SPRINTEX LIMITED

SPRINTEX LIMITED ABN: 38 106 337 599

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ASX Announcement

ASX Code: SIX

22 September 2014

NOTICE OF GENERAL MEETING

Dear Shareholder

A General Meeting is to be held on 22 October 2014 at 10.00am at the Company’s Offices at 183 Mulgul Road, Malaga WA 6090.

The Notice of Meeting which outlines the items of business, Explanatory Notes and Proxy Form accompany this letter.

If you are unable to attend the meeting, I encourage you to appoint a proxy to vote on your behalf. Please complete your personalised proxy form which has been mailed out to you today. The instructions for voting by proxy or in person are set out in the notes accompanying the form.

If you plan to attend the meeting in person, please bring your Proxy Form to facilitate your registration.

ENDS

Company Overview

Sprintex Limited (Sprintex) is the ISO 9001 accredited designer and manufacturer of the patented low emission, highly efficient Sprintex® twin screw supercharger. Following commissioning of a low cost volume manufacturing facility in Malaysia, Sprintex is now focusing on participation in the exponential growth underway in the global forced induction marketplace from this new state of the art facility.

183 Mulgul Road, Malaga WA 6090 PO Box 3348 Malaga DC WA 6945 Phone: +61 8 9262 7277 Fax: +61 8 9262 7288 Email: [email protected] URL: www.sprintex.com.au

SPRINTEX LIMITED ACN 106 337 599

NOTICE OF GENERAL MEETING

183 Mulgul Road, Malaga WA on 22 October 2014 at 10.00 am WST

THIS DOCUMENT IS IMPORTANT

An Independent Expert’s Report is attached to this Notice, in Annexure A, as required by ASIC Regulatory Guide 74. The Independent Expert’s Report concludes that the transaction the subject of the Resolution in this Notice of Meeting is fair and reasonable to the Company’s non-associated Shareholders, for the reasons set out in the report. The Independent Expert’s Report is available via the Company’s website: http://www.sprintex.com.au/

If you do not understand this document or are in any doubt as to how to deal with this document, you should consult your stockbroker, solicitor, accountant or other professional adviser immediately. Should you wish to discuss the matters in this Notice of General Meeting please do not hesitate to contact the Company Secretary on +61 8 9262 7222

ONTENTS
Business of the Meeting	3
Explanatory Statement	7
Glossary	21
Proxy Form	24
Annexure A – Independent Expert Report	26

IMPORTANT INFORMATION

Notice is hereby given that a General Meeting of Shareholders will be held at the Company’s registered office at 183 Mulgul Road, Malaga WA 6090 on 22 October 2014 at 10.00am WST for the purpose of transacting the following business.

The purpose of the attached Explanatory Statement is to provide information to Shareholders to enable each Shareholder to make an informed decision regarding the Resolution set out in this Notice of General Meeting.

If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisors before voting.

The Explanatory Statement is to be read in conjunction with this Notice of General Meeting. Capitalised words and expressions in this Notice of General Meeting have the same meaning as in the Explanatory Statement and, where not defined in the Explanatory Statement, are defined in the attached Glossary.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return to the Company or Share Registry as follows:

Company Secretary Advanced Share Registry Services Sprintex Limited 110 Stirling Highway 183 Mulgul Road Nedlands, WA, 6009 Malaga, WA 6090

Please note that a duly completed Proxy Form and (where applicable) any power of attorney or a certified copy of the power of attorney, must be received by the Company not later than 10.00 am WST on 20 October 2014.

Proxy Forms received later than this time will be invalid.

ENTITLEMENT TO ATTEND AND VOTE

The Company may specify a time, not more than 48 hours before the General Meeting, at which a “snap-shot” of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the meeting.

The Company’s Directors have determined that all Shares of the Company that are recorded on the Company’s register of members at 4.00pm pm WST 20 October 2014 shall, for the purposes of determining voting entitlements at the General Meeting, be taken to be held by the persons registered as holding the Shares at that time.

ASIC AND ASX

A final copy of this Notice of General Meeting and Explanatory Statement has been lodged with ASIC and ASX. Neither ASIC, ASX nor any of their respective officers takes any responsibility for the contents of this document.

BUSINESS OF THE MEETING

AGENDA

RESOLUTION 1 – APPROVAL TO ISSUE SHARES TO CHINA AUTOMOTIVE HOLDINGS LIMITED

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That, for the purposes of item 7 in the table in section 611 of the Corporations Act, Chapter 2E of the Corporations Act, Listing Rule 10.11, and for all other purposes, approval is given for the Company to issue up to 1,006,372,000 Shares at $0.003 per Share to China Automotive Holdings Limited (or its nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

Independent Expert Report : Stantons International Securities has prepared an Independent Expert Report which comments on the fairness and reasonableness of the allotment and issue of the Shares to China Automotive Holdings Limited (or its nominee) ( CAHL ). The Independent Expert Report concludes that the issue of the Shares to CAHL is fair and reasonable to the non-associated Shareholders. Shareholders are urged to carefully consider the Independent Expert’s Report.

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by CAHL, a party to the transaction, any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary Shares, if this Resolution is passed and any associate of those persons.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 2 – APPROVAL TO ISSUE SHARES TO WILSON’S PIPE FABRICATION PTY LIMITED

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, approval is given for the Company to issue up to 205,666,667 Shares at $0.003 per Share to Wilson’s Pipe Fabrication Pty Limited (or its nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by Wilson’s Pipe Fabrication Pty Limited (or its nominee) ( WPF ), a party to the transaction, any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary Shares, if this Resolution is passed and any associate of those persons.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 3 – APPROVAL TO ISSUE SHARES TO DAVID WHITE

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an

ordinary resolution:

“That for the purpose of Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, approval is given for the Company to issue up to 80,053,851 Shares at $0.003 per Share to David White (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice.”

Voting exclusion: The Company will disregard any votes cast on this Resolution by David White (or his nominee), a party to the transaction, any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary Shares, if this Resolution is passed and any associate of those persons.

However, the Company need not disregard a vote if:

(c) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(d) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 4 – APPROVAL TO ISSUE SHARES TO RICHARD O’BRIEN

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That for the purpose of Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, approval is given for the Company to issue up to 9,399,277 Shares at $0.003 per Share to Richard O’Brien (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice.”

Voting exclusion: The Company will disregard any votes cast on this Resolution by Richard O’Brien (or his nominee), a party to the transaction, any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary Shares, if this Resolution is passed and any associate of those persons.

However, the Company need not disregard a vote if:

(e) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(f) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 5 – APPROVAL TO ISSUE SHARES TO ROBERT MOLKENTHIN

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 16,000,000 Shares at $0.003 per Share to Robert Molkenthin (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 6 – APPROVAL TO ISSUE SHARES TO JAY UPTON

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 16,000,000 Shares at $0.003 per Share to Jay Upton (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 7 – APPROVAL TO ISSUE SHARES TO TYRONE JONES

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 20,000,000 Shares at $0.003 per Share to Tyrone Jones (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 8 – APPROVAL TO ISSUE SHARES TO GORDON EMSLIE

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 24,000,000 Shares at $0.003 per Share to Gordon Emslie (or his nominee), for the purpose and on the terms set out in the Explanatory Statement accompanying this Notice."

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

(b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Dated: 11 September 2014

By Order of the Board

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Mr Richard O’Brien DIRECTOR

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of Shareholders of the Company in relation to the business to be conducted at the General Meeting to be held at the Company’s registered office at 183 Mulgul Road, Malaga WA 6090 on 22 October 2014 at 10.00 am WST.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolutions in the accompanying Notice of General Meeting.

This Explanatory Statement should be read in conjunction with the Notice of General Meeting preceding this Explanatory Statement. Capitalised terms in this Explanatory Statement are defined in the glossary to this document.

1. BACKGROUND

1.1 Proposed recapitalisation

As announced on 13 August 2014, the Company intends to carry out a placement of Shares to existing substantial Shareholders, Directors and certain senior management executives of the Company at an issue price of $0.003 to raise cash of approximately $261,000 ( Placement ) as well as a Share Purchase Plan to eligible Shareholders of the Company to raise cash of approximately $600,000 to $777,000 ( SPP ).

The Company is also proposing the capitalisation of the CAHL Debt and WPF Debt as set out below ( Capitalisation ) and the capitalisation of other debts owed by the Company as well as the issue of Shares to certain senior managers within the Company in lieu of part of their remuneration entitlements.

In addition, CAHL (or its nominee) and WPF (or its nominee) have agreed to provide funding to the Company of up to $600,000 and $217,000 respectively.

The funding provided by CAHL (or its nominee) may be used to subscribe for Shares up to a maximum value of $600,000 in the event that the SPP does not raise a minimum of $777,000 on the terms set out below.

WPF will provide up to $217,000 funding by subscribing for Shares in the Placement.

The issue of the Shares under the Placement, Capitalisation and SPP are proposed to occur at $0.003 per Share.

1.2 Debt Agreements

On 25 March 2014, WPF and CAHL, as lenders, and the Company, as borrower, entered into a loan facility agreement ( March Loan Facility ). Pursuant to the March Loan facility, CAHL advanced funds in the amount of $619,116 and WPF advanced funds in the amount of $400,000 to the Company to meet its working capital and budgeted capital expenditure requirements.

On 17 April 2014 the Company, as borrower, and CAHL, as lender, entered into another loan facility agreement ( April Loan Facility ) pursuant to which CAHL advanced further funds in the amount of $600,000 to the Company to meet its working capital and budgeted capital expenditure requirements.

On 15 May 2014 the Company, as borrower, and CAHL, as lender, entered into a further loan facility agreement ( May Loan Facility ) pursuant to which CAHL advanced further funds in the amount of $600,000 to the Company to meet its working capital and budgeted capital expenditure requirements.

On 14 July 2014 the Company, as borrower, and CAHL, as lender, entered into a further loan facility agreement ( July Loan Facility ) pursuant to which CAHL advanced further funds in the amount of $200,000 to the Company to meet its working capital and budgeted capital expenditure requirements.

On 19 August 2014 the Company, as borrower, and CAHL, as lender, entered into a further loan facility agreement ( August Loan Facility ) pursuant to which CAHL advanced further funds in the amount of $400,000 to the Company to meet its working capital and budgeted capital expenditure requirements.

Pursuant to the March Loan Facility, April Loan Facility, May Loan Facility, July Loan Facility and August Loan Facility ( Facility Agreements ), the Company owes the following amounts to CAHL and WPF:

(a) CAHL- $2,419,116 ( CAHL Debt ); and

(b) WPF- $400,000 ( WPF Debt ).

It is proposed that subject to Shareholder approval, that this debt will be capitalised by way of the issue of Shares to CAHL and WPF (or their respective nominees) at an issue price of $0.003 per Share.

1.3 Placement

In addition to the capitalisation of the WPF Debt, WPF has agreed to subscribe for Shares to raise working capital for the Company.

WPF has agreed to subscribe for 72,333,333 Shares at an issue price of $0.003 to raise $217,000.

1.4 SPP Placement

In addition to the above, CAHL has also agreed to subscribe for up to a further $600,000 at $0.003 conditional upon the participation of other Shareholders in the SPP and the Company not finding other investors who may wish to subscribe for some or all of these Shares (instead of CAHL).

Under the terms of this arrangement, in the event that the SPP raises less than $777,000 then CAHL (or its nominee) has agreed to subscribe for up to a maximum of $600,000 of Shares on the same terms of other Shareholders under the SPP.

As a consequence, the Company will raise a minimum of $600,000 under the SPP depending on the take-up of other Shareholders under the SPP. The obligation on CAHL to subscribe for these additional Shares will reduce to the extent that Shareholders subscribe for between $177,000 and $777,000 Shares under the SPP and also to the extent that before completion of the SPP, the Company is able to find other investors who may be willing to subscribe for Shares up to a value of $600,000 to cover any shortfall under the SPP.

1.5 Intended use of funds

The Company intends to use the funds raised from the Placement, together with the proceeds of the SPP, for budgeted capital expenditure and working capital purposes and to launch and promote the Company’s core products in the North American market.

Pursuant to the proposed allotment under the Capitalisation, the Company will repay debts of $2,419,116 owing to CAHL and $400,000 owing to WPF.

The table below provides a summary of the use of funds.

Use of funds	$
North America	750,000
Working capital, including reduction of operating expenses	740,872
Capitalisation of debt	2,819,116
Total	4,309,988

2. RESOLUTION 1 – APPROVAL TO ISSUE SHARES TO CHINA AUTOMOTIVE HOLDINGS LIMITED

2.1 Background

Mr Richard Siemens is the non-executive Chairman of the Company and CAHL is an entity controlled by him. Resolution 1 seeks Shareholder approval for the issue of Shares under the Capitalisation and, depending on other Shareholder participation, under the SPP to CAHL (or its nominee).

The table below sets out the maximum number of Shares to be issued to CAHL pursuant to Resolution 1.

	CAHL (or its nominee)
Capitalisation	806,372,000
SPP1	200,000,000
Total	1,006,372,000

1 This is the maximum number of Shares that would be issued to CAHL under the SPP. CAHL’s commitment to subscribe for Shares in the SPP however will be relieved to the extent that more than $177,000 is raised under the SPP such that if $777,000 is raised under the SPP from other Shareholders, no Shares will be issued to CAHL under this arrangement. The Company is also in the process of attempting to enter into discussions with other investors who may be willing to subscribe for some or all of these Shares in the event Shareholders do not subscribe for at least $777,000 under the SPP. WPF is not participating in these arrangements other than potentially in its capacity as a Shareholder.

2.2 Corporations Act Requirements

(a) Prohibition on certain acquisitions of relevant interests in voting shares.

Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the voting shares in a company, if as a result of the acquisition that person’s or someone else’s voting power in the company increases from 20% or below to more than 20%, or from a starting point that is above 20% and below 90%.

Section 608 of the Corporations Act provides that a person has a relevant interest in the securities if they:

(i) are the holder of the securities; or
(ii) have power to exercise, or control the exercise, or control the exercise of, a right to vote attached to securities; or
(iii) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise these powers, each of them is taken to have that power.

The voting power of a person is determined under section 610 of the Corporations Act. It involves calculating the number of voting shares in the company in which the person and the person’s “associates” (as defined in Division 2 of Part 1.2 of the Corporations Act) have a relevant interest.

A person (“second person”) will be an “associate” of the other person (“first person”) if:

(i) that first person is a body corporate and the second person is:
(A) a body corporate the first person controls;
(B) a body corporate that controls the first person; or
(C) a body corporate that is controlled by an entity that controls the person;

(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purposes of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; or
(iii) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the company’s affairs.

(b) Exception to the section 606 prohibition

There are various exceptions to the prohibition in section 606. Section 611 contains a table setting out circumstances in which the acquisition of relevant interests are exempt from the prohibition. Item 7 of this table provides an exemption where a resolution is passed at a general meeting of the company before the acquisition is made. The parties involved in the acquisition and their associates are not able to cast a vote on the resolution.

2.3 Information required by section 611 item 7 of the Corporations Act and ASIC Regulatory Guide 74

By passing Resolution 1, CAHL (or its nominee) will not be prohibited from acquiring a relevant interest in Shares in excess of the takeover threshold in the Corporations Act.

The following paragraphs set out information required to be provided to Shareholders under item 7 in the table in section 611 of the Corporations Act and ASIC Regulatory Guide 74.

Shareholders are also referred to the Independent Expert's Report attached to this Notice of Meeting as Annexure A.

(a) Identity of the person proposing to make the acquisition and their associates

CAHL (and by virtue of section 608(3) of the Corporations Act, Richard Siemens) will acquire a relevant interest in a further 806,372,000 Shares (and depending on Shareholder participation in the SPP, up to a further 200,000,000 Shares) to be issued under Resolution 1 by reason of section 608(1) of the Corporations Act (being the holder of the securities).

(b) The maximum extent of the increase in the voting power in the Company that would result from the issue and acquisition of the Shares

As at the date of this Notice, Richard Siemens and CAHL have a relevant interest in 21.50% of the Shares of the Company.

If Resolution 1 is passed then Richard Siemens and CAHL will have the relevant interest in Shares set out in the table below.

Effect on relevant voting power

The table below sets out the maximum effect on the voting power of Richard Siemens (and his associates, including CAHL) assuming that:

(a) the maximum number of Shares to be issued subject to Shareholder approval under Resolutions 2 to 8, are issued; and
(b) the take up by eligible Shareholders in the SPP is as set out below and that the obligation by CAHL to subscribe for Shares (up to a maximum of $600,000 is adjusted accordingly).

	Total number of Shares held by Richard Siemens (including CAHL and his associates)	Total number of Shares on issue	Voting power of Richard Siemens (or his associates)
At Present	206,371,904	959,977,044	21.50%
Shares issued under the	1,012,743,904	2,137,468,839	47.4%

Placement and Capitalisation only	(206,371,904 + 806,372,000)
Assuming no take up under SPP (and CAHL subscribes for maximum of $600,000)	1,212,743,904 (206,371,904 + 806,372,000 + 200,000,000)	2,337,468,839 (2,137,468,839 + 200,000,000)	51.9%
Assuming take up is $177,000 (being 22.78% of $777,000) under the SPP and CAHL subscribes for the maximum of $600,000 Shares	1,212,743,904 (206,371,904 + 806,372,000 + 200,000,000)	2,396,468,839 (2,137,468,839 + 259,000,000)	50.6%
Assuming take up is $388,500 (being 50% of $777,000) under the SPP and CAHL subscribes for $388,500 Shares	1,142,243,904 (206,371,904 + 806,372,000 + 129,500,000)	2,396,468,839	47.7%
Assuming take up is $777,000 (being 100% of $777,000) under the SPP and CAHL does not subscribe for any Shares	1,012,743,904 (206,371,904 + 806,372,000)	2,396,468,839	42.3%

(c) Intentions of Richard Siemens regarding the future of the Company

Richard Siemens has informed the Company that, as at the date of this Explanatory Statement and on the basis of facts and information available to him, if Shareholders approve Resolution 1 then he:

(i) has no current intention to change the existing business of the Company;
(ii) has no current intention to inject further capital into the Company, unless requested by the Company;
(iii) has no current intention in relation to the future employment of present employees of the entity;
(iv) does not propose for any property be transferred between the Company and him, or any person associated with him;

(v) has no current intention to otherwise redeploy the fixed assets of the Company; and
(vi) has no current intention to change the Company’s existing financial dividend policies.
(d) Particulars of the proposed acquisitions and timing

The details of the proposed acquisitions are set out above in section 1 of this Explanatory Statement.

The Shares the subject of Resolution 1 will be issued no later than one month following the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

(e)

Reasons for the allotment

Pursuant to the proposed allotment under the Capitalisation, the Company will repay debts of $2,419,116 owing to CAHL by way of the issue to CAHL (or its nominee) of 806,372,000 Shares at an issue price of $0.003 per Share.

In addition to the above, CAHL’s commitment to subscribe for up to further $600,000 depending on participation of other Shareholders under the SPP will raise a minimum of a further $600,000 (before costs) for the Company.

Funds raised by the Company under the Placement and the SPP will be used for funding the expenditures set out in section 1.5 above.

(f) Independent Expert Report as to whether the issue of Shares to CAHL (or its nominee) is fair and reasonable

The Directors of the Company have commissioned the Independent Expert to prepare a report on the question of whether the issue of Shares to CAHL (or its nominee, is fair and reasonable to the Shareholders not associated with the proposal.

That report is attached to this Explanatory Statement at Annexure A.

The Independent Expert concludes that the issue of Shares to CAHL (or its nominee is, on balance, fair and reasonable to Shareholders not associated with the proposal.

Shareholders are urged to read the Independent Expert's Report.

(g) Impact on the Company if Shareholders do not approve the issue of Shares to CAHL (or its nominee)

If Resolution 1 is not approved by Shareholders, CAHL (or its nominee) will not proceed with the issue of Shares in the Placement, Capitalisation or SPP to CAHL (or its nominee) on the basis that the Company has not received the required approvals including under section 611 item 7 of the Corporations Act.

Accordingly, if Shareholders do not approve Resolution 1:

(i) the Capitalisation will not proceed and the Company will still owe the amount of $2,419,116 to CAHL; and
(ii) CAHL (or its nominee) will not subscribe for further Shares up to a maximum of $600,000 in the SPP and as such if other Shareholders do not subscribe under the SPP, the Company will not raise a minimum of $600,000 under the SPP.

2.4 Chapter 2E Corporations Act

Chapter 2E of the Corporations Act regulates the provision of “financial benefits” to “related parties” by a public company. Chapter 2E prohibits a public company from giving a financial benefit to a related party of the public company unless either:

(a) the giving of the financial benefit falls within one of the nominated exceptions to the provisions; or

(b) prior shareholder approval is obtained to the giving of the financial benefit.

A “related party” is widely defined under the Corporations Act, and includes entities controlled by related parties of the Company. As CAHL is controlled by Richard Siemens, who is a Director of the Company, they are both related parties of the Company for the purposes of Section 208 of the Corporations Act.

A “financial benefit” is construed widely and in determining whether a financial benefit is being given, Section 229 of the Corporations Act requires that any consideration that is given is disregarded, even if the consideration is adequate. It is necessary to look at the economic and commercial substance and the effect of the transaction in determining the financial benefit. Section 229 of the Corporations Act includes as an example of a financial benefit, the issuing of securities or the granting of an option to a related party.

The issue of the Shares under Resolution 1 constitutes the provision of a financial benefit to a related party.

In compliance with the information requirements of Section 219 of the Corporations Act, Shareholders are advised of the information below. Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by Resolution 1.

(a) Identity of the related parties to whom Resolution 1 permits financial benefits to be given.

The Shares are proposed to be issued to CAHL (or its nominee). CAHL is controlled by Richard Siemens, who is a related party of the Company by virtue of his directorship. CAHL is therefore a related party of the Company by virtue of section 228(4) of the Corporations Act because it is controlled by a related party of the Company.

(b) Nature of the financial benefit

Resolution 1 seeks approval from Shareholders to allow the Company to issue an aggregate maximum of up to 1,006,372,000 Shares on the terms and for the reasons set out in this Explanatory Memorandum.

Schedule 1 of this Notice of Meeting sets out the key terms and conditions of the Shares.

The Shares to be issued will be fully paid ordinary shares in the capital of the Company on the same terms and conditions as the Company’s existing Shares and will rank equally in all respects with the Company’s existing Shares. The Company will apply for official quotation of the Shares on ASX.

The maximum number of Shares to be issued to CAHL (or its nominee) is set out in the table above under section 2.1 of this Explanatory Statement.

(c) Valuation of financial benefit

The issue of the Shares under the Capitalisation and SPP are proposed to occur at $0.003 per Share, accordingly the valuation of the Shares to be issued is set out below.

Name	Maximum number of Shares	Value
CAHL (or its nominee)	1,006,372,000	$3,019,116

(d) Dilution

If the Shares are allotted, the effect will be to dilute the holdings of Shares of other Shareholders. The issue of the Shares to CAHL will in aggregate be equal to approximately 41.9% of the Company’s fully-diluted share capital assuming implementation of all the Resolutions and a maximum of $777,000 is raised under the SPP, resulting in a total of 2,396,468,839 Shares on issue.

Further details on the dilutionary impact of the proposed issue of Shares to CAHL is set out in section 2.3(b) above.

(e)

Interests of CAHL (or its nominee) in the Company

The direct and indirect interests of CAHL (or its nominee) in securities of the Company as at the date of this Notice of General Meeting are:

Name	Security
CAHL (or its nominee)	206,371,904 Shares

(f)

Remuneration of Director

Mr Siemens does not receive any remuneration in his capacity as the non-Executive Chairman of the Company.

2.5 Listing Rule 10.11 Regulatory Requirements

Listing Rule 10.11 provides that, unless a specified exception applies, a Company must not issue or agree to issue securities to a Related Party without the approval of ordinary shareholders.

CAHL is a related party of the Company, by virtue of section 228(4) Corporations Act, as Richard Siemens holds a controlling interest in CAHL.

As such, Shareholder approval is sought under Listing Rule 10.11 as Resolution 1 proposes the issue of securities to CAHL (or its nominee), who is a related party as it is controlled by a Director of the Company.

As Shareholder approval is being sought under ASX Listing Rule 10.11, approval is not also required under Listing Rule 7.1.

In compliance with the information requirements of Listing Rule 10.13, Shareholders are advised of the following information:

(a) Name of person to receive securities

The Shares will be issued to CAHL (or its nominee).

(b) Maximum number of securities to be issued

The maximum number of Shares to be issued to CAHL (or its nominee) is set out in the table above at section 2.1 of this Explanatory Statement.

(c) Date of issue and allotment

The Company anticipates that the Shares will be allotted and issued no later than 1 month after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

(d) Relationship with the Company

CAHL is a related party of the Company, by virtue of section 228(4) Corporations Act, as Richard Siemens holds a controlling interest in CAHL.

(e) Issue price

The issue price per Share is to be $0.003.

(f) Terms of issue

The Shares to be issued will be fully paid ordinary shares in the capital of the Company on the same terms and conditions as the Company’s existing Shares and rank equally in all respects with the existing Shares.

The Company will apply to ASX for official quotation of the Shares following issue.

(g) Intended use of the funds raised

The purpose of the issue is to recapitalise the Company. Details of the intended use of funds are set out above in section 1.5.

(h) Voting exclusion statement

A voting exclusion statement for Resolution 1 is included in the Notice preceding this Explanatory Statement.

2.6 Directors’ recommendation

The Directors (other than Richard Siemens who has a material person interest in the outcome of Resolution 1) recommend that Shareholders vote in favour of Resolution 1 as it permits the Company to raise additional working capital and allows the Company to retain its cash resources by the capitalisation of outstanding debts owed to CAHL.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in granting the Shares to CAHL (or its nominee) pursuant to Resolution 1.

3. RESOLUTIONS 2, 3 AND 4 – APPROVAL TO ISSUE SHARES TO WILSON’S PIPE FABRICATION PTY LIMITED, DAVID WHITE, AND RICHARD O’BRIEN

3.1 Background

Pursuant to the Placement, the Company proposes to issue up to 295,119,795 Shares at an issue price of $0.003 each to WPF and Messrs White and O’Brien, or their respective nominees. The issue of these Shares will be equal to approximately 12.31% of the Company’s existing fully-diluted share capital as at the date of this Notice of Meeting and assuming the other issues of Shares contemplated by the Notice of Meeting proceed and a maximum of $777,000 is raised under the SPP, resulting in a total of 2,396,468,839 Shares on issue.

Resolutions 2, 3 and 4 seek approval to issue Shares to WPF and Messrs White and O’Brien (or their nominee).

Mr Michael Wilson is a non-executive director of the Company and WPF is an entity controlled by him. Resolution 2 seeks Shareholder approval for the issue of Shares under the Capitalisation and the Placement to WPF (or its nominee). WPF (or its nominee) will not participate in the SPP arrangements set out above other than potentially along with all other Shareholders in the SPP.

The table below sets out the maximum number of Shares to be issued to WPF (or its nominee) pursuant to Resolution 2.

	WPF (or its nominee)
Placement	72,333,333
Capitalisation	133,333,334
Total	205,666,667

Messrs White and O’Brien are directors of the Company. Resolutions 3 and 4 seek Shareholder approval for the issue of Shares to these directors.

In order to reduce the cash outflow of the Company, David White has agreed to receive Shares in the Company in lieu of remuneration for the 2013/2014 financial year for the amount of $224,000. Resolution 3 accordingly seeks approval for the issue of 74,666,667 Shares to Mr White in lieu of remuneration for the 2013/2014 financial year.

Additionally, under Resolutions 3 and 4, David White and Richard O’Brien have lent monies totalling $16,162 and $28,198 respectively and each has agreed to subscribe for 5,387,184 Shares and 9,399,277 Shares at an issue price of $0.003 per Share respectively to repay these amounts.

3.2 Regulatory Requirements

Listing Rule 10.11 provides that, unless a specified exception applies, a Company must not issue or agree to issue securities to a related party without the approval of ordinary shareholders. A “related party”, for the purposes of the Listing Rules, has the meaning given to it in the Corporations Act, and includes the directors of a company.

As such, Shareholder approval is sought under Listing Rule 10.11 as Resolutions 2, 3 and 4 propose the issue of securities to WPF, Messrs White and O’Brien, who are related parties of the Company by virtue of their directorships.

As Shareholder approval is being sought under ASX Listing Rule 10.11, approval is not also required under Listing Rule 7.1.

In compliance with the information requirements of Listing Rule 10.13, Shareholders are advised of the following information:

(a) Name of person to receive securities

The Shares will be issued to WPF and Messrs White and O’Brien or their nominee.

(b) Maximum number of securities to be issued

The maximum number of Shares to be issued to each of WPF, David White and Richard O’Brien or their nominee is outlined in the table below.

Name	Value	Cash Contribution	Number of Shares
WPF (or its nominee)	$617,000	$217,000	205,666,667
David White (or his nominee)	$240,162	$16,162*	80,053,851
Richard O’Brien (or his nominee)	$28,198	$28,198	9,399,277

Mr White has agreed to accept the issue of shares in lieu of outstanding remuneration of $224,000.

(c) Date of issue and allotment

The Company anticipates that the Shares will be allotted and issued not later than 1 month after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

(d) Relationship with the Company

The Shares are proposed to be issued to WPF, Messrs White and O’Brien or their nominee.

Messrs White and O’Brien are Directors of the Company and are, as such, related parties of the Company.

WPF is a related party of the Company, by virtue of sections 228(2)(a), 228(2)(c) and 228(4) Corporations Act, as Michael Wilson and his partner, Megan Wilson, jointly hold all of the ordinary fully paid shares in WPF.

(e) Issue price

The price per Share acquired is $0.003.

(f) Terms of issue

The Shares will be fully paid ordinary shares in the capital of the Company on the same terms and conditions as the Company’s existing Shares and rank equally in all respects with the existing Shares.

A summary of the material terms of the Shares is set out in Schedule 1.

The Company will apply to ASX for official quotation of the Shares.

(g) Intended use of the funds raised

The purpose of the issue is to recapitalise the Company. Details of the intended use of funds are set out above in section 1.5.

(h) Voting exclusion statement

Voting exclusion statements for Resolutions 2, 3 and 4 are included in the Notice of General Meeting preceding this Explanatory Statement.

3.3 Chapter 2E Corporations Act

(a) the giving of the financial benefit falls within one of the nominated exceptions to the provisions; or
(b) prior shareholder approval is obtained to the giving of the financial benefit.

A “related party” is widely defined under the Corporations Act, and includes the directors of the company. As such, the Directors of the Company are related parties of the Company for the purposes of Section 208 of the Corporations Act.

The issue of the Shares under Resolutions 2, 3 and 4 constitutes the provision of a financial benefit to a related party.

(a) Identity of the related parties to whom Resolutions 2, 3 and 4 permit financial benefits to be given.

The Shares will be issued to WPF and Messrs White and O’Brien or their respective nominees.

WPF is controlled by Michael Wilson, who is a related party of the Company by virtue of his directorship. WPF is therefore a related party of the Company by virtue of section 228(4) of the Corporations Act because it is an entity controlled by a related party of the Company.

Messrs David White and O’Brien are Directors of the Company and, as such, are related parties of the Company.

(b) Nature of the financial benefit

Resolutions 2, 3 and 4 seek approval from Shareholders to allow the Company to issue an aggregate of 295,119,795 Shares on the terms and for the reasons set out in this Explanatory Memorandum

Schedule 1 of this Notice of Meeting sets out the key terms and conditions of the Shares.

The maximum number of Shares to be issued to each of WPF, David White and Richard O’Brien is outlined in the table above in section 3.2(b).

(c)

Valuation of financial benefit

The issue of the Shares under the Placement and Capitalisation are proposed to occur at $0.003 per Share, accordingly the valuation of the Shares to be issued is set out below.

Name	Maximum number of Shares	Value
WPF (or its nominee)	205,666,667	$617,000
David White* (or his nominee)	80,053,851	$240,162
Richard O’Brien (or his nominee)	9,399,277	$28,197

Mr White has agreed to accept the issue of shares in lieu of outstanding remuneration of $224,000.

(d)

Dilution

If the Shares are issued, the effect will be to dilute the holdings of Shares of other Shareholders. The issue of the Shares will in aggregate be equal to approximately 12.31% of the Company’s fully-diluted share capital assuming implementation of all the Resolutions, and a maximum of $777,000 is raised under the SPP resulting in a total of 2,396,468,839 Shares on issue.

(e) Interests of WPF, David White and Richard O’Brien in the Company

The direct and indirect interests of WPF, David White and Richard O’Brien in securities

Name	Security
WPF (or its nominee)	207,213,352 Shares
David White (or his nominee)	2,693,592 Shares
Richard O’Brien (or his nominee)	9,399,277 Shares

(c)

Remuneration of Directors

Details of the remuneration of each Director, including their related entities, for the

year ended 30 June 2014, is set out below.

The Company expects the total remuneration for each Director for the year ended 30 June 2014 to be similar to that set out below in respect of the previous financial year.

Name	Total Remuneration
Michael Wilson	$Nil
David White	$224,000
Richard O’Brien	$24,000

3.4 Board Recommendation

The Board, other than Michael Wilson who has a material personal interest in Resolution 2, recommends that Shareholders approve Resolution 2 on the basis that it permits the Company to raise additional working capital and allows the Company to retain its cash resources by the capitalisation of outstanding debts owed to WPF.

The Board, other than David White who has a material personal interest in Resolution 3, recommends that Shareholders approve Resolution 3 on the basis that allows the Company to retain its cash resources by the capitalisation of outstanding debts owed to David White.

The Board, other than Richard O’Brien who has a material personal interest in Resolution 4, recommends that Shareholders approve Resolution 4 on the basis that allows the Company to retain its cash resources by the capitalisation of outstanding debts owed to Richard O’Brien.

4. RESOLUTIONS 5, 6 7 AND 8 – APPROVAL TO ISSUE SHARES TO ROBERT MOLKENTHIN, JAY UPTON, TYRONE JONES, AND GORDON EMSLIE

4.1 Background

In order to reduce the cash outflow of the Company, each of Robert Molkenthin, Jay Upton, Tyrone Jones and Gordon Emslie ( Senior Managers ) has agreed to participate in the Placement by way of a management contribution plan whereby each of the Senior Managers agree to salary sacrifice in return for Shares.

Resolutions 5, 6, 7 and 8 seek Shareholder approval pursuant to ASX Listing Rule 7.1 for the placement of up to $228,000 in Shares at an issue price of $0.003 per Share.

Details of the amount each Senior Manager has agreed to salary sacrifice and the maximum number of Shares each Senior Manager will acquire under the Placement are set out in the table below:

Name	Value	Number of Shares
Robert Molkenthin	$48,000	16,000,000
Jay Upton	$48,000	16,000,000
Tyrone Jones	$60,000	20,000,000
Gordon Emslie	$72,000	24,000,000

Total $228,000 76,000,000

4.2 ASX Listing Rules

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more Equity Securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period without shareholder approval.

If the issue and allotment of Shares pursuant to Resolutions 5-8 exceeds the 15% limit, the Company will require the approval of Shareholders, and if it does not exceed the 15% limit, the Shares to be issued will not be included in the 15% capacity if Shareholders approve the issue.

The effect of obtaining Shareholder approval under Resolutions 5-8 will be to allow the Company to issue up to $228,000 in Shares during the period of 3 months after the General Meeting (or such longer period, if permitted by ASX), without using the Company’s 15% annual placement capacity.

4.3 Information required by ASX Listing Rule 7.3

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.1:

(a) Maximum number of securities to be issued

The Company intends to issue up to an aggregate total of 76,000,000 Shares (as set out in the table above in section 4.1).

(b) Date of issue The Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue will occur on the same date.

(c) Issue price

The issue price of the Shares will be at a price per Share of $0.003.

(d) Terms of the securities

The Shares to be issued will rank equally with the existing quoted Shares of the Company. The Company will apply to ASX for official quotation of the Shares.

(e) Persons to whom the securities will be issued to

The Shares will be issued to Messrs Molkenthin, Upton, Jones and Emslie, or their nominees.

(f) Intended use of funds raised

The purpose of the issue is to recapitalise the Company. Details of the intended use of funds are set out above in section 1.5.

(g) Voting exclusion statement

Voting exclusion statements for Resolutions 5, 6, 7 and 8 are included in the Notice of General Meeting preceding this Explanatory Statement.

4.4 Directors’ recommendation

The Directors recommend that Shareholders vote in favour of Resolutions 5, 6, 7 and 8 as they will allow the Company to retain the flexibility to issue further Equity Securities representing up to 15% of the Company’s share capital during the next 12 months.

GLOSSARY

April Loan Facility has the meaning in section 1.2 of the Explanatory Statement. August Loan Facility has the meaning in section 1.2 of the Explanatory Statement. AUD$, $ and dollars means Australian dollars, unless otherwise stated . ASIC means the Australian Securities and Investments Commission. ASX means ASX Limited.

Board means the current board of directors of the Company.

CAHL has the meaning in section 1.2 of the Explanatory Statement. Chair means the Chairman of the General Meeting. Company or Sprintex means Sprintex Limited (ACN 106 337 599). Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Equity Securities has the meaning given to that term in the Listing Rules.

Explanatory Statement means the explanatory statement accompanying the Notice.

Facility Agreements has the meaning in section1.2 of the Explanatory Statement.

General Meeting or Meeting means the general meeting convened by the Notice.

Independent Expert means Stantons International Securities.

July Loan Facility has the meaning in section 1.2 of the Explanatory Statement.

Listing Rules means the listing rules of the ASX.

March Loan Facility has the meaning in section 1.2 of the Explanatory Statement.

May Loan Facility has the meaning in section 1.2 of the Explanatory Statement.

Notice or Notice of General Meeting or Notice of Meeting means this notice of general meeting including the Explanatory Statement and the Proxy Form.

Option means an option to subscribe for a Share.

Placement has the meaning in section 1.1 of the Explanatory Statement.

Proxy Form means the proxy form accompanying the Notice.

Related Party has the meaning given to that term in Listing Rule 19.12.

Resolution means the resolution set out in the Notice of General Meeting.

Senior Managers has the meaning set out in section 4.1 of the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

SPP has the meaning in section 1.1 of the Explanatory Statement.

USD$ means United States dollars

WPF has the meaning in section 1.2 of the Explanatory Statement.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1

The following is a summary of the more significant rights and liabilities attaching to the Shares to be issued pursuant to the Placement. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

The rights attaching to the Shares arise from a combination of the Company’s Constitution, the Corporations Act, the ASX Listing Rules and general law. A copy of the Company’s Constitution is available for inspection free of charge during business hours at its registered office.

1. RIGHTS ATTACHING TO SHARES

The Shares to be issued are ordinary shares and will, as from their allotment, rank equally in all respects with all existing Shares.

A summary of the rights attaching to the Shares is set out below.

(a) Voting Rights

Subject to the Constitution of the Company and any rights or restrictions for the time being attached to any class of Shares, at general meetings of the Company, every Shareholder present in person, or by proxy, attorney or representative has one vote on a show of hands, and upon a poll, one vote for each Share held by the Shareholder. In the case of an equality of votes, the chairman does not have a casting vote.

(b) Dividends

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, the Company may pay dividends as the Directors resolve but only out of the profits of the Company. The Directors may determine the method and time for payment of the dividend.

(c) Winding-Up

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, on a winding up of the Company the liquidator may, with the sanction of a special resolution, divide among the members the whole or any part of the property of the Company.

(d) Transfer of Shares

Generally, shares are freely transferable, subject to satisfying the requirements of the ASX Listing Rules, the ASX Settlement Operating Rules and the Corporations Act. The Directors may decline to register any transfer of Shares but only where permitted to do so by the Corporations Act, the ASX Listing Rules, the ASX Settlement Operating Rules, or under the Company’s Constitution.

(e) Further Increases in Capital

Subject to the Corporations Act, and the ASX Listing Rules, and any rights attached to a class of shares, the Company (under the control of the Directors) may allot and issue shares and grant options over shares, on any terms, at any time and for any consideration, as the Directors resolve.

(f) Variation of Rights

Subject to the Corporations Act, the ASX Listing Rules, the ASX Settlement Operating Rules and the terms of issue of shares in a particular class, the Company may vary or cancel rights attached to shares in that class by either special resolution passed at a general meeting of the holders of the shares in that class, or with the written consent of the holders of at least 75% of the votes in that class.

(g) Meetings and Notices

Each Shareholder will be entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive notices, accounts and other documents required to be furnished to Shareholders under the Company’s Constitution, the Corporations Act and the ASX Listing Rules.

PROXY FORM

APPOINTMENT OF PROXY SPRINTEX LIMITED ACN 106 337 599

GENERAL MEETING

I/We

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being a member of Sprintex Limited entitled to attend and vote at the General Meeting, hereby

Appoint

Name of proxy

OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the General Meeting to be held at 10am WST, on 22 October 2014 at 183 Mulgul Road, Malaga WA, and at any adjournment thereof.

Chairman authorised to exercise proxies on remuneration related matters (Resolutions 3, 5, 6, 7 and 8): If I/we have appointed the Chairman of the Meeting as my/our proxy or if the Chairman of the Meeting becomes my/our proxy by default, by signing and submitting this form I/we expressly authorise the Chairman of the Meeting to exercise my/our proxy in respect of Resolutions 3, 4, 5, 6, 7 and 8 (except where I/we have indicated a different voting intention below) even though Resolutions 3, 5, 6, 7 and 8 are connected directly or indirectly with the remuneration of a member of key management personnel for Sprintex Limited.

The Chair of the Meeting intends to vote undirected proxies in favour of each of the items of business (including Resolutions 1-8): If you have appointed the Chairman of the Meeting as your proxy (or the Chairman of the Meeting becomes your proxy by default), and you wish to give the Chairman specific voting directions on an item, you should mark the appropriate boxes opposite those items below (directing the Chairman to vote for, against, or to abstain from voting).

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN

Resolution 1- Approval to issue Shares to China Automotive Holdings Limited Resolution 2- Approval to issue Shares to Wilson’s Pipe Fabrication Pty Limited Resolution 3- Approval to issue Shares to David White Resolution 4- Approval to issue Shares to Richard O’Brien Resolution 5- Approval to issue Shares to Robert Molkenthin Resolution 6- Approval to issue Shares to Jay Upton Resolution 7- Approval to issue Shares to Tyrone Jones Resolution 8- Approval to issue Shares to Gordon Emslie

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

Signature of Member(s):

Individual or Member 1 Sole Director/Company Secretary	Member 2 Director	Date: ____ Member 3

		Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _________

ACN 106 337 599

INSTRUCTIONS FOR COMPLETING ‘APPOINTMENT OF PROXY’ FORM

1.

( Appointing a Proxy ): A member entitled to attend and cast a vote at a General Meeting is entitled to appoint a proxy to attend and vote on their behalf at the meeting. If the member is entitled to cast 2 or more votes at the meeting, the member may appoint a second proxy to attend and vote on their behalf at the meeting. However, where both proxies attend the meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A member who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a member appoints 2 proxies and the appointments do not specify the proportion or number of the member’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a member of the Company.

( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing Instructions ):

( Individual ): Where the holding is in one name, the member must sign.
( Joint Holding ): Where the holding is in more than one name, all of the members should sign.
( Power of Attorney ): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.
( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the General Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
- (a) post to Sprintex Limited, 183 Mulgul Road, Malaga, WA 6090; or
- (b) post to Advanced Share Registry Services, 110 Stirling Hwy, Nedlands WA 6009;
- (c) facsimile to the Company on facsimile number +61 8 9262 7288; or
- (d) email to the Company at [email protected],

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy forms received later than this time will be invalid.

ANNEXURE A – INDEPENDENT EXPERT’S REPORT

PO Box 1908 West Perth WA 6872 Australia

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Level 2, 1 Walker Avenue West Perth WA 6005 Australia

Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

10 September 2014

The Directors Sprintex Limited 183 Mulgul Road MALAGA WA 6090

ABN: 42 128 908 289 AFS Licence No: 448697 www.stantons.com.au

Summary of Conclusion of Opinions

In our opinion, taking into account the factors noted below and in section 9 of this report and the comments made in the ESS to Shareholders accompanying the Notice of September 2014, the proposals as noted in Resolution 1 whereby Sprintex may issue up to 200,000,000 SPP Shortfall Shares to Siemens Interests at 0.3 cents each and issue 806,372,000 Debt Conversion Shares to Siemens Interests are on balance, fair and reasonable to the non-associated shareholders of Sprintex at the date of this report.

Dear Sirs,

RE: SPRINTEX LIMITED (ABN 38 106 337 599) (“SPRINTEX” OR “THE COMPANY”) MEETING OF SHAREHOLDERS TO CONSIDER RESOLUTIONS RELATING TO THE PROPOSAL TO ISSUE SPP SHORTFALL SHARES AND DEBT CONVERSION SHARES TO THE INTERESTS OF RICHARD SIEMENS - MEETING PURSUANT TO SECTION 611 (ITEM 7) OF THE CORPORATIONS ACT 2001 (“TCA”)

1. INTRODUCTION

1.1 We have been requested by the Directors of Sprintex to prepare an Independent Expert’s Report to determine the fairness and reasonableness of the transactions referred to in Resolution 1 as detailed in the Notice of Meeting (“Notice”) and Explanatory Statement (“ESS”) attached to the Notice to Sprintex shareholders to be issued to shareholders in September 2014 for a meeting planned to be held in October 2014.
1.2 In August 2014, the Company announced that it had agreed to a series of capital raisings and debt conversions as follows:
Issue 72,333,333 shares to the existing Directors of Sprintex (or the Directors nominee companies) at 0.3 cents each to raise cash of $217,000 (“Director Placement Shares”). The Director Placement Shares are to be issued to the interests of Michael Wilson (Wilson’s Pipe Fabrication Pty Ltd) (“WPF”);
Issue 954,491,795 shares to the Directors of Sprintex (or the Directors nominee companies) at 0.3 cents each to convert Debt owed by Sprintex to parties associated with the Directors totalling $2,863,476 (“Debt Conversion Shares”). This relates to the issue of 806,372,000 Debt Conversion Shares to the interests of Richard Siemens ($2,419,116) and 133,333,334 Debt Conversion Shares to the interests of Michael Wilson ($400,000), 5,387,184 Debt Conversion Shares to the interests of David White ($16,162) and 9,399,277 Debt Conversion Shares to the interests of Richard O’Brien ($28,198);

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Liability limited by a scheme approved under Professional Standards Legislation

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Issue 74,666,667 shares in Sprintex to David White, a Director of Sprintex at 0.3 cents each in lieu of remuneration/service payments ($224,000) for 2013/14 (“Remuneration Shares”);
Issue 76,000,000 shares to four senior managers of Sprintex (none are Directors of Sprintex) at 0.3 cents each as in lieu of a total of $228,000 salary for a 12 month period (“Management Shares”); and
Introduce a Share Purchase Plan (“SPP”) and under the SPP offer to all shareholders (other than those associated with the five current Directors of Sprintex) to subscribe for new shares in Sprintex at 0.3 cents each. The maximum amount each shareholder may take up under the SPP Offer is $15,000 or 5,000,000 shares. The maximum number of shares that may be issued under the SPP Offer will be 259,000,000 (“SPP Shares”) to raise a maximum of $777,000 (565,505,170 shares are, as at the date of this report under the control of the five existing Directors of Sprintex as noted below). The final number of SPP shares that may be issued under the SPP cannot yet be quantified. Sprintex in its calculation of various percentage shareholdings as noted in this report have assumed 59,000,000 SPP Shares that may be issued to non Director interests’ that would raise a total of approximately $177,000 (ignores up to $600,000 that may be taken up by Siemens Interests as noted below). If more or less shares are taken up under the SPP, the percentage interests of the Directors and their controlled entities would fall or rise accordingly.

In addition to the above, China Automotive Holdings Limited (“CAHL”) a company controlled by Richard Siemens has also agreed to subscribe for up to a further $600,000 at 0.3 cents each conditional upon the participation of other shareholders in the SPP and the Company not finding other investors who may wish to subscribe for some or all of these shares (instead of CAHL).

Under the terms of this arrangement, in the event that the SPP raises less than $777,000 then CAHL (or its nominee) has agreed to subscribe for up to a maximum of $600,000 of shares (described in this report as the “SPP Shortfall Shares”) on the same terms of other shareholders under the SPP.

As a consequence, the Company will raise a minimum of $600,000 under the SPP depending on the take-up of other shareholders under the SPP. The obligation on CAHL to subscribe for these additional SPP Shortfall Shares will reduce to the extent that shareholders subscribe for between $177,000 and $777,000 SPP Shares under the SPP and also to the extent that, before completion of the SPP, the Company is able to find other investors who may be willing to subscribe for shares up to a value of $600,000 to cover any shortfall under the SPP.

1.3 In summary, if all shares are issued as noted above (except the SPP Shares and any SPP Shortfall Shares), Sprintex would raise gross cash funds of $217,000 from parties associated with the Directors, convert existing Debt of $2,863,476, eliminate $224,000 of 2013/14 salaries owing to David White and save $228,000 in 2014/15 management salaries/service payments (shares issued in lieu). The Company will also raise cash funds under the SPP as noted above.
1.4 The Directors of Sprintex are Richard Siemens (“Siemens”), Michael Wilson (“Wilson”), Steven Apedaile (“Apedaile”), David White (“White”) and Richard O’Brien (“O’Brien”). The shareholding interests of such Directors (held in their own names and/or companies or partnerships under their control) are as noted in paragraphs 3.1 and 3.2 of this report.
1.5 Currently, the shareholding interests’ of Siemens (“Siemens Interests”) is 206,371,904 shares that represent an approximate 21.50% shareholding interest in Sprintex (all in the name of CAHL. It is proposed that up to a maximum of 200,000,000 SPP Shortfall Shares and 806,372,000 Debt Conversion Shares are to be issued to the Siemens Interests (CAHL) as noted in Resolution 1 to the Notice (a total of up to 1,006,372,000 ordinary shares). If this occurs, Siemens Interests would own 1,212,743,904 shares in Sprintex that would represent approximately 50.60% of the expanded issued capital of Sprintex. The percentage

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shareholding of CAHL will vary depending upon the applications received under the SPP and any placements to other unrelated, major shareholders.

1.6 Currently, the shareholding interests’ of Wilson (“Wilson Interests”) is 207,213,352 shares that represent an approximate 21.59% shareholding interest in Sprintex (all in the name of WPF). It is proposed that 72,333,333 Director Placement Shares and 133,333,334 Debt Conversion Shares are to be issued to the Wilson Interests as noted in Resolution 2 to the Notice (a total of 205,666,667 ordinary shares). If this occurs, the Wilson Interests would own 412,880,019 shares in Sprintex that would represent approximately 17.23% of the expanded issued capital of Sprintex. The percentage shareholding of the Wilson Interests will vary depending upon the applications received under the SPP and any placements to other unrelated, major shareholders.
1.7 The shareholding interests of the other three Directors would also alter if all shares are issued as noted above. Apedaile Interests would alter from approximately 14.57% to approximately 5.83%; O’Brien Interests would alter from approximately 0.98% to approximately 0.78% and the White Interests would alter from approximately 0.28% to approximately 3.45%. It is proposed that 9,399,277 and 5,387,184 Debt Conversion Shares are to be issued to the O’Brien Interests and White Interests respectively and 74,666,667 Remuneration Shares will be issued to the White Interests. The percentage shareholding of the other three Directors will vary depending upon the applications received under the SPP and any placements to other unrelated, major shareholders.
1.8 Under Paragraph 606 of the Corporations Act 2001 (“TCA”), a person must not acquire a relevant interest in issued voting shares in a company if because of the transaction, that persons’ or someone else’s voting power in the company increases:
(a) from 20% or below to more than 20%; or (b) from a starting point that is above 20% and below 90%.

Under Section 611 (Item 7) of TCA, Section 606 does not apply in relation to any acquisition of shares in a company by resolution passed at a general meeting at which no votes were cast in favour of the resolution by the acquirer or the disposer or their respective associates. Due to the possible increase in shareholdings of the Siemens Interests as noted above an independent expert is required to report on the fairness and reasonableness of the issue of Directors Placement Shares and Debt Conversion Shares in Sprintex to Siemens Interests.

1.9 Therefore a notice prepared in relation to a meeting of shareholders convened for the purposes of Section 611 (Item 7) of TCA must be accompanied by an Independent Expert's Report stating whether the issue of ordinary shares to the Siemens Interests are fair and reasonable to the shareholders of Sprintex not associated with Siemens. Under ASIC Regulatory Guideline 111 “Contents of Expert Reports” an Independent Expert’s Report is required to report on the fairness and reasonableness of the transaction pursuant to Resolution 1 as Siemens Interests may increase its relevant shareholding interest in Sprintex as noted above.

The Sprintex directors have requested Stantons International Securities to prepare an Independent Expert’s Report to assist the shareholders in determining how to vote on Resolution 1 as outlined in the Notice and the ESS.

1.10 Apart from this introduction, the report considers the following:
Summary of opinion
Implications of the proposals
Future directions of Sprintex

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Basis of valuation of Sprintex shares
Premium for control
Fairness and Reasonableness of the Proposals with the interests of Siemens
Conclusion on fairness of the Proposals
Reasonableness of the Proposal with Siemens
Conclusion as to Reasonableness of the Proposals
Sources of information
Appendix A and our Financial Services Guide
1.11 In addition to Resolution 1 (the issue of up to a total of 1,006,372,000 ordinary shares in Sprintex) there are seven other resolutions being presented to the shareholders of Sprintex and we are not reporting on the merits or otherwise of such resolutions. Resolution 2 relates to the issue of up to 205,666,667 ordinary shares in Sprintex to the Wilson Interests, Resolution 3 relates to the issue of 74,666,667 Remuneration Shares and 5,387,184 Debt Conversion Shares to David White, Resolution 4 relates to the issue of 9,399,277 Debt Conversion Shares to Richard O’Brien, Resolution 5 relates to the issue of 16,000,000 Management Shares to Robert Molkenthin, Resolution 6 relates to the issue of 16,000,000 Management Shares to Jay Upton, Resolution 7 relates to the issue of 20,000,000 Management Shares to Tyrone Jones and Resolution 8 relates to the issue of 24,000,000 Management Shares to Gordon Emslie.

Messrs Molkenthin, Upton, Jones and Emslie are senior managers and key management personal of Sprintex. The issue of all Management Shares will eliminate the payment of 2014/15 salaries totalling $228,000.

1.12 We are not reporting on the merits or otherwise of the matters contained in Resolutions 2 to 8 but do note that it is the intention of Sprintex to raise a gross $217,000 from all Directors Interests and convert Debts due to Director Interests at 0.3 cents each and issue new shares as noted in Resolutions 2 to 8. Thus we need to assess the fairness and reasonableness of the issue of all Director Placement Shares and Debt Conversion Shares being issued to all Directors Interests and take into account the issues of further shares as noted in Resolutions 2 to 8 (including the Management Shares, Remuneration Shares and SPP Shares).

2. SUMMARY OF OPINIONS

2.1 In determining the fairness and reasonableness of the transactions and proposals pursuant to Resolutions 1 (the potential issue of SPP Shortfall Shares and proposed issue of Debt Conversion Shares to Siemens Interests), we have had regard for the definitions set out by the Australian Securities and Investments Commission (“ASIC”) in its Regulatory Guide 111. Regulatory Guide 111 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price and the value that may be attributed to the securities under offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness).

The concept of “fairness” is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in the above mentioned offer. Furthermore, this comparison should be made assuming 100% ownership of the “target” and irrespective of whether the consideration is scrip or cash. An offer is “reasonable” if it is fair.

2.2 An offer may also be reasonable, if despite not being ”fair”, where there are sufficient grounds for security holders to accept the offer in the absence of any higher bid before the close of the offer. Regulatory Statement 111 also states that in all cases, where an acquisition of shares by way of an allotment is to be approved by shareholders pursuant to Section 611 (Item 7) of TCA, a report by an independent expert stating whether or not the proposals pursuant to Resolution 1 are fair and reasonable, having regard to the interests of

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shareholders other than the proposed allottees (in this case, Siemens Interests) and whether a premium for potential control is being paid by the allottees, will be required.

2.3 Regulatory Guide 111 also provides that such an allotment should involve a comparison of the advantages and disadvantages likely to accrue to non-associated shareholders if the transaction proceeds compared with if it does not. Although in this case the proposed potential issues of SPP Shortfall Shares and Debt Conversion Shares to Siemens Interests are not takeover offers, we have considered the general principals noted above to determine our opinions on fairness and reasonableness pertaining to the proposal under Resolution 1.
2.4 Accordingly, our report relating to Resolution 1 is concerned firstly with the fairness and reasonableness of the proposals from the point of view of the existing non associated shareholders of Sprintex, and secondly (in relation to Resolution 1) whether the price payable for the potential for Siemens Interest to improve (increase) his shareholding interest in the Company, includes a premium for increased control.
2.5 In our opinion, taking into account the factors noted below and in section 9 of this report and the comments made in the ESS to Shareholders accompanying the Notice of September 2014, the proposals noted in Resolution 1 whereby Sprintex may issue up to 200,000,000 SPP Shortfall Shares and issue 806,372,000 Debt Conversion Shares to Siemens Interests at 0.3 cents each are on balance, fair and reasonable to the nonassociated shareholders of Sprintex at the date of this report.
2.6 Notwithstanding that the Sprintex share price (closing price of 0.2 cents) as at 4 September 2014 (last sale to the day before the date of this report) each shareholder needs to examine the share price of Sprintex and market conditions at the time of exercise of vote to ascertain the impact, if any, on Resolution 1 and other Resolutions involving the issue of shares in Sprintex at 0.3 cents each. The opinions expressed above must be read in conjunction with the more detailed analysis and comments made in this report.

3. IMPLICATIONS OF THE PROPOSALS WITH THE INTERESTS OF SIEMENS

3.1 As at 4 September 2014, there were 959,977,044 fully paid ordinary shares on issue in Sprintex. The significant fully paid shareholders as at close of business on 1 September 2014 are disclosed as:

Name of Shareholder Michael John Wilson & Megan Joy Wilson (various ownerships) China Automotive Holdings Limited Steven James Apedaile & Michelle Lynda Apedaile (various ownerships) HSBC Custody Nominees Limited Euro Mark Limited		No. of Shares 207,213,352 206,371,904 139,827,045 70,166,630 37,340,256	% Interest 21.59 21.50 14.57 7.31 3.89
		660,919,187	68.86

3.2 The top twenty fully paid shareholders as at 1 September 2014 own approximately 85.84% of the issued capital.

The overall Apedaile Interests are 139,827,045 shares, the White Interests are 2,693,592 and the O’Brien Interests are 9,399,277 shares.

3.3 The possible changes to the number of ordinary shares on issue may be as follows:

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	Number on issue
On issue as at 4 September 2014	959,977,044
Issue of Director Placement Shares	72,333,333
Issue of Debt Conversion Shares	954,491,795
Issue of Remuneration Shares	74,666,667
Issue of Management Shares	76,000,000
Potential ordinary shares on issue
before the SPP Shares	2,137,468,839
Issue of SPP Shares	59,000,000
Issue of SPP Shortfall Shares to Siemens Interests	200,000,000
Shares on issue before the issue of
any further Shares	2,396,468,839

The number of shares on issue will also vary depending upon any placements to other unrelated, major shareholders.

As noted above, Sprintex Directors have assumed a 22.78% take up ($177,000 take up by non Director interests’ (59,000,000 SPP Shares) and the issue of a maximum of 200,000,000 SPP Shortfall Shares to Siemens Interests). If more or less shares are taken up under the SPP, the percentage interests of the Directors and their controlled entities would fall or rise accordingly.

3.4 If all Director Placement Shares are issued, the Company will raise a gross $217,000.

If all Debt Conversion Shares are issued, the Company’s external debt will reduce by $2,863,476.

If all 74,666,667 Remuneration Shares are issued, the amount owing to White as 2013/14 salary/service payments ($224,000) are eliminated and this is a cash saving to Sprintex.

If all 76,000,000 Management Shares are issued to 4 senior managers of Sprintex, the Company will save a cash outlay of $228,000 in 2014/15.

If 59,000,000 SPP Shares are issued, the Company will raise cash funds of $177,000 (and if all SPP Shares are issued, the Company would raise gross cash funds of $777,000). The final amount to be raised via the SPP cannot yet be quantified. It is noted that the Siemens Interests may subscribe for up to a maximum of 200,000,000 SPP Shortfall Shares and Sprintex would raise $600,000 (if there is no other take up under the SPP).

Estimated costs in relation to the Notice (excludes commissions that may be payable on the issue of Investor Shares) are $100,000.

3.5 There are no listed or unlisted share options on issue as at 4 September 2014. There are 11,250,000 outstanding Performance Rights (3,750,000 Class B, C and D Performance Rights).

The Class B Performance Rights convert to ordinary shares on a 1 for 1 basis when the Company achieves a First Quarter of positive earnings before interest, taxation, depreciation and amortisation (“EBITDA”).

The Class C Performance Rights convert to ordinary shares on a 1 for 1 basis when the Company achieves a First Year of positive EBITA; and

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The Class D Performance Rights convert to ordinary shares on a 1 for 1 basis when the Company achieves a Second Consecutive Year of positive EBITA.

3.6 In relation to the Board of Directors control, the current directors are Messrs Michael Wilson, Richard Siemens, Steven Apedaile, Richard O’Brien and David White. It is not planned to change the Board of Directors in the near future but this may change as the needs arise.
3.7 The shareholdings of the interest of Siemens post the issue of Director Placement Shares and Debt Conversions and other planned share issues as noted above (including 200,000,000 SPP Shortfall Shares) may be as follows:
1,212,743,904 ordinary shares representing 50.60% of the expanded issued capital of Sprintex (approximately 42.26% if the SPP Shortfall Shares are not issued as $777,000 is raised from other shareholders, in which case CAHL would hold 1,012,743,904 shares).

The only other major shareholder would relate to the Wilson Interests as WPF would own 412,880,019 ordinary shares representing 17.23% of the expanded issued capital of Sprintex (approximately 18.80% if the SPP Shortfall Shares are not issued).

If more or less shares are taken up under the SPP, the percentage interests of the Directors and their controlled entities would fall or rise accordingly. The number of shares on issue will also vary depending upon any placements to other unrelated, major shareholders.

4. FUTURE DIRECTION OF SPRINTEX

4.1 We have been advised by management of Sprintex that:
the immediate short-term plan is, inter-alia, to place the Director Placement Shares, Debt Conversion Shares, Remuneration Shares, Management Shares, SPP Shares to raise new funds and eliminate some debt and 2014/15 liability obligations. The amount that may be raised from the placement of shares to the Director Interests will be used to pay off some existing creditors and for new working capital. The working capital will be used to expand the business of Sprintex;
no dividend policy has been set and is not proposed to be set until such time as the Company is profitable and has a positive cash flow;
The Board of Directors in not planned to change in the near future but may change as the needs arise; and
the Company is likely to raise further capital and possibly debt finance as and when required to continue to develop the Company’s technology and fund its interest in the 50/50 Proreka Sprintex Sdn Bhd Joint Venture (“Joint Venture”). The Joint Venture in Malaysia owns a state of the art 40,000 square foot manufacturing facility. The 50% not owned by Sprintex is owned by AutoV Corporation Bhd (“AutoV”). The facility has the capacity to produce 20,000 supercharges each year and the Joint Venture facility is the primary facility supplying superchargers globally. The first superchargers were produced from the Malaysian plant in January 2013 and the Company is completing the program to establish supply lines for the Malaysian facility. The financing of 80% of the equipment at the Malaysian facility was undertaken via bank financing under a bank facility of RM 5 million (approximately $1,600,000). The financing was conditional on each of the Malaysian resident directors of the Joint Venture, AutoV Corporation Bhd (the Company’s Joint Venture partner) and AutoV Corporation Bhd’s parent, Globaltec Formation Bhd. The Company has provided indemnities totalling half of the bank facility, being a maximum of RM 2.5 million (approximately $835,000) to support the

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guarantees issued by the above named parties. Over the past year, AutoV ceased to pay its share of JV costs and thus Sprintex has been required to fund the JV.

4.2 Further details are in announcements made by Sprintex to the ASX to 9 September 2014 and shareholders are encouraged to read recent reports on the Sprintex business before determining whether to vote for or against Resolution 1 (and other Resolutions involving Sprintex) in the Notice.

5. BASIS OF TECHNICAL VALUATION OF SHARES IN SPRINTEX

5.1 In considering the proposals as outlined in Resolution 1 we have sought to determine if the issue price of the Debt Conversion Shares and SPP Shortfall Shares (if issued) to Siemens Interests is in excess of the current fair value of the shares in Sprintex on issue and then conclude whether the proposals with Siemens Interests are fair and reasonable to the existing non-associated shareholders of Sprintex (not associated with Siemens).
5.1.2 The proposals pursuant to Resolution 1 would be fair to the existing non associated shareholders if the issue price of the Debt Conversion Shares and SPP Shortfall Shares is greater than or equal to the implicit value of the shares in Sprintex currently on issue. Accordingly, we have sought to determine a theoretical value that could reasonably be placed on Sprintex shares for the purposes of this report.
5.1.3 The valuation methodologies we have considered in determining the current technical value of a Sprintex share are:
Capitalised maintainable earnings/discounted cash flow;
Takeover bid - the price which an alternative acquirer might be willing to offer;
Adjusted net asset backing and windup value; and
The market value price of Sprintex shares.

5.2 Capitalised Maintainable Earnings / Discounted Cash Flows

5.2.1 Sprintex currently does not have a reliable cash flow or profit history from its supercharger manufacturing business therefore this methodology is not entirely appropriate. An external technical valuation of the supercharger technology of Sprintex has not been undertaken as to date losses have been incurred. The Sprintex Group to 30 June 2014 has unaudited accumulated losses of over $42.6 million and the losses after tax (research and development rebates) for the years ended 30 June 2013 and 30 June 2012 were approximately $4.777 million and $5.192 million respectively and for the six months ended 31 December 2013 approximately $2.284 million.
5.2.2 The Company has shifted the manufacturing operations to Malaysia via the 50/50 Joint Venture as noted above and cash manufacturing costs are expected to fall materially. A 2012/13 Business Plan had been prepared with some preliminary cash flow forecasts, however in view of the early set up of the Joint Venture (only commenced in 2013), we have not deemed it necessary to value the supercharger business based on preliminary forecasted cash flows that contain assumptions that may or may not turn out to be reliable. To date, the Joint Venture has been in a loss making position. To 31 May 2014 the JV has lost approximately $2,200,000. Obviously, the Company has upside (including an improved share price) but it is too early to predict when the Joint Venture will commence to be profitable.

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5.3 Takeover Bid

5.3.1 It is possible that a potential bidder for Sprintex could purchase all or part of the existing shares, however no certainty can be attached to this occurrence. To our knowledge, there are no current bids in the market place and the directors of Sprintex have formed the view that it is unlikely that any party will commit to any takeover bids for Sprintex in the immediate future. Refer paragraph 3.7 above for possible shareholding percentages of Siemens Interests. The Siemens Interest has a shareholding interest in approximately 21.50% of Sprintex as at 1 September 2014. Potentially, the Siemens Interests shareholding in Sprintex may exceed 50%, as noted above.

5.4 Net Asset Backing and Wind-Up Value

5.4.1 A summary of the unaudited consolidated statement of financial position of Sprintex as at 30 June 2014 is summarised below after allowing for estimated losses of $867,000 (including depreciation of $78,000) incurred from 1 July 2014 to 30 September 2014 and allowing for additional borrowings from the interests of Siemens post 30 June 2014 of $600,000.

Current assets Cash at bank Pledged bank deposits Trade and other receivables Inventories Non-current assets Investment in a Joint Venture Property, plant and equipment Goodwill and intellectual property Total assets Current liabilities Trade and other payables Provisions- employees Interest bearing liabilities Provisions - warranty Total liabilities Net Assets (Liabilities)	Unaudited 30 June 2014 (as adjusted) $000’s 767 138 189 1,178
	2,272
	- 1,270 11
	1,281
	3,553
	1,193 84 2,864 111
	4,252
	4,252
	(699)

5.4.2 Based on the adjusted book values at 30 June 2014 as adjusted this equates to a value per issued ordinary share (959,977,044 shares on issue) of approximately nil cents (ignoring the value, if any, of non-booked tax benefits).
5.4.3 In 2012, due to losses being incurred, the Company wrote down its technology/goodwill interests (Sprintex® Technology) by approximately $479,000. As at 30 June 2014, the carrying value was $11,098. Due to extensive losses to date and forecasted losses in 2014/15, we consider that the Sprintex® Technology carrying value is not unreasonable. Management has advised that the Sprintex® Technology is currently not for sale and a sale price to an independent third party cannot be ascertained at this point of time. The Company plans to

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continue its business model of manufacturing supercharges (via the Malaysian Joint Venture) and sell direct the supercharger systems to major car manufacturers and after care car companies. As noted elsewhere, the JV is in a loss making position.

However, it is noted that that the “market” over the past year or so has consistently valued the Company at a price (based on market capitalisation) greater than the net book assets of Sprintex. It would appear that the investors (minorities) are ascribing a value to the technology of at least $5,500,000 (at 0.6 cents per share). However, we have not applied this “potential” value in ascribing a current value to a Sprintex share. Losses to date have been substantial and despite trademark protection, there are other companies with supercharger products and it may be difficult to sell the technology interests of Sprintex.

5.4.4 In 2102/2013, due to losses in the Malaysian Joint Venture, the Company wrote down its investment in the Joint Venture to $nil. As at 31 May 2014, the unaudited net assets of the Joint Venture are disclosed at approximately the Australian dollar equivalent of $1,170,000. A 50% share equates to around $585,000. Losses are being incurred in the Joint Venture and are not expected to turn around (into profits) until 2015/16 and may well be later.
5.4.5 Taking the unaudited net liabilities of $699,000 as noted above and adding the 50% share of net assets of the Joint Venture, results in an adjusted net liability position of around ($114,000) that is equivalent to approximately nil cents per share.

If we added $5,500,000 for the value attributable to the Sprintex® Technology as alluded to above, the net fair value may approximate $5,386,000 that equates to approximately 0.56 cents per share. However, the Company’s precarious financial position could, in the absence of a capital raising of some substance (and conversion of shareholder debts), lead to the Company falling into Administration. If in Administration, the realisable value of the Sprintex® Technology may be significantly less than the $5,500,000 possible value noted above.

Due to the unknown longer term value of the Sprintex® Technology, we have decided to use a fair value of a Sprintex share for the purposes of this report at nil cents (but noting it could be higher).

5.5 Market Price of Sprintex Shares

5.5.1 We set out below a summary of share prices of Sprintex from 1 January 2104 to 12 August 2014 (the day before the announcement of the Placements and Debt Conversion proposals).

	High Last Sale Cents Low Last Sale Cents Last Sale Cents Volumes Trade (000’s) No of days traded on ASX January 2014 1.0 0.8 1.0 1,058 2 February 2014 1.0 0.8 0.9 324 4 March 2014 1.2 0.8 1.2 5,032 10 April 2014 1.2 0.8 1.1 3,325 6 May 2014 0.9 0.6 0.7 4,725 8 June 2014 1.0 0.6 0.6 8,114 9 July 2014 nil nil nil nil nil August 2014 (to12th) nil nil nil nil nil

On 14 June 2012, the Company announced a 1 for 6 Rights Issue at 2 cents per share (along with 3 free attached share options for every 1 share subscribed for. The Rights Issue closed on 8 August 2012 and a total of 83,874,225 shares were issued of which the directors of Sprintex subscribed for 59,804,500. On 26 September 2012, the Company announced a

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“significant order and North American agreement with Performance Motorsports Inc (PMI) for the recently developed supercharger system for the new Toyota/Subaru joint venture sports car branded as the Scion FR-S in North America” (known in Australia as the Toyota 86 and the Subaru BRZ). The share price the next day leaped from the 1.0/1.3 cents range to trade on 27/28 September 2012 at between 1.6 cents and 1.8 cents. In October 2012, the shares traded between 1.4 cents and 2.1 cents.

In 2013, there were a number of announcements made by Sprintex, including, inter-alia announcements headed Jeep System Sales and Distribution in North America in March 2013, New, Small Supercharger Developed in May 2013, Convertible Notes in June 2013, Non Renounceable Option Entitlement Issue in July 2013 and a Preliminary Final Report in August 2013, Annual Report in September 2013 and various announcements in 2013 relating to substantial shareholder notices. The share price of a Sprintex share in 2013 traded in the range of 0.1 cents and 0.2 cents with a last sale in December 2013 of 1.5 cents.

In the period January 2104 to 12 August 2014, the Company, inter-alia made announcements on Appendix 3B’s (various relating to share options being exercised), Half Year Report and Accounts (28 February 2014), Response to ASX Query (26 May 2014) and various Substantial Shareholder Notices. On 19 March 2014, 4,200,000 shares were traded, on 8 April 2014, 2,214,146 shares were traded, on 29 May 2014, 2,758,303 shares were traded and on 19 June 2014, 5,773,441 shares were traded.

5.5.2 No independent valuations have been prepared on the technology interests of Sprintex and we do not consider it necessary to obtain an independent valuation for the purposes of this report. We note that the market has been informed of all of the current projects and joint ventures entered into between Sprintex and other parties. We also note it is not the present intention of the directors of Sprintex to liquidate the Company and therefore any theoretical value based upon wind up value or even net book values (as adjusted), is just that, theoretical. The shareholders, existing and future, must acquire shares in Sprintex based on the market perceptions of what the market considers a Sprintex share to be worth.

The market has either generally valued the vast majority of junior/mid size technology/manufacturing companies at significant discounts or premiums to appraised technical values and this has been the case for a number of years although we also note that there is an orderly market for Sprintex shares and the market is kept fully informed of the activities of the Company. The market capitalisation of Sprintex as at 31 July 2014 (based on a last sale price on 26 June 2014) was approximately $5.769 million and based on a share trade on 29 August 2014 of 0.3 cents, the market capitalisation approximated $2.88 million (parts of August disclosed a market capitalisation as low as $1.92 million). Sprintex’s market capitalisation is greater than the adjusted net equity (liability) position as at 30 June 2014. In effect, the minority shareholders are ascribing some value to the potential to successfully commercialise the Sprintex® Technology and assume that some time, losses will be curtailed and the Company will become profitable.

6. Preferred Valuation Method for Valuing a Sprintex Share

6.1.1 In assessing the fair value of Sprintex and a Sprintex share pre the Placements and Debt Conversions and other share issues proposed, we have selected the net assets at fair market values on a going concern methodology as the preferred methodology as:
Sprintex does not currently generate sufficient revenues or profits and per the audited accounts has incurred significant losses in the financial years ended 30 June 2013 and 2012. Therefore the capitalisation of future maintainable earnings is not yet appropriate;

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Sprintex although has potential future net cash inflows, the Company still needs to raise significant cash funds on further development of the Sprintex Technology and pay outstanding debts and therefore the Discounted Cash Flow methodology is not considered appropriate (but refer comments in paragraph 5.2.1 above); and
Although the shares of Sprintex are listed there is no “Deep Market” of share trading in CSD. We have however used share prices as a secondary market valuation methodology. The share prices to date may be affected by the losses to date and poor financial condition of the Sprintex Group. Until these matters are fixed, the share price of a Sprintex share may not be re-rated upwards.
6.1.2 As stated at paragraph 5.4.5 we have assessed the value of Sprintex prior to the Placements and Debt Conversions (and other proposed share issues) on a net asset basis as adjusted and on a going concern basis as being nil cents (with a possibility if market sentiment was taken into account of approximately 0.56 cents).
6.1.3 We note that, the net asset value may not necessarily reflect fair values in the current economic circumstances of the Company. If funds can be raised and the Company turns losses into profits, then arguably the fair value of a Sprintex share may be in excess of the current fair book value and current market values.
6.1.4 It is noted that using ASX share prices (as a secondary valuation methodology) the fair market value of a Sprintex share to a shareholder pre the proposed Placements and Debt Conversions lies mainly in the range of 0.6 cents and 1.0 cents (using sale prices on ASX between April 2014 and 12 August 2014). Subsequent to the announcement of the Placements and Debt Conversions (and other share issues), the shares have traded at between 0.2 cents and 0.4 cents (only traded on 8 trading days to 4 September 2014). The last sale on 4 September 2014 was at 0.2 cents.
6.1.5 Further capital raisings may be required in subsequent periods depending on future cash flows of the Company (that is dependent on the success or otherwise of turning the Sprintex business around- to move into a profit mode).

We have considered the pre-announcement (the announcement of 13 August 2104) ASX share price of a Sprintex share that falls mainly in the range (on very low volumes) of 0.6 cents to 1.0 cents. As stated, the ASX share prices do not necessarily reflect fair values in the current economic circumstances of the Company but as the shares are freely tradable then the pre-announcement share prices could also be taken into account in determining the fairness of the proposals with the Siemens Interests.

Notwithstanding the prospectivity of Sprintex’s supercharger manufacturing business, without cash the Company cannot continue to manufacture and develop the supercharger technology assets and meet its short term working capital requirements. The closing share price as at 12 August 2014 (last sale before the announcement was 0.6 cents on 24 June 2014) does not necessarily reflect fair value of the Company’s shares. If Sprintex can manage the working capital requirements over the next year or so and the relatively new Joint Venture proves successful, then arguably the fair value of a Sprintex share would be in excess of the 0.3 cent issue price of the Director Placement Shares, Debt Conversion and other shares to be issued. The share price in the future is unknown but it may be fair to say that if the continued development and exploitation of the Company’s supercharger business assets are enhanced then it is likely that the share price would be higher than the share price over the past six months to 13 August 2014 (and share prices subsequent to 13 August 2014 and to 4 September 2014).

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The future ultimate value of a Sprintex share will depend upon, inter alia:

the future prospects of its supercharger manufacturing business and the Joint Venture;
the state of the vehicle (and supercharger) markets (and prices) in Australia and overseas;
the state of Australian and overseas stock markets;
the strength of the Board and management and/or who makes up the Board and management;
general economic conditions;
the ability of the Company to secure funding requirements for its development and marketing;
the liquidity of shares in Sprintex; and
possible ventures and acquisitions entered into by Sprintex.
6.16 We have put more of a weighting on the net asset backing approach. In our view, for the purposes of ascribing a value to a Sprintex share for the purposes of arriving at a conclusion on the fairness and reasonableness of the proposals under Resolution 1, the current fair value of a Sprintex share is nil cents. It is noted that this value does not recognise market sentiment that ascribes some value placed on the Sprintex Technology by minority investors as noted above.

7. PREMIUM FOR CONTROL

7.1 Premium for control for the purposes of this report, has been defined as the difference between the price per share, which a buyer would be prepared to pay to obtain or improve a controlling interest in the Company and the price per share which the same person would be required to pay per share, which does not carry with it control or the ability to improve control of the Company.
7.2 Under TCA, control may be deemed to occur when a shareholder or group of associated shareholders control more than 20% of the issued capital. In this case, Siemens Interests shareholdings may change to approximately 50.61% if all of the Director Placement Shares, Debt Conversion Shares and other shares are issued (including 200,000,000 SPP Shortfall Shares). Accordingly, we have addressed whether a premium for potential control will be paid. It is noted that Messrs Siemens, Wilson and Apedaile own approximately 21.50%, 21.59% and 14.57% respectively prior to the issue of the Director Placement Shares and Debt Conversion Shares (and other proposed share issues).

In take-over offers, it is often the case that a premium for control falls in the normal range of 15% to 40% and it is often accepted that a 20% premium for control should be payable. The actual premium may be more or less. In this case, we have considered a reasonable premium for increased control should be 20%.

Accordingly, we have addressed whether a premium for obtaining an increase in control in the case of Siemens Interests will be paid.

7.3 Our preferred methodology is to value Sprintex and a Sprintex share on a technical net asset basis which assumes a 100% interest in the Company. Therefore no adjustment is considered necessary to the technical asset value determined under paragraph 5.4.5 as this already represents the fair value of the Company or a share in the Company on a pre Proposed Transactions (Pre Placements and Debt/future Debt Conversions) control basis.

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7.4 The 12 August 2014 market value of a Sprintex share approximated 0.6 cents and it is noted that the shares in the three months to 12 August 2014 traded mainly in the 0.6 cent to 1.0 cent range, although it is noted that the net book asset backing per share is now disclosed at nil cents per share. Therefore, noting ASX share prices, Siemens Interests are considered to be not paying a premium for potential control (noting that the Siemens Interests potential shareholding post the Placement Share and Debt Conversion Share issues and other issues as noted above) based on the ordinary share price of a Sprintex share in the range of 0.6 cents (50% discount) to 1.0 cents (70% discount). However, as noted above, using the share price of a Sprintex share trading on ASX is not our preferred methodology.
7.5 We note that currently Siemens does not have Board control of Sprintex and following the passing and consummation of Resolutions 1 to 8, Siemens (and all other existing Directors) will continue on the Sprintex Board. There will still be 5 Board members.
7.6 We set out below the comparison of the low, preferred and high values of a Sprintex share compared to the issue price for the Placement Shares and Debt Conversion Shares.

Pre-Transactions

Pre-Transactions
Para. Low (cents) Estimated fair value of an Sprintex Share 6.1.6 Nil Issue Price of the Shares (based on ASX prices) 0.60 Excess (Deficiency) between Issue Price and fair values 0.60 Net value of assets pre Placements and Debt Conversions (refer paragraph 5.4.5) Value of Director Debts converted Cash received from the Placements to Director’s interests Funds from SPP (assumed 15%) Funds received from the SPP Shortfall Share issue Adjusted net assets post Placements, Debt Conversions and issue of Management and Remuneration Shares Number of shares on issue post Placements and Debt Conversions Net asset value per share post Placements and Debt Conversions Minority interest discount	Low (cents) Nil 0.60
	0.60

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Minority value per share post
Placements and Debt
Conversions	0.130 cents
Increase/(Shortfall) in value to
a Minority Shareholder post
Placements and Debt
Conversions	0.130 cents

7.7 In order to reflect the minority interest value we have applied a minority interest discount to the technical net asset value. The minority interest discount has been calculated as the inverse of the premium for increased control of 20% as discussed above.
7.8 As noted above the fair market value of a Sprintex share Post-Transactions on a minority basis , taking into account the cash raised from the Placements and the $2,683,476 debt converted to equity and the associated dilution resulting from the issue of new shares under the Placements and Debt Conversions approximates 0.130 cents.
7.9 On a pre proposals control basis, the value of a Sprintex share approximates nil cents. The Placement Shares and Debt Conversion Shares are proposed to be issued at 0.30 cents per share. Based on the preferred pre-proposals value of nil cents per share, a premium for control is being paid by the Siemens Interests.
7.10 As noted above, the ASX market value (to 12 August 2014) of a Sprintex share mainly lies in the range of approximately 0.6 to 1.0 cents, with a last sale value of 0.6 cents per Sprintex share (on a non controlling interest basis). The 10 day volume weighted average (“VWAP”) share price prior to the day of the announcement to make the Placements and Debt Conversions approximates 0.965 cents. Taking into account a premium for increased control of say 20%, the value of a Sprintex share to the non controlling interest would be as follows:

ASX market value on a non controlling interest basis	0.965 cents (VWAP)
Premium for control (20%)	0.193 cents
Value on a controlling interest basis	1.158 cents
Number of shares on issue	959,977,044
Total Control Value pre-issue of Placement Shares
and Debt Conversion Shares	$11,116,534
Debts converted	$2,863,476
Cash raised from the Placements	$217,000
Cash raised from SPP	$177,000
Cash raised from the issue of SPP Shortfall Shares	$600,000
Total Value	$14,974,010
Minority Discount applied (16.67%)	$(2,496,167)
Minority valuation post issue of Placement Shares
and Debt Conversion Shares	$12,477,843
Number of shares post issue of shares	2,396,468,839
Minority valuation post issue of Placement Shares
and Debt Conversion Shares	0.521 cents
Excess/ (Shortfall) in value to the minorities
post the issue of Placement Shares and
Debt Conversion Shares	(0.637) cents

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Using ASX pre-announcement share prices, the minority shareholders, post the Transactions, would also be worse off and thus the proposals to issue shares pursuant to Resolution 1 (and other Resolutions) would not be fair. However, based on an ASX share price of 0.2 cents (last sale price as at 4 September 2014), the proposals may be considered fair.

8 CONCLUSION AS TO FAIRNESS

8.1 In arriving at our conclusion on fairness, we considered whether the transactions with Siemens and Wilson are “fair” by comparing:
(a) the fair market value of a Sprintex share pre-transaction on a control basis; versus (b) the fair market value of a Sprintex share post-transaction on a minority basis, taking into account the value of the debts converted ($2,819,116) and the cash received from the Placements, SPP, SPP Shortfall and the associated dilution resulting from the issue of new shares via the Placements, Debt Conversions and other share issues.
8.2 The proposal to issue SPP Shortfall Shares and Debt Conversion Shares to the Siemens Interests is believed to be fair to Sprintex’s non-associated shareholders if the value of the consideration offered (0.3 cents per share in relation to the Placements and value to extinguish Debt) is equal to or greater than the fair value of a Sprintex share taking into account the comments in paragraph 8.1 above.
8.3 As noted in paragraphs 7.6 and 7.8, the minority shareholders are better off post the Placements and Debt Conversions as compared with the fair market value of a Sprintex share pre Placements/Debt Conversions on a control basis (but using share prices as traded on ASX, the minority shareholders would be worse off).
8.4 In our opinion, taking into account the factors noted in this report, the proposals as outlined in Resolution 1 may on balance be considered to be fair at the date of this report.

It is noted that the volumes of trades in Sprintex shares on ASX are not high and a Deep Market does not exist (the last sale price was 0.6 cents on 24 June 2014 (0.6 cents to 1.0 cents pre the announcement of the Placements/Debt Conversions based on the April 2014 to 12 August 2014 share prices as traded on ASX). Subsequently, the shares in Sprintex have traded between 0.2 cents and 0.4 cents (to 4 September 2014).

Using the pre announcement trading share prices, adjusted for a premium for control, the proposed Placements and Debt Conversions would not be fair. However, our preferred methodology to value the shares in Sprintex is to use the adjusted net asset backing methodology as noted elsewhere in this report.

9. REASONABLENESS OF THE PROPOSALS WITH SIEMENS INTERESTS

We set out below, some of the advantages, disadvantages and other factors pertaining to the proposals under Resolution 1 and the Placements and Debt Conversions generally.

Advantages

9.1 If shareholders do not approve Resolution 2, the Placement Shares will not be issued and the Company would lose the benefit of receiving a gross $217,000. To raise monies is quite difficult presently and the raising of a further $600,000 at 0.3 cents each from the Siemens Interests will be very useful in the current economic climate (assumes $600,000 raised from the issue of the SPP Shortfall Shares). In addition, the Company may receive new cash funds from other shareholders under the SPP. The Company is budgeting for a $177,000

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take up (excludes the interests of the Directors) but hopefully more funds will be raised. This should alleviate cash flow concerns in the immediate future, and position the Company to fund its operations. If shareholders do not approve Resolutions 1 to 8, then there is the strong possibility that the Company cannot continue in its present form and the Company may in the worst case scenario be forced to divest itself of some or its assets. Sprintex urgently requires funds to allow the Company to continue its supercharger business activities and meet current and future debts. Additionally funds are required to fund business development and corporate overheads.

The last significant capital raising by the Company was as a result of the exercise of June 2014 share options at 2.0 cents each between September 2013 to March 2014 (Entitlement Issue of 211,453,567 share options occurred and completed in August 2013). The Company raised a further gross $211,454 from the issue of 211,453,567 listed share options in June 2013 (monies received in June and July 2013) at 0.1 cents each.

9.2 The proposed repayment of the Debts due to Siemens Interests and Wilsons Interests via the issue of approximately 939,705,334 Debt Conversion Shares will remove significant liabilities ($2,819,116) from the balance sheet of the Sprintex Group. A further $44,360 borrowed in August from the interests of Richard O’Brien and David White will also be eliminated by issuing a total of a further 14,786,461 Debt Conversion Shares.
9.3 There is a continuing incentive for Siemens (and Wilson) to ensure Sprintex becomes a viable supercharger system manufacturer and development company as Siemens and Wilson will continue to have significant shareholding interest in Sprintex if the Placement Shares, Debt Conversion Shares and SPP Shortfall Shares are issued There is a huge incentive for Siemens and Wilson (and the other directors of Sprintex to make Sprintex a successful company and have the share price rise considerably. All shareholders would benefit from a rise in the share price.
9.4 The capital raising costs are estimated at $100,000 (estimated cost of the Notice and shareholders meeting) that represents a capital raising fee of approximately 2.75% based on the cash to be received and debts converted (approximately 10.06% excluding the debts converted figure). The capital raising cost is at favourable rate when compared to similar capital raisings where the commission rates can be approximately 5% to 7% of the capital raising plus the costs to hold the meeting of shareholders.
9.5 The Director Placements and SPP issue if a maximum of $777,000 is raised (including the $600,000 from the SPP Shortfall Share issue) and the $217,000 raised by the issue of Director Placement Shares) in total is budgeted to raise a gross $994,000 and the conversion of debt to equity will strengthen the balance sheet of the Company and may facilitate future capital raisings.

Disadvantages

9.6 The number of fully paid ordinary shares on issue may rise by up to 1,436,491,795 on the issue of all of the Placement Shares, Debt Conversion Shares and other proposed share issues at 0.3 cents per share to 2,396,468,839 before any other share issues. In total this could represent an approximate 149.64% increase in the ordinary shares of the Company. This dilutes the shareholding of the existing non associated shareholders.
9.7 An influential potential increase in shareholding of the Company may be given to Siemens on the issue of the 806,372,000 Debt Conversion Shares and possibly up to 200,000,000 SPP Shares. Siemens is already a cornerstone and influential investor in Sprintex and having such investment may limit the opportunity for other parties to bid for all or part of the shares in Sprintex in the future.

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Other Factors

9.8 The future share price may exceed the 0.3 cent issue price of the Placement and Debt Conversion Shares proposed to be issued.
9.9 The issue price of 0.3 cents of Placement Shares to Siemens Interests is at the same price as the issue price to the other Directors and management personal and under the SPP.
9.10 The Company is not paying any commission for the monies to be received from the issue of the Director Placement Shares to Wilson when normally it would be expected to pay a commission of between 5% and 7%. This is a significant cost saving to the Company.

10. CONCLUSION AS TO REASONABLENESS

10.1 In our opinion, taking into account the factors noted above and in section 7 of this report and the comments made in the ESS to Shareholders accompanying the Notice of September 2014, the proposals noted in Resolution 1 whereby Sprintex will issue up to 600,000,000 SPP Shortfall Shares and issue 806,372,000 Debt Conversion Shares to Siemens Interests at 0.3 cents each are on balance, fair and reasonable to the nonassociated shareholders of Sprintex at the date of this report.

Notwithstanding that the Sprintex share price (closing price of 0.6 cents) as at 24 June 2014 and 0.2 cents on 4 September 2014 (last sale price to the date of this report) each shareholder needs to examine the share price of Sprintex and market conditions at the time of exercise of vote to ascertain the impact, if any, on Resolution 1.

11. SHAREHOLDER DECISION

11.1 Stantons International Securities has been engaged to prepare an independent expert’s report setting out whether in its opinion the issue of Debt Conversion Shares and potentially SPP Shortfall Shares to Siemens Interests are fair and reasonable and state reasons for that opinion. Stantons International Securities has not been engaged to provide a recommendation to shareholders in relation to the proposals under Resolution 1 (and the other Resolutions) (but we have been requested to determine whether the proposals pursuant to Resolution 1 are fair and/or reasonable to those shareholders not associated with the Siemens Interests. The responsibility for such a voting recommendation lies with the directors of Sprintex.
11.2 In any event, the decision whether to accept or reject Resolution 1 (and the other Resolutions) is a matter for individual shareholders based on each shareholder’s views as to value, their expectations about future market conditions and their particular circumstances, including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. If in any doubt as to the action they should take in relation to the proposal under Resolution 1 shareholders should consult their own professional adviser.
11.3 Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell shares in Sprintex. This is an investment decision upon which Stantons International Securities does not offer an opinion and is independent on whether to accept the proposal under Resolutions 1. Shareholders should consult their own professional adviser in this regard.

12. SOURCES OF INFORMATION

12.1 In making our assessment as to whether the proposal pursuant to Resolution 1 are fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company that is relevant to the current circumstances. In addition, we have held discussions with the management of Sprintex about the present and

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future operations of Sprintex. Statements and opinions contained in this report are given in good faith, but in the preparation of this report, we have relied in part on information provided by the directors and management of Sprintex.

12.2 Information we have received, includes, but is not limited to:

Drafts of Notice of General Meeting of Shareholders and ESS of Sprintex for the General Meeting of Shareholders the Company planned for October 2014;
Discussions with management of Sprintex;
Top 20 shareholding and share option details of Sprintex as at 1 September 2014;
Share prices of Sprintex since 1 January 2013 to 4 September 2014;
Annual Report of Sprintex for the years ended 30 June 2012 and 30 June 2013 and half year accounts to 31 December 2013 lodged with ASX;
Announcements made by Sprintex to the ASX from 1 January 2011 to 9 September 2014;
The preliminary cash flow forecasts of the Joint Venture and Sprintex for 2014/15;
A research paper on Sprintex by a research provider dated July 2011;
Spread sheet as at 29 August 2014 of shares proposed to be issued to various parties;
Information on Sprintex as provided on the ASX web site and Sprintex’s web site; and
The 2012/13 Business Plan of Sprintex;
The unaudited accounts of the Sprintex Group for the year ended 30 June 2014; and
The Preliminary Final Report for the year ended 30 June 2014 (unaudited).

12.3 Our report includes Appendix A and our Financial Services Guide attached to this report.

Yours faithfully STANTONS INTERNATIONAL SECURITIES PTY LTD (Trading as Stantons International Securities)

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John Van Dieren - FCA Director

APPENDIX A

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AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stantons International Securities dated 10 September 2014, relating to the proposal to allow the issue of Debt Conversion Shares and possibly SPP Shortfall Shares to the interests of Siemens as outlined in paragraph 1.2 of the report and Resolution 1 in the Notice of Meeting to Shareholders and the Explanatory Statement proposed to be distributed to the Sprintex shareholders in September 2014.

At the date of this report, Stantons International Securities does not have any interest in the outcome of the proposals. There are no relationships with Sprintex and Siemens other than acting as an independent expert for the purposes of this report. Before accepting the engagement Stantons International considered all independence issues and concluded that there were no independence issues in accepting the assignment to prepare the Independent Experts Report. There are no existing relationships between Stantons International Securities and the parties participating in the transactions detailed in this report which would affect our ability to provide an independent opinion. Stantons International Audit and Consulting Pty Ltd undertook an independent expert’s report in 11 October 2012 relating to then proposals for Messrs Wilson and Siemens to exercise certain share options in the Company at 2 cents each. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at a maximum of $20,000. The fee is payable regardless of the outcome. With the exception of the fee, neither Stantons International Securities nor John P Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report.

Stantons International Securities does not hold any securities in Sprintex. There are no pecuniary or other interests of Stantons International Securities that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stantons International Securities and Messrs J Van Dieren and M Michalik have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stantons International Securities Pty Ltd is the holder of an Australian Financial Services Licence (no 448697) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. The directors of Stantons International Audit and Consulting Pty Ltd are the directors of Stantons International Securities Pty Ltd. Stantons International Securities Pty Ltd has extensive experience in providing advice pertaining to mergers, acquisitions and strategic for both listed and unlisted companies and businesses.

Mr John P Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

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DECLARATION

This report has been prepared at the request of the Directors of Sprintex in order to assist them to assess the merits of allowing the Siemens Interests to be issued Debt Conversion Shares and possibly SPP Shortfall Shares at 0.3 cents each as outlined in Resolution 1 to the ESS to which this report relates. This report has been prepared for the benefit of Sprintex shareholders and does not provide a general expression of Stantons International Securities opinion as to the longer term value of Sprintex, its subsidiaries, Joint Ventures and their assets. Stantons International Securities does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of the Sprintex Group or the Joint Venture. Neither the whole nor any part of this report, nor any reference thereto may be included in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stantons International Securities to the form and context in which it appears.

DUE CARE AND DILEGENCE

This report has been prepared by Stantons International Securities with due care and diligence. The report is to assist shareholders in determining the fairness and reasonableness of the proposals set out in Resolution 1 to the Notice and each individual shareholder may make up their own opinion as to whether to vote for or against Resolution 1.

DECLARATION AND INDEMNITY

Recognising that Stantons International Securities Pty Ltd may rely on information provided by Sprintex and its officers (save whether it would not be reasonable to rely on the information having regard to Stantons International Securities Pty Ltd experience and qualifications), Sprintex has agreed:

(a) To make no claim by it or its officers against Stantons International Securities Pty Ltd (and Stantons International Audit and Consulting Pty Ltd) to recover any loss or damage which Sprintex may suffer as a result of reasonable reliance by Stantons International Securities Pty Ltd on the information provided by Sprintex; and
(b) To indemnify Stantons International Securities Pty Ltd (and Stantons International Audit and Consulting Pty Ltd) against any claim arising (wholly or in part) from Sprintex or any of its officers providing Stantons International Securities Pty Ltd any false or misleading information or in the failure of Sprintex or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stantons International Securities Pty Ltd.

A draft of this report was presented to Sprintex directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

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FINANCIAL SERVICES GUIDE FOR STANTONS INTERNATIONAL SECURITIES PTY LTD (Trading as Stantons International Securities) Dated 10 September 2014

Stantons International Securities ABN 42 128 908 289 and Financial Services Licence 448697 (“SIS” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No: 448697;
remuneration that we and/or our staff and any associated receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

Securities (such as shares, options and notes)

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4. General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

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5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither SIS, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by our employees

SIS has no employees and Stantons International Audit and Consulting Pty Ltd charges a fee to SIS. All Stantons International Audit and Consulting Pty Ltd employees receive a salary. Stantons International Audit and Consulting Pty Ltd employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

SIS is ultimately a wholly subsidiary of Stantons International Audit and Consulting Pty Ltd a professional advisory and accounting practice. Stantons International Audit and Consulting Pty Ltd trades as Stantons International that provides audit, corporate services, internal audit, probity, management consulting, accounting and IT audits.

From time to time, SIS and Stantons International Audit and Consulting Pty Ltd and/or their related entities may provide professional services, including audit, accounting and financial advisory services, to financial product issuers in the ordinary course of its business.

9. Complaints resolution

9.1 Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to:

The Complaints Officer Stantons International Securities Level 2 1 Walker Avenue WEST PERTH WA 6005

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

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9.2 Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited (“FOSL”). FOSL is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOSL are available at the FOSL website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited PO Box 3 MELBOURNE VIC 8007

Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399

Contact details

You may contact us using the details set out above.

Telephone 08 9481 3188 Fax 08 9321 1204 Email [email protected]

AI assistant

SPRINTEX LIMITED — Proxy Solicitation & Information Statement 2014

65799_rns_2014-09-21_252a84ef-2d00-4812-ac08-ac30d7f0b681.pdf

ASX Announcement

ASX Code: SIX

NOTICE OF GENERAL MEETING

Dear Shareholder

ENDS

Company Overview

SPRINTEX LIMITED ACN 106 337 599

NOTICE OF GENERAL MEETING

THIS DOCUMENT IS IMPORTANT

CONTENTS

IMPORTANT INFORMATION

VOTING BY PROXY

ENTITLEMENT TO ATTEND AND VOTE

ASIC AND ASX

BUSINESS OF THE MEETING

AGENDA

RESOLUTION 1 – APPROVAL TO ISSUE SHARES TO CHINA AUTOMOTIVE HOLDINGS LIMITED

RESOLUTION 2 – APPROVAL TO ISSUE SHARES TO WILSON’S PIPE FABRICATION PTY LIMITED

RESOLUTION 3 – APPROVAL TO ISSUE SHARES TO DAVID WHITE

RESOLUTION 4 – APPROVAL TO ISSUE SHARES TO RICHARD O’BRIEN

RESOLUTION 5 – APPROVAL TO ISSUE SHARES TO ROBERT MOLKENTHIN

RESOLUTION 6 – APPROVAL TO ISSUE SHARES TO JAY UPTON

RESOLUTION 7 – APPROVAL TO ISSUE SHARES TO TYRONE JONES

RESOLUTION 8 – APPROVAL TO ISSUE SHARES TO GORDON EMSLIE

EXPLANATORY STATEMENT

1. BACKGROUND

1.1 Proposed recapitalisation

1.2 Debt Agreements

1.3 Placement

1.4 SPP Placement

1.5 Intended use of funds

2. RESOLUTION 1 – APPROVAL TO ISSUE SHARES TO CHINA AUTOMOTIVE HOLDINGS LIMITED

2.1 Background

2.2 Corporations Act Requirements

(a) Prohibition on certain acquisitions of relevant interests in voting shares.

(b) Exception to the section 606 prohibition

2.3 Information required by section 611 item 7 of the Corporations Act and ASIC Regulatory Guide 74

(a) Identity of the person proposing to make the acquisition and their associates

(b) The maximum extent of the increase in the voting power in the Company that would result from the issue and acquisition of the Shares

Effect on relevant voting power

(c) Intentions of Richard Siemens regarding the future of the Company

Reasons for the allotment

(f) Independent Expert Report as to whether the issue of Shares to CAHL (or its nominee) is fair and reasonable

(g) Impact on the Company if Shareholders do not approve the issue of Shares to CAHL (or its nominee)

2.4 Chapter 2E Corporations Act

(a) Identity of the related parties to whom Resolution 1 permits financial benefits to be given.

(b) Nature of the financial benefit

(c) Valuation of financial benefit

(d) Dilution

(e)

Interests of CAHL (or its nominee) in the Company

(f)

Remuneration of Director

2.5 Listing Rule 10.11 Regulatory Requirements

(a) Name of person to receive securities

(b) Maximum number of securities to be issued

(c) Date of issue and allotment

(d) Relationship with the Company

(e) Issue price

(g) Intended use of the funds raised

(h) Voting exclusion statement

2.6 Directors’ recommendation

3. RESOLUTIONS 2, 3 AND 4 – APPROVAL TO ISSUE SHARES TO WILSON’S PIPE FABRICATION PTY LIMITED, DAVID WHITE, AND RICHARD O’BRIEN

3.1 Background

3.2 Regulatory Requirements

(a) Name of person to receive securities

(b) Maximum number of securities to be issued

(c) Date of issue and allotment

(d) Relationship with the Company

(e) Issue price

(f) Terms of issue

(g) Intended use of the funds raised

(h) Voting exclusion statement

3.3 Chapter 2E Corporations Act

(a) Identity of the related parties to whom Resolutions 2, 3 and 4 permit financial benefits to be given.

(b) Nature of the financial benefit

(c)

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