(912
)
(1,670
)
$
1,513
$
7,281
$
14,245
$
9,427
$
13,246
(4,113
)
$
1,513
$
3,168
$
14,245
$
9,427
$
13,246
$
0.01
$
0.03
$
0.11
$
0.08
$
0.11
$
0.01
$
0.03
$
0.11
$
0.08
$
0.11
$
17.69
$
0.11
$
0.08
$
0.11
$
0.03
$
0.05
$
0.23
$
0.15
$
0.22
$
0.03
$
0.05
$
0.23
$
0.15
$
0.22
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
125,000,000
125,000,000
125,193,360
$
0.11
$
0.10
$
0.11
$
0.10
$
0.22
$
0.21
$
0.22
$
0.21
123,501,120
123,723,146
128,501,120
128,723,146
Notes:
(1)
Includes share-based compensation
expenses of $110 thousand.
(2)
Includes share-based compensation
expenses of $163 thousand.
(3)
Includes share-based compensation
expenses of $647 thousand.
(4)
Unaudited pro forma net income per
common share is computed by dividing net income attributable to
common shareholders by the sum of (i) the weighted average
number of common shares outstanding and (ii) the number of
common shares whose proceeds, calculated using the share price
at the midpoint of the price range shown on the face of this
prospectus, would be necessary to pay the amount by which the
conditional $30.0 million cash dividend exceeds our
earnings for the fiscal year ended February 28, 2010.
(5)
Each ADS represents two
Class A common shares.
Table of Contents
As of February 29/28,
2008
2009
2010
As of August 31, 2010
Actual
Actual
Actual
Actual
Pro
Forma
(1)
(in thousands of $)
$
5,704
$
29,693
$
50,752
$
81,495
81,495
8,131
38,553
65,504
97,515
97,515
5,714
18,023
29,408
42,101
42,101
500
500
500
7,012
26,198
38,578
56,234
86,234
1,119
12,355
26,926
41,281
11,281
9,000
9,000
9,000
1,119
3,355
17,926
32,281
11,281
Note:
(1)
Reflects the automatic conversion
of all of our Series A preferred shares into 5,000,000
Class B common shares immediately prior to the completion
of this offering and the accrual of a $30.0 million cash
dividend declared to our shareholders of record as of the
dividend declaration date and payable upon the completion of
this offering.
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
58
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59
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60
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For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
$
%
$
%
$
%
%
$
%
(in thousands of $, except percentages)
8,882
100.0
%
37,476
100.0
%
69,594
100.0
%
32,983
100.0
%
53,022
100.0
%
(4,367
)
(49.2
)
(18,554
)
(49.5
)
(37,649
)
(54.1
)
(16,068
)
(48.7
)
(26,255
)
(1)
(49.5
)
(370
)
(4.2
)
(2,353
)
(6.3
)
(5,608
)
(8.1
)
(1,958
)
(5.9
)
(4,184
)
(2)
(7.9
)
(2,478
)
(27.9
)
(5,890
)
(15.7
)
(10,872
)
(15.6
)
(4,602
)
(14.0
)
(7,808
)
(3)
(14.7
)
(1,615
)
(4.3
)
(2,848
)
(32.1
)%
(9,858
)
(26.3
)%
(16,480
)
(23.7
)%
(6,560
)
(19.9
)%
(11,992
)
(22.6
)%
Notes:
(1)
Includes share-based compensation
expenses of $110 thousand.
(2)
Includes share-based compensation
expenses of $163 thousand.
(3)
Includes share-based compensation
expenses of $647 thousand.
61
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62
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63
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64
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65
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Net revenues of Wuhan School and Qianjiang School would grow at
a CAGR of 10.4% and 9.4%, respectively, from 2009 to 2014
primarily through an increase in the number of students. The
long-term growth rate of Wuhan School and Qianjiang School after
2014 was assumed to be 3% per year.
Cost of revenues mainly consists of teacher salary and welfare,
rent, and tutoring materials. Cost of revenues as a percentage
of revenues of Wuhan School was expected to decrease from 91% in
2009 to 62% of sales in 2014 because staff cost and rental would
not grow as fast as revenues. Cost of revenues as a percentage
of revenues of Qianjiang School was expected to increase from
53% in 2009 to 60% of sales in 2014.
Operating expenses as a percentage of revenues were expected to
decrease from 2009 to 2014 as we anticipated that corporate
overhead and administrative expense would not increase as fast
as revenues during the period due to the improvement of
operating efficiency.
There would be no material changes in the existing political,
legal, fiscal and economic conditions in China and in our
ability to recruit and retain competent management, key
personnel and technical staff to support our ongoing operations.
There was no material deviation in industry trends and market
conditions from economic forecasts.
66
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67
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68
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our financial and operating results;
the assumptions and basis of our financial projections;
the nature of our business;
the stage of development of our operations;
our business plan;
our business risks;
the nature and prospects of the private education industry in
China;
the global economic outlook in general and the specific economic
and competitive elements affecting our business, industry and
market; and
the market-derived investment returns of entities engaged in
similar business.
that no material change will occur in the applicable future
periods in the existing political, legal, fiscal or economic
conditions and in the education industry in China;
69
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that no material change will occur in the current PRC law
applicable to us and the applicable tax rates will remain
unchanged;
that exchange rates and interest rates in the applicable future
periods will not differ materially from the current rates;
that our future growth will not be constrained by lack of
funding;
that we have the ability to retain competent management and key
personnel to support our ongoing operations; and
that industry trends and market conditions for the education and
related industries will not deviate significantly from current
forecasts.
70
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For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
$
%
$
%
$
%
%
$
%
(in thousands of $, except percentages)
$
8,882
100.0
%
$
37,476
100.0
%
$
69,594
100.0
%
$
32,983
100.0
$
53,022
100.0
%
(4,367
)
(49.2
)
(18,554
)
(49.5
)
(37,649
)
(54.1
)
(16,068
)
(48.7
)
(26,255
)
(1)
(49.5
)
4,515
50.8
18,922
50.5
31,945
45.9
16,915
51.3
26,767
50.5
(370
)
(4.2
)
(2,353
)
(6.3
)
(5,608
)
(8.1
)
(1,958
)
(5.9
)
(4,184
)
(2)
(7.9
)
(2,478
)
(27.9
)
(5,890
)
(15.7
)
(10,872
)
(15.6
)
(4,602
)
(14.0
)
(7,808
)
(3)
(14.7
)
(1,615
)
(4.3
)
(2,848
)
(32.1
)
(9,858
)
(26.3
)
(16,480
)
(23.7
)
(6,560
)
(19.9
)
(11,992
)
(22.6
)
1,667
18.7
9,064
24.2
15,465
22.2
10,355
31.4
14,775
27.9
11
0.1
77
0.2
283
0.4
103
0.3
162
0.3
(210
)
(0.6
)
(124
)
(0.2
)
(119
)
(0.4
)
(27
)
(0.1
)
(363
)
(1.0
)
6
0.0
731
2.0
1,678
18.8
9,299
24.8
15,624
22.4
10,339
31.3
14,916
28.1
(165
)
(1.8
)
(2,018
)
(5.4
)
(1,379
)
(1.9
)
(912
)
(2.7
)
(1,670
)
(3.1
)
$
1,513
17.0
%
$
7,281
19.4
%
$
14,245
20.5
%
$
9,427
28.6
%
$
13,246
25.0
%
Notes:
(1)
Includes share-based compensation
expenses of $110 thousand.
(2)
Includes share-based compensation
expenses of $163 thousand.
(3)
Includes share-based compensation
expenses of $647 thousand.
71
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72
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73
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74
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75
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76
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For the Three Months Ended
November 30, 2008
February 28, 2009
May 31, 2009
August 31, 2009
November 30, 2009
February 28, 2010
May 31, 2010
August 31, 2010
% of Net
% of Net
% of Net
% of Net
% of Net
% of Net
% of Net
% of Net
$
Revenues
$
Revenues
$
Revenues
$
Revenues
$
Revenues
$
Revenues
$
Revenues
$
Revenues
(In thousands of $, except percentages)
10,229
100.0
%
14,203
100.0
%
15,439
100.0
%
17,544
100.0
%
16,374
100.0
%
20,237
100.0
%
20,496
100.0
%
32,526
100.0
%
(5,200
)
(50.8
)%
(7,057
)
(49.7
)%
(7,215
)
(46.7
)%
(8,853
)
(50.5
)%
(9,133
)
(55.8
)%
(12,448
)
(61.5
)%
(12,062
)
(58.9
)%
(14,193
)
(43.6
)%
5,029
49.2
%
7,146
50.3
%
8,224
53.3
%
8,691
49.5
%
7,241
44.2
%
7,789
38.5
%
8,434
41.1
%
18,333
56.4
%
(567
)
(5.6
)%
(855
)
(6.0
)%
(750
)
(4.9
)%
(1,209
)
(6.9
)%
(1,654
)
(10.1
)%
(1,996
)
(9.9
)%
(1,674
)
(8.1
)%
(2,510
)
(7.7
)%
(1,803
)
(17.6
)%
(2,022
)
(14.2
)%
(2,223
)
(14.4
)%
(2,379
)
(13.5
)%
(3,075
)
(18.8
)%
(3,196
)
(15.8
)%
(3,752
)
(18.3
)%
(4,056
)
(12.5
)%
(1,615
)
(11.4
)%
(2,370
)
(23.2
)%
(4,492
)
(31.6
)%
(2,973
)
(19.3
)%
(3,588
)
(20.4
)%
(4,729
)
(28.9
)%
(5,192
)
(25.7
)%
(5,426
)
(26.4
)%
(6,566
)
(20.2
)%
2,659
26.0
%
2,654
18.7
%
5,251
34.0
%
5,103
29.1
%
2,512
15.3
%
2,597
12.8
%
3,008
14.7
%
11,767
36.2
%
25
0.2
%
39
0.3
%
65
0.4
%
38
0.2
%
127
0.8
%
54
0.3
%
107
0.5
%
55
0.2
%
(25
)
(0.2
)%
(80
)
(0.5
)%
(38
)
(0.2
)%
(6
)
(0.0
)%
(33
)
(0.1
)%
6
0.0
%
(363
)
(2.6
)%
6
0.0
%
2,684
26.2
%
2,305
16.2
%
5,236
33.9
%
5,103
29.1
%
2,633
16.1
%
2,651
13.1
%
3,088
15.1
%
11,828
36.4
%
(583
)
(5.7
)%
(499
)
(3.5
)%
(462
)
(3.0
)%
(450
)
(2.6
)%
(232
)
(1.4
)%
(234
)
(1.2
)%
(346
)
(1.7
)%
(1,324
)
(4.1
)%
$
2,101
20.5
%
$
1,806
12.7
%
$
4,774
30.9
%
$
4,653
26.5
%
$
2,401
14.7
%
$
2,417
11.9
%
$
2,742
13.4
%
$
10,504
32.3
%
(1)
Includes share-based compensation
expenses of $110 thousand.
(2)
Includes share-based compensation
expenses of $163 thousand.
(3)
Includes share-based compensation
expenses of $647 thousand.
77
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78
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For the Year Ended February 29/28,
For the Six Months Ended August 31,
2008
2009
2010
2009
2010
(in thousands of $)
$
6,324
$
23,468
$
27,175
$
16,198
$
30,955
(1,470
)
(5,116
)
(5,250
)
(696
)
(214
)
132
5,252
(903
)
(1,622
)
(163
)
315
385
37
26
165
5,301
23,989
21,059
13,906
30,743
403
5,704
29,693
29,693
50,752
5,704
29,693
50,752
43,599
81,495
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80
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Payment due by period
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
(in thousand $)
$
42,674
13,155
20,159
9,347
13
513
513
500
500
Notes:
(1)
Represents our non-cancelable
leases for our offices, learning centers and service centers.
(2)
Represents outstanding
consideration payable in connection with our acquisitions of
Tianjin Education, Jianli School, Qianjiang School and Wuhan
School as of February 28, 2010. $240,198 in acquisition
cash consideration payable for the acquisition of Tianjin
Education and Wuhan School was outstanding as of August 31,
2010.
(3)
Represents the principal amount due
to a third party pursuant to a convertible loan. The convertible
loan has a principal amount of $500,000, bears an annual
interest rate of 15% and will mature on January 30, 2012.
81
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82
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83
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84
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85
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86
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87
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Large classes:
in-class teaching with typically more than
30 students per class. This is the traditional format of
after-school tutoring. However, it is experiencing a declining
trend due to its lower effectiveness compared to the other
formats of after-school tutoring. In 2009, this segment
represented an estimated market size of RMB26.5 billion
($3.9 billion), according to iResearch. iResearch expects
the market share of large classes to continue to decline over
time.
Small classes:
in-class teaching with typically
10-30
students per class. The smaller class size allows teachers to
pay closer attention to individual students and better tailor
the classes to their study needs. This class setting therefore
has become the most popular format of after-school tutoring
given its attractive balance between affordability and the
amount of individual attention students are able to receive from
their teachers. In 2009, this segment represented an estimated
market size of RMB104.6 billion ($15.4 billion),
according to iResearch. iResearch expects this segment to grow
at a CAGR of 19.3% over the next five years.
One-on-one
personalized tutoring.
This class format offers the most
customized tutoring services based on a students specific
situations and study needs and has grown in popularity in recent
years driven by the increasing demand for highly tailored
tutoring services as well as an increase in the number of
high-income households in China. In 2009, the
one-on-one
personalized tutoring segment represented an estimated market
size of RMB56.2 billion ($8.3 billion), according to
iResearch. iResearch expects this segment to grow at a CAGR of
20.0% over the next five years.
Online courses:
pre-recorded or live class videos coupled
with interactive teaching and testing materials offered through
educational websites. Online courses are able to reach a broader
base of students as they are unconstrained by geographic
location barriers and accessible on-demand by potential students
whose schedules or location do not allow them to attend courses
in person. In 2009, the online course segment represented an
estimated market size of RMB2.4 billion
($352.6 million), according to iResearch. iResearch expects
this segment to grow at a CAGR of 40.2% over the next five years.
2009 (estimated)
2014 (estimated)
88
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89
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90
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91
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92
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93
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educate our students to become well-rounded people with
integrity and high moral standards;
motivate our students to set and achieve high long-term goals;
nurture our students passion for learning; and
foster a loving and caring character in our students.
94
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95
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96
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Primary School
Middle School
High School
K
1
2
3
4
5
6
7
8
9
10
11
12
: Currently
offered.
: Not
offered at the corresponding grade level in public schools in
China.
97
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Number of
Number of
Learning Centers
Service Centers
80
61
14
12
2
2
3
3
4
3
6
6
98
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brand;
student achievements;
price/value;
type and quality of tutoring services offered; and
ability to effectively tailor service offerings to specific
needs of students, parents and educators.
3 trademark registrations for our brand and logo in China and
Hong Kong;
registrations of 13 domain names;
copyrights to substantially all of the course content we
developed in house, including all of our online courses; and
copyright registration certificates for 20 software programs
developed by us relating to different aspects of our operations.
100
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Our main webpage which is linked to the websites listed below
Online courses
College entrance examinations
High school entrance examinations
Personalized premium services
Mathematics for primary and middle schools; specialized training
for competition mathematics
English language
Chinese composition
Preschool and kindergarten education
Number of
Employees
% of Total
1,067
37.7
%
912
32.3
%
149
5.3
%
217
7.7
%
325
11.5
%
157
5.6
%
2,827
100.0
%
101
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102
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103
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104
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105
Table of Contents
106
Table of Contents
107
Table of Contents
108
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109
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110
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capital contributions to our subsidiaries in China, whether
existing ones or newly established ones, must be approved by the
PRC Ministry of Commerce or its local bureaus;
loans by us to our subsidiaries in China, each of which is a
foreign-invested enterprise, to finance their activities cannot
exceed statutory limits and must be registered with the PRC
State Administration of Foreign Exchange, or SAFE, or its local
bureaus; and
loans by us to our affiliated entities, which are domestic PRC
entities, must be approved by the National Development and
Reform Commission and must also be registered with SAFE or its
local bureaus.
111
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F-9
F-43
30
Chairman of the Board of Directors and Chief Executive Officer
30
Director and President
42
Independent Director Appointee*
45
Independent Director Appointee*
28
Vice President
29
Vice President
33
Chief Financial Officer
*
Jane Jie Sun and Wai Chau Lin have
accepted our appointment to be our independent directors,
effective upon the effectiveness of our registration statement
on
Form F-1,
of which this prospectus is a part.
113
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appointing the independent auditors and pre-approving all
auditing and non-auditing services permitted to be performed by
the independent auditors;
reviewing with the independent auditors any audit problems or
difficulties and managements response;
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discussing the annual audited financial statements with
management and the independent auditors;
reviewing the adequacy and effectiveness of our accounting and
internal control policies and procedures and any steps taken to
monitor and control major financial risk exposures;
reviewing and approving all proposed related party transactions;
meeting separately and periodically with management and the
independent auditors; and
monitoring compliance with our code of business conduct and
ethics, including reviewing the adequacy and effectiveness of
our procedures to ensure proper compliance.
reviewing and approving, or recommending to the board for its
approval, the compensation for our chief executive officer and
other executive officers;
reviewing and recommending to the board for determination with
respect to the compensation of our non-employee
directors; and
reviewing periodically and approving any incentive compensation
or equity plans, programs or similar arrangements.
selecting and recommending to the board nominees for election by
the shareholders or appointment by the board;
reviewing annually with the board the current composition of the
board with regards to characteristics such as independence,
knowledge, skills, experience and diversity;
making recommendations on the frequency and structure of board
meetings and monitoring the functioning of the committees of the
board; and
advising the board periodically with regards to significant
developments in the law and practice of corporate governance as
well as our compliance with applicable laws and regulations, and
making recommendations to the board on all matters of corporate
governance and on any remedial action to be taken.
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Number of
Class A
Vesting
Restricted
Date of
Commencement
Vesting
Name
Shares
Grant
Date
Schedule
*
July 26, 2010
July 26, 2010
4 years
*
July 26, 2010
July 26, 2010
4 years
*
July 26, 2010
July 26, 2010
4 years
2,125,000
July 26, 2010
4 years
3,294,500
July 26, 2010
1 to 4 years
5,419,500
July 26, 2010
*
Less than 1% of the outstanding common shares.
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each of our directors and executive officers; and
each person known to us to own beneficially more than 5% of our
common shares.
Shares Beneficially
Shares Beneficially
Owned after This Offering
Owned Prior to This Offering
% of Voting
Number
%
(1)
Number
%
(2)
Power
(3)
59,550,000
47.6
%
59,550,000
40.0
%
46.7
%
20,300,000
16.2
%
20,300,000
13.6
%
15.9
%
8,812,500
7.1
%
8,812,500
5.9
%
6.9
%
6,337,500
5.1
%
6,337,500
4.3
%
5.0
%
95,000,000
76.0
%
95,000,000
63.8
%
74.6
%
59,550,000
47.6
%
59,550,000
40.0
%
46.7
%
21,875,000
17.5
%
21,875,000
14.7
%
17.2
%
14,550,000
11.6
%
14,550,000
9.8
%
11.4
%
8,125,000
6.5
%
8,125,000
5.5
%
6.4
%
8,812,500
7.1
%
8,812,500
5.9
%
6.9
%
6,337,500
5.1
%
6,337,500
4.3
%
5.0
%
(1)
For each person and group included
in this column, percentage ownership is calculated by dividing
the number of shares beneficially owned by such person or group
by 125,000,000, being the sum of the total number of common
shares outstanding as of the date of the prospectus and the
number of common shares issuable upon conversion of all
outstanding series A preferred shares at the conversion
rate of one preferred share to one Class B common share.
(2)
For each person and group included
in this column, percentage ownership is calculated by dividing
the number of shares beneficially owned by such person or group
by 149,000,000, being the total number of common shares
outstanding immediately after the closing of this offering,
assuming that the underwriters do not exercise their
over-allotment option.
(3)
Percentage of total voting power
represents voting power with respect to all of our Class A
and Class B common shares, as a single class. Each holder
of our Class B common shares is entitled to ten votes per
Class B common share and each holder of Class A common
shares is entitled to one vote per Class A common share
held by our shareholders on all matters submitted to them for a
vote. Our Class A common shares and Class B common
shares vote together as a single class on all matters submitted
to a vote of our shareholders, except as may otherwise be
required by law. Our Class B common shares are convertible
at any time by the holder into Class A common shares on a
1:1 basis.
(4)
Consists of
59,550,000 Class B common shares held by Bright Unison
Limited, a British Virgin Islands company. Bangxin Zhang is the
sole shareholder and the sole director of Bright Unison Limited.
Bangxin Zhangs business address is
c/o 18/F,
Hesheng Building, 32 Zhongguancun Avenue, Haidian District,
Beijing 100080, Peoples Republic of China.
(5)
Consists of
(i) 14,550,000 Class B common shares held by
Central Glory Investments Limited, a British Virgin Islands
company, to which Yundong Cao is the sole shareholder and the
sole director and (ii) 5,750,000 Class B common shares
held by Passion Prance Limited, a British Virgin Islands
company, to which Yundong Caos spouse is the sole
shareholder and the sole director. Mr. Cao
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disclaims beneficiary ownership of
the shares held by Passion Prance Limited. Yundong Caos
business address is
c/o 18/F,
Hesheng Building, 32 Zhongguancun Avenue, Haidian District,
Beijing 100080, Peoples Republic of China.
(6)
Consists of
8,812,500 Class B common shares held by Perfect Wisdom
International Limited, a British Virgin Islands company. Yachao
Liu is the sole shareholder and the sole director of Perfect
Wisdom International Limited. Yachao Lius business address
is
c/o 18/F,
Hesheng Building, 32 Zhongguancun Avenue, Haidian District,
Beijing 100080, Peoples Republic of China.
(7)
Consists of
6,337,500 Class B common shares held by Excellent New
Limited, a British Virgin Islands company. Yunfeng Bai is the
sole shareholder and the sole director of Excellent New Limited.
Yunfeng Bais business address is
c/o 18/F,
Hesheng Building, 32 Zhongguancun Avenue, Haidian District,
Beijing 100080, Peoples Republic of China.
(8)
Bright Unison Limited is a company
incorporated in the British Virgin Islands. Bangxin Zhang is the
sole shareholder and the sole director of Bright Unison Limited.
Its registered office is at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin
Islands.
(9)
Tiger Global Five China Holdings is
a company organized under the laws of Mauritius and controlled
by Tiger Global Five Parent Holdings, which is in turn
controlled by Tiger Global Private Investment Partners V, L.P.,
or PIP V. PIP V is controlled by its general partner
Tiger Global PIP Performance V, L.P., which is controlled by its
general partner Tiger Global PIP Management V, Ltd., which is in
turn controlled by Charles P. Coleman III. The registered office
of Tiger Global Five China Holdings is Twenty Seven, Cybercity,
Ebene, Mauritius.
(10)
Central Glory Investments Limited
is a company incorporated in the British Virgin Islands. Yundong
Cao is the sole shareholder and the sole director of Central
Glory Investments Limited. Its registered office is at
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands.
(11)
Consists of
(i) 3,125,000 Class B common shares held by KTB
China Optimum Fund and (ii) 5,000,000 Class B common
shares issuable upon the conversion of the Series A
preferred shares held by KTB China Optimum Fund. KTB China
Optimum Fund was formed in Korea, and its general partner is KTB
Capital Co., Ltd. KTB Capital Co., Ltd., which is a wholly owned
subsidiary of KTB Securities Co., Ltd., a listed company on
Korea Stock Exchange, has the discretionary authority to vote
and dispose of the shares held by KTB China Optimum Fund. KTB
China Optimum Funds registered office is at KTB network
building
826-14
Yeoksam-dong Gangnam-gu, Seoul, Korea.
(12)
Perfect Wisdom International
Limited is a company incorporated in the British Virgin Islands.
Yachao Liu is the sole shareholder and the sole director of
Perfect Wisdom International Limited. Its registered office is
at P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands.
(13)
Excellent New Limited is a company
incorporated in the British Virgin Islands. Yunfeng Bai is the
sole shareholder and the sole director of Excellent New Limited.
Its registered office is at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin
Islands.
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authorize our board of directors to issue preference shares in
one or more series and to designate the price, rights,
preferences, privileges and restrictions of such preference
shares without any further vote or action by our
shareholders; and
limit the ability of shareholders to requisition and convene
general meetings of shareholders.
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the statutory provisions as to majority vote have been met;
the shareholders have been fairly represented at the meeting in
question;
the arrangement is such that a businessman would reasonably
approve; and
the arrangement is not one that would more properly be
sanctioned under some other provision of the Companies Law.
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a company is acting or proposing to act illegally or ultra vires;
the act complained of, although not ultra vires, could be
effected duly if authorized by more than a simple majority vote
which has not been obtained; and
those who control the company are perpetrating a fraud on
the minority.
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Cash.
The depositary will distribute any
U.S. dollars available to it resulting from a cash dividend
or other cash distribution or the net proceeds of sales of any
other distribution or portion thereof (to the
130
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extent applicable), on an averaged or other practicable basis,
subject to (i) appropriate adjustments for taxes withheld,
(ii) such distribution being impermissible or impracticable
with respect to certain registered ADR holders, and
(iii) deduction of the depositarys expenses in
(1) converting any foreign currency to U.S. dollars to
the extent that it determines that such conversion may be made
on a reasonable basis, (2) transferring foreign currency or
U.S. dollars to the United States by such means as the
depositary may determine to the extent that it determines that
such transfer may be made on a reasonable basis,
(3) obtaining any approval or license of any governmental
authority required for such conversion or transfer, which is
obtainable at a reasonable cost and within a reasonable time and
(4) making any sale by public or private means in any
commercially reasonable manner. If exchange rates fluctuate
during a time when the depositary cannot convert a foreign
currency, you may lose some or all of the value of the
distribution.
Shares.
In the case of a distribution in shares,
the depositary will issue additional ADRs to evidence the number
of ADSs representing such shares. Only whole ADSs will be
issued. Any shares which would result in fractional ADSs will be
sold and the net proceeds will be distributed in the same manner
as cash to the ADR holders entitled thereto.
Rights to receive additional shares.
In the case
of a distribution of rights to subscribe for additional shares
or other rights, if we provide evidence satisfactory to the
depositary that it may lawfully distribute such rights, the
depositary will distribute warrants or other instruments in the
discretion of the depositary representing such rights. However,
if we do not furnish such evidence, the depositary may:
sell such rights if practicable and distribute the net proceeds
in the same manner as cash to the ADR holders entitled
thereto; or
if it is not practicable to sell such rights, do nothing and
allow such rights to lapse, in which case ADR holders will
receive nothing.
Other Distributions.
In the case of a distribution
of securities or property other than those described above, the
depositary may either (i) distribute such securities or
property in any manner it deems equitable and practicable or
(ii) to the extent the depositary deems distribution of
such securities or property not to be equitable and practicable,
sell such securities or property and distribute any net proceeds
in the same way it distributes cash.
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temporary delays caused by closing our transfer books or those
of the depositary or the deposit of shares in connection with
voting at a shareholders meeting, or the payment of
dividends;
the payment of fees, taxes and similar charges; or
compliance with any U.S. or foreign laws or governmental
regulations relating to the ADRs or to the withdrawal of
deposited securities.
to receive any distribution on or in respect of shares,
to give instructions for the exercise of voting rights at a
meeting of holders of shares,
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to pay the fee assessed by the depositary for administration of
the ADR program and for any expenses as provided for in the
ADR, or
to receive any notice or to act in respect of other matters,
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a fee of $1.50 per ADR or ADRs for transfers of certificated or
direct registration ADRs;
a fee of up to $0.05 per ADS for any cash distribution made
pursuant to the deposit agreement;
a fee of up to $0.05 per ADS per calendar year (or portion
thereof) for services performed by the depositary in
administering the ADRs (which fee may be charged on a periodic
basis during each calendar year and shall be assessed against
holders of ADRs as of the record date or record dates set by the
depositary during each calendar year and shall be payable in the
manner described in the next succeeding provision);
reimbursement of such fees, charges and expenses as are incurred
by the depositary
and/or
any
of the depositarys agents (including, without limitation,
the custodian and expenses incurred on behalf of holders in
connection with compliance with foreign exchange control
regulations or any law or regulation relating to foreign
investment) in connection with the servicing of the shares, the
delivery of deposited securities or otherwise in connection with
the depositarys or its custodians compliance with
applicable law, rule or regulation (which charge shall be
assessed on a proportionate basis against holders as of the
record date or dates set by the depositary and shall be payable
at the sole discretion of the depositary by billing such holders
or by deducting such charge from one or more cash dividends or
other cash distributions);
a fee for the distribution of securities (or the sale of
securities in connection with a distribution), such fee being in
an amount equal to the fee for the execution and delivery of
ADSs which would have been charged as a result of the deposit of
such securities (treating all such securities as if they were
shares) but which securities or the net cash proceeds from the
sale thereof are instead distributed by the depositary to those
holders entitled thereto;
stock transfer or other taxes and other governmental charges;
cable, telex and facsimile transmission and delivery charges
incurred at your request in connection with the deposit or
delivery of shares;
transfer or registration fees for the registration of transfer
of deposited securities on any applicable register in connection
with the deposit or withdrawal of deposited securities; and
expenses of the depositary in connection with the conversion of
foreign currency into U.S. dollars.
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payment with respect thereto of (i) any stock transfer or
other tax or other governmental charge, (ii) any stock
transfer or registration fees in effect for the registration of
transfers of shares upon any applicable register and
(iii) any applicable fees and expenses described in the
deposit agreement;
the production of proof satisfactory to it of (i) the
identity of any signatory and genuineness of any signature and
(ii) such other information, including without limitation,
information as to citizenship,
136
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residence, exchange control approval, beneficial ownership of
any securities, compliance with applicable law, regulations,
provisions of or governing deposited securities and terms of the
deposit agreement and the ADRs, as it may deem necessary or
proper; and
compliance with such regulations as the depositary may establish
consistent with the deposit agreement.
any present or future law, rule, regulation, fiat, order or
decree of the United States, the Cayman Islands, the
Peoples Republic of China (for this section only,
including the Hong Kong Special Administrative Region) or any
other country, or of any governmental or regulatory authority or
securities exchange or market or automated quotation system, the
provisions of or governing any deposited securities, any present
or future provision of our charter, any act of God, war,
terrorism or other circumstance beyond our, the
depositarys or our respective agents control shall
prevent, delay or subject to any civil or criminal penalty, any
act which the deposit agreement or the ADRs provide shall be
done or performed by us, the depositary or our respective agents
(including, without limitation, voting);
it exercises or fails to exercise discretion under the deposit
agreement or the ADR;
it performs its obligations under the deposit agreement and ADRs
without gross negligence or bad faith;
it takes any action or refrains from taking any action in
reliance upon the advice of or information from legal counsel,
accountants, any person presenting shares for deposit, any
registered holder of ADRs, or any other person believed by it to
be competent to give such advice or information; or
it relies upon any written notice, request, direction or other
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
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be a party to and bound by the terms of the deposit agreement
and the applicable ADR or ADRs, and
appoint the depositary its attorney-in-fact, with full power to
delegate, to act on its behalf and to take any and all actions
contemplated in the deposit agreement and the applicable ADR or
ADRs, to adopt any and all procedures necessary to comply with
applicable laws and to take such action as the depositary in its
sole discretion may deem necessary or appropriate to carry out
the purposes of the deposit agreement and the applicable ADR and
ADRs, the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof.
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1% of the number of our common shares then outstanding, in the
form of ADSs or otherwise, which will equal approximately
1.49 million shares immediately after this offering,
assuming the underwriters do not exercise their over-allotment
option; and
the average weekly trading volume of our ADSs on the New York
Stock Exchange during the four calendar weeks preceding the date
on which notice of the sale is filed with the SEC.
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144
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excess distribution
and/or
gain
will be allocated ratably over the U.S. Holders
holding period for the ADSs or common shares;
amount allocated to the current taxable year and any taxable
years in the U.S. Holders holding period prior to the
first taxable year in which we are classified as a PFIC, or
pre-PFIC year, will be taxable as ordinary income;
amount allocated to each prior taxable year, other than the
current taxable year or a pre-PFIC year, will be subject to tax
at the highest tax rate in effect applicable to the
U.S. Holder for that year; and
interest charge generally applicable to underpayments of tax
will be imposed on the tax attributable to each prior taxable
year, other than the current taxable year or a pre-PFIC year.
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Number of ADSs
12,000,000
Per ADS
Total
No
Full
No
Full
Exercise
Exercise
Exercise
Exercise
$
$
$
$
149
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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
common shares or ADSs or any securities convertible into or
exercisable or exchangeable for such common shares or ADSs or
enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers
to another, in whole or in part, any of the economic
consequences of ownership of the common shares or ADSs, whether
any such transaction described above is to be settled by
delivery of common shares or ADSs or such other securities, in
cash or otherwise;
file any registration statement with the SEC relating to the
offering of any common shares or ADSs or any securities
convertible into or exercisable or exchangeable for such common
shares or ADSs; or
publicly disclose the intention to make any such offer, pledge,
sale or disposition, or enter into any such transaction, swap,
hedge or other arrangement, or file any such registration
statement.
the sale of common shares or ADSs to the underwriters;
the issuance of common shares or the grant of options to
purchase common shares under our share incentive plan; and
the issuance by us of common shares upon the exercise of an
option or a warrant or the conversion of a security outstanding
on the date of this prospectus of which the underwriters have
been advised in writing or which is otherwise described in this
prospectus.
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
common shares or ADSs or any securities convertible into or
exercisable or exchangeable for such common shares or ADSs or
enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers
to another, in whole or in part, any of the economic
consequences of ownership of the common shares or ADSs, whether
any such transaction described above is to be settled by
delivery of common shares or ADSs or such other securities, in
cash or otherwise; or
publicly disclose the intention to make any such offer, pledge,
sale or disposition, or enter into any such transaction, swap,
hedge or other arrangement.
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during the last 17 days of the
180-day
restricted period we issue an earnings release or material news
or a material event relating to our company occurs; or
prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
period.
151
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152
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153
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154
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$
9,839
125,000
14,300
250,000
400,000
1,200,000
180,000
$
2,179,139
155
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156
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157
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158
Page(s)
F-2
F-3
F-4
F-5
F-6F-7
F-8F-36
F-37F-40
F-41
F-42
F-43
F-44
F-45-F-58
F-1
Table of Contents
F-2
Table of Contents
As of
As of
February 28,
February 28,
2009
2010
$
29,692,901
$
50,752,481
340,418
1,918,156
92,112
1,063
121,819
481,129
831,297
1,414,923
2,280,941
32,022,546
55,904,694
2,471,337
4,991,490
131,289
283,968
939,207
2,170,548
2,226,343
1,389,160
762,272
763,802
$
38,552,994
$
65,503,662
Liabilities, Convertible Redeemable Preferred Shares and
Equity
$
$
987,742
18,022,550
29,407,994
101,043
108,204
1,462,095
3,609,797
6,817,816
2,636,095
580,225
25,831,580
37,901,981
500,000
203,776
175,610
162,293
26,197,649
38,577,591
9,000,000
9,000,000
120,000
120,000
(120,000
)
(120,000
)
559,898
779,641
2,660,818
4,857,443
21,400
12,069,734
113,229
219,253
3,355,345
17,926,071
$
38,552,994
$
65,503,662
F-3
Table of Contents
For the year
For the year
For the year
ended
ended
ended
February 29,
February 28,
February 28,
2008
2009
2010
$
8,882,191
$
37,475,583
$
69,593,523
(4,367,086
)
(18,554,255
)
(37,648,875
)
4,515,105
18,921,328
31,944,648
(370,185
)
(2,353,011
)
(5,608,116
)
(2,478,092
)
(5,889,370
)
(10,871,866
)
(1,615,455
)
(2,848,277
)
(9,857,836
)
(16,479,982
)
1,666,828
9,063,492
15,464,666
10,485
119,922
323,861
(42,967
)
(40,643
)
(209,949
)
(124,400
)
(362,668
)
731,092
1,677,313
9,298,922
15,623,484
(164,741
)
(2,018,253
)
(1,378,525
)
1,512,572
7,280,669
14,244,959
1,512,572
7,280,669
14,244,959
(4,113,035
)
1,512,572
3,167,634
14,244,959
$
0.01
$
0.03
$
0.11
$
0.01
$
0.03
$
0.11
$
$
17.69
$
0.11
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
125,000,000
232,877
5,000,000
$
0.11
$
0.11
123,501,120
128,501,120
F-4
Table of Contents
Consolidated Statements of Changes in Equity and Comprehensive
Income
(In U.S. dollars, except share and share related data)
Total TAL
Class B common
Accumulated
Education
shares
Additional
other
Group
Class B common shares
subscription
paid-in
Statutory
(Accumulated deficit)/
comprehensive
shareholders
Comprehensive
Shares
Amount
receivable
capital
reserve
retained earnings
income (loss)
equity
income
1,000
$
1
$
(1
)
$
62,580
$
$
(555,968
)
$
$
(493,388
)
$
131,810
131,810
1,512,572
1,512,572
1,512,572
494,040
(494,040
)
42,102
42,102
42,102
(49,327
)
(49,327
)
(49,327
)
1,000
1
(1
)
194,390
494,040
462,564
(7,225
)
1,143,769
$
1,505,347
365,508
365,508
7,280,669
7,280,669
7,280,669
119,999,000
119,999
(119,999
)
2,166,778
(2,166,778
)
(1,442,020
)
(1,442,020
)
(4,113,035
)
(4,113,035
)
71,127
71,127
71,127
(216,784
)
(216,784
)
(216,784
)
266,111
266,111
266,111
120,000,000
120,000
(120,000
)
559,898
2,660,818
21,400
113,229
3,355,345
$
7,401,123
219,743
219,743
14,244,959
14,244,959
14,244,959
2,196,625
(2,196,625
)
21,493
21,493
21,493
84,531
84,531
84,531
120,000,000
$
120,000
$
(120,000
)
$
779,641
$
4,857,443
$
12,069,734
$
219,253
$
17,926,071
$
14,350,983
F-5
Table of Contents
For the year
For the year
For the year
ended
ended
ended
February 29,
February 28,
February 28,
2008
2009
2010
$
1,512,572
$
7,280,669
$
14,244,959
46,416
452,009
1,272,074
114,536
565,300
841,193
1,615,455
362,668
(731,092
)
(41,914
)
(91,458
)
92,247
(4,270
)
3,603
(120,688
)
425,014
(802,788
)
(862,708
)
(139,879
)
(602,485
)
(557,895
)
(235,756
)
(635,096
)
(1,228,785
)
987,204
3,701,239
11,995,607
11,343,086
(36,135
)
6,954
644,389
1,805,910
3,217,670
302,689
2,285,218
(2,060,038
)
6,325,036
23,467,385
27,175,273
(532,814
)
(2,142,362
)
(3,785,897
)
(277,022
)
(1,422,679
)
(660,519
)
(1,464,231
)
(1,551,362
)
(1,470,355
)
(5,116,403
)
(5,250,128
)
F-6
Table of Contents
For the year
For the year
For the year
ended
ended
ended
February 29,
February 28,
February 28,
2008
2009
2010
4,886,965
131,810
365,508
219,743
(180,345
)
(1,442,020
)
500,000
131,810
5,252,473
(902,622
)
315,097
384,961
37,057
5,301,588
23,988,416
21,059,580
402,897
5,704,485
29,692,901
5,704,485
29,692,901
50,752,481
$
1,931
$
335,439
$
3,997,584
F-7
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
1.
Organization
and Principal Activities
Place of
Later of date of
incorporation
Percentage of
incorporation
(or establishment)
economic
/operation
ownership
(Xueersi Hong Kong)
March 11, 2008
Hong Kong
100
%
Holding company
Co., Ltd. (TAL Beijing)
May 8, 2008
Beijing
100
%
Software sales,
and consulting service
Consulting Co., Ltd. (Huanqiu Zhikang)
September 17, 2009
Beijing
100
%
Education and management
consulting service
Co., Ltd. (Yidu Huida)
November 11, 2009
Beijing
100
%
Software sales and
consulting service
Co., Ltd. (Xueersi Education)
December 31, 2005
Beijing
100
%
Sales of educational
materials and products
Co., Ltd. (Xueersi Network)
August 23, 2007
Beijing
100
%
On-line education
School (Haidian Xueersi)
July 3, 2006
Beijing
100
%
After-school tutoring for primary
and secondary school students
Training School (Dongcheng Xueersi)
March 21, 2008
Beijing
100
%
After-school tutoring for primary
and secondary school students
Co., Ltd. (Zhikang)
June 30, 2008
Beijing
100
%
After- school tutoring for primary
and secondary school students
English Training School (Jianli School)
July 1, 2008
Hubei
100
%
Language education
English Training School (Qianjiang School)
July 1, 2008
Hubei
100
%
Language education
English Training School (Wuhan School)
July 1, 2008
Hubei
100
%
Language education
Information Co., Ltd. (Shanghai Lehai)
August 1, 2008
Shanghai
100
%
Technology development
and consulting service
School (Changning School)
August 1, 2008
Shanghai
100
%
After-school tutoring for primary
and secondary school students
School (Minhang School)
August 1, 2008
Shanghai
100
%
Language education
Training School (Xicheng Xueersi)
April 2, 2009
Beijing
100
%
After-school tutoring for primary
and secondary school students
F-8
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
Place of
Later of date of
incorporation
Percentage of
incorporation
(or establishment)
economic
/operation
ownership
Consulting Co., Ltd. (Shanghai Education)
July 2, 2009
Shanghai
100
%
Educational information consulting
and educational software development
Consulting Co., Ltd. (Tianjin Education)
August 14, 2009
Tianjin
100
%
Educational information
consulting service
Co., Ltd. (Guangzhou Education)
August 16, 2009
Guangzhou
100
%
Educational technology
research and development
Co., Ltd. (Shenzhen Education)
December 22, 2009
Shenzhen
100
%
Teaching software research
and development
Agreements that transfer economic benefits to TAL Beijing
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
Agreements that provide TAL Beijing effective control over the
VIEs
As of
As of
February 28,
February 28,
2009
2010
$
27,027,498
$
45,171,584
6,452,080
8,792,445
33,479,578
53,964,029
25,822,900
34,897,136
366,069
175,610
$
26,188,969
$
35,072,746
F-10
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
8,882,191
$
37,475,583
$
68,884,665
$
1,512,572
$
7,312,960
$
14,260,357
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
6,325,036
$
24,956,771
$
21,611,823
$
(1,470,355
)
$
(5,066,464
)
$
(5,250,128
)
$
131,810
$
365,508
$
(1,402,622
)
2.
Significant
Accounting Policies
F-11
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
3 years
4-5 years
3-5 years
Shorter of the lease term or estimated useful lives
10.0 years
3.5 years
2.6-3.5 years
3.0 years
2.0-3.0 years
0.9-2.0 years
F-12
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-13
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-14
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-15
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-16
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-17
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
3.
Acquisitions
F-18
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
Amortization
period
$
12,504
3,189
177,822
3.50 years
97,656
3.50 years
2,915
2.00 years
2,915
1.50 years
1,338,753
(70,327
)
550,956
367,304
787,080
1,705,340
(139,913
)
$
1,565,427
F-19
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
Amortization
period
$
173,832
102,010
157,523
(344,380
)
(1,585
)
330,865
3.50 years
262,360
10.00 years
164,704
3.50 years
16,033
3.00 years
3,207
1.67 years
357,300
(194,292
)
$
1,027,577
F-20
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
For the years ended
February 29,
February 28,
2008
2009
(unaudited)
(unaudited)
$
9,517,600
$
37,876,116
$
1,546,449
$
6,598,516
$
0.01
$
0.02
$
0.01
$
0.02
$
17.68
4.
Extinguishment
of Liabilities
5.
Available-for-Sale
Securities
F-21
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
$
660,519
42,567
(73,623
)
629,463
(289,045
)
340,418
1,464,231
112,708
799
$
1,918,156
(1)
The Group determined the decline to be other-than temporary due
to the continuing challenging global financial markets, poor
performance of the equity markets, as well as the duration and
the extent to which the fair value of the securities had
continued to be less than the cost and therefore booked an
impairment loss in the income statement of $266,111, net of tax
effect of $96,557.
As of February 28, 2009
As of February 28, 2010
Gross
Gross
Gross
Gross
unrealized
unrealized
unrealized
unrealized
Cost
gains
(losses)
Fair value
Cost
gains
(losses)
Fair value
$
340,418
$
$
$
340,418
$
1,805,448
$
120,678
$
(7,970
)
$
1,918,156
6.
Prepaid
Expenses and Other Current Assets
As of
As of
February 28,
February 28,
2009
2010
$
797,674
$
1,344,238
391,049
305,782
165,257
450,705
60,943
180,216
$
1,414,923
$
2,280,941
F-22
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
7.
Property
and Equipment, Net
As of
As of
February 28,
February 28,
2009
2010
$
1,280,185
$
3,399,250
869,600
2,293,808
458,412
624,296
377,318
462,112
(514,178
)
(1,787,976
)
$
2,471,337
$
4,991,490
8.
Intangible
Assets, Net
As of
As of
February 28,
February 28,
2009
2010
$
1,846,858
$
1,846,858
425,576
425,576
348,566
348,566
262,360
262,360
19,200
19,200
9,902
9,902
(696,148
)
(1,537,341
)
10,029
14,039
$
2,226,343
$
1,389,160
F-23
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
9.
Accrued
Expenses and Other Current Liabilities
As of
As of
February 28,
February 28,
2009
2010
$
2,303,069
$
3,893,895
38,791
453,081
533,035
513,062
634,397
1,343,425
100,505
614,353
$
3,609,797
$
6,817,816
$
76,760
137,257
137,257
161,788
$
513,062
10.
Convertible
Loan
11.
Income
Taxes
F-24
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
304,620
$
2,620,738
$
1,936,420
(139,879
)
(602,485
)
(557,895
)
$
164,741
$
2,018,253
$
1,378,525
F-25
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
As of
As of
February 28,
February 28,
2009
2010
$
510,275
$
903,939
(29,146
)
(72,642
)
481,129
831,297
35,434
134,915
70,558
163,003
137,639
303,909
(112,342
)
(317,859
)
131,289
283,968
203,776
147,433
28,177
$
203,776
$
175,610
F-26
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
1,677,313
$
9,298,922
$
15,623,484
33
% (1)
25
%
25
%
553,513
2,324,731
3,905,871
64,410
214,023
23,593
257,357
289,945
(476,775
)
(923,868
)
(3,070,154
)
5,527
3,850
140,483
249,013
$
164,741
$
2,018,253
$
1,378,525
(1)
PRC statutory tax rate was 33% for the period between
March 1, 2007 and December 31, 2007 and 25% for the
period between January 1, 2008 and February 29, 2008.
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
476,775
$
923,868
$
3,070,154
$
0.01
$
0.02
$
0.09
$
$
17.68
$
0.09
$
0.01
$
0.02
$
0.09
F-27
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
12.
Impairment
Loss on Intangible Assets and Goodwill
As of February 28,
2009
2010
$
$
762,272
2,021,450
(1,256,084
)
(3,094
)
1,530
$
762,272
$
763,802
$
$
(1,256,084
)
(1,256,084
)
$
(1,256,084
)
$
(1,256,084
)
F-28
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
13.
Convertible
Redeemable Preferred Shares
F-29
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
14.
Common
Shares
F-30
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
15.
Net
Income per Share
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
1,512,572
$
7,280,669
$
14,244,959
4,113,035
1,512,572
3,167,634
14,244,959
1,512,572
3,161,499
(i)(ii)
13,675,161
(i)
4,119,170
(i)(iii)
569,798
(i)
1,512,572
3,161,499
14,244,959
120,000,000
120,000,000
120,000,000
232,877
5,000,000
120,000,000
120,000,000
125,000,000
$
0.01
$
0.03
$
0.11
$
$
17.69
$
0.11
$
0.01
$
0.03
$
0.11
(i)
In 2009 and 2010, undistributed net income was allocated between
common shares and preferred shares on pro rata basis on the
dividend participating rights. Since each Series A
convertible redeemable preferred share has the same
participating right as each common share, the allocation was
based on the
F-31
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
weighted average numbers of common shares and Series A
convertible redeemable preferred shares. The net income
allocated for computing net income per preferred share-basic
also contains the deemed dividend for accretion of the
redemption premium.
(ii)
For the year ended February 28, 2009, $3,167,634 of
undistributed net income was allocated between the weighted
average numbers of 120,000,000 common shares and
232,877 Series A convertible redeemable preferred
shares. Therefore, undistributed net income allocated for common
shares was $3,161,499 and $6,135 for Series A convertible
redeemable preferred shares.
(iii)
For the year ended February 28, 2009, net income allocated
for computing net income per Series A convertible
redeemable preferred shares-basic was $4,119,170 of which $6,135
was undistributed net income allocated between the weighted
average numbers of common shares and Series A convertible
redeemable preferred shares and $4,113,035 was deemed dividend
on Series A convertible redeemable preferred shares.
16.
Commitments
and Contingencies
$
13,154,964
12,113,895
8,044,734
6,134,223
3,226,231
$
42,674,047
17.
Segment
Information
F-32
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
8,882,191
$
37,152,739
$
69,138,216
322,844
455,307
$
8,882,191
$
37,475,583
$
69,593,523
18.
Mainland
China Contribution Plan
19.
Statutory
Reserves and Restricted Net Assets
F-33
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
20.
Related
Party Transactions
(a)
Amounts due from the founding shareholders-non-trading
As of
As of
February 28,
February 28,
2009
2010
$
92,112
(i)
$
i.
The amounts represent cash advances to the founding shareholders
for business expansion.
(b)
Amount due to the founding shareholders-non-trading
As of
As of
February 28,
February 28,
2009
2010
$
101,043
(ii)
$
108,204
(ii)
ii.
The amount represents rental deposits and acquisition
consideration paid by the founding shareholder on behalf of the
Group.
21.
Capital
Contribution
22.
Distribution
to Shareholders
23.
Pro Forma
Information (Unaudited)
F-34
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
24.
Subsequent
Events
F-35
Table of Contents
Notes to Consolidated Financial Statements
For the Years Ended February 29, 2008, February 28, 2009
and February 28, 2010
(In U.S. dollars, except share and share related data)
F-36
Table of Contents
Additional InformationFinancial Statement
Schedule I
Condensed Financial Information of Parent Company Balance
Sheets
(In US$, except share and share related data)
As of
As of
February 28,
February 28,
2009
2010
$
5,000,000
$
500,000
5,000,000
500,000
5,000,000
7,490,488
22,076,253
$
12,490,488
$
27,576,253
Liabilities, Convertible Redeemable Preferred Shares and
Equity
$
126,463
$
135,233
8,680
14,949
135,143
150,182
500,000
135,143
650,182
9,000,000
9,000,000
120,000
120,000
(120,000
)
(120,000
)
2,682,218
16,927,177
559,898
779,641
113,229
219,253
3,355,345
17,926,071
$
12,490,488
$
27,576,253
F-37
Table of Contents
Additional InformationFinancial Statement
Schedule I
Condensed Financial Information of Parent Company Statements of
Operations
(In US$, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
$
(22,126
)
$
(8,834
)
(22,126
)
(8,834
)
18
43
(6,248
)
1,512,572
7,302,777
14,259,998
$
1,512,572
$
7,280,669
$
14,244,959
F-38
Table of Contents
Additional InformationFinancial Statement
Schedule I
Consolidated Statements of Changes in Equity and Comprehensive
Income
(In U.S. dollars, except share and share related data)
Class B
(Accumulated
Accumulated
Class B
common share
Additional
deficit)
other
common shares
subscription
paid-in
Retained
comprehensive
Total
Comprehensive
Shares
Amount
receivable
capital
earnings
Income (loss)
equity
income
1,000
$
1
$
(1
)
$
62,580
$
(555,968
)
$
$
(493,388
)
$
131,810
131,810
1,512,572
1,512,572
1,512,572
42,102
42,102
42,102
(49,327
)
(49,327
)
(49,327
)
1,000
1
(1
)
194,390
956,604
(7,225
)
1,143,769
$
1,505,347
365,508
365,508
7,280,669
7,280,669
7,280,669
119,999,000
119,999
(119,999
)
(1,442,020
)
(1,442,020
)
(4,113,035
)
(4,113,035
)
71,127
71,127
71,127
(216,784
)
(216,784
)
(216,784
)
266,111
266,111
266,111
120,000,000
120,000
(120,000
)
559,898
2,682,218
113,229
3,355,345
$
7,401,123
219,743
219,743
14,244,959
14,244,959
14,244,959
21,493
21,493
21,493
84,531
84,531
84,531
120,000,000
$
120,000
$
(120,000
)
$
779,641
$
16,927,177
$
219,253
$
17,926,071
$
14,350,983
F-39
Table of Contents
Additional InformationFinancial Statement
Schedule I
Condensed Financial Information of Parent Company Cash Flow
Statements
(In US$, except share and share related data)
For the year ended
For the year ended
For the year ended
February 29,
February 28,
February 28,
2008
2009
2010
$
1,512,572
$
7,280,669
$
14,244,959
(1,512,572
)
(7,302,777
)
(14,259,998
)
126,463
8,770
8,680
6,269
113,035
4,886,965
500,000
(5,000,000
)
4,886,965
(4,500,000
)
5,000,000
(4,500,000
)
5,000,000
$
$
5,000,000
$
500,000
F-40
Table of Contents
(In U.S. dollars, except share and share related
data)
As of
As of
As of
February 28,
August 31,
August 31,
2010
2010
2010
Pro forma
(unaudited)
(Note 2)
$
50,752,481
$
81,494,598
$
81,494,598
1,918,156
448,277
448,277
121,819
252,268
252,268
437,152
437,152
831,297
1,226,469
1,226,469
2,280,941
3,838,203
3,838,203
55,904,694
87,696,967
87,696,967
4,991,490
5,550,290
5,550,290
283,968
167,989
167,989
2,170,548
2,308,268
2,308,268
1,389,160
1,025,325
1,025,325
763,802
765,923
765,923
$
65,503,662
$
97,514,762
$
97,514,762
Liabilities, Convertible Redeemable Preferred Shares and
Equity
$
987,742
$
712,710
$
712,710
29,407,994
42,100,775
42,100,775
108,204
100,571
100,571
6,817,816
9,618,867
9,618,867
580,225
3,054,408
3,054,408
30,000,000
37,901,981
55,587,331
85,587,331
500,000
500,000
500,000
175,610
146,684
146,684
38,577,591
56,234,015
86,234,015
9,000,000
9,000,000
120,000
120,000
125,000
(120,000
)
779,641
1,699,503
(19,305,497
)
4,857,443
4,857,443
4,857,443
12,069,734
25,315,575
25,315,575
219,253
288,226
288,226
17,926,071
32,280,747
11,280,747
$
65,503,662
$
97,514,762
$
97,514,762
F-41
Table of Contents
Six-Month
Six-Month
Period Ended
Period Ended
August 31,
August 31,
2009
2010
$
32,983,005
$
53,022,037
16,067,926
26,254,975
16,915,079
26,767,062
1,958,295
4,183,992
4,601,514
7,807,640
6,559,809
11,991,632
10,355,270
14,775,430
102,839
205,340
(43,452
)
(118,730
)
(27,373
)
6,429
10,339,379
14,916,374
912,268
1,670,533
9,427,111
13,245,841
9,427,111
13,245,841
9,427,111
13,245,841
$
0.08
$
0.11
$
0.08
$
0.11
$
0.08
$
0.11
120,000,000
120,000,000
125,000,000
125,193,360
5,000,000
5,000,000
$
0.10
$
0.10
123,723,146
128,723,146
F-42
Table of Contents
Class B
Total TAL
common
Accumulated
Education
Class B
shares
Additional
other
Group
common shares
subscription
paid-in
Statutory
Retained
comprehensive
shareholders
Comprehensive
Shares
Amount
receivable
capital
reserve
earnings
income
equity
income
120,000,000
$
120,000
$
(120,000
)
$
559,898
$
2,660,818
$
21,400
$
113,229
$
3,355,345
$
9,427,111
9,427,111
9,427,111
19,702
19,702
19,702
41,739
41,739
41,739
120,000,000
$
120,000
$
(120,000
)
$
559,898
$
2,660,818
$
9,448,511
$
174,670
$
12,843,897
$
9,488,552
120,000,000
$
120,000
$
(120,000
)
$
779,641
$
4,857,443
$
12,069,734
$
219,253
$
17,926,071
$
120,000
120,000
13,245,841
13,245,841
13,245,841
919,862
919,862
72,615
72,615
72,615
5,973
5,973
5,973
(9,615
)
(9,615
)
(9,615
)
120,000,000
$
120,000
$
$
1,699,503
$
4,857,443
$
25,315,575
$
288,226
$
32,280,747
$
13,314,814
Table of Contents
(In U.S. dollars, except share and share related data)
Six-Month
Six-Month
Periods Ended
Periods Ended
August 31,
August 31,
2009
2010
$
9,427,111
$
13,245,841
438,369
1,140,156
335,783
367,471
919,862
92,223
(48,578
)
(130,501
)
(705,149
)
(1,690,015
)
(274,942
)
(369,207
)
(308,730
)
(393,576
)
(157,500
)
84,417
(258,742
)
5,672,499
12,577,482
283,209
(7,948
)
1,480,818
3,054,910
(99,657
)
2,477,391
16,198,262
30,954,735
(695,551
)
(1,684,984
)
1,470,660
(695,551
)
(214,324
)
(180,345
)
(283,180
)
(1,442,020
)
120,000
(1,622,365
)
(163,180
)
25,399
164,886
13,905,745
30,742,117
29,692,901
50,752,481
43,598,646
81,494,598
1,381,236
1,369,739
F-44
Table of Contents
F-45
Table of Contents
As of
As of
February 28,
August 31,
2010
2010
$
45,171,584
$
55,158,850
8,792,445
8,366,390
53,964,029
63,525,240
34,897,136
42,938,739
175,610
146,684
$
35,072,746
$
43,085,423
Six-Month
Six-Month
Periods Ended
Periods Ended
August 31,
August 31,
2009
2010
$
32,983,005
$
46,589,727
$
10,385,657
$
14,324,095
Six-Month
Six-Month
Periods Ended
Periods Ended
August 31,
August 31,
2009
2010
$
16,902,677
$
9,329,391
$
(1,137,634
)
$
635,540
$
(1,622,365
)
$
(283,180
)
F-46
Table of Contents
2.
Unaudited
Pro Forma Information
F-47
Table of Contents
F-48
Table of Contents
1,918,156
(1,456,261
)
(12,819
)
(799
)
$
448,277
As of February 28, 2010
As of August 31, 2010
Gross
Gross
Gross
Gross
unrealized
unrealized
unrealized
unrealized
Cost
gains
(losses)
Fair value
Cost
gains
(losses)
Fair value
$
1,805,448
$
120,678
$
(7,970
)
$
1,918,156
$
340,418
$
107,859
$
448,277
F-49
Table of Contents
As of
As of
February 28,
August 31,
2010
2010
$
1,344,238
$
2,262,829
305,782
247,566
450,705
197,781
603,146
180,216
526,881
$
2,280,941
$
3,838,203
As of
As of
February 28,
August 31,
2010
2010
$
3,399,250
$
3,931,921
2,293,808
3,252,549
624,296
757,688
462,112
541,560
(1,787,976
)
(2,933,428
)
$
4,991,490
$
5,550,290
F-50
Table of Contents
As of
As of
February 28,
August 31,
2010
2010
$
1,846,858
$
1,846,858
425,576
425,576
348,566
348,566
262,360
262,360
19,200
19,200
9,902
9,902
(1,537,341
)
(1,904,812
)
14,039
17,675
$
1,389,160
$
1,025,325
8.
Accrued
Expenses and Other Current Liabilities
As of
As of
February 28,
August 31,
2010
2010
$
3,893,895
$
5,509,769
453,081
705,402
513,062
240,198
1,343,425
2,250,961
614,353
912,537
$
6,817,816
$
9,618,867
$
76,760
$
77,128
137,257
137,257
161,788
163,070
$
513,062
$
240,198
F-51
Table of Contents
9.
Income
Taxes
F-52
Table of Contents
Six-Month
Six-Month
Periods ended
Periods ended
August 31,
August 31,
2009
2010
PRC income tax expenses
$
1,281,475
$
1,973,863
PRC income tax benefits
(369,207
)
(303,330
)
$
912,268
$
1,670,533
As of
As of
February 28,
August 31,
2010
2010
$
903,939
$
1,299,540
(72,642
)
(73,071
)
831,297
1,226,469
134,915
196,579
163,003
162,914
303,909
587,294
(317,859
)
(778,798
)
283,968
167,989
147,433
120,127
28,177
26,557
$
175,610
$
146,684
F-53
Table of Contents
F-54
Table of Contents
10.
Goodwill
As of
As of
February 28,
August 31,
2010
2010
$
762,272
$
763,802
1,530
2,121
$
763,802
$
765,923
11.
Net
Income Per Share
Six-Month
Six-Month
Periods ended
Periods ended
August 31,
August 31,
2009
2010
$
9,427,111
$
13,245,841
9,427,111
13,245,841
9,050,027
(i)
12,716,007
(i)
377,084
(i)
529,834
(i)
9,427,111
13,245,841
120,000,000
120,000,000
5,000,000
5,000,000
193,360
(ii)
125,000,000
125,193,360
$
0.08
$
0.11
$
0.08
$
0.11
$
0.08
$
0.11
(i)
Undistributed net income was allocated between common shares and
preferred shares prorated on the dividend participation rights.
Since each Series A convertible redeemable preferred share
has the same participating right as each common share, the
allocation was based on the numbers of common shares and
Series A convertible redeemable preferred shares.
(ii)
The Group has nonvested shares outstanding which could diluted
basic net income per share in the future.
F-55
Table of Contents
12.
Commitments
and Contingencies
$
7,590,469
13,602,220
9,882,230
7,128,243
4,071,011
$
42,274,173
13.
Segment
Information
Six-Month
Six-Month
Periods Ended
Periods Ended
August 31,
August 31,
2009
2010
$
32,829,477
$
52,859,699
153,528
162,338
$
32,983,005
$
53,022,037
F-56
Table of Contents
14.
Mainland
China Contribution Plan
15.
Related
Party Transactions
As of
As of
February 28,
August 31,
2010
2010
$
108,204
(i)
$
100,571
(i)
i.
The amount represents rental deposits and acquisition
consideration paid by the founding shareholder on behalf of the
Group.
16.
Share-Based
Compensation
F-57
Table of Contents
Number of
nonvested
shares
5,419,500
5,419,500
17.
Subsequent
Events
F-58
Table of Contents
Table of Contents
Credit
Suisse
Morgan Stanley
Piper
Jaffray
Oppenheimer & Co.
Table of Contents
ITEM 6.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ITEM 7.
RECENT
SALES OF UNREGISTERED SECURITIES.
Underwriting
Date of Sale or
Number of
Discount and
Purchaser
Issuance
Securities
Consideration
Commission
January 24, 2008
565 common shares
Par Value
N/A
January 24, 2008
260 common shares
Par Value
N/A
January 24, 2008
100 common shares
Par Value
N/A
January 24, 2008
75 common shares
Par Value
N/A
January 22, 2009
67,799,435 common shares
Par Value
N/A
January 22, 2009
31,199,740 common shares
Par Value
N/A
January 22, 2009
11,999,900 common shares
Par Value
N/A
January 22, 2009
8,999,925 common shares
Par Value
N/A
KTB/UCI China
Ventures II Limited
February 12, 2009
5,000,000 Series A preferred shares
$5,000,000
N/A
July 26, 2010
5,419,500 restricted shares
Par Value
N/A
II-1
Table of Contents
ITEM 8.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
ITEM 9.
UNDERTAKINGS.
(1)
For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by
the registrant under Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3)
For the purpose of determining liability under the Securities
Act to any purchaser, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it
II-2
Table of Contents
is first used after effectiveness;
provided, however,
that no statement made in a registration statement or
prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(4)
For the purpose of determining any liability under the
Securities Act of 1993 to any purchaser in the initial
distribution of the securities, the undersigned registrant
undertakes in a primary offering of securities of the
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed
pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by
or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
II-3
Table of Contents
By:
Name:
Bangxin Zhang
Title:
Chairman and Chief Executive Officer
Chairman and Chief Executive Officer
(principal executive officer)
Director and President
Chief Financial Officer
(principal financial and accounting officer)
* By
Table of Contents
By:
Name:
Kate Ledyard, on behalf of
Law Debenture Corporate Services Inc.
Title:
Manager
Table of Contents
Exhibit
1
.1
Form of Underwriting Agreement
3
.1
Third Amended and Restated Memorandum and Articles of
Association of the Registrant as currently in effect
3
.2
Fourth Amended and Restated Memorandum and Articles of
Association of the Registrant as effective upon closing of this
offering
4
.1
Form of Class A common share certificate
4
.2
Form of American depositary receipt evidencing American
depositary shares (included in Exhibit 4.3)
4
.3
Form of Deposit Agreement between the Registrant and the
depositary
4
.4
Amended and Restated Shareholders Agreement among the
Registrant, the Series A preferred holder, Tiger Global
Five China Holdings and other parties thereto, dated
August 12, 2009
5
.1
Form of Opinion of Maples and Calder, the Cayman Islands counsel
to the Registrant, regarding the issue of shares being registered
8
.1
Form of Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP regarding certain U.S. federal tax matters
8
.2
Form of Opinion of Maples and Calder regarding certain Cayman
Islands tax matters (included in Exhibit 5.1)
8
.3
Form of Opinion of Tian Yuan Law Firm regarding certain PRC law
matters
10
.1
2010 Share Incentive Plan
10
.2
Share Purchase Agreement among the Registrant, the Series A
preferred holder and other parties thereto, dated
February 12, 2009
10
.3
Share Purchase Agreement among the Registrant, KTB China Optimum
Fund, Tiger Global Five China Holdings and other parties
thereto, dated August 12, 2009
10
.4
Assumption Agreement between the Registrant and KTB China
Optimum Fund, dated September 4, 2009
10
.5
Form of Indemnification Agreement with the Registrants
directors and officers
10
.6
Form of Employment Agreement between the Registrant and an
Executive Officer of the Registrant
10
.7
English translation of Exclusive Business Cooperation Agreement
among TAL Education Technology (Beijing) Co., Ltd., Beijing
Xueersi Education Technology Co., Ltd., Beijing Xueersi Network
Technology Co., Ltd., Bangxin Zhang, Yundong Cao, Yachao Liu,
Yunfeng Bai, and other parties thereto, dated June 25, 2010
10
.8
English translation of Call Option Agreement among TAL Education
Technology (Beijing) Co., Ltd., Beijing Xueersi Education
Technology Co., Ltd., Beijing Xueersi Network Technology Co.,
Ltd., Bangxin Zhang, Yundong Cao, Yachao Liu and Yunfeng Bai,
dated February 12, 2009
10
.9
English translation of Equity Pledge Supplemental Agreement
among TAL Education Technology (Beijing) Co., Ltd., Beijing
Xueersi Education Technology Co., Ltd., Bangxin Zhang, Yundong
Cao, Yachao Liu and Yunfeng Bai, dated June 25, 2010
10
.10
English translation of Equity Pledge Supplemental Agreement
among TAL Education Technology (Beijing) Co., Ltd., Beijing
Xueersi Network Technology Ltd., Bangxin Zhang, Yundong Cao,
Yachao Liu and Yunfeng Bai, dated June 25, 2010
10
.11
English translation of Powers of Attorney by Bangxin Zhang,
Yundong Cao, Yachao Liu and Yunfeng Bai, dated August 12,
2009
21
.1
Subsidiaries of the Registrant
23
.1
Consent of Deloitte Touche Tohmatsu CPA Ltd.
23
.2
Form of Consent of Maples and Calder (included in
Exhibit 5.1)
23
.3
Form of Consent of Tian Yuan Law Firm (included in
Exhibit 8.3)
23
.4
Consent of iResearch Consulting Group
23
.5
Consent of American Appraisal China Limited
23
.6
Consent of Jane Jie Sun, an independent director appointee
Table of Contents
Exhibit
23
.7
Consent of Wai Chau Lin, an independent director appointee
24
.1
Powers of Attorney (included on the signature page of this
registration statement)
99
.1
Code of Business Conduct and Ethics of the Registrant
Filed previously.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Very truly yours, | ||||||||||
|
||||||||||
TAL EDUCATION GROUP | ||||||||||
|
||||||||||
By: | ||||||||||
|
Name: | Bangxin Zhang | ||||||||
|
Title: |
Chairman and Chief
Executive Officer |
SIGNATURE PAGE TO UNDERWRITING AGREEMENT
By: | _________________________________ | ||
Name: | |||
Title: | |||
By: | _________________________________ | ||
Name: | |||
Title: | |||
Number of Firm ADSs | ||
Underwriter | To Be Purchased | |
Credit Suisse Securities (USA) LLC
|
[ ] | |
Morgan Stanley & Co. International plc
|
[ ] | |
Oppenheimer & Co. Inc.
|
[ ] | |
Piper Jaffray & Co.
|
[ ] | |
|
||
Total:
|
[ ] | |
|
Schedule I-1
1. | Preliminary Prospectus issued on [ ], 2010 |
Schedule II-1
F-1
F-2
Very truly yours,
|
||||
F-3
1. | The name of the Company is TAL Education Group. | |
2. | The Registered Office of the Company is situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine. | |
3. | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Law or any other law of the Cayman Islands. | |
4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Law. | |
5. | The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. | |
6. | The liability of each Shareholder of the Company is limited to the amount, if any, unpaid on the Shares held by such Shareholder. | |
7. | The authorised share capital of the Company is US$2,000,000 divided into (i) 500,000,000 Class A Common Shares of a nominal or par value of US$0.001 each and (ii) 500,000,000 Class B Common Shares of a nominal or par value of US$0.001 each and (iii) 1,000,000,000 shares of a nominal or par value of US$0.001 each of such Class or Classes (howsoever designated) as the Board of Directors may determine in accordance with Articles 8 and 9 of the Articles of Association. Subject to the Companies Law and the Articles of Association, the Company shall have power to redeem or purchase any of its Shares and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether |
original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided. | ||
8. | The Company has the power to deregister in the Cayman Islands and be registered by way of continuation in some other jurisdiction. | |
9. | Capitalized terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company. |
CLAUSE | PAGE | |||
TABLE A
|
2 | |||
INTERPRETATION
|
2 | |||
PRELIMINARY
|
6 | |||
SHARES
|
6 | |||
MODIFICATION OF RIGHTS
|
7 | |||
CERTIFICATES
|
8 | |||
FRACTIONAL SHARES
|
8 | |||
LIEN
|
8 | |||
CALLS ON SHARES
|
9 | |||
FORFEITURE OF SHARES
|
10 | |||
TRANSFER OF SHARES
|
10 | |||
CONVERSION OF COMMON SHARES
|
11 | |||
TRANSMISSION OF SHARES
|
12 | |||
ALTERATION OF SHARE CAPITAL
|
12 | |||
REDEMPTION AND PURCHASE OF SHARES
|
13 | |||
GENERAL MEETINGS
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14 | |||
NOTICE OF GENERAL MEETINGS
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15 | |||
PROCEEDINGS AT GENERAL MEETINGS
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15 | |||
VOTES OF SHAREHOLDERS
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16 | |||
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
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18 | |||
CLEARING HOUSES
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18 | |||
DIRECTORS
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18 | |||
ALTERNATE DIRECTOR OR PROXY
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19 | |||
POWERS AND DUTIES OF DIRECTORS
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19 | |||
BORROWING POWERS OF DIRECTORS
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21 | |||
THE SEAL
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21 | |||
DISQUALIFICATION OF DIRECTORS
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21 | |||
PROCEEDINGS OF DIRECTORS
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22 | |||
PRESUMPTION OF ASSENT
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24 | |||
DIVIDENDS
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24 | |||
ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION
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25 | |||
CAPITALISATION OF RESERVES
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25 | |||
SHARE PREMIUM ACCOUNT
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26 | |||
NOTICES
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27 |
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INDEMNITY
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28 | |||
NON-RECOGNITION OF TRUSTS
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29 | |||
WINDING UP
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29 | |||
AMENDMENT OF ARTICLES OF ASSOCIATION
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29 | |||
CLOSING OF REGISTER OR FIXING RECORD DATE
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30 | |||
REGISTRATION BY WAY OF CONTINUATION
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30 | |||
DISCLOSURE
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ii
The Regulations contained or incorporated in Table A in the First Schedule of the Law shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company. |
1. | In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context: |
ADS |
means an American depositary share representing
Class A Common Shares;
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Affiliate |
means, with respect to any specified Person, any
other Person who or which, directly or indirectly,
controls, is controlled by, or is under common
control with such specified Person, including
without limitation, any partners, officer,
director, member or employee of such Person and any
venture capital fund now or hereafter existing that
is controlled by or under common control with one
or more general partners or managing members of, or
shares the same management company with, such
Person;
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Articles or Articles of Association |
means these articles of association of the Company,
as amended or substituted from time to time;
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Board or Board of Directors or Directors |
means the directors of the Company for the time
being, or as the case may be, the directors
assembled as a board or as a committee thereof;
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Chairman |
means the chairman of the Board of Directors;
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Class or Classes |
means any class or classes of Shares as may from
time to time be issued by the Company;
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Class A Common Share |
means a Class A Common Share in the capital of the
Company with a par value of US$0.001 per share.
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Class B Common Share |
means a Class B Common Share in the capital of the
Company with a par value of US$0.001 per share.
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Commission |
means Securities and Exchange Commission of the
United States of America or any other federal
agency for the time being administering the
Securities Act;
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Common Share |
means a Class A Common Share or a Class B Common
Share;
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Company |
means TAL Education Group, a Cayman Islands
exempted company;
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Companies Law |
means the Companies Law (2010 Revision) of the
Cayman Islands and any statutory amendment or
re-enactment thereof;
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Companys Website |
means the website of the Company, the address or
domain name of which has been notified to
Shareholders;
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Designated Stock Exchange |
means The New York Stock Exchange in the United
States or any other stock exchange that the
Companys ADSs are listed for trading;
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Designated Stock Exchange Rules |
means the relevant code, rules and regulations, as
amended, from time to time, applicable as a result
of the original and continued listing of any shares
or ADSs on the Designated Stock Exchange;
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electronic |
means the meaning given to it in the Electronic
Transactions Law and any amendment thereto or
re-enactments thereof for the time being in force
and includes every other law incorporated therewith
or substituted therefor;
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electronic communication |
means electronic posting to the Companys Website,
transmission to any number, address or internet
website or other electronic delivery methods as
otherwise decided and approved by not less than
two-thirds of the vote of the Board;
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Electronic Transactions Law |
means the Electronic Transactions Law (2003
Revision) of the Cayman Islands and any statutory
amendment or re-enactment thereof;
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Independent Director |
means a director who is an independent director as
defined in the Designated Stock Exchange Rules;
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Law |
means the Companies Law and every other law and
regulation of the Cayman Islands for the time being
in force concerning companies and affecting the
Company;
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Memorandum of Association |
means the memorandum of association of the Company,
as amended or substituted from time to time;
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Month |
means calendar month;
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Ordinary Resolution |
means a resolution:
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(a) | passed by a simple majority of such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of the Company and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled; or | |
(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed; |
paid up |
means paid up as to the par value in respect of the
issue of any Shares and includes credited as paid
up;
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Person |
means any natural person, firm, company, joint
venture, partnership, corporation, association or
other entity (whether or not having a separate
legal personality) or any of them as the context so
requires;
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Register |
means the register of Members of the Company
maintained in accordance with the Companies Law;
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Registered Office |
means the registered office of the Company as
required by the Companies Law;
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Seal |
means the common seal of the Company (if adopted)
including any facsimile thereof;
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Secretary |
means any Person appointed by the Directors to
perform any of the duties of the secretary of the
Company;
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Securities Act |
means the Securities Act of 1933 of the United
States of America, as amended, or any similar
federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be
in effect at the time;
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Share |
means a share in the capital of the Company. All
references to Shares herein shall be deemed to be
Shares of any or all Classes as the context may
require. For the avoidance of doubt in these
Articles the expression Share shall include a
fraction of a Share;
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Shareholder or Member |
means a Person who is registered as the holder of
Shares in the Register;
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Share Premium Account |
means the share premium account established in
accordance with these Articles and the Companies
Law;
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signed |
means bearing a signature or representation of a
signature affixed by mechanical means or an
electronic symbol or process attached to or
logically associated with an electronic
communication and executed or adopted by a person
with the intent to sign the electronic
communication;
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Special Resolution |
means a special resolution of the Company passed in
accordance with the Law, being a resolution:
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(a) | passed by a majority of not less than two-thirds of such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled; or | |
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(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed; |
United States |
means the United States of America, its
territories, its possessions and all areas subject
to its jurisdiction; and
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year |
means calendar year.
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2. | In these Articles, save where the context requires otherwise: |
(a) | words importing the singular number shall include the plural number and vice versa; |
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(b) | words importing the masculine gender only shall include the feminine gender and any Person as the context may require; | ||
(c) | the word may shall be construed as permissive and the word shall shall be construed as imperative; | ||
(d) | reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America; | ||
(e) | reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force; | ||
(f) | reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case; | ||
(g) | reference to in writing shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing or partly one and partly another; and | ||
(h) | Section 8 of the Electronic Transactions Law shall not apply. |
3. | Subject to the last two preceding Articles, any words defined in the Companies Law shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. |
4. | The business of the Company may be conducted as the Directors see fit. |
5. | The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. |
6. | The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortised over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine. |
7. | The Directors shall keep, or cause to be kept, the Register at such place as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office. |
8. | Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may: |
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(a) | issue, allot and dispose of the same to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine; and |
6
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(b) | grant options with respect to such Shares and issue warrants or similar instruments with respect thereto; |
and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. | ||
9. | The Directors may authorise the division of Shares into any number of Classes and the different Classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by a Special Resolution. The Directors may issue Shares with such preferred or other rights, all or any of which may be greater than the rights of Common Shares, at such time and on such terms as they may think appropriate. | |
10. | The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgement of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares. | |
11. | The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason. |
12. | Whenever the capital of the Company is divided into different Classes the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, only be materially adversely varied or abrogated with the consent in writing of the holders of a majority of the issued Shares of that Class or with the sanction of a Special Resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis , apply, except that the necessary quorum shall be one or more Persons at least holding or representing by proxy one-third in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those Shareholders who are present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration , but in any other case shall treat them as separate Classes. |
13. | The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially adversely varied or abrogated by, inter alia , the creation, allotment or issue of further Shares ranking pari passu with or in priority or subsequent to them or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be materially adversely varied or abrogated by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights. |
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14. | Every Person whose name is entered as a member in the Register shall, without payment, be entitled to a certificate within two months after allotment or lodgement of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that person and the amount paid up thereon, provided that in respect of a Share or Shares held jointly by several persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the member entitled thereto at the Members registered address as appearing in the Register. |
15. | Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act. |
16. | Any two or more certificates representing Shares of any one Class held by any Member may at the Members request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of US$1.00 or such smaller sum as the Directors shall determine. |
17. | If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
18. | In the event that Shares are held jointly by several persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders. |
19. | The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated. |
20. | The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Companys lien on a Share extends to any amount payable in respect of it. |
21. | The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in |
8
respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy. | ||
22. | For giving effect to any such sale the Directors may authorise some Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. | |
23. | The proceeds of the sale after deduction of expenses, fees and commission incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale. |
24. | Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares by giving notice to such Shareholders at least fourteen days prior to the specified time of payment, and each Shareholder shall pay to the Company at the time or times so specified the amount called on such Shares. |
25. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
26. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
27. | The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
28. | The Directors may make arrangements on the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. |
29. | The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. |
9
30. | If a Shareholder fails to pay any call or instalment of a call in respect of partly paid Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. | |
31. | The notice shall name a further day (not earlier than the expiration of fourteen days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the Shares in respect of which the call was made will be liable to be forfeited. | |
32. | If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect. | |
33. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. | |
34. | A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited. | |
35. | A certificate in writing under the hand of a Director of the Company that a Share has been duly forfeited on a date stated in the certificate, shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share. | |
36. | The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favour of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale. | |
37. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
38. | The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make |
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the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares. |
39.
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(a) | The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien. | ||
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(b) | The Directors may also, but are not required to, decline to register any transfer of any Share unless: |
i. | the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; | ||
ii. | the instrument of transfer is in respect of only one Class of Shares; | ||
iii. | the instrument of transfer is properly stamped, if required; | ||
iv. | in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; | ||
v. | the Shares transferred are free of any lien in favour of the Company; and | ||
vi. | a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board of Directors may from time to time require, is paid to the Company in respect thereof. |
40. | The registration of transfers may, on 14 days notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the Register closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register of Members closed for more than 30 days in any year. | |
41. | All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within two months after the date on which the transfer was lodged with the Company send to each of the transferor and the transferee notice of the refusal. |
42. | Each Class B Common Share is convertible into one (1) Class A Common Share at any time by the holder thereof. Class A Common Shares are not convertible into Class B Common Shares under any circumstances. Conversions of Class B Common Shares to Class A Common Shares shall be effected by way of the re-designation of such Class B Common Shares into an equal number of Class A Common Shares. | |
If at any time any of the Persons who hold our Class B Common Shares immediately prior to the completion of the Companys initial public offering of Class A Common Shares represented by ADSs and their respective Affiliates collectively own less than 5% of the total number of the issued and outstanding Class B Common Shares of the Company, each issued and outstanding Class B Common Shares shall be automatically and immediately converted into one Class A Common Share, and no Class B Common Shares shall be issued by the Company thereafter. |
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Subject to the Companies Law and notwithstanding any other provisions of these Articles, upon any transfer of Class B Common Shares by a holder thereof to any Person which is not an Affiliate of such holder, such Class B Common Shares shall be automatically and immediately converted into an equal number of Class A Common Shares. |
43. | The legal personal representative of a deceased sole holder of a Share shall be the only Person recognised by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognised by the Company as having any title to the Share. |
44. | Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy. |
45. | A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
46. | The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument. |
47. | The Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe. |
48. | The Company may by Ordinary Resolution: |
(a) | consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares; | ||
(b) | convert all or any of its paid up Shares into stock and reconvert that stock into paid up Shares of any denomination; |
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(c) | subdivide its existing Shares, or any of them into Shares of a smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and |
(d) | cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
49. | The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorised by law. |
50. | Subject to the provisions of the Companies Law and these Articles, the Company may: |
(a) | issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the Company. The redemption of Shares shall be effected in such manner as may be determined, before the issue of such Shares, by either the Board or by the Shareholders by Special Resolution; |
(b) | purchase its own Shares (including any redeemable Shares) provided that the Shareholders shall have approved the manner of purchase by Ordinary Resolution or the manner of purchase is in accordance with the following Articles (this authorisation is in accordance with section 37(2) of the Companies Law); and |
(c) | the Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Law, including out of capital. |
51. | Purchase of Shares represented by ADSs listed on the Designated Stock Exchange | |
The Company is authorised to purchase any Shares which are represented by ADSs listed on the Designated Stock Exchange in accordance with the following manner of purchase: |
(a) | in the event that the Company purchases any ADSs, it shall also purchase the Shares underlying such ADS in accordance with this Article; |
(b) | the purchase price shall be paid by the Company to the depositary, to be paid by the depositary to the seller of the relevant ADSs (and such monies shall be held on trust by the depositary for the account of such seller until they have been paid to such seller), or may, by agreement between the depositary and the Company, be paid directly by the Company to such seller; |
(c) | the maximum number of Shares that may be repurchased shall be equal to the number of issued and outstanding Shares less one Share; and |
(d) | the repurchase of the ADSs and the underlying Shares shall be at such time; at such price and on such other terms as determined and agreed by the Board in their sole discretion provided however that: |
(i) | such repurchase transactions shall be in accordance with the Designated Stock Exchange Rules and any other relevant codes, rules and regulations applicable to the listing of the ADSs on the Designated Stock Exchange; and |
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(ii) | at the time of the repurchase, the Company is able to pay its debts as they fall due in the ordinary course of its business. |
52. | Purchase of shares not represented by ADSs | |
The Company is authorised to purchase any Shares not underlying ADSs in accordance with the following manner of purchase: |
(a) | the Company shall serve a repurchase notice in a form approved by the Board on the Shareholder from whom the Shares are to be repurchased at least two business days prior to the date specified in the notice as being the repurchase date; | ||
(b) | the price for the Shares being repurchased shall be such price agreed between the Board and the applicable Shareholder; | ||
(c) | the date of repurchase shall be the date specified in the repurchase notice; and | ||
(d) | the repurchase shall be on such other terms as specified in the repurchase notice as determined and agreed by the Board and the applicable Shareholder in their sole discretion. |
53. | The purchase of any Share shall not oblige the Company to purchase any other Share other than as may be required pursuant to applicable law and any other contractual obligations of the Company. |
54. | The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof. |
55. | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
56. | (a) The Company may in each year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors. |
(b) | At these meetings the report of the Directors (if any) shall be presented. |
57. | (a) The Directors may call general meetings, and they shall on a Shareholders requisition forthwith proceed to convene an extraordinary general meeting of the Company. |
(b) | A Shareholders requisition is a requisition of Shareholders holding at the date of deposit of the requisition in aggregate not less than one-third of such of the issued Shares of the Company as at that date of the deposit carries the right of voting at general meetings of the Company. |
(c) | The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists. |
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(d) | If the Directors do not within 21 days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further 21 days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three months after the expiration of the said 21 days. |
(e) | A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors. |
58. | At least ten days notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
(a) | in the case of an annual general meeting by all the Shareholders (or their proxies) entitled to attend and vote thereat; and |
(b) | in the case of an extraordinary general meeting by a majority in number of the Shareholders (or their proxies) having a right to attend and vote at the meeting, being a majority together holding not less than ninety five per cent in par value of the Shares giving that right. |
59. | The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting. |
60. | No business shall be transacted at any general meeting unless a quorum of Shareholders is present at the time when the meeting proceeds to business. The quorum required for a general meeting of Shareholders consists of at least one Shareholder, present in person or by proxy and entitled to vote, holding in aggregate not less than one-tenth of the voting power of the Shares in issue carrying a right to vote at such meeting. |
61. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Shareholders, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the Shareholder or Shareholders present and entitled to vote shall form a quorum. |
62. | If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, participation in any general meeting of the Company may be by means of a telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
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63. | The chairman, if any, of the Directors shall preside as chairman at every general meeting of the Company. | |
64. | If there is no such chairman, or if at any general meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, any Director or Person nominated by the Directors shall preside as chairman, failing which the Shareholders present in person or by proxy shall choose any Person present to be chairman of that meeting. | |
65. | The chairman may with the consent of any general meeting at which a quorum is present (and shall if so directed by the meeting) adjourn a meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for fourteen days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. | |
66. | The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. | |
67. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman or any Shareholder holding at least one-tenth of the voting power of the Shares given a right to vote at the meeting, present in person or by proxy, and unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution. | |
68. | If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. | |
69. | In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote. | |
70. | A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
71. | Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder present in person and every Person representing a Shareholder by proxy shall, at a general meeting of the Company, each have one vote and on a poll (i) every holder of Class A Common Shares and every Person representing a holder of Class A Common Shares by proxy shall have one vote for each Class A Common Share of which |
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such Person or the Person represented by proxy is the holder, and (ii) every holder of Class B Common Shares and every Person representing a holder of Class B Common Shares by proxy shall have ten (10) votes for each Class B Common Share of which such Person or the Person represented by proxy is the holder. |
72. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register. | |
73. | A Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote in respect of Shares carrying the right to vote held by him, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person, may vote in respect of such Shares by proxy. | |
74. | No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid. | |
75. | On a poll, votes may be given either personally or by proxy. | |
76. | The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. A proxy need not be a Shareholder. | |
77. | An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve. | |
78. | The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company: |
(a) | not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or |
(b) | in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or |
(c) | where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the chairman or to the secretary or to any director; |
provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited (no later than the time for holding the meeting or adjourned meeting) at the registered office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The Chairman may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid. |
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79. | The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. |
80. | A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorised representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
81. | Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorise such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director. |
82. | If a clearing house (or its nominee) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorise such person or persons as it thinks fit to act as its representative or representatives at any general meeting of the Company or at any general meeting of any class of Members of the Company provided that, if more than one person is so authorised, the authorisation shall specify the number and class of Shares in respect of which each such person is so authorised. A person so authorised pursuant to this Article shall be entitled to exercise the same powers on behalf of the clearing house (or its nominee) which he represents as that clearing house (or its nominee) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorisation. |
83. | (a) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two Directors, the exact number of Directors to be determined from time to time by the Board of Directors. For so long as Shares or ADSs are listed on the Designated Stock Exchange, the Directors shall include such number of Independent Directors as applicable law, rules or regulations or the Designated Stock Exchange Rules require. |
(b) | The Board of Directors shall have a Chairman elected and appointed by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, the attending Directors may choose one of their number to be the chairman of the meeting. |
(c) | The Company may by Ordinary Resolution appoint any person to be a Director. |
(d) | The Board may appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board, subject to the Companys compliance with director nomination procedures required under the Designated Stock Exchange Rules, as long as Shares or ADSs are listed on the Designated Stock Exchange. |
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84. | A Director shall hold office until he is removed from office by Ordinary Resolution notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). |
85. | The Board may, from time to time, and except as required by applicable law or the listing rules of the recognized stock exchange where the Companys securities are traded, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Board on various corporate governance related matters as the Board shall determine by resolution from time to time. |
86. | A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at general meetings. |
87. | The remuneration of the Directors may be determined by the Directors or by Ordinary Resolution. |
88. | The Directors shall be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. |
89. | Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Directors place at any meeting of the Directors at which he is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. |
90. | Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting. |
91. | Subject to the Companies Law, these Articles and to any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all |
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expenses incurred in setting up and registering the Company and may exercise all powers of the Company. |
92. | Subject to these Articles, the Directors may from time to time appoint any natural person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, the office of president, one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be removed by the Directors. |
93. | No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed. |
94. | The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors or by the Company by Ordinary Resolution. |
95. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors. |
96. | The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorised signatory (any such person being an Attorney or Authorised Signatory, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorised Signatory as the Directors may think fit, and may also authorise any such Attorney or Authorised Signatory to delegate all or any of the powers, authorities and discretion vested in him. |
97. | The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article. |
98. | The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural person or corporation. |
99. | The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any |
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natural person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby. |
100. | Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them. |
101. | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. |
102. | The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence. |
103. | The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose. |
104. | Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company. |
105. | The office of Director shall be vacated, if the Director: |
(a) | becomes bankrupt or makes any arrangement or composition with his creditors; |
(b) | dies or is found to be or becomes of unsound mind; |
(c) | resigns his office by notice in writing to the Company; |
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(d) | without special leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings and the Board resolves that his office be vacated; or |
(e) | is removed from office pursuant to any other provision of these Articles. |
106. | The Directors may meet together (either within or without the Cayman Islands) for the despatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Save as provided in Article 93, questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the Chairman shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. |
107. | A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
108. | The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present. |
109. | A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration. |
110. | A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested, be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. |
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111. | Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company. |
112. | The Directors shall cause minutes to be made in books or loose-leaf folders provided for the purpose of recording: |
(a) | all appointments of officers made by the Directors; |
(b) | the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and |
(c) | all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors. |
113. | When the Chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings. |
114. | A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as if it had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate. |
115. | The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose. |
116. | The Directors may elect a chairman of their meetings and determine the period for which he is to hold office but if no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the Directors present may choose one of their number to be chairman of the meeting. |
117. | Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting. |
118. | A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote. |
119. | All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there |
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was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director. |
120. | A Director of the Company who is present at a meeting of the Board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the Minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action. |
121. | Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorise payment of the same out of the funds of the Company lawfully available therefor. |
122. | Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
123. | The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors be applicable for meeting contingencies, or for equalising dividends or for any other purpose to which those funds may be properly applied and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit. |
124. | Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. |
125. | With the sanction of an Ordinary Resolution, the Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit. |
126. | Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so |
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long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. |
127. | If several Persons are registered as joint holders of any Share, any of them may give effectual receipts for any dividend or other moneys payable on or in respect of the Share. | |
128. | No dividend shall bear interest against the Company. | |
129. | Any dividend unclaimed after a period of six years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company. |
130. | The books of account relating to the Companys affairs shall be kept in such manner as may be determined from time to time by the Directors. | |
131. | The books of account shall be kept at the Registered Office, or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors. | |
132. | The Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by law or authorised by the Directors or by Ordinary Resolution. | |
133. | The accounts relating to the Companys affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited. | |
134. | The Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration. | |
135. | Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors. | |
136. | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members. | |
137. | The Directors in each year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Law and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. |
138. | Subject to the Companies Law, the Directors may, with the authority of an Ordinary Resolution: |
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(a) | resolve to capitalise an amount standing to the credit of reserves (including a Share Premium Account, capital redemption reserve and profit and loss account), whether or not available for distribution; |
(b) | appropriate the sum resolved to be capitalised to the Shareholders in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards: |
(i) | paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or | ||
(ii) | paying up in full unissued Shares or debentures of a nominal amount equal to that sum, |
and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Shareholders credited as fully paid; |
(c) | make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit; |
(d) | authorise a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either: |
(i) | the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalisation, or | ||
(ii) | the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalised) of the amounts or part of the amounts remaining unpaid on their existing Shares, |
and any such agreement made under this authority being effective and binding on all those Shareholders; and |
(e) | generally do all acts and things required to give effect to the resolution. |
139. | The Directors shall in accordance with the Companies Law establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share. | |
140. | There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Law, out of capital. |
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141. | Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it airmail or air courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile or by placing it on the Companys Website should the Directors deem it appropriate provided that the Company has obtained the members prior express positive confirmation in writing to receive notices in such manner. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. | |
142. | Notices posted to addresses outside the Cayman Islands shall be forwarded by prepaid airmail. | |
143. | Any Shareholder present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened. | |
144. | Any notice or other document, if served by: |
(a) | post, shall be deemed to have been served five days after the time when the letter containing the same is posted; | ||
(b) | facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient; | ||
(c) | recognised courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service; or | ||
(d) | electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail. |
In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service. | ||
145. | Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document, have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share. | |
146. | Notice of every general meeting of the Company shall be given to: |
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(a) | all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and |
(b) | every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting. |
No other Person shall be entitled to receive notices of general meetings. |
147. | No Member shall be entitled to require discovery of any information in respect of any detail of the Companys trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public. | |
148. | The Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the Company. |
149. | Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Companys auditors) and the personal representatives of the same (each an Indemnified Person) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Persons own dishonesty, wilful default or fraud, in or about the conduct of the Companys business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. |
150. | No Indemnified Person shall be liable: |
(a) | for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or |
(b) | for any loss on account of defect of title to any property of the Company; or |
(c) | on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or |
(d) | for any loss incurred through any bank, broker or other similar Person; or |
(e) | for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Persons part; or |
28
(f) | for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Persons office or in relation thereto; |
unless the same shall happen through such Indemnified Persons own dishonesty, wilful default or fraud. |
151. | Unless the Directors otherwise prescribe, the financial year of the Company shall end on the last day of February in each year and shall begin on March 1 in each year. |
152. | No Person shall be recognised by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Law requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register. |
153. | If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Law, divide amongst the Members in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability. |
154. | If the Company shall be wound up, and the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. If in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
155. | Subject to the Companies Law, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part. |
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156. | For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case 40 days. If the Register shall be so closed for the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders the Register shall be so closed for at least ten days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the Register. |
157. | In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within 90 days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination. |
158. | If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
159. | The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company. |
160. | The Directors, or any service providers (including the officers, the Secretary and the registered office agent of the Company) specifically authorised by the Directors, shall be entitled to disclose to any regulatory or judicial authority any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company. |
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Page | ||||
PARTIES
|
1 | |||
RECITALS
|
1 | |||
|
||||
Section 1. Certain Definitions
|
||||
(a) ADR Register
|
1 | |||
(b) ADRs; Direct Registration ADRs
|
1 | |||
(c) ADS
|
1 | |||
(d) Custodian
|
1 | |||
(e) Deliver, execute, issue et al.
|
1 | |||
(f) Delivery Order
|
2 | |||
(g) Deposited Securities
|
2 | |||
(h) Direct Registration System
|
2 | |||
(i) Holder
|
2 | |||
(j) Securities Act of 1933
|
2 | |||
(k) Securities Exchange Act of 1934
|
2 | |||
(l) Shares
|
2 | |||
(m) Transfer Office
|
2 | |||
(n) Withdrawal Order
|
2 | |||
Section 2. ADRs
|
2 | |||
Section 3. Deposit of Shares
|
3 | |||
Section 4. Issue of ADRs
|
4 | |||
Section 5. Distributions on Deposited Securities
|
4 | |||
Section 6. Withdrawal of Deposited Securities
|
4 | |||
Section 7. Substitution of ADRs
|
4 | |||
Section 8. Cancellation and Destruction of ADRs
|
5 | |||
Section 9. The Custodian
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5 | |||
Section 10. Co-Registrars and Co-Transfer Agents
|
5 | |||
Section 11. Lists of Holders
|
5 | |||
Section 12. Depositarys Agents
|
5 | |||
Section 13. Successor Depositary
|
6 | |||
Section 14. Reports
|
6 | |||
Section 15. Additional Shares
|
7 | |||
Section 16. Indemnification
|
7 | |||
Section 17. Notices
|
8 | |||
Section 18. Miscellaneous
|
8 | |||
Section 19. Consent to Jurisdiction
|
8 | |||
TESTIMONIUM
|
11 | |||
SIGNATURES
|
11 |
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Page | ||||
EXHIBIT A
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|
||||
FORM OF FACE OF ADR
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A-1 | |||
|
||||
Introductory Paragraph
|
A-1 | |||
|
||||
(1) Issuance of ADRs and Pre-Release of ADRs
|
A-2 | |||
(2) Withdrawal of Deposited Securities
|
A-3 | |||
(3) Transfers of ADRs
|
A-3 | |||
(4) Certain Limitations
|
A-4 | |||
(5) Taxes
|
A-5 | |||
(6) Disclosure of Interests
|
A-6 | |||
(7) Charges of Depositary
|
A-6 | |||
(8) Available Information
|
A-7 | |||
(9) Execution
|
A-8 | |||
|
||||
Signature of Depositary
|
A-8 | |||
|
||||
Address of Depositarys Office
|
A-8 | |||
|
||||
FORM OF REVERSE OF ADR
|
A-9 | |||
|
||||
(10) Distributions on Deposited Securities
|
A-9 | |||
(11) Record Dates
|
A-10 | |||
(12) Voting of Deposited Securities
|
A-10 | |||
(13) Changes Affecting Deposited Securities
|
A-10 | |||
(14) Exoneration
|
A-11 | |||
(15) Resignation and Removal of Depositary; the Custodian
|
A-13 | |||
(16) Amendment
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A-13 | |||
(17) Termination
|
A-14 | |||
(18) Appointment
|
A-14 | |||
(19) Waiver
|
A-14 |
-ii-
1
2
3
4
5
6
7
(a) |
JPMorgan Chase Bank, N.A.
1 Chase Manhattan Plaza, Floor 58 New York, NY, 10005-1401 Attention: ADR Administration Fax: +1 (212) 552-6650 |
||
(b) |
TAL Education Group
18/F, Hesheng Building 32 Zhongguancun Avenue, Haidian District Beijing 100080 Peoples Republic of China Attention: Presidents Office Fax: +86 (10) 529 2 669 |
8
9
10
TAL EDUCATION GROUP
|
||||
By: | ||||
Name: | ||||
Title | ||||
JPMORGAN CHASE BANK, N.A.
|
||||
By: | ||||
Name: | ||||
Title: Vice President | ||||
11
No. of ADSs: | ||
Number | ||
Each ADS represents | ||
[EXCHANGE] Share | ||
CUSIP: |
A-1
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-14
A-15
Re: | American Depositary Shares of TAL Education Group (the Company) |
(a) | the Registration Statement; and | ||
(b) | such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinion set forth below. |
Very truly yours,
|
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