PROPOSED ACQUISITION OF 75% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF STAR CHARIOT LIMITED ( PROPOSED ACQUISITION )

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1 Co. Registration No R PROPOSED ACQUISITION OF 75% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF STAR CHARIOT LIMITED ( PROPOSED ACQUISITION ) 1. Introduction Further to the announcement dated 6 August 2013, the Board of Directors (the Board ) of Next- Generation Satellite Communications Limited (the Company, and together with its subsidiaries, the Group ) wishes to inform that the Company has on 13 January 2014 entered into a sale and purchase agreement ( SPA ) with C Media Limited (the Vendor ), the parent company of Mobile Media (China) Limited with whom the Company entered into a non-binding term sheet, for the proposed acquisition of 75% of the paid-up capital ( Sale Shares ) of Star Chariot Limited ( Star ) by the Company from the Vendor for an aggregate purchase consideration of S$27,600, Information on Star and its business Star was incorporated under the laws of the British Virgin Islands on 3 March 2011 with limited liability and has a paid-up capital of US$100. Star holds 100% shareholding interest of MMB Limited ( MMB ), a company incorporated under the laws of Hong Kong. Star and MMB are investment holding companies, and were incorporated as special purpose vehicles for the purposes of holding equity interests in Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd ( Zhongchuan Tianxia ), Beijing MobileVision Technology Company Limited ( Beijing MobileVision ) and Shannan MobileVision Technology Company Limited ( Shannan MobileVision ) (collectively, the Target Group ). Zhongchuan Tianxia is a company incorporated under the laws of People s Republic of China ( PRC or China ) and has a paid-up registered capital of US$150,475. As part of the Restructuring Exercise (as defined below), Zhongchuan Tianxia shall hold the control of its subsidiary, Beijing MobileVision through variable interest entity (VIE) structure 1. Beijing MobileVision is a company incorporated under the laws of PRC and has a paid-up registered capital of RMB18,750,000. Beijing MobileVision is presently undertaking the incorporation of Shannan MobileVision, which is expected to be completed prior to Completion (as defined below). Upon the completion of the Restructuring Exercise, the Target Group will be engaged principally in the following business (the Target Business ): (i) (ii) distribution of video or audio content or related content through cellular, wireless and satellite network operators (directly or indirectly through licensed partners) to mobile devices and the internet; distribution of a series of static cartoon images or related content through cellular, wireless and satellite network operators (directly or indirectly through licensed partners) to mobile devices and the internet; 1 As part of the Restructuring Exercise, Zhongchuan Tianxia shall enter agreements with Beijing MobileVision and its shareholders, and the shareholders of Beijing Mobilevision shall issue power of attorneys in favour of Zhongchuan Tianxia, for the purposes of transferring 100% of the economic benefit of Beijing MobileVision to Zhongchuan Tianxia 1

2 (iii) (iv) (v) (vi) (vii) content creation, editorial and technical audit compliance of mobile video and audio of series of cartoon images services; building, operating and providing mobile content platform including software and hardware development and system integration services; providing technical support services for mobile content distribution technologies; development of value added services with cellular and wireless network operators to provide mobile content through short messaging service (SMS), multimedia messaging service (MMS) and other messaging services; and research and development of its business and related technologies. The Group intends to grow the Target Business with the Vendor. 3. Information on the Vendor Since 2004, the Vendor and its subsidiaries have been offering a variety of mobile video, audio and other related value-added services through the networks of the major Chinese telecommunications operators including China Mobile, China Unicom and China Telecom. The Vendor produces online community applications for video, music, movie and targeted marketing, and is dedicated to building an open mobile Internet video platform. In 2007, the Vendor established a joint venture with China National Radio ( 中央人民广播电台 ) offering mobile video services. In the last few years, the Vendor has developed into one of the leading mobile video providers and established distribution channels in China. Other than the Target Business, the Vendor also engages in other value-added services which include community-based social networking applications, mobile ecommerce services including movie ticketing, business to business (B2B) marketing, and online sharing applications (the Excluded Business ). The Excluded Business will be operated independently by the Vendor after the Proposed Acquisition. 4. Information on Hillgo Asia Limited Hillgo Asia Limited was incorporated under the laws of the British Virgin Islands on 28 March 2013 with limited liability and has a paid-up capital of US$1. It is an investment holding company and was incorporated as special purpose vehicle for the purpose of holding its sole asset, a convertible note ( Hillgo Convertible Note ) in the principal amount of HK$49,000,000 issued by Neo Telemedia Limited on 5 April As announced on 3 July 2013, the Company has completed the transfer of the entire issued share capital of Hillgo Asia Limited to the Company pursuant to the terms of an agreement with a certain finance company in Hong Kong. 5. Purchase Consideration 5.1 The purchase consideration of S$27,600,000 for the Proposed Acquisition (the Purchase Consideration ) was arrived at after taking into account:- (a) the business potential for the Group in its advancement of its communications business in the PRC taking into account the extensive business coverage and network of the Target Group in the PRC; (b) the market value of the Target Group of S$40,700,000 as determined by Roma Appraisals Limited ( RAL ), an independent valuer. Based on RAL s valuation of the Target Group, the 2

3 market value of the Sale Shares (being 75% equity interest in the Target Group) is S$30,525,000 as at 31 July 2013; and (c) the acquisition of Sale Shares by the Group will enable the Group to gain a competitive advantage vis-à-vis its actual and potential competitors in the PRC. 5.2 Subject to the terms of the SPA, the Purchase Consideration for the Proposed Acquisition will be satisfied partly by the transfer of the entire issued and paid up share capital Hillgo Asia Limited and partly by way of allotment and issuance of new ordinary shares in the capital of the Company ( Consideration Shares ) to the Vendor in the following manner:- (a) the sum of S$7,835,100 shall be satisfied by the transfer of one (1) ordinary share, representing the entire issued and paid up share capital, in Hillgo Asia Limited ( Hillgo Asia Share ); and (b) the remaining sum of S$19,764,900 shall be satisfied by the issuance of up to 1,976,490,000 Consideration Shares at the issue price of S$0.010 per Consideration Share ( Issue Price ) by the Company to the Vendor, according to the following manner:- (i) the first payment tranche of 75% of the Purchase Consideration being S$20,700,000 ( First Tranche Payment ) via the issuance of up to 1,286,490,000 Consideration Shares ( First Tranche Shares ) at the Issue Price to the Vendor and the transfer of the Hillgo Asia Share to the Vendor; (ii) the second payment tranche of 12.5% of the Purchase Price of S$3,450,000 ( Second Tranche Payment ) via the issuance of 345,000,000 Consideration Shares ( Second Tranche Shares ) to the Vendor within one (1) month after receipt of an independent auditor s ( Auditor ) certification that the Target Group has achieved the net profit before tax (excluding non-recurring or extraordinary items of revenue or gain) ( NPBT ) of at least S$3,690,000 for the period from the 1 January 2014 to 31 March 2014 ( First Year NPBT Target ) as ascertained from the audited consolidated account of the Target Group ( Accounts ) for the financial year ended 31 March 2014 and verified by the Auditor. In the event that the First Year NPBT Target is not achieved by the Target Group, the parties agree that the entire Second Tranche Payment shall not be payable by the Company and the Company shall be released and discharged from its obligation to pay for the Second Tranche Payment entirely; and (iii) the third and final payment tranche of 12.5% of the Purchase Consideration being S$3,450,000 ( Third Tranche Payment ) via the issuance of 345,000,000 Consideration Shares at the Issue Price to the Vendor ( Third Tranche Shares ) within one (1) month after receipt of the Auditor s certification that the Target Group has achieved the NPBT of at least S$8,000,000 plus the Shortfall (as defined below) (if any) for the period between 1 April 2014 to 31 March 2015 ( Second Year NPBT Target ) as ascertained from the Accounts for the financial year ended 31 March 2015 and verified by the Auditor. In the event that the Second Year NPBT Target is not achieved by the Target Group, the parties agrees that the entire Third Tranche Payment shall not be payable by the Company and the Company shall be released and discharged from its obligation to pay for the Third Tranche Payment entirely. Should the actual NPBT of the Target Group for the period between 1 January 2014 (as defined below) to 31 March 2014 fall below the First Year NPBT Target, the difference shall be the shortfall (the Shortfall ). All interest ( Interest ) (net of taxes attributable to such interest and to be paid by Hillgo Asia 3

4 Limited) accrued under the Hillgo Convertible Note at any time prior to the date of completion of the SPA ( Completion Date ) shall wholly belong to the Company. The Vendor agrees that the Company shall be entitled to set off all outstanding Interest (irregardless whether such Interest is actually paid to Hillgo Asia Limited) against the Purchase Consideration at Completion (as defined below) by reducing the the number of Consideration Shares to be issued as First Tranche Shares to the Vendor. The Vendor shall be entitled to retain all such outstanding Interest received after the aforesaid set-off. 6. Value of the Sale Shares Sale Shares Based on the unaudited proforma financial statements of Target Group for the financial year ended 31 December 2012, the net tangible asset value and the net profit attributable to the Sale Shares were S$3,028,000 and S$3,112,000 respectively. RAL was appointed by the Company as the independent valuer for the purpose of conducting an independent valuation of the Sale Shares. The valuation was conducted on a market value basis. According to the International Valuation Standards established by the International Valuation Standards Council in 2011, market value is defined as the estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. The RAL has relied primarily on the income-based approach and has adopted the discounted cash flow method to determine the market value of the Target Group. Based on the valuation report dated 9 January 2014 issued by RAL ( Valuation Report ), the market value of the Target Group as at 31 July 2013 was S$40,700,000 and accordingly, the independent valuation of the Sale Shares (being 75% equity interest in the Target Group) is S$30,525, Material conditions 7.1 Conditions precedent The completion of the Proposed Acquisition is conditional upon the fulfilment of the following conditions precedent: (i) (ii) all consents, approvals and authorisations of bankers, financial institutions, landlords of leases, relevant third parties, government or regulatory authorities (including but not limited to the Singapore Exchange Securities Trading Limited ( SGX-ST )) having jurisdiction over the transactions contemplated under the SPA, which are necessary in connection with the entry into and completion of the SPA by the parties, transfer of the Sale Shares from the Vendor to the Company, the ownership by the Company of the Sale Shares having been obtained, the transfer of the Hillgo Asia Share from the Company to the Vendor and the issue of the Consideration Shares by the Company to the Vendor and being in full force and effect and not having been withdrawn, suspended amended or revoked, and if subject to conditions, on such conditions acceptable to the Company or the Vendor (as the case may be), and such consents, approvals and authorisation remaining in full force and effect and not being revoked prior to the Completion Date; there being no material adverse change in the prospects, operations, assets, business, profits or financial condition of the Target Group, Hillgo Asia Limited and/or the Company and/or the Vendor or a significant adverse change in the financial market conditions in Singapore or the PRC; 4

5 (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) approval of the board of directors, and its shareholders (if required), of the Company for the purchase of the Sale Shares and the transfer of the Hillgo Asia Share from the Company to the Vendor upon the terms and conditions as set out in the SPA (or upon other terms and conditions as may be agreed between the parties) having been obtained; approval of the board of directors, and its shareholders (if required), of the Vendor for the sale of the Sale Shares and the transfer of the Hillgo Asia Share from the Company to the Vendor upon the terms and conditions as set out in the SPA (or upon other terms and conditions as may be agreed between the parties) having been obtained; approval of the board of directors, and its shareholder(s) (if required), of Hillgo Asia Limited for the transfer of the Hillgo Asia Share from the Company to the Vendor upon the terms and conditions as set out in the SPA (or upon other terms and conditions as may be agreed between the parties) having been obtained the Vendor being satisfied in its sole and absolute discretion with the results of the due diligence investigations (whether legal, financial, contractual, tax or otherwise) carried out by the Vendor and/or its appointed advisers in respect of the Company, including but not limited to the affairs, business, assets, liabilities, operations, records, financial position, financial performance, tax liabilities, accounts, results, prospects of the Company and no outstanding issues is left unaddressed on or before 28 February 2014 (or such later date as agreed between the parties); the Company being satisfied in its sole and absolute discretion with the results of the due diligence investigations (whether legal, financial, contractual, tax or otherwise) carried out by the Company and/or its appointed advisers in respect of Star and its subsidiaries and/or its associated companies and their business, including but not limited to the affairs, business, assets, liabilities, operations, records, financial position, financial performance, tax liabilities, accounts, results, prospects of Target Group and the Target Business and no outstanding issues is left unaddressed on or before 28 February 2014 (or such later date as agreed between the parties); the approval in-principle being issued by the SGX-ST for the listing of and quotation for up to 1,976,490,000 Consideration Shares, and such approval not having been revoked or amended, and if the approval is granted subject to conditions, such conditions being reasonably acceptable to the Vendor and, if any such condition shall be required to be fulfilled on or before the Completion Date, the fulfilment of such condition on or before the Completion Date and such conditions being satisfied or waived by the SGX-ST and the SGX-ST not having made any ruling the effect of which is to restrict or impede the listing of and quotation for the Consideration Shares; the satisfaction of any condition(s) that may be imposed by SGX-ST under the respective approval referred to in paragraph 7.1 (viii) above insofar as such condition(s) need to be fulfilled prior to Completion (as defined below); the Restructuring Exercise having been completed to the satisfaction of the Company and the Company s receipt of the satisfactory documentary evidence and supporting documents thereof; the receipt by the Company of a satisfactory valuation report on the value of the Target Group, in form and substance acceptable to the Company; the Company remaining listed on SGX-ST and has not received any notification from SGX-ST and/or any party proposing or threatening to delist the Company; agreement by the parties as to the form of the shareholders agreement; 5

6 (xiv) (xv) (xvi) (xvii) (xviii) (xix) (xx) (xxi) (xxii) agreement by the parties as to the form of the call and put option agreement; the allotment, issue and subscription of the Consideration Shares, the Restructuring Exercise, the transfer of the Hillgo Asia Share from the Company to the Vendor and the sale and purchase of the Sale Shares not being prohibited by any statute, order, rule, regulation, directive or request promulgated or issued by any legislative, executive or regulatory body or authority in Singapore or elsewhere, which is applicable to the Company, the Vendor, Hillgo Asia Limited and/or Star; the Vendor and the Company not having received notice of any injunction or other order, directive or notice restraining or prohibiting the consummation of the transactions contemplated by the SPA, and there being no action seeking to restrain or prohibit the consummation thereof, or seeking damages in connection therewith, which is pending or any such injunction, other order or action which is threatened; there being no material breach by the Company or the Vendor of the representations, warranties, covenants and indemnities given by the Company or the Vendor (as the case may be) as set out in the SPA; approval of the shareholders of the Company being obtained in a general meeting for the issue of up to 1,976,490,000 Consideration Shares and the transfer of the Hillgo Asia Share from the Company to the Vendor; the appointment of one (1) executive director nominated by the Vendor on the board of directors of the Company; the completion of the Restructuring Exercise and subsequent to the Restructuring Exercise, all licences (including without limitation, the Information Network Communicated Audio-Video Programme Licence issued by China's media regulator, the State General Administration of Press, Publication, Radio, Film and Television ( 国家新闻出版广电总局 ), the Radio and TV Program Production and Business Operation Licence issued by the local subordinate of China's media regulator, the State General Administration of Press, Publication, Radio, Film and Television ( 国家新闻出版广电总局 ), the Value-Added Telecommunications Service Operation Licence issued by the Ministry of Industry and Information Technology in China ( 工业和信息化部 ) and any import and export licences), consents, registrations, authorities, permits and authorities (public and private) necessary to enable Star and its subsidiaries to carry on its business effectively in the PRC have been obtained and are valid and subsisting and no event or reason has arisen which may result in such licences, consents, registrations, authorities, permits and authorities being suspended, cancelled or revoked or which may not be renewed or reissued upon or prior to their expiry; the execution of the binding service agreement between Beijing Zhongtong Consultation Service Company Limited ( Beijing Zhongtong ) and Shannan MobileVision for the transfer of 48% of the gross revenue arising from the provision of cellular, wireless and satellite network distribution services relating to mobile content (i.e. video/audio and series of cartoon images) by Beijing Zhongtong to Shannan MobileVision and the receipt by the Company of a legal opinion from its PRC legal counsel, in form and substance acceptable to the Company, confirming the validity and enforceability of such service agreement; the disclosure letter, to be delivered to the Company on the date of the SPA, being satisfactory in form and substance to the Company; 6

7 (xxiii) (xxiv) (xxv) the receipt by the Company a copy of the audited accounts of each company within the Target Group (save for Star and MMB Limited) for the last three years prior to the Restructuring Exercise certified as true and fair by the Vendor; the receipt by the Company of a copy of the proforma accounts of the Target Group for each of the financial years ended 31 December 2011, 31 December 2012 and the financial period ended 31 October 2013 certified as true and fair by the Vendor, together with the projected profit and loss statement and balance sheet from 1 July 2013 to 31 March 2015 (as submitted by the Vendor to RAL on 8 October 2013), certified by the Vendor as prepared based on the proforma accounts of the Target Group for each of the financial years ended 31 December 2011, 31 December 2012 and the financial period ended 31 October 2013 which gave a true and fair view of the state of affairs of the Group for the relevant financial periods and adopting fair and reasonable assumptions; and the receipt by the Company of a copy of the management accounts of each Group Company for the financial years ended 31 December 2011 and 2012 and for the 10- months period ended 31 October 2013 prepared in accordance with US GAAP (including detailed ledger and sub-ledgers for these accounts). 7.2 Other salient terms (i) Moratorium The Vendor agrees with and undertakes to place all the First Tranche Shares under moratorium in such manner as agreed by the parties for a period of 12 months from the date of the issue of such Shares. (ii) Control of the Target Group The Vendor agrees with the Company that: (a) (b) (c) the Vendor shall procure that the Company will obtain control of 75% of the Target Group (which shall include financial, operational and board control) as may be necessary for the Company to consolidate its financial results and/or statement with the Target Group with effect from (and including) the date the Company obtains approval of its shareholders in the general meeting for the Proposed Acquisition, the issue of 1,976,490,000 Considerations Shares to the Vendor and the transfer of the Hillgo Asia Share or such later date as the parties may agree ( Control Date ), notwithstanding that the transfers of the Sale Shares from the Vendor to the Company have not taken place; the Vendor shall procure Star to allow the Company access to all its books and records (including accounting and financial books and records) as the Company may reasonably require with effect from the Control Date; and the Company shall be entitled to appoint a majority number of directors to the board of directors of Star with effect from the Control Date. (iii) Pre-completion restructuring, excluded proceeds and exit provision (a) the Vendor agrees and undertakes with the Company to procure the completion of the restructuring of the Target Group such that: (a) the Excluded Business of the Target Group will not form part of the Target Group s Target Business; and (b) Star obtains the sole legal and beneficial ownership of all rights to the economic benefits of the Target Business and assets related to or required in connection with the Target Business and 7

8 management, financial and operational control of the Target Business ( Restructuring Exercise ); (b) (c) the parties acknowledge that, prior to the date of the SPA, Beijing MobileVision has disposed certain businesses to Beijing Yinfu Tianxia Investment Management Limited ( 北京盈富天下投资管理中心 ( 有限合伙 )), the proceeds of which, amounting to RMB24 million ( Excluded Proceeds ), is expected to be received by Beijing MobileVision after the date of the SPA. Subject to the terms of the SPA, the parties agree that, notwithstanding the Restructuring Exercise, the Excluded Proceeds shall not form part of the assets of the Target Business and the Company shall, at the request of the Vendor, procure the transfer of the Excluded Proceeds collected to the Vendor provided Beijing MobileVision shall retain such part and/or amount of the Excluded Proceeds, as mutually agreed between parties, required to satisfy any payment obligation or liability (including but not limited to corporate income tax liability, professional fees and other expenses) which Beijing MobileVision (or any company within the Target Group) may incur or which may arise in connection with its disposal of certain businesses to Beijing Yinfu Tianxia Investment Management Limited ( 北京盈富天下投资管理中心 ( 有限合伙 )). In the event Beijing Yinfu Tianxia Investment Management Limited ( 北京盈富天下投资管理中心 ( 有限合伙 )) fails to make payment of the Excluded Proceeds or any part thereof at least twenty one (21) days prior to the date which the payment for the relevant corporate income tax liability of Beijing MobileVision becomes due (as determined by an independent PRC accounting firm appointed by the parties), the Vendor undertakes and guarantees that it shall make payment of such amounts (as determined by such independent PRC accounting firm), required to satisfy such tax liability of Beijing MobileVision (or any company within the Target Group), to Beijing MobileVision within seven (7) days of a request from the Company; and the parties agree that in the event that after Completion (as defined below), if the Company fails to be removed from the watch-list of the SGX-ST and thereby resulting in the delisting of the Company from the SGX-ST, the Vendor shall be entitled, and the Company shall also be entitled to require the Vendor, to purchase the Sale Shares from the Company at the Purchase Consideration and the Purchase Consideration shall be fully satisfied by, where permitted by law, the exchange of all Consideration Shares and/or cash paid and/or the balance in cash or its equivalent (as acceptable to the Company) paid to the Vendor by the Company in accordance with the SPA to facilitate the aforesaid, the Vendor and the Company shall enter into the call and put option agreement on Completion (as defined below) to effect the aforesaid. 7.3 Completion Completion shall take place on the day falling one (1) week after the conditions precedent set out in the SPA are either fulfilled to the satisfaction of the Company or waived by the Company at its discretion ( Completion ). 8. Rationale for the Proposed Acquisition Proposed Acquisition The rationale for and benefits of the Proposed Acquisition are, inter alia, as follows: (a) the Proposed Acquisition will enable the Group to have a stable stream of income and profits; 8

9 (b) the NPBT (as detailed in paragraph 5.2 above) attributable to the Company s proportionate interest in Target Group will give the Group more time to restructure its existing non-profitable businesses; (c) the Proposed Acquisition will assist the Group to in meeting the criteria to exit SGX-ST Watch List; (d) the Proposed Acquisition will enable the Group an opportunity to enter an emerging mobile content industry in the Chinese market without cash outlay and will also enable the Group to expand from a pure infrastructure provider to a telecommunication solutions provider which is in line with the Group s vision; and (e) the Proposed Acquisition presents an opportunity for the Group to acquire a profitable company with viable business model and a good management team. 9. Funding of the Proposed Acquisition S$19,764,900 of the aggregate Purchase Consideration of S$27,600,000 for the Proposed Acquisition will be satisfied through the issue of the Consideration Shares at S$0.010 each. The remaining consideration of S$7,835,100 will be satisfied by the transfer of the Hillgo Asia Share from the Company to the Vendor. 10. Financial Effects of the Proposed Acquisition Proposed Acquisition The financial effects of the Proposed Acquisition on the Company set out below are: (a) purely for illustrative purposes only and do not reflect the future actual financial position of the Company or the Group after completion of the Proposed Acquisition. (b) based on (i) the unaudited consolidated financial statements of the Company for the financial year ended 31 March 2013 ( FY2013 ) and (ii) unaudited proforma financial statements of Star for financial year ended 31 December Net Tangible Assets (NTA) The effect of the Proposed Acquisition on the unaudited NTA per share of the Group for FY2013, assuming that the Proposed Acquisition had been effected at the end of FY2013 is as follows: Before the Proposed Acquisition After the Proposed Acquisition NTA ($ 000) 84,593 79,786 NTA per share (cents) Earnings per Share (EPS) The effect of the Proposed Acquisition on the unaudited EPS of the Group for FY2013, assuming that the Proposed Acquisition had been effected at the beginning of FY2013 is as follows: 9

10 Before the Proposed Acquisition After the Proposed Acquisition Loss after tax and minority interests (8,552) (6,218) ($ 000) EPS (cents) (0.13) (0.10) 11. Relative Figures computed based on Rule 1006 of the Listing Manual Proposed Acquisition The relative figures for the Proposed Acquisition computed on the relevant bases set out in Rule 1006 of the Listing Manual are as follows: 1006(a) Net Asset Value Test Not applicable. 1006(b) Profit Test Not meaningful. The unaudited net profit attributable to the Sale Shares for the 9 month financial period ended 30 September 2013 of approximately S$1,599,000 as compared with the Group s unaudited net loss of S$2,409,000 for the half year ended 30 September (c) Consideration Test The Purchase Consideration of S$27,600,000 for the Proposed Acquisition represents approximately 83.11% of the Company s market capitalisation of approximately S$33.21 million as at 10 January 2014 (being the last market day preceding the date of the SPA). 1006(d) Equity Securities Test The 1,976,490,000 new ordinary shares proposed to be issued by the Company as part consideration to the Vendor for the Proposed Acquisition represents approximately 30.95% of the total issued share capital of the Company of 6,386,335,828 Shares (excluding 24,200,000 treasury shares) as at the date hereof. 1006(e) Reserves Test Not applicable On the bases of Rules 1006(c) and (d) above, the Proposed Acquisition is a major transaction as defined in Rule 1014 of the Listing Manual. Accordingly, the Proposed Acquisition is subject to Shareholders approval. 12. Service Agreement The Vendor shall be entitled to appoint one Executive Director to the Board of the Company. It is envisaged that the Company will, upon Completion, enter into service contract with nominee of the Vendor to be appointed to the Board of the Company. 13. Interest of Directors and Controlling Shareholder 10

11 None of the Directors (other than in his capacity as a Director or Shareholder of the Company) and controlling shareholder of the Company has any interest, direct or indirect, in the Proposed Acquisition. 14. Documents for Inspection Copies of the SPA and the Valuation Report are available for inspection at the Company s registered office at 1 Commonwealth Lane, #07-04 One Commonwealth, Singapore for three months from the date of this announcement. 15. General (a) Additional Listing Application An application will be submitted to the SGX-ST for the listing and quotation of the Consideration Shares on the Official List of the SGX-ST. (b) Extraordinary General Meeting A circular setting out information on, inter alia, the Proposed Acquisition, together with a notice of the extraordinary general meeting to be convened will be despatched by the Company to the Shareholders in due course. By Order of the Board Next-Generation Satellite Communications Limited Lam Ah Seng@ Lam Pang Chuang Executive Director 13 January