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CIRCULAR DATED 9 JUNE 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt about the contents of this Circular or the action that you should take, you should

consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser

immediately.

If you have sold or transferred all your Shares (as defined herein) in the capital of Jackspeed Corporation Limited(“JCL” or the “Company”), you should forward this Circular, together with the Notice of Extraordinary GeneralMeeting and the enclosed Proxy Form immediately to the purchaser or transferee or to the stockbroker, bank oragent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

The Singapore Exchange Securities Trading Limited (“SGX-ST”) assumes no responsibility for the accuracy orcorrectness of any of the statements made, reports contained or opinions expressed in this Circular. Approval in-principle granted by the SGX-ST for the admission of the Consideration Shares, New Shares and Additional NewShares (as defined herein) to the Official List of the SGX-ST and the listing of and quotation for theConsideration Shares, the New Shares and the Additional New Shares on the Official List of the SGX-ST is in noway reflective of the merits of the Company and its Subsidiaries, the Proposed Transactions (as defined herein)or the Shares.

JACKSPEED CORPORATION LIMITED(Incorporated in the Republic of Singapore on 15 January 1993)

(Company Registration Number 199300300W)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO:

(1) THE PROPOSED ACQUISITION OF 100% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF

JACKSON VEHICLE HOLDINGS PTE LTD;

(2) THE WHITEWASH RESOLUTION IN CONNECTION WITH THE PROPOSED ACQUISITION (AS

DEFINED HEREIN);

(3) THE PROPOSED PLACEMENT TO AAPICO HITECH PUBLIC COMPANY LIMITED OF 34,933,334

NEW ORDINARY SHARES IN THE CAPITAL OF JACKSPEED CORPORATION LIMITED;

(4) THE PROPOSED PLACEMENT TO MR ANG KIAN LEE OF 8,733,333 NEW ORDINARY SHARES IN

THE CAPITAL OF JACKSPEED CORPORATION LIMITED;

(5) THE PROPOSED ALLOTMENT AND ISSUE OF UP TO 17,111,111 ADDITIONAL NEW SHARES (AS

DEFINED HEREIN) TO AAPICO HITECH PUBLIC COMPANY LIMITED PURSUANT TO THE

SUBSCRIPTION AGREEMENT; AND

(6) THE PROPOSED ALLOTMENT AND ISSUE OF UP TO 4,277,778 ADDITIONAL NEW SHARES (AS

DEFINED HEREIN) TO MR ANG KIAN LEE PURSUANT TO THE SUBSCRIPTION NOTICE.

Independent financial adviser to

the Independent Directors (as defined herein)

PricewaterhouseCoopers Corporate Finance Pte Ltd

IMPORTANT DATES AND TIMES:

Last date and time for lodgement of Proxy Form : 24 June 2006 at 11.00 a.m.

Date and time of Extraordinary General Meeting : 26 June 2006 at 11.00 a.m. or soon thereafterfollowing the conclusion or adjournment of theAnnual General Meeting of the Company to beheld at 10.00 a.m. on the same day and at thesame venue

Place of Extraordinary General Meeting : 47 Loyang Drive Singapore 508955

®

CONTENTS

Page

DEFINITIONS ................................................................................................................................ 3

LETTER TO SHAREHOLDERS .................................................................................................... 9

1. INTRODUCTION.................................................................................................................. 9

2. DETAILS OF THE PROPOSED ACQUISITION .................................................................. 13

3. INFORMATION ON JVHPL.................................................................................................. 17

4. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION ............................................ 27

5. THE WHITEWASH RESOLUTION ...................................................................................... 27

6. THE FIRST PROPOSED PLACEMENT TO AAPICO HITECH PUBLIC COMPANYLIMITED OF 34,933,334 NEW ORDINARY SHARES IN THE CAPITAL OFJACKSPEED CORPORATION LIMITED ............................................................................ 30

7. THE SECOND PROPOSED PLACEMENT TO MR ANG KIAN LEE OF 8,733,333NEW ORDINARY SHARES IN THE CAPITAL OF JACKSPEED CORPORATION LIMITED .............................................................................................................................. 33

8. THE ALLOTMENT AND ISSUE OF UP TO 17,111,111 ADDITIONAL NEW SHARESTO AAPICO HITECH PUBLIC COMPANY LIMITED PURSUANT TO THE SUBSCRIPTION AGREEMENT .......................................................................................... 35

9. THE ALLOTMENT AND ISSUE OF UP TO 4,277,778 ADDITIONAL NEW SHARES TO MR ANG KIAN LEE PURSUANT TO THE SUBSCRIPTION NOTICE .......................... 35

10. MATERIAL LITIGATION ...................................................................................................... 36

11. ABSTENTION FROM VOTING ............................................................................................ 36

12. OPINION OF THE INDEPENDENT FINANCIAL ADVISER ................................................ 36

13. AUDIT COMMITTEE’S STATEMENT .................................................................................. 37

14. DIRECTORS’ RECOMMENDATIONS.................................................................................. 37

15. EXTRAORDINARY GENERAL MEETING .......................................................................... 38

16. ACTION TO BE TAKEN BY SHAREHOLDERS .................................................................. 38

17. DIRECTORS’ RESPONSIBILITY STATEMENT .................................................................. 38

18. CONSENT............................................................................................................................ 38

19. DOCUMENTS FOR INSPECTION ...................................................................................... 39

20. ADDITIONAL INFORMATION.............................................................................................. 39

APPENDIX A .................................................................................................................................. 40

APPENDIX B.................................................................................................................................. 63

APPENDIX C.................................................................................................................................. 64

APPENDIX D.................................................................................................................................. 67

NOTICE OF EXTRAORDINARY GENERAL MEETING ................................................................ 69

PROXY FORM

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DEFINITIONS

The following definitions apply throughout this Circular unless otherwise stated:-

“AAPICO” : AAPICO Hitech Public Company Limited.

“AGM” : The Annual General Meeting of the Company held on 29 June2005.

“Accessories Segment” : The business of the JVHPL Group.

“Additional New Shares” : The Shares that AAPICO and/or Mr Ang are entitled to furthersubscribe for under the Subscription Agreement and theSubscription Notice respectively.

“Affected Parties” : Liew Ham Chow and any parties acting in concert with him.

“After Market” : A market made up of car traders, car accessories traders andparallel importers.

“Articles of Association” : The articles of association of the Company, as amended fromtime to time.

“Audit Committee” : The audit committee of the Company which as at the LatestPracticable Date of this Circular comprises:

1. Chang Yeh Hong;

2. Lee Kim Lian Juliana; and

3. Voo Jun Hing.

“Board” : The board of directors of the Company.

“Business Day” : A day (excluding Saturdays, Sundays and public holidays) onwhich banks are open for business in Singapore.

“CDP” : The Central Depository (Pte) Limited.

“Car Distributor Market” : A market made up of car distributors who have the right todistribute a certain brand of automobiles on behalf of therespective automobile manufacturers.

“Cash Consideration” : An amount equal to the pro forma unaudited net tangibleassets of the JVHPL Group as at 28 February 2006 payable incash to the Vendors on Completion.

“Code” : The Singapore Code on Take-overs and Mergers, as amendedfrom time to time.

“Companies Act” : The Companies Act, Chapter 50 of Singapore, including anymodification or re-enactment thereof for the time being in force.

“Company”or “JCL” : Jackspeed Corporation Limited.

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“Completion” : The completion of:

(i) the sale and purchase of the Sale Shares under theShare Purchase Agreement;

(ii) the subscription by and the allotment and issue of newShares to AAPICO pursuant to the SubscriptionAgreement; and/or

(iii) the subscription by and the allotment and issue of newShares to Mr Ang pursuant to the Subscription Notice.

“Completion Date” : The date on which the Proposed Acquisition and/or ProposedPlacements are completed.

“Consideration” : The consideration for the purchase of the Sale Shares as setout in the Share Purchase Agreement.

“Consideration Shares” : The new Shares (if any), credited as fully paid, to be allottedand issued to the Vendors at the Issue Price within one (1)month after the completion of the audit of the JVHPL Group foreach of FY 2007 and FY 2008 pursuant to the Share PurchaseAgreement.

“Control” : The capacity to dominate decision-making, directly or indirectly,in relation to the financial and operating policies of theCompany.

“Controlling Shareholder” : A person who:

(a) holds directly or indirectly 15% or more of the issuedshare capital of the Company; or

(b) in fact exercises Control over the Company.

“Directors” : The directors of the Company from time to time.

“EGM” : The Extraordinary General Meeting of the Company to beconvened on 26 June 2006, notice of which is set out on page69 of this Circular.

“EPS” : Earnings per Share.

“Entitlement to Additional : The number of Shares that AAPICO and/or Mr Ang are each New Shares” entitled to further subscribe for under the Subscription

Agreement and the Subscription Notice respectively.

“FY” : Financial year ended or, as the case may be, ending 28February or in a leap year, 29 February.

“First Proposed Placement” : The proposed placement to AAPICO of 34,933,334 newShares.

“Ford Group” : Ford Motor Company and its subsidiaries in Thailand.

“IATF” : International Automotive Task Force.

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“Independent Directors” : The Directors who are not interested in the outcome of theresolution in respect of the Proposed Acquisition and theWhitewash Resolution, namely Ang Kian Lee, Chang YehHong, Lee Kim Lian Juliana and Voo Jun Hing.

“Independent Shareholder” : A Shareholder of the Company other than the Vendors andtheir respective nominees, as at the date of this Circular,unless otherwise stated.

“Issue Price” : The issue price of S$0.18 per share.

“JCL Group” : The Company and its Subsidiaries.

“JVHPL” : Jackson Vehicle Holdings Pte. Ltd.

“JVHPL Group” : JVHPL, JVS and JVT.

“JVS” : Jackson Vehicle (Singapore) Pte. Ltd.

“JVT” : J.V. (Thailand) Co., Ltd.

“Latest Practicable Date” : 6 June 2006, being the Latest Practicable Date prior to theprinting of this Circular.

“Leather Segment” : The leather business of the JCL Group.

“Listing Manual” : The listing manual of the SGX-ST, as amended from time totime.

“Memorandum of Association” : The memorandum of association of the Company, as may beamended from time to time.

“Mr Ang” : Mr Ang Kian Lee.

“NTA” : Net tangible assets.

“Net Profit” : The net profit after tax of the JVHPL Group as set out in itsaudited accounts, such accounts having been prepared inconformity with the Singapore Financial Reporting Standardsas employed by the JCL Group.

“New Shares” : The 43,666,667 new Shares to be issued at S$0.18 per Sharepursuant to the Proposed Placements.

“OEM” : Original equipment manufacturer.

“P/E” : Price-earnings ratio.

“PBT of the Accessories : The profit before tax of the Accessories Segment (after (i) Segment” deducting profit before tax attributed to minority interests and

(ii) excluding any extraordinary items) and after taking intoaccount the basic salary and fixed annual wage supplementbut before taking into account the annual incentive bonus.

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“PBT of the Leather Segment” : The profit before tax of the JCL Group less the contributionsfrom the aviation and marine division, the JVHPL Group andany other new investments from the date of the ServiceAgreements (after (i) deducting profit before tax attributed tominority interests and (ii) excluding any extraordinary items)and after taking into account the basic salary and fixed annualwage supplement but before taking into account the annualincentive bonus.

“PRC” : People’s Republic of China.

“PwCCF” : PricewaterhouseCoopers Corporate Finance Pte Ltd, theindependent financial adviser to the Independent Directors inrespect of the Proposed Acquisition and the WhitewashResolution.

“Pool Bonus” : The bonus from the Accessories Segment and the bonus fromthe Leather Segment.

“Proposed Acquisition” : The proposed acquisition of 100% of the issued and paid-upshare capital of JVHPL from the Vendors.

“Proposed Executive Directors” : Lee Seng Jeow and Ho Choon Meng.

“Proposed Placements” : The First Proposed Placement and the Second ProposedPlacement.

“Proposed Transactions” : (1) The Proposed Acquisition;

(2) The Proposed Placements;

(3) The allotment and issue of up to 17,111,111 AdditionalNew Shares to AAPICO pursuant to the SubscriptionAgreement; and

(4) The allotment and issue of up to 4,277,778 AdditionalNew Shares to Mr Ang pursuant to the SubscriptionNotice.

“Purchase Consideration” : The sum of S$14.55 million, being the maximum aggregatepurchase consideration payable by the Company to theVendors in their respective Shareholding Proportion.

“RM” : Malaysian Ringgit, which is the lawful currency of Malaysia.

“RMB” : Renminbi, which is the lawful currency of the PRC.

“Record Date” : In relation to any dividends, rights, allotments or otherdistributions, the date as at the close of business (or suchother time as may be notified by the Company), on whichShareholders of the Company must be registered in order toparticipate in such dividends, rights, allotments or otherdistributions.

“S$”and “cents” : Singapore dollars and cents respectively.

“SGS” : Socit Gnrale de Surveillance.

“SGX-ST” : Singapore Exchange Securities Trading Limited.

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“SIC” : Securities Industry Council.

“SIC Confirmation” : The confirmation from the SIC required to ensure that theAffected Parties will not be obliged to make a general offer forthe Company under the Code upon the allotment and issue ofthe Consideration Shares on the terms of the Share PurchaseAgreement.

“Sale Shares” : The 10,000 ordinary shares in the capital of JVHPL, which arebeneficially owned by the Vendors.

“Second Proposed Placement” : The proposed placement to Mr Ang of 8,733,333 new Shares.

“Securities and Futures Act” : The Securities and Futures Act, Chapter 289 of Singapore, asor “SFA” amended from time to time.

“Service Agreements” : The service agreements entered into by the Company with LeeSeng Jeow and Ho Choon Meng and the service agreemententered into by JVS with Liew Nyuk Ngoh on 7 June 2006.

“Shareholders” : Persons who are registered as holders of the Shares exceptwhere the registered holder is CDP, in which case the term“Shareholders” shall, in relation to such Shares, mean theDepositors whose securities accounts maintained with CDPare credited with the Shares.

“Shareholding Proportion” : The following shareholding proportion in which the Vendorshold shares in the capital of JVHPL:

Liew Ham Chow – 45%

Liew Nyuk Ngoh – 20%

Ho Choon Meng – 20%

Lee Seng Jeow – 15%

“Shares” : Ordinary shares in the capital of the Company.

“Share Purchase Agreement” : The conditional share purchase agreement dated 14 February2006 for the sale of 100% of the issued and paid-up capital ofJVHPL by the Vendors to the Company, as varied by theSupplemental Share Purchase Agreement.

“Singapore” : The Republic of Singapore.

“Singapore Dollar(s)” : The lawful currency of Singapore.

“Subscribers” : AAPICO and Mr Ang.

“Subscription Agreement” : The subscription agreement between AAPICO and theCompany dated 15 February 2006.

“Subscription Notice” : The subscription notice from Mr Ang to the Company dated 15February 2006.

“Subsidiary”or “Subsidiaries” : The subsidiaries of a company as defined in section 5 of theCompanies Act.

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“Supplemental Share Purchase : The supplementary share purchase agreement entered into on Agreement” 7 June 2006 by the Company with the Vendors varying the

Share Purchase Agreement.

“THB” : Thai Baht, which is the lawful currency of Thailand.

“Tan Chong Motor” : Tan Chong Motor Sales Pte Ltd.

“Thailand” : The Kingdom of Thailand.

“Tier-one Supplier” : A supplier who is appointed by the automobile manufacturer totransact directly with it.

“Tranche” : Each of the tranches under which the Vendors may be issuedConsideration Shares under the Share Purchase Agreement.

“USD” : United States dollars, which is the lawful currency of the UnitedStates of America.

“Vendors” : Liew Ham Chow, Liew Nyuk Ngoh, Ho Choon Meng and LeeSeng Jeow.

“Whitewash Resolution” : The proposed resolution for the waiver by the IndependentShareholders in respect of their right to receive a general offerfrom the Affected Parties.

“2007 Shortfall Amount”or : The aggregate of the difference between S$1.5 million and the “SF 2007” Net Profit for FY 2007.

“2008 Shortfall Amount”or : The aggregate of the difference between S$2.0 million and the“SF 2008” Net Profit for FY 2008.

“%”or “per cent.” : Per centum or percentage.

“Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed to themrespectively in Section 130A of the Companies Act.

Words importing the singular shall, where applicable, include the plural and vice versa, and wordsimporting the masculine gender shall, where applicable, include the feminine and neuter genders.References to persons shall, where applicable, include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time beingamended or re-enacted. Any word defined in the Companies Act, the SFA, the Code, the ListingManual or any modification thereof and used in this Circular shall have the meaning assigned to itunder the Companies Act, the SFA, the Code, the Listing Manual or such modification thereof, as thecase may be, unless the context otherwise requires.

Any discrepancies in figures included herein between the amounts and the totals thereof are due torounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregationof the figures that precede them.

Any reference to a time of day and date in this Circular shall be a reference to Singapore time anddate, unless otherwise stated.

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LETTER TO SHAREHOLDERS

JACKSPEED CORPORATION LIMITED(Incorporated in the Republic of Singapore on 15 January 1993)

(Company Registration Number 199300300W)

Directors: Registered Office:

Liew Ham Chow 47 Loyang DriveVoo Jun Hing Singapore 508955Ang Kian LeeChang Yeh Hong Lee Kim Lian Juliana

9 June 2006

To: The Shareholders of Jackspeed Corporation Limited

Dear Sir/Madam

(1) THE PROPOSED ACQUISITION OF 100% OF THE ISSUED AND PAID-UP SHARE CAPITAL

OF JACKSON VEHICLE HOLDINGS PTE LTD;

(2) THE WHITEWASH RESOLUTION IN CONNECTION WITH THE PROPOSED ACQUISITION;

(3) THE PROPOSED PLACEMENT TO AAPICO HITECH PUBLIC COMPANY LIMITED OF

34,933,334 NEW ORDINARY SHARES IN THE CAPITAL OF JACKSPEED CORPORATION

LIMITED;

(4) THE PROPOSED PLACEMENT TO MR ANG KIAN LEE OF 8,733,333 NEW ORDINARY

SHARES IN THE CAPITAL OF JACKSPEED CORPORATION LIMITED;

(5) THE PROPOSED ALLOTMENT AND ISSUE OF UP TO 17,111,111 ADDITIONAL NEW

ORDINARY SHARES TO AAPICO HITECH PUBLIC COMPANY LIMITED PURSUANT TO

THE SUBSCRIPTION AGREEMENT; AND

(6) THE PROPOSED ALLOTMENT AND ISSUE OF UP TO 4,277,778 ADDITIONAL NEW

ORDINARY SHARES TO MR ANG KIAN LEE PURSUANT TO THE SUBSCRIPTION

NOTICE.

1. INTRODUCTION

The Board is convening an EGM to be held on 26 June 2006 to seek the approval ofShareholders in relation to the following matters:

1.1 The Proposed Acquisition

On 15 February 2006, the Board announced that the Company had entered into the SharePurchase Agreement with the Vendors for the sale and purchase of 10,000 shares in the capitalof JVHPL. On 7 June 2006, the Company entered into the Supplemental Share PurchaseAgreement with the Vendors to vary the terms of the Share Purchase Agreement. Subject tothe fulfilment of the terms and conditions of the Share Purchase Agreement as varied by theSupplemental Share Purchase Agreement, the Company will acquire 100% of the issued andpaid-up share capital of JVHPL for a maximum aggregate Consideration of S$14.55 million.

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The Issue Price represents a discount of approximately 11% from the volume weighted averageprice of S$0.202 for trades in the Shares on the SGX-ST on 13 February 2006. The Issue Priceis given at a premium of respectively 8.9% and 12.5% over the average daily closing price ofthe Shares for one month and three months preceding 15 February 2006 which is the date ofthe first announcement of the Share Purchase Agreement.

Application of Chapter 9 of the Listing Manual

The Controlling Shareholder and executive Director, Liew Ham Chow, is a shareholder of 45%of the issued and paid-up share capital of JVHPL as at the Latest Practicable Date. Liew HamChow and Liew Nyuk Ngoh are siblings and Liew Nyuk Ngoh is a director and shareholder of20% of the issued and paid-up share capital of JVHPL as at the Latest Practicable Date.Accordingly, as Liew Ham Chow and Liew Nyuk Ngoh are “interested persons” under Chapter 9of the Listing Manual, the Proposed Acquisition constitutes an “Interested Person Transaction”.

Under Rule 906(1)(a) of the Listing Manual, an issuer must obtain shareholder approval for anyInterested Person Transaction of a value equal to, or more than 5% of the group’s latest NTA.The Purchase Consideration payable pursuant to the Share Purchase Agreement will representup to 78.4% of the JCL Group’s latest audited NTA. Accordingly, the Proposed Acquisitionrequires the approval of the Independent Shareholders at the EGM.

As at 28 February 2005, the aggregate value of all transactions entered into by the JCL Groupwith the JVHPL Group in FY 2005 does not exceed S$100,000.

As at the Latest Practicable Date, other than the Proposed Acquisition, there are no InterestedPerson Transactions that are required to be aggregated under Chapter 9 of the Listing Manual.

Save as disclosed above, none of the Directors or Controlling Shareholders has any interest,direct or indirect, in the Proposed Acquisition.


Under Rule 1013 of the Listing Manual, a transaction is classified as a “major transaction” if anyof the relative figures computed on the bases set out in Rule 1006 exceeds 20%. In thesecircumstances, Shareholders’ approval must be obtained under Rule 1014 of the ListingManual.

Applying the applicable bases of Rule 1006 of the Listing Manual, the relative figures computedare as follows:

(a) Rule 1006(a) – not applicable, as this is an acquisition as opposed to a disposal.

(b) Rule 1006(b) – the profit attributable to the Sale Shares is approximately S$0.40 million.The JCL Group’s net profit after tax for FY 2005 was approximately S$2.47 million. Assuch, the relative figure is approximately 16%.

(c) Rule 1006(c) – the Company’s market capitalisation as at 13 February 2005 (the marketday preceding the date of the Share Purchase Agreement) is approximately S$26.46million. Based on the assumption that the NTA of the JVHPL Group for FY 2006 isS$3.0 million, and that the Net Profit for each of FY 2007 and FY 2008 is S$3.0 million,the aggregate value of the Consideration given, based on the volume weighted averageprice on 13 February 2006 of S$0.202, is S$15.96 million. Therefore, the relative figurecomputed under this rule is approximately 60%.

(d) Rule 1006(d) – as at the date of the execution of the Share Purchase Agreement, theCompany’s issued share capital comprised 131,000,000 Shares. Pursuant to the SharePurchase Agreement, assuming that the Cash Consideration for the ProposedAcquisition is S$3.0 million, a maximum aggregate of 64,166,667 Consideration Shareswill be issued. Therefore, the relative figure computed under this rule is approximately49%.

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Since the relative figures in Rule 1006 (c) and (d) exceed 20% but do not exceed 100%, theProposed Acquisition is regarded as a major transaction pursuant to Rule 1013 of the ListingManual.

As a result of the Proposed Acquisition pursuant to the Share Purchase Agreement, (i) theaggregate value of the Consideration given, compared with the Company’s marketcapitalisation, and (ii) the number of equity securities issued by the Company as Considerationfor the Proposed Acquisition, compared with the number of equity securities previously in issuebeing 60% and 49% respectively, has exceeded the 20% threshold imposed under Rule 1006.The Proposed Acquisition is therefore a “major transaction” requiring Shareholders’ approval,which the Company is seeking at the EGM.

Compliance with Chapter 9 and 10 of the Listing Manual

Given that the Proposed Acquisition is an Interested Person Transaction and a majortransaction under Rule 906(1) and Chapter 10 Part VII of the Listing Manual respectively, theCompany is seeking specific approval from the Independent Shareholders in respect of theProposed Acquisition for, inter alia, the proposed acquisition of 100% of the issued and paid-upcapital of JVHPL and the subsequent allotment and issue of the Consideration Shares at theforthcoming EGM. PwCCF has been appointed as the independent financial adviser to advisethe Independent Directors on whether, from a financial point of view, the terms of the ProposedAcquisition are on normal commercial terms and are not prejudicial to the interests of theCompany and the Independent Shareholders. A copy of PwCCF’s letter to the IndependentDirectors in relation to the Proposed Acquisition is set out in Appendix A of this Circular.

1.2 The Whitewash Resolution

Pursuant to the Share Purchase Agreement, Liew Ham Chow and Liew Nyuk Ngoh, who aresiblings and Vendors to the Proposed Acquisition will receive Consideration Shares. As such,the Affected Parties may be required under the Code to make a general offer for the Sharespursuant to Rule 14 of the Code, unless such obligation to make a general offer is waived bythe SIC. The Affected Parties have applied for, and have received, a waiver from the SIC of therequirements of Rule 14 of the Code on 13 March 2006, subject to the fulfilment of theconditions set out in section 5.3 of this Circular which include obtaining Shareholders’ approvalfor the Whitewash Resolution at the EGM.

PwCCF has been appointed by the Company as the independent financial adviser to advisethe Independent Directors on, inter alia, the Whitewash Resolution. A copy of PwCCF’s letter tothe Independent Directors in relation to the Whitewash Resolution is set out in Appendix A ofthis Circular.

Independent Shareholders should note that by voting in favour of the Whitewash

Resolution, they will be giving up their rights to receive a general offer under Rule 14 of

the Code from Liew Ham Chow (which he and any parties acting in concert with him

would be obliged to make upon the issue of the Consideration Shares) at the highest

price paid or agreed to be paid by Liew Ham Chow (and any parties acting in concert

with him) for Shares in the six months prior to the commencement of the offer.

Independent Shareholders should also note that by voting in favour of the Whitewash

Resolution, they could be forgoing the opportunity to receive a general offer from

another person who may be discouraged from making a general offer in view of the

potential dilutive effect of the Consideration Shares, which will only be issued to the

Vendors after the accounts of the JVHPL Group for FY 2007 and FY 2008 are audited.

Independent Shareholders should note that the passing of the resolutions to approve

the Proposed Acquisition is conditional upon the Whitewash Resolution being approved

by the Independent Shareholders. In view of this, in the event that the Whitewash

Resolution is not passed by the Independent Shareholders, the Proposed Acquisition

will NOT take place.

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1.3 The First Proposed Placement to AAPICO of 34,933,334 new Shares

On 15 February 2006, the Board also announced that the Company had entered into theSubscription Agreement with AAPICO. Subject to the satisfaction of the terms and conditions ofthe Subscription Agreement, AAPICO has agreed to subscribe and pay for 34,933,334 newShares, which will constitute 20% of the increased number of Shares, at the Issue Price.

The First Proposed Placement of 34,933,334 new Shares to AAPICO will constitute more than20% of the increased number of Shares as at the last AGM. At the AGM, the share issuemandate given by the Shareholders for the aggregate number of Shares and convertiblesecurities that may be issued must be not more than 50% of the issued share capital of theCompany, of which the aggregate number of Shares and convertible securities of the Companyissued other than on a pro rata basis to existing Shareholders must not be more than 20% ofthe issued share capital of the Company.

The First Proposed Placement will require the approval of the Shareholders. The Company isseeking the specific approval from the Shareholders to permit it to allot and issue new Sharesamounting to 20% of the increased number of Shares to AAPICO pursuant to Rule 805 of theListing Manual.

As the Issue Price for each Share represents a discount of approximately 11% from the volumeweighted average price of S$0.202 for trades in the Shares on the SGX-ST on 13 February2006, the First Proposed Placement will require Shareholders’ specific approval pursuant toRule 811(3) of the Listing Manual.

1.4 The Second Proposed Placement to Mr Ang of 8,733,333 new Shares

On 15 February 2006, the Company had also announced that it had, through the SubscriptionNotice, entered into an agreement with Mr Ang, a non-executive Director. Subject to thesatisfaction of the terms and conditions stated in the Subscription Notice, Mr Ang has agreedto subscribe and pay for 8,733,333 new Shares, which will constitute 5% of the increasednumber of Shares, at the Issue Price.

Mr Ang is a non-executive Director and as such, the Second Proposed Placement wouldrequire the approval of Shareholders under Rule 812(2) of the Listing Manual. In addition, theconsideration payable by Mr Ang for his subscription of 8,733,333 new Shares is S$1.57million, which constitutes 8.5% of the JCL Group’s NTA as at 28 February 2005 and wouldamount to an Interested Person Transaction under Chapter 9 of the Listing Manual requiringspecific Shareholders’ approval.

As the Issue Price for each Share represents a discount of approximately 11% from the volumeweighted average price of S$0.202 for trades in the Shares on the SGX-ST on 13 February2006, the specific approval of Shareholders pursuant to Rule 811(3) of the Listing Manual isrequired. As such, the Company is seeking Shareholders’ approval for the Second ProposedPlacement pursuant to Rule 811(3), Rule 812(2) and Rule 906(1) under the Listing Manual.

1.5 The allotment and issue of up to 17,111,111 Additional New Shares to AAPICO and the

allotment and issue of up to 4,277,778 Additional New Shares to Mr Ang pursuant to the

Subscription Agreement and Subscription Notice respectively

After the completion of the audit of the JVHPL Group for FY 2007 and FY 2008, subject to theprofitability of the JVHPL Group, the Vendors to the Proposed Acquisition will receiveConsideration Shares. Subject to AAPICO and Mr Ang maintaining at least 20% and 5% of thetotal number of issued Shares respectively from time to time, AAPICO and Mr Ang have eachagreed to subscribe for all (and not some only) of their Entitlement to Additional New Shares ofthe Company, taking into account the share consideration to be paid under the Share PurchaseAgreement on a pro rata basis, so as to maintain their shareholdings at 20% and 5% of thetotal number of issued Shares respectively.

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Rule 812(2) of the Listing Manual requires that specific shareholder approval be obtained for allplacements to directors or substantial shareholders of the Company. Thus, conditional upon theShareholders approving the First Proposed Placement and the Second Proposed Placementwhich will result in both AAPICO and Mr Ang becoming at least substantial Shareholders of theCompany, the Company is seeking Shareholders’ approval for the subsequent allotment andissue of Additional New Shares to AAPICO and Mr Ang as required under Rule 812 of theListing Manual.

Mr Ang is a non-executive Director of the Company and is thus an “interested person” underChapter 9 of the Listing Manual. As such, conditional upon the Shareholders approving theSecond Proposed Placement, the Company is seeking Shareholders’ approval for thesubsequent allotment and issue of up to 4,277,778 Additional New Shares to Mr Ang.

1.6 Purpose of this Circular

The purpose of this Circular is to provide Shareholders with information, the rationale for andthe pro forma financial effects of the Proposed Transactions and to seek Shareholders’ approvalfor the proposed resolutions set out in the Notice of EGM on page 69 of this Circular.

2. DETAILS OF THE PROPOSED ACQUISITION

In connection with the listing of the Company on the Official List of the SGX-ST on 10November 2003, a call option was entered into by the Company and two shareholders of JVS,Liew Ham Chow and Liew Nyuk Ngoh in respect of 56% of the shares in JVS on 21 July 2003(the “Call Option”). On 14 February 2006, the Call Option was terminated by the parties to theCall Option by mutual agreement prior to the execution of the Share Purchase Agreement.

Pursuant to the Share Purchase Agreement, the Company will acquire 100% of the issued andpaid-up share capital in JVHPL consisting of the Sale Shares. The Purchase Consideration isproposed to be satisfied by way of Cash Consideration and by the allotment and issuance ofConsideration Shares as described in paragraph 2.1.

2.1 Purchase Consideration

The Purchase Consideration for the Proposed Acquisition is a maximum aggregate amount ofS$14.55 million which will be paid to the Vendors in their respective Shareholding Proportion.The Purchase Consideration was determined following arm’s length negotiations on a willing-buyer and willing-seller basis, and is based on a price earnings ratio of 4.85.

In addition, the parties have also taken into account the prospects of the JVHPL Group, thebusiness of auto-parts manufacturing and assembly, as well as the Net Profit targets of S$1.5million and S$2.0 million that are to be achieved by the Vendors in FY 2007 and FY 2008respectively.

The maximum aggregate value of the Proposed Acquisition being S$14.55 million will besatisfied by:

(a) the Cash Consideration of a sum of S$3,112,880, which is equivalent to the NTA of theJVHPL Group as at 28 February 2006, payable upon Completion; and

(b) deferred Consideration through the allotment and issue of Consideration Shares at thenegotiated pre-determined Issue Price. The Consideration Shares will be issued in twotranches, the first Tranche and the second Tranche in accordance with the prescribedformulae set out below:

(i) First Tranche : 40% x (Net Profit for FY 2007 x 4.85 – Cash Consideration)

(ii) Second Tranche : 60% x (Net Profit for FY 2008 x 4.85 – Cash Consideration)

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Deferred Share Consideration

(a) The Consideration Shares for the first Tranche will be payable within one (1) month afterthe completion of the audit of the JVHPL Group for FY 2007. The minimum andmaximum value of the first Tranche of Consideration Shares payable will be zero (0) andS$4,574,848 respectively; and

(b) The Consideration Shares for the second Tranche will be payable within one (1) monthafter the completion of the audit of the JVHPL Group for FY 2008. The minimum andmaximum value of the second Tranche of Consideration Shares payable will be zero (0)and S$6,862,272 respectively.

Terms of payment

The Consideration Shares to be allotted and issued by the Company to the Vendors will rankpari passu in all respects with the existing Shares save for any dividends, rights, allotments orother distributions that may be declared or paid, the Record Date for which falls before the dateof the issue of the Consideration Shares in FY 2007 or FY 2008, as the case may be, and willonly be issued under the following circumstances and on the following terms:

(a) based on a weightage of 40:60 for FY 2007 and FY 2008 respectively;

(b) based on a price earnings ratio of 4.85;

(c) in the event that the Net Profit for either FY 2007 or FY 2008 exceeds S$3.0 million,Consideration Shares will not be issued for the Net Profit amounts in excess of S$3.0million; and

(d) subject to the meeting of Net Profit targets of S$1.5 million and S$2.0 million in FY 2007and FY 2008 respectively, the failure of which will result in the Vendors repaying to theCompany, the 2007 Shortfall Amount in cash, up to a maximum of S$1.5 million, and/orthe 2008 Shortfall Amount in cash, up to a maximum of S$2.0 million, as the case maybe.

Illustrations

For illustrative purposes we set out the following scenarios to illustrate the total number ofConsideration Shares issued to the Vendors under various circumstances. As the maximumaggregate Consideration payable is S$14.55 million, assuming that the Cash Consideration forthe Proposed Acquisition is S$3.0 million:

Scenario (1)

Where Net Profit targets of S$1.5 million in FY 2007 and S$2.0 million in FY 2008 are met, thetotal amount of share consideration received by the Vendors in terms of value and number ofShares will be calculated according to the following formula:

Consideration payable = 40% x [(Net Profit for FY 2007 X P/E 4.85) – Cash

Consideration] + 60% x [(Net Profit for FY 2008 x P/E 4.85)

– Cash Consideration]

Increase in no. of Shares

(taking into consideration

Share Consideration No. of Consideration Additional New Shares issued

(S$ million) Shares issued to AAPICO and Mr Ang)

First Tranche 1.71 9,500,000 12,666,667

Second Tranche 4.02 22,333,333 29,777,778

Total (including 8.73 31,833,333 42,444,445Cash Consideration)

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Scenario (2)

Where the Net Profit for FY 2007 is S$4.0 million and the Net Profit for FY 2008 is S$4.0million, as Consideration Shares will not be issued for the Net Profit amounts in excess ofS$3.0 million, the maximum amount of share consideration received by the Vendors in terms ofvalue and number of shares will be calculated according to the following formula:


Consideration] + 60% x [(Net Profit for FY 2008 x P/E 4.85)

– Cash Consideration]



Share Consideration No. of Consideration Additional New Shares issued

(S$ million) Shares issued to AAPICO and Mr Ang)

First Tranche 4.62 25,666,667 34,222,222

Second Tranche 6.93 38,500,000 51,333,333

Total (including 14.55 64,166,667 85,555,555Cash Consideration)

Scenario (3)

Where the Net Profit for each of FY 2007 and FY 2008 is negative, the Vendors will not receiveany share consideration. After FY 2007, the Vendors will return the sum of S$1.5 million in cashto the Company due to the failure to meet the Net Profit target of S$1.5 million in FY 2007.Likewise, after FY 2008, the Vendors will return the sum of S$2.0 million in cash to theCompany due to the failure to meet the Net Profit target of S$2.0 million in FY 2008.

2.2 Conditions Precedent

Under the Share Purchase Agreement, Completion of the Proposed Acquisition is conditionalupon, inter alia,:

(a) the Vendors having divested all of their shareholding interest in the capital of Katsuya(Thailand) Co. Ltd (“Katsuya”);

(b) each of the Vendors having discharged themselves of their respective roles in themanagement of Katsuya and/or resigned from their positions as directors of Katsuya, asthe case may be.

(c) the receipt of documentation reasonably satisfactory to the Company evidencing therestructuring exercise wherein the Vendors have transferred their beneficial interests inJVS and JVT to JVHPL;

(d) the completion of the financial and legal due diligence investigations to be conducted bythe Company’s professional advisers on JVHPL on or before the Completion Date, andthe results of such due diligence investigations being reasonably satisfactory to theCompany;

(e) all consents, approvals and licenses (whether governmental, corporate or otherwise)which are necessary to be obtained under any existing contractual, financing or securityarrangements or such other consents or approvals from any third party, governmental orregulatory body or relevant competent authority as may be necessary to be obtained inrespect of or in connection with the transactions described or contemplated herein andthe proposed allotment and issue of the Consideration Shares by the Company to theVendors, being granted or obtained and such consents and approvals remaining in fullforce and effect and not withdrawn or revoked or amended, on or before the CompletionDate, and all conditions attaching thereto required to be complied with being compliedwith on or before the Completion Date;

(f) there being no material adverse change (as determined by the Company) in the JVHPLGroup’s assets, properties, and business relationship in respect of Ford Motor Companyand its subsidiaries, since the date of the Share Purchase Agreement;

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(g) The Company having obtained in-principle approval for the listing of and quotation forthe Consideration Shares on the Official List of the SGX-ST and such approval nothaving been revoked or withdrawn on or before the Completion Date and, where suchapproval is subject to conditions, such conditions being acceptable to the parties and (tothe extent that such conditions are capable of being fulfilled on or before Completion)they are so fulfilled;

(h) the confirmation from the SIC having been obtained, to ensure that Liew Ham Chow willnot be obliged to make a general offer for the Shares of the Company under the Codeupon the allotment and issue of the Consideration Shares on the terms of the SharePurchase Agreement and such confirmation not having been revoked or withdrawn on orbefore the Completion Date and, where such confirmation is subject to conditions, suchconditions being acceptable to the parties and (to the extent that such conditions arecapable of being fulfilled on or before Completion) they are so fulfilled;

(i) Lee Seng Jeow and Ho Choon Meng each entering into a service agreement with theCompany and Liew Nyuk Ngoh entering into a service agreement with JVS for aminimum term of three (3) years from the Completion Date on terms to be mutuallyagreed by the parties;

(j) all loans and advancements made by JVHPL, JVS and JVT to its directors, if any, beingfully repaid on or before the Completion Date; and

(k) the representations and warranties of the Vendors and the Company in the SharePurchase Agreement being true, accurate and correct in all material respects as if madeon the Completion Date, with reference to the then existing circumstances (subject onlyto any matter disclosed or expressly provided for under the terms of the Share PurchaseAgreement) and the Vendors having performed in all material respects all of theirobligations therein to be performed on or before the Completion Date.

With regards to conditions (e) and (g), the SGX-ST has on 6 June 2006 granted in-principleapproval for the listing of and quotation for the Consideration Shares on the Official List of theSGX-ST, subject to the approval of the Shareholders in respect of the Proposed Acquisition andthe allotment and issue of the Consideration Shares. The in-principle approval of the SGX-STis not to be taken as an indication of the merits of the Company, its Subsidiaries, the ProposedAcquisition or the allotment and issue of the Consideration Shares.

With regards to condition (h), the SIC has on 13 March 2006 confirmed that Liew Ham Chow isnot obliged to make a general offer for Company under the Code upon the allotment and issueof the Consideration Shares pursuant to the terms of the Share Purchase Agreement.

With regards to condition (i), the Company and JVS have entered into the Service Agreementswith the Proposed Executive Directors and Liew Nyuk Ngoh, respectively on 7 June 2006. TheService Agreements will commence upon Completion of the Proposed Acquisition.

As the conditions precedent stated above are continuing warranties up to the Completion Date,to the best of the Company’s knowledge, as at the date of this Circular, the conditionsprecedent stated above have not been breached.

2.3 Continuing obligations

The Vendors have agreed to meet Net Profit targets of S$1.5 million and S$2.0 million in FY2007 and FY 2008 respectively. In the event that the Net Profit for FY 2007 is less than S$1.5million, the Vendors shall, in accordance with their Shareholding Proportion, pay to theCompany the 2007 Shortfall Amount in cash within one (1) month after the accounts of theJVHPL Group for FY 2007 have been audited. Likewise, in the event that the Net Profit for FY2008 is less than S$2.0 million, the Vendors shall, in accordance with their ShareholdingProportion, pay to the Company the 2008 Shortfall Amount in cash within one (1) month afterthe accounts of the JVHPL Group for FY 2008 have been audited, provided that the paymentsmade after FY 2007 and FY 2008 shall not exceed S$1.5 million and S$2.0 million respectively.

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2.4 Rationale for and benefits of the Proposed Acquisition

The Directors believe that the Proposed Acquisition is an investment opportunity that will be inthe best interest of the Company, and note that completion of the Proposed Acquisition wouldallow the Company to enlarge its product portfolio and expand its regional presence. TheProposed Acquisition will facilitate the expansion of the Company’s operations into Thailandwhich is currently a major manufacturing and assembly hub for many international automobileand auto-parts manufacturers.

The Company is currently in the business of producing custom-fitted automotive leather trim forcar seats and leather wrapping for other automotive interior products, such as steering wheels,consoles, gear shift knobs and hand brakes. The JVHPL Group is in the business of supplying,assembling and installing carpet mats for automobiles and non-factory fitted accessories suchas alarm systems, parking sensors and sill plates. Other business activities include theengineering and the assembly of automobile products such as stainless steel bars for pick ups,sport bar kits, side and rear protector bar kits. The Directors are of the view that the ProposedAcquisition will allow the Company to enjoy the benefits accruing from the acquisition of acomplementary business by increasing its product range to provide a comprehensive andcomplementary, one-stop range of automotive accessories products and services for itscustomers. This will in turn broaden the earnings base of the Company and increase theCompany’s revenue and eventually serve to enhance shareholder value by engaging inbusiness activities which have growth prospects.

The Directors view the Proposed Acquisition as a mode of generating business and gainingaccess to a new range of customers based on the JVHPL Group’s established businessstructure and business network in the automobile accessories sector of the automobileindustry in Singapore and Thailand. The Proposed Acquisition of JVHPL will result in theexpansion of the Company’s business, as well as the rationalising and streamlining of themanagement, administrative and sales teams through economies of scale.

In this regard, the Directors are also of the view that the Proposed Acquisition will allow theCompany to tap into the experience and network of the JVHPL Group’s management team andstrengthen the Board. The Directors intend to propose that Ho Choon Meng and Lee SengJeow be appointed to the Board as executive Directors upon completion of the ProposedAcquisition. It is the Directors’ intention that upon their appointment, Ho Choon Meng willmanage the JVHPL Group and assist in the growth of the JCL Group and Lee Seng Jeow willbe involved in the sales, marketing and development of the JCL Group.

3. INFORMATION ON JVHPL

JVHPL is an investment holding company incorporated in Singapore on 1 June 2005 and hasan issued and paid-up share capital of S$10,000 consisting of 10,000 shares. Upon completionof JVHPL’s restructuring exercise, JVHPL will beneficially own 100% of the issued and paid-upshare capital of JVS and JVT. The JVHPL Group is primarily engaged in non-capital intensivebusiness activity.

The shareholders of JVHPL before the Proposed Acquisition are as follows:

Name No. of Shares Owned %

Liew Ham Chow 4,500 45

Liew Nyuk Ngoh 2,000 20

Ho Choon Meng 2,000 20

Lee Seng Jeow 1,500 15

As at the Latest Practicable Date, Liew Nyuk Ngoh and Ho Choon Meng are directors ofJVHPL.

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3.1 Jackson Vehicle (Singapore) Pte Ltd

JVS began as an automobile workshop in 1982 and was founded by Liew Ham Chow. JVSdiversified its business over the years and in 2000, JVS relinquished its service and repairbusiness and focused its principal business activity on the supply and installation of non-factory fitted accessories, including interior-trim products to Singapore’s car distributors anddealers and supply and trade of carpet mats for automobiles. Other business activities includethe supply and trade of car accessories such as alarm systems, parking sensors and sillplates, and exterior finish work for automobiles. In 2004, JVS was awarded the ISO 9002:3000certification by Certification International.

The primary product and service of JVS are the production and sale of carpets and theprovision of carpeting services to the After Market in Singapore. JVS has a significant marketshare in the production and sale of carpets for the automobile industry in Singapore andprovides carpeting services to approximately 5000 cars in Singapore every month. 25% of thecarpets provided are manufactured in-house by JVS while the remaining carpets are procuredoverseas from third party manufacturers.

Since 2000, the production and sale of carpet mats, audio and electronic components to theAfter Market in Singapore has been contributing approximately 55% of JVS’s annual revenue.The remaining revenue of JVS is attributable to the manufacture and installation of interiorplastic panels, chrome trims and other interior steel products and the trading of automobileaccessories.

3.2 J.V. (Thailand) Co., Ltd

JVT was incorporated in Thailand on 19 April 2002 and is primarily an OEM engaged in theengineering and assembly of automobile products such as stainless steel bars for pick ups,sport bar kits, side and rear protector bar kits. Other products produced and installed by JVTinclude chrome door mirror covers, chrome exhaust tips, door handle protectors, gear knobswith leather wraps and wooden inserts, side protection moulding, lockable spare tyre covers,reverse parking sensors, roof rack cargo tray kits, roof rail assembly kits, side door weathershields, leather and wood grain steering wheels, tail lamp guards, tow hook kits and kit doorscuff plates.

In 2005, JVT was awarded the ISO/TS 16949 certification by SGS. The ISO/TS 16949certification is a worldwide professional technical standard developed by the IATF. The IATFwas formed by a group of international automotive manufacturers including General Motors,Ford, Daimler Chrysler, BMW, Volkswagen, Renault, Fiat, PSA Citroen and their respectivetrade associations to provide improved quality products to automotive customers worldwide.The ISO/TS 16949 certification is required by vehicle manufacturers in Europe and the UnitedStates of America and is integral to their process of selection of their suppliers for the supply ofvehicle components. The ISO/TS 16949 certification is regarded as an accreditation evidencingthe high standard of a manufacturer’s process management, the quality of parts supplied to itscustomers and timely delivery of its products and services to its customers.

The ISO/TS 16949 certification played an integral part in the Ford Group entering into a letterof intent to order products worth a total of S$60.0 million from JVT over a period of four (4)years. JVT is a Tier-one Supplier to the Ford Group for the engineering and assembly of caraccessories for, and the finishing of, automobiles manufactured by the Ford Group such as theFord Ranger, Ford Escape, Ford Everest and Ford Focus. These finished models are thenexported and sold overseas, including but not limited to parts of Europe.

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3.3 Major Customers and Suppliers

3.3.1 Customers

The customers of JVS are large players from the After Market and the Car DistributorMarkets in the automobile industry in Singapore. JVS’s main customers in Singaporeinclude, inter alia, distributors of car makes such as Nissan, Toyota, Mitsubishi, KIA,Mazda and Chevrolet. In 2005, JVT entered into a letter of intent with its key customer,the Ford Group, to supply products worth S$60.0 million to the Ford Group over aperiod of four (4) years.

3.3.2 Suppliers

The JVHPL Group purchases its products and raw materials from Singapore, Malaysia,Thailand and the PRC. Major suppliers include manufacturers of automobileaccessories and these suppliers are selected based on their competitive pricing andtimely delivery of their products and services. JVS does not have any long-termagreement with any major supplier nor is it dependent on any single supplier.

3.4 Competitive Strengths of the JVHPL Group

3.4.1 Good macroeconomic fundamentals

The JVHPL Group’s core markets are Singapore and Thailand, and these countries arerelatively affluent with a high demand for automobiles. In the recent years, Thailandhas developed to become a major manufacturing and assembly hub for manyinternational automobile and auto-parts manufacturers. As such, the JVHPL Group iswell positioned to develop and market their products in the automobile accessoriesmarket in Thailand.

3.4.2 Experienced management team

Ho Choon Meng, the chief executive officer of the JVHPL Group has had more than ten(10) years of hands-on experience in the automotive industry and is instrumental in thegrowth and expansion of the JVHPL Group. In 2002, Ho Choon Meng spearheaded theJVHPL Group’s expansion into Thailand by setting up JVT.

Lee Seng Jeow, the deputy chief executive officer of JVS, has had more than fifteen(15) years of experience in the automotive industry. He focuses on the businessdevelopment and formulation of corporate strategies and general corporate direction ofJVS. Together, their business acumen and industry knowledge, as well as themaintenance of good relationships with the JVHPL Group’s customers and suppliers inSingapore and overseas are vital to the business of the JVHPL Group.

3.4.3 Network of suppliers

The JVHPL Group consciously maintains a good relationship with their suppliers. Inaddition, the JVHPL Group also constantly sources for alternative suppliers to ensurecontinuity in the supply of products for the performance of their contractual obligationsto all their customers.

3.5 Risks associated with the JVHPL Group

The JVHPL Group is exposed to a number of possible risks which may arise from economic,business, market and financial factors and developments, and which may have an adverseimpact on the future performance of the JVHPL Group.

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3.5.1 Risks associated with the JVHPL Group

Risks associated with JVS’s and JVT’s key management personnel

The JVHPL Group is dependent on the key management personnel of the JVHPLGroup, in particular, Ho Choon Meng and Lee Seng Jeow. These key managementpersonnel, together with a dynamic management team in both JVS and JVT, haveexpanded the JVHPL Group from an automobile workshop to a manufacturer andsupplier of automobile accessories to the automobile industry in Singapore andThailand. As such, the loss of the services of these key management personnel of theJVHPL Group, especially Ho Choon Meng and Lee Seng Jeow, will have an adverseimpact on the performance of the JVHPL Group.

Risks associated with JVT’s major customer

JVT is dependent on orders that it will receive from the Ford Group pursuant to theletter of intent that it had entered into with the Ford Group in 2005. The Ford Group iscurrently JVT’s key customer, contributing 95% of JVT’s annual revenue. As such, theloss of or a significant reduction in purchase orders from the Ford Group in Thailandover the next four (4) years, will have a material adverse impact on JVT’s financialperformance and position.

Risks associated with JVT’s major supplier

In respect of the contract it secured with the Ford Group, JVT is reliant on a singlesource supplier in Malaysia. A failure on the part of this supplier to meet JVT’srequirements will lead to a delay in the delivery of goods and services to the FordGroup.

Risks associated with JVS’s major customer

Tan Chong Motor, the distributor of Nissan in Singapore, contributes approximately 56%of JVS’s annual revenue. As such, the loss of, or a significant reduction in purchaseorders from Tan Chong Motor, will have a material adverse impact on the JVHPLGroup’s financial performance and position.

Risks associated with the non-renewal of the ISO/TS 16949 certification

Currently, the ISO/TS 16949 certification awarded to JVT is determined by factors suchas the process management system, quality of products and services as well as thequality and standard of the staff in JVT. If JVT is unable to meet the criteria for the grantof this certification, the said certification may not be renewed. In the event that thecertification is not renewed, JVT will not be allowed to bid for contracts which requirethe ISO/TS 16949 certification as a pre-requisite for tender. This would be detrimentalto the business operations of JVT.

3.5.2 Risks associated with the industry in which the JVHPL Group operates

Risks associated with economic conditions

The JVHPL Group is heavily reliant on the automotive industry in Singapore, Thailandand Europe. The demand for cars is generally dependent on factors including economicconditions, the purchasing power of the consumers and the standard of living in therespective geographical markets. Any substantial decrease in demand in theautomotive industry would result in a decrease in demand for the products and servicesof the JVHPL Group. Special factors affecting the demand for automobile accessoriesinclude the number and prices of certificates of entitlement for cars issued by thegovernment in Singapore, and the import duties on cars which will affect car prices inSingapore, Thailand and Europe.

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Risks associated with changes in governmental regulations

The products supplied by JVS and JVT to its customers are affected by changes ingovernmental policies imposed on the Car Distributor Market in Singapore, Thailandand Europe. There is no assurance that JVS and JVT will continue to have the right tosupply automobile accessories to all their customers in their respective Car DistributorMarkets and the loss of such customers would have a material adverse effect on theresults of their financial performance.

Risks associated with changes in procurement policies of Car Distributor

Markets

JVS may lose its right to continue providing customers with their products and servicesif the car distributors or automobile manufacturers change their procurement policieswith regard to the selection of suppliers of the automotive components in Singapore.

Risks associated with potential new entrants to the Singapore market

The car accessories industry in Singapore in which JVS operates is highly competitive.As such, JVS faces competition from new entrants. In the event that JVS’s existing orpotential competitors offer cheaper alternatives to their products or services, or engagein aggressive pricing in order to increase their market share, the JVHPL Group’sfinancial performance may be adversely affected.

3.5.3 Risks associated with the PRC, the United States of America, Thailand and

Malaysia

Risks associated with political and economic conditions in Thailand

JVT’s performance may be affected by the political, regulatory and economicuncertainties in Thailand. There are certain risks inherent in doing business in Thailand,such as unexpected changes in the regulatory requirements, political instability, bankingand credit risks and potentially adverse tax consequences. Such changes may have amaterial adverse impact on the business, financial results and operations of the JVHPLGroup.

Risks associated with foreign exchange fluctuations

The reporting currency of the JVHPL Group is S$ but the JVHPL Group also transactsin USD, RMB, RM and THB. As such, the JVHPL Group is exposed to the risk offoreign exchange fluctuations arising from the differing currency denominations of theirrevenue stream and costs. To the extent that the revenue stream of the JVHPL Groupand its costs are not naturally matched in the same currency, the JVHPL Group will beexposed to any adverse fluctuations of the USD, RMB, RM, and THB.

The JVHPL Group is also exposed to fluctuations in foreign exchange arising from thedifference in timing between the receipt and payment of funds by the JVHPL Group. Assuch, any significant fluctuation in the USD, RMB, RM and THB will have an impact onthe financial performance of the JVHPL Group. Further, any adverse fluctuation inexchange rates will cause the JVHPL Group to incur foreign exchange transactionlosses.

3.6 Financial Information on the JVHPL Group

The following pro forma financial information of the JVHPL Group is based on the JVHPL’s proforma accounts for the financial year ended 30 November 2005 (which is based on the auditedaccounts of JVS for the financial year ended 30 November 2005 and the audited accounts ofJVT for the financial year ended 31 December 2005).

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Pro Forma Financial Results FY 2005

Revenue (S$) 12,997,014

Cost of Goods Sold (S$) 9,565,992

Gross Profit (S$) 3,431,022

Gross Profit Margin (%) 26%

Net Profit After Tax (S$) 399,958

Pro Forma Financial Position FY 2005

Non Current Assets (S$) 1,745,847

Current Assets (S$) 4,362,645

Current Liabilities (S$) 2,549,930

Net Current Assets / (Liabilities) (S$) 1,812,715

Non Current Liabilities (S$) 1,049,281

Capital and Reserves (S$) 2,509,281

3.7 Service Agreements

On 7 June 2006, pursuant to a condition precedent in the Share Purchase Agreement, ourCompany entered into separate service agreements with the Proposed Executive Directors,and JVS entered into a service agreement with Liew Nyuk Ngoh. The Service Agreements willtake effect upon Completion of the Proposed Acquisition.

The terms of the appointment for the Proposed Executive Directors and Liew Nyuk Ngoh arefor three (3) years. During this three year period, the Company or JVS, as the case may be,may terminate the services of the Proposed Executive Directors or Liew Nyuk Ngoh, by givingnot less than three (3) months’ written notice, or the payment of salary in lieu of notice. TheCompany or JVS, as the case may be, may also terminate their respective Service Agreementsif the person (i) commits any gross default or grave misconduct in connection with or affectingthe business of the Company; (ii) breaches or does not observe the terms of his serviceagreement; (iii) becomes bankrupt or makes any composition or enters into any deed ofarrangement with his creditors (if any); (iv) becomes of unsound mind; or (v) is incapacitatedfrom performing his duties and obligations under the Service Agreements by reason of hishealth or accident for one hundred and eighty (180) days or more in the preceding twelve (12)months. The Service Agreements cover the various terms of employment, specifically thesalaries, bonuses and benefits.

Pursuant to the terms of their respective Service Agreements, the Proposed ExecutiveDirectors will each be entitled to a monthly salary of S$12,000 and an annual wagesupplement equivalent to one (1) month’s salary. The Proposed Executive Directors are alsoentitled to an annual incentive bonus.

The total annual incentive bonus for the Proposed Executive Directors will be payable withinone (1) month after the announcement of the consolidated financial statements of our Groupfor each financial year has been made by the Board.

The Proposed Executive Directors are also entitled to a transport allowance of S$2,000 permonth each. All reasonable travelling, hotel and other expenses incurred by our ProposedExecutive Directors wholly, exclusively and necessarily in or about the performance of theirduties pursuant to their Service Agreements will be borne by the Company.

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3.7.1 Lee Seng Jeow’s annual incentive bonus will comprise of three parts, which are asfollows:-

(i) a bonus from the Accessories Segment,

(ii) a bonus from the Leather Segment, and

(iii) a Pool Bonus which comprises of two parts, Part A and Part B.

(a) Lee Seng Jeow’s bonus from the Accessories Segment

PBT of the Accessories Segment

Up to the first S$1,800,000

Where the PBT of the AccessoriesSegment is more thanS$1,800,000 but does not exceedS$2,500,000


Where the PBT of the AccessoriesSegment is more thanS$3,600,000

(b) Lee Seng Jeow’s bonus from the Leather Segment

PBT of the Leather Segment


Where the PBT of the LeatherSegment is more thanS$3,700,000 but does not exceedS$4,700,000


Where the PBT of the LeatherSegment is more thanS$6,200,000

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Amount / Rate of bonus from the

Accessories Segment

16% of 2% of the PBT of theAccessories Segment





Leather Segment

10% of 2% of the PBT of theLeather Segment




(c) Lee Seng Jeow’s Pool Bonus = Part A + Part B

Part A






Part B






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Amount / Rate contributable to

the pool bonus component from

the Leather Segment

10% of 55% of 2% of the PBT ofthe Leather Segment






the Accessories Segment

10% of 45% of 2% of the PBT ofthe Accessories Segment




3.7.2 Ho Choon Meng’s annual incentive bonus comprises two parts, which are as follows:-

(i) a bonus from the Accessories Segment, and

(ii) the Pool Bonus.

(a) Ho Choon Meng’s bonus from the Accessories Segment






(b) Ho Choon Meng’s Pool Bonus = Part A + Part B

Part A






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the Accessories Segment






Accessories Segment





Part B






3.7.3 Pursuant to the terms of the service agreement with Liew Nyuk Ngoh, she is entitled toa monthly salary of S$6,510 and an annual wage supplement equivalent to one (1)month’s salary.

Liew Nyuk Ngoh is also entitled to a transport allowance of S$800 per month and amobile phone allowance of S$400 per month. All reasonable travelling, hotel and otherexpenses incurred by her wholly exclusively and necessarily in or about theperformance of her duties pursuant to her service agreement will be borne by JVS.

3.7.4 The Proposed Executive Directors and Liew Nyuk Ngoh have agreed, inter alia, that forthe duration of the appointments under their respective Service Agreements, theProposed Executive Directors and Liew Nyuk Ngoh shall not, without the prior writtenconsent of the Board, directly or indirectly (i) be engaged in any other business whichis in competition with that conducted by the JCL Group, or (ii) be concerned orinterested in any other business of a similar nature to or in competition with that carriedon by the JCL Group, or which is a supplier or customer of the JCL Group in relation toits goods or services.

Furthermore, in the event the appointments of the Proposed Executive Directors andLiew Nyuk Ngoh are terminated under their respective Service Agreements, theProposed Executive Directors and Liew Nyuk Ngoh are not permitted in connection withthe carrying on of any business similar to or in competition with the business of theCompany on their own behalf or on behalf of any person firm or company, directly orindirectly (a) seek to do business with any person, firm or company who has at anytime during the twenty four (24) months immediately preceding the cessation of theappointment(s) of the Proposed Executive Director(s) or Liew Nyuk Ngoh donebusiness with the JCL Group; or (b) endeavour to entice away from the JCL Group anyperson who has at any time during the twenty four (24) months immediately precedingthe cessation of the appointment(s) of the Proposed Executive Director(s) or Liew NyukNgoh been employed or engaged by the JCL Group.

The Proposed Executive Directors and Liew Nyuk Ngoh are also, for a period of twentyfour (24) months after ceasing to be employed under the Service Agreement(s), notpermitted to carry on or be engaged in any activity or business which is in competitionwith the business of the Company in Singapore or any country where the JCL Grouphas operations or carried on business at the time of the termination of the ServiceAgreement(s), whether alone or jointly with or as manager, agent, consultant oremployee of any person, firm or company.

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the Leather Segment





4. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION

The financial effects of the Proposed Acquisition on the NTA, gearing and EPS of the JCLGroup are set out in Appendix C of this Circular.

5. THE WHITEWASH RESOLUTION

5.1 Requirement under the Code to make a general offer

Under Rule 14 of the Code, when any person acquires, whether by a series of transactionsover a period of time or not, shares in a company which (taken together with shares held oracquired by persons acting in concert with him) carry 30% or more of the voting rights of suchcompany, such person shall have to extend a general offer to all the other shareholders of suchcompany for all the issued shares in the capital of such company in accordance with theprovisions of Rule 14 of the Code.

As at the Latest Practicable Date, Liew Ham Chow is a major Shareholder with an interest in51,645,600 Shares (representing approximately 39.42% of the current issued and paid-upshare capital of the Company) and Liew Nyuk Ngoh does not own or control any interest in theShares.

For illustrative purposes only, assuming that (i) all conditions precedent stipulated in relation tothe Proposed Transactions are completed and/or satisfied, based on the existing shareholdingsof the Company as at the Latest Practicable Date and (ii) the Cash Consideration for theProposed Acquisition is S$3.0 million, the effects of the Proposed Transactions on theshareholdings of Liew Ham Chow, Liew Nyuk Ngoh, AAPICO, Mr Ang and the IndependentShareholders are set out in Appendix D of this Circular.

In the event that the Proposed Placements are completed, Liew Ham Chow’s shareholdinginterest will be diluted below 30%. However, if the Proposed Acquisition is approved by theIndependent Shareholders and Consideration Shares are issued to the Vendors based on theJVHPL Group’s Net Profit in FY 2007 and FY 2008, the Affected Parties could potentially crossthe 30% threshold which will trigger a general offer under Rule 14 of the Code. For illustrativepurposes, we set out the following scenarios:

Scenario (1)

Where the JVHPL Group achieves the Net Profit targets of S$1.5 million and S$2.0

million for FY 2007 and FY 2008 respectively.

In the event that the Proposed Transactions are completed and the Net Profit targets of S$1.5million and S$2.0 million for FY 2007 and FY 2008 respectively are met by the JVHPL Group,Liew Ham Chow will be issued 4,275,000 Consideration Shares and 10,050,000 ConsiderationShares after FY 2007 and FY 2008 respectively, amounting to an aggregate of 14,325,000 newShares. If a corresponding contemporaneous allotment and issue of an aggregate of 10,611,111Additional New Shares is made to AAPICO and Mr Ang pursuant to the SubscriptionAgreement and Subscription Notice respectively, Liew Ham Chow’s shareholding interest in theCompany will increase to 30.39% after FY 2008.

In view of the foregoing, the allotment and issue of the Consideration Shares to Liew HamChow as deferred Consideration will result in Liew Ham Chow’s shareholding interest in theCompany exceeding the 30% threshold in Rule 14.1 of the Code, thus triggering an obligationon his part to make a general offer for all the Shares.

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Scenario (2)

Where the JVHPL Group achieves a Net Profit of S$3.0 million in FY 2007.

In the event that the Proposed Transactions are completed and the JVHPL Group achieves aNet Profit of S$3.0 million in FY 2007, Liew Ham Chow will be allotted and issued 11,550,000Consideration Shares under the first Tranche after FY 2007. If a correspondingcontemporaneous allotment and issue of an aggregate of 8,555,555 Additional New Shares ismade to AAPICO and Mr Ang pursuant to the Subscription Agreement and Subscription Noticerespectively, Liew Ham Chow’s shareholding interest in the Company will increase to 30.25%after FY 2007.

In view of the foregoing, the allotment and issue of Consideration Shares after FY 2007 to LiewHam Chow as deferred Consideration will result in Liew Ham Chow’s shareholding interest inthe Company exceeding the threshold of 30% under Rule 14.1 of the Code. As such, theallotment and issue of the Consideration Shares to Liew Ham Chow after FY 2007 wouldtrigger his obligation to make a general offer for all the Shares.

5.2 Potential Dilution of Shareholders who are independent in respect of the Proposed

Transactions

As a result of the Proposed Transactions, the collective shareholding interest of theIndependent Shareholders may be diluted in certain circumstances. For illustrative purposes,the dilutive effects on the shareholding interest of the Independent Shareholders as a result ofthe Proposed Acquisition and/or the Proposed Placements are set out in Appendix D of thisCircular.

As set out in Appendix D, the Independent Shareholders’ aggregate shareholding in theCompany could potentially be diluted to a maximum of approximately 30.36%.

5.3 Waiver from the requirements of Rule 14 of the Code

On 13 March 2006, the SIC granted to the Affected Parties a waiver from the requirements ofRule 14 of the Code subject to, inter alia, the following conditions (the “SIC Conditions”):

(a) a majority of the Independent Shareholders present and voting at the EGM held beforethe Proposed Acquisition, approve by way of a poll, the Whitewash Resolution to waivetheir rights to receive a general offer from the Affected Parties;

(b) the Whitewash Resolution being separate from other resolutions;

(c) the Affected Parties and parties not independent of them abstain from voting on theWhitewash Resolution;

(d) the Affected Parties did not purchase and are not to purchase any shares or instrumentsconvertible into, rights to subscribe for and options in respect of Shares other than theConsideration Shares to be issued:

i. during the period between the date of the announcement of the ProposedAcquisition and the date Shareholders’ approval is obtained for the WhitewashResolution;

ii. in the six (6) months prior to the announcement of the Proposed Acquisition, butsubsequent to negotiations, discussions or the reaching of understandings oragreements with the Directors in relation to the allotment and issue of theConsideration Shares;

(e) The Company appointing an independent financial adviser to advise the IndependentShareholders on the Whitewash Resolution;

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(f) The Company setting out clearly in this Circular:

i. details of the proposed issue of Consideration Shares;

ii. the dilution effect to existing holders of voting rights of issuing the ConsiderationShares;

iii. the number and percentage of voting rights in the Company as well as the numberof instruments convertible into rights to subscribe for and options in respect ofShares (other than the Consideration Shares to be issued) held by the AffectedParties as at the Latest Practicable Date;

iv. the number and percentage of voting rights to be issued as Consideration Sharesto each existing Shareholder;

v. that the Independent Shareholders, by voting for the Whitewash Resolution, arewaiving their rights to a general offer from Liew Ham Chow at the highest pricepaid by the Affected Parties for Shares in the past six (6) months preceding thecommencement of the Proposed Acquisition; and

vi. that the Independent Shareholders, by voting for the Whitewash Resolution, couldbe forgoing the opportunity to receive a general offer from another person whomay be discouraged from making a general offer in view of the potential dilutioneffect of the Consideration Shares, which will only be issued after the accounts ofthe Company for FY 2007 and FY 2008 are audited;

(g) the Circular states that the waiver granted by the SIC to the Affected Parties from therequirement to make a general offer under Rule 14 is subject to the conditions stated at(a) to (f) above;

(h) Liew Ham Chow obtains SIC’s approval in advance for those parts of the Circular thatrefer to the Whitewash Resolution; and

(i) Liew Ham Chow provides a written undertaking to Council that he will comply or procurethe relevant persons to comply with the disclosure requirements set out in Note 2 onSection 2 of Appendix 1 of the Code.

The Waiver granted to the Affected Parties from the requirement to make a general offer issubject to the SIC conditions set out in section 5.3 above. As at the Latest Practicable Date,save for conditions (a) and (i), all other conditions imposed by the SIC set out above havebeen satisfied.

Independent Shareholders in respect of the Whitewash Resolution are therefore asked to vote,by way of a poll, on the Whitewash Resolution in the Notice of EGM as set out on page 69 inthis Circular.

5.4 Whitewash Resolution

Independent Shareholders in respect of the Whitewash Resolution are requested to vote byway of a poll on the Whitewash Resolution set out in the Notice of EGM on page 69 of thisCircular, waiving their rights to receive a general offer from the Affected Parties.

5.5 Advice of the Independent Financial Advisor

It should be noted that PwCCF has been appointed by the Company as the independentfinancial adviser to advise the Independent Directors on, inter alia, the Whitewash Resolution.

A copy of PwCCF’s letter to the Independent Directors in relation to the Whitewash Resolutionis set out in Appendix A of this Circular.

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5.6 Interests of the Directors and substantial Shareholders

Liew Ham Chow has confirmed that he has declared all his interests in the WhitewashResolution.

None of the remaining Directors (other than in his or her capacity as a Director or Shareholder)and Controlling Shareholders of the Company has any interest, direct or indirect, in theWhitewash Resolution.

The interests of all Directors and substantial Shareholders of the Company in the issued andpaid-up share capital of the Company as at the Latest Practicable Date are set out in AppendixB of this Circular.

6. THE FIRST PROPOSED PLACEMENT TO AAPICO HITECH PUBLIC COMPANY LIMITED

OF 34,933,334 NEW ORDINARY SHARES IN THE CAPITAL OF JACKSPEED

CORPORATION LIMITED

6.1 The Subscription Agreement

The aggregate consideration of S$6.29 million is payable on Completion of the First ProposedPlacement by AAPICO to the Company for the subscription of 34,933,334 new Shares at theIssue Price. Assuming the Proposed Placements are completed, the new Shares allotted andissued to AAPICO will represent 20% of the increased number of Shares of the Company.

The New Shares, when allotted and issued, will rank pari passu in all respects with and carryall rights similar to the existing Shares in the Company, except that they will not rank for anydividends, rights, allotments or other distributions that may be declared or paid, the RecordDate for which falls on or before the Completion Date.

6.2 Conditions Precedent

Under the Subscription Agreement, Completion of the Subscription Agreement is conditionalupon, inter alia:

(a) AAPICO carrying out a due diligence exercise on the Company for a period of four (4)weeks after the execution of the Subscription Agreement and disclosing to AAPICOinformation requested by AAPICO for the purposes of carrying out the due diligence andthe results of such due diligence exercise being satisfactory to AAPICO;

(b) in-principle approval for the listing of and quotation for the 34,933,334 new Shares onthe Official List of the SGX-ST being obtained from the SGX-ST and not having beenrevoked and, where such approval is subject to conditions (only such conditions whichare not normally imposed by the SGX-ST for a transaction of a similar nature), suchconditions being reasonably acceptable to the Company and AAPICO and, to the extentthat any conditions for the listing of and quotation for the 34,933,334 new Shares on theOfficial List of the SGX-ST are required to be fulfilled on or before the Completion Date,they are so fulfilled;

(c) the subscription, issue and allotment of the 34,933,334 new Shares not being prohibitedby any statute, order, rule, regulation, directive or request promulgated or issued after thedate of the Subscription Agreement by any legislative, executive or regulatory body orauthority of Singapore or elsewhere, which is applicable to the Company and/orAAPICO;

(d) there being no material adverse change or the existence of circumstances which wouldgive rise to any material adverse change in the business, financial condition, properties,assets, liabilities, actual or contingent or prospects of the Company from that shown inthe audited financial statements of the Company for FY 2005 (together with the notesand reports annexed thereto or incorporated therein) and to the warranties given by theCompany pursuant to the Subscription Agreement, since the date of the SubscriptionAgreement; and

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(e) the approval of the board of directors of AAPICO for the subscription of 34,933,334 newShares pursuant to the Subscription Agreement.

If any of the conditions set forth above as the case may be is not satisfied on or before theCompletion Date, the Subscription Agreement shall ipso facto cease and determine thereafterand none of the parties shall have any claim against the other for damages, losses,compensation or otherwise. Without prejudice to the aforesaid, in the event that the results ofthe due diligence exercise are unsatisfactory in any respect in the reasonable opinion ofAAPICO, AAPICO is entitled, at its option, to waive condition (a) and proceed with theCompletion or terminate the Subscription Agreement.

With regards to conditions (b) and (c), the SGX-ST has on 6 June 2006 granted in-principleapproval for the listing of and quotation for the New Shares on the Official List of the SGX-ST,subject to the specific approval of the Shareholders for the allotment and issue of the NewShares. The in-principle approval of the SGX-ST is not to be taken as an indication of themerits of the Company, its Subsidiaries, the First Proposed Placement or the allotment andissue of the 34,933,334 new Shares to AAPICO.

As the conditions precedent stated above are continuing warranties up to the Completion Date,to the best of the Company’s knowledge, as at the date of this Circular, the conditionsprecedent stated above have not been breached.

6.3 Information about AAPICO

AAPICO is a company incorporated in the Kingdom of Thailand and was listed on the StockExchange of Thailand in 2002. As at 14 February 2006, AAPICO had a market capitalisation ofTHB 6.24 billion. The head office of AAPICO is currently situated in Thailand and AAPICO hasproduction facilities in Thailand and in Kunshan and Shanghai in the PRC.

AAPICO is an established OEM of automotive parts and has been awarded the ISO/TS16949:2002 certification of quality. It delivers a full spectrum of services in the automobileindustry including the design, production and installation of automotive parts. In addition tobeing an OEM, AAPICO is also engaged in the manufacture of car assembly jigs and stampingdies, and its global clientele includes Isuzu, Ford Motors, Toyota and General Motors.

6.4 Rationale for the First Proposed Placement

The Directors believe that the First Proposed Placement is an opportunity for the Company toenter into an alliance with an established automotive manufacturing company and will createpositive synergies to the core business of the Company. The Directors believe that such analliance will be in the best interest of the Company. The Directors intend to nominate Mr YeapSwee Chuan to the Board in the capacity of a non-executive chairman as the Directors are ofthe opinion that Mr Yeap’s appointment will strengthen the Board and improve the managementof the Company. The Directors note that completion of the First Proposed Placement wouldallow the JCL Group to expand its regional presence and generate business and gain accessto a new range of customers based on AAPICO’s international business network in theautomobile accessories sector of the automobile industry.

The Directors are of the view that the alliance with AAPICO will facilitate the expansion of JCLGroup’s operations and promote the sale of its products and services in Thailand. As such, theDirectors believe that the alliance will eventually serve to enhance shareholder value byexpanding its business activities in areas that have growth prospects.

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6.5 Proceeds from the First Proposed Placement

The estimated net proceeds from the First Proposed Placement, after deducting expenses ofapproximately S$0.57 million relating to the First Proposed Placement, are estimated to beapproximately S$5.72 million and the Company intends to apply:

(a) approximately S$3.0 million of such proceeds towards the Proposed Acquisition; and

(b) approximately S$2.72 million of such proceeds towards the future investments of theJCL Group.

6.6 Moratorium

Under the Subscription Agreement, AAPICO has undertaken to the Company that, inter alia, itwill not transfer, assign or dispose of any part of the 34,933,334 new Shares for a period of six(6) months commencing on the Completion Date (the “FPP Moratorium Period”). In the eventthat AAPICO subscribes for the 34,933,334 new Shares through a wholly owned subsidiary,AAPICO has also undertaken to the Company that it will maintain its effective interest in suchsubsidiary throughout the FPP Moratorium Period.

6.7 Termination of the Subscription Agreement

AAPICO will be entitled to terminate the Subscription Agreement prior to the Completion Date,by way of written notice, upon the occurrence of, inter alia, the following events:

(a) any changes in the law materially affecting the Company and/or its Subsidiaries, theirfinancial position or business, or any other material adverse change in the business ofthe Company and/or its Subsidiaries;

(b) suspension in the trading of the Company’s shares on the SGX-ST for a consecutiveperiod of more than seven (7) Business Days or a delisting of the issued Shares fromthe SGX-ST;

(c) any material change in the Controlling Shareholders, or if the shareholding interest ofLiew Ham Chow is reduced below 20% of the total number of issued Shares from timeto time; or

(d) it has come to the attention of AAPICO that the Company is in breach of its warrantiesand undertakings contained in the Subscription Agreement.

6.8 Interests of Directors and substantial Shareholders

Save for Mr Ang who currently holds 2,000,000 shares representing, as at 31 December 2004,approximately 0.008% of the share capital of AAPICO, none of the Directors, and as far as theDirectors are aware, none of the substantial Shareholders of the Company has any interest,direct or indirect, in the First Proposed Placement.


6.9 Financial Effects of the First Proposed Placement

In the event that the First Proposed Placement is completed, the First Proposed Placement willincrease the existing number of Shares from 131,000,000 Shares to 165,933,334 Shares. Thenew Shares allotted and issued to AAPICO will represent approximately 26.7% of the numberof Shares as at 29 June 2005. Assuming that the Second Proposed Placement is completed,the new Shares allotted and issued to AAPICO will represent 20% of the Company’s increasednumber of Shares.

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The Issue Price represents a discount of approximately 11% from the volume weighted averageprice of S$0.202 for trades in the Shares on the SGX-ST on 13 February 2006.

The allotment and issue of the new Shares pursuant to the First Proposed Placement willexceed the share issue mandate granted to the Company at the AGM and the Company will beseeking the approval of its Shareholders for the First Proposed Placement at the forthcomingEGM.

The financial effects of the First Proposed Placement on the NTA, gearing and EPS of the JCLGroup are set out in Appendix C of this Circular.

6.10 Changes in the shareholding of the Company

The effect of the First Proposed Placement on the interests of the Independent Shareholdersas at the Latest Practicable Date is set out in Appendix D of this Circular.

7. THE SECOND PROPOSED PLACEMENT TO MR ANG KIAN LEE OF 8,733,333 NEW

ORDINARY SHARES IN THE CAPITAL OF JACKSPEED CORPORATION LIMITED

7.1 The Subscription Notice

The aggregate consideration of S$1.57 million is payable on Completion of the SecondProposed Placement by Mr Ang to the Company for the subscription of 8,733,333 new Sharesat the Issue Price. Assuming that the Proposed Placements are completed, the new Sharesallotted and issued to Mr Ang will represent 5% of the increased number of Shares of theCompany.

The New Shares, when allotted and issued, will rank pari passu in all respects with and carryall rights similar to the existing Shares in the Company, except that they will not rank for anydividends, rights, allotments or other distributions that may be declared or paid, the RecordDate for which falls on or before the Completion Date.

7.2 Information about Mr Ang

Mr Ang, a Singapore citizen, is a non-executive Director who has had twenty (20) years ofmanagement experience and was previously a director of the Lion Group of Companies inIndonesia, including PT Lion Metal Works, a listed company. He had also previously worked asa bank inspector with the Monetary Authority of Singapore from 1974 to 1979. Mr Ang iscurrently a director of Raeco Pte Ltd, which is an investment company.

Mr Ang, being a non-executive director of the Company, is an “interested person” underChapter 9 of the Listing Manual. The consideration for the Second Proposed Placement isS$1.57 million which constitutes 8.5% of the JCL Group’s latest NTA. Under Rule 906(1) of theListing Manual, the Second Proposed Placement is an Interested Person Transaction subject toShareholders’ approval, which the Company is seeking at the EGM.

7.3 Rationale and benefits of the Second Proposed Placement

The Directors regard Mr Ang as a strategic investor and the Directors intend to appoint Mr Angas an executive Director to oversee the business development and networking strategies of theJCL Group. The Directors are of the opinion that the Completion of the Second ProposedPlacement and Mr Ang’s appointment would strengthen and improve the management of theCompany and increase the Company’s potential range of customers based on Mr Ang’sextensive business network. The Directors believe that the alliance with Mr Ang together withhis appointment as an executive Director will serve to enhance shareholder value as the JCLGroup will be able to engage in business activities through Mr Ang’s expertise, which will havegrowth prospects for JCL Group.

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7.4 Use of Proceeds

The estimated net proceeds from the Second Proposed Placement, after deducting expensesof approximately S$0.13 million relating to the Second Proposed Placement, are estimated tobe approximately S$1.44 million and the Company intends to apply such proceeds towards thegeneral working capital of the Company.

7.5 Moratorium

Mr Ang has undertaken to observe a moratorium period of six (6) months commencing fromthe allotment date of the 8,733,333 new Shares not to transfer, assign or dispose of any part ofthe new Shares.

7.6 Interests of Directors and Substantial Shareholders

Mr Ang is a non-executive Director of the Company. Save as aforesaid, none of the Directors,and as far as the Directors are aware, none of the substantial Shareholders of the Companyhas any interest, direct or indirect in the Second Proposed Placement.


7.7 Financial Effects of the Second Proposed Placement

Assuming that the Second Proposed Placement is completed, the Second ProposedPlacement will increase the existing number of shares of the Company from 131,000,000ordinary shares to 139,733,333 ordinary shares. The new Shares allotted and issued to Mr Angwill represent approximately 6.7% of the number of Shares as at 29 June 2005 and assumingthat the Proposed Placements are completed, the new Shares allotted and issued to Mr Angwill represent 5% of the Company’s increased number of Shares. The Issue Price represents adiscount of approximately 11% from the volume weighted average price of S$0.202 for tradesin the Shares on the SGX-ST on 13 February 2006.

The allotment and issue of the new Shares pursuant to the Second Proposed Placement is anInterested Person Transaction under Chapter 9 of the Listing Manual. As such, the Companywill be seeking the approval of its Shareholders for the Second Proposed Placement at theforthcoming EGM. The SGX-ST has on 6 June 2006 granted in-principle approval for the listingof and quotation for the New Shares on the Official List of the SGX-ST, subject to the specificapproval of the Shareholders for the allotment and issue of the New Shares. The in-principleapproval of the SGX-ST is not to be taken as an indication of the merits of the Company, itsSubsidiaries, the Second Proposed Placement or the allotment and issue of the 8,733,333 newShares to Mr Ang.

The financial effects of the Second Proposed Placement on the NTA, gearing and EPS of theJCL Group are set out in Appendix C of this Circular.


The effect of the Second Proposed Placement on the interests of the IndependentShareholders of the Company as at the Last Practicable Date is set out in Appendix D of thisCircular.

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8. THE ALLOTMENT AND ISSUE OF UP TO 17,111,111 ADDITIONAL NEW SHARES TO

AAPICO HITECH PUBLIC COMPANY LIMITED PURSUANT TO THE SUBSCRIPTION

AGREEMENT

8.1 Subscription of Additional New Shares by AAPICO pursuant to the Subscription

Agreement

After the accounts of the JVHPL Group have been audited for FY 2007 and FY 2008, subjectto the profitability of the JVHPL Group, the Vendors to the Proposed Acquisition will receiveConsideration Shares. Separately, subject to AAPICO maintaining at least 20% of the totalnumber of issued shares of the Company from time to time, AAPICO has agreed to subscribefor all (and not some only) of its Entitlement to Additional New Shares so as to maintain itsshareholding interest at 20% of the total number of issued Shares.

The Additional New Shares, when allotted and issued, will rank pari passu in all respects withand carry all rights similar to the existing Shares, except that they will not rank for anydividends, rights, allotments or other distributions that may be declared or paid, the RecordDate for which falls on or before the date on which these Additional New Shares are allotted.

8.2 Financial effects of the subscription of Additional New Shares by AAPICO and Mr Ang

The combined financial effects of the Subscription of Additional New Shares by AAPICO andMr Ang on the NTA, gearing and EPS of the JCL Group are set out in Appendix C of thisCircular.


The effect of the subscription of Additional New Shares, by AAPICO and Mr Ang, on theinterests of the Independent Shareholders as at the Latest Practicable Date is set out inAppendix D of this Circular.

8.4 In-principle approval of the SGX-ST

The SGX-ST has on 6 June 2006 granted in-principle approval for the listing of and quotationfor the Additional New Shares on the Official List of the SGX-ST, subject to the specificapproval of the Shareholders for the allotment and issue of the Additional New Shares. The in-principle approval of the SGX-ST is not to be taken as an indication of the merits of theCompany, its Subsidiaries, or the allotment and issue of the Additional New Shares to AAPICO.

9. THE ALLOTMENT AND ISSUE OF UP TO 4,277,778 ADDITIONAL NEW SHARES TO MR

ANG KIAN LEE PURSUANT TO THE SUBSCRIPTION NOTICE

9.1 Subscription of Additional New Shares by Mr Ang pursuant to the Subscription Notice

After the accounts of the JVHPL Group have been audited for FY 2007 and FY 2008, subjectto the profitability of the JVHPL Group, the Vendors to the Proposed Acquisition will receiveConsideration Shares. Subject to Mr Ang maintaining at least 5% of the total number of issuedShares from time to time, Mr Ang has agreed to subscribe for all (and not some only) of hisEntitlement to Additional New Shares in the Company so as to maintain his shareholdinginterest at 5% of the total number of issued Shares.

9.2 Financial effects of the subscription of Additional New Shares by AAPICO and Mr Ang

The combined financial effects of the Subscription of Additional New Shares by AAPICO andMr Ang on the NTA, gearing and EPS of the JCL Group are set out in Appendix C of thisCircular.


The effect of the Subscription of Additional New Shares, by AAPICO and Mr Ang, on theinterests of the Independent Shareholders as at the Latest Practicable Date is set out inAppendix D of this Circular.

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9.4 In-principle approval of the SGX-ST

The SGX-ST has on 6 June 2006 granted in-principle approval for the listing of and quotationfor the Additional New Shares on the Official List of the SGX-ST, subject to the specificapproval of the Shareholders for the allotment and issue of the Additional New Shares. The in-principle approval of the SGX-ST is not to be taken as an indication of the merits of theCompany, its Subsidiaries, or the allotment and issue of the Additional New Shares to Mr Ang.

10. MATERIAL LITIGATION

Neither the Company nor its Subsidiaries are engaged in any litigation as plaintiff or defendantin respect of any claims or amounts which are or may be material and the Directors have noknowledge of any proceedings which are pending or threatened against the Company or itsSubsidiaries or of any facts likely to give rise to any litigation, claims or proceedings whichmight materially affect the financial position or the business of the Company or any of itsSubsidiaries during the last twelve (12) months before the Latest Practicable Date.

11. ABSTENTION FROM VOTING

The Affected Parties, together with all of the Vendors who are also Shareholders, haveundertaken to abstain from making any recommendation to the Shareholders on the ProposedAcquisition and will abstain from voting, whether in person or by representative or proxy, at theEGM on the Proposed Acquisition in respect of their shareholdings in the Company.

Liew Ham Chow will also abstain from voting on the Whitewash Resolution whether in personor by representative or proxy, at the EGM in respect of his shareholding in the Company.

Mr Ang will abstain from voting on Ordinary Resolutions (4) and (6), whether in person or byrepresentative or proxy, at the EGM on the Second Proposed Placement in respect of hisshareholding in the Company, if any.

12. OPINION OF THE INDEPENDENT FINANCIAL ADVISER

PwCCF has been appointed as the independent financial adviser to advise the IndependentDirectors on

(a) whether, from a financial point of view, the Proposed Acquisition is on normalcommercial terms and is not prejudicial to the interests of the Company and theIndependent Shareholders; and

(b) the Whitewash Resolution.

A copy of PwCCF’s letter to the Independent Directors, in relation to the Proposed Acquisitionand the Whitewash Resolution, is set out in Appendix A of this Circular.

Taking into consideration the factors set out in its letter, PwCCF is of the view that

(a) the Proposed Acquisition is on normal commercial terms and is not prejudicial to theinterests of the Independent Shareholders; and

(b) the Whitewash Resolution, when considered in the context of the Proposed Acquisition,is not prejudicial to the interests of the Independent Shareholders.

Accordingly, PwCCF has advised the Independent Directors to recommend that the

Independent Shareholders vote in favour of the Proposed Acquisition and the

Whitewash Resolution.

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13. AUDIT COMMITTEE’S STATEMENT

13.1 Ordinary Resolution (1)

The Audit Committee having considered and reviewed, amongst others, the terms, rationaleand financial effects of the Proposed Acquisition of JVHPL and the other relevant facts set outin this Circular and taking into account the opinion of PwCCF in its letter set out in Appendix Aof this Circular, is of the opinion that the Proposed Acquisition is on normal commercial terms,and is not prejudicial to the interests of the Company and the Independent Shareholders.

13.2 Ordinary Resolutions (4) and (6)

The Audit Committee having considered and reviewed, amongst others, the terms, rationaleand financial effects of:

(a) the Second Proposed Placement of new Shares to Mr Ang, and

(b) the allotment and issue of Additional New Shares to Mr Ang after FY 2007 and FY 2008,

and the other relevant facts set out in this Circular, is of the opinion that the Second ProposedPlacement and the allotment and issue of Additional New Shares to Mr Ang are on normalcommercial terms, and are not prejudicial to the interests of the Company and the IndependentShareholders.

14. DIRECTORS’ RECOMMENDATIONS


As one of the Directors, Mr Liew Ham Chow, is interested in the outcome of the ProposedAcquisition, he has abstained from deliberating on and making a recommendation in respect ofthe Whitewash Resolution. The Independent Directors have carefully considered the advicegiven by PwCCF in its letter set out in Appendix A of this Circular and the statement of theAudit Committee set out on page 37 of this Circular. Accordingly, the Independent Directorsrecommend that Shareholders vote in favour of Ordinary Resolution (1) in respect of theProposed Acquisition to be proposed at the EGM and conditional upon Ordinary Resolution (2)being approved, to vote in favour of the allotment and issue of the Consideration Shares as setout in the Notice of EGM on page 69 of this Circular.


As one of the Directors, Mr Liew Ham Chow, is interested in the outcome of the WhitewashResolution, he has abstained from deliberating on and making a recommendation in respect ofthe Whitewash Resolution. The Independent Directors are of the opinion, for the reasons setout in sections 5.3, 5.5 and 5.6 of this Circular and taking into account the opinion of PwCCFin its letter set out in Appendix A of this Circular, that the Whitewash Resolution is notprejudicial to the interests of the Company and the Independent Shareholders. Accordingly, theIndependent Directors recommend that the Shareholders vote in favour of Ordinary Resolution(2) to be proposed at the EGM as set out in the Notice of EGM on page 69 of this Circular.


Having considered the rationale for the First Proposed Placement and the placement ofAdditional New Shares to AAPICO as set out in sections 6.4 and 8 of this Circular, theDirectors believe that the First Proposed Placement and the placement of Additional NewShares to AAPICO are on normal commercial terms and are not prejudicial to the interests ofthe Company and the Independent Shareholders. Accordingly, the Directors recommend thatthe Shareholders vote in favour of Ordinary Resolutions (3) and (5) to be proposed at the EGMas set out in the Notice of EGM on page 69 of this Circular.

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As one of the Directors, Mr Ang, is interested in the outcome of Ordinary Resolutions (4) and(6), he has abstained from deliberating on and making a recommendation in respect ofOrdinary Resolutions (4) and (6). Having considered the rationale for the Second ProposedPlacement and the placement of Additional New Shares to Mr Ang as set out in sections 7.3and 9 of this Circular and the statement of the Audit Committee set out on page 37 of thisCircular, the Directors (save for Mr Ang) believe that the Second Proposed Placement and theplacement of Additional New Shares to Mr Ang are on normal commercial terms and are notprejudicial to the interests of the Company and the Independent Shareholders. Accordingly, theDirectors (save for Mr Ang) recommend that the Shareholders vote in favour of OrdinaryResolutions (4) and (6) to be proposed at the EGM as set out in the Notice of EGM on page 69of this Circular.

15. EXTRAORDINARY GENERAL MEETING

The EGM, notice of which is set out on page 69 of this Circular, will be held on 26 June 2006at 11.00 a.m. or soon thereafter following the conclusion or adjournment of the Annual GeneralMeeting of the Company to be held at 10.00 a.m. on the same day at 47 Loyang DriveSingapore 508955, for the purpose of considering and, if thought fit, passing with or withoutmodifications, the resolutions set out in the Notice of the EGM.

16. ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders who are unable to attend the EGM and who wish to appoint a proxy to attend andvote on their behalf will find attached to this Circular a Proxy Form which they are required tocomplete, sign and return in accordance with the instructions printed thereon as soon aspossible and in any event so as to reach the registered office of the Company at 47 LoyangDrive Singapore 508955, no later than 48 hours before the time set for the EGM. Thecompletion and lodgement of a Proxy Form by a Shareholder does not preclude him fromattending and voting at the EGM in person if he so wishes.

A Depositor shall not be regarded as a member of the Company entitled to attend the EGMand to speak and vote thereat unless his name appears on the Depository Register at least 48hours before the EGM.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

Save in respect of Appendix A of this Circular, the Directors collectively and individually acceptfull responsibility for the accuracy of the information given in this Circular and confirm, havingmade all reasonable enquiries, that to the best of their knowledge and belief, the facts statedand opinions expressed in this Circular are fair and accurate as at the Latest Practicable Dateand that there are no material facts the omission of which would make any statement disclosedin this Circular misleading. Save as disclosed in this Circular, the Directors are not aware of anyother material information relating to the Proposed Transactions.

In relation to Appendix A of this Circular, the sole responsibility of the Directors has been toensure that the facts stated with respect to the JCL Group and the JVHPL Group are, to thebest of their knowledge and belief, fair and accurate in all material respects.

18. CONSENT

PwCCF has given and has not withdrawn its written consent to the inclusion of its letter dated 9June 2006 in the form and context in which it appears in Appendix A of this Circular to act inthe capacity as the independent financial adviser to the Independent Directors in relation to theProposed Acquisition and the Whitewash Resolution and to be named as such in this Circular,and to all references to them in the form and context in which they are made in this Circular.

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19. DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at the registered office of the Company at47 Loyang Drive Singapore 508955 during normal business hours from the date of this Circularup to and including the date of the EGM:

(a) the Memorandum and Articles of Association of the Company;

(b) minutes of the AGM on 29 June 2005;

(c) the Share Purchase Agreement dated 14 February 2006;

(d) the Subscription Agreement dated 15 February 2006;

(e) the Subscription Notice dated 15 February 2006;

(f) the announcements of the Company made on 15 February 2006 and 22 February 2006respectively;

(g) the SIC letter dated 13 March 2006;

(h) the Service Agreements dated 7 June 2006;

(i) the Supplemental Share Purchase Agreement dated 7 June 2006;

(j) the letter of consent from PwCCF dated 9 June 2006; and

(k) the letter from PwCCF to the Independent Directors, in respect of the ProposedAcquisition and the Whitewash Resolution, dated 9 June 2006.

20. ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in Appendix B of this Circular.

Yours faithfullyFor and on behalf of the Directors of Jackspeed Corporation Limited

Liew Ham ChowExecutive ChairmanJackspeed Corporation Limited

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40

APPENDIX A

LETTER FROM PRICEWATERHOUSECOOPERS CORPORATE

FINANCE PTE LTD TO THE INDEPENDENT DIRECTORS

OF JACKSPPED CORPORATION LIMITED

9 June 2006

To: The Independent DirectorsJackspeed Corporation Limited

Dear Sirs / Madam

(1) THE PROPOSED ACQUISITION OF 100% OF THE ISSUED AND PAID-UP SHARE CAPITAL

OF JACKSON VEHICLE HOLDINGS PTE LTD

(2) THE WHITEWASH RESOLUTION IN CONNECTION WITH THE PROPOSED ACQUISITION

1. INTRODUCTION

This letter forms part of the circular to the Shareholders dated 9 June 2006 (“Circular”) inrelation to, inter alia, the proposed acquisition of the entire issued and paid-up share capital ofJVHPL for a maximum aggregate consideration of S$14.55 million by JCL. Unless otherwisedefined herein, all terms in this letter shall bear the same meaning as in the Circular.

On 15 February 2006, the Board announced that the Company had entered into the SharePurchase Agreement with the Vendors for the sale and purchase of 10,000 shares in the capitalof JVHPL. On 7 June 2006, the Company entered into the Supplemental Share PurchaseAgreement with the Vendors to vary the terms of the Share Purchase Agreement. Subject tothe fulfilment of the terms and conditions of the Share Purchase Agreement as varied by theSupplemental Share Purchase Agreement, the Company will acquire 100% of the issued andpaid-up share capital of JVHPL for a maximum aggregate Consideration of S$14.55 million.

The Purchase Consideration for the Proposed Acquisition is to be satisfied by way of (i) theCash Consideration of a sum of S$3,112,880, which is equivalent to the NTA of the JVHPLGroup as at 28 February 2006, payable upon Completion, and (ii) the deferred Considerationthrough the allotment and issue of a maximum value of S$11,437,120 Consideration Shares.The number of Consideration Shares to be allotted and issued is pegged to the Net Profit ofthe JVHPL Group for FY 2007 and FY 2008. Upon Completion, JVHPL will be a wholly-ownedsubsidiary of JCL.

Accordingly, the Board is convening an EGM to be held on 26 June 2006 to seek the approvalof Independent Shareholders in relation, inter alia, the Proposed Acquisition of 100% of theissued and paid-up share capital of Jackson Vehicle Holdings Pte Ltd and the WhitewashResolution in connection with the Proposed Acquisition.

2. TERMS OF REFERENCE

PwCCF has been appointed to advise the Independent Directors on whether the financialterms of the Proposed Acquisition are on normal commercial terms and are not prejudicial tothe interests of the Company and its Independent Shareholders, and to provide arecommendation on the Whitewash Resolution in relation to the Proposed Acquisition. We donot, by this letter, make any representation or warranty in relation to the merits of the ProposedAcquisition.

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We are not and were not involved in any aspect of the negotiations pertaining to the ProposedAcquisition, nor were we involved in the deliberations leading up to the decisions on the part ofthe Directors to agree on the terms of the Proposed Acquisition.

We have limited our evaluation to the financial terms of the Proposed Acquisition and have nottaken into account the commercial risks or commercial merits of the Proposed Acquisition. Ourterms of reference do not require us to evaluate or comment on the rationale for, strategic orcommercial merits and/or risks of the Proposed Acquisition or the future performance orprospects of either JCL Group or the JVHPL Group. As with other business transactions of theCompany, the merit and/or associated risks, whether commercial, financial or otherwise, of theProposed Acquisition are solely the responsibility of the Board. Likewise we are not expressingherein as to the prices at which the shares of JCL may trade upon completion of the ProposedAcquisition. We are also not addressing the relative merits of the Proposed Acquisition ascompared to any alternative transaction previously considered by JCL or that otherwise maybecome available to JCL in the future. Such evaluations or comments remain the responsibilityof the Board and management of JCL.

Our terms of reference do not require us to, and we do not, evaluate or comment on the termsof, the rationale for, strategic or commercial merits and/or risks of the Proposed Placementsand the allotment and issue of Additional New Shares pursuant to the Subscription Agreementand Subscription Notice.

In the course of our evaluation and for the purpose of our opinion in relation to the ProposedAcquisition, we have held discussions with certain Directors and management of both JCLGroup and JVHPL Group and have examined information provided by the Directors andmanagement of both JCL Group and JVHPL Group and other publicly available informationcollated by us, upon which our view is based. We have not independently verified suchinformation, whether written or verbal, and accordingly cannot and do not make anyrepresentation or warranty in respect of, and do not accept any responsibility for, the accuracy,completeness or adequacy of such information. We have nevertheless made enquiries andused our judgment as we deemed necessary or appropriate in assessing such information andare not aware of any reason to doubt the reliability of the information. We have not made anindependent evaluation or appraisal of the assets and liabilities of either JCL Group or JVHPLGroup and we have not been furnished with any such evaluation or appraisal.

We have relied upon the assurances of the Directors that, save in respect of this letter, theCircular has been approved by the Directors (including those who have delegated detailedsupervision of the Circular) who have taken all reasonable enquiries, that to the best of theirknowledge and belief, the facts stated and opinions expressed in the Circular are fair andaccurate as at the Latest Practicable Date and that there are no material facts the omission ofwhich would make any statement disclosed in the Circular misleading. Save as disclosed in theCircular, the Directors are not aware of any other material information relating to the ProposedTransactions. Accordingly, the Directors collectively and individually accepted full responsibilityfor the accuracy of the information given in the Circular as set out in the “Directors’Responsibility Statement”. In relation to this letter, the Directors have ensured that the factsstated with respect to the JCL Group and the JVHPL Group are to the best of their knowledgeand belief, fair and accurate in all material respects. In addition, the Directors have provided uswith a responsibility statement in a letter dated 9 June 2006, which we have relied upon.

Accordingly, no representation or warranty, express or implied, is made and no responsibility isaccepted by us concerning the accuracy, completeness or adequacy of all such information,provided or otherwise made available to us or relied on by us as described above.

Furthermore, our terms of reference do not require us to express, and we do not express, anopinion on the future growth prospects of the Company, JVHPL Group or the consolidatedgroup. We are, therefore, not expressing any opinion herein as to the future financial or otherperformance of the Company, JVHPL Group or the consolidated group.

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Our opinion is based upon prevailing market, economic, industry, monetary and otherconditions (where applicable) and the information made available to us contained in theCircular as of, the Latest Practicable Date. We assume no responsibility to update, revise orreaffirm our view in light of any subsequent development after the Latest Practicable Date thatmay affect our opinion contained therein. Shareholders should take note of anyannouncements relevant to their consideration of the Proposed Acquisition which may bereleased by the Company after the Latest Practicable Date. In rendering our advice and givingour recommendation, we have not had regard to the specific investment objectives, financialsituation or individual circumstances of any Independent Shareholder.

As different Shareholders would have different investment objectives, we would advise

the Independent Directors to recommend that any individual Shareholder who may

require specific advice in relation to their investment portfolio should consult their

stockbroker, bank manager, solicitor, accountant, tax advisor or other professional

advisor.

Our opinion is for the use and benefit of the Independent Directors in their deliberation

of whether the financial terms of the Proposed Acquisition are on normal commercial

terms and are not prejudicial to the interests of the Company and its Independent

Shareholders, and the statements made by the Independent Directors shall remain the

responsibility of the Independent Directors.

Our opinion in relation to the Proposed Acquisition and the Whitewash Resolution

should be considered in the context of the entirety of this letter and the Circular.

We recommend that the Independent Directors advise the Independent Shareholders to readthese pages carefully.

3. PROPOSED ACQUISITION AS A MAJOR TRANSACTION

We set out extracts from section 1.1 of the Letter to Shareholders included in this Circular initalic as follows:


Under Rule 1013 of the Listing Manual, a transaction is classified as a “major transaction” ifany of the relative figures computed on the bases set out in Rule 1006 exceeds 20%. In thesecircumstances, Shareholders’ approval must be obtained under Rule 1014 of the ListingManual.

Applying the applicable bases of Rule 1006 of the Listing Manual, the relative figurescomputed are as follows:

(a) Rule 1006(a) – not applicable, as this is an acquisition as opposed to a disposal.

(b) Rule 1006(b) – the profits attributable to the Sale Shares is approximately S$0.40million. The JCL Group’s net profit after tax for FY 2005 was approximately S$2.47million. As such, the relative figure is approximately 16%.

(c) Rule 1006(c) – the Company’s market capitalisation as at 13 February 2005 (the marketday preceding the date of the Share Purchase Agreement) is approximately S$26.46million. Based on the assumption that the NTA of the JVHPL Group for FY 2006 is S$3.0million, and that the Net Profit for each of FY 2007 and FY 2008 is S$3.0 million, theaggregate value of the Consideration given, based on the volume weighted averageprice on 13 February 2006 of S$0.202, is S$15.96 million. Therefore, the relative figurecomputed under this rule is approximately 60%.

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(d) Rule 1006(d) – as at the date of the execution of the Share Purchase Agreement, theCompany’s issued share capital comprised 131,000,000 Shares. Pursuant to the SharePurchase Agreement, assuming that the Cash Consideration for the ProposedAcquisition is S$3.0 million, a maximum aggregate of 64,166,667 Consideration Shareswill be issued. Therefore, the relative figure computed under this rule is approximately49%.

Since the relative figures in Rule 1006 (c) and (d) exceed 20% but do not exceed 100%, theProposed Acquisition is regarded as a major transaction pursuant to Rule 1013 of the ListingManual.

As a result of the Proposed Acquisition pursuant to the Share Purchase Agreement, (i) theaggregate value of the Consideration given, compared with the Company’s marketcapitalisation, and (ii) the number of equity securities issued by the Company asConsideration for the Proposed Acquisition, compared with the number of equity securitiespreviously in issue being 60% and 49% respectively, has exceeded the 20% thresholdimposed under Rule 1006.The Proposed Acquisition is therefore a “major transaction”requiringShareholders’ approval, which the Company is seeking at the EGM.

4. PROPOSED ACQUISITION AS AN INTERESTED PERSON TRANSACTION



The Controlling Shareholder and executive Director, Liew Ham Chow, is a shareholder of 45%of the issued and paid-up share capital of JVHPL as at the Latest Practicable Date. Liew HamChow and Liew Nyuk Ngoh are siblings and Liew Nyuk Ngoh is a director and shareholder of20% of the issued and paid-up share capital of JVHPL as at the Latest Practicable Date.Accordingly, as Liew Ham Chow and Liew Nyuk Ngoh are “interested persons” under Chapter9 of the Listing Manual, the Proposed Acquisition constitutes an “Interested PersonTransaction”.

Under Rule 906(1)(a) of the Listing Manual, an issuer must obtain shareholder approval forany Interested Person Transaction of a value equal to, or more than 5% of the group’s latestNTA. The Purchase Consideration payable pursuant to the Share Purchase Agreement willrepresent up to 78.4% of the JCL Group’s latest audited NTA. Accordingly, the ProposedAcquisition requires the approval of the Independent Shareholders at the EGM.

5. PROPOSED WHITEWASH RESOLUTION


Pursuant to the Share Purchase Agreement, Liew Ham Chow and Liew Nyuk Ngoh, who aresiblings and Vendors to the Proposed Acquisition, will receive Consideration Shares. As such,the Affected Parties may be required under the Code to make a general offer for the Sharespursuant to Rule 14 of the Code, unless such obligation to make a general offer is waived bythe SIC.The Affected Parties have applied for, and have received, a waiver from the SIC of therequirements of Rule 14 of the Code on 13 March 2006, subject to the fulfilment of theconditions set out in section 5.3 of this Circular which include obtaining Shareholders’approval for the Whitewash Resolution at the EGM.

Independent Shareholders should note that by voting in favour of the Whitewash

Resolution, they will be giving up their rights to receive a general offer under Rule 14 of

the Code from Liew Ham Chow (which he and any parties acting in concert with him

would be obliged to make upon the issue of the Consideration Shares) at the highest

price paid or agreed to be paid by Liew Ham Chow (and any parties acting in concert

with him) for Shares in the six months prior to the commencement of the offer.

Independent Shareholders should also note that by voting in favour of the Whitewash

Resolution, they could be forgoing the opportunity to receive a general offer from

another person who may be discouraged from making a general offer in view of the

potential dilutive effect of the Consideration Shares, which will only be issued to the

Vendors after the accounts of the JVHPL Group for FY 2007 and FY 2008 are audited.

Independent Shareholders should note that the passing of the resolutions to approve the

Proposed Acquisition is conditional upon the Whitewash Resolution being approved by

the Independent Shareholders. In view of this, in the event that the Whitewash Resolution

is not passed by the Independent Shareholders, the Proposed Acquisition will NOT take

place.

6. RATIONALE AND BENEFITS OF THE PROPOSED ACQUISITION


The Directors believe that the Proposed Acquisition is an investment opportunity that will be inthe best interest of the Company, and note that completion of the Proposed Acquisition wouldallow the Company to enlarge its product portfolio and expand its regional presence. TheProposed Acquisition will facilitate the expansion of the Company’s operations into Thailandwhich is currently a major manufacturing and assembly hub for many international automobileand auto-parts manufacturers.

The Directors are of the view that the Proposed Acquisition will also allow the Company toenjoy the benefits accruing from the acquisition of a complementary business by increasingits product range to provide a comprehensive and complementary, one-stop range ofautomotive accessories products and services for its customers. This will in turn broaden theearnings base of the Company and increase the Company’s revenue and eventually serve toenhance shareholder value by engaging in business activities which have growth prospects.

The Directors view the Proposed Acquisition as a mode of generating business and gainingaccess to a new range of customers based on JVHPL Group’s established business structureand business network in the automobile accessories sector of the automobile industry inSingapore and Thailand.The Proposed Acquisition of JVHPL will result in the expansion of theCompany’s business, as well as the rationalising and streamlining of the management,administrative and sales teams through economies of scale.

In this regard, the Directors are also of the view that the Proposed Acquisition will allow theCompany to tap into the experience and network of the JVHPL Group’s management teamand strengthen the Board. The Directors intend to propose that Ho Choon Meng and LeeSeng Jeow be appointed to the Board as executive Directors upon completion of theProposed Acquisition. It is the Directors’ intention that upon their appointment, Ho ChoonMeng will manage the JVHPL Group and assist in the growth of the JCL Group and Lee SengJeow will be involved in the sales, marketing and development of the JCL Group.

7. INFORMATION ON JVHPL

Information on JVHPL can be found in section 3 of the Letter to Shareholders included in thisCircular.

8. DETAILS ON THE PROPOSED ACQUISITION

Information on the Proposed Acquisition is set out in section 2 of the Letter to Shareholdersincluded in this Circular and key extracts are reproduced below. We set out extracts from thissection in italic as follows:

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Purchase Consideration

The Purchase Consideration for the Proposed Acquisition is a maximum aggregate amount ofS$14.55 million which will be paid to the Vendors in their respective Shareholding Proportion.The Purchase Consideration was determined following arm’s length negotiations on a willing-buyer and willing-seller basis, and is based on a price earnings ratio of 4.85.

In addition, the parties have also taken into account the prospects of the JVHPL Group, thebusiness of auto-parts manufacturing and assembly, as well as the Net Profit targets of S$1.5million and S$2.0 million that are to be achieved by the Vendors in FY 2007 and FY 2008respectively.

The maximum aggregate value of the Proposed Acquisition being S$14.55 million will besatisfied by:

(a) the Cash Consideration of a sum of S$ 3,112,880, which is equivalent to the NTA of theJVHPL Group as at 28 February 2006, payable upon Completion; and

(b) deferred Consideration through the allotment and issue of Consideration Shares at thenegotiated pre-determined Issue Price. The Consideration Shares will be issued in twotranches, the first Tranche and the second Tranche in accordance with the prescribedformulae set out below:

(i) First Tranche : 40% x (Net Profit for FY 2007 x 4.85 – Cash Consideration)(ii) Second Tranche : 60% x (Net Profit for FY 2008 x 4.85 – Cash Consideration)

Deferred Share Consideration

(a) The Consideration Shares for the first Tranche will be payable within one (1) month afterthe completion of the audit of the JVHPL Group for FY 2007. The minimum andmaximum value of the first Tranche of Consideration Shares payable will be zero (0) andS$4,574,848 respectively; and

(b) The Consideration Shares for the second Tranche will be payable within one (1) monthafter the completion of the audit of the JVHPL Group for FY 2008. The minimum andmaximum value of the second Tranche of Consideration Shares payable will be zero (0)and S$6,862,272 respectively.

Terms of payment

The Consideration Shares to be allotted and issued by the Company to the Vendors will rankpari passu in all respects with the existing Shares save for any dividends, rights, allotments orother distributions that may be declared or paid, the Record Date for which falls before thedate of the issue of the Consideration Shares in FY 2007 or FY 2008, as the case may be, andwill only be issued under the following circumstances and on the following terms:

(a) based on a weightage of 40:60 for FY 2007 and FY 2008 respectively;

(b) based on a price earnings ratio of 4.85;

(c) in the event that the Net Profit for either FY 2007 or FY 2008 exceeds S$3.0 million,Consideration Shares will not be issued for the Net Profit amounts in excess of S$3.0million; and

(d) subject to the meeting of Net Profit targets of S$1.5 million and S$2.0 million in FY 2007and FY 2008 respectively, the failure of which will result in the Vendors repaying to theCompany, the 2007 Shortfall Amount in cash, up to a maximum of S$1.5 million, and/orthe 2008 Shortfall Amount in cash, up to a maximum of S$2.0 million, as the case maybe.

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Illustrations

For illustrative purposes we set out the following scenarios to illustrate the total number ofConsideration Shares issued to the Vendors under various circumstances. As the maximumaggregate Consideration payable is $14.55 million, assuming that the Cash Consideration forthe Proposed Acquisition is S$3.0 million:

Scenario (1)

Where Net Profit targets of S$1.5 million in FY 2007 and S$2.0 million in FY 2008 are met, thetotal amount of share consideration received by the Vendors in terms of value and number ofShares will be calculated according to the following formula:


Consideration] + 60% x [(Net Profit for FY 2008 x P/E 4.85) –

Cash Consideration]



Share No. of Additional New Shares

Consideration Consideration issued to AAPICO

(S$ million) Shares Issued and Mr Ang)

First Tranche 1.71 9,500,000 12,666,667

Second Tranche 4.02 22,333,333 29,777,778

Total (including Cash 8.73 31,833,333 42,444,445Consideration)

Scenario (2)

Where the Net Profit for FY 2007 is S$4.0 million and the Net Profit for FY 2008 is S$4.0million, as Consideration Shares will not be issued for the Net Profit amounts in excess ofS$3.0 million, the maximum amount of share consideration received by the Vendors in terms ofvalue and number of shares will be calculated according to the following formula:


Consideration] + 60% x [(Net Profit for FY 2008 x P/E 4.85) –

Cash Consideration]



Share No. of Additional New Shares

Consideration Consideration issued to AAPICO

(S$ million) Shares Issued and Mr Ang)

First Tranche 4.62 25,666,667 34,222,222

Second Tranche 6.93 38,500,000 51,333,333

Total (including Cash 14.55 64,166,667 85,555,555Consideration)

Scenario (3)

Where the Net Profit for each of FY 2007 and FY 2008 is negative, the Vendors will not receiveany share consideration. After FY 2007, the Vendors will return the sum of S$1.5 million in cashto the Company due to the failure to meet the Net Profit target of S$1.5 million in FY 2007.Likewise, after FY 2008, the Vendors will return the sum of S$2.0 million in cash to theCompany due to the failure to meet the Net Profit target of S$2.0 million in FY 2008.

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Conditions Precedent

Under the Share Purchase Agreement, Completion of the Proposed Acquisition is conditionalupon, inter alia:

(a) the Vendors having divested all of their shareholding interest in the capital of Katsuya(Thailand) Co. Ltd(“Katsuya”);

(b) each of the Vendors having discharged themselves of their respective roles in themanagement of Katsuya and/or resigned from their position as directors of Katsuya, asthe case may be;

(c) the receipt of documentation reasonably satisfactory to the Company evidencing therestructuring exercise wherein the Vendors have transferred their beneficial interests inJVS and JVT to JVHPL;

(d) the completion of the financial and legal due diligence investigations to be conductedby the Company’s professional advisers on JVHPL on or before the Completion Date,and the results of such due diligence investigations being reasonably satisfactory to theCompany;

(e) all consents, approvals and licenses (whether governmental, corporate or otherwise)which are necessary to be obtained under any existing contractual, financing or securityarrangements or such other consents or approvals from any third party, governmental orregulatory body or relevant competent authority as may be necessary to be obtained inrespect of or in connection with the transactions described or contemplated herein andthe proposed allotment and issue of the Consideration Shares by the Company to theVendors, being granted or obtained and such consents and approvals remaining in fullforce and effect and not withdrawn or revoked or amended, on or before theCompletion Date, and all conditions attaching thereto required to be complied withbeing complied with on or before the Completion Date;

(f) there being no material adverse change (as determined by the Company) in the JVHPLGroup’s assets, properties, and business relationship in respect of Ford Motor Companyand its subsidiaries, since the date of the Share Purchase Agreement;

(g) the Company having obtained in-principle approval for the listing of and quotation forthe Consideration Shares on the Official List of the SGX-ST and such approval nothaving been revoked or withdrawn on or before the Completion Date and, where suchapproval is subject to conditions, such conditions being acceptable to the parties and(to the extent that such conditions are capable of being fulfilled on or beforeCompletion) they are so fulfilled;

(h) the confirmation from the SIC having been obtained, to ensure that Liew Ham Chow willnot be obliged to make a general offer for the Shares of the Company under the Codeupon the allotment and issue of the Consideration Shares on the terms of the SharePurchase Agreement and such confirmation not having been revoked or withdrawn onor before the Completion Date and, where such confirmation is subject to conditions,such conditions being acceptable to the parties and (to the extent that such conditionsare capable of being fulfilled on or before Completion) they are so fulfilled;

(i) Lee Seng Jeow and Ho Choon Meng each entering into a service agreements with theCompany and Liew Nyuk Ngoh, each entering into a service agreement with JVS for aminimum term of three (3) years from the Completion Date on terms to be mutuallyagreed by the parties;

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(j) all loans and advancements made by JVHPL, JVS and JVT to its directors, if any, beingfully repaid on or before the Completion Date; and

(k) the representations and warranties of the Vendors and the Company in the SharePurchase Agreement being true, accurate and correct in all material respects as ifmade on the Completion Date, with reference to the then existing circumstances(subject only to any matter disclosed or expressly provided for under the terms of theShare Purchase Agreement) and the Vendors having performed in all material respectsall of their obligations therein to be performed on or before the Completion Date.

With regards to conditions (e) and (g), the SGX-ST has on 6 June 2006 granted in-principleapproval for the listing of and quotation for the Consideration Shares on the Official List of theSGX-ST, subject to the approval of the Shareholders in respect of the Proposed Acquisitionand the allotment and issue of the Consideration Shares.

With regards to condition (h), the SIC has on 13 March 2006 confirmed that Liew Ham Chowis not obliged to make a general offer for Company under the Code upon the allotment andissue of the Consideration Shares pursuant to the terms of the Share Purchase Agreement.

With regards to condition (i), the Company and JVS have entered into the Service Agreementswith the Proposed Executive Directors and Liew Nyuk Ngoh, respectively on 7 June 2006.TheService Agreements will commence upon Completion of the Proposed Acquisition.

As the conditions precedent stated above are continuing warranties up to the CompletionDate, to the best of the Company’s knowledge, as at the date of this Circular, the conditionsprecedent stated above have not been breached.

Continuing obligations

The Vendors have agreed to meet Net Profit targets of S$1.5 million and S$2.0 million in FY2007 and FY 2008 respectively. In the event that the Net Profit for FY 2007 is less than S$1.5million, the Vendors shall, in accordance with their Shareholding Proportion, pay to theCompany the 2007 Shortfall Amount in cash within one (1) month after the accounts of theJVHPL Group for FY 2007 have been audited. Likewise, in the event that the Net Profit for FY2008 is less than S$2.0 million, the Vendors shall, in accordance with their ShareholdingProportion, pay to the Company the 2008 Shortfall Amount in cash within one (1) month afterthe accounts of the JVHPL Group for FY 2008 have been audited, provided that the paymentsmade after FY 2007 and FY 2008 shall not exceed S$1.5 million and S$2.0 millionrespectively.

9. FINANCIAL ASSESSMENT OF THE PROPOSED ACQUISITION

In assessing the financial terms of the Proposed Acquisition, we have considered the following:

(a) the Issue Price of the Consideration Shares;

(b) the valuation multiples of Comparable Companies (as defined herein);

(c) financial effects of the Proposed Acquisition on the JCL Group as set out in Appendix Cof this Circular; and

(d) other considerations.

These factors are discussed in greater detail in the ensuing paragraphs.

9.1 The Issue Price of the Consideration Shares

In evaluating the Issue Price of S$0.18 per Consideration Share from a market priceexpectations perspective, on the basis that the stock market may be considered to provide anefficient mechanism by which such price expectations may be expressed, we have consideredwhether current and historical share prices of the Company are reasonable indicators forassessing the Purchase Consideration. We wish to highlight that under ordinary circumstances,the market valuation of shares traded on a recognised stock exchange may be affected by, interalia, its relative liquidity, the size of its free float, the extent of research coverage and investorinterest it attracts, and the general market sentiment at a given point in time. Therefore, thisanalysis serves as an illustrative guide only.

We set out below a chart on the daily closing prices and the daily trading volume of the Sharesduring the period commencing 16 February 2005 (being 1 year immediately preceding the 15February 2006 announcement of the Share Purchase Agreement) to the Latest PracticableDate for a general assessment of the trading patterns of the Shares.

The highest closing price at which the Shares traded during this period was S$0.240 per Shareon 21 March 2005 and the lowest closing price was S$0.140 per Share on 23 January 2006.The average daily trading volume is 331,888 Shares. Based on the annual report of theCompany for FY 2005, there was a free float of 51.01% of the Shares.

Since 16 February 2005, the Company has made the following significant announcements:

(a) Unaudited consolidated full year financial statement announcement for FY 2005 on 28April 2005, which shows a 21.8% increase in revenue to S$32.8 million and a 24.7%increase in net profit to S$2.5 million as compared to the previous financial year;

(b) Unaudited consolidated half year financial results announcement for the first half of FY2006 on 12 October 2005, which shows a 1.0% increase in revenue to S$17.4 million anda 23.3% increase in net profit to S$1.4 million as compared to the previouscorresponding period;

(c) 7 February 2006 announcement of the incorporation of the wholly-owned subsidiary ofthe Company - Jackspeed Europe NV, in Belgium.

(d) 15 February 2006 announcement of the Share Purchase Agreement;

(e) 15 February 2006 announcement of the Proposed Placements of 34,933,334 newordinary shares in the capital of JCL to AAPICO and 8,733,333 new ordinary Shares toMr Ang;

1 month 6 months 9 months 12 monthshare price (S$) 0.164 0.158 0.162 0.178

remium of the sue Price over the verage Share price 9.8% 14.2% 11.4% 1.2%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Feb05

Mar

05

Apr 05

May

05

Jun

05

Jul 0

5

Aug 0

5

Sep 0

5

Oct05

Nov 0

5

Dec 0

5

Jan 0

6

Feb06

Mar

06

Apr 06

May

06

Jun

06

Volum

e T

rade

d

0.100

0.120

0.140

0.160

0.180

0.200

0.220

0.240

0.260

Sha

re P

rice

in (

S$)

Source: Bloomberg

Closing price movement and volume of the Shares during the 12 months preceding the date of announcement of the Share Purchase Agreement to the Latest Practiable Date

Announcement of FY05 results

Announcement of the Proposed

Acquisition

Announcement of the Proposed Placements to AAPICO and Mr Ang

Incorporation of Jackspeed Europe

N.V.

Further information on the Proposed Acquisition

Announcement of 1H06 results

Announcement of FY06 results

49

(f) 22 February 2006 announcement to provide further information in relation to certainaspects of the announcement of the Proposed Acquisition of JVHPL on 15 February2006; and

(g) Unaudited consolidated full year financial statement announcement for FY 2006 on 26April 2006, which shows a 3% decease in revenue to S$31.8 million and a 5% increasein net profit to S$2.6 million as compared to the previous financial year

We set out below a table which shows the average daily closing price of the Shares and thepremium of the Issue Price over the average daily closing price of the Shares for one month,three months, six months, nine months and twelve months respectively preceding the 15February 2006 announcement of the Share Purchase Agreement.

1 month 3 months 6 months 9 months 12 months

Average daily closing price (S$) 0.164 0.160 0.158 0.162 0.178

Premium of the Issue Price over 9.8% 12.5% 14.2% 11.4% 1.2%the average daily closing price

We noted that the Issue Price is at a premium of 9.8%, 12.5%, 14.2%, 11.4% and 1.2% over theaverage daily closing price of the Shares over the last one, three, six, nine and twelve month(s)respectively preceding the 15 February 2006 announcement of the Share Purchase Agreement.

Comparable Transactions

We have tabulated below selected broadly comparable transactions by companies listed on theSGX-ST which involved the acquisition of a majority stake in companies via the issuance ofnew shares with/without cash payment or other types of payments by such companies(“Comparable Transactions”) based on the shareholders’ circular dated from January 2005 toFebruary 2006, to illustrate the typical premium/discount represented by the respective issueprice to the last traded share price before, and the average daily closing prices for one monthand three months before the date of announcement of the transaction by the respectivecompanies.

Premium/ Premium/

(Discount) over (Discount) over

Premium/ the average the average

(Discount) over daily closing daily closing

the last price for one price for three

transacted price month before month before

Date of Issue before the date the date of the date of

Company Name announcement Price of announcement announcement announcement

(%) (%) (%)

China Entertainment 14 Sep 2004 S$0.05 (16.7) (1) (4.3) (1) 13.3 (1)

Delong Holdings Limited 24 Sep 2004 S$0.075 0 (1) (9.8) (1) (12.4) (1)

Breadtalk Group Limited 21 Oct 2004 S$0.29 5.5 8.9 15.3NeteLusion Limited 12 Nov 2004 US$0.15 (25.0) (1) (31.8) (1) (32.8) (1)

Magnus Energy Group 23 Nov 2004 S$0.055 10.0 18.4 18.4Ltd.Lasseters International 24 Nov 2004 S$0.28 14.3 13.6 12.9Holdings LimitedTPV Technology Limited 16 Dec 2004 HK$4.367 0.1 0.3 (7.0)Leong Hin Holdings 17 Dec 2004 S$0.225 (2.2) (1) (0.1) (1) 10.5 (1)

LimitedIpco International Limited 11 Jul 2005 S$0.06 (7.7) (0.8) (5.3)Xpress Holdings Limited 17 Oct 2005 HK$0.34 12.3 19.2 37.7

Mean 5.7 9.9 12.0Median 7.7 11.2 14.1High 14.3 19.2 37.7Low (7.7) (0.8) (7.0)

Company(2) 15 Feb 2006 S$0.18 (10.0) 9.8 12.5

50

51

Note:

(1) Outliers specifically excluded as these acquisitions are mainly part of the corporate restructuring undertaken bydistressed or loss making companies

(2) The last transacted price of the Shares was S$0.20 on 14 February 2006, being the last trading day before theannouncement of the Proposed Acquisition

Source: Announcements & circulars of respective companies and Bloomberg

Based on the above, we noted that the Issue Price is at a 10.0% discount to the last transactedprice of the Shares before the announcement of the Share Purchase Agreement, which isbelow the range of the Comparable Transactions. The Issue Price is at a 9.8% premium to theaverage daily closing prices for the one month preceding the date of announcement of theShare Purchase Agreement, which is within the range but below the mean of the ComparableTransactions. The Issue Price is at a 12.5% premium to the average daily closing prices for thethree months preceding the date of announcement of the Share Purchase Agreement, which iswithin the range and above the mean of the Comparable Transactions.

However, we also noticed that there has been substantial increase in the price and tradingvolume of the Shares since the beginning of February 2006, as compared to the price andtrading volume of the Shares since August 2005. We have made reasonable enquiries and theDirectors have confirmed to us that they are not aware of any information not previouslyannounced concerning the Company which, if known, might explain such variances in the priceand trading volume.

Taking into consideration the following factors:

(a) the historical Share trading performance above;

(b) the significant announcements released by the Company on the SGX-ST from 16thFebruary 2005 to the Latest Practicable Date;

(c) the Issue Price being at a premium of 9.8%, 12.5%, 14.2%, 11.4% and 1.2% over theaverage daily closing price of the Shares over the last one, three, six, nine and twelvemonth(s) respectively preceding the date of announcement of the Share PurchaseAgreement;

(d) the Issue Price is at a 12.5% premium to the average daily closing prices for the threemonths preceding the date of announcement of the Share Purchase Agreement, which iswithin the range and above the mean of the Comparable Transactions;

(e) the Issue Price is at a discount of 10.0% to the last transacted price before theannouncement of the Share Purchase Agreement, which is below the range of theComparable Transactions;

(f) the Issue Price is at a 9.8% premium to the average daily closing prices for the onemonth preceding the date of announcement of the Share Purchase Agreement, which iswithin the range and slightly below the mean of the Comparable Transactions; and

(g) there has been substantial increase in the price and trading volume of the Shares sincethe beginning of February 2006. The Directors have confirmed to us that they are notaware of any information not previously announced concerning the Company which, ifknown, might explain such variances in the price and trading volume,

the Issue Price is not prejudicial to the interests of the Company and the IndependentShareholders.

9.2 Comparable Companies Analysis

Selection of Comparable Companies

In considering what may be regarded as a reasonable range for the valuation of the shares inJVHPL for the purposes of assessing the financial terms of the Proposed Acquisition, we havereferred to the valuation statistics of listed companies primarily engaged in the manufacturingand trading of automobile parts and accessories in Singapore, Thailand and Malaysia.

Based on our research and after discussions with the management of JVHPL Group and theCompany, we are of the view that the following selected companies listed on the StockExchange of Thailand and Bursa Malaysia Berhad (“Comparable Companies”) may beconsidered to be broadly comparable to JVHPL Group.

We recognise, however, that there is no listed company directly comparable to JVHPL Group interms of location, sales growth, type of products, scale of operations, geographical spread ofactivities within South East Asia, track record, future prospects, asset base, risk profile andother relevant criteria.

The Independent Directors should note that any comparison made with respect to the

Comparable Companies in relation to JVHPL Group is for illustrative purposes only.

Company Business Description

Hirotako Holdings Hirotako Holdings Berhad is an investment holding company.Berhad Through its subsidiaries, the company manufactures seat belts, car

airbag modules, steering wheels, noise and heat reduction materialand insulator parts for motor vehicles. Hirotako also trades inprecision metal stamping, machining and automotive components,tooling dies and electrical and consumer products.

New Hoong Fatt New Hoong Fatt Holdings Berhad is an investment holding company Holdings Berhad which provides management services. Through its subsidiaries, the

company markets, distributes, and trades automotive spare parts andaccessories. The company also has operations in metal stampingand cathodic electro-deposition painting services, and manufacturesand trades automotive body stamped parts.

SMIS Corporation SMIS Corporation Berhad is an investment holding company. The Berhad company, through its subsidiaries, manufactures and trades

automotive carpets, manufactures automotive braking and motorcyclecomponents, and trades machinery and industrial parts supplies.

AAPICO Hitech Public AAPICO Hitech Public Company Limited (“AAPICO Hitech PCL”) Company Limited manufactures car assembly jigs and stamping dies used for

manufacturing automobiles in assembly plants. The company alsomanufactures OEM automotive parts and operates automobiledealership business.

Interhides Public Interhides Public Company Limited (“Interhides PCL”) manufacturesCompany Limited leather automobile upholstery. The company markets its leather

products to automobile manufacturers.

KPN Automotive KPN Automotive Public Company Limited (“KPN Automotive PCL”)Public Company manufactures automotive parts and plastic used in the industry of carLimited and motorcycle assembly, electrical appliances, and household

appliances.

52

Somboon Advance Somboon Advance Technology Public Company Limited (“PCL”)Technology Public manufactures and sells automotive parts for sale to automobile Company Limited manufacturers. The company’s products include axle shafts, leaf

springs, disk and drum brakes, manifold exhaust, fly wheels,stabilizer bars, and coil springs.

Thai Rung Union Thai Rung Union Car Public Company Limited (“Thai Rung Union CarCar Public Company PCL”) is an original equipment manufacturer (OEM) for IsuzuLimited automobile parts such as chassis and space cabs for minibuses. The

company also provides customized-assembly services for cars, andmanufactures generic molds automobile parts. Its subsidiariesprovide automotive maintenance services.

Thai Steel Cable Thai Steel Cable Public Company Limited (“Thai Steel Cable PCL”)Public Company manufactures automobile parts. The Company produces controlLimited cables and window regulators for automobile manufacturers.

Selection of Valuation Statistics

In our analysis, we have examined the valuation characteristics of the Comparable Companiesbased on the valuation statistics.

Forward P/E

The Purchase Consideration for the Proposed Acquisition will be determined substantiallybased on the Net Profit of JVHPL Group for FY 2007 and FY 2008 and a P/E of 4.85 asagreed in the Share Purchase Agreement (“Forward P/E”). For illustrative purpose only,approximately 78.6% of the Maximum Purchase Consideration will be paid after the completionof the audit for JVHPL Group for FY 2007 and FY 2008.

Hence, we have used Forward P/E as the primary valuation statistics in our comparableanalysis. We set out below in the table the estimated P/E based on the latest InstitutionalBrokers Estimate System (“IBES”) consensus mean estimates for the respective ComparableCompanies for FY 2006 and FY 2007, and the Forward P/E of JVHPL Group for FY 2007 andFY 2008. As the financial year end of JVHPL Group will be 28 February 2007 for FY 2007 and29 February 2008 for FY 2008, the financial year end of the Comparable Companies are 31December, the Forward P/E of JVHPL Group for FY 2007 and FY 2008 are more comparablewith the estimated P/E of Comparable Companies for FY 2006 and FY 2007 respectively.

Company Mkt. Cap. 2006 Estimated 2007 Estimated

(S$million)(1) P/E (2) P/E (2)

Listed on the Bursa Malaysia Berhad

Hirotako Holdings Berhad 40.1 N.A.(4) N.A. (4)

New Hoong Fatt Holdings BHD 60.8 6.63 5.81SMIS Corporation Berhad 8.9 N.A. (4) N.A. (4)

Listed on the Stock Exchange of Thailand

AAPICO Hitech PCL 163.3 6.64 5.92Interhides PCL 37.9 N.A. (4) N.A. (4)

KPN Automotive PCL 61.0 7.56 7.05Somboon Advance Technology PCL 191.8 8.55 7.50Thai Rung Union Car PCL 99.9 12.74 15.37Thai Steel Cable PCL 118.9 9.75 7.91

Mean 8.65 8.26Median 8.06 7.28High 12.74 15.37Low 6.63 5.81

Purchase Consideration of JVHPL 4.85 (3) 4.85 (3)

Source: Bloomberg, respective company annual reports and result announcements

53

54

Note:

(1) The market capitalisation is calculated based on the total number of issued shares for the ComparableCompanies and their respective share prices as at the Latest Practicable Date, translated to S$ at exchange rateof S$1:RM 2.31 and S$1: Baht 24.25 as at the Latest Practicable Date.

(2) 2006 Estimated P/E and 2007 Estimated P/E are based on the estimates of net income obtained from latestIBES consensus mean estimates for the respective Comparable Companies for the financial years ending 31December 2006 and 31 December 2007 as at the Latest Practicable Date.

(3) Based on the P/E as agreed in the Share Purchase Agreement.

(4) Estimated P/E from IBES were not available for these companies. For illustrative purposes, the historical P/E forHirotako Holdings Berhad, SMIS Corporation Berhad and Interhides PCL are 7.88 times, 14.74 times and 5.00times respectively as at the Latest Practicable Date.

From the table above, we noted that:-

The Purchase Consideration implies a Forward P/E of 4.85 times based on JVHPL Group’saudited consolidated Net Profit for the year ending 28 February 2007 (“2007 Forward P/E”).This compares favourably with the estimated forecast P/E of the Comparable Companiescomputed based on the last traded prices as at the Latest Practicable Date and the IBESestimates of their net income for the financial year ending 31 December 2006 for the respectivecompanies (“2006 Comparable Companies P/E”) as the 2007 Forward P/E is below the rangeof the 2006 Comparable Companies P/E.

The Purchase Consideration also implies a Forward P/E of 4.85 times based on JVHPLGroup’s audited consolidated Net Profit for the year ending 29 February 2008 (“2008 Forward

P/E”). This compares favourably with the estimated forecast P/E of the Comparable Companiescomputed based on the last traded prices as at the Latest Practicable Date and the IBESestimates of their net income for the financial year ending 31 December 2007 for the respectivecompanies (“2007 Comparable Companies P/E”) as the 2008 Forward P/E is below the rangeof the 2007 Comparable Companies P/E.

We set out below the following two tables to illustrate the Net Consideration (hereby defined asthe Purchase Consideration less the cash repayment (if any) to be made by the Vendors,should the Net Profit of JVHPL Group falls below the Net Profit Targets of FY 2007 and/or FY2008) and the Implied P/E (hereby defined as the price-earnings ratio calculated by dividingthe Net Consideration by the weighted average Net Profit of JVHPL Group for FY 2007 and FY2008. The weightage of Net Profit for FY 2007 and FY 2008 Net Profit is 40% and 60%respectively.) of the Proposed Acquisition under different Net Profit assumptions.

Net Consideration

As illustrated by the table above, the Net Consideration would range from zero (0) to amaximum of S$14.55 million. In the event that the Net Profit for both FY2007 and FY2008 iszero (0), the Vendors would receive zero (0) Consideration Shares and be required to pay theCompany S$3.5 million in cash which is S$0.4 million more than the S$3.1 million CashConsideration. The Net Consideration is presented purely for illustrative purposes and maydefer from the actual accounting treatment for the Company’s recording of their investment inJVHPL Group.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.00.0 (0.50) 0.00 1.24 2.71 3.68 4.65 5.62 5.62 5.620.5 0.00 0.50 1.74 3.21 4.18 5.15 6.12 6.12 6.121.0 1.61 2.11 3.35 4.82 5.79 6.76 7.73 7.73 7.731.5 3.57 4.07 5.31 6.78 7.75 8.72 9.69 9.69 9.692.0 5.52 6.02 7.26 8.73 9.70 10.67 11.64 11.64 11.642.5 6.98 7.48 8.72 10.19 11.16 12.13 13.10 13.10 13.103.0 8.43 8.93 10.17 11.64 12.61 13.58 14.55 14.55 14.553.5 8.43 8.93 10.17 11.64 12.61 13.58 14.55 14.55 14.55

4.0 8.43 8.93 10.17 11.64 12.61 13.58 14.55 14.55 14.55Net

Pro

fit fo

r FY2

008

(S$

mill

ion) Net Profit for FY 2007 (S$ million)

55

Implied P/E

As illustrated by the table above, the maximum Implied P/E will be 4.85 times.

It should be noted that if the profit targets of JVHPL Group for FY 2007 of S$1.5 million or forFY 2008 of S$2.0 million are not met, not only will the Vendors be issued Consideration Sharescomputed based on the actual Net Profit of FY 2007 and FY 2008, the Vendors shall, inaccordance with their Shareholding Proportion, pay to the Company the 2007 Shortfall Amountand 2008 Shortfall Amount in cash within one (1) month after the accounts of FY 2007 and FY2008 have been audited respectively, provided that the payments made at the end of FY 2007and FY 2008 shall not exceed S$1.5 million and S$2.0 million respectively. Therefore thisimplies that under such situation, the Implied P/E will be lower than 4.85 times as illustrated inthe table above.

It should also be noted that under the potential scenarios where the Net Profit of JVHPL Groupexceed S$3.0 million for FY 2007 or FY 2008, as the Net Profit used in the formulas todetermine the Share Consideration shall be capped at S$3.0 million, the Implied P/E will alsobe lower than 4.85 times as illustrated in the table above.

We recognise that using historical valuation statistics would not be necessarily relevant

in our analysis of the value of the JVHPL Group as the purchase consideration is highly

dependent on the future performance of the JVHPL Group and the Consideration Shares

will only be issued to the Vendors after FY 2007 and FY 2008 respectively. Hence we

have not used any historical valuation statistics in our analysis.

9.3 Financial effects of the Proposed Acquisition on the JCL Group as set out in Appendix C

of this Circular;

The financial effects of the Proposed Acquisition on the JCL Group have been set out inAppendix C of the Letter to Shareholders included in this Circular. In accordance to the termsof reference, we have only considered the financial effects of the Proposed Acquisition andhave not considered the impact of the Proposed Placements.

We set out extracts from this section in italics as follows:

For illustrative purposes only, the following sets out the financial effects of the ProposedAcquisition but before the Placements on the NTA and gearing of the JCL group, assumingthat the Proposed Acquisition had been completed on 28 February 2005 and that the CashConsideration for the Proposed Acquisition is S$3.0 million.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.00.0 n.m. 0.00 3.10 4.52 4.60 4.65 4.68 4.01 3.510.5 0.00 1.00 2.49 3.57 3.80 3.96 4.08 3.60 3.221.0 2.68 2.64 3.35 4.02 4.14 4.23 4.29 3.87 3.511.5 3.96 3.70 4.08 4.52 4.56 4.59 4.61 4.21 3.872.0 4.60 4.30 4.54 4.85 4.85 4.85 4.85 4.48 4.162.5 4.65 4.40 4.59 4.85 4.85 4.85 4.85 4.52 4.223.0 4.68 4.47 4.62 4.85 4.85 4.85 4.85 4.55 4.283.5 4.01 3.88 4.07 4.31 4.35 4.38 4.41 4.16 3.934.0 3.51 3.43 3.63 3.88 3.94 3.99 4.04 3.83 3.64N

et P

rofit

for F

Y200

8 (S

$ m

illio

n) Net Profit for FY 2007 (S$ million)

56

NTA

Number of NTA per Shares

NTA(1) (S$) shares (cents)

As at 28 February 2005 18,630,401 131,000,000 14.22

With the Proposed Acquisition but 23,839,682 (2) 195,166,667 (2) 12.22 (2)

without the Proposed Placements21,339,682 (3) 162,833,333 (3) 13.11 (3)

20,639,682 (4) 131,000,000 (4) 15.76 (4)

The above pro forma financial information of the JVHPL Group is based on JVHPL’sunaudited pro forma accounts for the financial year ended 30 November 2005 (which isbased on the audited accounts of JVS for the financial year ended 30 November 2005 andthe unaudited accounts of JVT for the financial year ended 31 December 2005).

Note:

(1) For illustrative purposes only, the NTA of the JCL Group after the Proposed Acquisition is computed by addingthe NTA of JVHPL as at 30 November 2005 to the NTA of the JCL Group as at 28 February 2005.The effects ofthe Proposed Acquisition on the NTA takes into account the sum of S$300,000 being the expense paid by theCompany pursuant to the Proposed Transactions.

(2) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is at least S$3 million, where such NetProfit is the maximum amount of Net Profit that will be used to calculate the number of Consideration Shares tobe issued to the Vendors after each of the said financial years.

(3) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is S$1.5 million and S$2.0 millionrespectively.

(4) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued forFY 2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due tothe failure to meet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will haveto pay to the Company S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million inFY 2008.The pro forma financial effect of the Proposed Acquisition on the NTA of the Company has taken intoconsideration that the sum of S$3.5 million payable as aforesaid is subject to corporate tax of 20%.

Gearing

Total Shareholders’

Borrowings Funds Gearing(1)

(S$) (S$) (times)

As at 28 February 2005 3,441,000 18,568,043 0.19

With the Proposed Acquisition but 5,038,970 (2) 36,118,043 (2) 0.14without the Proposed Placements

5,038,970 (3) 27,798,043 (3) 0.18

5,038,970 (4) 20,577,325 (4) 0.24

The above pro forma financial information of the JVHPL Group is based on the JVHPLGroup’s unaudited pro forma accounts for the financial year ended 30 November 2005 (whichis based on the audited accounts of JVS for the financial year ended 30 November 2005 andthe audited accounts of JVT for the financial year ended 31 December 2005).

Note:

(1) The Gearing is calculated based on total bank borrowing divided by shareholders’ funds.

(2) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is at least S$3.0 million, where such NetProfit is the maximum amount of Net Profit that will be used to calculate the number of Consideration Shares tobe issued to the Vendors after each of the said financial years.

57


(4) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued forFY 2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due tothe failure to meet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will haveto pay to the Company S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million inFY 2008. In computing the pro forma financial effect of the Proposed Acquisition, it has been assumed thatthere is goodwill impaired and that the sum of S$3.5 million payable as aforesaid is subject to corporate tax of20%.

For illustrative purposes only, the financial effect of the Proposed Acquisition on the EPS iscomputed assuming that the Proposed Acquisition had been completed on 1 March 2004and that the Cash Consideration for the Proposed Acquisition is S$3.0 million.

EPS

Net Profit

Attributable to

Shareholders EPS

(S$) Number of Shares (cents)

For the financial year ended 2,467,359 131,000,000 1.88 28 February 2005



4,476,641 (3) 131,000,000 (3) 3.42 (3)

The above pro forma financial information of the JVHPL Group is based on the JVHPLGroup’s unaudited pro forma accounts for the financial year ended 30 November 2005 (whichis based on the audited accounts of JVS for the financial year ended 30 November 2005 andthe audited accounts of JVT for the financial year ended 31 December 2005)

Note:

(1) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is at least S$3 million, where such NetProfit is the maximum amount of Net Profit that will be used to calculate the number of Consideration Shares tobe issued to the Vendors after each of the said financial years.


(3) Where the Net Profit of JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued forFY 2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due tothe failure to meet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will haveto pay to the Company S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million inFY 2008. In computing the pro forma financial effect of the Proposed Acquisition, it has been assumed thatthere is goodwill impaired and the sum of S$3.5 million payable as aforesaid is subject to corporate tax of 20%.

Our comments in this sub-section are to be read in conjunction with the selected FinancialEffects illustrations as set out above.

(i) NTA per Share

We noted from the table above, before the proposed acquisition, the NTA per Share ofthe JCL Group is 14.22 cents as at 28 February 2005.

For illustrative purposes, assuming that the Net Profit of JVHPL Group is at least S$3.0million for each of FY 2007 and FY 2008, the NTA per Share of the JCL Group as at 28February 2005 is 12.22 cents after the completion of the Proposed Acquisition. Thisrepresents a decrease of 2.00 cents, or 14.1% from the NTA per share of 14.22 centsbefore the Proposed Acquisition.

58

For illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY 2007 and FY 2008 respectively, the NTA per Share of the JCLGroup as at 28 February 2005 is 13.11 cents after the completion of the ProposedAcquisition. This represents a decrease of 1.11 cents, or 7.8% from the NTA per Share of14.22 cents before the Proposed Acquisition.

For the above 2 scenarios, the NTA per Share is diluted mainly due to the CashConsideration of S$3,112,880 being higher than JVHPL Group’s NTA as at 30 November2005.

For illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY 2008 is zero (0) and no Consideration Shares is issued, the NTA per Shareof the JCL Group as at 28 February 2005 is 15.76 cents after the completion of theProposed Acquisition. This represents an increase of 1.54 cents, or 10.8% from the NTAper share of 14.22 cents before the Proposed Acquisition. This is due to the Vendorspaying to the Company a sum of S$3.5 million in cash for failure to meet the Net Profittargets.

However, as the JVHPL Group is primarily engaged in non-capital intensive businessactivity, we are of the view that the use of NTA as a basis of measure of the financialimpact of the Proposed Acquisition is not appropriate under this situation.

(ii) Gearing

For illustrative purposes, assuming that the Net Profit of JVHPL Group is at least S$3.0million for each of FY 2007 and FY 2008, the gearing ratio of the JCL Group as at 28February 2005 is 0.14 times after the completion of the Proposed Acquisition. Thisrepresents a decrease of 0.05 times, or improvement of 26.3% from the Gearing of 0.19times before the Proposed Acquisition.

For illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY 2007 and FY 2008 respectively, the gearing ratio of the JCLGroup as at 28 February 2005 is 0.18 times after the completion of the ProposedAcquisition. This represents a decrease of 0.01 times, or improvement of 5.3% from thegearing ratio of 0.19 times before the Proposed Acquisition.

For illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY2008 is zero (0) and no Consideration Shares is issued, the gearing ratio ofthe JCL Group as at 28 February 2005 is 0.24 times after the completion of theProposed Acquisition. This represents an increase of 0.05 times, or deterioration of26.3% from the gearing ratio of 0.19 times before the Proposed Acquisition.

This is mainly due to no Consideration Shares being issued to the Vendors, hence theJCL Group’s shareholders’ equity remains unchanged while JVHPL Group’s totalborrowings of S$1.6 million is included in the JCL Group’s total borrowings as a result ofconsolidation.

(iii) EPS

For illustrative purposes, assuming that the Net Profit of JVHPL Group is S$3.0 millionfor each of FY 2007 and FY 2008, the EPS for the JCL Group for FY 2005 is 2.80 centsafter the completion of the Proposed Acquisition. This represents an increase of 0.92cents, or 48.9% from the EPS of 1.88 cents before the Proposed Acquisition.

For illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY 2007 and FY 2008 respectively, the EPS of the JCL Group forFY 2005 is 2.74 cents after the completion of the Proposed Acquisition. This representsan increase of 0.86 cents, or 45.7% from the EPS of 1.88 cents before the ProposedAcquisition.

For illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY 2008 is zero (0) and that no Consideration Shares is issued, the EPS ofthe JCL Group for FY 2005 is 3.42 cents after the completion of the ProposedAcquisition. This represents an increase of 1.54 cents, or 81.9% from the EPS of 1.88cents before the Proposed Acquisition. The significant increase in EPS of the JCL Groupis mainly due to the recognition of the cash repayment of S$3.5 million as profits in theCompany, partially offsetted by the full write down in value of goodwill and with noConsideration Shares being issued.

9.4 Other Considerations

In determining whether the terms of the Proposed Acquisition are on normal commercial termsand are not prejudicial to the Company and Independent Shareholders, we have alsoconsidered the following:-

(a) Rationale for the Proposed Acquisition and potential benefits to JCL

The full text of the rationale and benefits of the Proposed Acquisition is set out in section2.4 of the Letter to Shareholders included in this Circular and we would advise that theIndependent Directors advise Shareholders to read this section carefully.

(b) Cash Consideration

The Cash Consideration is backed by the NTA of JVHPL Group as the amount of CashConsideration is equivalent to audited NTA of JVHPL Group as at 28 February 2006.

(c) Consideration Shares

The terms of the payment under the Share Purchase Agreement provide for formulae toadjust the number of Consideration Shares to be issued based on the actual Net Profitsof JVHPL Group for FY 2007 and FY 2008.

We would like to draw to the attention of the Independent Directors that the minimumnumber of Consideration Shares will be zero (0) should the Net Profit of JVHPL Groupfor each of FY 2007 and FY 2008 be less than S$0.62 million respectively, assumingthat the Cash Consideration for the Proposed Acquisition is S$3.0 million. The maximumnumber of Consideration Shares will be 64,166,667 should the Net Profit of JVHPLGroup for each of FY 2007 and FY 2008 be S$ 3.0 million or more, respectively, andassuming that the Cash Consideration for the Proposed Acquisition is S$3.0 million.

(d) Continuing obligations of the Vendors

The Vendors have agreed to meet Net Profit targets of S$1.5 million and S$2.0 million inFY 2007 and FY 2008 respectively. In the event that the Net Profit for FY 2007 is lessthan S$1.5 million, the Vendors shall, in accordance with their Shareholding Proportion,pay to the Company the 2007 Shortfall Amount in cash within one (1) month after theaccounts of the JVHPL Group for FY 2007 have been audited. Likewise, in the event thatthe Net Profit for FY 2008 is less than S$2.0 million, the Vendors shall, in accordancewith their Shareholding Proportion, pay to the Company the 2008 Shortfall Amount incash within one (1) month after the accounts of the JVHPL Group for FY 2008 havebeen audited, provided that the payments made after FY 2007 and FY 2008 shall notexceed S$1.5 million and S$2.0 million respectively.

(e) Risk factors faced by the JVHPL Group

The risks factors in relation to the JVHPL Group, the industry in which the JVHPL Groupoperates and Thailand and Malaysia are set out in section 3.5 of the Letter toShareholders included in the Circular. Our terms of reference have limited our evaluationto the financial terms of the Proposed Acquisition and we have not taken into account thecommercial risks or commercial merits of the Proposed Acquisition. Our terms ofreference do not require us to evaluate or comment on the strategic or long-termcommercial merits of the Proposed Acquisition or on the prospects of either JCL Groupor on the JVHPL Group.

59

10. OPINION

Having regard to our terms of reference, in arriving at our opinion, we have taken into accounta range of factors which we consider to be pertinent and have a significant bearing on ourassessment of the Proposed Acquisition. We have carefully considered as many factors as wedeem essential and balanced them before reaching our opinion. Accordingly, it is important thatour letter, in particular, all the considerations and information we have taken into account, beread in its entirety.

We have set out below a summary of our observations as follows:

(a) the Cash Consideration is backed by the NTA of JVHPL Group as the amount of CashConsideration is equivalent to the audited NTA of the JVHPL Group as at 28 February2006;

(b) the terms of the payment under the Share Purchase Agreement provide for formulae toadjust the number of Consideration Shares to be issued based on the actual Net Profitsof JVHPL Group for FY 2007 and FY 2008;

(c) the Purchase Consideration implies a Forward P/E of 4.85 times which comparesfavourably with estimated forecast P/E of the Comparable Companies as it is below therange of the Comparable Companies P/E;

(d) the vendors have continuing obligations to meet the profit targets of JVHPL Group for FY2007 of S$1.5 million and for FY 2008 of S$2.0 million respectively. In the event that theNet Profit for FY 2007 is less than S$1.5 million, the Vendors shall, in accordance withtheir Shareholding Proportion, pay to the Company the 2007 Shortfall Amount in cashwithin one (1) month after the accounts of the JVHPL Group for FY 2007 have beenaudited. Likewise, in the event that the Net Profit for FY 2008 is less than S$2.0 million,the Vendors shall, in accordance with their Shareholding Proportion, pay to the Companythe 2008 Shortfall Amount in cash within one (1) month after the accounts of the JVHPLGroup for FY 2008 have been audited, provided that the payments made after FY 2007and FY 2008 shall not exceed S$1.5 million and S$2.0 million respectively. Hence undersuch circumstances, the Implied P/E for the Proposed Acquisition will be lower than 4.85times with the cash repayment mechanism in place;

(e) in the event that the Net Profit of JVHPL Group exceed S$3.0 million for both FY 2007 orFY 2008, the Net Profit used in the formulas to determine the Share Consideration shallbe capped at S$3.0 million. Hence under such circumstances, the Implied P/E of theProposed Acquisition could also be lower than 4.85 times;

(f) the Issue Price is at premium to the average daily closing price of the Shares over thelast one, three, six, nine and twelve month(s) preceding the date of announcement of theShare Purchase Agreement respectively;

(g) the Issue Price is at a 10.0% discount to the last transacted price of the Shares beforethe announcement of the Share Purchase Agreement, which is below the range of theComparable Transactions. The Issue Price is at a 9.8% premium to the average dailyclosing prices for the one month preceding the date of announcement of the SharePurchase Agreement, which is within the range but slightly below the mean of theComparable Transactions. The Issue Price is at a 12.5% premium to the average dailyclosing prices for the three months preceding the date of announcement of the SharePurchase Agreement, which is within the range and above the mean of the ComparableTransactions.

60

However, we also noticed that there has been substantial increase in the price andtrading volume of the Shares since the beginning of February 2006, as compared to theprice and trading volume since August 2005. We have made reasonable enquiries andthe Directors confirmed to us that they are not aware of any information not previouslyannounced concerning the Company which, if known, might explain such variances inthe price and trading volume.

(h) for illustrative purposes, assuming that the Net Profit of JVHPL Group is at least S$3.0million for each of FY2007 and FY2008 and that the Cash Consideration for theProposed Acquisition is S$3.0 million, the NTA per Share of the JCL Group as at 28February 2005 after the completion of the Proposed Acquisition is 12.22 cents, thisrepresents a decrease of 2.00 cents, or 14.1% from the NTA per Share as at 28February 2005 before the completion of the Proposed Acquisition.

for illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY2007 and FY2008 and that the Cash Consideration for theProposed Acquisition is S$3.0 million, the NTA per Share of the JCL Group as at 28February 2005 after the completion of the Proposed Acquisition is 13.11 cents, thisrepresents a decrease of 1.11 cents, or 7.8% from the NTA per Share as at 28 February2005 before the completion of the Proposed Acquisition.

for illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY 2008 is zero (0) and no Consideration Shares is issued, the NTA per Shareof the JCL Group as at 28 February 2005 after the completion of the ProposedAcquisition is 15.76 cents, this represents a increase of 1.54 cents, or 10.8% from theNTA per Share of 14.22 cents as at 28 February 2005 before the completion of theProposed Acquisition.

However, as the JVHPL Group is primarily engaged in non-capital intensive businessactivity, we are of the view that the use of NTA as a basis of measure of the financialimpact of the Proposed Acquisition is not appropriate under this situation.

(i) for illustration purposes, assuming that the Net Profit of JVHPL Group is at least S$3.0million for each of FY 2007 and FY 2008, the gearing ratio of the JCL Group as at 28February 2005 is 0.14 times after the completion of the Proposed Acquisition. Thisrepresents a decrease of 0.05 times, or improvement of 26.3% from the Gearing of 0.19times before the Proposed Acquisition.

for illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY 2007 and FY 2008 respectively, the gearing ratio of the JCLGroup as at 28 February 2005 is 0.18 times after the completion of the ProposedAcquisition. This represents a decrease of 0.01 times, or improvement of 5.3% from thegearing ratio of 0.19 times before the Proposed Acquisition.

for illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY2008 is zero (0) and no Consideration Shares is issued, the gearing ratio ofthe JCL Group as at 28 February 2005 is 0.24 times after the completion of theProposed Acquisition. This represents an increase of 0.05 times, or deterioration of26.3% from the gearing ratio of 0.19 times before the Proposed Acquisition.

(j) for illustrative purposes, assuming the Net Profit of JVHPL Group is S$3.0 million foreach of FY 2007 and FY 2008, EPS of the JCL Group for FY 2005 is 2.80 cents afterthe completion of the Proposed Acquisition. This represents an increase of 0.92 cents, or48.9% from the EPS of 1.88 cents before the Proposed Acquisition.

for illustrative purposes, assuming that the Net Profit of JVHPL Group is S$1.5 millionand S$2.0 million for FY 2007 and FY 2008 respectively, the EPS of the JCL Group forFY 2005 is 2.74 cents after the completion of the Proposed Acquisition. This representsan increase of 0.86 cents, or 45.7% from the EPS of 1.88 cents before the ProposedAcquisition.

61

62

for illustrative purposes, assuming that the Net Profit of JVHPL Group for each of FY2007 and FY 2008 is zero (0) and that no Consideration Shares will be issued, the EPSof the JCL Group for FY 2005 is 3.42 cents after the completion of the ProposedAcquisition. This represents an increase of 1.54 cents, or 81.9% from the EPS of 1.88cents before the Proposed Acquisition.

(k) the rationale for the Proposed Acquisition as set out in section 2.4 of the Letter toShareholders included in this Circular;

Accordingly, on balance after taking into account the above factors, PwCCF is of the

opinion as of the date hereof that the Proposed Acquisition is on normal commercial

terms and are not prejudicial to the interests of the Company and its Independent

Shareholders.

We therefore advise the Independent Directors of JCL to recommend that the

Independent Shareholders vote in favour of the Proposed Acquisition and the

Whitewash Resolution to be proposed in respect thereof at the EGM, the notice of which

is set out in the Circular.

This recommendation is not given in the context of any other requirement and is not to

be taken or construed by any existing or prospective Shareholder as forming part of any

recommendation in connection with their Shares other than for the purposes of the

Proposed Acquisition and the Whitewash Resolution. Specifically, this opinion does not

purport to provide any support given or guidance, express or implied, with respect to

any invitation to acquire existing Shares.

Shareholders should note that trading in the JCL Shares is subject to possible marketfluctuations and, accordingly, our advice on the Proposed Acquisition does not and cannot takeinto account the future trading activities or patterns or price levels beyond the LatestPracticable Date.

This letter is addressed to the Independent Directors for their benefit, in connection with and forthe purpose of their consideration of the financial terms of the Proposed Acquisition, and therecommendation made by them to the Shareholders shall remain the responsibility of theIndependent Directors. Whilst a copy of this letter may be reproduced in the Circular, neitherthe Company nor the Directors may reproduce, disseminate or quote this letter (or any partthereof) for any other purpose at any time and in any manner without the prior written consentof PwCCF in each specific case. This opinion is governed by, and construed in accordancewith, the laws of Singapore, and is strictly limited to the matters stated herein and does notapply by implication to any other matter. Nothing herein shall confer or be deemed or isintended to confer any right of benefit to any third party and the Contracts (Rights of ThirdParties) Act Chapter 53B of Singapore and any re-enactment thereof shall not apply.

Yours trulyfor and on behalf ofPricewaterhouseCoopers Corporate Finance Pte Ltd

Kan Yut Keong Ng Jiak SeeManaging Director Executive Director

APPENDIX B

INTERESTS OF THE DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

The shareholding interests of the Directors and substantial Shareholders in the Company as at theLatest Practicable Date, as recorded in the Register of Directors’ Shareholdings and the Register ofsubstantial Shareholders maintained under the provisions of the Companies Act were as follows:

Direct Interest Deemed Interest

No. of Shares % No. of Shares %

Directors

Liew Ham Chow 35,645,600 27.21 16,000,000 12.21

Voo Jun Hing 980,000 0.75 Nil Nil

Chang Yeh Hong 200,000 0.15 Nil Nil

63

64

APPENDIX C

FINANCIAL EFFECTS OF THE PROPOSED TRANSACTIONS

For illustrative purposes only, the following sets out the financial effects of the Proposed Transactionson the NTA and gearing of the JCL Group, assuming that the Proposed Acquisition and the ProposedPlacements had been completed on 28 February 2005 and that the Cash Consideration for theProposed Acquisition is S$3.0 million.

NTA

NTA(1) Number of Shares NTA per Share

(S$) (cents)

As at 28 February 2005 18,630,401 131,000,000 14.22


without the Proposed Placements 21,339,682 (3) 162,833,333 (3) 13.11 (3)

20,639,682 (4) 131,000,000 (4) 15.76 (4)

Without the Proposed Acquisition but 25,797,401 174,666,667 14.77 with the Proposed Placements

With both the Proposed Acquisition 25,306,682 174,666,667 14.49and Proposed Placements

With the Proposed Acquisition, the 34,844,182 (2) 260,222,222 (2) 13.39 (2)

Proposed Placements and allotment and issue of Consideration 30,501,182 (3) 217,111,111 (3) 14.05 (3)

Shares and Additional New Shares to the Subscribers after FY 2007 28,106,682 (4) 174,666,667 (4) 16.09 (4)

and FY 2008

The above pro forma financial information of the JVHPL Group is based on the JVHPL’s unauditedpro forma accounts for the financial year ended 30 November 2005 (which is based on the auditedaccounts of JVS for the financial year ended 30 November 2005 and the audited accounts of JVT forthe financial year ended 31 December 2005).

Note:

(1) For illustrative purposes only, the NTA of the Company after the Proposed Acquisition is computed by adding the NTA ofJVHPL as at 30 November 2005 to the NTA of the Company as at 28 February 2005. The effects of the ProposedAcquisition and the Proposed Placements on the NTA take into account the sum of S$300,000 being the expense paidby the Company pursuant to the Proposed Transactions.

(2) Where the Net Profit of the JVHPL Group for each of FY 2007 and FY 2008 is at least S$3.0 million, where such NetProfit is the maximum amount of Net Profit that will be used to calculate the number of Consideration Shares to beissued to the Vendors after each of the said financial years.

(3) Where the Net Profit of the JVHPL Group for each of FY 2007 and FY 2008 is S$1.5 million and S$2.0 millionrespectively.

(4) Where the Net Profit of the JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued for FY2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due to the failure tomeet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will have to pay to theCompany S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million in FY 2008. The pro formafinancial effect of the Proposed Transactions on the NTA of the Company has taken into consideration that the sum ofS$3.5 million payable as aforesaid is subject to corporate tax of 20%.

65

Gearing

Total Borrowings Shareholders’ Funds Gearing(1)

(S$) (S$) (times)

As at 28 February 2005 3,441,000 18,568,043 0.19



5,038,970 (4) 20,577,325 (4) 0.24 (4)

Without the Proposed Acquisition 3,441,000 25,735,043 0.13but with the Proposed Placements


With the Proposed Acquisition, the 5,038,970 (2) 47,122,543 (2) 0.11 (2)

Proposed Placements and allotment and issue of Consideration Shares 5,038,970 (3) 36,959,543 (3) 0.14 (3)

and Additional New Shares to theSubscribers after FY 2007 and 5,038,970 (4) 28,044,324 (4) 0.18 (4)

FY 2008

The above pro forma financial information of the JVHPL Group is based on JVHPL’s unaudited proforma accounts for the financial year ended 30 November 2005 (which is based on the auditedaccounts of JVS for the financial year ended 30 November 2005 and the audited accounts of JVT forthe financial year ended 31 December 2005).

Note:

(1) The Gearing is calculated based on total bank borrowings divided by shareholders’ funds.



(4) Where the Net Profit of the JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued for FY2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due to the failure tomeet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will have to pay to theCompany S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million in FY 2008. In computingthe pro forma financial effect of the Proposed Transactions, it has been assumed that there is goodwill impaired and thatthe sum of S$3.5 million payable as aforesaid is subject to corporate tax of 20%.

66

For illustrative purposes only, the financial effects of the Proposed Transactions on the EPS havebeen computed assuming that the Proposed Acquisition and Proposed Placements had beencompleted on 1 March 2004 and that the Cash Consideration for the Proposed Acquisition is S$3.0million.

EPS

Net Profit Attributable Number of EPS

to Shareholders (S$) Shares (cents)

For the financial year ended 2,467,359 131,000,000 1.8828 February 2005

With the Proposed Acquisition 5,467,359(1) 195,166,667(1) 2.80(1)

but without the Proposed Placements4,467,359(2) 162,833,333(2) 2.74(2)

4,476,641(3) 131,000,000(3) 3.42(3)

Without the Proposed Acquisition but 2,467,359 174,666,667 1.41with the Proposed Placements


With the Proposed Acquisition, the 5,467,359(1) 260,222,222(1) 2.10(1)

Proposed Placements and allotmentand issue of Consideration Shares 4,467,359(2) 217,111,111(2) 2.06(2)

and Additional New Shares to theSubscribers after FY 2007 and 4,476,641(3) 174,666,667(3) 2.56(3)

FY 2008

The above pro forma financial information of the JVHPL Group is based on JVHPL’s unaudited proforma accounts for the financial year ended 30 November 2005 (which is based on the auditedaccounts of JVS for the financial year ended 30 November 2005 and the audited accounts of JVT forthe financial year ended 31 December 2005).

Note:



(3) Where the Net Profit of the JVHPL Group for each of FY 2007 and FY 2008 is zero (0), no Shares will be issued for FY2007 and FY 2008. After FY 2007, the Vendors will have to pay to the Company S$1.5 million in cash due to the failure tomeet the Net Profit target of S$1.5 million in FY 2007. Likewise, after FY 2008, the Vendors will have to pay to theCompany S$2.0 million in cash due to the failure to meet the Net Profit target of S$2.0 million in FY 2008. In computingthe pro forma financial effect of the Proposed Transactions, it has been assumed that there is goodwill impaired and thesum of S$3.5 million payable as aforesaid is subject to corporate tax of 20%.

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0,00

0 (2

)

Consi

dera

tion S

hare

s aft

er

FY

2007

51,6

45,6

00 (3

)39

.42

(3)

– (3

)–

(3)

341,

000

(3)

0.26

(3)

79,0

13,4

00 (3

)60

.32

(3)

131,

000,

000

(3)

On C

om

ple

tion o

f th

e a

llotm

ent

80,5

20,6

00 (1

)41

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(1)

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)6.

58 (1

)–

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(1)

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40.4

9 (1

)19

5,16

6,66

7 (1

)

and i

ssue o

f se

cond T

ranch

e o

f65

,970

,600

(2)

40.5

1 (2

)6,

366,

667

(2)

3.91

(2)

11,4

82,6

66 (2

)7.

05 (2

)79

,013

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3 (2

)16

2,83

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3 (2

)

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dera

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hare

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er

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2008

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00 (3

)39

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)–

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000

(3)

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(3)

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00 (3

)60

.32

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000,

000

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ect

on s

hare

hold

ings

aft

er

FY

2007 i

n t

he e

vent

the P

ropose

d T

ransa

ctio

ns

are

appro

ved

On C

om

ple

tion o

f th

e a

llotm

ent

and

63,1

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00 (1

)30

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)5.

0 (1

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4.46

(1)

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)37

.83

(1)

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888,

889

(1)

issu

e o

f th

e f

irst

Tra

nch

e

of

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dera

tion S

hare

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ddit

ional

55,9

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s to

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ribers

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er

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2007

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00 (3

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Eff

ect

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hare

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ings

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er

FY

2008

in t

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vent

the P

ropose

d T

ransa

ctio

ns

are

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ved

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om

ple

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)30

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(1)

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65,9

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ubsc

ribers

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45,6

00 (3

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174,

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67

No

te:

(1)

Whe

re t

he N

et P

rofit

of

the

JVH

PL

Gro

up fo

r ea

ch o

f F

Y 2

007

and

FY

200

8 is

at

leas

t S

$3.0

mill

ion,

whe

re s

uch

Net

Pro

fit is

the

max

imum

am

ount

of

Net

Pro

fit t

hat

will

be

used

to c

alcu

late

the

num

ber

of C

onsi

dera

tion

Sha

res

to b

e is

sued

to t

he V

endo

rs a

fter

each

of

the

said

fina

ncia

l yea

rs.

(2)

Whe

re t

he N

et P

rofit

of

the

JVH

PL

Gro

up fo

r ea

ch o

f F

Y 2

007

and

FY

200

8 is

S$1

.5 m

illio

n an

d S

$2.0

mill

ion

resp

ectiv

ely.

(3)

Whe

re t

he N

et P

rofit

of

the

JVH

PL

Gro

up f

or e

ach

of F

Y 2

007

and

FY

200

8 is

zer

o (0

), n

o S

hare

s w

ill b

e is

sued

afte

r F

Y 2

007

and

FY

200

8.A

fter

FY

200

7, t

he V

endo

rs w

ill h

ave

to p

ay t

o th

eC

ompa

ny S

$1.5

mill

ion

in c

ash

due

to t

he f

ailu

re t

o m

eet

the

Net

Pro

fit t

arge

t of

S$1

.5 m

illio

n in

FY

200

7.Li

kew

ise,

afte

r F

Y 2

008,

the

Ven

dors

will

hav

e to

pay

to

the

Com

pany

S$2

.0 m

illio

n in

cash

due

to t

he fa

ilure

to m

eet

the

Net

Pro

fit ta

rget

of

S$2

.0 m

illio

n in

FY

200

8.

68

JACKSPEED CORPORATION LIMITED(Company Registration No. 199300300W)

(Incorporated in the Republic of Singapore)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Jackspeed CorporationLimited (the “Company”) will be held on 26 June 2006 at 11.00 a.m. or soon thereafter following theconclusion or adjournment of the Annual General Meeting of the Company to be held at 10.00 a.m.on the same day at 47 Loyang Drive Singapore 508955 for the purpose of considering and, if thoughtfit, passing, with or without amendments, the following ordinary resolutions:

ORDINARY RESOLUTION (1)

The proposed acquisition of 100% of the issued and paid-up share capital of Jackson Vehicle

Holdings Pte Ltd (“JVHPL”), (“Proposed Acquisition”) and allotment and issue of up to

64,166,667 new ordinary shares in the capital of the Company at the issue price of S$0.18 per

share (the “Consideration Shares”) thereunder

That:-

(a) Pursuant to Chapters 9 and 10 of the Listing Manual of the Singapore Exchange SecuritiesTrading Limited (the “SGX-ST”), approval be and is hereby given for the acquisition by theCompany of an aggregate of 10,000 ordinary shares in the capital of JVHPL, representing theentire issued and paid-up capital of JVHPL from Liew Ham Chow, Liew Nyuk Ngoh, Ho ChoonMeng and Lee Seng Jeow (collectively, the “Vendors”), for a maximum aggregateconsideration of S$14.55 million to be satisfied by:

(i) cash consideration of a sum equal to the net tangible assets of JVHPL as at 28February 2006, and

(ii) deferred share consideration through an allotment and issue of the ConsiderationShares after the Company’s financial years ending 28 February 2007 and/or 29 February2008,

on terms and subject to the conditions set out in the Share Purchase Agreement dated 14February 2006 (the “Share Purchase Agreement”), as varied by the Supplemental SharePurchase Agreement dated 7 June 2006 (the “Supplemental Share Purchase Agreement”)entered into between the Company and the Vendors, as may be amended or supplementedfrom time to time;

(b) the Directors be and are hereby authorised, pursuant to section 161 of the Companies Act,Chapter 50 of Singapore, to allot and issue the Consideration Shares to the Vendors, suchConsideration Shares to rank pari passu in all respects with all existing shares in the capital ofthe Company; and

(c) the Directors be and are hereby authorised to complete and do all acts and things as they mayconsider necessary or expedient or in the interest of the Company for the purposes of or inconnection with the Share Purchase Agreement, as varied by the Supplemental SharePurchase Agreement and/or to give effect to this Ordinary Resolution (1), including but notlimited to the negotiations and execution of other ancillary documents, procurement of thirdparty consents and making of amendments to the Share Purchase Agreement as varied by theSupplemental Share Purchase Agreement.

69

70



Whitewash Resolution in connection with the Proposed Acquisition (by way of poll)

That:-

Subject to the passing of Ordinary Resolution (1), and subject to the conditions in the letter from theSecurities Industry Council dated 13 March 2006 being fulfilled, the shareholders of the Companywho are independent of Liew Ham Chow and any parties acting in concert with him (the “Affected

Parties”), do hereby, on a poll taken, unconditionally and irrevocably waive their rights to receive ageneral offer for all the shares in the capital of the Company held by them (the “Offer”) to be madeby the Affected Parties at the highest price paid or agreed to be paid by the Affected Parties in the sixmonths prior to the Affected Parties incurring the Offer obligation under Rule 14 of the SingaporeCode on Take-overs and Mergers, as a result of the allotment and issue of Consideration Shares tothe Affected Parties.


The proposed allotment and issue of 34,933,334 new ordinary shares in the capital of the

Company to AAPICO Hitech Public Company Limited (“AAPICO”)

That:-

Pursuant to Chapter 8 of the Listing Manual of the SGX-ST and section 161 of the Companies Act,Chapter 50 of Singapore, the Directors be and are hereby authorised to allot and issue, inaccordance with the terms and conditions of the Subscription Agreement dated 15 February 2006between AAPICO and the Company (the “Subscription Agreement”), 34,933,334 new ordinaryshares in the capital of the Company to AAPICO at an issue price of S$0.18 per share (the “AAPICO

Shares”), such AAPICO Shares to rank pari passu in all respects with all existing shares in thecapital of the Company, and to complete and do all acts and things as they may consider necessaryor expedient or in the interest of the Company for the purposes of or in connection with theSubscription Agreement and/or to give effect to this Ordinary Resolution (3).


The proposed allotment and issue of 8,733,333 new ordinary shares in the capital of the

Company to Mr Ang Kian Lee (“Mr Ang”)

That:-

Pursuant to Chapters 8 and 9 of the Listing Manual of the SGX-ST and section 161 of the CompaniesAct, Chapter 50 of Singapore, the Directors be and are hereby authorised to allot and issue, inaccordance with the terms and conditions of the Subscription Notice dated 15 February 2006 from MrAng (the “Subscription Notice”), 8,733,333 new ordinary shares in the capital of the Company toMr Ang at an issue price of S$0.18 per share (the “Ang Shares”), such Ang Shares to rank paripassu in all respects with all existing shares in the capital of the Company, and to complete and doall acts and things as they may consider necessary or expedient or in the interest of the Company forthe purposes of or in connection with the Subscription Notice and/or to give effect to this OrdinaryResolution (4).

71



The proposed allotment and issue of up to 17,111,111 new ordinary shares in the capital of the

Company to AAPICO after the Company’s financial years ending 28 February 2007 and/or 29

February 2008

That:-

Subject to the passing of Ordinary Resolution (3) and pursuant to Chapter 8 of the Listing Manual ofthe SGX-ST and section 161 of the Companies Act, Chapter 50 of Singapore, the Directors be andare hereby authorised to allot and issue, up to 17,111,111 additional new ordinary shares in the capitalof the Company to AAPICO at an issue price of S$0.18 per share (the “Additional AAPICO

Shares”) on the terms and subject to the conditions of the Subscription Agreement, such AdditionalAAPICO Shares to rank pari passu in all respects with all existing shares in the capital of theCompany, and to complete and do all acts and things as they may consider necessary or expedientor in the interest of the Company for the purposes of or in connection with the SubscriptionAgreement and/or to give effect to this Ordinary Resolution (5).


The proposed allotment and issue of up to 4,277,778 new ordinary shares in the capital of the

Company to Mr Ang after the Company’s financial years ending 28 February 2007 and/or 29

February 2008

That:-

Subject to the passing of Ordinary Resolution (4) and pursuant to Chapters 8 and 9 of the ListingManual of the SGX-ST and section 161 of the Companies Act, Chapter 50 of Singapore, the Directorsbe and are hereby authorised to allot and issue up to 4,277,778 additional new ordinary shares in thecapital of the Company to Mr Ang at an issue price of S$0.18 per share (the “Additional Ang

Shares”) on terms and subject to the conditions of the Subscription Notice, such Additional AngShares to rank pari passu in all respects with all existing shares in the capital of the Company, and tocomplete and do all acts and things as they may consider necessary or expedient or in the interest ofthe Company for the purposes of or in connection with the Subscription Notice and/or to give effect tothis Ordinary Resolution (6).

BY ORDER OF THE BOARD

KHOO SOO FANG

LOW MEI MEI MAUREEN

COMPANY SECRETARIES

9 JUNE 2006

SINGAPORE

Notes:

(1) A Shareholder entitled to attend and vote at a meeting of the Company is entitled to appoint one or more proxies toattend and vote in his stead. A proxy need not be a Shareholder of the Company.

(2) Where a Shareholder appoints two proxies, the Company may treat the appointment as invalid unless the Shareholderspecifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.

(3) The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 47 Loyang DriveSingapore 508955 not less than 48 hours before the time appointed for holding the Extraordinary General Meeting.

(4) The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised inwriting. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed eitherunder its seal or under the hand of an officer or attorney duly authorised.

(5) A corporation which is a Shareholder may authorize by resolution of its directors or other governing body such person asit thinks fit to act as its representative at the Extraordinary General Meeting, in accordance with Section 179 of theCompanies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed orillegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in theinstrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Companymay reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to haveShares entered against his name in the Depository Register as at 48 hours before the time appointed for holding theExtraordinary General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

72

JACKSPEED CORPORATION LIMITED(Incorporated in the Republic of Singapore on 15 January 1993)(Company Registration Number 199300300W)

EXTRAORDINARY GENERAL MEETING

PROXY FORM

I/We* (Name), NRIC/Passport No

of (Address)

being a member/members* of JACKSPEED CORPORATION LIMITED hereby appoint

Name Address NRIC/ Percentage of

Passport Number shareholdings to be

represented by proxy

And/or* failing him/her*

Name Address NRIC/ Percentage of

Passport Number shareholdings to be

represented by proxy

or, failing him/her/them*, the Chairman of the Extraordinary General Meeting of the Company (“EGM”) asmy/our* proxy/proxies* to attend and to vote for me/us* on my/our* behalf and, if necessary, to demand a poll, atthe EGM of the Company to be held on 26 June 2006 at 11.00 a.m. or soon thereafter following the conclusion oradjournment of the Annual General Meeting of the Company to be held at 10.00 a.m. on the same day at 47Loyang Drive Singapore 508955 and at any adjournment thereof.

I/We* direct my/our* proxy/proxies* to vote for/against* the Resolution to be passed at the EGM as indicatedbelow. If no specific direction as to voting is given, my/our* proxy/proxies* will vote or abstain from voting athis/her/their* discretion, as he/she/they will on any other matter arising at the EGM. If no person is named in theabove boxes, the Chairman of the EGM shall be my/our* proxy/proxies* to vote, for or against the Resolution tobe passed at the EGM as indicated below, for me/us and on my/our behalf at the EGM and at any adjournmentof the EGM.

No. Ordinary Resolutions:- To be used on a To be used in the show of hands event of a poll

For** Against** For*** Against***

1. To approve the Proposed Acquisition and the allotment and issue of the Consideration Shares

2. To approve the Whitewash Resolution in connection with Proposed Acquisition

3. To approve the proposed allotment and issue of 34,933,334 New Shares to AAPICO pursuant to the First Proposed Placement

4. To approve the proposed allotment and issue of 8,733,333 New Shares to Mr Ang pursuant to the Second Proposed Placement

5. To approve the proposed allotment and issue of up to 17,111,111 Additional New Shares to AAPICO

6. To approve the proposed allotment and issue of up to 4,277,778 Additional New Shares to Mr Ang

* Please delete accordingly** Please indicate your vote “For”or “Against”*** If you wish to exercise all your votes “For”or “Against”, please tick “X”within the box provided. Alternatively please indicate the number of

votes as appropriate.

Dated this day of 2006.

Signature(s) of Member(s) or Common Seal

IMPORTANT: PLEASE READ NOTES OVERLEAF

Important:

1. For investors who have used their Central Provident Fund(“CPF”) monies to buy shares in the capital of JackspeedCorporation Limited, this Circular is sent to them at therequest of their CPF Approved Nominees and is sent solelyFOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF Investors andshall be ineffective for all intents and purposes if used orpurported to be used by them.

3. CPF Investors who wish to vote should contact their CPFapproved nominee.

Total number of Shares held in: No. of Shares

CDP Register

Register of Members

�

NOTES:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the DepositoryRegister as defined in Section 130A of the Companies Act, Chapter 50 of Singapore, you should insert that number ofShares. If you have Shares entered against your name in the Depository Register and Shares registered in your name inthe Register of Members of the Company, you should insert the aggregate number of Shares entered against your namein the Depository Register and registered in your name in the Register of Members. If no number is inserted, thisinstrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A Shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint one or two proxies to attendand vote in his/her stead. A proxy need not be a Shareholder of the Company.

3. Where a Shareholder appoints two proxies, the appointments shall be deemed to be in the alternative unless hespecifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. This instrument appointing a proxy or proxies (together with the power of attorney (if any) under which it is signed or acertified copy thereof) must be deposited at the registered office of the Company at 47 Loyang Drive Singapore 508955no less than 48 hours before the time appointed for holding the EGM.

5. The instrument appointing a proxy or proxies must be in writing and signed by the appointer or his/her duly authorisedattorney or, if the appointer is a body corporate, signed by a duly authorised attorney or affixed with its common sealthereto.

6. A body corporate which is a member may appoint by resolution of its directors or other governing body an authorisedrepresentative or representatives in accordance with its Articles of Association and Section 179 of the Companies Act,Chapter 50 of Singapore to attend and vote for and on behalf of such body corporate.

7. The Company shall be entitled to reject this instrument appointing a proxy or proxies if it is incomplete, improperlycompleted or illegible or where the true intentions of the appointor are not ascertainable from the instructions of theappointor specified in this instrument appointing a proxy or proxies.

8. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointinga proxy or proxies if the member, being the appointor, is not shown to have Shares entered against his/her name in theDepository Register as at 48 hours before the time appointed for holding the EGM, as certified by CDP to the Company.

9. Terms not defined herein have the meanings ascribed to them in the Circular dated 9 June 2006.

10. The submission of an instrument or form appointing a proxy or proxies by a member of the Company does not precludehim/her from attending and voting in person at the EGM if he wishes to do so.

11. A Depositor’s name must appear on the Depository Register maintained by CDP no less than 48 hours before the timeappointed for holding the EGM in order for him to be entitled to attend and vote at the EGM.

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