CENTURION CORPORATION LIMITED (Company Registration No W) (Incorporated in the Republic of Singapore) ANNOUNCEMENT

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1 CENTURION CORPORATION LIMITED (Company Registration No W) (Incorporated in the Republic of Singapore) ANNOUNCEMENT PROPOSED ACQUISITION OF AN ADDITIONAL STAKE IN DORMITORY INVESTMENTS PRIVATE LIMITED 1. INTRODUCTION 1.1 Previous Announcements. The Board of Directors ( Board ) of Centurion Corporation Limited (the Company ) refers to: its announcement dated 31 January 2012, in connection with the successful tender by the Company for an 85% equity stake in Dormitory Investments Private Limited ( DIPL ); and its announcement dated 24 February 2012, in connection with the entry by Centurion Dormitories Pte. Ltd. ( CDPL ) into a sale and purchase agreement with Crest Industrial Holdings Pte. Ltd. ( CIH ), in connection with the proposed acquisition by CDPL of all 6,800,000 issued ordinary shares in DIPL held by CIH, representing approximately 85% of the equity interest in DIPL (the Crest Acquisition and the announcement, the Crest Acquisition Announcement ). 1.2 Signing of KCB SPA. The Board now wishes to announce that CDPL has today entered into a sale and purchase agreement ( KCB SPA ) with Mr Kang Choon Boon ( KCB ) to acquire 400,000 issued ordinary shares in DIPL held by KCB (the Sale Shares ), representing approximately 5% of the equity interest in DIPL, and a call option ( Call Option ) in respect of all (and not some only) of the remaining 800,000 issued ordinary shares in DIPL held by KCB ( Call Option Shares ), representing approximately 10% of the equity interest in DIPL (collectively, the KCB Acquisition and the sale and purchase agreement, the KCB SPA ). The Crest Acquisition and the KCB Acquisition are collectively referred to in this Announcement as the. 2. PRINCIPAL TERMS OF THE KCB SPA 2.1 Sale Shares. Pursuant to the KCB SPA, KCB shall sell as legal and beneficial owner and transfer to CDPL, and CDPL shall purchase from KCB, all of KCB's rights, title and interest in the Sale Shares free and clear of all encumbrances, together with all rights, dividends, entitlements and benefits as at the Sale Completion (as described below) and thereafter attaching thereto. 1

2 The Sale Completion shall occur when all of the conditions precedent in the KCB SPA are satisfied, subject to a long-stop date of 29 February 2012 ( Sale Completion and the date of the Sale Completion, the Sale Completion Date ). Please refer to paragraph 2.4 of this Announcement for further details. 2.2 Call Option. Pursuant to the KCB SPA, KCB has also granted to CDPL the Call Option which may be exercised by CDPL by serving a notice in writing to KCB at any time during the period between the date of the grant of the certificate of statutory completion ( CSC ) in respect of the dormitory at Tuas (the Tuas Asset ) issued by the Building and Construction Authority of Singapore ( BCA ) and the date falling 12 months from the Sale Completion Date. KCB has agreed that it shall, upon receiving the requisite call option notice from CDPL, sell to CDPL free from all encumbrances and with all rights attaching thereto as at the date of completion of the transfer of the Call Option Shares pursuant to the exercise of the Call Option ( Call Option Completion and the date of the Call Option Completion, the Call Option Completion Date ), all of the Call Option Shares at the Call Option Price (as defined below). The Call Option Completion shall occur on the business day falling seven business days after the receipt or deemed receipt by KCB of the requisite call option notice. 2.3 KCB Consideration. Assuming CDPL exercises the Call Option, the aggregate consideration payable for the KCB Acquisition is S$7,125,000 (the KCB Consideration ) in cash which will comprise: S$2,375,000, being the consideration payable by CDPL for the Sale Shares on the Sale Completion Date ( Sale Shares Consideration ); and S$4,750,000, being the consideration payable by CDPL to KCB for the Call Option Shares on the Call Option Completion Date ( Call Option Price ). The KCB Consideration was arrived at after taking into account, inter alia, the reserve price of S$45 million for 100% of the equity interest in DIPL set by CIH and a financial evaluation of DIPL and its subsidiaries (the DIPL Group ) based upon the prevailing conditions in the worker dormitory industry in Singapore. The Sale Shares Consideration may, in accordance with the terms of the KCB SPA, be adjusted for any difference between the net current assets and the net current liabilities of the DIPL Group as at the Sale Completion. Any adjustment to the Sale Shares Consideration will be settled in cash. The Call Option Price may be adjusted to such higher amount which will be determined by CDPL in its sole and absolute discretion, subject to a minimum of S$4,750,000. The Company will release an appropriate announcement in the event of any upward adjustment to the Call Option Price. 2.4 Conditions Precedent. The Sale Completion is subject to, inter alia,: 2

3 (iii) (iv) (v) each of KCB s warranties under the KCB SPA remaining true and not misleading in all respects at the Sale Completion, as if repeated at the Sale Completion and at all times between the date of the KCB SPA and the Sale Completion; all other material and necessary consents, approvals, actions, filings or giving of notice to any governmental body in connection with the sale of the Sale Shares, if any, being granted and not withdrawn or revoked by such government bodies and other relevant authorities having jurisdiction over the sale of the Sale Shares; the results of legal, financial and operational due diligence investigations on the DIPL Group conducted by CDPL and its advisors being satisfactory to CDPL; the simultaneous completion of the Crest Acquisition; and all outstanding loans (including any accrued interest therein) due from DIPL to KCB having been fully repaid by DIPL. 2.5 Undertakings. CDPL shall, with effect from the Sale Completion Date, bear all costs incurred by DIPL in connection with obtaining the CSC from the BCA and the rectification of all defects in the Tuas Asset (the Property Costs ) up to a maximum of S$700,000 (the Threshold Amount ). If the Property Costs exceed the Threshold Amount, KCB has undertaken to CDPL that KCB shall forthwith reimburse DIPL for any such excess Property Costs incurred by DIPL. 2.6 Completion of the. The Sale Completion is subject, inter alia, to the simultaneous completion of the Crest Acquisition. Upon the Crest Completion, the Company will hold an 85% equity interest in DIPL through CDPL. Accordingly, DIPL will, on the Crest Completion, be an indirect subsidiary of the Company. Assuming that the Sale Completion occurs as well, the Company will hold an additional 5% equity interest in DIPL through CDPL. The remaining 10% equity interest in DIPL will be held by KCB, until such time as CDPL elects to exercise the Call Option. Upon the Call Option Completion, the Company will own the entire equity interest in DIPL through CDPL. 3. RATIONALE FOR THE DIPL ACQUISITIONS The Company s rationale for seeking to acquire the DIPL Group has previously been disclosed in the Crest Acquisition Announcement. Please refer to the Crest Acquisition Announcement for the Company s rationale for the Crest Acquisition, which is also applicable to the KCB Acquisition. 3

4 4. FUNDING The Company intends to fund the KCB Consideration with a combination of bank financing and the internal resources of the Company and its subsidiaries ( Group ). 5. INFORMATION ON THE DIPL GROUP 5.1 DIPL. Information on the DIPL Group has previously been disclosed in the Crest Acquisition Announcement. Please refer to the Crest Acquisition Announcement for information on the DIPL Group. 5.2 Asset Value. As at 31 December 2011, the book value / net tangible asset value of the DIPL Acquisitions was approximately S$33.8 million. 5.3 Net Profits. The net profits before tax, minority interests and exceptional items attributable to the for the year ended 31 December 2011 is approximately S$ 10.3 million FINANCIAL EFFECTS OF THE DIPL ACQUISITIONS 6.1 Assumptions. The pro forma financial effects of the on selected financial measures and ratios of the Group are set out on an aggregated basis below, and have been computed using the announced unaudited consolidated financial information of the Group for the financial year ended 31 December 2011 ( FY 2011 ). For the purpose of illustrating the financial effects of the, the financial effects are based on, inter alia, the assumption that the pro forma financial effects of the DIPL Acquisitions on the earnings per share ( EPS ), the net tangible assets ( NTA ) per share, and the share capital of the Company are prepared purely for illustration only and do not reflect the actual future financial situation of the Group after the completion of the. In addition, upon completion of the, the Company will carry out, in accordance with FRS 103, Business Combinations, a purchase price allocation ( PPA ) exercise to assess the fair values of the net identifiable assets of the DIPL Group. The excess of the cost of acquisition over the fair values of the net identifiable assets will be recorded as goodwill in the balance sheet and subject to an annual impairment test. Accordingly, for the purpose of illustrating the financial effects of the, the Company has assumed, on a provisional basis, that the fair values of the net identifiable assets of the DIPL Group with respect to the are equal to the expected carrying amounts of the DIPL Group with respect to the. As a result, the provisional goodwill on acquisition would approximately amount to S$24.1 million. On the finalization of the PPA, the actual amount of goodwill (if any) arising from the DIPL Acquisitions could be materially different because the fair values of the net identifiable assets of 1 The net profits reflected in paragraph 5.3 are derived solely from the Tuas Asset. 4

5 the DIPL Group may differ from the varying values of the net identifiable assets of the DIPL Group. As the illustration of the financial effects of the is done on a provisional basis, the impact of potential impairment of goodwill and amortization of other intangible assets identified as part of the PPA has not been taken into account. 6.2 NTA. Assuming that the had been completed on 31 December 2011, the effect on the NTA per share of the Group as at 31 December 2011 is as follows: Before the After the NTA (S$ 000) 100, ,974 Number of shares 756,060, ,060,841 NTA per share (S$ cents) Earnings. Purely for illustrative purposes only and assuming that the had been completed on 1 January 2011, the pro forma financial effects on the consolidated earnings of the Group for FY 2011 is as follows: Before the After the Profit attributable to the Shareholders 6,917 14,923 (2)(4) (S$ 000) (1) Weighted average number of shares 542,022, ,022,099 EPS (S$ cents) (3)(4) Notes: (1) The net profits of the Group have been adjusted for the goodwill written off in relation to the excess of the cost of the reverse acquisition over the net fair values of the Group amounting to S$12.97 million as well as a one-off reverse acquisition expense of S$0.1 million. Accordingly, the net profits for the Group for FY 2011 (on an after-tax basis) used in the above computation are S$6.92 million. (2) The profits attributable to the are derived solely from the Tuas Asset. (3) The earnings attributable to the are derived solely from the Tuas Asset. (4) As disclosed in paragraph 6.1 above, the illustration of the financial effects of the is done on a provisional basis. Accordingly, the impact of potential impairment of goodwill and amortization of other intangible assets identified as part of the PPA has not been taken into account. Accordingly, Shareholders should note that the profits derived from the may be materially reduced by the impairment of the goodwill and amortization of other intangible assets being determined in future financial periods. 5

6 6.4 Share Capital. The will not have any impact on the issued share capital of the Company. 7. CHAPTER 10 THRESHOLDS 7.1 Acquisition. The relative figures for the computed on the bases set out in Rule 1006 are as follows: Rule 1006 Bases Relative Figures (%) (b) Net profits (1) attributable to the compared with the Group s net profits 122% (c) The aggregate consideration (2) of the compared with the market capitalisation of the Company (3) 32% Notes: (1) Net profits is defined as profit before income tax, minority interest and exceptional items. The figures are based on the Group s net profits as derived from the announced unaudited consolidated financial statements of the Group for FY The net profits of the Group have been adjusted for the goodwill written off in relation to the excess of the cost of the reverse acquisition over the net fair values of the Group amounting to S$12.97 million as well as a one-off reverse acquisition expense of S$0.1 million. Accordingly, the net profits for the Group for FY 2011 used in the above computation are S$8.4 million. (2) The aggregate consideration for the is S$47.5 million. (3) The market capitalisation of the Company is based upon a total number of 756,060,841 shares in issue (excluding treasury shares) as at 27 February 2012 at the volume-weighted average price of S$ per share as transacted on 27 February As the relative figures under Rules 1006 (b) and 1006(c) exceed 20 per cent., the DIPL Acquisitions constitute a major transaction as defined in Chapter 10 of the Listing Manual. 7.2 No Shareholders Approval Required. Notwithstanding that the relative figures under Rules 1006 (b) and 1006 (c) exceed 20 per cent., neither of the is subject to shareholders approval, on the basis that: (iii) the are each within the ordinary course of business of the Group; the will result in the expansion of the Company s existing business of dormitory real estate ownership and management ( Dormitory Business ) which is the principal business of the Group; and the will not change the risk profile of the Company in the sense that: 6

7 (a) (b) (c) (d) the will not increase the scale of the Company s existing operations significantly; there will be no change in control of the Company as a result of the DIPL Acquisitions; the will not have a significant adverse impact on the Company s earnings, working capital and gearing; and the Tuas Asset operated by the DIPL Group is located in Singapore, which is the Company s home country and principal place of business. In addition, the DIPL Acquisitions are in line with the Company s existing Dormitory Business which is the principal business of the Group. Accordingly, the will not result in an expansion of the Company s business to a new geographical market and/or a new business sector. 8. FURTHER INFORMATION 8.1 Directors Service Contracts. No person is proposed to be appointed as a director of the Company in connection with the. Accordingly no service contract is proposed to be entered into between the Company and any such person. 8.2 Interests of Directors and Substantial Shareholders. None of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the. 8.3 Documents for Inspection. A copy of the KCB SPA is available for inspection during normal business hours at the registered office of the Company at 45 Ubi Road 1, Summit Building, Singapore for a period of three months commencing from the date of this announcement. BY ORDER OF THE BOARD Kong Chee Min Chief Executive Officer 28 February 2012 CIMB Bank Berhad, Singapore Branch is the financial adviser to the Company in relation to the Westlite Acquisition and the JVCo Acquisition (the "Financial Adviser"). The Financial Adviser has not independently verified, and assumes no responsibility for, the contents of this announcement. 7

CENTURION CORPORATION LIMITED (Company Registration No W) (Incorporated in the Republic of Singapore) ANNOUNCEMENT

CENTURION CORPORATION LIMITED (Company Registration No. 198401088W) (Incorporated in the Republic of Singapore) ANNOUNCEMENT PROPOSED ACQUISITION OF AN 85% STAKE IN DORMITORY INVESTMENTS PRIVATE LIMITED