CIRCULAR DATED 17 SEPTEMBER 2010 THIS CIRCULAR IS IMPORTANT AS IT CONTAINS THE RECOMMENDATION OF THE INDEPENDENT DIRECTORS OF PINE AGRITECH LIMITED AND THE ADVICE OF CIMB BANK BERHAD, SINGAPORE BRANCH.THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION.PLEASE READ IT CAREFULLY. This Circular is issued by Pine Agritech Limited (the “Company”). If you are in any doubt in relation to this Circular or as to the action you should take, you should consult your stockbroker, bank manager, accountant, solicitor, tax adviser or other professional adviser immediately. If you have sold or transferred all issued and paid-up ordinary shares in the capital of the Company, you should immediately forward this Circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. PINE AGRITECH LIMITED (Company Registration No.35792) (Incorporated in Bermuda) CIRCULAR TO SHAREHOLDERS in relation to the MANDATORY CONDITIONAL OFFER by SAC CAPITAL PRIVATE LIMITED (Company Registration No.200401542N) (Incorporated in the Republic of Singapore) for and on behalf of LINK CREST LIMITED (Company Registration No.1593965) (Incorporated in the British Virgin Islands) to acquire all the issued ordinary shares in the capital of the Company other than those already owned, controlled or agreed to be acquired by Link Crest Limited and parties acting in concert with it Independent Financial Adviser to the Independent Directors of the Company CIMB BANK BERHAD (13491-P) SINGAPORE BRANCH (Incorporated in Malaysia) SHAREHOLDERS SHOULD NOTE THAT THE OFFER WILL CLOSE AT 5.30 P.M. ON 15 OCTOBER 2010 OR SUCH LATER DATE(S) AS MAY BE ANNOUNCED FROM TIME TO TIME BY OR ON BEHALF OF THE OFFEROR AND THE OFFEROR DOES NOT INTEND TO REVISE THE OFFER PRICE (AS DEFINED HEREIN), EXCEPT THAT THE OFFEROR RESERVES THE RIGHT TO DO SO IN A COMPETITIVE SITUATION. TABLE OF CONTENTS Page DEFINITIONS .................................................................................................................................... 2 SUMMARY TIMETABLE .................................................................................................................... 6 SUMMARY PROCEDURES FOR ACCEPTANCE ............................................................................ 7 LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS 1. INTRODUCTION...................................................................................................................... 9 2. THE OFFER ............................................................................................................................ 10 3. OPTIONS PROPOSAL ............................................................................................................ 12 4. UNDERTAKINGS...................................................................................................................... 13 5. INFORMATION ON THE OFFEROR AND STATE CREST LIMITED ...................................... 14 6. RATIONALE FOR THE OFFER AND FUTURE PLANS FOR THE COMPANY ...................... 15 7. LISTING STATUS AND COMPULSORY ACQUISITION.......................................................... 16 8. INFORMATION IN RESPECT OF THE DIRECTORS.............................................................. 18 9. INDEPENDENT DIRECTORS’RECOMMENDATION.............................................................. 19 10. ACTION TO BE TAKEN BY SHAREHOLDERS ...................................................................... 22 11. OVERSEAS SHAREHOLDERS .............................................................................................. 22 12. DIRECTORS’RESPONSIBILITY STATEMENT........................................................................ 23 APPENDIX I – LETTER FROM CIMB TO THE INDEPENDENT DIRECTORS .......................... I-1 APPENDIX II – ADDITIONAL GENERAL INFORMATION.......................................................... II-1 APPENDIX III – AUDITED CONSOLIDATED FINANCIALSTATEMENTS OF THE GROUP........ III-1 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009 APPENDIX IV – UNAUDITED FINANCIAL STATEMENTS OF THE GROUP FOR...................... IV-1 FOR THE SIX MONTHS ENDED 30 JUNE 2010 APPENDIX V – VALUATION LETTER AND REPORT FROM THE VALUER.............................. V-1 APPENDIX VI – RELEVANT PROVISIONS IN THE BYE-LAWS OF THE COMPANY ................ VI-1 1 DEFINITIONS In this Circular, the following definitions apply throughout except where the context otherwise requires: GENERAL “Bermuda Companies Act” or : The Companies Act 1981 of Bermuda, as amended or modified “Companies Act” from time to time “Bye-Laws” : The bye-laws of the Company “Board” : Board of Directors of the Company “Cash Alternative Offer Price” : S$0.20 in cash per Offer Share “Circular” : This Circular to Shareholders in relation to the Offer setting out, inter alia, the recommendation of the Independent Directors and the advice of CIMB to the Independent Directors in respect of the Offer “Closing Date” : 5.30 p.m. on 15 October 2010 or such later date(s) as may be announced from time to time by or on behalf of the Offeror, being the last day for lodgement of acceptances of the Offer “Code” : The Singapore Code on Take-overs and Mergers “Convertible Bonds” : Outstanding convertible bonds due 27 July 2012 issued by the Company pursuant to the offering circular dated 24 July 2007 and the bond subscription agreement dated 10 July 2007 which are convertible into new Shares “Directors” : The directors of the Company (including the Independent Directors) as at the Latest Practicable Date “ESOS” : Pine Agritech Employee Share Option Scheme adopted by the Company on 23 March 2005, as amended and modified from time to time “FAA” : Form of Acceptance and Authorisation, which forms part of the Offer Document and which is issued to Shareholders whose Shares are deposited with CDP “FAT” : Form of Acceptance and Transfer, which forms part of the Offer Document and which is issued to Shareholders whose Shares are not deposited with CDP “FY” : Financial year ended or ending on, as the case may be, 31 December “IFA Letter” : The letter dated 17 September 2010 from CIMB to the Independent Directors in respect of the Offer as set out in Appendix I to this Circular “Independent Directors” : The Directors who are considered independent for the purposes of making recommendations to the Shareholders in respect of the Offer, namely, Mr Li Feng, Mr Ong Tiong Seng and Mr Chan Wai Meng 2 “Latest Practicable Date” : 7 September 2010, being the latest practicable date prior to the printing of this Circular, save that where parts of the Offer Document are reproduced, references to the “Latest Practicable Date”in such reproduction shall mean the Offer Document LPD “Listing Manual” : The Listing Manual of the SGX-ST “Market Day” : A day on which the SGX-ST is open for trading of securities “New SCL Shares” : New SCL Shares to be issued in connection with the acceptances of the Offer at the Share Alternative “Offer” : The mandatory conditional offer by SAC Capital, for and on behalf of the Offeror, to acquire the Offer Shares on the terms and subject to the conditions set out in the Offer Document, the FAA and the FAT “Offer Announcement” : The announcement of the Offer by SAC Capital, for and on behalf of the Offeror, on the Offer Announcement Date “Offer Announcement Date” : 16 August 2010, being the date of the Offer Announcement “Offer Document” : The offer document dated 3 September 2010 issued by SAC Capital, for and on behalf of the Offeror, in respect of the Offer “Offer Document LPD” : 27 August 2010, stated in the Offer Document to be the latest practicable date prior to the printing of the Offer Document “Offer Price” : The Cash Alternative Offer Price and/or the Share Alternative “Offer Shares” : All the remaining Shares in issue, other than those Shares already owned, controlled or agreed to be acquired by the Offeror and parties acting in concert with it, and shall include the Shares unconditionally issued or to be issued pursuant to the valid exercise, prior to the close of the Offer, of any option “Offer Unconditional : The announcement of the Offer becoming unconditional by SAC Announcement” Capital, for and on behalf of the Offeror, on 6 September 2010 “Offeror Shares” : Ordinary shares of US$1.00 each in the capital of the Offeror “Optionholders” : Holders of Options “Options” : Options to subscribe for new Shares granted pursuant to the ESOS “Option Price” : Shall have the meaning ascribed to it in Section 3.2 of this Circular “Options Proposal” : Shall have the meaning ascribed to it in Section 3.2 of this Circular “Overseas Shareholders” : Shareholders whose addresses are outside Singapore, as shown in the Register or, as the case may be, in the records of CDP “PFH Undertaking” : Shall have the meaning ascribed to it in Section 8.1 of this Circular “Register” : The register of holders of the Shares, as maintained by the Registrar “RMB”and “RMB cents” : Renminbi yuan and Renminbi cents, respectively 3 “SCL Shares” : Ordinary shares of S$0.20 each in the capital of SCL “Securities Account” : The securities account maintained by a depositor with CDP but not including a securities sub-account “Shares”or “PAL Shares” : Ordinary shares of S$0.02 each in the capital of the Company “Share Alternative” : One (1) New SCL Share for each Offer Share “Shareholders”or “PAL : Holders of Offer Shares, including depositors whose Offer Shares Shareholders” are deposited with CDP “Shareholders Agreement” : Shareholders’ agreement dated 16 August 2010 entered into between Achievement Way, Golden Revenue, Elite Union and the Offeror to regulate the operation of the Offeror “Singapore Companies Act” : The Companies Act, Chapter 50 of Singapore “S$” and “cents” : Singapore dollars and cents, respectively “Valuation Letter and Report” : The letter from the Valuer dated 20 February 2010 (including the valuation certificate) and the valuation report from the Valuer dated 20 February 2010, as set out in Appendix V to this Circular “%” or “per cent.” : Percentage or per centum COMPANIES / ORGANISATIONS “Achievement Way” : Achievement Way Corporation “CDP” : The Central Depository (Pte) Limited “CIMB” : CIMB Bank Berhad, Singapore Branch, the independent financial adviser to the Independent Directors in respect of the Offer “Company”or “PAL” : Pine Agritech Limited “Elite Union” : Elite Union Corporation “Golden Revenue” : Golden Revenue Inc. “Group”or “PAL Group” : The Company and its subsidiaries “Offeror” : Link Crest Limited “PFH” : People’s Food Holdings Limited “Registrar” : Boardroom Corporate & Advisory Services Pte.Ltd. “SAC Capital” : SAC Capital Private Limited “SGX-ST” : Singapore Exchange Securities Trading Limited “SIC” : Securities Industry Council of Singapore “SCL” : State Crest Limited, a wholly-owned subsidiary of the Offeror “Valuer” : LCH (Asia-Pacific) Surveyors Limited 4 Unless otherwise defined, the term “acting in concert” and “associates” shall have the meaning ascribed to them in the Code. The terms “depositor” and “depository register” shall have the meaning ascribed to it in Section 130A of the Singapore Companies Act. The terms “subsidiary”and “related corporation”shall have the meanings ascribed to them respectively in Section 5 and Section 6 of the Singapore Companies Act. The term “Controlling Shareholder”shall have the meaning ascribed to it in the Listing Manual. References to “you”and “your”in this Circular are to the Shareholders. The headings in this Circular are inserted for convenience only and shall be ignored in construing this Circular. Words importing the singular shall, where applicable, include the plural and vice versa and words importing one gender shall include the other gender. 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 being amended or re-enacted. Any word defined in the Singapore Companies Act, the Listing Manual or the Code or any statutory modification thereof and used in this Circular shall, where applicable, have the meaning assigned to it under the Singapore Companies Act, the Listing Manual or the Code or any statutory modification thereof, as the case may be, unless the context otherwise requires. Any reference to a time of day and date in this Circular is made by reference to Singapore time and date, unless otherwise stated. Any discrepancies in this Circular between the listed amounts and the total thereof are due to rounding. Accordingly, figures may have been adjusted to ensure that totals reflect an arithmetic aggregation of the figures that precede them. References in this Circular to the total number of issued Shares are based on 3,000,000,000 issued and paid-up Shares. Forward-looking Statements All statements other than statements of historical facts included in this Circular are or may be forward- looking statements.Forward-looking statements include but are not limited to those using words such as “aim”, “seek”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “plan”, “potential”, “strategy”, “forecast”, “possible”, “probable”and similar expressions or future or conditional verbs such as “if”, “will”, “would”, “should”, “could”, “may”or “might”.These statements reflect the Company’s current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information.Such forward-looking statements are not guarantees of future results, performance, events or achievements and involve known and unknown risks and uncertainties.Accordingly, actual results may differ materially from those described in such forward-looking statements. Given the risks and uncertainties involved, Shareholders and investors should not place undue reliance on such forward- looking statements, and neither the Company nor CIMB assumes any obligation to update publicly or revise any forward-looking statement. 5 SUMMARY TIMETABLE Date of Despatch of Offer Document : 3 September 2010 Date of Offer becoming or is declared : 6 September 2010 unconditional Date of Despatch of Circular : 17 September 2010 Closing Date : 5.30 p.m.on 15 October 2010 or such later date(s) as may be announced from time to time by or on behalf of the Offeror Settlement of consideration for valid : (a) In respect of acceptances of the Offer which are acceptances of the Offer complete in all respects and are received on or before the date on which the Offer becomes or is declared to be unconditional in all respects, within 10 days of that date;or (b) In respect of acceptances of the Offer which are complete in all respects and are received after the Offer becomes or is declared to be unconditional in all respects, but before the Offer closes, within 10 days of the date of receipt of such acceptances 6 SUMMARY PROCEDURES FOR ACCEPTANCE This summary should be read in conjunction with, and in the context of, Appendix V to the Offer Document. 1. Procedures for acceptance of the Offer by Depositors whose Securities Accounts are and/or will be credited with Offer Shares (a) Depositors whose Securities Accounts are credited with Offer Shares If you have Offer Shares standing to the credit of the “Free Balance” of your Securities Account, you should receive the Offer Document together with the FAA.If you wish to accept the Offer, you should complete and sign the accompanying FAA strictly in accordance with the provisions and instructions in the Offer Document and the provisions and instructions printed on the FAA, and forward the completed and signed FAA either by hand to: Link Crest Limited c/o The Central Depository (Pte) Limited 4 Shenton Way #02-01 SGX Centre 2 Singapore 068807 or by post in the enclosed pre-addressed envelope at your own risk, to: Link Crest Limited c/o The Central Depository (Pte) Limited Robinson Road Post Office P.O.Box 1984 Singapore 903934 so as in either case to arrive not later than 5:30 p.m.on the Closing Date. In particular, you must insert in Part A of the FAA the number of Offer Shares already standing to the credit of the “Free Balance” of your Securities Account in respect of which you wish to accept the Offer at the Cash Alternative Offer Price (Box A1) and/or the Share Alternative (Box A2). (b) Depositors whose Securities Accounts will be credited with Offer Shares If you have purchased Offer Shares on the SGX-ST and such Offer Shares are in the process of being credited to the “Free Balance” of your Securities Account, you should also receive the Offer Document together with a FAA.If you wish to accept the Offer in respect of such Offer Shares, you should, after the “Free Balance”of your Securities Account has been credited with such number of Offer Shares, complete and sign the FAA in accordance with the provisions and instructions in the Offer Document and the provisions and instructions printed on the FAA and deliver the completed and signed FAA either by hand to: Link Crest Limited c/o The Central Depository (Pte) Limited 4 Shenton Way #02-01 SGX Centre 2 Singapore 068807 7 or by post in the enclosed pre-addressed envelope at your own risk, to: Link Crest Limited c/o The Central Depository (Pte) Limited Robinson Road Post Office P.O.Box 1984 Singapore 903934 so as in either case to arrive not later than 5:30 p.m.on the Closing Date. (c) Depositors whose Securities Accounts are and will be credited with Offer Shares If you already have Offer Shares standing to the credit of the “Free Balance” of your Securities Account, and if you have purchased additional Offer Shares on the SGX-ST that are in the process of being credited to your Securities Account, you may accept the Offer in respect of the Offer Shares standing to the credit of the “Free Balance” of your Securities Account, but in respect of the additional Offer Shares purchased which are in the process of being credited to your Securities Account, you may accept the Offer in respect of such additional Offer Shares only after the “Free Balance” of your Securities Account has been credited with such number of Offer Shares.The provisions set out above shall apply in the same way to your acceptance(s). 2. Procedures for acceptance of the Offer by Shareholders who hold Offer Shares which are not deposited with CDP If you hold Offer Shares which are not deposited with CDP, you should receive the Offer Document together with the FAT. If you wish to accept the Offer, you should complete and sign the accompanying FAT in accordance with the provisions and instructions in the Offer Document and the provisions and instructions printed on the FAT and forward, at your own risk, the duly completed and signed FAT, together with the relevant share certificate(s), other document(s) of title and/or any other relevant document(s) required by the Offeror, by hand or by post (in the enclosed pre-addressed envelope) to: Link Crest Limited c/o Boardroom Corporate & Advisory Services Pte.Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 so as to arrive not later than 5:30 p.m.on the Closing Date. In particular, you must insert in Part A of the FAT the number of Offer Shares in respect of which you wish to accept the Offer at the Cash Alternative Offer Price (Box A1) and/or the Share Alternative (Box A2). 8