AEI CORPORATION LTD. (Incorporated in the Republic of Singapore) (Company Registration Number: G)

Transcription

1 CIRCULAR DATED 25 JUNE 2014 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, accountant, solicitor or other professional adviser immediately. If you have sold or transferred all your shares in the capital of AEI Corporation Ltd. ("Company"), you should immediately forward this Circular, the Notice of Extraordinary General Meeting and the Proxy Form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or the transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. AEI CORPORATION LTD. (Incorporated in the Republic of Singapore) (Company Registration Number: G) CIRCULAR TO SHAREHOLDERS IN RELATION TO RATIFICATION OF THE COMPANY S ENTRY INTO THE PROJECT RELATING TO THE DEVELOPMENT OF THE LAND

2 IMPORTANT DATES AND TIMES: Last date and time for lodgement of Proxy Form : Date and time of Extraordinary General Meeting : 8 July 2014 at 9 a.m. 10 July 2014 at 9 a.m. Place of Extraordinary General Meeting : 12 Penjuru Lane Jurong Town Industrial Estate Singapore

3 CONTENTS PAGE DEFINITIONS...4 LETTER TO SHAREHOLDERS INTRODUCTION RATIFICATION OF THE COMPANY S ENTRY INTO THE PROJECT RELATING TO THE DEVELOPMENT OF THE LAND THE PROPOSED DEVELOPMENT AS A MAJOR TRANSACTION INTEREST OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS FINANCIAL EFFECTS OF THE PROPOSED DEVELOPMENT SERVICE AGREEMENTS DIRECTORS RECOMMENDATIONS EXTRAORDINARY GENERAL MEETING ACTION TO BE TAKEN BY SHAREHOLDERS DIRECTORS RESPONSIBILITY STATEMENT DOCUMENTS AVAILABLE FOR INSPECTION NOTICE OF EXTRAORDINARY GENERAL MEETING... N-1 PROXY FORM... P-1 DEFINITIONS

4 DEFINITIONS Associates : (a) In relation to any director, chief executive officer, substantial shareholder or controlling shareholder (being an individual) means: (i) (ii) (iii) his immediate family; the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more; and (b) in relation to a substantial shareholder or a controlling shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more. Board : The Board of Directors of the Company as at the date of this Circular. Building Consideration : Has the meaning ascribed to it in Section 2.2(a). CDP : The Central Depository (Pte) Limited. Circular : This circular to Shareholders dated 25 June Companies Act : The Companies Act (Chapter 50) of Singapore, as amended, modified or supplemented from time to time. Company : AEI Corporation Ltd. Conditions of Tender : The conditions of tender published by the JTC for the Land. Director(s) : The director(s) of the Company as at the date of this Circular.

5 DEFINITIONS EGM : The extraordinary general meeting of the Company to be convened and held at 9 a.m. on 10 July 2014 at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore , notice of which is set out on page N-1 of this Circular ( Notice of EGM ). EPS : Earnings Per Share. FY : Financial year ended or ending (as the case may be) 31 December. Form of Tender : The form of tender submitted by the Subsidiary to the JTC. Group : The Company and its subsidiaries. GST : Goods and Services Tax. JTC : The Jurong Town Corporation. Land : Has the meaning ascribed to it in Section 1.1. Latest Practicable Date : The latest practicable date prior to the printing of this Circular, being 2 June Listing Manual : The Listing Manual (Section A: Rules of Mainboard) of the SGX- ST or the Listing Manual of the SGX-ST (as the case may be), as the same may be amended, modified or supplemented from time to time. Maximum Consideration : The maximum consideration of S$15,038, that the Company will pay for the Proposed Development. NTA : Net Tangible Assets. Proposed Development : Has the meaning ascribed to it in Section 1.1. psm : per square meter.

6 DEFINITIONS SFA : The Securities and Futures Act (Chapter 289) of Singapore, as amended, modified or supplemented from time to time. SGX-ST : Singapore Exchange Securities Trading Limited. Shareholders : Registered holders of Shares in the register of members of the Company, except that where the registered holder is CDP, the term Shareholders shall, where the context admits, means the persons named as depositors in the depository register maintained by CDP and into whose securities accounts those Shares are credited. Share(s) : Ordinary share(s) in the capital of the Company. Substantial Shareholder : A Shareholder who has an interest in not less than 5% of the issued Shares. Consultants : Has the meaning ascribed to it in Section 2.2(a). Technical Conditions of Tender : The technical conditions of tender published by the JTC for the Land. S$ and cents : Dollars and cents respectively of the currency of Singapore. % or per cent. : Per centum or percentage. The terms Depositor, Depository Agent and Depository Register shall have the meanings ascribed to them, respectively, in section 130A of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine shall, where applicable, include the feminine and neuter gender and vice versa. References to persons shall, where applicable, include corporations. Any reference to any enactment is a reference to that enactment as for the time being amended or reenacted. Any word defined under the Companies Act, the SFA or the Listing Manual or any statutory modification thereof and used in this Circular shall, where applicable, have the same meaning assigned to it under the Companies Act, the SFA or the Listing Manual or any modification thereof, as the case may be, unless otherwise provided.

7 DEFINITIONS Any reference to a time of day shall be a reference to Singapore time unless otherwise stated. Any discrepancy in the tables included herein between the listed amounts and totals thereof are due to rounding. Accordingly, figures shown as totals in this Circular may not be an arithmetic aggregation of the figures that precede them.

8 LETTER TO SHAREHOLDERS AEI CORPORATION LTD. (Incorporated in the Republic of Singapore) (Company Registration Number: G) Board of Directors: Registered Office: Tan Chu En Ian (Executive Director and Chief Executive Officer) Sinta Muchtar (Executive Director) Yeung Koon Sang alias David Yeung (Non-Executive Chairman and Independent Director) Dr. Vasoo Sushilan (Independent Director) Teng Cheong Kwee (Independent Director) 12 Penjuru Lane Jurong Town Industrial Estate Singapore June 2014 To: The Shareholders of AEI Corporation Ltd. Dear Sir/Madam, 1. INTRODUCTION 1.1 Extraordinary General Meeting The Board is proposing to convene an extraordinary general meeting to seek Shareholders approval in respect of the proposed ratification of the Company s entry into the project relating to the development of a parcel of land at Tuas South Street 13 (Plot 38) ( Land ) in accordance with the Conditions of Tender and the Technical Conditions of Tender ( Proposed Development ). 1.2 Purpose of this Circular The purpose of this Circular is to provide Shareholders with information relating to, and the reasons for the above proposal and to seek Shareholders approval for the same at the 8

9 extraordinary general meeting to be held at 9 a.m. on 10 July 2014 at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore The notice of the EGM is set out on page N-1 of this Circular. 2. RATIFICATION OF THE COMPANY S ENTRY INTO THE PROJECT RELATING TO THE DEVELOPMENT OF THE LAND 2.1 Introduction The Company is principally engaged in the production of precision extruded profiles and a range of other precision metal components in order to meet its customers stringent requirements. For the purpose of relocating our Group s manufacturing plant from our existing premises to the Land to support our core-business operations and streamline our production cost to meet the increasing challenges of the competitive landscape of the electronic and metal industries, our Group had identified and entered into the Proposed Development by submitting a tender to the JTC which was subsequently accepted. The Company had announced on 15 April 2014 that its wholly-owned subsidiary, AEI (China) Holdings Pte. Ltd ( Subsidiary ), has submitted to the JTC a tender for the lease of the Land at a tender bid of S$5,038, The Subsidiary has offered to lease from the JTC the Land for a term of 21 years 5 months from a date to be determined by the JTC subject to the Conditions of Tender, the Technical Conditions of Tender and on the terms and conditions set out in the draft forms of the building agreement ( Building Agreement ) and lease ( Lease ) attached to the Conditions of Tender at an annual rent of S$12.00 and at a sale price as abovementioned. It is one of the terms in the Form of Tender for the Company to carry out and complete the proposed development on the Land in accordance with the terms and conditions set out in the Building Agreement, the Conditions of Tender and the Technical Conditions of Tender. The Company was aware that an acceptance by the JTC of the Subsidiary s tender would constitute a binding contract between the JTC and the Subsidiary. On 14 April 2014, the JTC has accepted and awarded the tender submitted by the Subsidiary ( JTC Letter of Acceptance ). In this regard, as the Proposed Development is not within the Company s existing business and the Company had entered into the Proposed Development before Shareholders approval could be obtained, the Company now wishes to seek the approval of the Shareholders for the ordinary resolution relating to the ratification of the Company s entry into the Proposed Development. 9

10 2.2 Details of the Proposed Development The Land is situated at Tuas South with transportation access to Ayer Rajah Expressway, Pan Island Expressway and Malaysia-Singapore Second Link. The Lease is subject to, inter alia, development to a minimum gross plot ratio requirement of not less than 0.7 but not more than 1, and development in accordance with the relevant guidelines as stipulated by the JTC, within 60 months. (a) Estimated Costs of the Proposed Development Notwithstanding that the land price of the Land is $5,038,888 ( Land Price or Sale Price ), this being $702 psm, is the highest bid submitted, our Directors are of the view that this is a reasonable and fair market tender price. There were 7 tenders for the Land and the Land Price was $94,280 or 1.9% higher than the second highest tender price. The successful tender prices for plots of land around the Tuas South areas in the three month period from December 2013 to February 2014 ranged from $700 psm to $1,000 psm. In addition to the Land Price, based on the discussions with some of the architects, engineers, building contractors and quantity surveyors (collectively Consultants ) on the basis of our proposed design of the factory and office layout, the estimated costs of building works of the facility to accommodate our relocated office, manufacturing plant and construction of the necessary infrastructure are expected to be in a range between $8 million and $10 million ( Building Consideration ). The estimated Building Consideration was arrived at based on preliminary discussions with the Consultants and with reference to the Building Agreement, the Conditions of Tender and the Technical Conditions of Tender as well as the prevailing market price for similar project. As at the date of this Circular, the Group has not formally appointed any such Consultants in respect of the building works. In view of the above, the Group s estimated costs for the Proposed Development of the Land, being the Land Price and the Building Consideration will not be more than S$15,038, ( Maximum Consideration ). (b) Awards of contracts The Group is proposing to construct the Group s manufacturing plant on the Land and is currently in negotiations with relevant Consultants in respect of the building works for the Proposed Development. Our Group will select the Consultants on an arm s length basis 10

11 taking into consideration their track records, reputation, quality of work, ability to meet timelines and market conditions. The Group expects the estimated date of completion of the Proposed Development would be in year 2016 or Rationale and Background of the Proposed Development Following assessment of our Group s operational requirements in the recent years and the growth strategies in the current business and market environment, our Group believes the size of our current corporate office and manufacturing plant at Penjuru Lane is no longer cost efficient. We are currently paying up to $40.01 psm per annum or $746,046 per year (subject to periodic market adjustments). The Proposed Development not only enables us to contain any increase in land rental as the tendered Land Price represents the total rental amount paid for the whole lease period of 21 years and 5 months at $32.78 psm per annum or $235,279 per year, but also offers us opportunities to redesign the production process flow to improve production efficiency. 2.4 Funding of the Proposed Development The Company intends to fund 40% of the Building Consideration and Land Price through internally generated funds, with the remaining 60% of the actual costs to be funded through loans from financial institutions and/or other financing methods. As at the Latest Practicable Date, our Group has been in discussions with financial institutions on the financing of the Proposed Development and has received indicative financing term sheets. 2.5 Payment Schedule and Usage of the Land In accordance with the Conditions of Tender, our Subsidiary agrees to: comply with the terms and conditions set out or referred to in the Conditions of Tender; pay by cashier s order 25% (less S$251,944 being the amount of tender deposit already paid) of the Land Price with the corresponding amounts of the GST within 28 days of the date of acceptance of the tender and the 28 days shall include the date of JTC s acceptance; pay by cashier s order the remaining 75% of the Land Price with the corresponding amounts of the GST within 90 days of the date of acceptance of the tender and the 90 11

12 days shall include the date of JTC s acceptance on or before the signing of the Building Agreement in accordance with the Conditions of Tender; and carry out and complete the Proposed Development in accordance with the terms and conditions set out within the Building Agreement, Conditions of Tender and Technical Conditions of Tender. In accordance with the Conditions of Tender, our Subsidiary has also declared that the development on the Land shall be used for manufacturing activities. As at the Latest Practicable Date, we have paid S$1,259,722 to the JTC, a sum being 25% of the Land Price. The Company wishes to highlight to the Shareholders that as at the Latest Practicable Date the Company is unable to commence on the layout plan or planning submission process until the Subsidiary has settled payment for the Sale Price in full pursuant to the payment schedule as set out in sub-paragraphs and of this Circular. As we will not be recorded as the lessee prior to payment of the entire Sale Price, the relevant government agencies will not commence the review of our proposed layout plan. 2.6 Conditions Precedent Completion of the Proposed Development is conditional upon, amongst others, approval by relevant governmental and statutory authorities. A brief description of the key approvals required for the Proposed Development is set out below: (a) (b) (c) Urban Redevelopment Authority: Development Planning and Control Planning permission for the commencement of development works and compliance with master zoning plan. Building and Construction Authority: Building and Structural Safety Approvals for building and structural plans, and the issuance of the temporary occupation permit and certificate statutory completion. Fire Safety and Shelter Department: Fire Safety Approval for fire safety plans, and the issuance of the Fire Safety Certificate prior to the use or occupation of any building. (d) Central Building Plan Unit, National Environment Agency: Environmental Control Clearance for land use applications, development plans and proposals on environmental matters. 12

13 (e) (f) (g) (h) Public Utilities Board: Utilities (Water Supply) Issuance of Certificate of Satisfactory Completion of Water Service Work. Energy Market Authority: Utilities (Electricity and Gas Supply) Issuance of licences relating to electrical installations and connections. Civil Aviation Authority of Singapore: Permitted Height Clearance for the height limit on the rooftop. Infocomm Development Authority: Aeronautical Services Clearance for the height and radius on TX (transmission) station. 3. THE PROPOSED DEVELOPMENT AS A MAJOR TRANSACTION 3.1 General Rule under Chapter 10 of the Listing Manual Chapter 10 of the Listing Manual governs the continuing listing obligations of a listed company in respect of acquisitions and realisations. Such acquisitions and realisations may require Shareholders approval and/or an immediate announcement depending on the size of the relative figures ( Relative Figures ) computed on the following bases: (a) (ii) (iii) (iv) the net asset value of the assets to be disposed of, compared with the net asset value of the group; the net profits attributable to the assets acquired or disposed of, compared of those of the group; the aggregate value of the consideration given or received, compared with the market capitalisation of the listed company; or the equity securities issued by the listed company as consideration for acquisition, compared with the equity capital previously in issue. Pursuant to Rule 1014 of the Listing Manual, Shareholders approval is required if any of the Relative Figures as computed on the bases set out in Rule 1006 exceeds 20%, and such a transaction is classified as a major transaction. 13

14 3.2 Application of Rule 1006 of the Listing Manual The Relative Figures are derived based on the assumption that our Group paid Maximum Consideration for the Proposed Development and are set out as follows: Rule 1006(a) Net asset value of the assets to be disposed of Net asset value of the Group Relative Figures Not Applicable as this transaction is not a disposal Rule 1006(b) Net profits attributable to the Proposed Development Net profits of the Group for FY2013 Relative Figures Not applicable as there are no profits attributable to the Proposed Development until it is completed. The Proposed Development is expected to be completed in 2016/2017. As such there are no net profits attributable to the Proposed Development for FY2013. Rule 1006(c) Consideration for the Proposed Development The Company s market capitalisation (1) Relative Figures S$15,038,888 S$33,911, % Rule 1006(d) Maximum number of equity securities issued by the Company as consideration Number of the Company s equity securities previously in issue Relative Figures Not Applicable as no equity securities will be issued by the Company as consideration. Note: (1) Under Rule 1002(5) of the SGX Listing Manual Mainboard Rules, market capitalisation is determined by multiplying the number of shares in issue by the weighted average price of such shares transacted on the market day preceding the date of the sale and purchase agreement. Accordingly, the market capitalisation of the Company is based on 251,196,667 Shares in issue (excluding treasury shares) as at 11 April 2014 and the volume weighted average price of S$0.135 of the Shares transacted on 11 April 2014, being the market day preceding the date of the JTC Letter of Acceptance in relation to the Proposed Development. However, as there was no transaction of the Shares on 11 April 2014, the volume weighted average price of the Shares on 10 April 2014 was used to derive at the volume weighted average price of the Shares transacted on 11 April 2014, this being S$ As the relative figures above computed pursuant to the bases set out in Rule 1006(c) exceeds 20%, the Proposed Development will be classified as a major transaction under Chapter 10 of the Listing Manual, and is accordingly subject to the requisite approval from the Company s 14

15 Shareholders in a general meeting ( Shareholders Approval ) in accordance with Rule 1014 of the Listing Manual. 15

16 4. INTEREST OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Based on information in the Register of Directors Shareholdings and Register of Substantial Shareholders as at the Latest Practicable Date, the interests of our Directors and Substantial Shareholders as at the Latest Practicable Date were as follows: Directors Direct Interest Deemed Interest Total Interest Number of Shares % (1) Number of Shares % (1) Number of Shares Tan Chu En Ian 700, ,092, ,792, Sinta Muchtar ,092,079 ( ² ) ,271, ,479,235 ( ³ ) Yeung Koon Sang alias David Yeung 700,000 (5) % (1) 100, , Dr. Vasoo Sushilan 100, , Teng Cheong Kwee 100, , Substantial Shareholders Lauw & Sons Holdings Pte Ltd Treadstone Holdings Pte Ltd Holders of less than 5% who are related to Directors or Substantial Shareholders 41,479, ,479, ,092, ,000,000 (4) ,092, Nil Nil Nil Nil Nil Nil 16

17 Notes:- (1) The percentage shareholding interest is based on the issued share capital of 251,196,667 Shares excluding treasury shares as at the Latest Practicable Date. (2) Mr Tan Chu En Ian and Madam Sinta Muchtar each own 50% of the issued share capital of Treadstone Holdings Pte Ltd. They are therefore deemed interested in the 37,092,079 Shares held by Treadstone Holdings Pte Ltd. (3) Madam Sinta Muchtar owns 12.5% of the issued share capital of Lauw & Sons Holdings Pte Ltd and is deemed interested in the 41,479,235 Shares held by Lauw & Sons Holdings Pte Ltd. (4) Treadstone Holdings Pte Ltd also has a beneficial interest in 9,000,000 Shares held by DBS Nominees Pte Ltd. (5) Madam Sinta Muchtar is the spouse of Mr Tan Chu En Ian and is deemed interested in the 700,000 Shares held by Mr Tan Chu En Ian. None of the Directors or Substantial Shareholders or their respective Associates has any interest, direct or indirect, in the Proposed Development. 17

18 5. FINANCIAL EFFECTS OF THE PROPOSED DEVELOPMENT 5.1 Assuming the Maximum Consideration of S$15,038, is paid for the Proposed Development For illustrative purposes only, the financial effects of the Proposed Development on the net tangible assets ( NTA ) per share and earnings per share ( EPS ) of the Group, assuming the Maximum Consideration of S$15,038, is paid for the Proposed Development and based on the latest audited consolidated financial statements of the Group for the financial year ended 31 December 2013 are set out below: (a) NTA Assuming the Proposed Development had been completed on 31 December 2013, the financial effect on the NTA per share of the Group is as follows: Before Proposed Development After Proposed Development NTA (SGD 000) 55,759 55,759 No. of issued shares 251,196, ,196,667 NTA per share (cents) (b) EPS Assuming the Proposed Development had been completed on 1 January 2013, the financial effect on the EPS of the Group is as follows: Before Proposed Development After Proposed Development Profit after income tax (SGD 000) 2,012 2,012 No. of issued shares 251,196, ,196,667 EPS (cents) (c) Gearing (1) 18

19 Assuming that our Group obtains loan financing for 60% of the Maximum Consideration in relation to the Land Price and building works at an interest rate of 3% per annum, and finances the remaining expenditure with internal funds, the effect of the Proposed Development on our Group s gearing, assuming the Proposed Development had been completed on 31 December 2013, is as follows: Before the Proposed Development (S$ 000) After the Proposed Development (S$ 000) Proposed Borrowings (2) 2,502 11,525 Shareholders Funds (3) 55,759 55,759 Debt to Equity Ratio Notes: (1) Gearing is computed based on the ratio of Proposed Borrowings to Shareholders Funds. (2) The expression Proposed Borrowings refers to the amounts expressed in Singapore dollars of liabilities (excluding contingent liabilities) arising from borrowings from shareholder(s), financial institution and non-financial institution lenders. (3) The expression Shareholders Funds refers to the amounts expressed in Singapore dollars represented by the aggregate of the issued and paid-up capital, fair values reserves, translation reserves, reserve for own shares, share option reserves and revenues reserves of the Group. 5.2 Assuming Shareholders Approval is not obtained The SGX-ST has advised in a waiver letter ( Waiver Letter ) dated 3 April 2014 that it has no objection to the Company s application with regard to compliance with Listing Rule 1014(2) subject to the following: - (a) (b) the Company announcing the waiver granted, the reasons for seeking the waiver and the conditions as required under Listing Rule 107; and submission of a written confirmation from the Company that the waiver does not contravene any laws and regulations governing the Company and the articles of association of the Company. Following this, the Company has released an announcement in relation to, among others, paragraph 5.2(a) of this Circular on 15 April 2014, and the Company has also submitted a written confirmation to the SGX-ST in relation to paragraph 5.2(b) of this Circular. 19

20 Besides stating that SGX had no objection to the Company s proposal to seek shareholder s ratification of the Proposed Development at the EGM to be convened after the completion of the tender, the Waiver Letter also stated that the Company should clearly state to shareholders in the circular, the purpose of the Proposed Development and the financial impact to the Company in the worst-case scenario where the resolution for the Proposed Development is not ratified by shareholders at the EGM. The Directors wish to highlight that acceptance by the JTC of the tender has constituted a binding contract between the JTC and our Subsidiary as the tender for the Land was required to be an unconditional tender and could not be conditional upon approval from shareholders. In the event that the resolution for the Proposed Development is not ratified by shareholders at the EGM, the Subsidiary would not be able to observe or perform the terms and conditions contained or referred to in these Conditions of Tender, the Technical Conditions of Tender and the Building Agreement, JTC shall be entitled to pursuant to Condition 40 of Conditions of Tender, amongst others: (a) (b) forfeit the tender deposit and all other moneys including any part of the sale price or adjusted sale price paid under the provisions of Conditions of Tender which shall thereupon belong to JTC ( Penalty Under Condition 40(a) ); and redispose of and where possession of the said land has been delivered to the successful tenderer in accordance with Condition 41 of Conditions of Tender, to re-enter upon and resume possession and to redispose of the said land and any interest therein and in the Development (whether construction thereof has commenced or not) as if the successful tenderer has never submitted a tender under these Conditions of Tender and whether by public auction, private treaty or tender subject to such conditions and generally in such manner as JTC may in its discretion think fit with power to vary or rescind any contract, buy in any auction and/or to redispose of the same and the deficiency in the proceeds (if any) arising on such redisposal or attempted redisposal shall be made good and paid for by the successful tenderer to JTC and shall be recoverable by JTC against the successful tenderer as damages but any increase of proceeds on a redisposal shall belong to JTC absolutely. According to Condition 51 of Conditions of Tender, without prejudice to any right of action or other remedy which JTC may have or any proceedings, civil or criminal, which the Government and/or JTC may also decide to initiate or take (a) The Government and the JTC reserve the right to debar the successful tenderer from participating in all future tenders and auctions of the Ministries and Departments of the Government and Statutory Boards for such period as JTC may at their discretion determine for any failure on the part of the successful tenderer to observe or perform any 20

21 of the terms and conditions contained or referred to in these Conditions of Tender, the Technical Conditions of Tender and the Building Agreement; and (b) The successful tenderer shall pay such amount of compensation as notified by JTC for any loss and damage that may be suffered, directly or indirectly, by the JTC as a result of any failure to observe or perform any of the terms and conditions contained or referred to in these Conditions of Tender, the Technical Conditions of Tender and the Building Agreement on the part of the successful tenderer or the employees or agents of the successful tenderer. (a) and (b) above are collectively referred to as Penalty Under Condition 51. For illustrative purposes only, the financial effects of the Proposed Development on the NTA per share and EPS of the Group, assuming S$1,347,902.54, being the amount of 25% of the Land Price with the corresponding amounts of the GST already paid, is forfeited by the JTC pursuant to Penalty Under Condition 40(a) and based on the latest audited consolidated financial statements of the Group for the financial year ended 31 December 2013 are set out below: (a) NTA Assuming the Proposed Development had been aborted on 31 December 2013 and the amount S$1,347, is forfeited, the financial effect on the NTA per share of the Group is as follows: Before Proposed Development After Proposed Development was aborted NTA (SGD 000) 55,759 54,411 No. of issued shares 251,196, ,196,667 NTA per share (cents) (b) EPS Assuming the Proposed Development had been aborted on 1 January 2013, and the amount S$1,347, is forfeited, the financial effect on the EPS of the Group is as follows: 21

22 Before Proposed Development After Proposed Development was aborted Profit after income tax (SGD 000) 2, No. of issued shares 251,196, ,196,667 EPS (cents) The Company wishes to highlight that the figures in section 5.2 above is strictly for illustrative purposes only. The actual damages and loss to the Company, in the event where the resolution for the Proposed Development is not ratified by the Shareholders at the EGM, would be more than the forfeiture by the JTC of the amount S$1,347,902.54, as the amount S$1,347, does not include any other compensation JTC may impose pursuant to Penalty Under Condition 51 and other incidental costs and expenses incurred in relation to the preparation and bidding of the Land and the Proposed Development, not to mention the reputation loss and potential loss of business opportunities which the Group may suffer. 6. SERVICE AGREEMENTS No person will be appointed to the Board in connection with the Proposed Development and no service contracts in relation thereto will be entered into by the Company. 7. DIRECTORS RECOMMENDATIONS The Directors are of the opinion that the Proposed Development are in the best interests of the Company. Accordingly, they recommend that Shareholders vote in favour of the Ordinary Resolution relating to the Proposed Development. 8. EXTRAORDINARY GENERAL MEETING The EGM, notice of which is set out on page N-1 of this Circular, will be held at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore on 10 July 2014 at 9 a.m. for the purpose of considering and, if thought fit, passing (with or without modifications) the Ordinary Resolution set out in the notice of EGM. 9. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders who are unable to attend the EGM and wish to appoint a proxy to attend and vote on their behalf, should complete, sign and return the attached Proxy Form in accordance with the 22

23 instructions printed thereon as soon as possible and, in any event, so as to arrive at the Company s registered office at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore , not less than 48 hours before the time fixed for the EGM. Appointment of a proxy by a Shareholder does not preclude him from attending and voting in person at the EGM if he so wishes. A proxy need not be a Shareholder. A Depositor shall not be regarded as a Shareholder entitled to attend the EGM and to speak and vote thereat unless Shares are entered against his name on the Depository Register at least 48 hours before the time fixed for the EGM. 10. DIRECTORS RESPONSIBILITY STATEMENT The Directors, collectively and individually, accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Proposed Development and the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in the Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/ or reproduced in the Circular in its proper form and context. 11. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents may be inspected by Shareholders at the registered office of the Company at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore during normal business hours for three (3) months from the date of this Circular: (a) (b) (c) (d) (e) the Memorandum and Articles of Association; the Form of Tender; JTC Letter of Acceptance; Conditions of Tender (including Building Agreement and Lease and); Technical Conditions of Tender; and (f) Annual report of the Company dated 31 December

24 Yours faithfully For and on behalf of the Board AEI CORPORATION LTD. Tan Chu En Ian Executive Director and Chief Executive Officer 24

25 NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE OF EXTRAORDINARY GENERAL MEETING AEI CORPORATION LTD. (Incorporated in the Republic of Singapore) (Company Registration Number G) NOTICE IS HEREBY GIVEN that an extraordinary general meeting ( EGM ) of the shareholders ( Shareholders ) of AEI Corporation Ltd. ( Company ) will be held on 10 July 2014 at 9 a.m. at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore for the purposes of considering and, if thought fit, passing (with or without modifications) the following resolution: All capitalised terms in this notice, which are not defined herein, shall have the same meanings ascribed to them in the Circular to Shareholders of the Company dated 25 June ORDINARY RESOLUTION: RATIFICATION OF THE COMPANY S ENTRY INTO THE PROJECT RELATING TO THE DEVELOPMENT OF THE LAND That: (i) (ii) the entry by the Company into the project relating to the development of Land situated at Tuas South Street 13 (Plot 38) in accordance with the Conditions of Tender and the Technical Conditions of Tender ( Proposed Development ) be and are hereby approved, ratified and confirmed; and the Directors be and are hereby authorised to complete and to do all acts and things (including but not limited to the negotiation, execution and delivery of all such agreements and documents as may be required) as they/he/she may consider necessary, desirable, expedient or in the interests of the Company, to give effect to the Proposed Development and/or the transactions contemplated under the Proposed Development and/or this resolution. BY ORDER OF THE BOARD AEI Corporation Ltd. Foo Soon Soo Ngiam Zee Moey Company Secretaries Singapore, 25 June 2014 N-1

26 NOTICE OF EXTRAORDINARY GENERAL MEETING Notes: 1. A member entitled to attend and vote at this Meeting is entitled to appoint not more than two (2) proxies to attend and vote instead of him. A proxy need not be a member of the Company. 2. The form of proxy in the case of an individual shall be signed by the appointor or his attorney, and in the case of a corporation, either under its common seal or under the hand of an officer or attorney duly authorised. 3. If the form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit. 4. If no name is inserted in the space for the name of your proxy on the form of proxy, the Chairman of the EGM will act as your proxy. 5. The form of proxy or other instruments of appointment shall not be treated as valid unless deposited at the registered office of the Company at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore not less than 48 hours before the time appointed for holding the EGM and at any adjournment thereof. 6. A Depositor s name must appear on the Depository Register maintained by the CDP at least 48 hours before the time fixed for holding the EGM in order for the Depositor to be entitled to attend and vote at the EGM. N-2

27 PROXY FORM PROXY FORM AEI CORPORATION LTD. (Incorporated in the Republic of Singapore) (Company Registration Number: G) EXTRAORDINARY GENERAL MEETING PROXY FORM *I/We, NRIC/Passport No. of (Address) being a *member/members of AEI CORPORATION LTD. ( Company ) hereby appoint: Name Address NRIC/Passport No. Proportion of Shareholding (%) and/or (delete as appropriate) Name Address NRIC/Passport No. Proportion of Shareholding (%) or failing which, the Chairman of the extraordinary general meeting ( EGM ), as *my/our proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll at the EGM to be convened on 10 July 2014 at 9 a.m. at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore and at any adjournment thereof. *I/We direct *my/our proxy/proxies to vote for or against the resolutions to be proposed at the EGM as indicated hereunder. If no specific direction as to voting is given, the *proxy/proxies will vote or abstain from voting at *his/her/their discretion, as *he/she/they will on any other matter arising at the EGM. Ordinary Resolution To ratify the Company s entry into the Proposed Development To be used on a show of hands For(1) Against(1) No. of votes for(2) To be used in the event of a poll No. of votes against(2) Notes: (1) Please indicate your vote For or Against with a tick within the box provided. (2) If you wish to exercise all your votes For or Against, please indicate with a tick within the box provided. Alternatively, please indicate the number of votes as appropriate. Dated this day of Total number of Shares held CDP Register Register of Members *Signature(s) of Member(s)/Common Seal *Delete accordingly P-1

28 PROXY FORM IMPORTANT: PLEASE READ NOTES BEFORE COMPLETING THIS PROXY FORM Notes: 1. A member of the Company entitled to attend and vote at the EGM is entitled to appoint one (1) or two (2) proxies to attend and vote in his stead. 2. Where a member appoints more than one (1) proxy, he/she should specify the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy and if no percentage is specified, the first named proxy shall be treated as representing 100 per cent of the shareholding and the second named proxy shall be deemed to be an alternate to the first named. 3. A proxy need not be a member of the Company. 4. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in section 130A of the Companies Act, Cap. 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the register of members of the Company, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and registered in your name in the register of members of the Company, you should insert the aggregate number of Shares. If no number is inserted, this form of proxy will be deemed to relate to all the Shares held by you. 5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 12 Penjuru Lane, Jurong Town Industrial Estate, Singapore not less than 48 hours before the time set for the EGM. 6. The instrument appointing a proxy or proxies must be under the hand of the appointor or by his/her attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer. 7. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 8. A corporation which is a shareholder of the Company may, in accordance with section 179 of the Companies Act (Chapter 50) of Singapore, authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the EGM. 9. The Company shall be entitled to reject the instrument appointing a proxy or proxies, if it is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies if a shareholder of the Company, being the appointor, is not shown to have shares entered against his/her name in the Depository Register as at 48 hours before the time appointed for holding the EGM, as certified by the CDP to the Company. P-2