JAPAN LAND LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: K)

Transcription

1 CIRCULAR DATED 8 JANUARY 2010 This Circular is issued by Japan Land Limited (the Company ). THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your shares in the capital of the Company, you should hand this Circular, the notice of Extraordinary General Meeting and the enclosed Proxy Form to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Circular. JAPAN LAND LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: K) CIRCULAR TO SHAREHOLDERS IN RELATION TO (1) THE PROPOSED INVESTMENT BY CONNECTEDPLANET HOLDING LIMITED ( INVESTOR ) IN JURONG DATA CENTRE DEVELOPMENT PTE. LTD. ( JDD ), A WHOLLY OWNED SUBSIDIARY OF THE COMPANY COMPRISING:- (a) (b) THE ISSUE AND ALLOTMENT OF 25,000,000 NEW FULLY PAID ORDINARY SHARES IN THE CAPITAL OF JDD, REPRESENTING IN AGGREGATE 50% OF THE ENLARGED ISSUED SHARE CAPITAL OF JDD, TO THE INVESTOR; AND THE DISPOSAL OF 17,500,000 ORDINARY SHARES IN THE CAPITAL OF JDD, REPRESENTING IN AGGREGATE 35% OF THE ENLARGED ISSUED SHARE CAPITAL OF JDD, TO THE INVESTOR FOR AN AGGREGATE CONSIDERATION OF S$46,000,000. (2) THE PROPOSED CHANGE OF AUDITORS OF THE COMPANY. IMPORTANT DATES AND TIMES Last date and time for lodgement of Proxy Form : 23 January 2010 at a.m. Date and time of Extraordinary General Meeting : 25 January 2010 at a.m. Place of Extraordinary General Meeting : Suntec Singapore International Convention & Exhibition Centre 1 Raffles Boulevard, Suntec City Meeting Room 314, Level 3 Singapore

2 TABLE OF CONTENTS DEFINITIONS... 3 LETTER TO SHAREHOLDERS INTRODUCTION THE PROPOSED INVESTMENT RATIONALE FOR THE PROPOSED INVESTMENT INFORMATION ON THE INVESTOR AND JDD FINANCIAL EFFECTS THE PROPOSED CHANGE OF AUDITORS DIRECTORS CONFIRMATIONS AUDIT COMMITTEE S STATEMENT EXTRAORDINARY GENERAL MEETING ACTION TO BE TAKEN BY SHAREHOLDERS INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS SERVICE CONTRACTS DIRECTORS RECOMMENDATION DIRECTORS RESPONSIBILITY STATEMENT DOCUMENTS AVAILABLE FOR INSPECTION NOTICE OF EXTRAORDINARY GENERAL MEETING PROXY FORM 2

3 DEFINITIONS In this Circular, the following definitions shall apply throughout unless the context otherwise requires or otherwise stated: Board : The board of Directors of the Company as at the Latest Practicable Date Business Day : A day (excluding Saturdays, Sundays and gazetted public holidays) on which commercial banks are open for business in Singapore CDP : The Central Depository (Pte) Limited Circular : This circular to Shareholders dated 8 January 2010 in respect of the Proposed Investment and the Proposed Change of Auditors Companies Act : The Companies Act, Chapter 50 of Singapore, as amended or modified from time to time Company : Japan Land Limited Conditions Precedent : The conditions precedent to the completion of the Proposed Investment Consideration : The consideration of S$46,000,000 payable by the Investor to the Company pursuant to the Proposed Disposal Directors : The directors of the Company as at the Latest Practicable Date EGM : The extraordinary general meeting of the Company to be held on 25 January 2010 at a.m., notice of which is given on page 15 of this Circular Elchemi : Elchemi Group Limited E&Y : Messrs Ernst & Young LLP, Singapore Group : The Company and its subsidiaries Internet Data Centre : The internet data centre being constructed on the Property Investment Agreement : The investment agreement dated 3 November 2009 entered into between the Company, the Investor and JDD in relation to the Proposed Investment Investor : ConnectedPlanet Holding Limited, which is a whollyowned subsidiary of Elchemi JDD : Jurong Data Centre Development Pte. Ltd., a wholly owned subsidiary of the Company 3

4 DEFINITIONS KPMG : Messrs KPMG LLP, Singapore Latest Practicable Date : 7 January 2010, being the latest practicable date prior to the printing of this Circular Listing Manual : The listing manual of the SGX ST, as may be amended or modified from time to time MWZ : M+W Singapore Pte. Ltd., formerly known as M+W Zander (S) Pte Ltd New Shares : 25,000,000 new fully paid-up ordinary shares in the capital of JDD representing 50% of the enlarged issued and paid-up capital of JDD to be issued and allotted by JDD as fully-paid to the Investor pursuant to the Proposed Subscription Sale Shares : 17,500,000 fully paid-up ordinary shares in the capital of JDD representing 35% of the enlarged issued and paid-up capital of JDD to be transferred to the Investor pursuant to the Proposed Disposal Notice of EGM : The notice of the EGM as set out on page 15 of this Circular Ordinary Resolutions : The ordinary resolutions as set out in the Notice of EGM Parties : The parties to the Investment Agreement, namely, the Company, the Investor and JDD Property : The piece of land known as Private Lot A also known as Government Survey Lot 8441A of Mukim 5 and situated in International Business Park in Singapore Proposed Change of Auditors : The proposed change of auditors of the Company from E&Y to KPMG Proposed Disposal : The proposed disposal of the Sale Shares by the Company as the vendor to the Investor as the Purchaser pursuant to the Investment Agreement Proposed Investment : Collectively, the Proposed Subscription and the Proposed Disposal Proposed Subscription : The proposed subscription of the New Shares by the Investor and the issue and allotment of the New Shares by JDD to the Investor pursuant to the Investment Agreement Proposed Transactions Collectively, the Proposed Change of Auditors and the Proposed Investment Proxy Form : The proxy form in respect of the EGM as set out in this Circular 4

5 DEFINITIONS RA : The Refinancing Agreement between the Company, Investor and MWZ dated 25 November 2009 SFA : Securities and Futures Act, Chapter 289 of Singapore SGX ST : Singapore Exchange Securities Trading Limited Shareholders : Persons (other than CDP) who are for the time being registered as holders of Shares in the Register of Members maintained by the Company and Depositors who have Shares entered against their names in the Depository Register Shares : Ordinary shares in the capital of the Company S$ or cents : Singapore dollars or cents (as the case may be) JPY : Japanese Yen % or per cent : Per centum or percentage In this Circular: (i) (ii) (iii) (iv) (v) (vi) (vii) The terms Depositor, Depository Register and Depository Agent shall have the meaning ascribed to them respectively in Section 130A of the Companies Act. The term subsidiary shall have the meaning ascribed to it in Section 5 of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. The headings in this Circular are inserted for convenience only and shall be ignored in construing this Circular. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act or any statutory modification thereof and used in this Circular shall have the same meaning assigned to it under the Act or any statutory modification thereof, as the case may be. Any reference to a time of a day in this Circular shall be a reference to Singapore time unless otherwise stated. (viii) Any discrepancies in the tables in this Circular between the listed amounts and the totals thereof are due to rounding. 5

6 LETTER TO SHAREHOLDERS JAPAN LAND LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: K) Directors: Registered Office: Tetsuo Yamashita (Chairman) 20 Raffles Place Mitsutoshi Ono (Resigned with effect from 4 December 2009) #17-00 Ocean Towers Leow Tet Sin (Managing Director) Singapore Wu Wen-Hsiu Sandra (Non-Executive Director) Guok Chin Huat Samuel (Independent and non-executive Director) Jen Shek Voon (Independent and non-executive Director) Sin Boon Ann (Resigned with effect from 18 November 2009) 8 January 2010 To: The Shareholders of Japan Land Limited Dear Sir / Madam, 1. INTRODUCTION Our Directors have convened an EGM to seek your approval for: (a) (b) The Proposed Investment; and The Proposed Change of Auditors. The purpose of this Circular is to provide Shareholders with information relating to and explaining the proposals to be tabled at the EGM and to seek Shareholders approval for such proposals at the EGM. 2. THE PROPOSED INVESTMENT 2.1 Background The Company announced on 3 November 2009 that it had entered into an investment agreement ( Investment Agreement ) with ConnectedPlanet Holding Limited ( Investor ) and Jurong Data Centre Development Pte. Ltd. ( JDD ), a wholly owned subsidiary of the Company, in relation to the subscription of new ordinary shares in the capital of JDD by the Investor and the partial disposal of the Company s shareholdings in JDD in favour of the Investor. 2.2 Principal Terms of the Investment Agreement Pursuant to the terms and conditions of the Investment Agreement, the Investor has agreed: (i) (ii) to subscribe for 25,000,000 new ordinary shares in the capital of JDD ( New Shares ) and JDD has agreed to issue and allot the New Shares to the Investor ( Proposed Subscription ); and to purchase an aggregate 17,500,000 ordinary shares in the capital of JDD ( Sale Shares ) and the Company has agreed to sell the Sale Shares in three tranches in the manner set out in Section below ( Proposed Disposal ). 6

7 LETTER TO SHAREHOLDERS Proposed Subscription As at the Latest Practicable Date, JDD has an issued and paid-up share capital of S$25,000,000 comprising 25,000,000 ordinary shares. Under the terms of the Investment Agreement, the Investor will subscribe for the New Shares, representing in aggregate 50% of the enlarged issued share capital of JDD, at the subscription price of S$1.00 per New Share for an aggregate subscription price of S$25,000,000. The subscription price of S$1.00 per New Share is the same subscription price paid by the Company when it subscribed for shares in JDD. The subscription proceeds will be used for working capital purposes Proposed Disposal Subject to the completion of the Proposed Subscription and the fulfilment of the Conditions Precedent, the Company will sell the Sale Shares, representing in aggregate 35% of the enlarged issued share capital of JDD, to the Investor at the aggregate consideration of S$46,000,000. The Proposed Disposal will be effected in three tranches as follows: Number of Sale Shares transferred to the Investor on completion Purchase consideration payable on completion Tranche 1 6,847,800 S$17,999,931 Tranche 2 6,847,800 S$17,999,931 Tranche 3 3,804,400 S$10,000,138* Total 17,500,000 S$46,000,000 * Subject to retention as set out in Section below Completion Completion of the Proposed Subscription will take place contemporaneously with the completion of tranche 1 of the Proposed Disposal on the date falling five business days after the fulfilment (or waiver, as the case may be) of the Conditions Precedent and receipt by the Investor of a written notification from the Company confirming the foregoing (or such other date as the Parties may mutually agree in writing) ( Tranche 1 Completion Date ). Completion of tranche 2 of the Proposed Disposal shall take place on the date falling 30 days from Tranche 1 Completion Date or such other date as the Parties may mutually agree in writing. Completion of tranche 3 of the Proposed Disposal shall take place on the date falling 60 days from Tranche 1 Completion Date or such other date as the Parties may mutually agree in writing ( Tranche 3 Completion Date ). The Investor will retain the consideration payable in respect of tranche 3 of the Sale Shares for the deduction of claims for construction cost overruns of the Internet Data Centre on the Property exceeding S$213 million and taxation claims for a period of up to 12 months after Tranche 3 Completion Date, subject to earlier release if certain conditions are met. Upon the contemporaneous completion of the Proposed Subscription and tranche 1 of the Proposed Disposal, the Investor will be the majority shareholder holding approximately 63.7% of total issued and paid up share capital of JDD and upon completion of tranche 3 of the Proposed Disposal, the Investor will hold 85.0% of total issued and paid up share capital of JDD. Upon the contemporaneous completion of the Proposed Subscription and tranche 1 of the Proposed Disposal, the current directors of JDD (save for Mr. Leow Tet Sin) will resign in favour of the nominees appointed by the Investor and the Investor will have the right to manage JDD and shall be responsible for the funding of the construction of the Internet Data Centre and the operational decision making. The Company will also not have any control over the declaration of dividends by JDD. 7

8 LETTER TO SHAREHOLDERS Consideration The Consideration was arrived at on a willing buyer willing seller basis and shall be paid by way of telegraphic transfer in favour of the Company or as the parties may otherwise mutually agree. Factors taken into account in arriving at the Consideration include the strategic location of the data centre in the Jurong International Business Park, the potential value of the Internet Data Centre as a going concern when it is completed and fully operational, the current untenanted status of Internet Data Centre, the status of construction of the Internet Data Centre when the Investment Agreement was entered into, the amount to be paid to MWZ as the main contractor in relation to the construction of the Internet Data Centre and the amount of investment required to bring the Internet Data Centre into operationally ready status. A valuation report, further details of which are set out in Section 4.2, assessed the market value of the Property at $416 million assuming, inter alia, the satisfactory completion of the Internet Data Centre and that the Internet Data Centre will achieve 100% occupancy by the first quarter of The net tangible asset value of JDD and the Sale Shares is approximately S$49,222,390 and S$17,227,836 respectively and the Consideration of S$46,000,000 represents a gain of S$28,772,164 on disposal. The proceeds of the Proposed Disposal will be used as follows: 1) approximately S$11 million will be used for the repayment of the JPY 700 million 5% straight bond issued to Aizawa Securities Co., Limited; 2) approximately S$23 million will be used to repay loans; and 3) the balance will be used for working capital purposes Conditions Precedent The conditions precedent to the completion of the Proposed Investment include, inter alia, the following conditions: (i) (ii) (iii) (iv) (v) (vi) Unless otherwise stated in Clause 3 of the Investment Agreement or the disclosure letter, the representations, warranties and undertakings contained in the Investment Agreement or referred in the Investment Agreement remaining true and accurate and not misleading at the date of the Investment Agreement and at the completion date of each tranche as if on such date and at all times between the date of the Investment Agreement and Tranche 3 Completion Date; the results of the Investor s due diligence investigation conducted in respect of JDD including but not limited to the assets, liabilities, operations, financial position, accounts, legal and financing structure of JDD being satisfactory to the Investor; the passing of relevant corporate resolutions by the Company to approve the Proposed Investment including but not limited to the disposal and sale of the Sale Shares, and copies thereof being furnished to the Investor; an extraordinary general meeting of the shareholders of JDD being duly convened and the approval of the shareholders of JDD at such general meeting being obtained for (i) the issue and allotment by JDD to the Investor and/or its nominees of the New Shares and (ii) the alteration of the memorandum and articles of association of the JDD in such manner as the Investor may require; JDD having good and enforceable leasehold title to the Property at the date of the Investment Agreement and at each completion date subject to encumbrances disclosed in the Investment Agreement; the clearance by the SGX ST of the circular to the shareholders of the Company in relation to the Proposed Investment; and 8

9 LETTER TO SHAREHOLDERS (vii) the approval of the Proposed Investment by the shareholders of the Company in general meeting. As at the Latest Practicable Date, the conditions precedent set out in sub-paragraphs (ii), (iii) and (vi) have been fulfilled. In the event that any of the conditions above are not fulfilled or waived (as the case may be) by the Investor on or before 31 January 2010, save as expressly provided for in the Investment Agreement, all obligations and liabilities of the parties under the Investment Agreement shall cease and determine and no party shall have any claim against the other parties under the terms of the Investment Agreement Put and Call Option Subject to successful completion of the sale and purchase of all of the Sale Shares, the Company has granted to the Investor a call option, and the Investor has granted to the Company a put option ( Option ), in respect of all the remaining shares in JDD held by the Company ( Option Shares ). Pursuant to the Option, each party shall have the right to require the other party to sell to it or purchase from it (as the case may be) the Option Shares, at a fair value determined by an accounting firm appointed by the Investor for this purpose. The Option may only be exercised once by the Investor or the Company (as the case may be) at any time during the period commencing from the second anniversary of the Tranche 3 Completion Date and expiring one year thereafter ( Exercise Period ) by serving a notice exercising the Option ( Option Notice ) on the other party. The Option Notice may only be served during the Exercise Period, failing which, the Option shall lapse and cease to have further effect. 2.3 Refinancing Agreement JDD had on 25 November 2009 entered into a Refinancing Agreement ( RA ) with the Investor and MWZ, the main contractor appointed by the Company in relation to the construction of the Internet Data Centre, for the refinancing of the payment of monies owing by JDD to MWZ ( JDD Debt ) under the construction contract between JDD (as employer) and MWZ (as contractor) ( Construction Contract ). As at the Latest Practicable Date, the aggregate amount due and owing by JDD to MWZ is approximately S$131 million. Under the terms of the RA, the Investor has represented and warranted that it has the capacity to raise an amount of money equal to the JDD Debt, plus any amounts that will become due and payable by JDD to MWZ under the Construction Contract, plus an additional amount of S$5 million (for costs associated with interim financing and contingencies) ( Investment Amount ) and that it will not use the Investment Amount for any purpose other than fulfilling its obligations in JDD under the Investment Agreement. The Investor also agreed that it shall, by the date of the EGM or 31 January 2010, whichever is earlier, fulfil its investment obligations to JDD under the Investment Agreement, including the transfer of such sums of money to JDD in order for JDD, inter alia, to place the Investment Amount in an escrow account which has been charged in favour of MWZ ( Escrow Account ). Under the terms of the RA, JDD agreed, inter alia, to execute in favour of MWZ the following: 1) a deed of assignment in relation to the building agreement between JDD and Jurong Town Corporation for the construction of the Internet Data Centre on the Property ( Deed of Assignment ); and 2) a mortgage over the Property ( Mortgage ). Jurong Town Corporation, the lessor of the Property, has given its conditional approval of the Mortgage on 4 December

10 LETTER TO SHAREHOLDERS Under the terms of the RA, MWZ agreed, inter alia, to discharge the Deed of Assignment and Mortgage, upon receiving evidence of, inter alia, the Investment Amount being deposited into the Escrow Account by JDD. MWZ has also agreed to continue to perform its obligations under the Construction Contract unless certain conditions and obligations set out in the RA have not been fulfilled or performed, as the case may be. 3. RATIONALE FOR THE PROPOSED INVESTMENT The Company announced on 25 August 2009 that it had entered into a memorandum of understanding ( MOU ) with Elchemi in respect of the investment and financing in JDD. Subsequent to the signing of the MOU, the Company has continued to discuss the completion of the project and the financing of JDD for the purpose of constructing the Internet Data Centre. The Proposed Investment is the result of the negotiations of the Company with Elchemi and incorporates the terms and conditions of the investment by the Investor and co-operation between the parties. The Board has given the Proposed Investment careful consideration and are of the view that the Proposed Investment is in the interest of the Company and its Shareholders. Upon completion of the Proposed Disposal, the Company s current main operating subsidiary will be Japan Asia Land Limited, which is engaged in project management of development projects. The Company may also engage in new businesses which will be under the direction of group management in Singapore. The Board of Directors will be considering new business and development models which is expected to generate better cash flow and profitability for the Company when these new businesses are firmly established. 4. INFORMATION ON THE INVESTOR AND JDD 4.1 Investor ConnectedPlanet Holding Limited is a wholly owned subsidiary of Elchemi Group Limited, a private global investment firm headquartered in Singapore that originates, structures and acts as lead equity investor in companies in all stages of development. Whilst open to opportunities wherever they can be found, Elchemi focuses on sectors in which it has demonstrated expertise: real estate, infocomm, engineering and green technology. Elchemi has a global strategic cooperation agreement with Prescient Systems & Technologies Pte. Ltd., which is an associate company of Singapore Technologies Engineering Ltd ( STE ) to develop mission critical data centres, thus leveraging on their complementary market presence, capabilities and resources. 4.2 JDD Jurong Data Centre Development Pte. Ltd. is a wholly owned subsidiary of the Company. The principal activities of JDD are to develop, own, build and operate the Internet Data Centre. The Internet Data Centre will hold servers, information technology and other related equipment for entities thereby providing them with access to their internet and intranet. JDD has also a collaboration with ST Electronics (Info-Software Systems) Pte. Ltd. ( STE-InfoSoft ), a subsidiary of the STE Group, to provide data centre design, build and manage related services at the data centre. STE-InfoSoft is a leading provider of information communication technologies solutions in the region. The temporary occupation permit for the Internet Data Centre is expected to be issued in mid-january 2010 and the net lettable area of the Data Centre is 215,525 square feet. JDD commissioned a valuation report by CB Richard Ellis (Pte) Ltd dated 27 August 2009 on the Property for the purpose of a mortgage. The valuation report assessed the market value of the Property at $416 million assuming, inter alia, the satisfactory completion of the Internet Data Centre and that the Internet Data Centre will achieve 100% occupancy by the first quarter of

11 LETTER TO SHAREHOLDERS 5. FINANCIAL EFFECTS 5.1 Net Tangible Assets and Earnings Per Share The financial effects of the Proposed Investment on the Company would be as follows:- (i) the effect of the Proposed Investment on the net tangible asset ( NTA ) per Share of the Company at group level for the financial period commencing from 1 April 2008 and ended 31 May 2009 assuming that the Proposed Investment had been effected at the end of that financial period is as follows:- NTA per Share (1) Per Audited Financial Statements as at 31 May 2009 Before adjusting for Proposed Investment (cents) After adjusting for Proposed Investment (cents) (2) Notes: (1) Computed based on the issued share capital of 130,121,912 Shares as at 31 May (2) Based on the audited consolidated NTA of the Japan Land Group as at 31 May 2009 of approximately S$78,616,000. (ii) the effect of the Proposed Investment on the earnings per Share of the Company at group level for the financial period commencing from 1 April 2008 and ended 31 May 2009 assuming that the Proposed Investment had been effected at the beginning of that financial year is as follows:- Earnings per Share For the financial period ended 31 May 2009 Before adjusting for Proposed Investment - Earnings per Share (cents) 0.48 After adjusting for Proposed Investment - Earnings per Share (cents) Relative Figures computed pursuant to Rule 1006 of the Listing Manual Rule 1006(a) Net Asset Value of the Sale Shares and New Shares as at 31 August 2009 Approx. S$41.8 million Net Asset Value of the Group as at 31 August 2009 (1) Approx. S$46.4 million Relative Figure Approx. 90% Rule 1006(b) Net Profit/(Loss) before tax and minority interest attributable to the Approx. S$(0.3 million) Sale Shares and New Shares (unaudited) Net Profit/(Loss) before tax and minority interest of the Group (1) Approx. S$(2.1 million) Relative Figure Approx. 14% Rule 1006(c) Aggregate value of consideration received S$46.0 million Company s market capitalization (approximate) (2) Approx. S$40.3 million Relative Figure Approx. 114% 11

12 LETTER TO SHAREHOLDERS Rule 1006(d) Not applicable to disposal of asset. Notes: (1) According to the First Quarter Financial Statement Announcement for the Quarter Ended 31 August 2009 (Unaudited) of the Group announced on 14 October (2) Based on the closing share price of S$0.31 per share of Japan Land Limited and a total number of issued ordinary shares of 130,121,912 as at 2 November The closing share price for 3 November 2009, being the market day preceding the date of the Investment Agreement, was not available as no trades were concluded on that day. As the relative figures under Rules 1006 (a) and 1006(c) exceed 20%, the Proposed Investment is classified as a major transaction as defined in Chapter 10 of the Listing Manual. Accordingly, the Proposed Investment is subject to the approval of the shareholders of the Company in general meeting. 6. THE PROPOSED CHANGE OF AUDITORS On 14 October 2009 the Company announced that the Company s existing auditors, Messrs Ernst & Young LLP ( E&Y ), who were appointed as the auditors of the Company since 2000, have given notice of their desire to resign as auditors of the Company and JDD. The Company has requested for proposals from a number of professional accounting firms and audit firms who have experience in providing auditing services to public listed companies. In line with Guideline 11.4 of the Code of Corporate Governance, the Audit Committee has reviewed the credentials of Messrs KPMG LLP and other firms who have responded to the Company s requests, and has recommended to the Board that KPMG be appointed as the new external auditors of the Company in place of E&Y for the financial year ending on 31 May 2010 and to hold office until the conclusion of the next annual general meeting of the Company. The Directors have received the recommendation of the Audit Committee who have considered various factors, including the adequacy of the resources of KPMG, their experience and audit engagements, the number and expertise of the supervisory and professional staff who will be assigned to the audit of the consolidated financial statements and KPMG s proposed audit arrangements for the Group. The Directors have accepted the recommendation of the Audit Committee and are of the opinion that KPMG will be able to meet the audit requirements of the Group. As announced by the Company on 9 December 2009, the Audit Committee noted that E&Y had intimated to the Company s management of their desire to resign after giving their verbal audit clearance on 3 September The Audit Committee noted that there did not appear to be any professional grounds for E&Y to resign. It was mutually agreed between the Company and E&Y that E&Y should submit their letter of their intention to resign after the Annual General Meeting of the Company held on 29 September 2009 to be considered at an EGM to be convened at a mutually convenient date. On 7 October 2009, the Company received a notice from E&Y, dated 2 October 2009, of its resignation as auditors of the Company. The Company had no prior knowledge of or any information as to why E&Y decided to issue their resignation as and when they did, and in accordance with the Corporate Governance Code, the Audit Committee had discussed whether there were any professional reasons why E&Y would like to resign and concluded that they were not aware of any such reasons. The Company carefully reviewed and considered internally its response to E&Y s notice before announcing that E&Y had given notice of their desire to resign as auditors of the Company and JDD on 14 October On 4 November 2009, E&Y issued a letter to KPMG confirming that they are not aware of any professional reasons why KPMG should not accept the appointment as auditors of the Company. On 11 November 2009, KPMG gave its consent to act as auditors of the Company, subject to the approval of the Shareholders of the Company. 12

13 LETTER TO SHAREHOLDERS Pursuant to Section 205(15) of the Companies Act, the resignation of E&Y as auditors of the Company will only take effect upon the appointment of another auditor at a general meeting. Therefore, the appointment of KPMG as auditors of the Company in place of E&Y will take effect upon the approval of the same by Shareholders at the EGM. 7. DIRECTORS CONFIRMATIONS 7.1 Requirements under Rule 712 of the Listing Manual The Directors, having considered various factors, including the size and complexity of the Group s operations, the adequacy of the resources and the experience of KPMG and the number and expertise of the supervisory and professional staff who will be assigned to the audit of the consolidated accounts of the Group, are of the opinion that KPMG will be able to meet the audit requirements of the Group and that Rule 712 of the Listing Manual will have been complied with upon obtaining Shareholders approval. 7.2 Requirements under Rule 1203(5) of the Listing Manual (a) The Company has received a copy of E&Y s professional clearance letter to KPMG, dated 4 November 2009, confirming that E&Y is not aware of any professional reasons why KPMG should not accept the appointment as the Company s auditors. (b) (c) The Directors further confirm that there were no disagreements with E&Y on accounting treatments within the last 12 months of the date of this Circular and there are no circumstances connected with the change of auditors that should be brought to the attention of the Shareholders of the Company. As mentioned under Section 6 of this Circular above, the reason for the change of auditors is due to the notice by E&Y of their desire to resign as auditors of the Company. 8. AUDIT COMMITTEE S STATEMENT The Audit Committee has reviewed and deliberated on the Proposed Change of Auditors and recommended the same for approval after taking into consideration the suitability of KPMG and the requirements under Rule 712 of the Listing Manual. 9. EXTRAORDINARY GENERAL MEETING The EGM, notice of which is set out on page 15 of this Circular, will be held at Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Meeting Room 314, Level 3, Singapore on 25 January 2010 at a.m. for the purpose of considering and, if thought fit, passing with or without modifications, the resolutions set out in the notice of EGM on page 15 of this Circular. 10. ACTION TO BE TAKEN BY SHAREHOLDERS 10.1 Appointment of Proxies Shareholders who are unable to attend the EGM and wish to appoint a proxy to attend and vote at the EGM on their behalf will find attached to this Circular a Proxy Form which they are requested to complete, sign and return in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the place of business of the Company at 8 Temasek Boulevard, #39-01, Suntec Tower Three, Singapore not less than 48 hours before the time fixed for the EGM. The sending of a Proxy Form by a Shareholder does not preclude him from attending and voting in person at the EGM if he finds that he is able to do so. In such event, the relevant Proxy Forms will be deemed to be revoked. 13

14 LETTER TO SHAREHOLDERS 10.2 When Depositor regarded as Shareholder In view of Section 130D of the Companies Act, a Depositor shall not be regarded as a Shareholder entitled to attend the EGM and to speak and vote thereat unless he is shown to have Shares entered against his name in the Depository Register 48 hours before the EGM. 11. INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS To the best of the Directors knowledge, none of the Directors or controlling Shareholders of the Company has any interest, direct or indirect, in the Proposed Transactions. 12. SERVICE CONTRACTS No person is proposed to be appointed as a director of the Company in connection with the Proposed Transactions. Accordingly, no service contract is proposed to be entered into between the Company and any such person. 13. DIRECTORS RECOMMENDATION The Directors are of the opinion, for the reasons set out in this Circular, that the Proposed Transactions are in the best interests of the Shareholders and the Company respectively, and accordingly recommend Shareholders to vote in favour of the ordinary resolutions relating thereto to be proposed at the EGM as set out in the Notice of EGM. 14. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been approved by the Directors. The Directors (including those who may have delegated detailed supervision of the preparation of this Circular) collectively and individually accept full responsibility for the accuracy of the information given and confirm that, having made all reasonable enquiries, to the best of their knowledge and belief, the facts stated and opinions expressed in this Circular are fair and accurate and there are no material facts the omission of which would make any statement in this Circular misleading. 15. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company during normal business hours from the date of this Circular up to and including the date of the EGM:- (a) (b) (c) (d) (e) the Investment Agreement; the Memorandum and Articles of Association of the Company; the notice of resignation as auditors of the Company dated 2 October from E&Y; the professional clearance letter dated 4 November 2009 from E&Y to KPMG; and the letter of consent to act as auditors of the Company dated 11 November 2009 from KPMG. 14

15 NOTICE OF EXTRAORDINARY GENERAL MEETING JAPAN LAND LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: K) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the shareholders of Japan Land Limited (the Company ) will be held at Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Meeting Room 314, Level 3, Singapore on 25 January 2010 at a.m., for the purpose of considering and, if thought fit, passing with or without amendment, the ordinary resolutions as set out below. All capitalised terms used in this notice which are not defined herein shall have the meanings ascribed to them in the circular dated 8 January 2010 to shareholders of the Company ( Circular ). ORDINARY RESOLUTION 1:- PROPOSED INVESTMENT That approval be and is hereby given to the Directors of the Company:- (a) (b) (c) the entry into and the execution of the investment agreement dated 3 November 2009 ( Investment Agreement ) between the Company and Jurong Data Centre Development Pte. Ltd. and ConnectedPlanet Holding Limited, be and is hereby ratified, confirmed and approved; pursuant to Chapter 10 of the Listing Manual of the Singapore Exchange Securities Trading Limited, approval be and is hereby given for the Proposed Investment (as defined in the Circular) particulars of which are set out in the Circular; and the Directors of the Company be and are hereby authorised to take such steps and exercise such discretion to complete and do all such acts and things as any Director may deem desirable, necessary, advisable or expedient to give effect to the matters contemplated in the Investment Agreement and this Ordinary Resolution. BY ORDER OF THE BOARD Huang Yen San, Petrus Company Secretary 8 January 2010 ORDINARY RESOLUTION 2:- PROPOSED CHANGE OF AUDITORS That Messrs KPMG LLP be and are hereby appointed as auditors of the Company in place of Messrs Ernst & Young LLP, and to hold office until the conclusion of the next Annual General Meeting at a fee to be agreed between the Directors and Messrs KPMG LLP. Notes:- 1. A Shareholder entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. 2. A Shareholder that is a corporation is entitled to appoint its authorised representative or proxy to vote on its behalf. 3. A proxy need not be a Shareholder. 4. The instrument appointing a proxy must be deposited at the place of business of the Company at 8 Temasek Boulevard, #39-01, Suntec Tower Three, Singapore not less than 48 hours before the time of the Extraordinary General Meeting. 15

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17 PROXY FORM JAPAN LAND LIMITED (Company Registration Number: K) (Incorporated in the Republic of Singapore) PROXY FORM EXTRAORDINARY GENERAL MEETING IMPORTANT: FOR CPF INVESTORS ONLY 1. For investors who have used their CPF monies to buy shares, this Circular is forwarded to you at the request of your CPF Approved Nominees and is sent solely for information only. 2. This Proxy Form is therefore not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to vote should contact their CPF Approved Nominees. I/We NRIC/Passport No. of being a member/members of Japan Land Limited hereby appoint:- Name Address NRIC / Passport Number Proportion of Shareholdings (%) and/or (delete as appropriate) as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Extraordinary General Meeting of the Company to be held at Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Meeting Room 314, Level 3, Singapore on 25 January 2010 at a.m. and at any adjournment thereof. (Please indicate with an X in the spaces provided whether you wish your vote(s) to be cast for or against the resolution as set out in the Notice of Extraordinary General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Extraordinary General Meeting). To be used on a show of hands To be used in the event of a poll No. Ordinary Resolutions For* Against* For** Against** 1 To approve the Proposed Investment 2 To approve the Proposed Change of Auditors * Please indicate your vote For or Against. ** If you wish to use all your votes For or Against, please indicate with an X within the box provided. Otherwise please indicate the number of votes. Dated this day of CDP Register Register of Members No. of Shares Signature(s) of Shareholder(s)/Common Seal of Corporate Shareholder IMPORTANT: PLEASE READ THE NOTES OVERLEAF BEFORE COMPLETING THE PROXY FORM

18 PROXY FORM Notes:- 1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number. If you have Shares registered in your name in the Register of Members of the Company, you should insert that number. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the Shares held by you. 2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. 3. The instrument appointing a proxy or proxies must be deposited at the Company s place of business at 8 Temasek Boulevard, #39-01, Suntec Tower Three, Singapore not less than 48 hours before the time set for the meeting. 4. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented by each proxy. If no such proportion or number is specified, the first named proxy may be treated as representing 100% of the shareholding and any second named proxy as an alternate to the first named. 5. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its officer or attorney duly authorised. 6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointer by an attorney, the power of attorney (or other authority) or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 7. A corporation, which is a member, may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act, Cap The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointer are not ascertainable from the instructions of the appointer specified on the instrument of proxy. In addition, in the case of Shares entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointer, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by The Central Depository (Pte) Limited to the Company.

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