Oceanus

Oceanus: Co. has responded to queries raised by SGX, we mention the most important questions and answers set out below, and continue to remind investor’s to exercise caution when trading on the Co. shares.

1) Please show how provision for warrant redemption premium of Rmb 108m was arrived at?

Warrant Redemption Premium of 68% less interests paid over the term of the Loan and Warrant is applicable to institutional investors, Ocean Wonder and Hupomone Capital Partners. The provision of Rmb108m was arrived based on 291.5m shares X SGD 0.15 X 50% @ 4.9425 (RMB exchange rate)= Rmb108m.

2) Co issued profit guidance on 9 Nov11. Please explain why profit guidance could not have been issued earlier. In the explanation, please state when Co. first became aware of each of the various factors?

- Decrease in caged population due to mortality. The 30 Sept 2011 biological count was finalized and sent out by PRC staff on 29 Oct11.
- Lower abalone prices for smaller sized abalones – the prices were finalized and adjusted downwards on 11 Nov11. The impact on lower prices resulted in loss of Rmb292m.
- Provision for warrant redemption premium – this was adjusted after consulting Deloitte on 3 Nov 2011. Profit guidance was first drafted on 8th Nov and finalized version filed on 9 Nov.

3) Please explain why the density per tank over the same period last yr has reduced to below industry average?

- Production team faced unexpected high mortalities, both the Head of Production and CEO believed that lowering the densities would help reduce mortalities. They also believed it would be safer for the animals during event of power failure.

4) It is stated that the quality of the population has been eroded by the severe mortality rates of 63% seen in larger sized abalones of 5.8 cm and above. Please give the reasons for
the high mortality rate?

According to the CEO, the abalones were in poor conditions likely from unavailable quality feed and high temperatures during the summer season, resulting in high mortality rate affecting the larger abalones.

Ultimately we would like to remind investors to exercise caution when trading with Oceanus stock, highlighting the Fiasco that S-Chips have been embroiled in recent mths, which involves the manipulations of Cash Holdings, Inventories, accidents which involves Burning of Offices prior to auditors check etc….. So, what more lifestocks, where mortality rates are hard to prove and justify?