NATURAL COOL HOLDINGS LIMITED

CIRCULAR DATED 23 OCTOBER 2015 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER IMMEDIATELY. If you have sold or transferred all your shares in the issued share capital of Natural Cool Holdings Limited (the Company ), you should immediately forward this circular ( Circular ) together with the Notice of EGM and the accompanying Proxy Form immediately 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. This Circular has been prepared by the Company and its contents have been reviewed by the Company s sponsor, PrimePartners Corporate Finance Pte. Ltd. (the Sponsor ), for compliance with the Singapore Exchange Securities Trading Limited (the SGX-ST ) Listing Manual Section B: Rules of Catalist. The Sponsor has not verifi ed the contents of this Circular. This Circular has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this Circular, including the accuracy, completeness or correctness of any of the information, statements or opinions made or reports contained in this Circular. The contact person for the Sponsor is Mr Lance Tan, Director, Continuing Sponsorship, at 16 Collyer Quay, #10-00 Income at Raffl es, Singapore 049318, telephone (65) 6229 8088. NATURAL COOL HOLDINGS LIMITED (Incorporated in Singapore on 19 July 2005) (Company Registration No.: 200509967G) CIRCULAR TO SHAREHOLDERS in relation to 1. THE PROPOSED DISPOSAL BY THE COMPANY OF THE ENTIRE ISSUED AND PAID-UP SHARE CAPITAL, COMPRISING 3,780,001 SHARES, OF GATHERGATES GROUP PTE. LTD.; AND 2. THE PROPOSED ADOPTION OF SHARE BUYBACK MANDATE Last Date and Time for Lodgement of Proxy Forms : 7 November 2015 at 2 p.m. Date and Time of Extraordinary General Meeting : 9 November 2015 at 2 p.m. Place of Extraordinary General Meeting : 29 Tai Seng Avenue #07-01, Natural Cool Lifestyle Hub, Singapore 534119

TABLE OF CONTENTS DEFINITIONS... 3 LETTER TO SHAREHOLDERS... 6 1 INTRODUCTION... 6 2 THE PROPOSED DISPOSAL.. 8 3 INTRODUCER S FEE... 11 4 RATIONALE FOR THE PROPOSED DISPOSAL... 11 5 CORPORATE STRUCTURE OF THE GROUP FOLLOWING THE PROPOSED DISPOSAL... 11 6 USE OF PROCEEDS... 11 7 FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL... 12 8 DIRECTORS SERVICE CONTRACTS... 12 9 THE PROPOSED ADOPTION OF SHARE BUYBACK MANDATE... 13 10 INTERESTS OF DIRECTORS AND/OR SUBSTANTIAL SHAREHOLDERS... 25 11 EXTRAORDINARY GENERAL MEETING... 26 12 ACTIONS TO BE TAKEN BY SHAREHOLDERS... 26 13 RECOMMENDATION OF DIRECTORS... 26 14 DIRECTORS RESPONSIBILITY STATEMENT... 26 15 DOCUMENTS FOR INSPECTION... 27 APPENDIX 1: CORPORATE STRUCTURE OF THE GROUP POST-COMPLETION OF THE PROPOSED DISPOSAL... 28 Page NOTICE OF EXTRAORDINARY GENERAL MEETING... 29 PROXY FORM 2

DEFINITIONS Except where the context otherwise requires, the following defi nitions apply throughout this Circular: ACRA : The Accounting and Corporate Regulatory Authority of Singapore AGM : An annual general meeting of the Company Agreement : The sale and purchase agreement dated 16 September 2015 entered into between the Company and the Purchaser in relation to the Proposed Disposal Board of Directors or : The directors of the Company as at the Latest Practicable Date Board or Directors Business Day : A day (other than a Saturday, Sunday and public holiday) on which commercial banks are generally open for business in Singapore Catalist Rules : The SGX-ST Listing Manual Section B: Rules of Catalist, as amended, modifi ed or supplemented from time to time CDP : The Central Depository (Pte) Limited Circular : This circular to Shareholders dated 23 October 2015 Company : Natural Cool Holdings Limited Companies Act or Act : Companies Act (Chapter 50) of Singapore, as amended, modifi ed or supplemented from time to time Completion : The completion of the Proposed Disposal in accordance with the terms of the Agreement Completion Date : 30 November 2015, or such other date as the Purchaser and the Company may agree in writing, on which Completion will take place Conditions Precedent : The conditions precedent to Completion as set out in Section 2.4 of this Circular Consideration : The aggregate of S$33,888,888, being the sale consideration of the Proposed Disposal Corporate Guarantees : All the corporate guarantees granted by the Company in favour of fi nancial institutions to secure certain credit facilities granted to the Target Group EGM : The extraordinary general meeting of the Company, notice of which is set out on page 29 of this Circular EPS : Earnings per Share FY : Financial year ended or ending 31 December FY2014 Results : The audited consolidated fi nancial statements of the Group for the fi nancial year ended 31 December 2014 Group : The Company and its subsidiaries as at the date of this Circular Introducer : Gateway Capital Group Pte Ltd 3

DEFINITIONS Introducer s Fee : An aggregate of S$788,000 payable by the Company to the Introducer upon Completion Latest Practicable Date : 9 October 2015, being the latest practicable date prior to the printing of this Circular Market Day(s) : A day or days on which the SGX-ST is open for securities trading Market Purchases : On-market purchases transacted on the SGX-ST through the SGX-ST s trading system, through one (1) or more duly licensed stockbrokers appointed by the Company for the purpose of the Share Buyback Net Proceeds : The estimated net proceeds from the Proposed Disposal, after taking into consideration the Introducer s Fee, professional fees and miscellaneous fees NTA : Net tangible assets OCBC Charge : An open charge over the assets of Gathergates Switchgear (M) Sdn. Bhd. in favour of OCBC Bank (Malaysia) Berhad Off-Market Purchases : Off-market purchases (if effected otherwise than on the SGX-ST) in accordance with an equal access scheme as defi ned in Section 76C of the Act Ordinary Resolution(s) : The ordinary resolution(s) as set out in the Notice of EGM on page 29 of this Circular Proposed Disposal : The proposed disposal by the Company of the entire issued and paidup capital of the Target Company Purchaser : Nitto Kogyo Corporation Sale Shares : An aggregate of 3,780,001 ordinary shares in the Target Company, representing 100% of the entire issued and paid up share capital of the Target Company held by the Company Securities Account : A securities account maintained by a Depositor with CDP but does not include a securities sub-account maintained with a Depository Agent SGX-ST : Singapore Exchange Securities Trading Limited Share Buyback : The purchase or acquisition of issued Share(s) by the Company pursuant to the terms of the Share Buyback Mandate Share Buyback Mandate : The general and unconditional mandate given by the Shareholders to authorise the Directors to exercise all powers of the Company to purchase or otherwise acquire, on behalf of the Company, issued Shares in accordance with the terms set out in this Circular as well as the rules and regulations set forth in the Act and the Catalist Rules Shareholders : Persons who are registered as holders of the Shares in the Register of Members of the Company, or where CDP is the registered holder, the term Shareholders shall, in relation to such Shares, mean the Depositors who have Shares entered against their names in the Depository Register 4

DEFINITIONS Shares : Ordinary shares in the issued capital of the Company Take-over Code : The Singapore Code on Take-overs and Mergers, as amended, modifi ed or supplemented from time to time Target Company : Gathergates Group Pte. Ltd. Target Group : Collectively, the Target Company and the companies of which shares are held, directly or indirectly, by the Target Company, the details of which are set out in Section 2.1 of this Circular, and each, a Target Group Company Treasury Shares : Issued Shares of the Company which were (or are treated as having been) purchased by the Company in circumstances which Section 76H of the Act applies and have since purchase been continuously held by the Company S$ and cents : Singapore dollars and cents, the lawful currency of Singapore % or per cent. : Percentage or per centum Unless the context otherwise requires: (c) (d) (e) (f) (g) the terms Depositor, Depository Register and Depository Agent shall have the meanings ascribed to them respectively in Section 130A of the Companies Act; the terms subsidiary, related company and substantial shareholder shall have the meanings ascribed to them respectively in the Companies Act ; words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders; any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defi ned under the Companies Act, the Catalist Rules or the Take-over Code or any modifi cation thereof and not otherwise defi ned in this Circular shall, where applicable, have the same meaning ascribed to it under the Companies Act, the Catalist Rules or the Take-over Code or such modifi cation thereof, as the case may be, unless the context otherwise requires; any reference to a time of a day in this Circular shall be a reference to Singapore time unless otherwise stated; any discrepancies between the figures listed and the 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; and the headings in this Circular are inserted for convenience only and shall be ignored in construing this Circular. 5

NATURAL COOL HOLDINGS LIMITED (Incorporated in the Republic of Singapore) (Company Registration No.: 200509967G) Directors Registered Office Mr Joseph Ang Choon Cheng (Executive Chairman) 29 Tai Seng Avenue, #07-01 Mr Tsng Joo Peng (Executive Director and Natural Cool Lifestyle Hub, Chief Executive Offi cer) Singapore 534119 Mr Eric Ang Choon Beng (Executive Director) Mr Ken Tan Aik Kwong (Executive Director) Mr Edward Chia Puay Hwee (Executive Director) Mr Lim Siang Kai (Lead Independent Director) Dr Wu Chiaw Ching (Independent Director) Mr William Da Silva (Independent Director) 23 October 2015 To: The Shareholders of Natural Cool Holdings Limited Dear Sir/Madam (1) THE PROPOSED DISPOSAL BY THE COMPANY OF THE ENTIRE ISSUED AND PAID-UP SHARE CAPITAL, COMPRISING 3,780,001 SHARES, OF GATHERGATES GROUP PTE. LTD.; AND (2) THE PROPOSED ADOPTION OF SHARE BUYBACK MANDATE 1 INTRODUCTION 1.1 Background of Proposed Disposal The Company had on 16 September 2015 announced that it had on the same day entered into the Agreement with the Purchaser, an independent third party, pursuant to which the Company shall sell, and the Purchaser shall purchase, 3,780,001 ordinary shares ( Sale Shares ) in Gathergates Group Pte. Ltd. ( Target Company ), representing 100% of the issued share capital of the Target Company, free from all encumbrances and with all rights and advantages attaching to them as from Completion. 1.2 Proposed Disposal as Major Transaction The Proposed Disposal is governed by Chapter 10 of the Catalist Rules. Based on the latest announced unaudited consolidated financial statements of the Group for the six (6) months ended 30 June 2015, the relative figures in respect of the Proposed Disposal, as computed on the bases set out in Rule 1006 of the Catalist Rules, are as follows: Rule 1006 The net asset value of the assets to be disposed of, compared with the Group s net asset value as at 30 June 2015. Rule 1006 The unaudited profi t before income tax attributable to the assets disposed of, compared with the Group s unaudited profi t before income tax as at 30 June 2015. Target Company (S$ 000) Group (S$ 000) Relative Figures (%) 18,795 43,214 43.49 427 288 148.26 6

Rule 1006 (c) Aggregate value of consideration received, compared with the market capitalisation of the Company as at 15 September 2015, being the last full market day immediately preceding the execution of the Agreement Rule 1006 (d) The number of equity securities issued by the Company as consideration for an acquisition, compared with the number of equity securities previously in issue. Rule 1006 (e) The aggregate volume or amount of proved and probable reserves to be disposed of, compared with the aggregate of the Group s proved and probable reserves. This basis is applicable to a disposal of mineral, oil or gas asset by a mineral, oil and gas company, but not to an acquisition of such assets. Target Company (S$ 000) Group (S$ 000) Relative Figures (%) 33,889 26,503 127.87 Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Note:- (1) The market capitalisation of the Company of approximately S$26.5 million is determined by multiplying 205,447,985 Shares in issue by the volume weighted average price of S$0.129 of such Shares transacted as at 15 September 2015, being the market day immediately preceding the date of the Agreement. As the relative fi gures calculated pursuant to Rule 1006 and Rule 1006(c) exceed 50%, the Proposed Disposal will be classified as a major transaction within the meaning of Rule 1014 of the Catalist Rules, and will be subject to the approval of the Shareholders of the Company. As such, the Directors are convening the EGM to seek Shareholders approval for the Proposed Disposal. 1.3 Proposed Adoption of Share Buyback Mandate It is a requirement under the Act that a company which wishes to purchase or otherwise acquire its own shares has to obtain the approval of its shareholders at a general meeting of its shareholders. It is also a requirement under the Catalist Rules that an issuer which wishes to purchase its own shares should obtain prior approval of its shareholders at a general meeting. In this regard, approval is now being sought from Shareholders at the EGM for the adoption of the Share Buyback Mandate. An Ordinary Resolution will be proposed at the EGM pursuant to which the Share Buyback Mandate will be given to the Directors to exercise all powers of the Company to purchase or otherwise acquire its issued Shares on the terms of the Share Buyback Mandate. If approved by Shareholders at the EGM, the authority conferred by the Share Buyback Mandate will continue to be in force until the conclusion of the next AGM of the Company or the date by which such AGM is required to be held (whereupon it will lapse, unless renewed at such meeting) or the date on which the purchases or acquisitions of Shares have been carried out to the full extent mandated or until it is varied or revoked by the Company in a general meeting (if so varied or revoked prior to the next AGM of the Company), whichever is the earliest. 1.4 Purpose of Circular The purpose of this Circular is to explain the reasons for, and to provide Shareholders with relevant information relating to the Proposed Disposal and the proposed adoption of the Share Buyback Mandate as well as to seek Shareholders approval for Ordinary Resolutions to be tabled at the forthcoming EGM. This Circular has been prepared solely for the purposes outlined above and may not be relied upon by any persons (other than the Shareholder to whom this Circular is despatched to by the Company) or for any other purpose. 7

2 THE PROPOSED DISPOSAL 2.1 Information on the Target Company The Target Company is a company with limited liability, incorporated in Singapore on 25 November 2008. The Target Company has an issued share capital of S$3,780,001 comprising 3,780,001 fully paid ordinary shares, which is wholly-owned by the Company. The Target Company is an investment holding company, which holds shares, either directly or indirectly (through Gathergates Switchgear Pte. Ltd.), in the following companies: Held directly by Target Company Place of Incorporation Shareholding (%) Gathergates Switchgear Pte. Ltd. Singapore 100 Titans Power System Pte. Ltd. Singapore 100 Gathergates Industries (M) Sdn. Bhd. Malaysia 100 Lorentz Asia Pte. Ltd. Singapore 65 Held indirectly through Gathergates Switchgear Pte. Ltd. Gathergates Switchgear (M) Sdn. Bhd. Malaysia 100 Gathergates Elektrik Sdn. Bhd. Malaysia 100 VNS Manufacturing Pte. Ltd. Singapore 81 VNS Switchgear (India) Pvt. Ltd. India 19 (collectively with the Target Company, the Target Group, and each, a Target Group Company ). The Target Group is in the business of switchgear design and manufacturing, with its switchgear and controlgear products being marketed and sold under the brand Gathergates. 2.2 Information on the Purchaser The Purchaser is a public company limited by shares, incorporated in 1948 in Japan, and is currently listed on the First Section of the Tokyo Stock Exchange and Nagoya Stock Exchange. The Purchaser is mainly engaged in the designing, manufacturing and distribution of switchboard and controlling boards related products, and has been supporting the electrical and information infrastructure in various forms through the development of electrical equipment, machines and proposals since its incorporation. 2.3 Consideration The Consideration payable by the Purchaser for the Sale Shares is an aggregate of S$33,888,888, payable in cash by way of wire transfer in immediately available funds to the bank account nominated by the Company, on the Completion Date. The Consideration was arrived at on a willing buyer willing seller basis after arm s length negotiations, taking into account the unaudited net asset value and profi t after tax of the Target Group of approximately S$18.8 million and S$0.6 million respectively for the six (6) months fi nancial period ended 30 June 2015, together with the Target Company s unaudited consolidated profit after tax of approximately S$0.6 million for FY2014. 2.4 Conditions Precedent Completion of the Proposed Disposal is subject to the following Conditions Precedent, including but not limited to: the passing of a resolution by the Shareholders (in terms reasonably satisfactory to the Purchaser) approving the Proposed Disposal and the transactions contemplated by the Agreement; 8

(c) (d) (e) (f) (g) the delivery to the Purchaser of written consents (in terms satisfactory to the Purchaser) from certain persons to the effect that they consent to the sale and purchase of the Sale Shares and agree not to exercise any right (whether of termination or otherwise) arising by reasons of the Proposed Disposal, together with any other consents, approvals, notifi cations or clearances which are necessary or which the Purchaser has been advised that it is desirable to obtain (including from governmental or offi cial authorities in Singapore, Malaysia, India or elsewhere for and in connection with the transactions contemplated by the Agreement); there being no applicable laws that have the effect of prohibiting, delaying, making illegal or otherwise restraining Completion and none of the Company or any of the Target Group Company having received notice of any injunction or other order, directive, or notice restraining or prohibiting the consummation of the transactions hereby contemplated, 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 fact, matter or event which affects or is likely to affect in a materially adverse manner the business/operations, fi nancial position or prospects of the Target Group; each of Edward Chia Puay Hwee and Ken Tan Aik Kwong having entered into management or service agreements with Gathergates Switchgear Pte. Ltd. with effect from Completion; certain key employees of the Target Group remaining in the employment with the relevant Target Group Company, and not having given any notice terminating his or her employment agreements; and the Company having submitted to the relevant authorities, the documents required for the release and discharge of the OCBC Charge on or before 30 September 2015. 2.5 Corporate Guarantees As at the date of the Agreement, the Company has had provided certain Corporate Guarantees to secure certain credit facilities granted to the Target Group. The Purchaser has, in the Agreement, undertaken to the Company as follows: (c) to use its best endeavours to, within a reasonable time after the date of the Agreement and in any event within 60 days from Completion, procure and ensure the replacement or release of the Company from the Corporate Guarantees so as to discharge in full the obligations of the Company under such Corporate Guarantees; subject to sub-paragraph above, in respect of any Corporate Guarantees that are not released or discharged at Completion, the Purchaser shall, commencing from the Completion Date, ensure that the aggregate borrowings or drawings made by the Target Group Companies under the trade fi nancing facilities secured by such Corporate Guarantees does not at any time exceed S$12,000,000; subject to sub-paragraph above, in respect of any other Corporate Guarantees not covered by sub-paragraph and that are not released or discharged at Completion, to cease as from Completion drawing down on or incurring any additional borrowings (including any additional borrowings on facilities that have been paid down) under the fi nancing facilities secured by the Corporate Guarantees immediately upon Completion; and 9

(d) for as long as the Company is not discharged from liabilities under the Corporate Guarantees, to, from the Completion Date: (i) (ii) ensure that each of the Target Group Companies complies with all covenants and obligations under the loan or fi nancing documents pursuant to which the respective Corporate Guarantees were granted under and not do anything that may prejudice the obligations of the Company under the Corporate Guarantees or result in a claim against the Company pursuant to such Corporate Guarantees, including but not limited to ensuring the proper conduct and maintenance of the bank accounts maintained with such fi nancial institutions required under the relevant loan or fi nancing documents; and indemnify the Company against (1) all amounts paid by the Company pursuant to any such Corporate Guarantees and (2) all demands, claims, actions, proceedings, payments, fi nes, penalties, costs, expenses, losses, damages or other liabilities suffered or incurred by the Company arising from any premature termination, acceleration of payment or suspension of, or other loss of use of the accommodations afforded to the Target Group under, the fi nancing facilities pursuant to which the relevant Corporate Guarantees were granted under, and in the event the Company becomes liable to pay a lender of the Target Group under any of the Corporate Guarantees, pay or cause the relevant Target Group Company to pay within 30 days of demand the amount(s) that the Company is liable for under such Corporate Guarantee. The Company has, in the Agreement, undertaken to provide all necessary assistance as the Purchaser may reasonably require (such assistance not including the repayment of the facilities and loans secured by the Corporate Guarantees or the provision of substitute security by the Company), to ensure the replacement or release of the Company from the Corporate Guarantees so as to discharge in full the obligations of the Company under such Corporate Guarantees. 2.6 Completion Pursuant to the Agreement, Completion shall take place on the Completion Date, being 30 November 2015 or such other date as the Company and the Purchaser may agree in writing. In the event that any of the Conditions Precedent are not fulfi lled or waived by the Completion Date, the Company and the Purchaser shall mutually agree to defer Completion by a period of not more than 30 days, and if any of the Conditions Precedent are still not fulfi lled by the end of the 30 days period from the Completion Date, the Company and the Purchaser shall not be bound to proceed with the Proposed Disposal and the Agreement shall cease to be of any effect, save for certain surviving clauses and save in respect of claims arising out of any antecedent breach of the Agreement. In the event that any of the completion deliverables by the Company are not delivered on the Completion Date, the Company and the Purchaser shall mutually agree to defer Completion by a period of not more than 30 days, and if any of the completion deliverables are still not delivered by the Company at the end of the 30 days period from the Completion Date, the Purchaser shall not be obliged to complete the purchase of the Sale Shares or pay any of the Consideration, and may in its absolute discretion (in addition and without prejudice to any other right or remedy available to it) by written notice to the Company: waive all or any of the completion deliverables at its discretion (and without prejudice to its rights under the Agreement) and proceed to Completion so far as practicable; or terminate the Agreement without liability on its part. 10

2.7 Obligations post-completion Following Completion, the Company shall: (c) within 180 days from the Completion Date, release the and discharge the OCBC Charge; in respect of Gathergates Industries (M) Sdn. Bhd., procure the issue of the manufacturing licence required pursuant to the Industrial Co-ordination Act 1975 of Malaysia, or demonstrate that such licence is not required, within 180 days from the Completion Date; and provide satisfactory evidence that each of Edward Chia Puay Hwee and Ken Tan Aik Kwong has terminated his existing service agreement with the Company as at 31 December 2015. Within 30 days from Completion, the Purchaser shall, inter alia, pay to the Company the non-trade balances owing and due from the Target Group Companies to the Company (including inter-group management charges). 3 INTRODUCER S FEE The Purchaser was introduced to the Company by the Introducer. In consideration of the Introducer introducing the Purchaser to the Company, the Company will be paying the Introducer the Introducer s Fee in cash, upon Completion. The Introducer is an independent third party and its shareholders are not related to any of the Directors or controlling Shareholders of the Company, and their respective associates. 4 RATIONALE OF THE PROPOSED DISPOSAL The Proposed Disposal, being at a premium of approximately S$15.1 million over the unaudited net asset value of the Target Group as at 30 June 2015, represents a good opportunity for the Company to unlock the value of the assets in the Target Group in cash and strengthen its fi nancial and capital resources. The Company is expected to recognise a gain on disposal of approximately S$14.9 million, being a net gain on the Proposed Disposal after deducting the net asset value, professional fees, Introducer s Fee and miscellaneous fees such as printing costs and other costs related to the holding of the EGM. 5 CORPORATE STRUCTURE OF THE GROUP FOLLOWING THE PROPOSED DISPOSAL Following the Proposed Disposal, the Group s remaining business will include its air-conditioning business division and the newly acquired paint manufacturing business. Please refer to Appendix 1 of this Circular for the post-completion Group corporate structure. 6 USE OF PROCEEDS The Company expects to receive Net Proceeds of approximately S$32.9 million from the Proposed Disposal, after taking into consideration the Introducer s Fee, professional fees and miscellaneous fees. The Company intends to utilise the Net Proceeds for general working capital purposes as well as other business and/or other investment opportunities as and when they arise. The Company will also evaluate the feasibility, subject to compliance with any applicable requirements under the Companies Act and Catalist Rules, of distributing part of the Net Proceeds to its Shareholders by way of dividends or other form of distributions. Pending the deployment of the Net Proceeds for the purposes mentioned above, the Net Proceeds may be used for investment in short-term deposits, money market instruments and/or debt instruments, or used for any other purposes, as the Directors may, in their absolute discretion, deem fi t in the interests of the Company. 11

7 FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL The fi nancial effects have been prepared on a proforma basis based on the FY2014 Results. The fi nancial effects of the Proposed Disposal on the Group set out below are purely for illustrative purposes only and do not refl ect the future fi nancial position of the Company or the Group after the completion of the Proposed Disposal. 7.1 Effect of Proposed Disposal on NTA per Share Assuming that the Proposed Disposal had been completed on 31 December 2014 and based on the FY2014 Results, the effect of the Proposed Disposal on the NTA per Share are as follows: Before Completion of the Proposed Disposal After Completion of the Proposed Disposal NTA (S$ 000) 34,929 50,471 Number of issued Shares 205,447,985 205,447,985 NTA per share (Singapore cents) 17.00 24.57 7.2 Effect of Proposed Disposal on EPS Assuming that the Proposed Disposal has taken place on 1 January 2014 and based on the FY2014 Results, the Proposed Disposal would have the following effects on the Group s EPS as presented in the following table: Before Completion of the Proposed Disposal After Completion of the Proposed Disposal Consolidated net profi t attributable to Shareholders (S$ 000) 3,099 17,291 Weighted average number of Shares 205,447,985 205,447,985 EPS (Singapore cents) 1.51 8.42 8 DIRECTORS SERVICE CONTRACTS Pursuant to the Agreement, Edward Chia Puay Hwee and Ken Tan Aik Kwong shall: enter into management or service agreements with Gathergates Switchgear Pte. Ltd. with effect from Completion; and terminate their existing service agreements with the Company as at 31 December 2015. To this respect, each of Edward Chia Puay Hwee and Ken Tan Aik Kwong will be entering into a side letter with the Company, recording: (c) that each of Edward Chia Puay Hwee, Ken Tan Aik Kwong and the Company agrees that the employment of Edward Chia Puay Hwee and Ken Tan Aik Kwong with the Company will terminate with effect from 31 December 2015; that the Company consents to each of Edward Chia Puay Hwee and Ken Tan Aik Kwong being concurrently employed by the Target Group after Completion; and the arrangements on the remuneration and benefi ts of Edward Chia Puay Hwee and Ken Tan Aik Kwong, in respect of their existing remuneration terms with the Company, and termination benefi ts, if any. 12

Notwithstanding the above, no person is proposed to be appointed as a Director of the Company or any of its subsidiaries in connection with the Proposed Disposal. Accordingly, no service contract is proposed to be entered into between the Company and any such person. The board committee composition shall remain unchanged whilst the independent directors will make up half of the board of the Company. 9 THE PROPOSED ADOPTION OF SHARE BUYBACK MANDATE 9.1 Rationale for the Share Buyback Mandate The rationale for the Company to undertake the purchase or acquisition of its issued Shares is as follows:- (c) (d) Directors and management are constantly seeking to increase Shareholders value and to improve, inter-alia, the return on equity of the Group. The purchase by the Company of its issued Shares at the appropriate price level is one of the ways through which the return on equity of the Group may be enhanced; The Share Buyback Mandate will give the Directors the fl exibility to purchase or acquire Shares as and when circumstances permit. The Directors believe that the Share Buyback Mandate provides the Company and its Directors with a mechanism to facilitate the use of surplus cash over and above the Company s ordinary working capital requirements, in an expedient and cost-effi cient manner; The Share Buyback Mandate will also allow the Directors to exercise greater control over the Company s share capital structure, dividend policy and cash reserves and may lead to an enhancement of EPS and/or NTA per Share of the Company and the Group; and The Directors further believe that a Share Buyback by the Company may help mitigate shortterm market or price volatility, offset the effects of short-term share speculation or demand and bolster Shareholders confi dence. Shareholders should note that purchases of Shares pursuant to the proposed Share Buyback Mandate may not necessarily be carried out to the full limit as authorised. Whilst the Share Buyback Mandate would authorise Share Buybacks up to the said ten per cent. (10%) limit during the duration referred to in Section 9.2.2 below, Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Buyback Mandate may not be carried out to the full ten per cent. (10%) limit as authorised and the purchases or acquisitions of Shares pursuant to the Share Buyback Mandate would be made only as and when the Directors consider it to be in the best interest of the Company and/or Shareholders and in circumstances which they believe will not result in any material adverse effect to the fi nancial position of the Company or the Group, or result in the Company being delisted from the SGX-ST. The Directors will use their best efforts to ensure that after a Share Buyback pursuant to the Share Buyback Mandate, the number of Shares remaining in the hands of the public will not fall to such a level as to cause market illiquidity or adversely affect the orderly trading and listing status of the Shares on the SGX-ST. 9.2 Authority and Limits of the Share Buyback Mandate The authority and limitations placed on purchases or acquisitions of Shares by the Company under the Share Buyback Mandate are summarised below: 9.2.1 Maximum Number of Shares Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. The total number of Shares that may be purchased or acquired by the Company pursuant to the Share Buyback Mandate is limited to that number of Shares representing not more than ten per cent. (10%) of the total number of issued Shares of the Company as at the date of the EGM at which the Share Buyback Mandate is approved, unless the Company has, at any time 13

during the Relevant Period (as defi ned in Section 9.2.2), effected a reduction of its share capital in accordance with the applicable provisions of the Act, in which event the total number of issued Shares of the Company shall be taken to be the total number of issued Shares of the Company as altered. Any Shares which are held as Treasury Shares will be disregarded for purposes of computing the ten per cent. (10%) limit. Purely for illustrative purposes only, on the basis of 205,447,985 Shares in issue as at the Latest Practicable Date, and assuming that no further Shares are issued on or prior to the EGM, not more than 20,544,798 Shares (representing 10% of the total number of issued Shares as at that date) may be purchased or acquired by the Company pursuant to the Share Buyback Mandate. 9.2.2 Duration of Authority Purchases or acquisitions of Shares may be made, at any time and from time to time, by the Company on and from the date of the EGM at which the Share Buyback Mandate is approved up to the earlier of: (c) the conclusion of the next AGM or the date by which such AGM of the Company is held or required by law to be held; the date on which the Share Buybacks are carried out to the full extent mandated; or the date on which the authority conferred by the Share Buyback Mandate is revoked or varied by the Company in general meeting. (the Relevant Period ) The authority conferred on the Directors by the Share Buyback Mandate to purchase or acquire Shares may be renewed by the Shareholders in a general meeting of the Company, such as at the next AGM of the Company or at an extraordinary general meeting to be convened immediately after the conclusion or adjournment of the next AGM. 9.2.3 Manner of purchases or acquisitions of Shares Purchases or acquisitions of Shares can be effected by the Company by way of:- on-market purchases transacted on the SGX-ST through the SGX-ST s trading system, through one or more duly licensed stockbrokers appointed by the Company for the purpose of the Share Buyback ( Market Purchases ); and/or off-market purchases (if effected otherwise than on the SGX-ST) in accordance with an equal access scheme as defi ned in Section 76C of the Act ( Off-Market Purchases ). In an Off-Market Purchase, the Directors may impose such terms and conditions which are consistent with the Share Buyback Mandate, the Catalist Rules, the Act, the Articles of Association of the Company and other applicable laws and regulations, as they consider fi t in the interests of the Company in connection with or in relation to any equal access scheme or schemes. Under the Act, an equal access scheme must satisfy all the following conditions: offers for the purchase or acquisition of Shares shall be made to every person who holds Shares to purchase or acquire the same percentage of their Shares; all of those persons shall be given a reasonable opportunity to accept the offers made to them; and 14

(c) the terms of all the offers shall be the same, except that there shall be disregarded, where applicable: (i) (ii) (iii) differences in consideration attributable to the fact that the offers may relate to Shares with different accrued dividends entitlements; differences in consideration attributable to the fact that the offers relate to Shares with different amounts remaining unpaid; and differences in the offers introduced solely to ensure that each person is left with a whole number of Shares. Pursuant to Rule 870 of the Catalist Rules, if the Company wishes to make an Off-Market Purchase in accordance with an equal access scheme, it must issue an offer document to all Shareholders containing at least the following information: (c) (d) (e) (f) (g) the terms and conditions of the offer; the period and procedures for acceptances; the reasons for the proposed purchase or acquisition of Shares; the consequences, if any, of the purchases or acquisitions of Shares by the Company that will arise under the Take-over Code or other applicable take-over rules; whether the purchases or acquisitions of Shares, if made, would have any effect on the listing of the Shares on the SGX-ST; details of any purchases or acquisitions of Shares made by the Company in the previous twelve (12) months (whether by way of Market Purchases or Off-Market Purchases), giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for the purchases or acquisitions of Shares, where relevant, and the total consideration paid for the purchases or acquisitions; and whether the Shares purchased by the Company will be cancelled or kept as Treasury Shares. 9.2.4 Maximum Purchase Price The purchase price per Share (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) to be paid for the Shares purchased or acquired pursuant to the Share Buyback Mandate will be determined by the Directors, provided that such purchase price must not exceed:- in the case of a Market Purchase, one hundred and fi ve per cent. (105%) of the Average Closing Price (as defi ned hereinafter); and in the case of an Off-Market Purchase pursuant to an equal access scheme, one hundred and twenty per cent. (120%) of the Average Closing Price (as defi ned hereinafter), (the Maximum Price ) in either case, excluding related expenses of the purchase or acquisition. 15

For the above purposes of determining the Maximum Price: Average Closing Price means the average of the closing market prices of the Shares over the last fi ve (5) Market Days on which transactions in the Shares were recorded immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer (as defi ned below) pursuant to the Off-Market Purchase, and deemed to be adjusted for any corporate action that occurs after the relevant fi ve (5) Market Day period. date of making of the offer means the date on which the Company announces its intention to make an offer for an Off-Market Purchase, stating therein the purchase price (which shall not be more than the Maximum Price for an Off-Market Purchase calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase. 9.3 Status of purchased or acquired Shares Any Share purchased or acquired by the Company is deemed cancelled immediately on purchase or acquisition (and all rights and privileges attached to that Share will expire on such cancellation) unless such Share is held by the Company as Treasury Share. Accordingly, the total number of issued Shares will be diminished by the number of Shares purchased or acquired by the Company and which are not held as Treasury Share. All Shares purchased or acquired by the Company (other than Treasury Shares held by the Company to the extent permitted under the Act) will be automatically delisted by the SGX- ST, and (where applicable) all certifi cates in respect thereof will be cancelled and destroyed by the Company as soon as reasonably practicable following settlement of any such purchase or acquisition. The Company may decide to cancel Shares which have been purchased by the Company or hold such Shares as Treasury Shares, depending on whether it is in the interests of the Company to do so. 9.4 Treasury Shares Under the Act, Shares purchased or acquired by the Company may be held or dealt with as Treasury Shares. Certain of the provisions on treasury shares under the Act are summarised below: 9.4.1 Maximum holding: The aggregate number of Shares held by the Company as Treasury Shares shall not at any time exceed ten per cent. (10%) of the total number of Shares in issue at that time. In the event that the aggregate number of Treasury Shares held by the Company exceeds the aforesaid limit, the Company shall dispose of or cancel the excess Treasury Shares within six (6) months from the day the aforesaid limit is fi rst exceeded or such further periods as ACRA may allow. 9.4.2 Voting and other rights: The Company cannot exercise any right in respect of the Treasury Shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the Treasury Shares shall be treated as having no voting rights. In addition, no dividend may be paid, and no other distribution (whether in cash or otherwise) of the Company s assets (including any distribution of assets to members of the Company on a winding up) may be made, to the Company in respect of Treasury Shares. However, the allotment of shares as fully paid bonus shares in respect of the Treasury Shares is allowed. 16

The Treasury Shares may be sub-divided or consolidated, so long as the total value of the Treasury Shares after such sub-division or consolidation is the same as the total value of the Treasury Shares before the sub-division or consolidation, as the case may be. 9.4.3 Disposal or cancellation: Where Shares are held as Treasury Shares, the Company may at any time: (c) (d) (e) sell the Treasury Shares (or any of them) for cash; transfer the Treasury Shares (or any of them) for the purposes of or pursuant to an employees share scheme; transfer the Treasury Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person; cancel the Treasury Shares (or any of them); or sell, transfer or otherwise use the Treasury Shares for such other purposes as the Minister for Finance may by order prescribe. Under the Catalist Rules, an immediate announcement must be made of any sale, transfer, cancellation and/or use of Treasury Shares (in each case, the usage ). Such announcement must include details such as the date of the usage, the purpose of the usage, the number of Treasury Shares comprised in the usage, the number of Treasury Shares before and after the usage, the percentage of the number of Treasury Shares comprised in the usage against the total number of issued shares (of the same class as the Treasury Shares) which are listed on the SGX-ST before and after the usage and the value of the Treasury Shares comprised in the usage. 9.5 Reporting Requirement Within 30 days of the passing of the Shareholders resolution to approve the proposed adoption of the Share Buyback Mandate, the Company shall lodge a copy of such resolution with ACRA. The Company shall notify ACRA in the prescribed form within 30 days of a purchase or acquisition of Shares on the SGX-ST or otherwise. Such notifi cation shall include, inter alia, details of the purchase or acquisition, the total number of Shares purchased or acquired by the Company, the number of Shares cancelled, the number of Shares held as Treasury Shares, the Company s issued share capital before and after the purchase or acquisition of Shares and the amount of consideration paid by the Company for the purchase or acquisition, whether the Shares were purchased or acquired out of profi ts or the capital of the Company and such other particulars as may be required by ACRA. The Catalist Rules specify that a listed company shall notify the SGX-ST of all purchases or acquisitions of its shares not later than 9.00 a.m.: in the case of a Market Purchase, on the Market Day following the day on which the Market Purchase was made; or in the case of an Off-Market Purchase under an equal access scheme, on the second Market Day after the close of acceptance of the offer for the Off-Market Purchase. The notifi cation of such purchases or acquisitions of Shares to the SGX-ST shall be in such form and shall include such details that the SGX-ST may prescribe. The Company shall make arrangements with its stockbrokers to ensure that they provide the Company in a timely fashion the necessary information which will enable the Company to make the notifi cations to the SGX-ST. 17

9.6 Source of funds In purchasing or acquiring its Shares, the Company may only apply funds legally available for such purchase or acquisition as provided in the Articles of Association of the Company, Catalist Rules and in accordance with applicable laws in Singapore. The Company may not purchase or acquire its Shares for a consideration other than in cash or, in the case of a Market Purchase, for settlement otherwise than in accordance with the trading rules of the SGX-ST. Pursuant to the Act, any payment made by the Company in consideration of the purchase or acquisition of Shares by the Company may be made out of the Company s capital or profi ts, so long as the Company is solvent. It is an offence for a Director or an offi cer of the Company to approve or authorise the purchase or acquisition of Shares, knowing that the Company is not solvent. For this purpose, pursuant to the Section 76F(4) of the Act, a company is solvent if: the company is able to pay its debts in full at the time of the payment of the purchase or acquisition of its shares and will be able to pay its debts as they fall due in the normal course of business during the period of twelve (12) months immediately following the date of payment of the purchase or acquisition of its shares; and the value of the company s assets exceeds its liabilities (including contingent liabilities) and will not, after the proposed purchase or acquisition of shares, become less than the value of its liabilities (including contingent liabilities). The Company intends to use internal sources of funds or external borrowings or a combination of both to fi nance purchases or acquisitions of its Shares pursuant to the Share Buyback Mandate. The amount of funding required for the Company to purchase or acquire its Shares and the fi nancial impact on the Company and the Group arising from such purchases or acquisitions of Shares pursuant to the Share Buyback Mandate will depend on, inter alia, the aggregate number of Shares purchased or acquired, the consideration paid at the relevant time, and the amount (if any) borrowed by the Company to fund the purchases or acquisitions. However in considering the option of external fi nancing, the Board will consider particularly the prevailing gearing level of the Group. The Board will only make purchases or acquisitions of Shares pursuant to the Share Buyback Mandate in circumstances which they believe will not result in any material adverse effect to the fi nancial position of the Company or the Group. 9.7 Financial effects The fi nancial effects on the Company and the Group arising from purchases or acquisitions of Shares which may be made pursuant to the Share Buyback Mandate will depend on, inter alia, the number of Shares purchased or acquired, the price paid for such Shares, whether the Shares are purchased or acquired out of profi ts and/or capital of the Company and whether the Shares purchased or acquired are held by the Company as Treasury Shares or cancelled. Under the Act, the Company may purchase or acquire its Shares out of its profi ts and/or capital so long as the Company is solvent. Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of profi ts, such consideration (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) will correspondingly reduce the amount available for the distribution of cash dividends by the Company. Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, this will not reduce the amount available for the distribution of cash dividends by the Company. 18