PROPOSED CAPITAL REDUCTION AND CASH DISTRIBUTION; AND PROPOSED DISPOSAL OF 75% EQUITY INTEREST IN KSB CHINA HOLDINGS PRIVATE LIMITED

ELITE KSB HOLDINGS LIMITED Registration No. 200100824G (A) (B) PROPOSED CAPITAL REDUCTION AND CASH DISTRIBUTION; AND PROPOSED DISPOSAL OF 75% EQUITY INTEREST IN KSB CHINA HOLDINGS PRIVATE LIMITED (A) PROPOSED CAPITAL REDUCTION AND CASH DISTRIBUTION 1. Introduction The Board of Directors of Elite KSB Holdings Limited (the Company", and together with its subsidiaries, the Group ) wishes to announce to a proposed capital reduction exercise ( Capital Reduction ) to be carried out by the Company pursuant to Section 78A read with Section 78C of the Companies Act, Chapter 50 of Singapore ( Companies Act ), which will involve a cash distribution ( Cash Distribution ) by the Company to the shareholders of the Company ( Shareholders ) of approximately S$8.94 million or S$0.066 in cash for each ordinary share in the capital of the Company ( Share ) held as at a books closure date to be determined by the Directors of the Company ( Books Closure Date ). 2. The Proposed Capital Reduction 2.1 Background As announced on 31 October 2012, the Company had completed the sale of its 100% equity interests in its four subsidiaries (the 2012 ) and has received net sale proceeds of S$70.79 million. Following completion of the 2012, the assets of the Company consist substantially of cash and the Company does not have any significant business activities. Accordingly, the Company became a cash company and be subject to Rule 1303(2) and Rule 1018 of the Listing Manual. The management is currently actively exploring potential new business opportunity. The new businesses will have to meet the reverse takeover requirements under Rule 1015 of the Listing Manual within the timeframe provided in Rule 1018, failing which, the Singapore Exchange Securities Trading Limited (the SGX-ST ) may remove the Company from the Official List of the SGX-ST. The new businesses and the enlarged Group will also have to meet the requirements for listing its equity securities on the Official List of the SGX-ST under Rule 210 of the Listing Manual. In particular, the new businesses and the enlarged Group must, inter alia, satisfy one of the quantitative criteria set out in Rule 210(2). The acquisition of the new businesses will require the Company to seek Shareholders approval in accordance with the requirements of the Listing Manual (including Chapter 10) and such proposed acquisition will be made subject to Shareholders approval accordingly. The Company had on 30 November 2012 distributed a one-off special exempt dividend (the Special Dividend ) of S$48.09 million or S$0.355 per Share, which represents approximately 67.93% of the net proceeds of S$70.79 million arising from the 2012. The Company had also on 5 March 2013 distributed an interim tax-exempt (one-tier) dividend of S$2.03 million or S$0.015 per Share in respect of the financial year ending 30 June 2013, which together with the Special Dividend represents approximately 70.80% of the net proceeds of S$70.79 million arising from the 2012. The Company now wishes to distribute a further approximately S$8.94 million representing approximately 12.63% of the net proceeds of S$70.79 million arising from the 2012 to Shareholders through the Capital Reduction and Cash Distribution. 1

The Capital Reduction will not result in any change in the number of Shares held by Shareholders. Each Shareholder will hold the same number of Shares before and immediately after the Capital Reduction. 2.2 Illustration The following illustrates the position of a Shareholder who holds 1,000 Shares as at the Books Closure Date:- Shareholding before Capital Reduction Cash Distribution Shareholding immediately after Capital Reduction 1,000 Shares S$66.00 1,000 Shares 3. Rationale for the Capital Reduction As the 2012 was completed on 31 October 2012, the Company has up to 31 October 2013 to enter into a definitive agreement for a new business that meets the requirements for a new listing as provided in Rule 1018 stated above. Following completion of the 2012, the Company has reviewed and considered several business proposals but as at the date of this announcement, the Board has not identified any suitable business opportunities. The Board believes that by proceeding expeditiously to seek Shareholders approval for the Capital Reduction and Cash Distribution while at the same time keeping open the option to review business proposals as and when they arise in the manner described in the foregoing paragraph is in the best interest of the Shareholders. The Capital Reduction would allow a substantial cash distribution to be made to Shareholders, while enabling each Shareholder to maintain the same proportionate shareholding in the Company. Accordingly, the Board has decided to proceed to distribute approximately S$8.94 million representing approximately 12.63% of the net sale proceeds of S$70.79 million arising from the 2012 to Shareholders and the remaining shall be used to cater for the costs and expenses of the Company subsequent to the 2012 as well as to settle the related expenses of any proposed acquisition of the new businesses and such other corporate action(s) in connection thereto. Meanwhile, the Directors will continue to review and consider any such new business proposals as and when they arise. 4. Financial Effects Based on 135,473,111 Shares in issue as at the date of this announcement, an aggregate amount of approximately S$8.94 million will be returned to Shareholders pursuant to the Capital Reduction. For illustration purposes only, the financial effects of the Capital Reduction based on the unaudited consolidated half-year financial results of the Company for the period ended 31 December 2012 which was announced by the Company on 31 January 2013 are as set out below:- Share Capital/Earnings per Share ( EPS ) The proforma effect of the Capital Reduction on the share capital of the Company will be a reduction of the paid-up share capital from S$9,054,762.19 to S$113,536.86. 2

The Capital Reduction will have no impact on the earnings as well as the number of Shares held by Shareholders. Accordingly, there is no impact on the EPS. Gearing Gearing is defined as bank borrowings divided by shareholders funds. As at 31 December 2012, the Company had no bank borrowings. As such, the Capital Reduction will not have any effect on the Company s gearing. Shareholders Funds (S$ 000) As at 31 December 2012 Proforma after the Capital Reduction Share Capital 9,055 114 Retained Earnings 20,622 18,590 Foreign Currency Translation 217 217 Reserves Shareholder s Funds 29,894 18,921 Net tangible assets ( NTA ) As at 31 December 2012 Proforma after the Capital Reduction NTA (S$ 000) 29,894 18,921 Number of issued and paid-up 135,473,111 135,473,111 Shares NTA per Share (cents) 22.07 13.97 5. Conditions of the Capital Reduction The Capital Reduction shall be subject to, inter alia, the following conditions: (a) (b) (c) (d) (e) (f) the Directors making a solvency statement in relation to the reduction of the share capital of the Company and compliance with other relevant solvency requirements as prescribed by the Companies Act; the approval of Shareholders by way of a special resolution for the Capital Reduction (the Capital Reduction Resolution ) at an extraordinary general meeting of Shareholders (the EGM ); notifying the Comptroller of Income Tax of the passing of the Capital Reduction Resolution and the date on which it was passed, within 8 days beginning with the date of the Capital Reduction Resolution; compliance with the relevant publicity requirements as prescribed by the Companies Act; lodgment with the Accounting and Corporate Regulatory Authority of copies of the solvency statement and the Capital Reduction Resolution, within 15 days beginning with the date of the Capital Reduction Resolution; and no application(s) having been made by any creditor of the Company to the High Court for the cancellation of the Capital Reduction Resolution, within the period of 6 weeks beginning with the date of the Capital Reduction Resolution, or if any such application(s) were made, the High Court dismisses such creditors application(s). 3

(B) PROPOSED DISPOSAL OF 75% EQUITY INTEREST IN KSB CHINA HOLDINGS PRIVATE LIMITED ( KSB CHINA ) ( PROPOSED DISPOSAL ) 1. Introduction The Company had on 18 June 2013 entered into an agreement (the Agreement ) with Chew Ghim Bok for the Proposed, whereby the Company has agreed to sell its entire 75% equity interest in KSB China (the Sale Shares ) to him for a consideration of S$10,572,331 (the Consideration ). Chew Ghim Bok is the Company s Director, Chief Executive Officer and Controlling Shareholder, who holds a direct interest of 73,558,907 Shares representing approximately 54.30% of the total issued Shares. The Proposed is an interested person transaction ( IPT ) under Chapter 9 of the Listing Manual and a major transaction under Chapter 10 of the Listing Manual. Accordingly, the Proposed is subject to the approval of the Shareholders at the EGM. 2. The Proposed Pursuant to Agreement, the Company has agreed to sell the Sale Shares for the Consideration. The Consideration was determined based on arms length negotiations and was arrived at on a willing-buyer willing-seller basis taking into account the net asset value of KSB China (based on its unaudited management accounts as at 30 April 2013). The net assets value attributable to the Sale Shares as at 30 April 2013 was S$10,572,331. The Consideration shall be wholly satisfied in cash and shall be paid to the Company in a lump sum payment on completion. The sale and purchase of the Sale Shares and completion of the Agreement shall be subject to and conditional upon the fulfillment and satisfaction of, inter alia, the following conditions precedent:- (i) (ii) (iii) the Company obtaining approval from its Shareholders for the Proposed at the EGM; the Company having obtained all consents, approvals and authorisation of bankers, financial institutions, landlords of leases, relevant third parties, government, statutory or regulatory authorities in Singapore which are necessary or desirable in connection with the Proposed, and such other corporate action(s) as may be necessary having been obtained, and such consents, approvals and waivers not having been amended or revoked before the completion date of the Proposed, and if subject to conditions, on such conditions acceptable to Chew Ghim Bok, prior to the completion date; and the receipt of the independent financial adviser s opinion to the independent directors of the Company. 3. Information of KSB China After the 2012, the Group has ceased to have interest in the meat processing business. The Company however become an investment holding company. The current investment portfolio of the Company is held via its 75% owned subsidiary, KSB China. The balance 25% is owned by an unrelated third party, Zhang Tangzhi, who is a naturalised Singapore citizen, through his wholly owned company, Wize Asia Pte. Ltd.. The Company first engaged in investment holding through KSB China in 2006. Through his network, Zhang Tangzhi helps to identify investment opportunities for his business associates and partners. The investment portfolio includes minority holdings (of between 25% and 30%) in various companies with business interests in the People s Republic of China ( PRC ) namely, Shouguang Zhonghui Organic Feed Co., Ltd, Qingdao Dragon Wise Feed Company Limited, 4

Linyi Zhonghui Lianhang Feed Co., Ltd, Linyi Taihe Zhonghui Feed Co., Ltd and Weifang Gen Yuan Food Trading Co., Ltd.. The balance majority stakes in these companies are owned by PRC companies and are managed by their executives. Weifang Gen Yuan Food Trading Co., Ltd. is involved in food trading and distribution while the other 4 PRC companies are involved in the feed mill business. For the financial year ended 30 June 2012, 6-months financial period ended 31 December 2012 and 10-months financial period ended 30 April 2013, the profit before tax attributable to the Sale Shares were S$2.1 million, S$1.0 million and S$1.4 million respectively. 4. Rationale for the Proposed and use of Proceeds The management is currently actively exploring potential new business opportunity by way of a proposed reverse takeover transaction. The new businesses will have to meet the reverse takeover requirements under Rule 1015 of the Listing Manual within the timeframe provided in Rule 1018, failing which, the SGX-ST may remove the Company from the Official List of the SGX-ST. Based on discussion and feedback from potential interested parties, the owners of assets generally prefer a shell company that has no assets. To facilitate the negotiations for a potential reverse takeover exercise (if it materialised) and in light that the Company has not received any other alternative offers for KSB China from any third parties, the Company intends to undertake the Proposed as the Board considers that the Proposed as the most appropriate option for the Company to divest its current investment portfolio at this juncture. The net sale proceeds from the Proposed, after deducting all costs and expenses associated with the Proposed is estimated to be approximately S$10.45 million. The net proceeds of the Proposed will be used for working capital purposes which include payment of general and administration expenses, and to pursue new business opportunities that could enhance shareholder value over the long term. Pending the deployment of the funds, the Company will place 90% of the net proceeds in an account opened with and operated by an escrow agent which is part of any financial institution licensed and approved by the Monetary Authority of Singapore in accordance with Rule 1018(1) of the Listing Manual. 5. Chapter 9 of the Listing Manual Based on the Company s latest audited accounts, its consolidated NTA as at 30 June 2012 was approximately S$40.0 million. The Consideration represents approximately 26.4% of the Company s latest audited consolidated NTA. Accordingly, pursuant to Chapter 9 of the Listing Manual, the Proposed constitutes an IPT for which approval of Shareholders is required. Following the completion of 2012, there are no other IPTs entered into, either with Chew Ghim Bok (including his associates) or any other interested person for the current financial year ending 30 June 2013 up to the date of this announcement. Pursuant to Chapter 9 of the Listing Manual, an IFA will be appointed to provide an opinion on whether the Proposed is on normal commercial terms and whether it is prejudicial to the interests of the Company and its minority Shareholders. 6. Chapter 10 of the Listing Manual The relative figures computed on the bases set out in Rule 1006 of the Listing Manual are as follows:- (a) Net asset value of Sale Shares, compared with the Group s net asset value as at 31 December 2012 33.08% 5

(b) (c) (d) Net profits attributable to the Sale Shares, compared with the Group's net profits for the six months financial period ended 31 December 2012 Value of the Consideration, compared with the Company's market capitalisation of approximately S$39.96 million on 17 June 2013, being the Market Day preceding the date of the Agreement The number of new Shares to be issued by the Company as consideration for the Proposed, compared with the number of Shares of the Company previously in issue 2.32% (1) 26.45% Not applicable Note (1): The Group s net profits included the profits or losses before tax from Continuing and Discontinued Operations On the basis of Rules 1006(a) and 1006(c), the Proposed is a Major Transaction under Rule 1013 of the Listing Manual for which approval of Shareholders is required pursuant to Rule 1014 of the Listing Manual. Gain on disposal of the Sale Shares upon completion of the Proposed by the Company is expected to be S$7.57 million based on the Consideration of S$10,572,331 and the Company s investment in KSB China of S$3.0 million as at 31 December 2012. 7. Financial Effects of the Proposed For illustration purposes only, the financial effects of the Proposed based on the unaudited consolidated half-year financial results of the Company for the period ended 31 December 2012 which was announced by the Company on 31 January 2013 are as set out below:- (a) Effect on NTA per Share Before the Proposed After the Proposed NTA (S$ 000) 29,894 30,576 Number of Shares 135,473,111 135,473,111 NTA per Share (cents) 22.07 22.57 (b) Effect on EPS Profit after tax attributable to equity holders of the Company (S$ 000) Before the Proposed After the Proposed 40,135 40,695 Number of Shares 135,473,111 135,473,111 EPS (cents) (1) 29.63 30.04 Note (1): The earnings per share has been calculated based on the consolidated profit after tax from Continuing and Discontinued Operations. 8. Audit Committee Statement The Audit Committee will form its view as to whether the Proposed is on normal commercial terms and is not prejudicial to the interests of the Company and its minority Shareholders after considering the IFA s opinion referred to in section 9.3 below. The Audit 6

Committee s view on the Proposed will be set out in the Shareholders circular (the Circular ) to be despatched to the Shareholders in due course. 9. Further Information 9.1 Interest of Directors and Controlling Shareholders Chew Ghim Bok, a Director and Controlling Shareholder of the Company is interested in the Proposed. Wong Sau Bek and Chew Keng Wah, each a Director of the Company, is the spouse and sibling of Chew Ghim Bok respectively and is considered as his associate for the purpose of Chapter 9 of the Listing Manual. Save as disclosed above, none of the Directors or controlling Shareholders of the Company has any interest, direct or indirect in the Proposed. 9.2 Directors Service Contracts There are no directors proposed to be appointed by the Company in connection with the Proposed. Accordingly, there is no service contract entered into. 9.3 Independent Financial Adviser The Company has appointed Asiasons WFG Capital Pte Ltd as its independent financial adviser in respect of the Proposed. 10. Documents Available for Inspection A copy of the Agreement will be made available for inspection during normal business hours at the registered office of the Company at 6 Senoko Way, Senoko Industrial Estate, Singapore 758029, for a period of three (3) months from the date of this announcement. General The Circular setting out further information on the Capital Reduction and the Proposed, together with a notice of the EGM, will be despatched by the Company to the Shareholders in due course. In the meantime, the Shareholders are advised to refrain from taking any action in relation to their Shares in the Company, which may be prejudicial to their interests until they or their advisers have considered the information and the recommendations to be set out in the Circular. BY ORDER OF THE BOARD Chew Ghim Bok Director and Chief Executive Officer 18 June 2013 7