PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF MAX STRATEGIC INVESTMENTS PTE LTD FOR AN AGGREGATE CONSIDERATION OF S$70 MILLION

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1 AUSSINO GROUP LTD (Company Registration No.: H) (I) (II) PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF MAX STRATEGIC INVESTMENTS PTE LTD FOR AN AGGREGATE CONSIDERATION OF S$70 MILLION PROPOSED DISPOSAL OF THE COMPANY S EXISTING BUSINESSES TO SAMCORP CAPITAL CORPORATION 1 INTRODUCTION The Board of Directors (the Board ) of Aussino Group Ltd (the "Company" and together with its subsidiaries, the Group ) refers to the announcement dated 18 June 2012 (the MOU Announcement ) wherein the Company announced that it had entered into a memorandum of understanding dated 15 June 2012 with the Max Myanmar Group of Companies ( MMG ) in connection with the proposed acquisition (the Proposed Acquisition ) by the Company of the entire issued capital of Max Strategic Investments Pte Ltd (the Target ). Further to the MOU Announcement, the Board is pleased to announce that it has on 24 July 2012 entered into a conditional sale and purchase agreement (the "S&P Agreement") with Max Singapore Holdings Pte Ltd (the "Vendor"), the sole shareholder of the Target, for the purchase by the Company from the Vendor of the entire issued and paid-up share capital of the Target for an aggregate consideration of S$70,000,000 (the "Purchase Consideration"). The Purchase Consideration is to be satisfied in full by the allotment and issue to the Vendor (or as it may direct) of an aggregate of 218,750,000 new ordinary shares in the capital of the Company ("Consideration Shares") (which, for the avoidance of doubt, will be issued after the completion of the Proposed Share Consolidation (defined in paragraph below)) at the issue price of S$0.32 for each Consideration Share ("Issue Price"). The Proposed Acquisition constitutes as a Very Substantial Acquisition or Reverse Takeover transaction pursuant to Chapter 10 of the Listing Manual and will be subject to, inter alia, the approval of the shareholders of the Company (the Shareholders ) at an extraordinary general meeting to be convened. Further details of the Proposed Acquisition are set out below in Paragraph 2 of this Announcement. The Board also wishes to announce that it has on 24 July 2012 entered into a conditional sale and purchase agreement (the Disposal Agreement ) with Samcorp Capital Corporation (the Purchasing Shareholder ), a controlling shareholder of the Company, for the sale (the Proposed Disposal ) of the entire issued and paid-up capital of Amici International Trade Inc ( Amici ) (proposed to be re-named Aussino Inc following the completion of the Proposed Acquisition), a wholly-owned subsidiary of the Company, to the Purchasing Shareholder. Amici shall on completion of the Proposed Disposal be the beneficial owner of all the shares of all the existing subsidiaries currently held by the Company (the Sale Companies ). The consideration of S$9,400,000 (the Disposal Consideration ), has been arrived at on a willing buyer and willing seller basis having taken into account the unaudited net asset value of the Group as at 30 June The Purchasing Shareholder is wholly-owned by Mr Anthony Lim, the Chairman of the Group. The Proposed Disposal constitutes an interested person transaction which will be subject to, inter alia, the approval of the independent Shareholders at an extraordinary general meeting to be convened. Further details of the Proposed Disposal are set out below in Paragraph 3 of this Announcement. 2 OVERVIEW OF THE PROPOSED ACQUISITION For the purpose of this Announcement, the Proposed Acquisition (including the issue of the Consideration Shares) together with certain related transactions proposed in conjunction with the Proposed Acquisition further described below, including, the Proposed Share 1

2 Consolidation, the proposed change of name of the Company, the Whitewash Resolution and the proposed appointment of new directors of the Company, shall be collectively referred to as the Proposed RTO Transactions. Further information on the Proposed RTO Transactions will be provided in a circular to the Shareholders to be issued by the Company in due course (the "Circular"). 2.1 Information on the Target, the Vendor and Key Management of the Target Information on the Target The Target is an investment holding company incorporated in Singapore on 15 June 2012 for the purpose of the Proposed Acquisition. The Target has on 24 July 2012, entered into an asset purchase agreement to acquire from Max Myanmar Co., Ltd, the rights, title, interests and benefits in and to all the assets and resources employed by its energy business unit in the operation of petrol kiosks in Myanmar (the Max Energy Business Unit ). The assets and resources which will be sold or transferred from the Max Energy Business Unit to the Target include leases or occupational rights to land which are used for operating petrol kiosks, permits for the operation of petrol kiosks, the petrol kiosks, office buildings, barges, tug boats, bowsers, motor vehicles as well as electrical installation and equipment, office equipment and tools and other balance sheet items including cash, inventory and trade receivables. The Max Energy Business Unit was established to meet the petroleum demand of large multinationals and smaller commercial operators in Myanmar. The Max Energy Business Unit was initially founded as an oil trading business in early 2009 and has since expanded into the operation of petrol kiosks across Myanmar. Currently, the Max Energy Business Unit operates 21 petrol kiosks across various cities in Myanmar including, Mandalay, Naypyitaw, Bago, Ayeyarwady and Yangon, and employs more than 500 employees. The Max Energy Business Unit s main products include motor spirit, 92 and 95 RON octane, high speed and premium diesels and gasohol which are sourced from local suppliers in Myanmar as well as overseas suppliers which are mainly based in Singapore. The petroleum products are transported via vessels (for overseas supplies), tug boats and barges (for local supplies) for storage in facilities located in Myanmar. From the storage facilities, the petroleum products are then transported via bowsers to the corporate clients and to petrol kiosks for sale to retail customers. Future plans for the business include increasing the number of petrol kiosks in Myanmar. Any net proceeds raised from the Placement (as defined in paragraph 4 of this Announcement) will be used for organic growth via the expansion of the number of petrol kiosks in Myanmar and for general working capital purposes Information on the Vendor The Vendor is a private investment holding company incorporated in Singapore for the purpose of the Proposed Acquisition. As at the date of this Announcement, more than 90% of the share capital of the Vendor is owned by U Zaw Zaw. U Zaw Zaw is the founder of MMG and has been the chairman since MMG is one of the largest diversified business groups in Myanmar and has a strong track record in several business areas including trading, manufacturing, construction, hotel & tourism, services, banking and mining. U Zaw Zaw is also currently the president of Ayeyarwady Bank.. U Zaw Zaw graduated from Yangon University with a Bachelor of Science in Mathematics. 2

3 2.1.3 Key Management of the Target i) Dennis Lim Ban Lai ( Dennis Lim ) - Proposed chief executive officer and executive director of the Company pursuant to the completion of the Proposed Acquisition Dennis Lim is the managing director of Maxiasia Enterprise Pte Ltd., an affilate of MMG. As a senior executive of MMG, he is responsible for overseeing the trading, manufacturing and hotel divisions of MMG. Before being appointed as the managing director, Dennis Lim held appointments as the deputy general manager of the marketing department of Komatsu Asia Pacific Pte Ltd and the country manager for the Myanmar operations of Myanmar JPN Equipment Trading Co., Ltd. Dennis Lim obtained a Graduate Diploma in Sales & Marketing from the Marketing Institute of Singapore and is currently pursuing a Bachelor of Communications and Media Management at the University of South Australia. (ii) David Wang Soe Lin ( David Wang ) - Proposed executive director of the Company pursuant to the completion of the Proposed Acquisition David Wang is an executive director for Maxiasia Enterprise Pte Ltd. He is also a senior executive of MMG who is responsible for overseeing Ayeyarwady Bank of MMG. David Wang obtained a Graduate Diploma in Building and Estate Management from Ngee Ann Polytechnic and went on to graduate from the London School of Economics with a Bachelor of Science in Business (Honours) Pro-Forma Financial Highlights of the Target A summary of the pro-forma financial information of the Target is set out in Appendix A to this Announcement. 2.2 Rationale for the Proposed Acquisition The Company was placed on the Watch-List of the Singapore Exchange Securities Trading Limited (the SGX-ST ) pursuant to Rule 1311 of the Listing Manual with effect from 6 September 2011 after recording pre-tax losses for the three (3) most recently completed consecutive financial years. The Company would be required to meet the requirements of Rule 1314 of the Listing Manual within 24 months from 6 September 2011, failing which the SGX-ST may either delist the Company or suspend trading of the shares of the Company with a view to delisting the Company. Subsequent to the placing of the Company on the SGX-ST Watch-List, it has continued to operate under challenging retail market conditions. The Board is of the view that the Proposed Acquisition presents an opportunity for the Company to acquire a new operating business with significant growth potential in an emerging market that has recently introduced political and business reforms. These developments have attracted considerable investment interest from leading economies such as the United States and Australia as well as neighbouring Asian economies, including Singapore. The Board believes that the Proposed Acquisition is an investment opportunity that would be in the interests of the Company for the following key reasons: (i) Growth in Myanmar s economy Myanmar, the second largest country in Southeast Asia, has a population of 60.6 million, with eight major ethnic groups comprising over 100 ethnic nationalities. Bordering five nations; China, India, Bangladesh, Laos and Thailand, the country is 3

4 well-endowed with rich natural resources such as arable land, forestry, minerals, natural gas, freshwater, marine resources and is a leading source of gems and jade 1. In an effort to kick-start and modernise its economy, the Government of Myanmar has announced plans to liberalise trade and foreign direct investment regulations and enhance the business and investment framework. As part of a range of economic reforms, the Government worked with the International Monetary Fund ( IMF ) to unify the exchange rates and float the kyat in April 2012, and major state assets have been privatised and commercial monopolies divested and opened up for competition. Further, controls on banking operations have been relaxed, opening the way for Myanmar s minimal private sector lending to increase 2. With these initiatives, countries within the European Union and nations such as the United States and Australia are now focused on the long-term potential of the market and attracted by a youthful workforce and vast untapped natural resources. The IMF has projected annual growth rates in the real gross domestic product of Myanmar of approximately 6.0% in 2012 and 5.9% in The economic growth of Myanmar is expected to stimulate the country s fuel consumption and the Company will be able to ride on this favourable economic prospect through MSI following the Proposed Acquisition. (ii) Rising Energy Consumption in Myanmar As a result of the liberalization in the economic and political systems of Myanmar, new investments in all sectors of the economy and construction and infrastructure developments are growing at a faster pace. In conjunction with the economic growth, the energy demand in Myanmar has been increasing. The total energy consumption in Myanmar increased by approximately 22.7% from 21,916 kilo tonnes of oil equivalent ( KTOE ) during 2000 to 2001 to 26,882 KTOE during 2009 to Total petroleum consumption also increased by approximately 20.7% from 33,651 barrels per day in 2001 to 40,617 barrels per day in The growth in energy consumption in Myanmar bodes well for the petroleum business of the Target and therefore, the Proposed Acquisition would likely be advantageous for the growth prospects of the Company. (iii) The Target has an experienced management team with in-depth knowledge of Myanmar and the local energy sector In view of the Target s local market knowledge and substantial presence in the Myanmar oil trading and petrol kiosk management sector, the Board believes that the Proposed Acquisition allows the Company to invest in a growing business with a strong track record and wide business network that is led by an experienced management team in Myanmar. (iv) Enhanced market profile of the Company The Proposed Acquisition will provide the Company with a strong presence in Myanmar, a country acknowledged by the IMF as possibly the next Economic Frontier in Asia. The Proposed Acquisition would have the potential to significantly increase the market capitalisation of the Company and potentially widen the investor base for the Company, thereby enabling the Company to attract more extensive analyst coverage, leading to an overall increase in investor interest and trading. 1 Asian Development Bank, April Australian Government, Department of Foreign Affairs and Trade, July The April 2012 edition of the World Economic Outlook issued by IMF 4 Myanmar Ministry of Energy on 5 U.S. Energy Information Administration on 4

5 Based on the foregoing, the Board is of the view that the Proposed Acquisition and the resultant change of business will likely enhance shareholder value for the Company. 2.3 Principal Terms of the Proposed Acquisition Purchase Consideration The Purchase Consideration of S$70 million was arrived at after negotiations, on a willing buyer and willing seller basis, taking into account, inter alia, the unaudited pro-forma net assets value ("NAV") of the Target of approximately S$73.5 million as at 31 March The Company will commission an independent valuation of all the assets and resources employed by the Max Energy Business Unit which are to be acquired by the Target from Max Myanmar Co., Ltd as part of its due diligence for the Proposed Acquisition. The Purchase Consideration is to be satisfied by the issue of the Consideration Shares to the Vendor (or as it may direct) at the Issue Price. The Consideration Shares, when allotted and issued, shall rank pari passu in all respects with the then existing Consolidated Shares (as defined in paragraph of this Announcement) Conditions Precedent in relation to the Proposed Acquisition Completion of the Proposed Acquisition is conditional upon, inter alia, the completion of the Proposed Disposal and the Placement at a price of S$0.32 or more per Consolidated Share occurring simultaneously with the completion of the Proposed Acquisition, as well as other conditions precedent specified in Appendix B to this Announcement having been fulfilled or waived in accordance with the terms of the S&P Agreement within 12 months from the date of the S&P Agreement, or such later date as may be agreed in writing between the Company and the Vendor Proposed Share Consolidation Under Rule 1015(3)(d) of the Listing Manual, the issue price of each Share after adjusting for any share consolidation is required to be at least S$0.20. Accordingly, in conjunction with the Proposed Acquisition, the Company proposes to undertake a share consolidation (the Proposed Share Consolidation ) of every four (4) existing shares into one (1) consolidated share (the Consolidated Share ) at a time and date to be determined by the Board for the purposes of the Proposed Share Consolidation, to increase the Issue Price from S$0.08 to S$0.32 for each Consideration Share in compliance with Rule 1015(3)(d) of the Listing Manual. As at the date of this Announcement, the issued share capital of the Company is S$19,557,172 divided into 303,132,000 Shares. Immediately following the completion of the Proposed Acquisition and the Proposed Share Consolidation, the Company will have an issued share capital of S$94,357,172 divided into 312,211,571 Consolidated Shares Proposed Change of Name It is proposed that the Company changes its name to such name as the Vendor may decide, following completion of the Proposed Acquisition to reflect the new ownership structure and business of the Company Additional Issuance of Shares for Professionals Fees As part payment for professional fees in respect of the financial advisory services to be rendered to the Company in connection with the Proposed Acquisition and the Proposed Disposal, the Company has agreed to allot and issue 4,375,000 new Consolidated Shares (the PPCF Shares ) at the Issue Price to PrimePartners Corporate Finance Pte. Ltd. ( PPCF ) upon completion of the Proposed Acquisition. 5

6 The Company will also, on completion of the Proposed Acquisition, allot and issue an aggregate of 4,375,000 new Consolidated Shares (the Referral Agent s Shares ) at the Issue Price to Mileage Communications (China) Pte Ltd (the Referral Agent ), in relation to the Referral Agent introducing the relevant parties and facilitating the Proposed Acquisition Convertible Loan In addition, the Vendor will grant an interest-free convertible loan in the principal amount of S$2,000,000 (the Convertible Loan ) to the Company. The Company will be utilising the Convertible Loan to fund the expenses (including professional fees) to be incurred by the Company in relation to the Proposed Acquisition and other related transactions, in accordance with the terms of the S&P Agreement. Upon completion of the Proposed Acquisition, the Company will repay the Convertible Loan by the allotment and issue of 8,928,571 new Consolidated Shares (the Conversion Shares ) to the Vendor (or as it may direct) at the price of S$0.224 per Conversion Share, equivalent to a 30% discount to the Issue Price in full satisfaction of the Convertible Loan. The Company intends to seek Shareholders approval for the proposed allotment and issue of the PPCF Shares, the Referral Agent s Shares and the Conversion Shares at the extraordinary general meeting to be convened in connection with the Proposed Acquisition and Proposed Disposal Waiver from Mandatory General Offer On completion of the Proposed Acquisition, the Vendor and/or its nominees will have interests in the Company of more than 30% of the enlarged voting share capital of the Company. Pursuant to Rule 14 of The Singapore Code on Take-overs and Mergers (the Code ), the Vendor and parties acting in concert with it would be required to make a general offer for the remaining Shares not owned or controlled by the Vendor and parties acting in concert with it at the highest price paid or agreed to be paid by any of them for the Shares in the preceding six (6) months. It is a condition precedent to the Proposed Acquisition that the Securities Industry Council ( SIC ) grants the Vendor and its concert parties, and does not revoke or repeal such grant, a waiver of their obligation to make a general offer under Rule 14 of the Code for all the Shares not owned or controlled by them ( Whitewash Waiver ) and that independent Shareholders approve at a general meeting of the Company a whitewash resolution for the waiver of their right to receive such a mandatory general offer from the Vendor and its concert parties ( Whitewash Resolution ) Completion Subject to the conditions precedent of the Proposed Acquisition being fulfilled or waived, the Proposed Acquisition will be completed on the date falling not more than seven (7) days after the fulfilment of the conditions precedent set out in the S&P Agreement (the Completion Date ), unless they are waived by the Company or the Vendor, and on the same date as the completion of the Proposed Disposal Moratorium Undertakings The Vendor and U Zaw Zaw, as the controlling shareholder of the Vendor, have undertaken, inter alia, to provide such moratorium undertakings (including, inter alia, not to dispose of any of the Consideration Shares and the Conversion Shares issued to the Vendor and the shares held by U Zaw Zaw in the Vendor, for the same moratorium period), and to procure their nominees to provide such moratorium undertakings, as may be required under the relevant provisions of the Listing Manual and any such additional requirements as may be deemed necessary and imposed by PPCF, acting as the financial advisor to the Company in relation to the Proposed Acquisition. 6

7 Appointment of nominees of the Vendor as Directors on Completion Pursuant to the terms of the S&P Agreement, the Company has agreed to cause the resignation of all the existing directors of the Company and the valid appointment of Dennis Lim as the chief executive officer and executive director, David Wang as an executive director, as well as three (3) additional independent directors with effect from the date of completion of the Proposed Acquisition. The details of such appointments and service contracts (if any) will be set out in the Circular to be despatched to the Shareholders in due course. 2.4 Relative figures under Rule 1006 of the Listing Manual Based on the unaudited consolidated financial statements of the Group for the nine months ended 31 March 2012, the relative figures of the Proposed Acquisition computed on the bases set out in Rule 1006 of the Listing Manual are as follows:- (a) Net asset value of the Target as compared with the Group s net asset value Not applicable to an acquisition of assets (b) Net profits attributable to the Target for the 9 months ended 31 March 2012 as compared with the Group s net profits for the 9 months ended 31 March 2012 Not meaningful (1) (c) (d) Aggregate value of the consideration for the Proposed Acquisition as compared with the Company s market capitalisation as at 23 July 2012, being the market day immediately preceding the date of the S&P Agreement The number of Consideration Shares to be issued by the Company as consideration for the Proposed Acquisition, compared with the number of equity securities of the Company previously in issue 168.7% (2) 288.7% (2) Notes: (1) Not meaningful as, based on the unaudited consolidated financial statements of the Group, the Group was in a net loss position for the 9 months ended 31 March (2) Based on (i) the Purchase Consideration of S$70 million or 218,750,000 Consideration Shares and (ii) the market capitalisation of approximately S$41.5 million and consolidated issued share capital of 75,783,000 Consolidated Shares of the Company as at 23 July In addition, as the Vendor and/or its nominees will hold approximately 70.1% of the enlarged total number of issued Shares of the Company immediately upon the issuance of the Consideration Shares, a change in control of the Company will arise as a result. As the relative figures under Rule 1006 (c) and (d) of the Listing Manual exceed 100%, and given that completion of the Proposed Acquisition will result in a change in control of the Company, the Proposed Acquisition constitutes a "Very Substantial Acquisition" or "Reverse Takeover Transaction" as defined in Chapter 10 of the Listing Manual. Accordingly, the Proposed Acquisition and the proposed issue of the Consideration Shares are subject to the approval of Shareholders and the issue of a listing and quotation notice by the SGX-ST pursuant to the Listing Manual. 7

8 3 OVERVIEW OF THE PROPOSED DISPOSAL As stated in paragraph 1 above, the Company has entered into the Disposal Agreement with the Purchasing Shareholder for the Proposed Disposal of the entire issued and paid-up share capital of Amici. Amici shall, on completion of the Proposed Disposal, be the beneficial owner of all the shares of the Sale Companies currently held by the Company. The Sale Companies are as follows:- 1) Aussino Home Fashions Pte Ltd; 2) Pte Ltd; 3) Sino London Pte. Ltd.; 4) Aussino Fashion Textiles (Shanghai) Co., Ltd; 5) Aussino Home Fashions (Shanghai) Co., Ltd; 6) Sino Fashion (Shanghai) Co., Ltd; 7) Doppio Luxury Brands (China) Corporation; 8) Aussino International Corporation Pty Ltd; 9) Aussino Australia Pty Ltd; 10) Doppio Fashion Group Pty Ltd; 11) Galleria Fashions International Pty Ltd; 12) Aussino Malaysia Sdn. Bhd.; 13) Aussino (U.S.A.) Inc.; 14) Retro (U.S.A.), Inc.; 15) Suhan International Trade Co., Ltd; 16) Aussino Canada Inc.; 17) Aussino (Europe) Limited; 18) Sino Fashions (London) Limited; 19) HA Home Fashions Inc.; 20) Aussino Fashions Group Limited; and 21) Aussino Korea Inc. The Sale Companies and their respective subsidiaries shall be collectively referred to as the Sale Group Companies. The current principal activities of the Group comprise designing, manufacturing, wholesaling and retailing of home fashion textiles (the Existing Business ). 3.1 Rationale for the Proposed Disposal As stated in paragraph 2.2 above, the Company was placed on the Watch-List of the SGX-ST after recording pre-tax losses for the three (3) most recently completed consecutive financial years. In addition, the Group had reported a loss of S$4.4 million for the most recent nine (9) months ended 31 March Going forward, the Board expects the home fashion textiles industry to remain challenging, characterized by slow recovery and an uncertain financial and economic environment. In order for the Company to be removed from the Watch-List, the Company would be required to meet the requirements of Rule 1314 of the Listing Manual within 24 months from 6 September 2011, failing which the SGX-ST would delist the Company or suspend trading in the Company s shares with a view to delisting the Company. In view of the above, the Company proposes to divest all of its interests in the Sale Group Companies comprising the designing, manufacturing, wholesaling and retailing of home fashion textiles such that the Company s core business will focus on the operation of petrol kiosks business in Myanmar upon the completion of the Proposed Disposal. 8

9 3.2 Principal Terms of the Proposed Disposal Disposal Consideration The Disposal Consideration was arrived at after negotiations, on a willing buyer and willing seller basis, taking into account, inter alia, the unaudited NAV of the Group as at 30 June The Disposal Consideration, together with the net proceeds from the Placement, will be used for the Target s organic growth via the expansion of the number of petrol kiosks in Myanmar and for general working capital purposes. The Purchasing Shareholder intends to satisfy the Disposal Consideration by placing out up to 30,750,000 Consolidated Shares, subject to a minimum of 22,500,000 Consolidated Shares (the Placement Shares ) at the minimum price of S$0.32 per Placement Share pursuant to the Placement (as defined in paragraph 4 of this Announcement), amounting to an expected aggregate gross proceeds of between S$7.20 million to S$9.84 million. As at the date of this Announcement, the Purchasing Shareholder holds a direct stake of 150,992,900 Shares or 37,748,225 Consolidated Shares in the Company. The loss on disposal in respect of the Proposed Disposal is approximately S$5.61 million based on the book value of the investments in Sale Companies of approximately S$15.0 million as at 30 June Conditions Precedent in relation to the Proposed Disposal Completion of the Proposed Disposal is conditional upon, inter alia, the completion of the Proposed Acquisition and the Placement at a price of S$0.32 or more per Consolidated Share occurring simultaneously with the completion of the Proposed Disposal, as well as the other conditions precedent specified in Appendix C to this Announcement having been fulfilled or waived in accordance with the terms of the Disposal Agreement within 12 months from the date of the S&P Agreement, or such later date as may be agreed in writing between the Company and the Purchasing Shareholder Completion Subject to the conditions precedent of the Proposed Disposal being fulfilled or waived, it is the intention of the Company and the Purchasing Shareholder that the Proposed Disposal is to be completed on the Completion Date, being no later than seven (7) days following the fulfillment of the conditions precedent set out in the Disposal Agreement, unless they are waived by the Company or the Vendor, and on the same date as the completion of the Proposed Acquisition. 3.3 Relative figures under Clause 1006 of the Listing Manual Based on the unaudited consolidated financial statements of the Group for the nine months ended 31 March 2012, the relative figures of the Proposed Disposal computed on the bases set out in Rule 1006 (a) to (d) of the Listing Manual are as follows:- (a) Net asset value of the Sale Group Companies as at 31 March 2012 as compared with the Group s net asset value as at 31 March 2012 (b) Net profits attributable to the Sale Group Companies for the 9 months ended 31 March 2012 as compared with the Group s net profit for the 9 months ended 31 March % Not meaningful (1) (c) Aggregate value of the consideration for the Proposed Disposal as compared with the Company s market capitalisation as at 23 July 2012, being the market day immediately preceding the date of the Disposal Agreement 22.7% (2) 9

10 (d) The number of consideration shares to be issued by the Company as consideration for the acquisition, compared with the number of equity securities of the Company previously in issue Not applicable to disposal of assets Note: (1) Not meaningful as, based on the unaudited consolidated financial statements of the Group, the Group was in a net loss position for the 9 months ended 31 March (2) Based on (i) the Disposal Consideration of S$9.4 million and (ii) the market capitalisation of approximately S$41.5 million of the Company as at 23 July As the relative figures under Manual 1006(a) and (c) of the Listing Manual amount to or exceed 20%, the Proposed Disposal constitutes a Major Transaction as defined in Chapter 10 of the Listing Manual. Accordingly, the Proposed Disposal is subject to the approval of Shareholders pursuant to the Listing Manual. 3.4 Interested Person Transaction As at the date of this Announcement, the Purchasing Shareholder, a controlling shareholder of the Company, holds a direct stake of 150,992,900 Shares or approximately 49.8% in the Company. Accordingly, the Purchasing Shareholder, being the controlling shareholder of the Company, is deemed to be an interested person of the Company under Chapter 9 of the Listing Manual. Rule 906 of the Listing Manual requires, inter alia, that an issuer obtains shareholders approval for any interested person transaction of a value equal to, or more than 5% of the group s latest audited net tangible assets ( NTA ). Based on the Disposal Consideration of S$9.4 million, the Disposal Consideration represents approximately 62.3% of the audited NTA of the Group of approximately S$15.1 million as at 30 June 2011 ( Audited NTA ). As such, completion of the Proposed Disposal is subject to, inter alia, the approval of the Shareholders at an extraordinary general meeting to be convened. As stated in paragraph 1, the Purchasing Shareholder is wholly-owned by Mr Anthony Lim, the Chairman of the Group. The Purchasing Shareholder shall abstain from, and ensure that its associates and nominees will abstain from voting on the Proposed Disposal in respect of their respective shareholdings in the Company, amounting to an aggregate of approximately 51.0% 6 of the total number of issued Shares of the Company as at the date of this Announcement. As the Proposed Disposal and Proposed Acquisition are inter-conditional, the Purchasing Shareholder and its associates and nominees will also abstain from voting on the Proposed Acquisition. The Proposed Acquisition and Proposed Disposal are therefore subject to the approval of the independent Shareholders. The Audit Committee of the Company will be obtaining an opinion from an independent financial adviser to be appointed by the Company, before forming its view in relation to the Proposed Disposal, which is to be set out in the Circular to be issued to the Shareholders in due course. 3.5 Total Value of all Interested Person Transactions The current total value of all interested person transactions, excluding transactions which are less than S$100,000, with (a) the Purchasing Shareholder and (b) all interested persons of the Company, for the period from 1 July 2011 to the date of this Announcement (prior to and including the Proposed Disposal), and the percentage of the Group s Audited NTA represented by such values, are as follows: 6 Comprises the direct shareholding of 150,992,900 Shares held by the Purchasing Shareholder, the direct shareholding of 1,836,000 Shares held by Anthony Lim (indirect sole shareholder of the Purchasing Shareholder) and the direct shareholding of 1,758,000 Shares held by Molly Lim (spouse of Anthony Lim) as at the date of this Announcement. 10

11 Prior to the Proposed Disposal Amount Percentage of Audited NTA (S$) (%) Including the Proposed Disposal Amount Percentage of Audited NTA (S$) (%) Total value of all transactions with the Purchasing Shareholder Total value of all transactions with all interested persons of the Company - - 9,400, % - - 9,400, % 4 PLACEMENT Pursuant to the issuance and allotment of the Consideration Shares and Conversion Shares to the Vendor and/or its nominees as well as the issuance of the PPCF Shares and the Referral Agent s Shares, the Vendor and/or its nominees will hold approximately 72.9% of the enlarged total number of issued Shares of the Company. Taking into account the shareholding interests of the Purchasing Shareholder and its associates of approximately 5.2% should the Purchasing Shareholder place out the minimum number of 22,500,000 Placement Shares (who collectively remain as substantial shareholders), the enlarged issued share capital of the Company which will be held in the hands of public shareholders is approximately 21.9% and the Company will not meet the shareholding spread and distribution requirements set out in the Listing Manual. To meet the shareholding spread and distribution requirements set out in the Listing Manual as well as for fund raising purposes, it is intended under the S&P Agreement and the Disposal Agreement, that the Company and the Purchasing Shareholder, will respectively issue and/or place out new Shares and existing Shares (together the Placement Shares ) following the Proposed Acquisition (the Placement ) to meet the shareholding spread and distribution requirements as set out in the Listing Manual. 5 FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION AND THE PROPOSED DISPOSAL Bases and Assumptions The proforma financial effects of the Proposed Acquisition and the Proposed Disposal on the share capital, earnings, NTA and gearing of the Group have been prepared based on the unaudited combined proforma financial information of the Target for the financial year ended 31 March 2012 and the audited consolidated financial results of the Group for the financial year ended 30 June The proforma financial effects of the Proposed Acquisition and the Proposed Disposal are for illustrative purposes only and do not necessarily reflect the actual results and financial position of the Group following their respective completion. For the purposes of illustrating the financial effects of the Proposed Acquisition and the Proposed Disposal, the financial effects of the Proposed Acquisition and the Proposed Disposal are computed based on, inter alia, the following assumptions: (i) the financial effects on the Group s earnings and earnings per Share are computed assuming that the Proposed Acquisition and the Proposed Disposal were completed on 1 July The financial effects on the Group s NTA and gearing are computed 11

12 assuming that the Proposed Acquisition and the Proposed Disposal were completed on 30 June 2011; (ii) (iii) (iv) (v) (vi) notwithstanding the assumptions stated in (i) above, the financial effects take into account the placement of 50,500,000 new shares in the Company which were allotted and issued on 18 May 2012, as well as the aggregate gross proceeds raised of approximately S$1,754,370; the fair value adjustments on the net assets of the Group and positive or negative goodwill arising from the Proposed Acquisition, if any, have not been considered and will be determined on the date of completion when the shareholders of the Target have effectively obtained control of the Company. As the final goodwill will have to be determined at the completion of the Proposed Acquisition, the actual goodwill could be materially different from the aforementioned assumption. Any goodwill arising thereon from the Proposed Acquisition will be accounted for in accordance with the accounting policies of the Company; 218,750,000 Consideration Shares were issued at the Issue Price for each Consideration Share on 1 July 2010; the analysis does not take into account the financial effects of the potential issue of the Placement Shares, the Conversion Shares, the PPCF Shares and Referral Agent s Shares; and the analysis does not take into account any dividend or distributions out of profits that may be declared by the Target in respect of the financial year ended 31 March Share Capital (S$ 000) Before the Proposed Acquisition and Proposed Disposal After the Proposed Acquisition and Proposed Disposal Issued and paid-up share capital 19,557 19,557 Effects of Proposed Acquisition - 70,000 Effects of Proposed Disposal - - Enlarged issued and paid-up share capital 19,557 89,557 Number of Shares in issue ( 000) 303,132 1,178,132 Number of Consolidated Shares in issue after Share Consolidation ( 000) 75, ,533 NTA (S$ 000) Before the Proposed Acquisition and Proposed Disposal After the Proposed Acquisition and Proposed Disposal NTA 16,821 16,821 Effects of Proposed Acquisition - 73,470 Effects of Proposed Disposal - (4,180) Enlarged NTA 16,821 86,111 NTA per Share (cents) NTA per Consolidated Share (cents)

13 Earnings (S$ 000) Before the Proposed Acquisition and Proposed Disposal After the Proposed Acquisition and Proposed Disposal Loss for the year (5,302) (5,302) Effects of Proposed Acquisition - 5,200 Effects of Proposed Disposal - 5,302 Enlarged earning/(loss) for the year (5,302) 5,200 Earning/(Loss) per Share (cents) (1.75) 0.44 Earning/(Loss) per Consolidated Share (cents) (7.00) 1.77 Gearing (S$ 000) Before the Proposed Acquisition and Proposed Disposal After the Proposed Acquisition and Proposed Disposal Net Debt/(Cash) 19,849 (10,229) Total Capital 38,920 77,578 Gearing Ratio (1) 51% n.m. Notes: (1) Gearing is determined based on net debt divided by total capital. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalent. Total capital is calculated as equity plus net debt. (2) n.m. means not meaningful. 6 SHAREHOLDING EFFECTS For illustrative purposes only, it is envisaged that upon completion of the Proposed Acquisition, the Proposed Share Consolidation, the Placement and the Proposed Disposal, the shareholding structure of the Company, depending on the number of Placement Shares placed out by the Purchasing Shareholder, will be as follows: Scenario 1: Purchasing Shareholder places out the minimum of 22,500,000 Placement Shares Shareholder Before the Proposed Acquisition No. of Shares % After the Proposed Acquisition No. of Consolidated Shares % After the Placement and Proposed Disposal No. of Consolidated Shares % Current Shareholders (excluding the Purchasing Shareholder and its associates (1) ) Purchasing Shareholder and its associates 148,545, ,136, ,136, ,586, ,646, ,146, Vendor (2) ,678, ,678,

14 Referral Agent - - 4,375, ,375, PPCF 4,375, ,375, Placement shareholders ,250, Total 303,132, ,211, ,961, Scenario 2: Purchasing Shareholder places out the maximum of 30,750,000 Placement Shares Shareholder Before the Proposed Acquisition No. of Shares % After the Proposed Acquisition No. of Consolidated Shares % After the Placement and Proposed Disposal No. of Consolidated Shares % Current Shareholders (excluding the Purchasing Shareholder and its associates (1) ) Purchasing Shareholder and its associates 148,545, ,136, ,136, ,586, ,646, ,896, Vendor (2) ,678, ,678, Referral Agent - - 4,375, ,375, PPCF 4,375, ,375, Placement shareholders ,500, Total 303,132, ,211, ,961, Notes: (1) Comprising the Purchasing Shareholder, Anthony Lim (indirect sole shareholder of the Purchasing Shareholder) and Molly Lim (spouse of Anthony Lim). (2) Total number of Shares issued to the Vendor includes the Conversion Shares. 7 FINANCIAL ADVISER The Company has appointed PrimePartners Corporate Finance Pte. Ltd. as the financial adviser in respect of the Proposed RTO Transactions. 8 INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS Save as disclosed in this Announcement, none of the Directors nor (so far as the Directors are aware) controlling shareholders of the Company has any interest, direct or indirect, in the Proposed RTO Transactions and the Proposed Disposal. 9 INDEPENDENT FINANCIAL ADVISER The Company will be appointing an independent financial adviser to advise the Directors who are deemed independent for the purposes of the Whitewash Resolution on the Whitewash 14

15 Resolution and whether the terms of the Proposed Disposal (being an interested person transaction) are on normal commercial terms and are not prejudicial to the interests of the Company and its minority Shareholders. The advice of the independent financial adviser will be set out in the Circular to be despatched to Shareholders in due course. 10 AUDIT COMMITTEE S STATEMENT The Audit Committee of the Company will form its view on the Whitewash Resolution and the Proposed Disposal after taking into account the opinion of the independent financial adviser. 11 RESPONSIBILITY STATEMENT The Directors (including those who have been delegated supervision of this Announcement) collectively and individually accept full responsibility for the accuracy of the information given in this Announcement (save for information relating to the Target and the Max Energy Business Unit, including in the Appendix) and confirm, after making all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and opinions expressed in this Announcement are fair and accurate in all material respects as at the date hereof, and that there are no material facts the omission of which would make this Announcement misleading. The Vendor accepts full responsibility for the accuracy of the information given in this Announcement in respect of the Target and the Max Energy Business Unit and confirm, after making all reasonable enquiries, that to the best of its knowledge and belief, the facts stated and opinions expressed in this Announcement in respect of the Target and the Max Energy Business Unit are fair and accurate in all material respects as at the date hereof, and that there are no material facts in respect of the Target and the Max Energy Business Unit the omission of which would make any statement in respect of the Target and the Max Energy Business Unit misleading. Where information in this Announcement has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors and the Vendor, has been to ensure that such information has been accurately and correctly extracted form those sources and/or reproduced in this Announcement in its proper form and context. 12 CIRCULAR AND DOCUMENTS AVAILABLE FOR INSPECTION The Circular containing further information of the Proposed RTO Transactions and the Proposed Disposal and the other matters contemplated under the S&P Agreement and the Disposal Agreement respectively and enclosing the respective notices of the extraordinary general meetings, will be despatched by the Company to Shareholders in due course. A copy of the S&P Agreement and the Disposal Agreement will be made available for inspection by Shareholders during normal business hours at the registered office of the Company for a period of three (3) months from the date of this Announcement. 13 CAUTIONARY STATEMENT The Board would like to advise Shareholders that, although the S&P Agreement and the Disposal Agreement have been entered into, Completion is subject to conditions precedent being fulfilled and there is no assurance that Completion will take place. Accordingly, Shareholders are advised to exercise caution before making any decision in respect of their dealings in the Company s shares. Shareholders who are in any doubt about this Announcement should consult their legal, financial, tax or other professional adviser. 15

16 By Order of the Board Joanne Chow Director 25 July 2012 Forward-Looking Statements All statements other than statements of historical facts included in this Announcement are or may be forwardlooking statements. Forward-looking statements include but are not limited to those using words such as aim, "seek", "expect", "anticipate", "estimate", "believe", "intend", "project", "plan", "strategy", "forecast" and similar expressions or future or conditional verbs such as "will", "would", "should", "could", "may" and "might". These statements reflect current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information. Such forward-looking statements are not guarantees of future performance or events and involve known and unknown risks and uncertainties. Accordingly, actual results may differ materially from those described in such forward-looking statements. Shareholders and investors should not place undue reliance on such forward-looking statements, and none of the Directors, Vendor or PPCF guarantees any future performance or event. 16

17 APPENDIX A PRO FORMA FINANCIAL HIGHLIGHTS OF THE TARGET Unaudited Proforma Financial Information of the Target A summary of the unaudited proforma combined income statements of the Target (based on management accounts) for the last three (3) financial years ended 31 March 2010, 2011 and 2012 are set out below: Financial year ended (S$ 000) 31 March March March 2012 Revenue 9,820 39,150 93,150 Gross profit 1,280 3,600 8,850 Operating profit/ (loss) 1,230 3,390 7,430 Profit/ (loss) before income tax 1,230 3,390 7,430 Net profit/ (loss) for the year 860 2,370 5,200 A summary of the unaudited proforma combined balance sheet of the Target (based on management accounts) as at 31 March 2012 is set out below: (S$ 000) As at 31 March 2012 Non-current assets 63,940 Current assets 9,590 Current liabilities (60) Net current assets 9,530 Non-current liabilities Nil Net assets 73,470 Total equity 73,470 The financial year end of the Company is currently 30 June. It is the intention of the Company to change its year end to 31 March prior to the completion of the Proposed Acquisition to align its year end with that of the Target. 17

18 APPENDIX B CONDITIONS PRECEDENT IN RELATION TO THE PROPOSED ACQUISITION Unless otherwise defined, terms referred to in this Appendix B shall have the meaning ascribed to them in the S&P Agreement. (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Aussino Group Limited (the Purchaser ) obtaining such approval(s) from its Board of Directors (the Purchaser Board ) in connection with the S&P Agreement and the transactions contemplated therein as may be necessary; Max Singapore Holdings Pte Ltd (the Vendor ) obtaining such approval(s) from the Board of Directors of the Vendor and the shareholders of the Vendor in connection with the S&P Agreement and the transactions contemplated therein as may be necessary; Max Strategic Investments Pte Ltd (the Target ) obtaining such approval(s) from the Board of Directors of the Target for the transfer of the Sale Shares to the Purchaser; The Purchaser being satisfied, by the date of the submission of the draft shareholders circular of the Purchaser to the SGX-ST in relation to the acquisition of the Sale Shares provided in the S&P Agreement, with the results of the due diligence (whether legal, financial, contractual, tax or otherwise) to be carried out by the Purchaser and/or its advisers on the Target and the contents of the Disclosure Letter to be provided by the Vendor and U Zaw Zaw (the Undertaking Vendor Shareholder ) pursuant to paragraph (v) below (the Purchaser s Due Diligence Investigations ) on, including without limitation the title to and the status and condition of any properties (whether movable or immovable), assets (whether tangible or intangible), liabilities, businesses, operations, records, financial position, accounts, results, legal and corporate structure, its Subsidiaries and associated companies, the Injected Business and any other information disclosed to the Purchaser; The receipt by the Purchaser of the Disclosure Letter from the Vendor and the Undertaking Vendor Shareholder, delivered to the Purchaser within ninety (90) days after the signing of the S&P Agreement and any supplemental Disclosure Letter(s) to the aforesaid Disclosure Letter from the aforesaid deadline of ninety (90) days from the signing of the S&P Agreement to prior to Completion, and which discloses information relating to the respective warranties therein, and the Purchaser being satisfied with the contents thereof of the Disclosure Letter; The rectification, or the procurement of such rectification, to the satisfaction of the Purchaser by the Vendor, of all issues or irregularities uncovered by the Purchaser during the Purchaser s Due Diligence Investigations on the Target and/or its Subsidiaries, including the Injected Business; The Vendor being satisfied, by the date of the submission of the draft shareholders circular of the Purchaser to the SGX-ST in relation to the acquisition of the Sale Shares provided in the S&P Agreement, with the results of the due diligence (whether legal, financial, contractual, tax or otherwise) (the Vendor s Due Diligence Investigations ) to be carried out by the Vendor and/or its advisers on the Purchaser, including without limitation the title to and the status and condition of any properties (whether movable or immovable), assets (whether tangible or intangible), liabilities, businesses, operations, records, financial position, accounts, results, legal and corporate structure, its Subsidiaries and associated companies; The SIC having granted the Vendor and its concert parties (and not having revoked or repealed such grant) a waiver of their obligation to make a mandatory offer under Rule 14 of The Singapore Code on Take-overs and Mergers (the Code ) for the shares in the Purchaser not held by the Vendor and its concert parties and from having to comply with the requirements of Rule 14 of the Code subject to (a) any conditions that the SIC may impose, provided that such conditions are reasonably acceptable to the Vendor and its concert parties; and (b) the 18