VIRGIN AUSTRALIA HOLDINGS LIMITED (ASX:VAH) · VIRGIN AUSTRALIA HOLDINGS LIMITED (ASX:VAH) ......

24-hour media enquiries: 1800 142 467

VIRGIN AUSTRALIA HOLDINGS LIMITED (ASX:VAH)

VIRGIN AUSTRALIA ANNOUNCES DESPATCH OF SKYWEST SCHEME DOCUMENT

26 February 2013 Virgin Australia Holdings Limited (Virgin Australia) is pleased to attach the scheme document dated 26 February 2013 (Scheme Document) in relation to the proposed acquisition by Virgin Australia of 100% of the issued share capital in Skywest Airlines Ltd (Skywest, ASX: SXR, LSE SYKW) which is being despatched to Skywest shareholders today. The Scheme Document contains the notice of a meeting of the Skywest shareholders (Scheme Meeting) which is convened by the High Court of Singapore for the purpose of seeking Skywest shareholders' approval of the Scheme. Virgin Australia highlights the following important dates, time and place in respect of the Scheme Meeting:

Last date and time for lodgment of Proxy Form

: 11 March 2013 at 10:00am (Singapore time)

Date and time of Scheme Meeting

: 13 March 2013 at 10.00 am (Singapore time)

Place of Scheme Meeting

: 510 Thomson Road, #12-04 SLF Building, Singapore 298135

The Scheme Document contains full details of the Scheme including Virgin Australia's letter to the Skywest shareholders at pages 73 to 119 of the Scheme Document, the letter of advice of the independent financial adviser (IFA) to the Skywest Directors (IFA Letter) at pages 41 to 72 of the Scheme Document and the recommendation of the Skywest Directors in respect of the Scheme. Apart from those already held by the Virgin Australia group, there are 6,500,000 outstanding Skywest warrants (Skywest Warrants) entitling the warrant holders (Skywest Warrant Holders) to subscribe for a total of 6,500,000 new Skywest shares. Virgin Australia is proposing to pay cash amounts (Warrant Prices) for each Skywest Warrant in consideration for such Skywest Warrant Holders agreeing not to exercise any of their rights as a Skywest Warrant Holder and to surrender their Skywest Warrants (Skywest Warrants Proposal). The advice of the IFA is that, on balance, the financial terms of the Scheme are "fair and reasonable" to Skywest shareholders and is summarised in the Scheme Document as follows:

In arriving at our recommendation in respect of the Scheme, we have taken into account the factors

which we consider to have a significant bearing on our assessment which includes our analysis set

out in earlier sections of the following.

In evaluating and assessing the financial terms of the Scheme, we have given due consideration to:-

(a) rationale for the Acquisition and future plans for the Company;

(b) Implied Consideration;

(c) price movement and trading activity of Skywest Shares and VAH Shares;

(d) share price performance of Skywest Shares and VAH Shares relative to selected market

indices;

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(e) assessed NTA of the Group;

(f) comparison of the implied valuation ratios of Skywest with financial valuation ratios of

selected listed companies considered to be comparable to Skywest;

(g) evaluation of the Skywest Warrants Proposal; and

(h) other considerations in relation to the Scheme which have a significant bearing on our

assessment.

Having carefully considered all of the above, we are of the view that, on balance, the financial terms

of the Scheme are fair and reasonable to the Scheme Shareholders. We therefore advise you to

recommend that the Scheme Shareholders to vote in favour of the Scheme at the Scheme Meeting.

In addition to the above, we also note that the Warrant Prices for Skywest Warrants are, in each case, higher than the "see-through" price of the Skywest Warrants calculated based on the Implied Consideration and the exercise prices of the Skywest Warrants. We therefore advise you to recommend that the Skywest Warrant Holders to accept the Skywest Warrants Proposal.

Virgin Australia also draws your attention to the following:

the IFA Letter contained in Appendix 1 of the Scheme Document;

information on the Scheme (including in relation to the Skywest Warrants Proposal) set out in the Explanatory Statement at page 22 and Schedule 1 of Appendix 2 of the Scheme Document at page 75;

the assumptions set out in Schedule 3 of Appendix 2 of the Scheme Document in relation to Virgin Australia's statement of prospects for the year ending 30 June 2013 announced by Virgin Australia at its 2012 Annual General Meeting (Statement of Prospects); and

the letters from KPMG and Goldman Sachs in relation to the Statement of Prospects set out in Schedules 4 and 5 of Appendix 2 of the Scheme Document.

The above is not intended to be a comprehensive list of the matters contained in the Scheme Document.

ENDS

Media Contacts: Danielle Keighery: +61 400 223 136 Jacqui Abbott: +61 473 403 606 DIRECTORS' RESPONSIBILITY STATEMENT

The Directors (including any who may have delegated detailed supervision of this Announcement) have taken all reasonable care to ensure that the facts stated and all the opinions expressed in this Announcement are fair and accurate and that no material facts have been omitted from this Announcement, the omission of which would make any statement in this Announcement misleading, and the Directors jointly and severally accept full responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure through reasonable enquiries that such information is correctly extracted from such sources or, as the case may be, reflected or reproduced in this Announcement.

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SCHEME DOCUMENT DATED 26 FEBRUARY 2013

SKYWEST AIRLINES LTD.

(Incorporated in the Republic of Singapore) (Company Registration Number: 199708548K)

THE ACQUISITION OF SKYWEST AIRLINES LTD. BY

VAH NEWCO NO.2 PTY LTD (ACN 160 881 354), A WHOLLY-OWNED SUBSIDIARY OF

VIRGIN AUSTRALIA HOLDINGS LIMITED (ACN 100 686 226), BY WAY OF A SCHEME OF ARRANGEMENT

UNDER SECTION 210 OF THE COMPANIES ACT (CHAPTER 50 OF SINGAPORE)

Independent Financial Adviser to the Directors in relation to the Scheme

(Incorporated in the Republic of Singapore)

(Company Registration Number: 198701140E)

IMPORTANT DATES AND TIMES

SCHEME MEETING

Last date and time for lodgement of Voting Instruction Form:

10 March 2013 at 10.00 a.m. (Singapore time)

CHESS DI Holders last date and time for eligibility to vote:

10 March 2013 at 7.00 p.m. (Sydney time)

CREST DI Holders last date and time for eligibility to vote:

10 March 2013 at 7.00 p.m. (London time)

Last date and time for lodgement of Proxy Form:


Date and time of Scheme Meeting:


Place of Scheme Meeting: 510 Thomson Road #12-04 SLF Building Singapore 298135

The important dates, times and place relating to the Scheme Meeting and the indicative timetable are set out on page 9 of this Scheme Document. Your attention is also drawn to the notes under the indicative timetable. The consideration for the acquisition by VAH (as defined herein) of each Scheme Share (as defined herein) is A$0.45 (in the form of a combination of cash and VAH Consideration Shares (as defined herein)). For further details, please see pages 14 and 15 of this Scheme Document.

THIS SCHEME DOCUMENT (AS DEFINED HEREIN) IS ISSUED BY SKYWEST AIRLINES LTD. THIS SCHEME DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT CAREFULLY. IF YOU ARE IN ANY DOUBT IN RELATION TO THE CONTENTS OF THIS SCHEME DOCUMENT OR AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, OR OTHER PROFESSIONAL ADVISER IMMEDIATELY. THIS SCHEME DOCUMENT DOES NOT CONSTITUTE AN OFFER OR AN INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES PURSUANT TO THIS SCHEME DOCUMENT OR OTHERWISE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THIS SCHEME DOCUMENT DOES NOT COMPRISE A PROSPECTUS OR A PROSPECTUS EQUIVALENT. THE ACTION TO BE TAKEN BY YOU IS SET OUT ON PAGE 17 OF THIS SCHEME DOCUMENT.

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TABLE OF CONTENTS

PAGE

DEFINITIONS ....................................................................................................................................... 1

INDICATIVE TIMETABLE ....................................................................................................................... 9

CORPORATE INFORMATION .............................................................................................................. 11

LETTER FROM THE BOARD TO THE SHAREHOLDERS ................................................................. 12

1. INTRODUCTION .......................................................................................................... 12

2. BACKGROUND OF THE COMPANY, THE OFFEROR AND VAH ............................ 13

3. RATIONALE FOR THE ACQUISITION AND FUTURE PLANS FOR THE COMPANY .. 14

4. THE ACQUISITION AND THE SCHEME .................................................................... 14

5. SCHEME MEETING .................................................................................................... 16

6. ACTION TO BE TAKEN BY SHAREHOLDERS .......................................................... 17

7. ABSTENTION FROM VOTING .................................................................................... 18

8. CONFIRMATION OF FINANCIAL RESOURCES ....................................................... 18

9. INDEPENDENT FINANCIAL ADVISER TO THE DIRECTORS .................................. 19

10. DIRECTORS' RECOMMENDATIONS ...................................................................... 20

11. RESPONSIBILITY STATEMENT ................................................................................. 21

12. GENERAL INFORMATION .......................................................................................... 21

EXPLANATORY STATEMENT ............................................................................................................. 22

APPENDIX 1 – LETTER FROM THE IFA TO THE DIRECTORS ........................................................ 40

APPENDIX 2 – LETTER FROM THE OFFEROR TO THE SHAREHOLDERS .................................. 73

APPENDIX 3 – GENERAL INFORMATION RELATING TO THE COMPANY ................................. 120

APPENDIX 4 – RELEVANT EXCERPTS FROM THE AGREEMENT ................................................ 130

APPENDIX 5 – RELEVANT EXCERPTS FROM THE COMPANY'S ARTICLES OF

ASSOCIATION .......................................................................................................... 143

APPENDIX 6 – THE SCHEME ............................................................................................................ 159

APPENDIX 7 – NOTICE OF SCHEME MEETING .............................................................................. 166

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DEFINITIONS

In this Scheme Document, the following definitions apply throughout unless otherwise stated or the context otherwise requires: "ACCC" : The Australian Competition and Consumer Commission

"ACRA" : The Accounting and Corporate Regulatory Authority of

Singapore

"Acquisition" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"Agreement" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"AIM" : AIM, a market operated by London Stock Exchange plc

"AOC" : Air Operator’s Certificate

"Articles of Association" : The articles of association of the Company

"ASX"

: ASX Limited, or Australian Securities Exchange as the case requires

"ASX Settlement"

: ASX Settlement Pty Ltd, the operator of CHESS

"Audited Consolidated Financial Statements of the Group for FY2012"

: The audited consolidated financial statements of the Group for FY2012

"Australian Share Registrar"

: The Australian share registrar of the Company, Computershare Investor Services Pty Limited, whose address is at 117 Victoria Street, West End QLD 4101, Australia

"Books Closure Date" : A date and time (before the Effective Date) to be announced by the Company, at which time the share transfer books and the Register of Members will be closed to determine the entitlements of Shareholders in respect of the Scheme

"Business Day" : A day (other than a Saturday or Sunday or public holiday) on which commercial banks are open for business in Singapore

"Certificate Shareholders"

: Persons who are registered as holders of Skywest Shares in the Register of Members other than (a) the CHESS Nominee and (b) the CREST Nominee

"CHESS" : The clearing house electronic subregister system operated by the ASX Settlement

"CHESS DIs"

: Australian CHESS depository interests registered with the Australian Share Registrar

"CHESS DI Holders"

: Holders of CHESS DIs

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DEFINITIONS

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"CHESS Nominee"

: CHESS Depository Nominees Pty Ltd, the nominee holder of Skywest Shares underlying the CHESS DIs

"Code" : The Singapore Code on Take-overs and Mergers

"Companies Act" : Companies Act (Chapter 50 of Singapore)

"Company" or "Skywest"

: Skywest Airlines Ltd. (formerly known as Advent Air Ltd.)

"Company Prescribed Occurrence"

: Shall have the meaning ascribed to it in paragraph 7.1(f) of the Explanatory Statement

"Company Registered Office" : 510 Thomson Road, #12-04 SLF Building, Singapore 298135

"Company Securities" : (a) Securities which are being offered for or which carry voting rights; and

(b) Convertible Securities, warrants, options and Derivatives in respect of (a)

"Condition Precedent Satisfaction Date"

: Means 8.00 a.m. (Singapore time) on the date of the Scheme Meeting or any such later date up to the Record Date as specified by the Offeror

"Convertible Securities" : Securities convertible or exchangeable into new shares or existing shares in a company

"Court"

: The High Court of the Republic of Singapore

"Court Hearing Sanction Date" : The date of the Court hearing to sanction the Scheme

"Court Order" : The order of Court sanctioning the Scheme under Section 210 of the Companies Act

"CREST" : The computerised settlement system to facilitate the transfer of title of shares in uncertificated form operated by Euroclear UK and Ireland Limited

"CREST DIs" : UK CREST depository interests registered with the UK Share Registrar

"CREST DI Holders" : Holders of CREST DIs

"CREST Nominee"

: Computershare Company Nominees Ltd, the UK Share Registrar’s nominee holder of Skywest Shares underlying the CREST DIs

"Derivative" : Includes any financial product whose value in whole or in part is determined directly or indirectly by reference to the price of an underlying security or securities

"DI Holders"

: Collectively, the CHESS DI Holders and CREST DI Holders

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DEFINITIONS

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"Directors" or the "Board" : The directors of the Company or the board of directors of the Company as at the Latest Practicable Date

"Effective Date" : The date on which the Scheme, if approved, becomes effective in accordance with the terms of the Scheme

"Encumbrance" : Means any charge, mortgage, lien, hypothecation, hire purchase, judgment, encumbrance, easement, security, title retention, preferential right, trust arrangement or other security interest

"Entitled Shareholders" : Shareholders, other than the Offeror and its related corporations, as at 5.00 p.m. (Singapore time) on the Books Closure Date

"Explanatory Statement" : The explanatory statement required by Section 211 of the Companies Act and set out on pages 22 to 39 of this Scheme Document

"FATA" : The Foreign Acquisitions and Takeovers Act 1975 (Cth)

"FIRB" : The Foreign Investment Review Board of Australia

"First Announcement Date" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"FY" : Financial year ended or, as the case may be, ending 30 June

"Goldman Sachs"

: Goldman Sachs Australia Pty Ltd

"Governmental Agency" : Any foreign or Singapore government or governmental, semi-governmental, administrative, regulatory, fiscal or judicial agency, authority, body, commission, department, exchange, tribunal or entity (including, for the avoidance of doubt, AIM, ASX, ACCC, FIRB and the SIC)

"Group" : The Company and its subsidiaries

"IFA" : The independent financial adviser to the Directors, being DMG & Partners Securities Pte Ltd

"IFA Letter" : Shall have the meaning ascribed to it in paragraph 9.1 of the Letter from the Board to the Shareholders and as set out in Appendix 1 to this Scheme Document

"Joint Announcement" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"Joint Announcement Date" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"Latest Practicable Date" : 13 February 2013, being the latest practicable date prior to the printing of this Scheme Document

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DEFINITIONS

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"Listing Rules"

: Means all applicable rules and regulations of either or both of ASX and AIM (as the case may be), including without limitation: (a) in the case of ASX – the ASX listing rules; and

(b) in the case of AIM – the AIM rules

"Market Day" :

A day on which AIM or ASX is open for trading of securities as the case maybe

"Mr Aitkenhead" : Mr Ronald Lewis Aitkenhead

"Mr Chatfield" : Mr Robert Jeffries Chatfield

"Mr Jost" : Mr John Leonard Jost

"Mr Seah" : Mr Seah Kian Peng

"Offeror" or "VAH Sub" : VAH Newco No.2 Pty Ltd (ACN 160 881 354), a wholly-owned subsidiary of VAH

"Offeror Group" : The Offeror, and its holding company and subsidiaries

"Offeror Securities"

: (a) Equity share capital of VAH or securities which carry substantially the same rights as the VAH Consideration Shares; and

(b) Convertible Securities, warrants, options and Derivatives in respect of (a)

"Overseas Scheme Shareholders"

: Scheme Shareholders whose addresses are outside of Australia, Singapore and the United Kingdom as shown on the Register of Members

"Prevailing Exchange Rate" : The prevailing rate of exchange between Pounds Sterling and Australian Dollars as at 12.00 p.m. (Singapore time) five (5) Business Days prior to the date of settlement of the Scheme Cash and Securities Consideration

"Proxy Form" : The accompanying proxy form for the Scheme Meeting

"Record Date"

: The date falling on the Business Day immediately preceding the Effective Date

"Register of Members" : The register of members of the Company

"Regulatory Approvals" : Such consents and approvals or other acts from any Governmental Agency as required by the Company, the Offeror and/or VAH, or which the Company, the Offeror and/or VAH may agree are necessary or desirable, to implement the Acquisition

"Relevant Australian Custodian Details"

: Shall have the meaning ascribed to it in paragraph 10.2(c)(ii)(A) of the Explanatory Statement

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DEFINITIONS

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"Scheme" : The scheme of arrangement dated 26 February 2013 as set out on pages 159 to 165 in Appendix 6 to this Scheme Document (or as amended from time to time in accordance with Clause 4.3 of the Scheme) proposed in accordance with Section 210 of the Companies Act

"Scheme Cash and Securities Consideration"

: Shall have the meaning ascribed to it in paragraph 4.1(b) of the Letter from the Board to the Shareholders

"Scheme Cash Consideration"

: Shall have the meaning ascribed to it in paragraph 4.1(b)(i) of the Letter from the Board to the Shareholders

"Scheme Conditions" : Shall have the meaning ascribed to it in paragraph 7.1 of the Explanatory Statement

"Scheme Document" : This scheme document dated 26 February 2013 despatched by the Company to its Shareholders and containing, inter alia, information on the Acquisition, the Scheme, the Explanatory Statement complying with the requirements of Section 211 of the Companies Act, the notice of Scheme Meeting, the Proxy Form and the Voting Instruction Form

"Scheme Letter" : The proposal letter dated 26 February 2013 from the Offeror to the Shareholders in relation to the implementation of the Scheme as set out in Appendix 2 to this Scheme Document

"Scheme Meeting" : The meeting of Shareholders to be convened and held under the directions of the Court, notice of which is set out on pages 166 to 168 of this Scheme Document, and any adjournment thereof

"Scheme Shares" : All outstanding Skywest Shares not held directly or indirectly by the Offeror

"Scheme Shareholders" : All Shareholders other than the Offeror and its related corporations

"Share Registrars" : Collectively, the Australian Share Registrar and the UK Share Registrar

"Shareholders" : Persons who are registered as holders of Skywest Shares in the Register of Members

"SIC" : Securities Industry Council of Singapore

"Skywest Airlines" : Skywest Airlines (Australia) Pty Ltd

"Skywest Group" : Skywest and its group companies

"Skywest Shares" : Issued and paid-up ordinary shares in the share capital of the Company

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DEFINITIONS

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"Skywest Warrants"

: Shall have the meaning ascribed to it in paragraph 4.2 of the Letter from the Board to the Shareholders

"Skywest Warrant Holders"


"Skywest Warrants Proposal"


"Superior Offer" : Means an offer or proposal in writing that is (in the opinion of the Board determined in good faith and after consultation with legal and financial advisers) superior to the Scheme in terms of any one of the following factors provided that the remaining factors are at least equal to the Scheme: (a) price (which for the avoidance of doubt must be higher than the price contemplated in the Scheme), (b) structure and (c) conditions

"Tiger Airways" : Tiger Airways Holdings Limited

"Tiger Australia" : Tiger Airways Australia Pty Limited

"UAE" : United Arab Emirates

"UK Share Registrar"

: The United Kingdom share registrar of the Company, Computershare Investor Services plc, whose address is at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom

"USA" : United States of America

"VAH" or "Virgin Australia" : Virgin Australia Holdings Limited (ACN 100 686 226)

"VAH Consideration Shares" : Shall have the meaning ascribed to it in paragraph 4.1(b)(ii) of the Letter from the Board to the Shareholders

"VAH Consideration Share Issue Price"

: Shall have the meaning ascribed to it in paragraph 4.1(b)(ii) of the Letter from the Board to the Shareholders

"VAH Prescribed Occurrence"

: Shall have the meaning ascribed to it in paragraph 7.1(g) of the Explanatory Statement

"VAH Shares"


"Voting Instruction Form" : The accompanying voting instruction form for the Scheme Meeting

"Warrant Price" : Shall have the meaning ascribed to it in paragraph 4.1 of the Explanatory Statement

"30 October Announcements" : Shall have the meaning ascribed to it in paragraph 4.1 of the Explanatory Statement

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DEFINITIONS

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Units and Currencies

:

"Australian Dollars" or "A$" and "cents"

: Australian dollars and cents, being the lawful currency of Australia

"Pound Sterling" or "£" and "pence"

: Pound sterling and pence, being the lawful currency of the United Kingdom

"Singapore Dollars" or "S$" : Singapore dollars, being the lawful currency of the Republic of Singapore

"%" or "per cent." Percentage or per centum

Acting in Concert and Concert Parties. The expression "acting in concert" and the term "concert parties" shall have the meanings ascribed to them respectively in the Code. Expressions. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to "persons" shall include firms and corporations. Headings. The headings in this Scheme Document are inserted for convenience only and shall be ignored in construing this Scheme Document. Rounding. Any discrepancies in the figures included in this Scheme Document between the listed amounts and the totals thereof shown are due to rounding. Accordingly, figures shown as totals in this Scheme Document may not be an arithmetic aggregation of the figures which precede them. Statutes. Any reference in this Scheme Document to any statute or enactment is a reference to that statutory provision or enactment as for the time being amended or re-enacted. Any word defined under the Companies Act, the Code or any modification thereof, used in this Scheme Document and not otherwise defined in this Scheme Document shall, where applicable, have the meaning assigned to it under the Companies Act, the Code or any modification thereof, as the case may be, unless otherwise provided. Subsidiary and Related Corporations. The term "subsidiary" and "related corporations" shall have the meanings ascribed to them respectively in Sections 5 and 6 of the Companies Act. Time and Date. Any reference to a time of day or date in this Scheme Document shall be a reference to Singapore time or date, as the case may be, unless otherwise stated. Total Number of Skywest Shares. In this Scheme Document, the total number of Skywest Shares as at the Latest Practicable Date was 213,040,000.

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DEFINITIONS

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Forward-Looking Statements All statements other than statements of historical facts included in this Scheme Document are or may be forward-looking statements. Forward-looking statements include but are not limited to those using words such as "seek", "expect", "anticipate", "estimate", "believe", "intend", "project", "plan", "strategy", "forecast" and similar expressions or future or conditional verbs such as "will", "would", "should", "could", "may" and "might". These statements reflect the Company's current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information. Such forward-looking statements are not guarantees of future performance or events and involve known and unknown risks and uncertainties. Accordingly, actual results may differ materially from those described in such forward-looking statements. Shareholders and investors of the Company should not place undue reliance on such forward-looking statements, and the Company does not undertake any obligation to update publicly or revise any forward-looking statements.

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INDICATIVE TIMETABLE

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1. Last date and time for lodgement of Voting Instruction Forms for the Scheme Meeting for CHESS DI Holders (1) (2) and CREST DI Holders (1) (3)

: 10 March 2013 at 10.00 a.m. (Singapore time)

2. Last date and time for eligibility to vote for (a) CHESS DI Holders (2) (b) CREST DI Holders (3)

: :

10 March 2013 at 7.00 p.m. (Sydney time) 10 March 2013 at 7.00 p.m. (London time)

3. Last date and time for lodgement of Proxy Forms for the Scheme Meeting(4) (5)

: 11 March 2013 at 10.00 a.m. (Singapore time)

4. Scheme Meeting

Date and time of the Scheme Meeting : 13 March 2013 at 10.00 a.m. (Singapore time)

Place of the Scheme Meeting : 510 Thomson Road #12-04 SLF Building Singapore 298135

5. Expected Court Hearing Sanction Date

: 27 March 2013

6. Expected date of notice of Books Closure Date

: 28 March 2013

7. Expected last day of trading of Skywest Shares on AIM and ASX

: 28 March 2013

8. Expected Books Closure Date : 9 April 2013 at 5.00 p.m. (Singapore time)

9. Expected Effective Date (6)

: 12 April 2013

10. Expected date of cancellation of trading of Skywest Shares on AIM and ASX

: 12 April 2013

11. Expected date for payment of Scheme Cash and Securities Consideration

: 22 April 2013

12. Expected date of admission to and commencement of trading on ASX of the VAH Consideration Shares

: 23 April 2013

You should note that, save for the last dates and times for lodgement of Proxy Forms and Voting Instruction Forms and the date and time of the Scheme Meeting, the above timetable is indicative only and may be subject to change. For the events listed above which are described as "expected", please refer to future announcement(s) by the Company on AIM and/or ASX for the exact dates and times of these events.

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INDICATIVE TIMETABLE

10

Notes: (1) CHESS DI Holders and CREST DI Holders are requested to lodge the Voting Instruction Forms for the Scheme

Meeting by 10 March 2013 at 10.00 a.m. (Singapore time). (2) CHESS DI Holders wishing to be involved in the business of the Scheme Meeting should complete the Voting

Instruction Forms and ensure that the Voting Instruction Forms are lodged with the Australian Share Registrar, Computershare Investor Services Pty Limited, by one of the means below: (a) delivered by post to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne,

Victoria 3001;

(b) sent by fax to Computershare Investor Services Pty Limited at 1800 783 447 (within Australia) or + 61 3 9473 2555 (outside Australia); or

(c) online by visiting www.investorvote.com.au and logging in using the control number found on the front of

the accompanying Voting Instruction Form. Intermediary Online subscribers (Institutions/Custodians) may lodge their voting instruction online by visiting www.intermediaryonline.com.

To be eligible to vote, CHESS DI Holders will have to be registered with the Australian Share Registrar by 10 March 2013 at 7.00 p.m. (Sydney time).

(3) CREST DI Holders wishing to be involved in the business of the Scheme Meeting should complete the Voting Instruction Forms and ensure that the Voting Instruction Forms are lodged at the office of the UK Share Registrar, Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or use one of the alternative methods outlined on the Voting Instruction Form). To be eligible to vote, CREST DI Holders will have to be registered with the UK Share Registrar by 10 March 2013 at 7.00 p.m. (London time).

(4) Certificate Shareholders are requested to lodge the Proxy Forms for the Scheme Meeting not less than 48 hours before the time appointed for the Scheme Meeting.

(5) Certificate Shareholders who wish to appoint a proxy, should complete the Proxy Forms for the Scheme Meeting and (if lodged before the Scheme Meeting) deposit the Proxy Forms at the office of the UK Share Registrar, Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or use one of the alternative methods outlined on the Proxy Form). Completion and return of a Proxy Form for the Scheme Meeting will not preclude a Certificate Shareholder from attending and voting in person at the Scheme Meeting if they subsequently wish to do so. In such event, the relevant Proxy Form will be deemed to be revoked.

(6) The Scheme will only be effective and binding upon lodgement of the Court Order with ACRA. The Court Order will

be lodged with ACRA upon the satisfaction (or, where applicable, waiver) of all the Scheme Conditions, a list of which is set out in paragraph 7.1 of the Explanatory Statement.

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CORPORATE INFORMATION

11

DIRECTORS : Mr Robert Jeffries Chatfield

Group Executive Chairman

Mr John Leonard Jost

Non-Executive Director

Mr Seah Kian Peng


Mr Ronald Lewis Aitkenhead


COMPANY SECRETARY : Siobhan Mary Macgroarty Cool

Han Kee Fong

REGISTERED OFFICE : 510 Thomson Road #12-04 SLF Building Singapore 298135

SHARE REGISTRARS AND SHARE TRANSFER OFFICES

: UK Share Registrar Computershare Investor Services plc The Pavilions Bridgwater Road Bristol BS99 6ZY United Kingdom Australian Share Registrar Computershare Investor Services Pty Limited 117 Victoria Street West End QLD 4101 Australia

AUDITORS OF THE COMPANY : Ernst & Young LLP

1 Raffles Quay Singapore 048583 Partner-in-charge: Bek Teng Low

INDEPENDENT FINANCIAL ADVISER TO THE DIRECTORS IN RELATION TO THE SCHEME

: DMG & Partners Securities Pte Ltd 10 Collyer Quay #09-08 Ocean Financial Centre Singapore 049315

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LETTER FROM THE BOARD TO THE SHAREHOLDERS

12

SKYWEST AIRLINES LTD. (Incorporated in the Republic of Singapore)

(Company Registration Number: 199708548K) Directors:

Registered Office:

Mr Robert Jeffries Chatfield (Group Executive Chairman) 510 Thomson Road #12-04 SLF Building Singapore 298135

Mr John Leonard Jost (Non-Executive Director) Mr Seah Kian Peng (Non-Executive Director) Mr Ronald Lewis Aitkenhead (Non-Executive Director) 26 February 2013 To: The Shareholders of SKYWEST AIRLINES LTD. Dear Sir / Madam THE ACQUISITION OF SKYWEST AIRLINES LTD. BY VAH NEWCO NO.2 PTY LTD, A WHOLLY OWNED SUBSIDIARY OF VIRGIN AUSTRALIA HOLDINGS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 210 OF THE COMPANIES ACT (CHAPTER 50 OF SINGAPORE) 1. INTRODUCTION

1.1 Joint Announcement

On 30 October 2012 (the "First Announcement Date"), the respective boards of directors of VAH and the Company separately announced (the "30 October Announcements") that VAH proposed to acquire 100% of the issued share capital in the Company by way of a scheme of arrangement that will be subject to the laws of Singapore (the "Acquisition"). The 30 October Announcements also stated that the Acquisition was subject to a number of conditions, including but not limited to, the approval of the SIC to the terms of the Scheme and that definitive conditional legal agreements in relation to the Scheme would only be entered into on receipt of such SIC approval. On 6 December 2012 (the "Joint Announcement Date"), the respective boards of directors of VAH and the Company jointly announced (the "Joint Announcement") that approval had been received from the SIC for the terms of the Scheme and that the Offeror, VAH and the Company had entered into an implementation agreement to implement the Scheme (the "Agreement").

1.2 Effect of the Scheme

Upon the Scheme becoming effective and binding, the entire issued share capital of the Company will be owned by the Offeror.

1.3 Purpose

The purpose of this Scheme Document is to set out information pertaining to the Scheme, to seek your approval of the Scheme and to give you notice of the Scheme Meeting.

1.4 Explanatory Statement

An Explanatory Statement setting out the key terms of, the rationale for, and the effect of, the Scheme and the procedures for its implementation is set out on pages 22 to 39 of this Scheme Document. It should be read in conjunction with the full text of this Scheme Document, including the Scheme as set out on pages 159 to 165 of this Scheme Document.

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2. BACKGROUND OF THE COMPANY, THE OFFEROR AND VAH 2.1 The Company

Skywest (ASX:SXR, LSE:SKYW) has been in operation for close to 50 years, currently flying to 14 destinations on its regular passenger transport network. Skywest Airlines operates flights across regional Western Australia as well as to Darwin, Melbourne and internationally to Denpasar, Bali. With a strong presence in the corporate charter, 'fly-in fly-out' mining market and regular passenger transport, the airline carries approximately 800,000 passengers annually, servicing business travellers, tourists and regional communities. Excluding the eight (8) ATR-72 turboprops operated on behalf of Virgin Australia as part of the Australian Regional Airline Network (ARAN), Skywest Airlines' fleet includes a total of 20 Airbus A320 jet aircraft, Fokker F100 jet aircraft and Fokker F50 turboprops. The Company is a public company incorporated in Singapore and is a diversified airline, aerospace and investment group. Its current principal subsidiary, Skywest Airlines, is a high capacity airline operator and holiday package supplier in the Australasian region, which holds an Australian High Capacity AOC enabling the operation of large commercial aircraft for charter and regular scheduled air passenger traffic. As at the Latest Practicable Date, the Company has an issued and paid-up share capital of S$50,002,606, comprising an aggregate of 213,040,000 Skywest Shares.

2.2 VAH

VAH (ASX:VAH) was incorporated in Queensland, Australia on 27 May 2002 and has since established itself as a contemporary, full service airline, with a reputation for exceptional customer service. The airline employs more than 8,000 people in Australia, New Zealand and the USA. Virgin Australia has strategic alliances with four (4) key airline partners: Air New Zealand, Delta Air Lines, Etihad Airways and Singapore Airlines, providing customers with access to over 400 destinations worldwide. Its domestic and international operations are complemented by Virgin Samoa, a joint venture airline with the Government of Samoa.

Virgin Australia operates a fleet of 108 modern Airbus A330, Boeing 777, Boeing 737, Embraer E-Jet and ATR-72 turboprop aircraft to 34 Australian ports and 17 international destinations including the USA, UAE, New Zealand, Indonesia, Thailand, Papua New Guinea, Solomon Islands, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands. On 30 October 2012, Virgin Australia announced that it had entered into a share purchase agreement to acquire 60 per cent. of the existing shares in Tiger Australia from Tiger Airways. The transaction is subject to conditions and regulatory approvals, including ACCC clearance and FIRB approval. As part of the transaction, Virgin Australia and Tiger Airways propose to enter into a shareholders’ agreement, a brand licensing agreement and a services agreement. Tiger Australia will be managed as a standalone entity, with its own AOC and a separate board and management team. Tiger Australia will continue to operate under the Tiger Airways brand as a low cost carrier providing domestic air travel services in Australia with a fleet of Airbus A320 aircraft.

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As at the Latest Practicable Date, the directors of VAH are Mr Neil Chatfield, Ms Samantha Mostyn, Mr Robert Thomas, The Honourable Mark Vaile A.O., Mr John Borghetti, Mr David Baxby, Mr Joshua Bayliss and Mr Keith Roberts, and VAH has a share capital comprising 2,455,775,111 ordinary shares (the "VAH Shares"). The VAH Shares are admitted to trading on ASX.

2.3 The Offeror

The Offeror is an investment holding company incorporated in Queensland, Australia on 22 October 2012, and is a wholly-owned subsidiary of VAH. As at the Latest Practicable Date, the Offeror has a share capital comprising one (1) ordinary share and the directors of the Offeror are Mr John Borghetti and Mr Sankar Narayan.

3. RATIONALE FOR THE ACQUISITION AND FUTURE PLANS FOR THE COMPANY 3.1 Rationale

The Acquisition will enable VAH to fast-track its advancements in the growing 'fly-in fly-out' and regional markets, increasing competition in these segments. It will also enable VAH to offer a fully integrated network, service and frequent flyer program. Once acquired, Skywest will become part of the Virgin Australia brand. VAH intends to support the growth of Skywest, which will benefit jobs, business and tourism, particularly in Western Australia and throughout regional Australia.

3.2 Future Plans

As stated in the Scheme Letter as set out in Appendix 2 to this Scheme Document, on completion of the Scheme, the Company will become a wholly-owned subsidiary of the Offeror and an indirect wholly-owned subsidiary of VAH, and the Skywest Shares will be delisted from ASX and AIM. Following completion of the Acquisition, VAH will undertake a review of the businesses and operations of the Skywest Group with a view to aligning such businesses and operations with those of the VAH group. Skywest will continue to operate under its current AOC with its own chief executive officer and management team, based in Western Australia. Pending such review, VAH currently has no immediate plans to (a) introduce any major changes to the businesses of the Skywest Group, (b) make any major disposal or redeployment of assets (including the fixed assets of the Skywest Group) or (c) discontinue the employment of the employees of the Skywest Group, other than in the ordinary course of business and as required through the integration process. VAH also retains its right to consider options or opportunities which may present themselves, or be required, and which VAH regards to be in the best interests of VAH and the Skywest business.

4. THE ACQUISITION AND THE SCHEME 4.1 Terms of the Scheme

The Acquisition will be effected by way of a scheme of arrangement in accordance with Section 210 of the Companies Act, the Code and the terms and conditions of the Scheme Letter. The Scheme will involve, amongst other things, the following:

(a) the transfer of all the Scheme Shares held by the Scheme Shareholders to the

Offeror; and

(b) in consideration of the transfer of the Scheme Shares held by the Scheme Shareholders, the Scheme Shareholders will receive:

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(i) a cash consideration of A$0.225 (the "Scheme Cash Consideration"); and

(ii) 0.53 new ordinary shares in VAH (the "VAH Consideration Shares") at an

issue price of A$0.424 for each VAH Consideration Share (the "VAH Consideration Share Issue Price"),

(collectively, the "Scheme Cash and Securities Consideration") for each Scheme Share held by each Shareholder as at the Books Closure Date.

The aggregate cash amount payable to any Scheme Shareholder pursuant to the Scheme Cash Consideration will be rounded down to the nearest whole cent, if applicable, and will be paid in accordance with paragraph 13 of the Explanatory Statement.

The VAH Consideration Shares will be duly authorised, validly issued, credited as fully paid and free from any Encumbrances. The VAH Consideration Shares shall rank pari passu in all respects with the VAH Shares in issue as at the Effective Date, including the right to receive and retain any dividends, rights and other distributions declared, paid or made on or after the Effective Date. No fraction of any VAH Consideration Share shall be issued and instead any fractional entitlements to VAH Consideration Shares will be paid in cash pro-rata based on the VAH Consideration Share Issue Price. The Scheme Cash and Securities Consideration shall be paid to the Skywest Shareholders within 10 days after the Effective Date.

Pursuant to the Scheme, the Scheme Shares held by the Scheme Shareholders on record as at the Books Closure Date are to be transferred by the Scheme Shareholders to the Offeror (a) fully paid; (b) free from Encumbrances; and (c) together with all rights, benefits and entitlements as at the Joint Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by the Company on or after the Joint Announcement Date.

The Company currently has no intention of and will not declare, make or pay any dividend or any other distribution (whether in cash or in specie) or return of capital. However, in the event that any dividend, other distribution (whether in cash or in specie) or return of capital is declared by the Company on or after the Joint Announcement Date, the Offeror reserves the right to reduce the Scheme Cash and Securities Consideration by the amount of such dividend, distribution (whether in cash or in specie) or return of capital. On the Effective Date, the Company will become a wholly-owned subsidiary of the Offeror.

4.2 Skywest Warrants

As at the Latest Practicable Date, there are 6,500,000 outstanding Skywest warrants (the "Skywest Warrants") granted to Skywest Warrant Holders (as defined below), entitling the Skywest Warrant Holders to subscribe for a total of 6,500,000 new Skywest Shares:

Skywest Warrant Holder

Number of Skywest Shares under Skywest

Warrant

Date of Grant Date of Expiry Exercise Price

Mr Robert Jeffries Chatfield

3,000,000 12 December

2011 11 December

2013 25.78 pence

Mr Ronald Aitkenhead

300,000 12 December

2011 11 December

2013 25.78 pence

Mr Mark Shelton 1,200,000 17 February

2012 1 January 2014 25.78 pence

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Warrant


Mr Brian O'Dwyer 1,000,000 8 November

2012 11 December

2013 25.78 pence

Mr Jason Bitter 600,000 8 November

2012 11 December

2013 25.78 pence

Mr Duncan Scott 400,000 8 November

2012 11 December

2013 25.78 pence

The Offeror will not make an offer to acquire any Skywest Warrants which have not been validly exercised and the holder registered as a shareholder of the Company prior to or on the Books Closure Date. Instead, the Offeror will make a proposal to the holders of the Skywest Warrants (the "Skywest Warrant Holders") that, in consideration for such Skywest Warrant Holders agreeing not to exercise any of their rights as a holder of the Skywest Warrants and agreeing to surrender their Skywest Warrants, such holder will receive a cash amount for each Skywest Warrant (the "Skywest Warrants Proposal"). Further details of the Skywest Warrants Proposal are set out in paragraph 4.1 of the Explanatory Statement.

4.3 No Cash Outlay and No Brokerage

Scheme Shareholders should note that no cash outlay (including any stamp duties, brokerage expenses or brokerage fees) will be required from the Scheme Shareholders under the Scheme.

5. SCHEME MEETING

The Scheme, which is proposed in accordance with Section 210 of the Companies Act and the Code, has to be approved by the Shareholders at a meeting convened at the direction of the Court. By order(s) of the Court dated 22 February 2013, the Scheme Meeting was directed to be convened for the purpose of considering and, if thought fit, approving the Scheme.

By proposing that the Scheme be effected by way of a scheme of arrangement, the Company is providing the Shareholders with the opportunity to determine at the Scheme Meeting whether they consider the Scheme to be in their best interests. When the Scheme, with or without modification, becomes effective, the Scheme will be binding on all the Shareholders, whether or not they were present, in person or by proxy, or voted at the Scheme Meeting.

The Scheme must be approved by a majority in number of Scheme Shareholders, representing not less than three-fourths in value of the Skywest Shares held by the Scheme Shareholders present and voting either in person or by proxy at the Scheme Meeting. Pursuant to an order of the Court dated 22 February 2013, for the purposes of determining the number of Scheme Shareholders present and voting on the Scheme at the Scheme Meeting, Certificate Shareholders, DI Holders, the CHESS Nominee and the CREST Nominee will be treated as follows: (a) Certificate Shareholders are Scheme Shareholders;

(b) the CHESS Nominee and the CREST Nominee shall be deemed not to be Scheme

Shareholders; and

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(c) each DI Holder shall be deemed to be a Scheme Shareholder in respect of such number of Scheme Shares held in its account under the CHESS Nominee or the CREST Nominee, as the case may be.

A Certificate Shareholder or DI Holder need not vote all of the Scheme Shares registered in its name in the same way. Accordingly, a Certificate Shareholder or DI Holder may:

(i) vote all or part of its Scheme Shares FOR the Scheme, which part shall be counted in

value for approving the Scheme;

(ii) vote all or part of its Scheme Shares AGAINST the Scheme, which part shall be counted in value against approving the Scheme; and/or

(iii) abstain from voting in respect of all or part of its Scheme Shares, which part shall not

be counted in determining the value of shares which are present and voting on the Scheme.

For purposes of determining the number of Scheme Shareholders present and voting at the Scheme Meeting, a Certificate Shareholder or a DI Holder, as the case may be, will be taken to have voted FOR the Scheme, if the number of Scheme Shares voted FOR the Scheme by it exceeds the number of Scheme Shares voted AGAINST the Scheme by it, or AGAINST the Scheme, if the number of Scheme Shares voted AGAINST the Scheme by it exceeds the number of Scheme Shares voted FOR the Scheme by it. A Scheme Shareholder voting by proxy shall be included in the count of Scheme Shareholders present and voting at the Scheme Meeting as if that Scheme Shareholder was voting in person, such that the votes of a proxy who has been appointed to represent more than one Scheme Shareholder at the Scheme Meeting shall be counted as the votes of such number of appointing Scheme Shareholders. As at the Latest Practicable Date, none of the Offeror and, to the best of the Offeror's knowledge and belief, none of its concert parties hold any Skywest Shares. In the event that the Offeror and its concert parties acquire, own or control any Skywest Shares, the Offeror and its concert parties will abstain from voting at the Scheme Meeting.

The notice of the Scheme Meeting is set out on pages 166 to 168 of this Scheme Document. Shareholders are requested to take note of its date, time and place.

6. ACTION TO BE TAKEN BY SHAREHOLDERS

Certificate Shareholders who are unable to attend the Scheme Meeting are requested to sign and return the Proxy Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the UK Share Registrar, Computershare Investor Services plc at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or using one of the alternative lodgement methods outlined in the Proxy Form) not later than 48 hours before the time appointed for the Scheme Meeting. The completion and return of Proxy Forms will not prevent Certificate Shareholders from attending and voting at the Scheme Meeting in person if they subsequently wish to do so. In such event, the relevant Proxy Forms will be deemed to be revoked.

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CHESS DI Holders are requested to sign and return the Voting Instruction Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, so as to be received by the Australian Share Registrar, Computershare Investor Services Pty Limited, not later than 10 March 2013 at 7.00 p.m. (Sydney time) in the manner specified below: (a) delivered by post to Computershare Investor Services Pty Limited, GPO Box 242,

Melbourne, Victoria 3001;


(c) online by visiting www.investorvote.com.au and logging in using the control number

found on the front of the accompanying Voting Instruction Form. Intermediary Online subscribers (Institutions/Custodians) may lodge their voting instruction online by visiting www.intermediaryonline.com.

CREST DI Holders are requested to sign and return the Voting Instruction Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the office of the UK Share Registrar, Computershare Investor Services plc, at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or using one of the alternative lodgement methods outlined on the Voting Instruction Form) not later than 10 March 2013 at 7.00 p.m. (London time).

7. ABSTENTION FROM VOTING

As required by the SIC, the following parties will abstain from exercising the voting rights in respect of their Skywest Shares, if any, at the Scheme Meeting in respect of the Scheme: (a) the common substantial shareholders of the Offeror and the Company; and

(b) the Offeror and its concert parties. The common substantial shareholders of the Offeror and the Company, and each member of the Offeror and its concert parties (including any Directors) will decline to accept appointments as proxies to vote on the Scheme, unless the Shareholder concerned has given specific instructions in the relevant Proxy Form as to the manner in which his votes are to be cast in respect of the Scheme.

Accordingly, any proxies given to the common substantial shareholders of the Offeror and the Company, and any member of the Offeror and its concert parties (including any Directors) that do not give specific instructions as to the manner in which votes are to be cast shall be void.

8. CONFIRMATION OF FINANCIAL RESOURCES

Goldman Sachs, as financial advisor to VAH, has confirmed that sufficient financial resources are available to the Offeror to satisfy in full the Scheme Cash Consideration payable to all the Scheme Shareholders for all the Scheme Shares to be transferred to the Offeror pursuant to the Scheme.

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9. INDEPENDENT FINANCIAL ADVISER TO THE DIRECTORS 9.1 Appointment of IFA

DMG & Partners Securities Pte Ltd (the "IFA") has been appointed to advise the Directors in respect of the Scheme for the purpose of making a recommendation to the Shareholders in connection with the Scheme. The advice of the IFA is set out in its letter dated 26 February 2013 (the "IFA Letter"), which is set out in Appendix 1 to this Scheme Document.

9.2 IFA's Advice

Extracts of the IFA Letter summarising the opinion of the IFA to the Directors in relation to the Acquisition and the Scheme are reproduced below. Unless otherwise defined or the context otherwise requires, all capitalised terms in the extract below shall have the same meanings as defined in the IFA Letter.

Shareholders should read the following in conjunction with, and in the context of, the IFA Letter in its entirety as set out in Appendix 1 to this Scheme Document.

"7. OUR RECOMMENDATION

In arriving at our recommendation in respect of the Scheme, we have taken into account the factors which we consider to have a significant bearing on our assessment which includes our analysis set out in earlier sections of the following.

In evaluating and assessing the financial terms of the Scheme, we have given due consideration to:-



(c) price movement and trading activity of Skywest Shares and VAH Shares;

(d) share price performance of Skywest Shares and VAH Shares relative to

selected market indices;

(e) assessed NTA of the Group;

(f) comparison of the implied valuation ratios of Skywest with financial valuation ratios of selected listed companies considered to be comparable to Skywest;

(g) evaluation of the Skywest Warrants Proposal; and

(h) other considerations in relation to the Scheme which have a significant

bearing on our assessment.

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Having carefully considered all of the above, we are of the view that, on balance, the financial terms of the Scheme are fair and reasonable to the Scheme Shareholders. We therefore advise you to recommend that the Scheme Shareholders to vote in favour of the Scheme at the Scheme Meeting. In addition to the above, we also note that the Warrant Prices for Skywest Warrants are, in each case, higher than the "see-through" price of the Skywest Warrants calculated based on the Implied Consideration and the exercise prices of the Skywest Warrants. We therefore advise you to recommend that the Skywest Warrant Holders to accept the Skywest Warrants Proposal."

Shareholders should also note that the opinion and advice of the IFA should not be relied upon by any Shareholder as the sole basis for deciding whether or not to vote in favour of the Scheme.

10. DIRECTORS' RECOMMENDATIONS 10.1 Recommendation

(a) Scheme Recommendation

Having considered the rationale and the terms of the Scheme together with the advice of the IFA, the Directors recommend that, from a financial point of view, the terms of the Scheme are on balance reasonable. Accordingly, the Directors recommend that the Scheme Shareholders VOTE IN FAVOUR of the Scheme at the Scheme Meeting. Shareholders should also be aware that there is currently no certainty that the Scheme will become effective. Shareholders are advised to read this Scheme Document in its entirety, including the advice of the IFA as set out in Appendix 1 to this Scheme Document before deciding whether or not to vote in favour of the Scheme.

(b) Skywest Warrants Proposal Recommendation

The Directors concur with the IFA’s assessment of the financial terms of the Skywest Warrant Proposal and its recommendation thereon. Accordingly, the Directors recommend that Skywest Warrant Holders accept the Skywest Warrants Proposal.

10.2 No Regard to Specific Objectives

The Directors advise Shareholders, in deciding whether or not to vote in favour of the Scheme and/or the Skywest Warrants Proposal, to carefully consider the advice of the IFA and in particular, the various factors highlighted by the IFA in the IFA Letter.

In giving the above recommendation, the Directors have not had regard to the specific objectives, financial situation, tax position, tax status, risk profiles or particular needs and constraints and circumstances of any individual Shareholder. As each Shareholder would have different investment objectives and profiles, the Directors recommend that any individual Shareholder who may require advice in the context of his specific investment objectives or portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately.

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11. RESPONSIBILITY STATEMENT

The Directors (including those who may have delegated detailed supervision of this Scheme Document) jointly and severally accept full responsibility for the accuracy of information contained in this Scheme Document and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this Scheme Document (other than facts stated and opinions expressed by or in relation to the Offeror, VAH and Goldman Sachs, the IFA Letter and the Scheme Letter) have been arrived at after due and careful consideration and there are no other facts not contained in the document, the omission of which would make any statement in this Scheme Document misleading.

Where information in this Scheme Document has been extracted or reproduced from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Scheme Document. The Directors do not accept any responsibility for any information relating to or opinions expressed by the Offeror, VAH and Goldman Sachs.

12. GENERAL INFORMATION

Your attention is drawn to the further relevant information in the Appendices to this Scheme Document.

Yours faithfully For and on behalf of SKYWEST AIRLINES LTD. Mr Robert Jeffries Chatfield Group Executive Chairman

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EXPLANATORY STATEMENT (in compliance with Section 211 of the Companies Act)

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ACQUISITION OF THE COMPANY BY THE OFFEROR BY WAY OF A SCHEME OF ARRANGEMENT

1. INTRODUCTION 1.1 Joint Announcement of the Acquisition and the Scheme

On the First Announcement Date, the respective boards of directors of VAH and the Company separately announced that VAH had proposed to acquire 100% of the issued share capital in the Company, through the Offeror, by way of a scheme of arrangement under Section 210 of the Companies Act. The 30 October Announcements also stated that the Acquisition was subject to a number of conditions, including but not limited to, the approval of the SIC of the terms of the Scheme and that definitive conditional legal agreements in relation to the Scheme would only be entered into on receipt of such SIC approval. On the Joint Announcement Date, the respective boards of directors of VAH and the Company jointly announced that approval had been received from the SIC for the terms of the Scheme and that the Offeror, VAH and the Company had entered into an implementation agreement to implement the Scheme.

1.2 Effect of the Scheme Upon the Scheme becoming effective and binding, the entire issued share capital of the Company will be owned by the Offeror.

1.3 Explanatory Statement This Explanatory Statement should be read in conjunction with the full text of this Scheme Document, including the Scheme as set out on pages 159 to 165 of this Scheme Document. Capitalised terms used in this Explanatory Statement which are not defined in this Explanatory Statement or in the Scheme, shall bear the same meanings as ascribed to them on pages 1 to 8 of this Scheme Document.

2. RATIONALE FOR THE ACQUISITION AND THE SCHEME The rationale for the Acquisition and the Scheme is set out in paragraph 8 of the Scheme Letter.

3. THE SCHEME

3.1 Holdings of the Offeror As stated in the Scheme Letter, as at the Latest Practicable Date, none of the Offeror and to the best of the Offeror's knowledge and belief, none of its concert parties, owns any Skywest Shares. Please refer to paragraph 3 of Schedule 2 of the Scheme Letter for further details of the Offeror and its concert parties' holdings in the Skywest Shares and VAH Shares.

3.2 Scheme The Acquisition will be effected by way of a scheme of arrangement in accordance with Section 210 of the Companies Act, the Code and the terms and conditions of the Scheme Letter. The Scheme will involve, amongst other things, the following:

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(a) all the Scheme Shares held by the Scheme Shareholders will be transferred to the Offeror; and

(b) in consideration of the transfer of the Scheme Shares held by the Scheme Shareholders, the Scheme Shareholders will receive:

(i) the Scheme Cash Consideration; and

(ii) 0.53 VAH Consideration Shares at the VAH Consideration Share Issue Price.

The aggregate cash amount payable to any Scheme Shareholder pursuant to the Scheme Cash Consideration will be rounded down to the nearest whole cent, if applicable, and will be paid in accordance with paragraph 13 of the Explanatory Statement.

The VAH Consideration Shares will be duly authorised, validly issued, credited as fully paid and free from any Encumbrances. The VAH Consideration Shares shall rank pari passu in all respects with the VAH Shares in issue as at the Effective Date, including the right to receive and retain any dividends, rights and other distributions declared, paid or made on or after the Effective Date. No fraction of any VAH Consideration Share shall be issued and instead any fractional entitlements to VAH Consideration Shares will be paid in cash pro-rata based on the VAH Consideration Share Issue Price. The Scheme Cash and Securities Consideration shall be paid to the Skywest Shareholders within 10 days after the Effective Date. Pursuant to the Scheme, the Scheme Shares held by the Scheme Shareholders on record as at the Books Closure Date are to be transferred by the Scheme Shareholders to the Offeror (A) fully paid; (B) free from Encumbrances; and (C) together with all rights, benefits and entitlements as at the Joint Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by the Company on or after the Joint Announcement Date.

The Company currently has no intention of and will not declare, make or pay any dividend or any other distribution (whether in cash or in specie) or return of capital. However, in the event that any dividend, other distribution (whether in cash or in specie) or return of capital is declared by the Company on or after the Joint Announcement Date, the Offeror reserves the right to reduce the Scheme Cash and Securities Consideration by the amount of such dividend, distribution (whether in cash or in specie) or return of capital.

3.3 Scheme Consideration

The Scheme Consideration was proposed by the Offeror taking into account, amongst other things, prevailing market conditions, trading prices of the Skywest Shares, financial performance, financial position, operations and business prospects of each of VAH and the Company.


Shareholders should note that no cash outlay (including any stamp duties, brokerage expenses or brokerage fees) will be required from the Scheme Shareholders under the Scheme.

3.5 Waiver of Rights to a General Offer

Shareholders should note that by voting in favour of the Scheme, the Shareholders will be regarded as having waived their rights to a general offer by the Offeror to acquire the Skywest Shares under the Code.

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4. SKYWEST WARRANTS PROPOSAL

4.1 Warrants Proposal

The Offeror will not make an offer to acquire any Skywest Warrants which have not been validly exercised and the holder registered as a shareholder of the Company prior to or on the Books Closure Date. Instead, the Offeror will pay to the Skywest Warrant Holders a cash amount (the "Warrant Price") in consideration for such Skywest Warrant Holders agreeing:

(a) not to exercise their Skywest Warrants into new Skywest Shares;

(b) not to exercise any of their rights as Skywest Warrant Holders; and

(c) to surrender their Skywest Warrants for cancellation,

in each case, from the date of their acceptance of the Skywest Warrants Proposal to the respective dates of expiry of such Skywest Warrants. The Skywest Warrants Proposal is subject to the Scheme becoming effective and in relation to any Skywest Warrant, further subject to that Skywest Warrant continuing to be exercisable into new Skywest Shares as of the Effective Date. A separate letter setting out more fully the proposal to Skywest Warrant Holders will be sent to Skywest Warrant Holders in due course.

4.2 Warrant Price

The Warrant Price will be a cash amount of A$0.098 for each Skywest Warrant that has an expiration date of 11 December 2013 and A$0.099 for each Skywest Warrant that has an expiration date of 1 January 2014, in each case, calculated based upon the fair value of the Skywest Warrants determined using the binomial option pricing model consistent with the accounting treatment of the Skywest Warrants in the past financial statements and annual reports of Skywest.

5. INFORMATION ON THE OFFEROR AND VAH

Information on the Offeror and VAH, as well as the Offeror's rationale for the Acquisition and future plans for the Group, are set out in the Scheme Letter.

6. SCHEME MEETING

6.1 Scheme Meeting The Scheme, which is proposed in accordance with Section 210 of the Companies Act and the Code, is required to be approved by the Scheme Shareholders at the Scheme Meeting. By an order of the Court dated 22 February 2013, the Scheme Meeting was directed to be convened for the purpose of approving the Scheme. By proposing that the Acquisition be implemented by way of a scheme of arrangement under Section 210 of the Companies Act and the Code, the Company is providing the Shareholders with the opportunity to decide at the Scheme Meeting whether they consider the Scheme to be in their best interests.

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The Scheme must be approved by a majority in number of the Scheme Shareholders, representing not less than three-fourths in value of the Skywest Shares held by the Scheme Shareholders present and voting, either in person or by proxy at the Scheme Meeting. Pursuant to an order of the Court dated 22 February 2013, for the purposes of determining the number of Scheme Shareholders present and voting on the Scheme at the Scheme Meeting, Certificate Shareholders, DI Holders, the CHESS Nominee and the CREST Nominee will be treated as follows: (a) Certificate Shareholders are Scheme Shareholders;

(b) the CHESS Nominee and the CREST Nominee shall be deemed not to be Scheme

Shareholders; and (c) Each DI Holder shall be deemed to be a Scheme Shareholder in respect of such

number of Scheme Shares held in its account under the CHESS Nominee or the CREST Nominee, as the case may be.

A Certificate Shareholder or DI Holder need not vote all of the Scheme Shares registered in its name in the same way. Accordingly, a Certificate Shareholder or DI Holder may:

(i) vote all or part of its Scheme Shares FOR the Scheme, which part shall be counted in

value for approving the Scheme;

(ii) vote all or part of its Scheme Shares AGAINST the Scheme, which part shall be counted in value against approving the Scheme; and/or

(iii) abstain from voting in respect of all or part of its Scheme Shares, which part shall not

be counted in determining the value of shares which are present and voting on the Scheme.

For the purposes of determining the number of Scheme Shareholders present and voting at the Scheme Meeting, a Certificate Shareholder or a DI Holder, as the case may be, will be taken to have voted FOR the Scheme, if the number of Scheme Shares voted FOR the Scheme by it exceeds the number of Scheme Shares voted AGAINST the Scheme by it, or AGAINST the Scheme, if the number of Scheme Shares voted AGAINST the Scheme by it exceeds the number of Scheme Shares voted FOR the Scheme by it. A Scheme Shareholder voting by proxy shall be included in the count of Scheme Shareholders present and voting at the Scheme Meeting as if that Scheme Shareholder was voting in person, such that the votes of a proxy who has been appointed to represent more than one Scheme Shareholder at the Scheme Meeting shall be counted as the votes of such number of appointing Scheme Shareholders. As at the Latest Practicable Date, none of the Offeror and, to the best of the Offeror's knowledge and belief, none of its concert parties holds any Skywest Shares. In the event that the Offeror and its concert parties, acquire, own or control any Skywest Shares, the Offeror and its concert parties will abstain from voting at the Scheme Meeting. When the Scheme, with or without modification, becomes effective, it will be binding upon all the Shareholders, regardless of whether they support or reject the Scheme or whether or not they were present in person or by proxy or voted at the Scheme Meeting.

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6.2 Notice The notice of the Scheme Meeting is set out on pages 166 to 168 of this Scheme Document. Shareholders are requested to take note of the date, time and place of the Scheme Meeting.

7. CONDITIONS PRECEDENT

7.1 Conditions Precedent The Acquisition and the Scheme are conditional upon the satisfaction or waiver (as the case may be) of the following conditions precedent (the "Scheme Conditions"): (a) Scheme Approval: the approval of the Scheme by the Scheme Shareholders in

compliance with the requirements of Section 210(3) of the Companies Act;

(b) Court Order: the grant of the Court Order by the Court and such Court Order having become final;

(c) ACRA Registration: the registration of the Court Order with ACRA; (d) Regulatory Approvals: the receipt of all Regulatory Approvals prior to the Condition

Precedent Satisfaction Date, and such approvals not being revoked or withdrawn on or before the Record Date, including without limitation, the following:

(i) SIC Confirmation: confirmation from the SIC that Rules 14, 15, 16, 17, 20.1,

21, 22, 28, 29 and 33.2 and Note 1(b) to Rule 19 of the Code shall not apply to the Scheme subject to any conditions the SIC may deem fit to impose;

(ii) FIRB: the Treasurer of the Commonwealth of Australia: (A) Approval: gives (either himself or by his delegate) an approval under

FATA to the acquisition of Skywest Shares by the Offeror, and that approval is not subject to conditions, or is subject only to conditions that the Offeror reasonably considers to be acceptable;

(B) No Objection: provides (either himself or by his delegate) written advice or confirmation that there is no objection to the acquisition of Skywest Shares by the Offeror under FATA or the foreign investment policy of the Australian Government, and that advice or confirmation is not subject to conditions, or is subject only to conditions that the Offeror reasonably considers to be acceptable; or

(C) Expiry of Notice Period: ceases to be empowered to make any order

under Part II of FATA in respect of the acquisition of Skywest Shares by the Offeror;

(iii) ACCC: one of the following occurs:

(A) the ACCC advises the Offeror that:

(1) it does not intend to oppose or intervene in the proposed

arrangement advised to the ACCC and as set out in this Scheme Document; or

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(2) it does not intend to oppose or intervene in the proposed arrangement advised to the ACCC and as set out in this Scheme Document, subject to undertakings that are acceptable to the Offeror, acting in its reasonable discretion; or

(B) the Australian Competition Tribunal grants to the Offeror an

authorisation in relation to the Scheme, pursuant to Section 95AT of the Competition and Consumer Act 2010 or approval is otherwise obtained from the Australian Competition Tribunal or the Federal Court of Australia; and

(iv) Other Regulatory Approvals: all such consents, waivers and approvals required from ASX or AIM (whether pursuant to the Listing Rules or otherwise) to implement the Scheme are granted or obtained and such consents, waivers and approvals are not withdrawn, cancelled or revoked;

(e) Quotation Approval for Consideration Shares: before the Condition Precedent

Satisfaction Date, ASX provides approval for the official quotation of all the VAH Consideration Shares to be issued pursuant to the Scheme, subject to any conditions that ASX may reasonably require, including customary pre-quotation conditions and conditions relating to the Scheme becoming effective in accordance with its terms;

(f) No Company Prescribed Occurrence: between the Joint Announcement Date and the Record Date, no Company prescribed occurrence (set out in Part C of Appendix 4 to this Scheme Document) (the "Company Prescribed Occurrence") in relation to the Skywest Group occurs other than as required by the Agreement or the Acquisition;

(g) No VAH Prescribed Occurrence: between the Joint Announcement Date and the

Record Date, no VAH prescribed occurrence (set out in Part D of Appendix 4 to this Scheme Document) (the "VAH Prescribed Occurrence") in relation to VAH or the Offeror occurs other than as required by the Agreement or the Acquisition;

(h) Board Recommendation: the Board has unanimously stating in this Scheme

Document that it considers the Scheme to be in the best interests of Shareholders and recommend that Shareholders approve the Scheme, in the absence of a Superior Offer and subject to receipt by the Board of an opinion from the IFA advising that the Board should recommend that Scheme Shareholders approve the Scheme, and the Board having not withdrawn, qualified or varied those statements or recommendations before the Scheme is approved by the requisite majorities of Shareholders. The terms of reference for the IFA pursuant to its appointment shall require. Scheme shall require, the IFA in its opinion to advise the Board whether to recommend that Shareholders approve the Scheme;

(i) Company Representations, Warranties and Covenants:

(i) the representations and warranties of the Company set out in Part B of Appendix 4 to this Scheme Document that:

(A) are qualified as to materiality being true and correct; and

(B) are not qualified as to materiality being true and correct in all material

respects,

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subject to certain disclosures made by the Company in a disclosure letter to the Offeror dated 6 December 2012 which sets out certain information constituting exceptions to the representations and warranties of the Company and, in each case as of the Joint Announcement Date except to the extent any such representation and warranty expressly relates to an earlier date (in which case as of such earlier date); and

(ii) the Company shall have, as of the Record Date, performed and complied in

all material respects with all covenants and agreements contained in the Agreement which are required to be performed by or complied with by it, on or prior to the Record Date;

(j) Offeror Representations, Warranties and Covenants:

(i) the representations and warranties of the Offeror set out in Part A of

Appendix 4 to this Scheme Document that: (A) are qualified as to materiality being true and correct; and

(B) are not qualified as to materiality being true and correct in all material

respects,

in each case as of the Joint Announcement Date except to the extent any such representation and warranty expressly relates to an earlier date (in which case as of such earlier date); and

(ii) the Offeror shall have, as of the Record Date, performed and complied in all material respects with all covenants and agreements contained in the Agreement which are required to be performed by or complied with by it, on or prior to the Record Date; and

(k) No legal or regulatory restraint: between the Joint Announcement Date and up to

the Record Date, no injunction or other order being issued by any Governmental Agency or by any court of competent jurisdiction or other legal or regulatory restraint, prohibition or condition preventing the consummation of the Acquisition or the implementation of the Scheme or proposed transactions relating to the Scheme, being in effect.

7.2 Non-fulfilment of Scheme Conditions

Shareholders should note that the Scheme will only become effective if all the Scheme Conditions as specified in the Scheme Letter have been satisfied (or where applicable, waived) in accordance with the Scheme Letter and a copy of the Court Order has been lodged with ACRA or on such earlier date as the Court may determine and as may be specified in the Court Order sanctioning the Scheme. If any one or more of the Scheme Conditions are not satisfied (or where applicable, waived), the Scheme will not become effective and binding.

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8. REGULATORY APPROVALS

8.1 SIC The SIC has by way of a letter dated 5 December 2012 confirmed that the Scheme is exempted from Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29 and 33.2 and Note 1(b) to Rule 19 of the Code, subject to, inter alia, the following conditions:

(a) the common substantial shareholders of the Offeror and the Company abstain from

voting on the Scheme;

(b) the Offeror and its concert parties abstain from voting on the Scheme;

(c) the Directors who are also directors of the Offeror abstain from making a recommendation to the Scheme Shareholders on the Scheme;

(d) the Company appoints an independent financial adviser to advise the Shareholders

on the Scheme; (e) the Scheme Document contains advice to the effect that by voting for the Scheme,

the Shareholders are agreeing to the Offeror and its concert parties acquiring or consolidating effective control of the Company without having to make a general offer for the Company; and

(f) the Scheme Document discloses the names of the Offeror and its concert parties,

their current voting rights in the Company as of the Latest Practicable Date and their voting rights in the Company after the Scheme.

The common substantial shareholders of the Offeror and the Company, and the Offeror and its concert parties will abstain from voting on the Scheme at the Scheme Meeting and will not be making a recommendation to the Shareholders on the Scheme. There are no Directors who are also directors of the Offeror and accordingly, all Directors will be making a recommendation on the Scheme to the Shareholders. In compliance with the Code, DMG & Partners Securities Pte Ltd has been appointed as the independent financial advisers to the Directors to advise the Directors in relation to the Scheme. The SIC has confirmed that it has no objections to the Scheme Conditions.

8.2 Court Sanction

The Scheme is subject to sanction by the Court as set out under paragraph 10 of the Explanatory Statement.

8.3 ACCC and FIRB The Scheme is also subject to approvals from FIRB and ACCC as set out in paragraphs 7.1(d)(ii) and (iii) respectively of the Explanatory Statement. The ACCC announced on 31 January 2013 that it did not propose to intervene in the Acquisition pursuant to Section 50 of the Competition and Consumer Act 2010 and accordingly, the Scheme Condition set out in paragraph 7.1(d)(iii) of the Explanatory Statement has been satisfied. As at the Latest Practicable Date, the approval from the FIRB has not been obtained.

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9. EFFECT OF THE SCHEME If the Scheme becomes effective and binding, the entire issued share capital of the Company will be owned by the Offeror.

10. IMPLEMENTATION OF THE SCHEME

10.1 Application to Court for Sanction

Upon the Scheme being approved by a majority in number of the Scheme Shareholders present and voting, either in person or by proxy, at the Scheme Meeting, such majority holding not less than three-fourths in value of the Skywest Shares voted at the Scheme Meeting, and upon the approval of the FIRB being obtained, an application will be made to the Court by the Company for the sanction of the Scheme.

10.2 Procedure for Implementation

If the Court sanctions the Scheme, VAH, VAH Sub and the Company will (subject to the satisfaction (or where applicable, waiver) of all the Scheme Conditions) take the necessary steps to render the Scheme effective and the following will be implemented:

(a) dealings in Skywest Shares in the form of CREST DIs on AIM will be suspended at

7.00 p.m. (London time) and dealings in Skywest Shares in the form of CHESS DIs on ASX will be suspended at 7.00 p.m. (Sydney time) on the Business Day immediately following the Court Hearing Sanction Date and Skywest will make applications to cancel the listing and quotation of Skywest Shares on AIM and ASX, cancel the trading in CREST DIs on AIM and in CHESS DIs on ASX, such cancellations/delistings in each case to take effect on the Effective Date;

(b) from the Effective Date, all existing share certificates relating to the Scheme Shares

held or owned by Entitled Shareholders will be cancelled and cease to be evidence of title of the Skywest Shares represented thereby whether or not they are returned to the Company for cancellation;

(c) the Scheme Shares held by Entitled Shareholders will be transferred to VAH Sub and/or its nominees, and VAH Sub and/or VAH shall, in consideration for such transfer, within 10 calendar days after the Effective Date, pay the Scheme Cash and Securities Consideration to Entitled Shareholders in the following manner:

(i) Scheme Cash Consideration

(A) by sending a cheque for the aggregate Scheme Cash Consideration

drawn on an Australian bank and in Australian Dollars payable to and made out in favour of each such Entitled Shareholder by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; or

(B) by crediting the Pound Sterling equivalent of the aggregate Scheme Cash Consideration, determined based on the Prevailing Exchange Rate, through CREST; or

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(C) by crediting the Scheme Cash Consideration in Australian Dollars, to the relevant bank account(s) designated by CHESS DI Holders by the Books Closure Date to receive cash distributions from the Company in Australian Dollars; and

(ii) VAH Consideration Shares

(A) where any Entitled Shareholder has not successfully provided the

Share Registrars with details of any account(s) with any depository company or custodian in Australia (the "Relevant Australian Custodian") who has consented to receive and/or hold the VAH Consideration Shares on such Entitled Shareholder’s behalf (the "Relevant Australian Custodian Details"), by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of such Entitled Shareholder and the despatch of a statement of confirmation of such allotment and issue to such Entitled Shareholder, regardless of whether such Entitled Shareholder holds the Scheme Shares as custodian or nominee or otherwise, by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder, or in the case of joint Entitled Shareholders, to the first named Entitled Shareholder, by ordinary post to his address as appearing in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; or

(B) where any Entitled Shareholder has successfully provided the Share Registrars with the Relevant Australian Custodian Details, by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of the Relevant Australian Custodian, and the despatch of a confirmation of such allotment and issue to such Relevant Australian Custodian by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; and

(iii) the Company shall authorise any person to execute or effect on behalf of all

such Entitled Shareholders, an instrument or instruction of transfer of all the Scheme Shares held by such Entitled Shareholders, and every such instrument or instruction of transfer so executed shall be effective as if it had been executed by the relevant Entitled Shareholder.

By way of illustration, assuming that the Scheme becomes effective and binding on 12 April 2013, the posting of cheques or the crediting of the relevant bank account(s) for the Scheme Cash Consideration in the manner set out in paragraph 10.2(c)(i) above and the allotment and issue of the VAH Consideration Shares in the manner set out in paragraph 10.2(c)(ii) above is expected to take place on or before 22 April 2013. The despatch of payment of the Scheme Cash Consideration and statement(s) of confirmation of the allotment and issue of the VAH Consideration Shares by VAH and/or VAH Sub to each Entitled Shareholder in accordance with the above shall discharge VAH and/or VAH Sub of any liability in respect of the delivery of those payments and the VAH Consideration Shares.

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10.3 Retention and Release of Proceeds On or after the day being six (6) calendar months after the posting of such cheques relating to the Scheme Cash Consideration by or on behalf of VAH Sub and/or VAH, VAH Sub and/or VAH shall have the right to cancel or countermand payment of any such cheque which has not been cashed (or has been returned uncashed) and shall place the Scheme Cash Consideration monies in a bank account in the Company's name in respect of the Scheme Cash Consideration monies with a licensed bank in Singapore or Australia selected by the Company. The Company or its successor entity shall hold such monies until the expiration of six (6) years from the Effective Date and shall prior to such date make payments therefrom of sums payable pursuant to Clause 3.2 of the Scheme to persons who satisfy the Company or its successor entity that they are respectively entitled thereto and that the cheques referred to in Clause 3.2 of the Scheme for which they are payees have not been cashed. Any such determination shall be conclusive and binding upon all persons claiming an interest in the relevant monies, and any payments made by the Company hereunder shall not include any interest accrued on the sums to which the respective persons are entitled pursuant to Clause 3.1 of the Scheme. On the expiry of six (6) years from the Effective Date, each of the Company, VAH Sub and/or VAH shall be released from any further obligation to make any payments of the Scheme Cash Consideration under the Scheme and the Company or its successor entity shall transfer to VAH Sub the balance (if any) of the sums then standing to the credit of the bank account referred to in Clause 3.4(a) of the Scheme including accrued interest, subject, if applicable, to the deduction of interest, tax or any withholding tax or any other deduction required by law and subject to the deduction of any expenses.

11. SUSPENSION AND DELISTING

Shareholders should note that if they vote in favour of the Scheme and if the Scheme becomes effective as a consequence of such votes in favour of the Scheme, VAH Sub will own all the Skywest Shares and Skywest will be a wholly-owned subsidiary of VAH Sub and VAH. Dealings in Skywest Shares in the form of CREST DIs on AIM will therefore be suspended at 7.00 p.m. (London time) and dealings in Skywest Shares in the form of CHESS DIs on ASX will be suspended at 7.00 p.m. (Sydney time) on the Business Day immediately following the Court Hearing Sanction Date. Skywest will make applications to cancel the listing and quotation of Skywest Shares on AIM and ASX, cancel the trading in CREST DIs on AIM and in CHESS DIs on ASX, such cancellations/delistings in each case to take effect on the Effective Date.

12. CLOSURE OF BOOKS 12.1 Notice of Books Closure Date

Subject to the approval by the Scheme Shareholders of the Scheme at the Scheme Meeting, and the sanction of the Scheme by the Court, notice of the Books Closure Date will be given in due course for the purpose of determining the entitlements of the Entitled Shareholders to the Scheme Cash and Securities Consideration under the Scheme. The Books Closure Date is tentatively scheduled on 9 April 2013 at 5.00 p.m. (Singapore time).

12.2 Effect of Books Closure No transfer of the Skywest Shares may be effected after the Books Closure Date.

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13. SETTLEMENT AND REGISTRATION PROCEDURES Subject to the Scheme becoming effective, the settlement and registration procedures set out below will apply.

(a) Entitled Shareholders who are Certificate Shareholders

(i) Entitlements to the Scheme Cash and Securities Consideration will be determined on the basis of the Certificate Shareholders and their holdings of Scheme Shares appearing in the Register of Members at 5.00 p.m. (Singapore time) on the Books Closure Date.

Therefore, Certificate Shareholders who have not already done so are requested to take the necessary action to ensure that the Scheme Shares owned by them are registered in their names with the Share Registrars by 5.00 p.m. (Singapore time) on the Books Closure Date.

(ii) From the Effective Date, each existing share certificate representing a former

holding of Skywest Shares by Entitled Shareholders who are Certificate Shareholders will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the Scheme Cash and Securities Consideration to each Entitled Shareholder who is a Certificate Shareholder based on his holding of the Skywest Shares as at 5.00 p.m. (Singapore time) on the Books Closure Date in accordance with paragraph 10.2(c) above.

(iii) Scheme Cash Consideration

Entitled Shareholders who are Certificate Shareholders will receive a cheque for the aggregate Scheme Cash Consideration drawn on an Australian bank and in Australian Dollars payable to and made out in favour of each such Certificate Shareholder and despatched by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Certificate Shareholder.

(iv) VAH Consideration Shares

All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares. Instead, all Entitled Shareholders who are Certificate Shareholders who receive VAH Consideration Shares will be sent a statement of confirmation of issue and allotment of shares rather than a share certificate. Any fractional entitlements of VAH Consideration Shares to be paid in cash to Entitled Shareholders being Certificate Shareholders will be paid together with the Scheme Cash Consideration in the manner set out in paragraphs 10.2(c) and 13(a)(iii) above. Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on ASX on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

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(v) General

Entitled Shareholders who are Certificate Shareholders who wish to convert their Scheme Shares into CREST DIs or CHESS DIs, or who wish to receive the equivalent of their entitlement to the Scheme Cash Consideration in Pounds Sterling or have their Scheme Cash Consideration credited in Australian Dollars to their bank account(s), should make arrangements for their Scheme Shares to be converted into CREST DIs or CHESS DIs respectively, as the case may be, as soon as practicable. Further, Entitled Shareholders who are Certificate Shareholders who wish to have their VAH Consideration Shares held by a Relevant Australian Custodian should make arrangements for the conversion of their Scheme Shares into CHESS DIs as soon as practicable, such that their entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CHESS Nominee in the manner set out in paragraph 13(c)(v) below. Such Entitled Shareholders must deliver all required documents for any such conversion to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CREST Nominee or the CHESS Nominee, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

(b) CREST DIs held through the CREST Nominee as the Entitled Shareholder

(i) CREST DI Holders should note that the CREST Nominee, as the Entitled

Shareholder holding the Skywest Shares underlying the CREST DIs, will be entitled to receive the aggregate Scheme Cash and Securities Consideration attributable to Skywest Shares underlying the CREST DIs, for and on behalf of the CREST DI Holders.

(ii) The aggregate Scheme Cash and Securities Consideration to be received by

the CREST Nominee as the Entitled Shareholder holding the Skywest Shares underlying the CREST DIs, will be the aggregate of each CREST DI Holder’s entitlement to the Scheme Cash and Securities Consideration based on the number of Scheme Shares standing to each CREST DI Holder’s account under the CREST Nominee as at 5.00 p.m. (Singapore time) on the Books Closure Date, rounded down to the nearest whole cent (if applicable) and with fractional entitlements to the VAH Consideration Shares not being issued and paid in cash pro-rata based on the VAH Consideration Share Issue Price.

(iii) From the Effective Date, the existing share certificate(s) representing a

former holding of Skywest Shares by the CREST Nominee as the Entitled Shareholder will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the aggregate Scheme Cash and Securities Consideration to or at the direction of the CREST Nominee in accordance with paragraph 10.2(c) above.

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(iv) Scheme Cash Consideration

The CREST Nominee, for and on behalf of the CREST DI Holders, will make arrangements, or will procure that arrangements be made, for the equivalent of the Scheme Cash Consideration in Pounds Sterling, based on the Prevailing Exchange Rate, in respect of each CREST DI Holder’s entitlement to the Scheme Cash Consideration to be credited to the relevant bank account(s) of the CREST DI Holder by way of a CREST payment.

(v) VAH Consideration Shares

All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares.

Unless the CREST Nominee has provided the Company and/or the UK Share Registrar with the Relevant Australian Custodian Details, all VAH Consideration Shares in respect of each CREST DI Holder’s entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CREST Nominee and a statement of confirmation of such allotment and issue will be despatched to the CREST Nominee. The CREST Nominee will thereafter make arrangements for each CREST DI Holder to receive the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CREST Nominee.

CREST DI Holders who wish to have the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CREST Nominee held by a Relevant Australian Custodian, must therefore provide the CREST Nominee with their Relevant Australian Custodian Details as soon as practicable and in any event, no later than the Books Closure Date. CREST DI Holders are advised to contact the Share Registrars, for and on behalf of the CREST Nominee, to obtain details of the information required in respect of the Relevant Australian Custodian Details at the following e-mail address: [email protected]. Any fractional entitlements of VAH Consideration Shares to be paid in cash to CREST DIs will be paid in the same manner as the Scheme Cash Consideration in the manner set out in paragraphs 10.2(c) and 13(b)(iv) above. Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on ASX on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

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(vi) General CREST DI Holders who wish to convert their CREST DIs into CHESS DIs to receive the Scheme Cash Consideration in Australian Dollars and the VAH Consideration Shares through the CHESS Nominee, or who wish to directly hold the Scheme Shares underlying their CREST DIs, should make arrangements for such conversion or transfer of the relevant underlying Scheme Shares from the CREST Nominee to the CHESS Nominee or to themselves, as the case may be, as soon as practicable.

Such CREST DI Holders must deliver all required documents for any such conversion or transfer to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CHESS Nominee or as a Certificate Shareholder on the Register of Members, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

(c) CHESS DIs held through the CHESS Nominee as the Entitled Shareholder

(i) CHESS DI Holders should note that the CHESS Nominee, as the Entitled

Shareholder holding the Skywest Shares underlying the CHESS DIs, will be entitled to receive the aggregate Scheme Cash and Securities Consideration attributable to Skywest Shares underlying the CHESS DIs, for and on behalf of the CHESS DI Holders.

(ii) The aggregate Scheme Cash and Securities Consideration to be received by the

CHESS Nominee as the Entitled Shareholder holding the Skywest Shares underlying the CHESS DIs, will be the aggregate of each CHESS DI Holder’s entitlement to the Scheme Cash and Securities Consideration based on the number of Scheme Shares standing to each CHESS DI Holder’s account under the CHESS Nominee as at 5.00 p.m. (Singapore time) on the Books Closure Date, rounded down to the nearest whole cent (if applicable) and with fractional entitlements to the VAH Consideration Shares not being issued and paid in cash pro-rata based on the VAH Consideration Share Issue Price.

(iii) From the Effective Date, the existing share certificate(s) representing a former

holding of Skywest Shares by the CHESS Nominee as the Entitled Shareholder will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the aggregate Scheme Cash and Securities Consideration to or at the direction of the CHESS Nominee in accordance with paragraph 10.2(c) above.


The CHESS Nominee, for and on behalf of the CHESS DI Holders, will make arrangements or will procure that arrangements are made, for the Scheme Cash Consideration in Australian Dollars in respect of each CHESS DI Holder’s entitlement to the Scheme Cash Consideration to be either credited in Australian Dollars to the bank account(s) designated or nominated by the CHESS DI Holder by the Books Closure Date for dividend payments or by sending a cheque for such Scheme Cash Consideration drawn on an Australian bank and in Australian Dollars payable to and made out in favour of such CHESS DI Holder and despatched by ordinary post to his address in the records of the CHESS Nominee as at the Books Closure Date, at the sole risk of such CHESS DI Holder.

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(v) VAH Consideration Shares All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares. All VAH Consideration Shares in respect of each CHESS DI Holder’s entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CHESS Nominee to hold for and on behalf of the CHESS DI Holders and a statement of confirmation of such allotment and issue will be despatched to the CHESS Nominee. Arrangements will thereafter be made for each CHESS DI to receive the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CHESS Nominee.

Any fractional entitlements of VAH Consideration Shares to be paid in cash to CHESS DIs will be paid together with the Scheme Cash Consideration in the manner set out in paragraphs 10.2(c) and 13(c)(iv) above. Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on ASX on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

(vi) General

CHESS DI Holders who wish to convert their CHESS DIs into CREST DIs to receive the equivalent of Scheme Cash Consideration in Pounds Sterling and the VAH Consideration Shares through the CREST Nominee, or who wish to directly hold the Scheme Shares underlying their CHESS DIs, should make arrangements for such conversion or transfer of the relevant underlying Scheme Shares from the CHESS Nominee to the CREST Nominee or themselves, as the case may be, as soon as practicable.

Such CHESS DI Holders must deliver all required documents for any such conversion or transfer to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CREST Nominee or as a Certificate Shareholder on the Register of Members, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

14. DIRECTORS' INTERESTS

The interests of the Directors in the Skywest Shares as at the Latest Practicable Date are set out in paragraph 5.3 of Appendix 3 to this Scheme Document.

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15. SHAREHOLDERS NOT RESIDENT IN SINGAPORE, AUSTRALIA AND THE UNITED KINGDOM

15.1 Shareholders

The sending of this Scheme Document to Scheme Shareholders whose addresses are outside of Singapore, Australia and the United Kingdom, as shown in the Register of Members (each an "Overseas Scheme Shareholder"), may be affected by the laws of the relevant overseas jurisdictions. Accordingly, Overseas Scheme Shareholders should inform themselves about and observe any applicable requirements. Any Overseas Scheme Shareholder who is in doubt about his position should consult his professional adviser in the relevant jurisdiction. This Scheme Document has not been and will not be sent to any Scheme Shareholder, other than those resident in Singapore, Australia and the United Kingdom, due to potential restrictions on sending such documents into the relevant overseas jurisdictions. For the avoidance of doubt, the Scheme is proposed to all Scheme Shareholders and applies to all Scheme Shareholders and all Skywest Shares, including those Shareholders to whom this Scheme Document has not been and will not be sent.

15.2 Copies of this Scheme Document

Shareholders, including Overseas Scheme Shareholders, may obtain additional copies of this Scheme Document and any related documents, during normal business hours on any day prior to the date of the Scheme Meeting, from the registered office of the Company in Singapore at 510 Thomson Road, #12-04 SLF Building, Singapore 298135. Alternatively, an Overseas Scheme Shareholder may write to the Company at the same address to request for this Scheme Document and any related documents to be sent to them at an address in Singapore, Australia or the United Kingdom by ordinary post at their own risk, up to five (5) Market Days prior to the date of the Scheme Meeting.

15.3 Notice The Company and the Offeror each reserves the right to notify any matter, including the fact that the Scheme has been proposed, to any or all Shareholders (including Overseas Scheme Shareholders) by paid advertisement in a daily newspaper published and circulated in Singapore, an announcement on AIM or ASX, or on the Company's website (http://www.skywest.com.sg), in which case such notice shall be deemed to have been sufficiently given notwithstanding any failure of any Shareholder (including any Overseas Scheme Shareholder) to receive or see such announcement or advertisement.

15.4 Foreign Jurisdiction

It is the responsibility of any Overseas Scheme Shareholder who wishes to participate in the Scheme to satisfy himself as to the full observance of the laws of the relevant jurisdiction in that connection, including the obtaining of any governmental or other consent which may be required and compliance with all necessary formalities or legal requirements. Any Overseas Scheme Shareholder who is in any doubt about his position should consult his professional adviser in the relevant jurisdiction. In participating in the Scheme, the Overseas Scheme Shareholder represents and warrants to the Offeror and the Company that he is in full observance of the laws of the relevant jurisdiction in that connection, and that he is in full compliance with all necessary formalities or legal requirements.

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16. ACTION TO BE TAKEN BY SHAREHOLDERS Certificate Shareholders who are unable to attend the Scheme Meeting are requested to sign and return the Proxy Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the Company Registered Office not later than 48 hours before the time appointed for the Scheme Meeting. The completion and return of Proxy Forms will not prevent Certificate Shareholders from attending and voting at the Scheme Meeting in person if they subsequently wish to do so. In such event, the relevant Proxy Forms will be deemed to be revoked. CHESS DI Holders are requested to sign and return the Voting Instruction Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, be lodged with the Australian Share Registrar, Computershare Investor Services Pty Limited, by one of the means below: (a) delivered by post to Computershare Investor Services Pty Limited, GPO Box 242,

Melbourne, Victoria 3001;


(c) online by visiting www.investorvote.com.au and logging in using the control number

found on the front of the accompanying Voting Instruction Form. Intermediary Online subscribers (Institutions/Custodians) may lodge their voting instruction online by visiting www.intermediaryonline.com not later than 72 hours before the time appointed for the Scheme Meeting.

CREST DI Holders are requested to sign and return the Voting Instruction Form accompanying this Scheme Document in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the office of the UK Share Registrar, Computershare Investor Services plc, at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or using one of the alternative lodgement methods outlined on the Voting Instruction Form) not later than 72 hours before the time appointed for the Scheme Meeting.

17. ADVICE OF THE INDEPENDENT FINANCIAL ADVISER The advice of the IFA to the Directors is set out in the IFA Letter.

18. DIRECTORS' RECOMMENDATION

The recommendations of the Directors in relation to the Scheme are set out on page 20 of the Letter from the Board to the Shareholders.

19. GENERAL INFORMATION

Your attention is drawn to the further relevant information, including the Directors' interests in the Skywest Shares, set out in the Appendices to this Scheme Document. These Appendices form part of this Scheme Document. This Explanatory Statement should be read in conjunction with, and is qualified by, the full text of this Scheme Document, including the Scheme as set out on pages 159 to 165 of this Scheme Document.

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APPENDIX 1 LETTER FROM THE IFA TO THE DIRECTORS

40

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LETTER FROM DMG & PARTNERS SECURITIES PTE LTD TO THE DIRECTORS OF SKYWEST AIRLINES LTD

26 February 2013 The Directors of Skywest Airlines Ltd. 510 Thomson Road, #12-04 SLF Building Singapore 298135 Dear Sirs, PROPOSED ACQUISITION OF SKYWEST AIRLINES LTD (THE “COMPANY”) BY WAY OF A SCHEME OF ARRANGEMENT AND SKYWEST WARRANTS PROPOSAL IN RELATION TO THE OUTSTANDING WARRANTS IN THE CAPITAL OF THE COMPANY Unless otherwise defined or the context requires otherwise, all terms used herein have the same meanings as defined in the scheme document to Shareholders of the Company dated 26 February 2013 (the “Scheme Document”). 1. INTRODUCTION

On 30 October 2012 (the "First Announcement Date"), the respective boards of directors of VAH and the Company separately announced (the "First Announcements") that VAH proposed to acquire 100% of the issued share capital in the Company by way of a scheme of arrangement that will be subject to the laws of Singapore (the "Acquisition"). The First Announcements also stated that the Acquisition was subject to a number of conditions, including but not limited to, the approval of the SIC to the terms of the Scheme and that definitive conditional legal agreements in relation to the Scheme would only be entered into on receipt of such SIC approval. On 6 December 2012 (the "Joint Announcement Date"), the respective boards of directors of VAH and the Company jointly announced (the "Joint Announcement") that approval had been received from the SIC for the terms of the Scheme and that the Offeror, VAH and the Company had entered into an implementation agreement to implement the Scheme (the "Agreement"). The Scheme will be proposed in accordance with the Companies Act and the Singapore Code on Take-overs and Mergers (the “Code”). The Scheme will involve the acquisition by the Offeror of all the issued ordinary shares in the share capital of the Company (the “Skywest Shares”) held by shareholders of the Company (the “Skywest Shareholders”). Upon the Scheme becoming effective and binding, the entire issued share capital of Skywest will be acquired by the Offeror, and applications will be made to the Australian Securities Exchange (“ASX”) and the Alternative Investment Market operated by the London Stock Exchange (“AIM”) to delist Skywest from ASX and AIM, respectively. Pursuant to the requirements of the Code, DMG & Partners Securities Pte Ltd (“DMG”) has been appointed by the Company to advise the Directors for the purpose of making recommendations to Shareholders in respect of the Scheme and the Skywest Warrants Proposal.

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This letter sets out our evaluation and assessment of the financial terms of the Scheme and the Skywest Warrants Proposal and our recommendations to the Directors. This letter will be included in the Scheme Document dated 26 February 2013 to be issued by the Company providing details and the recommendations of the Directors with regards to the Scheme and the Skywest Warrants Proposal.

2. TERMS OF REFERENCE DMG has been appointed to advise the Directors on the financial terms of the Scheme and the Skywest Warrants Proposal as required by the Code. DMG’s advice shall not be construed as fulfilment of or in compliance with any requirements by ASX or AIM listing rules. DMG is neither a party to the negotiations or discussions in relation to the Scheme and the Skywest Warrants Proposal, nor were we involved in the deliberations leading up to the decision on the part of the Company to enter into the Scheme and the Skywest Warrants Proposal, and we do not, by this letter, in any way advise on the merits of the Scheme and the Skywest Warrants Proposal other than to form an opinion on whether the Scheme and the Skywest Warrants Proposal are on terms that are fair and reasonable to the Scheme Shareholders and Skywest Warrant Holders. Our terms of reference do not require us to evaluate or comment on the strategic, commercial, financial merits or risks (if any) of the Scheme and the Skywest Warrants Proposal or to compare its relative merits vis-à-vis alternative transactions previously considered by the Company (if any) or that may otherwise be available to the Company currently or in the future, and we do not express any opinion on any of the aforesaid. We are not required to and have not made any independent appraisal or valuation of the assets and liabilities of the Company and/or the Group. Any such evaluation, comment, comparison, consideration, appraisal or valuation remains and is solely the responsibility of the Directors and the management of the Company, but we may draw upon their views (to the extent we deem necessary or appropriate and at our sole discretion) in arriving at our opinion as set out in this letter. We have also relied on information on the Company and/or the Group, including the disclosures and representations made by the Directors and management on the values of the assets and liabilities of the Company and/or the Group stated therein. For the purpose of our advice and opinion, we have relied on publicly available information collated by us, information set out in the Scheme Document, and information (including representations, opinions, facts and statements) provided to us by the Directors and management, and the advisers of the Company. We have relied on the assurances of the Directors and management of the Company that they jointly and severally accept full responsibility for the accuracy, truth, completeness and adequacy of such information and they have confirmed to us that, upon making all reasonable inquiries and to the best of their respective knowledge, information and belief, all material information in connection with the Scheme, the Company and the Group has been disclosed to us, that such information is true, complete, accurate and fair in all material respects and that there is no other information or fact, the omission of which would cause any information disclosed to or relied upon by us or the facts of or in relation to the Scheme and the Skywest Warrants Proposal, the Company and the Group to be inaccurate, untrue, incomplete, unfair or misleading in any material respect.

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We have not independently verified any of the aforesaid information whether written or verbal, and have assumed its accuracy, truth, completeness and adequacy, including without limitation any information on the assets and liabilities of the Company and/or the Group. Accordingly, we cannot and do not represent or warrant (expressed or implied), and do not accept any responsibility for the accuracy, truth, completeness or adequacy of such information. We have further assumed that all statements of fact, belief, opinion and intention made by the Directors and the management of the Company to us or in the Scheme Document have been reasonably made after due and careful inquiry. Whilst care has been exercised in reviewing the information which we have relied on, we have not independently verified such information but nevertheless have made such reasonable enquiries and exercised our judgment on the reasonableness of such information as we deemed necessary and have found no reason to doubt the accuracy or reliability of the information. The scope of our appointment does not require us to conduct a comprehensive independent review of the business, operations or financial conditions of the Company and/or the Group, or to express, and we do not express, any view on the future growth prospects, value and earnings potential of the Company and/or the Group. Such review or comment, if any, remains the responsibility of the Directors and the management of the Company and/or the Group, although we may draw upon their views (to the extent required by the Code and/or deemed necessary or appropriate by us) in arriving at our advice as set out in this letter. We have not obtained from the Company and/or the Group any projection of the future performance including financial performance of the Company and/or the Group and further, we did not conduct discussions with the Directors and management of the Company and/or the Group on, and did not have access to, any business plan and financial projections of the Company and/or the Group. We also do not express any opinion herein as to the prices at which the shares of the Company may trade or the future value, financial performance or conditions of the Company and/or the Group, upon or after completion of the Scheme. We have not made any independent evaluation and appraisal on the assets and liabilities of the Company and/or the Group and we have not been furnished with any such evaluation or appraisal. Our advice and opinion herein is based upon market, economic, industry, monetary and other conditions prevailing on, and the information provided to us as of the Latest Practicable Date. Such conditions may change significantly over a relatively short period of time. We assume no responsibility to update, revise or reaffirm our opinion in light of, and this letter does not take into account, any subsequent development after the Latest Practicable Date that may affect our opinion herein. The Company has been separately advised by its advisers in the preparation of the Scheme Document (other than this letter). We have no role or involvement and have not provided any advice, financial or otherwise, whatsoever in the preparation, review and verification of the Scheme Document (other than this letter). Accordingly, we take no responsibility for and express no views, expressed or implied, on the contents of the Scheme Document (other than this letter). We have not regarded the general or specific investment objectives, financial situation, tax position, risk profile or unique needs and constraints of any individual Shareholder and Skywest Warrant Holder. As different Shareholders and the Skywest Warrant Holders would have different investment portfolios and objectives, we advise the Directors to recommend that any individual Shareholder and Skywest Warrant Holder who may require specific advice in relation to his or her investment portfolio should consult his or her stockbroker, bank manager, solicitor, accountant, tax advisor or other professional advisers.

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As stated above, this letter is only for the use and benefit of the Directors and the recommendations made by them to the Scheme Shareholders and Skywest Warrant Holders are the responsibility of the Directors. Shareholders and Skywest Warrant Holders should also take note of any announcements relevant to the Scheme and the Skywest Warrants Proposal which may be released by the Company after the Latest Practicable Date.

3. INFORMATION ON THE COMPANY, VAH AND THE OFFEROR

3.1 The Company Information on the Company has been extracted from paragraph 2.1 of the Scheme Document and set out in italics below. “Skywest (ASX:SXR, LSE:SKYW) has been in operation for close to 50 years, currently flying to 14 destinations on its regular passenger transport network. Skywest Airlines operates flights across regional Western Australia as well as to Darwin, Melbourne and internationally to Denpasar, Bali. With a strong presence in the corporate charter, ‘fly-in fly-out’ mining market and regular passenger transport, the airline carries approximately 800,000 passengers annually, servicing business travellers, tourists and regional communities. Excluding the eight (8) ATR-72 turboprops operated on behalf of Virgin Australia as part of the Australian Regional Airline Network (ARAN), Skywest Airlines' fleet includes a total of 20 Airbus A320 jet aircraft, Fokker F100 jet aircraft and Fokker F50 turboprops. The Company is a public company incorporated in Singapore and is a diversified airline, aerospace and investment group. Its current principal subsidiary, Skywest Airlines, is a high capacity airline operator and holiday package supplier in the Australasian region, which holds an Australian High Capacity AOC enabling the operation of large commercial aircraft for charter and regular scheduled air passenger traffic. As at the Latest Practicable Date, the Company has an issued and paid-up share capital of S$50,002,606, comprising an aggregate of 213,040,000 Skywest Shares.”

3.2 VAH Information on VAH has been extracted from paragraph 2.2 of the Scheme Document and set out in italics below. “VAH (ASX:VAH) was incorporated in Queensland, Australia on 27 May 2002 and has since established itself as a contemporary, full service airline, with a reputation for exceptional customer service. The airline employs more than 8,000 people in Australia, New Zealand and the USA. Virgin Australia has strategic alliances with four (4) key airline partners: Air New Zealand, Delta Air Lines, Etihad Airways and Singapore Airlines, providing customers with access to over 400 destinations worldwide. Its domestic and international operations are complemented by Virgin Samoa, a joint venture airline with the Government of Samoa. Virgin Australia operates a fleet of 108 modern Airbus A330, Boeing 777, Boeing 737, Embraer E-Jet and ATR-72 turboprop aircraft to 34 Australian ports and 17 international destinations including the USA, UAE, New Zealand, Indonesia, Thailand, Papua New Guinea, Solomon Islands, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands.

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On 30 October 2012, Virgin Australia announced that it had entered into a share purchase agreement to acquire 60 per cent. of the existing shares in Tiger Australia from Tiger Airways. The transaction is subject to conditions and regulatory approvals, including ACCC clearance and FIRB approval. As part of the transaction, Virgin Australia and Tiger Airways propose to enter into a shareholders’ agreement, a brand licensing agreement and a services agreement. Tiger Australia will be managed as a standalone entity, with its own AOC and a separate board and management team. Tiger Australia will continue to operate under the Tiger Airways brand as a low cost carrier providing domestic air travel services in Australia with a fleet of Airbus A320 aircraft. As at the Latest Practicable Date, the directors of VAH are Mr Neil Chatfield, Ms Samantha Mostyn, Mr Robert Thomas, The Honourable Mark Vaile A.O., Mr John Borghetti, Mr David Baxby, Mr Joshua Bayliss and Mr Keith Roberts, and VAH has a share capital comprising 2,455,775,111 ordinary shares (the “VAH Shares"). The VAH Shares are admitted to trading on ASX.”

3.3 The Offeror Information on the Offeror has been extracted from paragraph 2.3 of the Scheme Document and set out in italics below. “The Offeror is an investment holding company incorporated in Queensland, Australia on 22 October 2012, and is a wholly-owned subsidiary of VAH. As at the Latest Practicable Date, the Offeror has a share capital comprising one (1) ordinary share and the directors of the Offeror are Mr John Borghetti and Mr Sankar Narayan.”

4. THE ACQUISITION AND THE SCHEME 4.1 Terms of the Scheme Information relating to the terms of the Scheme has been extracted from paragraph 4.1 of the

Scheme Document and set out in italics below. Shareholders are advised to read paragraph 4.1 of the Scheme Document carefully. “The Acquisition will be effected by way of a scheme of arrangement in accordance with Section 210 of the Companies Act, the Code and the terms and conditions of the Scheme Letter. The Scheme will involve, amongst other things, the following: (a) the transfer of all the Scheme Shares held by the Scheme Shareholders to the Offeror;

and (b) in consideration of the transfer of the Scheme Shares held by the Scheme

Shareholders, the Scheme Shareholders will receive:

(i) a cash consideration of A$0.225 (the "Scheme Cash Consideration"); and

(ii) 0.53 new ordinary shares in VAH (the “VAH Consideration Shares") at an issue price of A$0.424 for each VAH Consideration Share (the "VAH Consideration Share Issue Price"),

(collectively, the "Scheme Cash and Securities Consideration") for each Scheme Share held by each Shareholder as at the Books Closure Date.

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The aggregate cash amount payable to any Scheme Shareholder pursuant to the Scheme Cash Consideration will be rounded down to the nearest whole cent, if applicable, and will be paid in accordance with paragraph 13 of the Explanatory Statement. The VAH Consideration Shares will be duly authorised, validly issued, credited as fully paid and free from any Encumbrances. The VAH Consideration Shares shall rank pari passu in all respects with the VAH Shares in issue as at the Effective Date, including the right to receive and retain any dividends, rights and other distributions declared, paid or made on or after the Effective Date. No fraction of any VAH Consideration Share shall be issued and instead any fractional entitlements to VAH Consideration Shares will be paid in cash pro-rata based on the VAH Consideration Share Issue Price. The Scheme Cash and Securities Consideration shall be paid to the Skywest Shareholders within 10 days after the Effective Date. Pursuant to the Scheme, the Scheme Shares held by the Scheme Shareholders on record as at the Books Closure Date are to be transferred by the Scheme Shareholders to the Offeror (a) fully paid; (b) free from Encumbrances; and (c) together with all rights, benefits and entitlements as at the Joint Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by the Company on or after the Joint Announcement Date. The Company currently has no intention of and will not declare, make or pay any dividend or any other distribution (whether in cash or in specie) or return of capital. However, in the event that any dividend, other distribution (whether in cash or in specie) or return of capital is declared by the Company on or after the Joint Announcement Date, the Offeror reserves the right to reduce the Scheme Cash and Securities Consideration by the amount of such dividend, distribution (whether in cash or in specie) or return of capital. On the Effective Date, the Company will become a wholly-owned subsidiary of the Offeror.”

4.2 Skywest Warrants Information relating to the Skywest Warrants has been extracted from paragraph 4.2 of the Scheme Document and set out in italics below. Shareholders are advised to read paragraph 4.2 of the Scheme Document carefully. “As at the Latest Practicable Date, there are 6,500,000 outstanding Skywest warrants (the “Skywest Warrants”) granted to Skywest Warrant Holders (as defined below), entitling the Skywest Warrant Holders to subscribe for a total of 6,500,000 new Skywest Shares:



Warrant

Date of Grant Date of Expiry Exercise

Price

Mr Robert Jeffries Chatfield 3,000,000 12 December

201111 December

2013 25.78 pence

Mr RonaldAitkenhead 300,000 12 December

201111 December

2013 25.78 pence

Mr Mark Shelton 1,200,000 17 February 2012 1 January 2014 25.78 pence

Mr Brian O'Dwyer 1,000,000 8 November 2012

11 December 2013 25.78 pence

Mr Jason Bitter 600,000 8 November 2012


Mr Duncan Scott 400,000 8 November 2012



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The Offeror will not make an offer to acquire any Skywest Warrants which have not been validly exercised and the holder registered as a shareholder of the Company prior to or on the Books Closure Date. Instead, the Offeror will make a proposal to the holders of the Skywest Warrants (the "Skywest Warrant Holders") that, in consideration for such Skywest Warrant Holders agreeing not to exercise any of their rights as a holder of the Skywest Warrants and agreeing to surrender their Skywest Warrants, such holder will receive a cash amount for each Skywest Warrant (the "Skywest Warrants Proposal"). Further details of the Skywest Warrants Proposal are set out in the paragraph 4.1 of the Explanatory Statement.”


Scheme Shareholders should note that no cash outlay (including any stamp duties, brokerage expenses or brokerage fees) will be required from the Scheme Shareholders under the Scheme.

5. RATIONALE FOR THE ACQUISITION AND FUTURE PLANS FOR THE COMPANY 5.1 Rationale

Information relating to the rationale for the acquisition has been extracted from paragraph 3.1 of the Scheme Document and set out in italics below.

“The Acquisition will enable VAH to fast-track its advancements in the growing ‘fly-in fly-out’ and regional markets, increasing competition in these segments. It will also enable VAH to offer a fully integrated network, service and frequent flyer program. Once acquired, Skywest will become part of the Virgin Australia brand. VAH intends to support the growth of Skywest, which will benefit jobs, business and tourism, particularly in Western Australia and throughout regional Australia.”

5.2 Future Plans Information relating to future plans for the Company has been extracted from paragraph 3.2 of the Scheme Document and set out in italics below. “As stated in the Scheme Letter as set out in Appendix 2 to this Scheme Document, on completion of the Scheme, the Company will become a wholly-owned subsidiary of the Offeror and an indirect wholly-owned subsidiary of VAH, and the Skywest Shares will be delisted from ASX and AIM. Following completion of the Acquisition, VAH will undertake a review of the businesses and operations of the Skywest Group with a view to aligning such businesses and operations with those of the VAH group. Skywest will continue to operate under its current AOC with its own chief executive officer and management team, based in Western Australia. Pending such review, VAH currently has no immediate plans to (a) introduce any major changes to the businesses of the Skywest Group, (b) make any major disposal or redeployment of assets (including the fixed assets of the Skywest Group) or (c) discontinue the employment of the employees of the Skywest Group, other than in the ordinary course of business and as required through the integration process. VAH also retains its right to consider options or opportunities which may present themselves, or be required, and which VAH regards to be in the best interests of VAH and the Skywest business.”


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6. ASSESSMENT OF THE FINANCIAL TERMS OF THE SCHEME

In evaluating and assessing the financial terms of the Scheme, we have given due consideration to:- (a) implied consideration of Skywest Shares (the “Implied Consideration”);

(b) price movement and trading activity of Skywest Shares and VAH Shares; (c) share price performance of Skywest Shares and VAH Shares relative to selected

market indices; (d) assessed NTA valuation of the Group; (e) comparison of the implied valuation ratios of Skywest with financial valuation ratios of


(f) evaluation of the Skywest Warrants Proposal; and (g) other considerations in relation to the Scheme which have a significant bearing on our

assessment.

6.1 Implied Consideration

Pursuant to the terms of the Scheme, the Scheme Shareholders will receive a combination of: (a) A$0.225 in cash (“Scheme Cash Consideration”); and

(b) 0.53 new ordinary shares in the capital of VAH (“Share Exchange Ratio”)

for each Skywest Share (the “Scheme Consideration”). We have derived the Implied Consideration based on (i) the Scheme Consideration set out above, and (ii) the respective volume weighted average market prices (“VWAP”) and closing prices of VAH Shares for the selected reference periods below.


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Pag

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452

-

0.46

5

Late

st P

ract

ica

ble

Dat

e

0.45

0

0.44

9

0.43

3

0.43

3

0.44

5

0.44

0

0.46

1

0.45

8

Sou

rce:

Blo

ombe

rg a

nd a

nno

unce

men

ts


For

per

sona

l use

onl

y

Pag

e 5

0 of

16

6

No

tes

: (1

) T

his

is t

he c

losi

ng p

rice

or t

he V

WA

P o

f th

e S

kyw

est

AIM

Sh

ares

bas

ed o

n th

e e

xcha

nge

rate

of

GB

P1

= A

$1.4

987

as

at 1

3 F

ebru

ary

20

13,

bein

g th

e La

test

Pra

ctic

able

D

ate

(2

)

Bas

ed o

n th

e su

m o

f (i)

the

Sha

re E

xcha

nge

Rat

io m

ultip

lied

by t

he V

WA

P o

r cl

osin

g pr

ice

of V

AH

Sha

res

for

the

corr

espo

ndin

g re

fere

nce

perio

ds a

nd (

ii) t

he S

chem

e

Cas

h C

onsi

dera

tion

of A

$0.2

25

(3)

T

his

is t

he V

WA

P o

r th

e cl

osin

g pr

ice

of t

he S

kyw

est

AS

X S

hare

s, S

kyw

est

AIM

Sh

ares

, V

AH

Sha

res

and

Impl

ied

Co

nsid

erat

ion

base

d on

the

clo

sing

pric

e an

d th

e V

WA

P

of V

AH

Sha

res

as

at 2

9 O

ctob

er

201

2, b

eing

the

Ma

rket

Da

y pr

ior

to th

e F

irst A

nnou

nce

men

t Dat

e

(4)

T

his

is t

he V

WA

P o

r th

e cl

osin

g pr

ice

of t

he S

kyw

est

AS

X S

hare

s, S

kyw

est

AIM

Sh

ares

, V

AH

Sha

res

and

Impl

ied

Co

nsid

erat

ion

base

d on

the

clo

sing

pric

e an

d th

e V

WA

P

of V

AH

Sha

res

as

at 3

0 O

ctob

er 2

012,

bei

ng t

he F

irst

Ann

ounc

emen

t D

ate.

The

Fir

st A

nnou

ncem

ent

was

mad

e pr

ior

to t

he c

omm

enc

eme

nt o

f tr

adin

g of

Sky

wes

t A

SX

S

hare

s an

d S

kyw

est A

IM S

hare

s on

thei

r re

spec

tive

stoc

k ex

chan

ges

on th

e F

irst

Ann

ounc

emen

t D

ate

(5

) T

his

is t

he V

WA

P o

r th

e cl

osin

g pr

ice

of t

he S

kyw

est

AS

X S

hare

s, S

kyw

est

AIM

Sh

ares

, V

AH

Sha

res

and

Impl

ied

Co

nsid

erat

ion

bas

ed o

n th

e cl

osin

g pr

ice

and

the

VW

AP

of

VA

H S

hare

s a

s at

31

Oct

obe

r 2

012,

bei

ng th

e M

arke

t Da

y im

med

iate

ly a

fter

the

Fir

st A

nnou

ncem

ent

Dat

e

Bas

ed o

n th

e ab

ove,

the

Im

plie

d C

onsi

dera

tion

purs

uant

to

the

Sch

eme,

bas

ed o

n th

e V

WA

P o

f V

AH

Sha

res,

is

betw

een

A$0

.439

and

A

$0.4

83.

For

the

purp

ose

of o

ur e

valu

atio

n, w

e ha

ve u

sed

the

clos

ing

shar

e pr

ice

of V

AH

of

A$0

.46

as o

f th

e la

st m

arke

t day

prio

r to

the

Firs

t A

nnou

ncem

ent,

whi

ch d

eriv

ed a

n Im

plie

d C

onsi

dera

tion

of A

$0.4

688.


For

per

sona

l use

onl

y


Page 51 of 166

6.2 Price movement and trading activity of Skywest Shares and VAH Shares

In assessing the reasonableness of the Implied Consideration from a market price expectation perspective, on the basis that the stock market may be considered to provide an efficient mechanism by which the intrinsic value of the Skywest Shares is expressed, we have considered the current and historical market price of Skywest to be reasonable indicators for assessing the intrinsic value of the Skywest Shares at a given point in time. We wish to highlight that under ordinary circumstances, the market valuation of shares traded on a recognized stock exchange may be affected by, inter alia, its relative liquidity, the size of its free float, the extent of research coverage and investor interest it attracts, the industries in which the companies operate in, and the general market sentiment at a given point in time. Therefore, this analysis serves as an illustrative guide only. We set out below a chart showing the Implied Consideration relative to the daily market closing price movements and trading volume of the Skywest Shares listed on both ASX and AIMS, for the 12-month period prior to the First Announcement Date and up to the Latest Practicable Date. Skywest Shares listed on ASX (“Skywest ASX Shares”)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Vo

lum

e T

rad

ed (

'000

)

Clo

sin

g P

rin

ce (

A$)

Implied Consideration - A$0.4688

First Announcement Date - 30 October 2012

For

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sona

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Page 52 of 166

Skywest Shares listed on AIM (“Skywest AIM Shares”)

Source: Bloomberg

Notes:

(1) The Implied Consideration was translated based on the exchange rate of GBP1 = A$1.4987 as at 13 February 2013, being the Latest Practicable Date.

In reviewing the price movement and trading volume, we have also taken note of the Company’s announcements for the 12-month period prior to the First Announcement Date and up to the Latest Practicable Date, which may have bearing to the price movement and trading volume:-

1 03-Nov-11 The Company announced that it has signed a scheduled charter contract with BHP Billiton Iron Ore for air charter services from Perth to Area C and Yandi in the Pilbara region of Western Australia. The air services contract is for 12 months with an option for BHP Billiton Iron Ore to extend for a further 12 months from September 2012.

2 21-Nov-11 The Company announced that it has signed a scheduled charter contract with Bechtel, the front-end engineering and design contractor of the Chevron Wheatstone Project. The contract is for six years and services provided are between Perth and Onslow which is located in the Northwest region of Western Australia.

3 30-Nov-11 The Company announced that it has taken delivery of its fourth new ATR72-500 aircraft. The operation of the new aircraft constitutes a part of the Australian Regional Airline Network ("ARAN") agreement between the Company and VAH, under which, the parties agreed, pursuant to a 10-year wet-lease, that the Company will operate up to 18 new aircraft on behalf of VAH.

4 15-Dec-11 The Company announced that a fourth ATR-72 aircraft has been delivered and it has leased an additional Fokker 100 aircraft that will be based in Perth.

0

5,000

10,000

15,000

20,000

25,000

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

Vo

lum

e T

rad

ed (

'000

)

Clo

sin

g P

rin

ce (

GB

P)


Implied Consideration - GBP0.3128(1)

For

per

sona

l use

onl

y


Page 53 of 166

5 25-Jan-12 The Company announced that the Australian Competition and Consumer Commission ("ACCC") has granted interim authorisation for a proposed corporate alliance between VAH and the Company. Under the corporate alliance, the airlines propose to offer bundled air passenger transport services to corporate customers seeking an integrated suite of charter, domestic and international services.

6 26-Jan-12 The Company announced that it has taken delivery of its fifth and sixth new ATR72-500 aircrafts. The operation of the two new aircrafts will constitute a part of the ARAN agreement between the Company and VAH, under which, the parties agreed, pursuant to a 10-year wet-lease, that the Company will operate up to 18 new aircraft on behalf of VAH.

7 10-Feb-12 The Company announced its half year financial report for the period ended 31 December 2011, reporting a 15.8% increase in revenue to S$145.0 million and a 37.2% decrease in net profit to S$4.48 million on the comparable half-year period.

8 22-Mar-12 The Company announced that the ACCC has issued a draft decision which proposes to grant authorisation to a corporate alliance between VAH and the Company. The ACCC considers that the corporate alliance will promote competition by enabling VAH and the Company to offer an extensive integrated air service package to corporate customers in competition with Qantas and its affiliates.

9 26-Mar-12 The Company announced that it has raised £2 million (A$3.02 million) before expenses via a share placement of 8,000,000 ordinary shares of the Company. Half of the placement shares were issued at £0.25 per share and the other half at A$0.38 per share.

10 10-Apr-12 The Company announced that it has entered into an agreement for VAH to invest A$8 million in the Company by way of an A$8 million convertible debt instrument which is convertible by VAH into ordinary shares of the Company at a conversion price of A$0.45 per share. In addition the Company has agreed to grant VAH a first tranche of 4 million warrants at a grant price of A$0.05 per warrant with a conversion price of A$0.45 and subject to shareholders' approval, the Company intends to grant an additional tranche of 2.41 million warrants to VAH on the same terms as the first tranche.

11 24-Apr-12 The Company announced that it has bought on market 365,000 ordinary shares at 23 pence per share to hold in treasury.

12 01-May-12 The Company announced that it has bought on market 35,000 ordinary shares at 23 pence per share to hold in treasury.

13 11-May-12 The Company announced that the ACCC has granted authorisation to a corporate alliance between VAH and the Company for five years. The corporate alliance will allow the airlines to offer bundled air passenger transport services to corporate customers who seek an integrated suite of charter, domestic and international services, such as mining companies with large fly-in-fly-out workforces.

14 24-May-12 The Company announced that it has bought on market 100,000 ordinary shares at 21.75 pence per share to hold in treasury.

15 30-May-12 The Company announced that it has obtained approval from shareholders' at an EGM to grant an additional tranche of 2.41 million warrants to VAH at a grant price of A$0.05 per warrant with a further exercise price of A$0.45 (as previously announced by the Company on 10 April 2012).

For

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y


Page 54 of 166

16 29-Jun-12 The Company announced an anticipated 25% increase in FY2012 revenues. The Company's ATR-72 fleet is expected to double by June 2013 and its fleet expansion is on track with increase of 37% in FY2012 and is expected to increase by 23% in FY2013.

17 30-Aug-12 The Company lodged its unaudited financial statements for the year ended 30 June 2012, reporting a 26.4% year-on-year increase in revenue to S$303.3 million and a 27.7% year-on-year decrease in its net profit to S$7.1 million.

18 30-Aug-12 The Company announced that it has bought on market 400,000 ordinary shares at 18.5 pence per share to hold in treasury.

19 28-Sep-12 The Company announced its audited financial statements for the year ended 30 June 2012.

20 02-Oct-12 The Company announced that BHP Billiton Iron Ore has selected the Company as the preferred vendor to provide air charter services for its new Jimblebar mine located in Western Australia. It is anticipated that services provided by the Company will increase to include twice daily return flights of up to three days a week from early to mid-2013.

21 30-Oct-12 The Company announced that subject to a number of conditions, a scheme is to be put to its shareholders involving a proposal by VAH to acquire 100% of the issued capital of the Company.

22 03-Dec-12 The Company announced that the resolution for dividend payment of S$0.0129 cents per share has been passed at the Company's annual general meeting. It further resolved to cancel 900,000 ordinary shares that are held in treasury.

23 06-Dec-12 The Company announced that formal approval has been received from the Securities Industry Council of Singapore for the terms of the proposed acquisition of the Company and VAH. As a consequence, the Company has entered into an implementation agreement to implement the Scheme.

24 18-Dec-12 The Company announced the appointment of DMG as the independent financial adviser to advise the Directors on the Scheme for the purpose of making a recommendation to the shareholders of the Company in connection with the Scheme.

25 21-Dec-12 The Company announced that it has signed a three year scheduled charter contract with Rio Tinto to provide air charter services to Boolgeeda in the Pilbara region of Western Australia for the Brockman 4 mine and surrounding mines.

26 31-Jan-13 The Company announced that the ACCC has today announced that it would not oppose the proposed acquisition of the Company by VAH.

Source: AIM announcements made by the Company

In view that the Scheme Shareholders will receive newly issued VAH Shares pursuant to the Scheme, we have also reviewed the daily closing prices and trading volume of the VAH Shares for the 12-month period prior to the First Announcement Date and up to the Latest Practicable Date. F

or p

erso

nal u

se o

nly


Page 55 of 166

VAH share price chart

Notes: (1) This is the closing price of the VAH Shares as at 29 October 2012, being the last Market Day on which the VAH

Shares were traded prior to the First Announcement Date.

We have also compared the Implied Consideration against the volume weighted average price (“VWAP”) of Skywest ASX Shares for selected reference periods both prior to and after the First Announcement Date as set out in the table below.

Reference Periods

Highest Closing

Price (A$)

Lowest Closing

Price (A$)

VWAP (1) (A$)

Premium of Implied

Consideration (2) over VWAP

(%)

Periods prior to the First Announcement

Last 12 months 0.470 0.220 0.353 32.75

Last 6 months 0.390 0.220 0.301 55.61

Last 3 months 0.330 0.220 0.286 63.96

Last 1 month 0.300 0.275 0.295 58.95

Last Market Day on which the Shares were traded prior to the First Announcement Date

N.A. N.A. 0.291 (3) 60.99

Periods after the First Announcement

First Announcement Date N.A. N.A. 0.417(4) 12.42

Market Day immediately after the First Announcement Date

N.A. N.A. 0.425 (5) 10.23

0

20,000

40,000

60,000

80,000

100,000

120,000

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Vo

lum

e T

rad

ed (

'000

)

Clo

sin

g P

rin

ce (

A$)


VAH Share Price- A$0.460(1)

For

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sona

l use

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y


Page 56 of 166

Between the Market Day immediately after the First Announcement and the Latest Practicable Date (both dates inclusive)

0.455 0.415 0.425 10.28

Latest Practicable Date N.A. N.A. 0.449 (6) 4.53

Source: Bloomberg

Notes: (1) The VWAP is weighted based on the transacted prices of the Skywest Shares for the Market Days in the

respective periods. (2) Based on the Implied Consideration of A$0.4688 per Skywest Share as at 29 October 2012 (3) This is the VWAP of the Skywest ASX Shares as at 29 October 2012, being the last Market Day on which the

Skywest ASX Shares were traded prior to the First Announcement Date. (4) This is the VWAP of the Skywest ASX Shares as at 30 October 2012, being the First Announcement Date.

The First Announcement was made prior to the commencement of trading of Skywest ASX Shares on the First Announcement Date.

(5) This is the VWAP of the Skywest ASX Shares as at 31 October 2012, being the Market Day immediately

after the First Announcement Date. (6) This is the VWAP of the Skywest ASX Shares as at 13 February 2013, being the Latest Practicable Date.

The key observations in respect of the above are highlighted below: (a) Over the 12-month period prior to the First Announcement Date, the Skywest ASX

Shares have closed between a low of A$0.220 and a high of A$0.470; (b) The Implied Consideration represents a premium of 32.75%, 55.61%, 63.96% and

58.95% to the VWAP for the 12-month, 6-month, 3-month and 1-month periods prior to the First Announcement Date respectively;

(c) The Implied Consideration represents a premium of 60.99% to the VWAP for the last

Market Day on which the Shares were traded prior to the First Announcement Date; (d) The Implied Consideration represents a premium of 12.42% to the VWAP as at the

First Announcement Date; (e) The Implied Consideration represents a premium of 10.23% to the VWAP for the

Market Day immediately after the First Announcement Date; (f) The Implied Consideration represents a premium of 10.28% to the VWAP for the period

between the Market Day immediately after the First Announcement and the Latest Practicable Date;

(g) The Implied Consideration represents a premium of 4.53% to the VWAP as at the

Latest Practicable Date.

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Page 57 of 166

We have also compared the Implied Consideration against the VWAP of Skywest AIM Shares for selected reference periods both prior to and after the First Announcement Date as set out in the table below.

Reference Periods

Highest Closing

Price (GBP)

Lowest Closing

Price (GBP)

VWAP (1) (GBP)

Premium of the Implied

Consideration (2) over VWAP

(%)

Periods prior to the First Announcement

Last 12 months 0.2800 0.175 0.212 47.24

Last 6 months 0.233 0.175 0.182 71.75

Last 3 months 0.199 0.175 0.186 68.08

Last 1 month 0.190 0.183 0.186 68.33

Last Market Day on which the Shares were traded prior to the First Announcement Date

N.A. N.A. 0.186 (3) 67.95

Periods after the First Announcement

First Announcement Date N.A. N.A. 0.266(4) 17.56

Market Day immediately after the First Announcement Date

N.A. N.A. 0.267 (5) 16.98

Between the Market Day immediately after the First Announcement and the Latest Practicable Date (both dates inclusive)

0.300 0.268 0.272 14.99

Latest Practicable Date N.A. N.A. 0.289 (6) 8.33

Source: Bloomberg

Notes: (1) The VWAP is weighted based on the transacted prices of the Skywest AIM Shares for the Market Days in the

respective periods. (2) Based on the Implied Consideration of A$0.4688 or GBP0.3128 (based on the exchange rate of GBP

1 = A$1.4987) per Skywest Share as at 29 October 2012. (3) This is the VWAP of the Skywest AIM Shares as at 29 October 2012, being the last Market Day on which the

Shares were traded prior to the First Announcement Date. (4) This is the VWAP of the Skywest AIM Shares as at 30 October 2012, being the First Announcement Date.

The First Announcement was made prior to the commencement of trading of the Skywest AIM Shares on the First Announcement Date.

(5) This is the VWAP of the Skywest AIM Shares as at 31 October 2012, being the Market Day immediately after

the First Announcement Date. (6) This is the VWAP of the Skywest AIM Shares as at 13 February 2013, being the Latest Practicable Date.

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Page 58 of 166

The key observations in respect of the above are highlighted below: (a) Over the 12-month period prior to the First Announcement Date, the Skywest AIM

Shares have closed between a low of GBP0.175 and a high of GBP0.280; (b) The Implied Consideration represents a premium of 47.24%, 71.75%, 68.08% and

68.33% to the VWAP for the 12-month, 6-month, 3-month and 1-month periods prior to the First Announcement Date respectively;

(c) The Implied Consideration represents a premium of 67.95% to the VWAP for the last

Market Day on which the Shares were traded prior to the First Announcement Date; (d) The Implied Consideration represents a premium of 17.56% to the VWAP as at the

First Announcement Date;

(e) The Implied Consideration represents a premium of 16.98% to the VWAP for the Market Day immediately after the First Announcement Date;

(f) The Implied Consideration represents a premium of 14.99% to the VWAP for the period

between the Market Day immediately after the First Announcement and the Latest Practicable Date;

(g) The Implied Consideration represents a premium of 8.33% to the VWAP at the Latest

Practicable Date. For illustration purposes only, we set out in the table below the average daily trading volume of the Skywest Shares and VAH Shares and the average daily trading volume as a percentage of its Free Float (as defined below).

For

per

sona

l use

onl

y

Pag

e 5

9 of

16

6

Sky

wes

t A

SX

S

har

es

Sk

ywes

t A

IM

Sh

ares

S

kyw

est

Sh

ares

V

AH

Sh

are

s

Ref

eren

ce P

eri

od

s A

vera

ge

Dai

ly

Tra

ded

Vo

lum

e (1

)

Ave

rag

e D

aily

T

rad

ed V

olu

me

(1)

Ave

rag

e D

aily

T

rad

ed V

olu

me

(2)

Ap

pro

xim

ate

per

cen

tag

e o

f F

ree

Flo

at (3

) (%

)

Ave

rag

e D

aily

T

rad

ed V

olu

me

(1)

Ap

pro

xim

ate

per

cen

tag

e o

f F

ree

Flo

at (4

) (%

)

Per

iod

s p

rio

r to

th

e F

irst

An

no

un

cem

ent

Last

12

mon

ths

26,0

62

99

,33

9

125,

401

0.

15

6,25

7,5

32

0.66

Last

6 m

onth

s 12

,17

1

109,

096

12

1,2

67

0.15

6,

217,

929

0.

65

Last

3 m

onth

s 14

,02

3

56,8

38

70

,86

1

0.09

6,

005,

938

0.

63

Last

1 m

onth

24

,17

3

62,6

73

86

,84

7

0.11

3,

195,

410

0.

34

Last

Mar

ket

Da

y on

wh

ich

the

Sha

res

we

re t

rade

d pr

ior

to t

he

Firs

t Ann

ounc

em

ent D

ate

(5)

99,5

72

86

,44

9

186,

021

0.

23

1,23

2,3

03

0.13

Per

iod

s af

ter

the

Fir

st A

nn

ou

nce

men

t

Firs

t Ann

ounc

em

ent D

ate(6

))

6,18

1,3

92

16,0

24,

593

22

,20

5,98

5

27.2

9

17,2

76,

891

1.

82

Mar

ket

Da

y im

med

iate

ly

afte

r th

e F

irst A

nnou

ncem

ent

Dat

e(7)

844,

682

3,

907,

202

4,

751,

884

5.

84

6,60

2,7

13

0.69

Bet

we

en

the

M

arke

t D

ay

imm

edia

tely

af

ter

the

Firs

t A

nno

unce

men

t an

d th

e La

test

P

ract

icab

le

Dat

e (b

oth

date

s in

clus

ive)

1,07

1,6

33

737,

031

1,

808,

664

2.

22

6,15

4,4

30

0.65

Late

st P

ract

ica

ble

Dat

e (8

))

252,

000

16

8,4

77

420,

477

0.

52

2,52

9,2

73

0.27

S

ourc

e: B

loom

berg


For

per

sona

l use

onl

y

Pag

e 6

0 of

16

6

No

tes

:

(1)

The

ave

rage

tra

din

g vo

lum

e is

com

pute

d ba

sed

on

the

tota

l tra

ding

vol

ume

for

all t

he M

arke

t D

ays

for

the

rel

evan

t p

erio

ds d

ivid

ed b

y th

e to

tal n

umb

er o

f M

arke

t D

ays

dur

ing

the

re

spec

tive

perio

ds.

(2

) T

he to

tal a

vera

ge

trad

ing

volu

me

of S

kyw

est A

SX

Sha

res

and

Sky

wes

t AIM

Sha

res

for

the

resp

ectiv

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The key observations in respect of the above are highlighted below: (a) The average daily trading volume of the Skywest Shares for the 12-month, 6-month,

3-month and 1-month periods prior to the First Announcement Date represents approximately 0.15%, 0.15%, 0.09% and 0.11% of the Skywest Free Float respectively;

(b) The average daily trading volume of the VAH Shares for the 12-month, 6-month,

3-month and 1-month periods prior to the First Announcement Date represents approximately 0.66%, 0.65%, 0.63% and 0.34% of the VAH Free Float respectively;

(c) The average daily trading volume of the Skywest Shares and VAH Shares on the last

Market Day on which the Shares were traded prior to the First Announcement Date represents 0.23% and 0.13% of the Skywest Free Float and VAH Free Float respectively;

(d) The average daily trading volume of the Skywest Shares and VAH Shares on the

First Announcement Date represents 27.29% and 1.82% of the Skywest Free Float and VAH Free Float respectively;

(e) The average daily trading volume of the Skywest Shares and VAH Shares on the

Market Day immediately after the First Announcement Date represents 5.84% and 0.69% of the Skywest Free Float and VAH Free Float respectively;

(f) The average daily trading volume of the Skywest Shares and VAH Shares for the

period between the Market Day immediately after the First Announcement and the Latest Practicable Date represents 2.22% and 0.65% of the Skywest Free Float and VAH Free Float respectively;

(g) The average daily trading volume of the Skywest Shares and VAH Shares on the

Latest Practicable Date represents 0.52% and 0.27% of the Skywest Free Float and VAH Free Float respectively.

Based on the above observations, it would appear likely that the trading activity and market price of both the Skywest ASX Shares and Skywest AIM Shares since the First Announcement Date up to the Latest Practicable Date may be supported by the Implied Consideration. Furthermore, VAH Shares have higher market liquidity then Skywest ASX Shares and Skywest AIM Shares for periods prior to the last Market Day prior to the First Announcement Date.

We wish to highlight that the above analysis of the price movement and trading volume of the Skywest ASX Shares, Skywest AIM Shares and VAH Shares serve only as an illustrative guide and is not an indication of the future price movement and trading volume of the respective Shares.

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6.3 Share price performance of Skywest Shares and VAH Shares relative to selected market indices

To assess the market price performance of the Skywest ASX Shares vis-à-vis the general price performance of the Australian equity market, we have compared the market movement of the Skywest ASX Shares against the All Ordinaries Index (“AOI”), the MSCI World Airlines Index (“WAI”) and VAH Shares for the 12-month period prior to the First Announcement Date to the Latest Practicable Date, as illustrated below.

Source: Bloomberg

40

60

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100

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VAH WAI Skywest ASX AOI

First Announcement Date -30 October 2012

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We note that prior to the First Announcement Date, the Skywest ASX Shares had generally under-performed the AOI, the WAI and the VAH Shares on a normalised basis.

To assess the market price performance of the Skywest AIM Shares vis-à-vis the general price performance of the London equity market, we have compared the market movement of the Skywest AIM Shares and VAH Shares against the FTSE AIM All-Share Index (“AAS”) and the WAI for the 12-month period prior to the First Announcement Date to the Latest Practicable Date, as illustrated below.

Source: Bloomberg

We note that prior to the First Announcement Date, the Skywest AIM Shares had generally under-performed the WAI, AAS and VAH on a normalised basis.

The movements in the last transacted prices of the Skywest ASX Share, Skywest AIM Shares, VAH Shares, WAI, AOI and AAS between the Market Day immediately prior to the First Announcement Date and the Latest Practicable Date are as follows:

Last price as at the Market Day

immediately prior to the First

Announcement Date

Closing price as at the Latest

Practicable Date

% change between the Market Day immediately

prior to the First Announcement Date and

the Latest Practicable Date (%)

Skywest ASX A$0.280 A$0.450 60.71

Skywest AIM GBP0.186 GBP0.289 55.38

VAH A$0.460 A$0.445 (3.26)

WAI 74.268 90.737 22.18

AOI 4,499.367 5,024.535 11.67

AAS 698.230 749.270 7.31 Source: Bloomberg

40

60

80

100

120

140

160

Ben

chm

ark

at 1

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VAH WAI Skywest AIM AAS

First Announcement Date -30 October 2012

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Between the Market Day immediately prior to the First Announcement Date and the Latest Practicable Date, the market price of the Skywest ASX Shares and Skywest AIM Shares have increased by approximately 60.71% and 55.38% respectively. The WAI, AOI and AAS increased by approximately 22.18%, 11.67% and 7.31% respectively, while the market price of the VAH Shares decreased by approximately 3.26%.

Based on the above observations, it would appear likely that the market price of the Skywest Shares since the Market Day immediately prior to the First Announcement Date up to the Latest Practicable Date may be supported by the Implied Consideration. Shareholders should note that the past trading performance of the Skywest Shares should not in any way be relied upon as an indication or a promise of the future trading performance of the Skywest Shares.

6.4 Assessed NTA valuation of the Group

The net tangible asset (“NTA”) based valuation approach provides an estimate of the value of a company assuming the sale of all its tangible assets, the proceeds which are first used to settle its liabilities and obligations with the balance available for distribution to its shareholders. 6.4.1 NTA of the Group as at 30 June 2012 against the Implied Consideration

Based on the latest announced audited balance sheet of the Group as at 30 June 2012, the NTA of the Group was approximately S$61.8 million or equivalent to approximately S$0.294 per Share or A$0.229 per Share (based on the exchange rate of S$1:A$0.7803 as at the Latest Practicable Date). The Implied Consideration of A$0.4688 represents a premium of approximately 104.7% to the NTA per share. Based on the latest announced audited balance sheet of the Group as at 30 June 2012, and assuming the exercise of the 7,800,000 outstanding Warrants at the weighted average price of 25.78 pence as at 30 Jun 2012, the adjusted NTA of the Group shall be approximately S$65.8 million or equivalent to approximately S$0.302 per Share or A$0.236 per Share (based on the exchange rate of S$1:A$0.7803 as at the Latest Practicable Date). The Implied Consideration of A$0.4688 represents a premium of approximately 98.6% to the adjusted NTA per share. In our evaluation of the financial terms of the Scheme, we have considered whether there are any factors which have not been otherwise disclosed in the financial statements of the Group and are likely to have a material impact on the audited NTA of the Group as at 30 June 2012. In this respect, save as disclosed in the audited financial statements of the Group as at 30 June 2012, the Directors have confirmed that, to their best knowledge and belief, as at the Latest Practicable Date, there are no additional contingent liabilities which are likely to have a material impact on the NTA of the Group. We have also reviewed the audited balance sheet of the Group as at 30 June 2012 to determine whether there are any assets that are of an intangible nature and as such, would not appear in a valuation based on NTA per share as at 30 June 2012. The Directors have confirmed that, to their best knowledge and belief, as at the Latest Practicable Date, there are no additional intangible assets which ought to be disclosed in the balance sheet of the Group in accordance with the International Financial Reporting Standards and which have not been so disclosed and where such intangible assets would have had a material impact on the overall financial position of the Group.

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6.4.2 Adjusted NTA of the Group as at 30 June 2012 against the Implied Consideration

In our evaluation of the financial terms of the Scheme, we have considered whether there are any material events that impact the audited balance sheet of the Group from 30 June 2012 to the Latest Practicable Date to determine whether adjustments need to be made to the book NTA per Share as at 30 June 2012. In this respect, the Directors have confirmed that, to their best knowledge and belief, as at the Latest Practicable Date, there have been no known material events that have or will impact the audited balance sheet of the Group since 30 June 2012.

6.4.3 Revalued NTA of the Group as at 30 June 2012 against the Implied Consideration

In our evaluation of the financial terms of the Scheme, we have also considered whether there are any tangible assets which should be valued at an amount that is materially different from that which is recorded in the audited balance sheet of the Group as at 30 June 2012.

The Directors have confirmed that, to their best knowledge and belief, as at the Latest Practicable Date, on aggregate basis, there are no material differences between the estimated market value of the assets and their respective book values as at 30 June 2012 which would have a material impact on the revalued NTA of the Group.

6.5 Comparison of the implied valuation ratios of Skywest with financial valuation ratios of

selected listed companies considered to be comparable to Skywest

We wish to highlight that the figures used in our financial assessment have been extracted where available and/or applicable, from Bloomberg, the Scheme Document and other publicly available sources. We make no representations or warranties, express or implied, as to the accuracy or completeness of such information. For the purpose of assessing the Implied Consideration, references can be made to companies which are listed and traded on ASX, whose business activities and industries are comparable to the Company (“Selected Comparable Companies”) to give an indication of the current market expectations with regards to the valuation of these businesses, implied by their respective closing market prices as at the Latest Practicable Date. We recognise, however, that our list of Selected Comparable Companies is not exhaustive and there may not be any companies listed on ASX or other stock exchanges that is directly comparable to the Company in terms of business activities, scale of operations, types of products, geographical markets, track record, future prospects, asset base, risk profile, customer base and other relevant criteria. As such, any comparison made with respect to the Selected Comparable Companies is therefore intended to serve as an illustrative guide only. For the purpose of our evaluation and for illustration, we have made comparisons between the Implied Consideration and the valuation of the Selected Comparable Companies on a historical basis using the following:

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Valuation Ratio General Description

Price-to-Earnings ("P/E")

P/E ratio or earnings multiple illustrates the valuation ratio of the market price of a company’s shares relative to its consolidated basic earnings per share as stated in its financial statements. The P/E ratio is affected by, inter alia, the capital structure of a company, its tax position as well as its accounting policies relating to depreciation and intangible assets. In our analysis, we used the market price of the shares as of the Latest Practicable Date, divided by the aggregate of the most recent announced four quarters earnings per share, adjusted for non-operating and / or non-recurring items which are not a result of its normal operating performance or ordinary course of business.

Price-to-Net Tangible Asset ("P/NTA")

“NTA” or “net tangible asset” is defined to exclude, where applicable, intangible assets of a company. P/NTA ratio illustrates the ratio of the market price of a company’s share relative to its historical NTA per share as recorded in its financial statements. The NTA figure provides an estimate of the value of a company assuming the sale of all its tangible assets, the proceeds which are first used to settle its liabilities and obligations with the balance available for distribution to its shareholders. Comparisons of companies using their NTAs are affected by differences in their respective accounting policies, in particular, their depreciation and asset valuation policies. In our analysis, we used the market price of the shares as of the Latest Practicable Date, divided by the most recently announced NTA per share.

Enterprise Value-to-Earnings Before Interest, Tax, Depreciation and Amortisation ("EV/EBITDA")

“EV” or “Enterprise Value” is the sum of a company’s market capitalisation, preferred equity, independent interests, consolidated short and long term debts, inclusive of finance lease liabilities, less its consolidated cash and cash equivalents.

“EBITDA” stands for historical consolidated earnings before interest, tax, depreciation and amortisation expenses, inclusive of share of associates’ and joint ventures’ income adjusted for non-operating and / or non-recurring items which are not a result of its normal operating performance or ordinary course of business.

The EV/EBITDA ratio illustrates the ratio of the market value of a company’s business relative to its historical pre-tax consolidated operating cashflow performance, without regard to its capital structure. In our analysis, we used the Enterprise Value based on the market capitalisation as of the Latest Practicable Date divided by the most recent announced four quarters EBITDA,

The statistics for the Selected Comparable Companies are based on their closing prices as at the Latest Practicable Date and the publicly available financial results based on their respective financial year ends. Comparisons between the Company and the Selected Comparable Companies may be affected, inter alia, by differences in their accounting policies. Our analysis has not attempted to adjust for such differences. In view of the above, it should be noted that any comparison made with respect to the Selected Comparable Companies merely serves as an illustration and that the conclusions drawn from the comparisons may not necessarily reflect the perceived market valuation of the Company as at the Latest Practicable Date. We set out in the table below the list of Selected Comparable Companies, together with a brief description of their principal activities which are considered to be broadly comparable to the Company.

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Selected Comparable Companies

Description

Market Capitalisation as at the Latest

Practicable Date (1)

(A$ million) Air New Zealand Ltd (“Air New Zealand”) Air New Zealand operates an airline business

that provides international and domestic air passenger and cargo transport services throughout New Zealand and the South West Pacific. The Company also provides engineering and ground handling services

1,136.7

Virgin Australia Holdings Ltd (“Virgin Australia”)

Virgin Australia is an Australian-based full service airline providing domestic and international operations.

1,093.0

Qantas Airways (“Qantas”) Qantas provides transportation of passengers

through two airlines including Qantas (full service carrier) and Jetstar (low cost carrier), operating international, domestic and regional services. The Company also includes Qantas Frequent Flyer and Qantas Freight which generates diverse revenue streams and adds value for customers and investors.

3,561.0

Alliance Aviation Services Ltd (“Alliance”)

Alliance is a mining services company. The Company specializes in providing transportation by air of its mining and energy customers' employees and contractors to and from remote locations, ad hoc charter services - operating commercial air charters servicing the needs of Government and corporate customers, and wet leasing services.

201.1

Regional Express Holdings Ltd (“Regional Express”)

Regional Express offers scheduled air passenger and freight transportation services within Australia.

142.5

Source: Bloomberg

Note: (1) Market capitalisation of the Selected Comparable Companies is based on their respective closing prices as

at the Latest Practicable Date.

We set out in the table below the financial ratios of the Company and the Selected Comparable Companies listed on ASX as at the Latest Practicable Date.

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Selected Comparable Companies

Historical P/E

(times) Historical P/NTA

(times)

Historical EV/EBITDA

(times)

Air New Zealand 17.6 0.9 4.0

Virgin Australia 25.0 1.3 5.8

Qantas n.m(1) 0.7 4.5

Alliance 10.4 2.0 5.9

Regional Express 5.7 0.8 2.5

High 25.0 2.0 5.9

Mean 14.7 1.1 4.5

Median 14.0 0.9 4.5

Low 5.7 0.7 2.5

Company (Based on Implied Consideration)

30.0 2.1 5.0

Source: Bloomberg and published financial statements of the respective Selected Comparable Companies

Notes: (1) Not meaningful as Qantas Airways recorded net losses for the financial year ended 30 June 2012.

Based on the above ratio analysis, we noted that:-

(a) The historical P/E ratio of the Company of 30.0 times based on the Implied

Consideration is above the range of the historical P/E ratios of the Selected Comparable Companies.

(b) The historical P/NTA ratio of the Company of 2.1 times based on the Implied Consideration is above the range of the historical P/NTA ratios of the Selected Comparable Companies.

(c) The historical EV/EBITDA ratio of the Company of 5.0 times based on the Implied Consideration is within the range, and above the mean and median of the historical EV/EBITDA ratios of the Selected Comparable Companies.

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6.6 Evaluation of the Skywest Warrants Proposal

6.6.1 Skywest Warrants Proposal Information on the Skywest Warrant Proposal has been extracted from paragraph 4 of

the Explanatory Statement in the Scheme Document and set out in italics below. Shareholders are advised to read paragraph carefully.

“4.1 Warrants Proposal

The Offeror will not make an offer to acquire any Skywest Warrants which have not been validly exercised and the holder registered as a shareholder of the Company prior to or on the Books Closure Date. Instead, the Offeror will pay to the Skywest Warrant Holders a cash amount (the “Warrant Price”) in consideration for such Skywest Warrant Holders agreeing: (a) not to exercise their Skywest Warrants into new Skywest Shares; (b) not to exercise any of their rights as Skywest Warrant Holders; and (c) to surrender their Skywest Warrants for cancellation, in each case, from the date of their acceptance of the Skywest Warrants Proposal to the respective dates of expiry of such Skywest Warrants. The Skywest Warrants Proposal is subject to the Scheme becoming effective and in relation to any Skywest Warrant, further subject to that Skywest Warrant continuing to be exercisable into new Skywest Shares as of the Effective Date. A separate letter setting out more fully the proposal to Skywest Warrant Holders will be sent to Skywest Warrant Holders in due course.

4.2 Warrant Price The Warrant Price will be a cash amount of A$0.098 for each Skywest Warrant that has an expiration date of 11 December 2013 and A$0.099 for each Skywest Warrant that has an expiration date of 1 January 2014, in each case, calculated based upon the fair value of the Skywest Warrants determined using the binomial option pricing model consistent with the accounting treatment of the Skywest Warrants in the past financial statements and annual reports of Skywest.”

6.6.2 Analysis of Warrant Price

We note that all Skywest Warrants have a common exercise price of 25.78 pence (or approximately A$0.3864 based on the exchange rate of GBP1 = A$1.4987 as at Latest Practicable Date). The “see-through” price of these warrants, calculated based on the difference between the Implied Consideration of A$0.4688, as defined under paragraph 6.1 of this letter, and the exercise price of the Skywest Warrants is A$0.0824. We further note that the Warrant Price will be a cash amount of (i) A$0.098 for each Skywest Warrant that has an expiration date of 11 December 2013 and (ii) A$0.099 for each Skywest Warrant that has an expiration date of 1 January 2014, calculated based upon the fair value of the Skywest Warrants determined using the binomial option pricing model. The Warrant Prices, in each case, are higher than the “see-through” price of the Skywest Warrants, which is calculated based on the difference between the Implied Consideration and the exercise price of the same.

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6.7 Other considerations in relation to the Scheme which have a significant bearing on our assessment

6.7.1 The Scheme is binding on Shareholders The Scheme must be approved by a majority in number of Scheme Shareholders, representing not less than three-fourths in value of the Skywest Shares held by the Scheme Shareholders present and voting either in person or by proxy at the Scheme Meeting. When the Scheme becomes effective, the Scheme will be binding on all the Shareholders, whether or not they were present, in person or by proxy, or voted at the Scheme Meeting. As at the Latest Practicable Date, none of the Offeror and to the best of the Offeror’s knowledge and belief, none of its concert parties hold any Skywest Shares.

6.7.2 Conditions of the Scheme The Scheme is condition upon the satisfaction of a number of conditions precedent, as set

out in paragraph 7.1 of the Explanatory Statement (collectively, the “Scheme Conditions”).

Scheme Shareholders should note that if any one or more of the Scheme Conditions are not satisfied or waived, the Scheme will not become effective and binding.

6.7.3 Irrevocable Undertaking

Certain Skywest Shareholders (the “Undertaking Shareholders”) have each given separate undertakings to VAH’s wholly-owned subsidiary, VAH Newco No. 2 Pty Ltd (“VAH Sub”) (collectively, the “Irrevocable Undertakings”) to, inter alia, vote, or procure the voting of, the Skywest Shares set out in the respective Irrevocable Undertakings, in favour of the Scheme at the Scheme Meeting, on and subject to the terms set out in their respective Irrevocable Undertakings. In the event that VAH Sub exercises the Switch Option, the Undertaking Shareholders will, subject to the terms and conditions set out in the respective Irrevocable Undertakings, accept or procure acceptance of the Offer in respect of all Skywest Shares set out in the respective Irrevocable Undertakings. Where the Undertaking Shareholders are Directors, such Undertaking Shareholders have also undertaken to recommend that Skywest Shareholders vote in favour of the Scheme or accept the Offer, as the case may be, in the absence of a Superior Offer and subject to the receipt by the Directors of a report from the IFA to Skywest advising that the Directors recommend that Skywest Shareholders approve the Scheme or accept the Offer, as the case may be. Each Irrevocable Undertakings shall lapse (i) on the date of completion of the Acquisition or (ii) the date on which VAH withdraws from the Acquisition, whichever is the earlier. Further, for the purposes of the Irrevocable Undertakings (other than the Irrevocable Undertaking given by Mr Robert Jeffries Chatfield), in the event there is a Superior Offer, VAH shall be deemed to have withdrawn from the Acquisition if VAH does not make an announcement of its proposal to proceed with the Acquisition on terms which will provide a superior outcome for Skywest Shareholders (“VAH Counterproposal”) than such Superior Offer (it being acknowledged that the price or value implied by the VAH Counterproposal does have to be above, but does not have to be materially above, the price or value implied by such Superior Offer and the other terms and conditions of the VAH Counterproposal taken as a whole are not less favourable than those in the Superior Offer) within five business days prior to, as the case may be, (a) the expiry of the Superior Offer (in the event the Superior Offer is effected by way of a general offer) or (b) the date of the scheme meeting (in the event the Superior Offer is effected by way of a scheme of arrangement pursuant to Section 210 of the Companies Act).

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6.7.4 Statement of prospects of VAH

At its 2012 Annual General Meeting and in its announcement dated 20 November 2012 in relation to its 2012 Annual General Meeting, VAH made the following statement as to its prospects for the year ending 30 June 2013 (the “Statement of Prospects”): “We maintain the same guidance we provided at our Financial Results in August of 8-9 per cent domestic capacity growth in the first half of the 2013 Financial Year. While Virgin Australia currently anticipates an improved Underlying Profit before Tax in Financial Year 2013 compared to Financial Year 2012 (excluding the impact of the proposed Skywest and Tiger acquisitions), the uncertainty in economic conditions and the particularly competitive environment precludes us from providing a profit guidance for the year. Virgin Australia expects a more balanced mix between the First Half and Second Half trading outcomes than has been achieved historically.” The Statement of Prospects was not made in connection with the Scheme. The directors of VAH (“VAH Directors”) have not issued a profit forecast for VAH in connection with the Scheme. Please refer to Appendix 2, for the letter from KPMG and Goldman Sachs in relation to the statement of prospects

6.7.5 Alternative offers from third parties

The Directors have confirmed that, from the First Announcement Date up to the Latest Practicable Date, the Company has not received any alternative offers for the Company’s shares from any third party.

7. OUR RECOMMENDATION

In arriving at our recommendation in respect of the Scheme and the Skywest Warrants Proposal, we have taken into account the factors which we consider to have a significant bearing on our assessment which includes our analysis set out in earlier sections of the following.

In evaluating and assessing the financial terms of the Scheme and the Skywest Warrants Proposal, we have given due consideration to:-



(c) price movement and trading activity of Skywest Shares and VAH Shares; (d) share price performance of Skywest Shares and VAH Shares relative to selected

market indices; (e) assessed NTA valuation of the Group; (f) comparison of the implied valuation ratios of Skywest with financial valuation ratios of


(g) evaluation of the Skywest Warrants Proposal; and (h) other considerations in relation to the Scheme which have a significant bearing on our

assessment.

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Having carefully considered all of the above, we are of the view that, on balance, the financial terms of the Scheme are fair and reasonable to the Scheme Shareholders. We therefore advise you to recommend that the Scheme Shareholders to vote in favour of the Scheme at the Scheme Meeting. In addition to the above, we also note that the Warrant Prices for Skywest Warrants are, in each case, higher than the “see-through” price of the Skywest Warrants calculated based on the Implied Consideration and the exercise prices of the Skywest Warrants. We therefore advise you to recommend that the Skywest Warrant Holders to accept the Skywest Warrants Proposal. The Directors should note that our recommendation is based upon market, economic industry and other conditions prevailing as at the Latest Practicable Date, and information made available to us as at the Latest Practicable Date. This letter is addressed to the Directors for their benefit, in connection with and for the purposes of their consideration of the Scheme and the Skywest Warrants Proposal. Their recommendations to the Scheme Shareholders and the Skywest Warrant Holders in respect of the Scheme and the Skywest Warrants Proposal shall remain their responsibility. Whilst a copy of this letter may be reproduced in the Scheme Document, neither the Company, the Directors nor any other persons may reproduce, disseminate or quote this letter (or any part thereof) for any other purpose other than for the purpose of the Scheme Meeting and for the purpose of the Scheme and the Skywest Warrants Proposal, at any time in any manner without our prior written consent in each specific case. This letter is governed by, and construed in accordance with the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter.

Yours faithfully For and on behalf of DMG & Partners Securities Pte Ltd Ng Boon Eng Wong Kee Seong Director Senior Vice President Head of Corporate Finance Corporate Finance

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LETTER FROM THE OFFEROR TO THE SHAREHOLDERS

73

26 February 2013 To: The Scheme Shareholders Dear Sir/Madam THE ACQUISITION OF SKYWEST AIRLINES LTD. BY VIRGIN AUSTRALIA HOLDINGS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 210 OF THE COMPANIES ACT, CHAPTER 50 OF SINGAPORE We are writing in relation to the proposed acquisition by Virgin Australia Holdings Limited (“VAH” or “Virgin Australia”) of 100 per cent. of Skywest Airlines Ltd. (“Skywest”), the transaction for which the in-principle agreement was announced on 30 October 2012. The proposed acquisition will occur through VAH’s wholly-owned subsidiary, VAH Newco No. 2 Pty Ltd (“VAH Sub”), by way of a scheme of arrangement (the “Scheme”) under Section 210 of the Companies Act, Chapter 50 of Singapore. Approval for the Scheme was received from the Securities Industry Council on 5 December 2012 and the approval of the Australian Competition and Consumer Commission for the proposed acquisition was received on 31 January 2013. However the Scheme remains conditional on the satisfaction of further approvals, including but not limited to, approvals from the Australian Foreign Investment Review Board and the High Court of the Republic of Singapore, as well as the approval of the shareholders of Skywest (“Skywest Shareholders”) at a general meeting. Under the proposed acquisition, Skywest Shareholders will receive the following consideration for each Skywest share: • A$0.225 paid in cash; and

• 0.53 ordinary shares in VAH. As the proposed acquisition partly comprises shares in VAH and is also subject to approval by Skywest Shareholders, we are writing to provide you with information about the VAH group and the proposed acquisition set out in the Schedules to this Letter. Skywest Shareholders will also receive a scheme document (the “Scheme Document”) from Skywest. The contents of this Letter (and its Schedules) should be read in conjunction with the Scheme Document and if you are in any doubt about the proposed acquisition or the Scheme or the action you should take, you should consult your stockbroker, bank manager, solicitor or other professional adviser.

VIRGIN AUSTRALIA HOLDINGS LIMITED (ACN 100 686 226)

56 Edmondstone Road, Bowen Hills Queensland 4006, Australia

VAH NEWCO NO.2 PTY LTD (ACN 160 881 354)

56 Edmondstone Road, Bowen Hills Queensland 4006, Australia

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Virgin Australia and Skywest launched a network partnership in October 2011 and the proposed acquisition will allow us to realise the full potential of the operations, through being able to offer customers a more integrated network, service and frequent flyer program. Under the proposed acquisition, Skywest will become part of the Virgin Australia brand and Virgin Australia will continue to invest to support the growth of Skywest, which will benefit business and tourism, particularly in Western Australia and throughout regional Australia. Virgin Australia believes the proposed acquisition is in the best interests of both parties and shareholders as it will enable us to use the combined strength of the businesses to capitalise on opportunities in the high growth ‘fly-in fly-out’ and regional markets. Yours faithfully For and on behalf of Virgin Australia Holdings Limited VAH Newco No. 2 Pty Ltd (ACN 100 686 226)

(ACN 160 881 354)

John Borghetti John Borghetti Chief Executive Officer Director The directors of each of VAH and VAH Sub (including those who may have delegated detailed supervision of this Letter) have taken all reasonable care to ensure that the facts stated and opinions expressed in this Letter are fair and accurate and that there are no other material facts not contained in this Letter, the omission of which would make any statement in this Letter misleading, and the directors of each of VAH and VAH Sub jointly and severally accept full responsibility accordingly. Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from Skywest, the sole responsibility of the directors of each of VAH and VAH Sub has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Letter.

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SCHEDULE 1

INFORMATION ON THE ACQUISITION AND THE SCHEME 1. INTRODUCTION 1.1 Announcement(s). On 30 October 2012, Virgin Australia Holdings Limited (“VAH” or “Virgin

Australia”) announced, inter alia, that VAH had reached an in-principle conditional agreement with Skywest Airlines Ltd. (“Skywest”) to acquire 100 per cent. of the issued share capital of Skywest (the “Acquisition”) pursuant to a scheme of arrangement (“Scheme”) under Section 210 of the Companies Act, Chapter 50 of Singapore (“Companies Act”), subject to a number of conditions, including, but not limited to, the approval of the Securities Industry Council (“SIC”) to the terms of the Scheme and that the definitive conditional legal agreements in relation to the Scheme would only be entered into on the receipt of the approval of the SIC. On 6 December 2012 (the “Joint Announcement Date”), the respective boards of directors of VAH and Skywest jointly announced that approval from the SIC had been received for the terms of the Scheme and that VAH, its wholly-owned subsidiary, VAH Newco No. 2 Pty Ltd (“VAH Sub”) and Skywest had entered into an implementation agreement dated 6 December 2012 (the “Implementation Agreement”) to implement the Scheme.

1.2 Scheme Document. This Letter and its Schedules should be read and construed together with, and in the context of, the scheme document dated 26 February 2013 (the “Scheme Document”) issued by Skywest to the shareholders of Skywest (“Skywest Shareholders”) in relation to the Scheme. If you are in any doubt about the Acquisition or the Scheme or the action you should take, you should consult your stockbroker, bank manager, solicitor or other professional adviser. Unless otherwise defined, all capitalised terms used in this Letter and its Schedules shall have the same meaning and construction as defined in the Scheme Document.

2. THE SCHEME 2.1 Terms of the Scheme. The Scheme will be proposed in accordance with Section 210 of the

Companies Act and the Singapore Code on Take-overs and Mergers (the “Singapore Code”) and will involve, inter alia, the following: (i) the transfer of all the Skywest Shares held by Skywest Shareholders to VAH Sub; and

(ii) in consideration for the transfer of their Skywest Shares, the Skywest Shareholders

will receive:

(a) A$0.225 in cash (the “Scheme Cash Consideration”); and

(b) 0.53 ordinary shares in VAH (the “VAH Consideration Shares”) at an issue price of A$0.424 for each VAH Consideration Share (“Issue Price”),

(collectively, the “Scheme Cash and Securities Consideration”) for each Skywest Share held by each Skywest Shareholder as of the Books Closure Date.

The aggregate cash amount payable to each Skywest Shareholder pursuant to the Scheme Cash Consideration will be rounded down to the nearest whole cent, if applicable, and will be paid in accordance with paragraph 13 of the Explanatory Statement of the Scheme Document.

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The VAH Consideration Shares will be duly authorised, validly issued, credited as fully paid and free from any charges, mortgages, liens, hypothecation, hire purchase, judgment, encumbrances, easements, security, title retention, preferential rights, trust arrangements or other security interests (“Encumbrances”). The VAH Consideration Shares shall rank pari passu in all respects with the ordinary shares in the capital of VAH (“VAH Shares”) in issue as at the date on which the Scheme becomes effective and binding (the “Effective Date”), including the right to receive and retain any dividends, rights and other distributions declared, paid or made on or after the Effective Date. No fraction of any VAH Consideration Share shall be issued and instead any fractional entitlements shall be paid in cash pro-rata based on the Issue Price.

Pursuant to the terms of the Scheme, the Skywest Shares will be transferred to VAH Sub fully paid, free from all Encumbrances and together with all rights, benefits and entitlements attaching thereto as of the Joint Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by Skywest on or after the Joint Announcement Date. At present, VAH understands that Skywest has no intention of declaring any dividends. However, in the event that any dividend, other distribution (whether in cash or in specie) or return of capital is declared by Skywest on or after the Joint Announcement Date, VAH reserves the right to reduce the Scheme Cash and Securities Consideration by the amount of such dividend, distribution (whether in cash or in specie) or return of capital.

For illustrative purposes only, the Scheme Cash and Securities Consideration to be received by Skywest Shareholders pursuant to the Scheme shall be as follows:

No. of Skywest Shares held by a Skywest Shareholder as at the

Record Date

Scheme Cash and Securities Consideration

Amount of Scheme Cash Consideration

payable

(A$)

No. of VAH Consideration Shares to be issued to a Skywest

Shareholder pursuant to the Scheme (after rounding down)

1,000 225 530

10,000 2,250 5,300

100,000 22,500 53,000

1,000,000 225,000 530,000

2.2 Scheme Conditions. The Scheme is conditional upon the satisfaction or waiver (as the case

may be) of certain conditions precedent (“Scheme Conditions”) which are set out in the Scheme Document. Pursuant to the terms of the Implementation Agreement, the Implementation Agreement may be terminated at any time prior to or on the Record Date, subject to the prior consultation with or approval of, as may be applicable, the SIC:

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(i) Court Order: by either VAH Sub or Skywest, if any court of competent jurisdiction or governmental agency has issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Scheme, the Acquisition or any part thereof, or has refused to do anything necessary to permit the Scheme, the Acquisition or any part thereof, and such order, decree, ruling, other action or refusal shall have become final and non-appealable;

(ii) Shareholders’ Approval: by VAH Sub or Skywest, if the resolution(s) submitted to the Scheme Meeting are not approved (without amendment) by the requisite majorities; or

(iii) Breach: by either (a) VAH Sub, if Skywest is in material breach of any provision of

the Implementation Agreement or has failed to perform and comply in all respects with any of the matters referred to in paragraph 7.1(i) of the Explanatory Statement of the Scheme Document on or prior to the Record Date, or (b) Skywest, if VAH Sub is in material breach of any provision of the Implementation Agreement or has failed to perform and comply in all respects with any of the matters referred to in paragraph 7.1(j) of the Explanatory Statement of the Scheme Document on or prior to the Record Date, provided that either VAH Sub or Skywest, as the case may be, has given written notice to the other party of such breach (“Notice of Breach”). In such circumstance, the defaulting party shall be given a period of 14 days from the date of the Notice of Breach (or such longer period as may be agreed to by the non-defaulting party in writing) (the “Remedy Period”) to remedy such breach (insofar as capable of remedy) to the reasonable satisfaction of the non-defaulting party. If such breach is not remedied to the reasonable satisfaction of the non-defaulting party by the expiry of the Remedy Period, the non-defaulting party shall be entitled to terminate the Implementation Agreement by notice in writing to the defaulting party provided that no party may terminate the Implementation Agreement pursuant to this provision if such party is in material and continuing breach of the Implementation Agreement.

Notwithstanding anything contained in the Implementation Agreement, the Implementation Agreement will terminate if any of the Scheme Conditions has not been satisfied (or, where applicable, waived) by 30 April 2013 except that: (1) in the event of any non-fulfilment of the Scheme Conditions in paragraphs 7.1(f), (h)

and (i) of the Explanatory Statement of the Scheme Document, VAH Sub can only rely on such non-fulfilment of any such Scheme Condition to terminate the Implementation Agreement after consultation with the SIC; and

(2) in the event of any non-fulfilment of the Scheme Conditions in paragraphs 7.1(g) and (j) of the Explanatory Statement of the Scheme Document, Skywest can only rely on such non-fulfilment of any such Scheme Condition to terminate the Implementation Agreement after consultation with the SIC.

In the event that VAH Sub terminates the Implementation Agreement by reason of the Company Prescribed Occurrence relating to Skywest set out in paragraph 15 of Part C of Appendix 4 of the Scheme Document resulting in the non-fulfilment of the Scheme Condition set out in paragraph 7.1(f) of the Explanatory Statement of the Scheme Document, VAH Sub has agreed to pay Skywest a lump sum of A$3,250,000 (without withholding or set off) within 10 business days of the date of termination of the Implementation Agreement.

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2.3 Switch Option. Pursuant to the terms of the Implementation Agreement, VAH Sub has the right at its discretion to elect at any time prior to the date of the Scheme Meeting, in compliance with the Singapore Code and subject to prior consultation with and (where applicable) approval of the SIC: (i) to implement the Acquisition by way of a pre-conditional or formal voluntary conditional

cash and/or scrip offer (“Offer”). In such event, VAH Sub will make the Offer on the same or better terms as those which apply to the Scheme, including without limitation, the same or a higher consideration than the Scheme Cash and Securities Consideration and an acceptance condition set at more than 50 per cent. or such higher percentage as VAH Sub may decide, of the Skywest Shares to which the Offer relates; and

(ii) in the event of a firm competing offer from a third party for all the Skywest Shares other than those held by such third party and parties acting in concert with such third party, at a price higher than the Scheme Cash and Securities Consideration and carries no additional conditions other than those necessary for the implementation of the competing offer, to proceed by way of an Offer (in the manner described in paragraph 2.3(i) above),

(the “Switch Option”).

3. IRREVOCABLE UNDERTAKINGS

Certain Skywest Shareholders (“Undertaking Shareholders”) have each given separate undertakings to VAH Sub (collectively, the “Irrevocable Undertakings”) to, inter alia, vote, or procure the voting of, the Skywest Shares set out in the respective Irrevocable Undertakings, in favour of the Scheme at the Scheme Meeting, on and subject to the terms set out in their respective Irrevocable Undertakings. In the event that VAH Sub exercises the Switch Option, the Undertaking Shareholders will, subject to the terms and conditions set out in the respective Irrevocable Undertakings, accept or procure the acceptance of the Offer in respect of all Skywest Shares set out in the respective Irrevocable Undertakings. Where the Undertaking Shareholders are directors of Skywest (“Skywest Directors”), such Undertaking Shareholders have also undertaken to recommend that Skywest Shareholders vote in favour of the Scheme or accept the Offer, as the case may be, in the absence of a Superior Offer and subject to the receipt by the Skywest Directors of a report from the IFA advising that the Skywest Directors recommend that Skywest Shareholders approve the Scheme or accept the Offer, as the case may be. Each Irrevocable Undertaking shall lapse (i) on the date of the completion of the Acquisition or (ii) the date on which VAH withdraws from the Acquisition, whichever is the earlier. Further, for the purposes of the Irrevocable Undertakings (other than the Irrevocable Undertaking given by Mr Robert Jeffries Chatfield), in the event that there is a Superior Offer, VAH shall be deemed to have withdrawn from the Acquisition if VAH does not make an announcement of its proposal to proceed with the Acquisition on terms which will provide a superior outcome for Skywest Shareholders (“VAH Counterproposal”) than such Superior Offer (it being acknowledged that the price or value implied by the VAH Counterproposal does have to be above, but does not have to be materially above, the price or value implied by such Superior Offer and the other terms and conditions of the VAH Counterproposal taken as a whole are not less favourable than those in the Superior Offer) within five business days prior to, as the case may be, (a) the expiry of the Superior Offer (in the event that the Superior Offer is effected by way of a general offer) or (b) the date of the scheme meeting (in the event that the Superior Offer is effected by way of a scheme of arrangement pursuant to Section 210 of the Companies Act).

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The Undertaking Shareholders and their respective interests in Skywest are as follows:

Undertaking Shareholder No. of Skywest Shares Held

Direct Interest Deemed Interest

Mr Robert Jeffries Chatfield 2,400,100 33,720,855

Mr Seah Kian Peng 2,050,000 -

Mr John Leonard Jost 27,250 4,675,412

Mr Ronald Lewis Aitkenhead 200,000 -

4. SKYWEST WARRANTS PROPOSAL 4.1 Warrants Proposal. VAH Sub will not make an offer to acquire any Skywest Warrants which

have not been validly exercised and the holder registered as a shareholder of Skywest prior to or on the Books Closure Date. Instead, VAH Sub will pay to the Skywest Warrant Holders a cash amount (the “Warrant Price”) in consideration for such Skywest Warrant Holders agreeing:

(i) not to exercise their Skywest Warrants into new Skywest Shares;

(ii) not to exercise any of their rights as a holder of the Skywest Warrants; and

(iii) to surrender their Skywest Warrants for cancellation,

in each case, from the date of their acceptance of the Skywest Warrants Proposal to the respective dates of expiry of such Skywest Warrants. The Skywest Warrants Proposal is subject to the Scheme becoming effective and in relation to any Skywest Warrant, further subject to that Skywest Warrant continuing to be exercisable into new Skywest Shares as of the Effective Date. A separate letter setting out more fully the proposal to Skywest Warrant Holders will be sent to Skywest Warrant Holders in due course.

4.2 Warrant Price. The Warrant Price will be a cash amount of A$0.098 for each Skywest

Warrant that has an expiration date of 11 December 2013 and A$0.099 for each Skywest Warrant that has an expiration date of 1 January 2014, in each case, calculated based upon the fair value of the Skywest Warrants determined using the binomial option pricing model consistent with the accounting treatment of the Skywest Warrants in the previous financial statements and annual reports of Skywest.

5. IMPLEMENTATION OF THE SCHEME 5.1 Application to Court for Sanction. Upon the Scheme being approved by a majority in

number of the Scheme Shareholders present and voting, either in person or by proxy, at the Scheme Meeting, such majority holding not less than three-fourths in value of the Skywest Shares voted at the Scheme Meeting, and upon the approval of the FIRB being obtained, an application will be made to the Court by Skywest for the sanction of the Scheme.

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5.2 Procedure for Implementation. If the Court sanctions the Scheme, VAH, VAH Sub and Skywest will (subject to the satisfaction (or where applicable, waiver) of all the Scheme Conditions) take the necessary steps to render the Scheme effective and the following will be implemented:

(i) dealings in Skywest Shares in the form of CREST DIs on AIM will be suspended at

7.00 p.m. (London time) and dealings in Skywest Shares in the form of CHESS DIs on ASX will be suspended at 7.00 p.m. (Sydney time) on the Business Day immediately following the Court Hearing Sanction Date and Skywest will make applications to cancel the listing and quotation of Skywest Shares on AIM and ASX, cancel the trading in CREST DIs on AIM and in CHESS DIs on ASX, such cancellations/delistings in each case to take effect on the Effective Date;

(ii) from the Effective Date, all existing share certificates relating to the Scheme Shares

held or owned by Entitled Shareholders will be cancelled and cease to be evidence of title of the Skywest Shares represented thereby whether or not they are returned to Skywest for cancellation;

(iii) the Scheme Shares held by Entitled Shareholders will be transferred to VAH Sub

and/or its nominees, and VAH Sub and/or VAH shall, in consideration for such transfer, within 10 calendar days after the Effective Date, pay the Scheme Cash and Securities Consideration to Entitled Shareholders in the following manner:

(a) Scheme Cash Consideration

(1) by sending a cheque for the aggregate Scheme Cash Consideration

drawn on an Australian bank and in Australian dollars payable to and made out in favour of each such Entitled Shareholder by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; or

(2) by crediting the Pounds Sterling equivalent of the aggregate Scheme Cash Consideration, determined based on the Prevailing Exchange Rate, through CREST; or

(3) by crediting the Scheme Cash Consideration in Australian dollars, to

the relevant bank account(s) designated by Entitled Shareholders by the Books Closure Date to receive cash distributions from Skywest in Australian Dollars; and

(b) VAH Consideration Shares

(1) where any Entitled Shareholder has not successfully provided the

Share Registrars with details of any account(s) with any depository company or custodian in Australia (“Relevant Australian Custodian”) who has consented to receive and/or hold the VAH Consideration Shares on such Entitled Shareholders’ behalf (“Relevant Australian Custodian Details”), by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of such Entitled Shareholder and the despatch of a statement of confirmation of such allotment and issue to such Entitled Shareholder, regardless of whether such Entitled Shareholder holds the Scheme Shares as custodian or nominee or otherwise, by ordinary post to his address in

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the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder, or in the case of joint Entitled Shareholders, to the first named Entitled Shareholder, by ordinary post to his address as appearing in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; or

(2) where any Entitled Shareholder has or has successfully provided the Share Registrars with the Relevant Australian Custodian Details, by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of the Relevant Australian Custodian, and the despatch of a statement of confirmation of such allotment and issue to such Relevant Australian Custodian by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; and

(iv) Skywest shall authorise any person to execute or effect on behalf of all such Entitled

Shareholders, an instrument or instruction of transfer of all the Scheme Shares held by such Entitled Shareholders, and every such instrument or instruction of transfer so executed shall be effective as if it had been executed by the relevant Entitled Shareholder.

By way of illustration, assuming that the Scheme becomes effective and binding on 12 April 2013, the posting of cheques or the crediting of the relevant bank account(s) for the Scheme Cash Consideration in the manner set out in paragraph 5.2(iii)(a) above and the allotment and issue of the VAH Consideration Shares in the manner set out in paragraph 5.2(iii)(b) above is expected to take place on or before 1 April 2013. The despatch of payment of the Scheme Cash Consideration and statement(s) of confirmation of the allotment and issue of the VAH Consideration Shares by VAH and/or VAH Sub to each Entitled Shareholder in accordance with the above shall discharge VAH and/or VAH Sub of any liability in respect of the delivery of those payments and the VAH Consideration Shares.

5.3 Retention and Release of Proceeds. On or after the day being six (6) calendar months

after the posting of such cheques relating to the Scheme Cash Consideration by or on behalf of VAH Sub and/or VAH, VAH Sub and/or VAH shall have the right to cancel or countermand payment of any such cheque which has not been cashed (or has been returned uncashed) and shall place the Scheme Cash Consideration monies in a bank account in Skywest's name in respect of the Scheme Cash Consideration monies with a licensed bank in Singapore or Australia selected by Skywest. Skywest or its successor entity shall hold such monies until the expiration of six (6) years from the Effective Date and shall prior to such date make payments therefrom of sums payable pursuant to Clause 3.2 of the Scheme to persons who satisfy Skywest or its successor entity that they are respectively entitled thereto and that the cheques referred to in Clause 3.2 of the Scheme for which they are payees have not been cashed. Any such determination shall be conclusive and binding upon all persons claiming an interest in the relevant monies, and any payments made by Skywest hereunder shall not include any interest accrued on the sums to which the respective persons are entitled pursuant to Clause 3.1 of the Scheme.

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On the expiry of six (6) years from the Effective Date, each of Skywest, VAH Sub and/or VAH shall be released from any further obligation to make any payments of the Scheme Cash Consideration under the Scheme and Skywest or its successor entity shall transfer to VAH Sub the balance (if any) of the sums then standing to the credit of the bank account referred to in Clause 3.4(a) of the Scheme including accrued interest, subject, if applicable, to the deduction of interest, tax or any withholding tax or any other deduction required by law and subject to the deduction of any expenses.

6. SETTLEMENT AND REGISTRATION PROCEDURES

Subject to the Scheme becoming effective, the settlement and registration procedures set out below will apply.

6.1 Entitled Shareholders who are Certificate Shareholders.

(i) Entitlements to the Scheme Cash and Securities Consideration will be determined on

the basis of the Certificate Shareholders and their holdings of Scheme Shares appearing in the Register of Members at 5.00 p.m. (Singapore time) on the Books Closure Date. Therefore, Certificate Shareholders who have not already done so are requested to take the necessary action to ensure that the Scheme Shares owned by them are registered in their names with the Share Registrars by 5.00 p.m. (Singapore time) on the Books Closure Date.

(ii) From the Effective Date, each existing share certificate representing a former holding

of Skywest Shares by Entitled Shareholders who are Certificate Shareholders will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the Scheme Cash and Securities Consideration to each Entitled Shareholder who is a Certificate Shareholder based on his holding of the Skywest Shares as at 5.00 p.m. (Singapore time) on the Books Closure Date in accordance with paragraph 5.2(iii) above.

(iii) Scheme Cash Consideration

Entitled Shareholders who are Certificate Shareholders will receive a cheque for the aggregate Scheme Cash Consideration drawn on an Australian bank and in Australian Dollars payable to and made out in favour of each such Certificate Shareholder and despatched by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Certificate Shareholder.

(iv) VAH Consideration Shares

All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares. Instead, all Entitled Shareholders who are Certificate Shareholders who receive VAH Consideration Shares will be sent a statement of confirmation of issue and allotment of shares rather than a share certificate. Any fractional entitlements of VAH Consideration Shares to be paid in cash to Entitled Shareholders being Certificate Shareholders will be paid together with the Scheme Cash Consideration in the manner set out in paragraphs 5.2(iii) and 6.1(iii) above.

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Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

(v) General

Entitled Shareholders who are Certificate Shareholders who wish to convert their Scheme Shares into CREST DIs or CHESS DIs, or who wish to receive the equivalent of their entitlement to the Scheme Cash Consideration in Pounds Sterling or have their Scheme Cash Consideration credited in Australian Dollars to their bank account(s), should make arrangements for their Scheme Shares to be converted into CREST DIs or CHESS DIs respectively, as the case may be, as soon as practicable. Further, Entitled Shareholders who are Certificate Shareholders who wish to have their VAH Consideration Shares held by a Relevant Australian Custodian should make arrangements for the conversion of their Scheme Shares into CHESS DIs as soon as practicable, such that their entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CHESS Nominee in manner set out in paragraph 6.3(v) below. Such Entitled Shareholders must deliver all required documents for any such conversion to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CREST Nominee or the CHESS Nominee, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

6.2 CREST DIs held through the CREST Nominee as the Entitled Shareholder.

(i) CREST DI Holders should note that the CREST Nominee, as the Entitled

Shareholder holding the Skywest Shares underlying the CREST DIs, will be entitled to receive the aggregate Scheme Cash and Securities Consideration attributable to Skywest Shares underlying the CREST DIs, for and on behalf of the CREST DI Holders.

(ii) The aggregate Scheme Cash and Securities Consideration to be received by

the CREST Nominee as the Entitled Shareholder holding the Skywest Shares underlying the CREST DIs, will be the aggregate of each CREST DI Holder’s entitlement to the Scheme Cash and Securities Consideration based on the number of Scheme Shares standing to each CREST DI Holder’s account under the CREST Nominee as at 5.00 p.m. (Singapore time) on the Books Closure Date, rounded down to the nearest whole cent (if applicable) and with fractional entitlements to the VAH Consideration Shares not being issued and paid in cash pro-rata based on the Issue Price.

(iii) From the Effective Date, the existing share certificate(s) representing a

former holding of Skywest Shares by the CREST Nominee as the Entitled Shareholder will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the aggregate Scheme Cash and Securities Consideration to or at the direction of the CREST Nominee in accordance with paragraph 5.2(iii) above.

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The CREST Nominee, for and on behalf of the CREST DI Holders, will make arrangements, or will procure that arrangements be made, for the equivalent of the Scheme Cash Consideration in Pounds Sterling, based on the Prevailing Exchange Rate, in respect of each CREST DI Holder’s entitlement to the Scheme Cash Consideration to be credited to the relevant bank account(s) of the CREST DI Holder by way of a CREST payment.

(v) VAH Consideration Shares

All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares.

Unless the CREST Nominee has provided Skywest and/or the UK Share Registrar with the Relevant Australian Custodian Details, all VAH Consideration Shares in respect of each CREST DI Holder’s entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CREST Nominee and a statement of confirmation of such allotment and issue will be despatched to the CREST Nominee. The CREST Nominee will thereafter make arrangements for each CREST DI Holder to receive the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CREST Nominee.

CREST DI Holders who wish to have the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CREST Nominee held by a Relevant Australian Custodian, must therefore provide the CREST Nominee with their Relevant Australian Custodian Details as soon as practicable and in any event, no later than the Books Closure Date. CREST DI Holders are advised to contact the Share Registrars, for and on behalf of the CREST Nominee, to obtain details of the information required in respect of the Relevant Australian Custodian Details at the following e-mail address: [email protected]. Any fractional entitlements of VAH Consideration Shares to be paid in cash to CREST DIs will be paid in the same manner as the Scheme Cash Consideration in the manner set out in paragraphs 5.2(iii) and 6.2(iv) above. Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on ASX on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

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(vi) General CREST DI Holders who wish to convert their CREST DIs into CHESS DIs to receive the Scheme Cash Consideration in Australian Dollars and the VAH Consideration Shares through the CHESS Nominee, or who wish to directly hold the Scheme Shares underlying their CREST DIs, should make arrangements for such conversion or transfer of the relevant underlying Scheme Shares from the CREST Nominee to the CHESS Nominee or to themselves, as the case may be, as soon as practicable.

Such CREST DI Holders must deliver all required documents for any such conversion or transfer to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CHESS Nominee or as a Certificate Shareholder on the Register of Members, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

6.3 CHESS DIs held through the CHESS Nominee as the Entitled Shareholder.

(i) CHESS DI Holders should note that the CHESS Nominee, as the Entitled

Shareholder holding the Skywest Shares underlying the CHESS DIs, will be entitled to receive the aggregate Scheme Cash and Securities Consideration attributable to Skywest Shares underlying the CHESS DIs, for and on behalf of the CHESS DI Holders.

(ii) The aggregate Scheme Cash and Securities Consideration to be received by the

CHESS Nominee as the Entitled Shareholder holding the Skywest Shares underlying the CHESS DIs, will be the aggregate of each CHESS DI Holder’s entitlement to the Scheme Cash and Securities Consideration based on the number of Scheme Shares standing to each CHESS DI Holder’s account under the CHESS Nominee as at 5.00 p.m. (Singapore time) on the Books Closure Date, rounded down to the nearest whole cent (if applicable) and with fractional entitlements to the VAH Consideration Shares not being issued and paid in cash pro-rata based on the Issue Price.

(iii) From the Effective Date, the existing share certificate(s) representing a former

holding of Skywest Shares by the CHESS Nominee as the Entitled Shareholder will cease to be evidence of title to the Skywest Shares represented thereby. Within 10 calendar days of the Effective Date, VAH Sub and/or VAH shall make payment of the aggregate Scheme Cash and Securities Consideration to or at the direction of the CHESS Nominee in accordance with paragraph 5.2(iii) above.


The CHESS Nominee, for and on behalf of the CHESS DI Holders, will make arrangements or will procure that arrangements are made, for the Scheme Cash Consideration in Australian dollars in respect of each CHESS DI Holder’s entitlement to the Scheme Cash Consideration to be either credited in Australian Dollars to the bank account(s) designated or nominated by the CHESS DI Holder by the Books Closure Date for dividend payments or by sending a cheque for such Scheme Cash Consideration drawn on an Australian bank and in Australian Dollars payable to and made out in favour of such CHESS DI Holder and despatched by ordinary post to his address in the records of the CHESS Nominee as at the Books Closure Date, at the sole risk of such CHESS DI Holder.

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(v) VAH Consideration Shares All VAH Shares, including the VAH Consideration Shares, are held in uncertificated form. This means that share certificates will not be issued in respect of any VAH Consideration Shares. All VAH Consideration Shares in respect of each CHESS DI Holder’s entitlement to the VAH Consideration Shares will be allotted and issued in the name of the CHESS Nominee to hold for and on behalf of the CHESS DI Holders, and a statement of confirmation of such allotment and issue will be despatched to the CHESS Nominee. Arrangements will thereafter be made for each CHESS DI to receive the VAH Consideration Shares which are attributable to the Scheme Shares standing to their account under the CHESS Nominee.

Any fractional entitlements of VAH Consideration Shares to be paid in cash to CHESS DIs will be paid together with the Scheme Cash Consideration in the manner set out in paragraphs 5.2(iii) and 6.3(iv) above. Application will be made to ASX for the VAH Consideration Shares to be listed on ASX and it is anticipated that their admission will become effective and trading in the VAH Consideration Shares will commence on ASX on the Market Day following the date of issue and allotment of the VAH Consideration Shares.

(vi) General

CHESS DI Holders who wish to convert their CHESS DIs into CREST DIs to receive the equivalent of Scheme Cash Consideration in Pounds Sterling and the VAH Consideration Shares through the CREST Nominee, or who wish to directly hold the Scheme Shares underlying their CHESS DIs, should make arrangements for such conversion or transfer of the relevant underlying Scheme Shares from the CHESS Nominee to the CREST Nominee or themselves, as the case may be, as soon as practicable.

Such CHESS DI Holders must deliver all required documents for any such conversion or transfer to the relevant Share Registrars as soon as practicable, and in any event no later than five (5) Business Days prior to the Books Closure Date, so as to appear in the records of the CREST Nominee or as a Certificate Shareholder on the Register of Members, as the case may be, as at 5.00 p.m. (Singapore time) on the Books Closure Date.

7. SUSPENSION AND DELISTING

If the Scheme becomes effective, VAH Sub will own all the Skywest Shares and Skywest will be a wholly-owned subsidiary of VAH Sub and VAH. Dealings in Skywest Shares in the form of CREST DIs on AIM will therefore be suspended at 7.00 p.m. (London time) and dealings in Skywest Shares in the form of CHESS DIs on ASX will be suspended at 7.00 p.m. (Sydney time) on the Business Day immediately following the Court Hearing Sanction Date. Skywest will make applications to cancel the listing and quotation of Skywest Shares on AIM and ASX, cancel the trading in CREST DIs on AIM and in CHESS DIs on ASX, such cancellations/delistings in each case to take effect on the Effective Date.

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8. RATIONALE AND FUTURE PLANS FOR SKYWEST 8.1 Rationale. The Acquisition will enable VAH to fast-track its advancements in the growing ‘fly-

in fly-out’ and regional markets, increasing competition in these segments. It will also enable VAH to offer a fully integrated network, service and frequent flyer program. Once acquired, Skywest would become part of the Virgin Australia brand. VAH intends to support the growth of Skywest, which will benefit jobs, business and tourism, particularly in Western Australia and throughout regional Australia.

8.2 Future Plans. Following completion of the Acquisition, VAH will undertake a review of the businesses and operations of the Skywest group with a view to aligning such businesses and operations with those of the VAH group. Skywest will continue to operate under its current Air Operator’s Certificate (“AOC”) with its own chief executive officer and management team, based in Western Australia. Pending such review, VAH currently has no immediate plans to (i) introduce any major changes to the businesses of the Skywest group, (ii) make any major disposal or redeployment of assets (including the fixed assets of the Skywest group) or (iii) discontinue the employment of the employees of the Skywest group, other than in the ordinary course of business and as required through the integration process. VAH also retains its right to consider options or opportunities which may present themselves, or be required, and which VAH regards to be in the best interests of VAH and the Skywest business.

9. GENERAL AND FINANCIAL INFORMATION RELATING TO VAH AND VAH SUB General and financial information relating to VAH and VAH Sub are set out in Schedules 2, 3, 4 and 5 to this Letter.

10. GENERAL AND FINANCIAL INFORMATION RELATING TO SKYWEST

10.1 Skywest. Skywest has been in operation for close to 50 years, currently flying to 14 destinations on its regular passenger transport network. Skywest Airlines operates flights across regional Western Australia as well as to Darwin, Melbourne and internationally to Denpasar, Bali. With a strong presence in the corporate charter, 'fly-in fly-out' mining market and regular passenger transport, the airline carries approximately 800,000 passengers annually, servicing business travelers, tourists and regional communities. Excluding the eight ATR-72 turboprops operated on behalf of Virgin Australia as part of the Australian Regional Airline Network (ARAN), Skywest Airlines’ fleet includes a total of 20 aircraft, including Airbus A320 jet aircraft, Fokker F100 jet aircraft and Fokker F50 turboprops. Skywest is a public company incorporated in Singapore and is a diversified airline, aerospace and investment group. Its current principal subsidiary, Skywest Airlines, is a high capacity airline operator and holiday package supplier in the Australasian region, which holds an Australian High Capacity AOC enabling the operation of large commercial aircraft for charter and regular scheduled air passenger traffic. As at the Latest Practicable Date, the issued and paid-up share capital of Skywest is S$50,002,606 comprising an aggregate of 213,040,000 Skywest Shares. The Skywest Directors are Mr Jeffries Chatfield, Mr Ronald Aitkenhead, Mr John Jost and Mr Seah Kian Peng.

10.2 Material Changes in the Financial Position of Skywest. Save as disclosed in the Scheme

Document, the Skywest group audited consolidated financial statements for FY2012 and any other information on Skywest and its subsidiaries (the “Skywest Group”) which is released by the Skywest Group on the AIM and ASX, including without limitation the release of its monthly operating statistics, as at the Latest Practicable Date, there have been no material changes to

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the financial position of the Skywest Group since 30 June 2012, being the date of the last published audited consolidated accounts of the Skywest Group.

10.3 Transfer Restrictions. The Memorandum and Articles of Association of Skywest do not

contain any restrictions on the right to transfer Skywest Shares, which has the effect of requiring holders of Skywest Shares, before transferring them, to offer them for purchase to Skywest Shareholders or to any person.

11. SPECIAL ARRANGEMENTS 11.1 No Agreement having any Connection with or Dependence upon the Scheme. Save for

the Implementation Agreement and the Irrevocable Undertakings, there is, as at the Latest Practicable Date, no agreement, arrangement or understanding between (i) VAH Sub or any of the parties acting in concert with VAH Sub for the purposes of the Scheme and (ii) any of the current or recent Skywest Directors or any of the current or recent Skywest Shareholders having any connection or dependence upon the Scheme.

11.2 No Payment or Benefit to Directors. As at the Latest Practicable Date, there is no

agreement, arrangement or understanding for any payment or other benefit to be made or given to any Skywest Director or to any director of any corporations (which is by virtue of the Companies Act deemed to be related to Skywest) as compensation for loss of office or otherwise in connection with the Scheme.

11.3 Transfer of Shares. As at the Latest Practicable Date, there is no agreement, arrangement

or understanding pursuant to which the Skywest Shares acquired by VAH Sub pursuant to the Scheme would be transferred to any other person.

11.4 No Agreement Conditional upon the Outcome of the Scheme. Save as disclosed in this

Letter or the Scheme Document, there is, as at the Latest Practicable Date, no agreement or arrangement which exists between (i) VAH Sub or VAH and (ii) any of the Skywest Directors or any other person in connection with or conditional upon the outcome of the Scheme or otherwise connected with the Scheme.

11.5 Directors’ Service Contracts. As at the Latest Practicable Date, there is no agreement,

arrangement or understanding between VAH Sub or any parties acting in concert with VAH Sub for the purposes of the Scheme and any directors of VAH Sub or VAH (“Virgin Directors”), whereby the total emoluments received by the Virgin Directors will be affected as a consequence of the Scheme.

12. DISCLOSURE OF HOLDINGS AND DEALINGS IN SECURITIES

Information on the interests and dealings of VAH Sub, VAH and any person acting in concert with VAH Sub for the purpose of the Scheme are set out in paragraph 3 of Schedule 2 to this Letter.

13. CONFIRMATION OF FINANCIAL RESOURCES Goldman Sachs Australia Pty Ltd (“Goldman Sachs”) has been appointed as the financial adviser to VAH in relation to the Scheme. Goldman Sachs, as the financial adviser to VAH, confirms that sufficient financial resources are available to VAH Sub to satisfy in full the Scheme Cash Consideration to be paid to Skywest Shareholders pursuant to the Scheme.

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14. MARKET QUOTATIONS Information on (i) the high, low and last closing prices and transacted volume of the Skywest Shares on AIM and ASX and the VAH Shares on ASX on a monthly basis from May 2012 (being six (6) calendar months preceding the First Announcement Date) to the Latest Practicable Date, (ii) the closing prices of the Skywest Shares on AIM and ASX and the VAH Shares on ASX on (a) 29 October 2012, being the last trading day prior to the First Announcement Date and (b) the Latest Practicable Date and (iii) the highest and lowest closing prices of the Skywest Shares on AIM and ASX and the VAH Shares on ASX during the period between the start of the six (6) months preceding the First Announcement Date and the Latest Practicable Date, and the respective dates of the relevant sales, is set out in paragraphs 5 and 6 of Schedule 2 to this Letter.

15. CONSENT

Goldman Sachs has given, and has not as at the Latest Practicable Date, withdrawn its written consent to the inclusion herein of its name and all references to its name in the form and context in which it appears in this Letter. Goldman Sachs does not make, or purport to make, any statement in this Letter other than the confirmation of financial resources in paragraph 13 above and those statements with respect to its name and to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any other statements in or omissions from this Letter.

16. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection during the normal business hours at the offices of Allens at Riverside Centre, 123 Eagle Street, Brisbane, Queensland 4000, Australia, for a period of three (3) months commencing from the date of the Scheme Document or up to the Effective Date, whichever is later: (i) the Constitution of VAH;

(ii) the Implementation Agreement; (iii) the Irrevocable Undertakings; (iv) the consent letter referred to paragraph 15 above; and (v) audited consolidated financial statements of VAH and its subsidiaries for the financial

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SCHEDULE 2

FURTHER INFORMATION ON VAH AND VAH SUB 1. INFORMATION ON VAH SUB 1.1 Directors. The names, addresses and designations of the directors of VAH Sub are set

out below:

Name Address Designation

John Borghetti c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Director

Sankar Narayan c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Director

1.2 Principal Activities and Share Capital. VAH Sub is an investment holding company

incorporated in Queensland, Australia on 22 October 2012. VAH Sub is a wholly-owned subsidiary of VAH. Save for entering into certain arrangements in connection with the Acquisition and the Scheme, VAH Sub has not carried on any business since its incorporation. As at the Latest Practicable Date, the issued share capital of VAH Sub is comprises one (1) ordinary share.

1.3 Registered Office. The registered office of VAH Sub is 56 Edmondstone Road, Bowen Hills,

Queensland, Australia.

1.4 Financial Information on VAH Sub. As VAH Sub was incorporated only on 22 October 2012 for the purpose of the Acquisition, no audited or unaudited financial statements of VAH Sub have been prepared as at the Latest Practicable Date. Save as a result of financing of the Acquisition and the Scheme, there has been no known material changes in the financial position of VAH Sub since its incorporation.

2. INFORMATION ON VAH 2.1 Directors. The names, addresses and designations of the directors of VAH are set out

below:


Mr Neil Chatfield

c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Independent Non-Executive Chairman

Ms Samantha Mostyn

c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Independent Non-Executive Director

Mr Robert Thomas c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia


The Hon. Mark Vaile A.O. c/o 56 Edmondstone Road, Bowen Hills, Queensland,


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Australia

Mr John Borghetti c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Managing Director and Chief Executive Officer

Mr David Baxby c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia


Mr Joshua Bayliss c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia


Mr Keith Roberts c/o 56 Edmondstone Road, Bowen Hills, Queensland, Australia

Alternate Director

2.2 Principal Activities. VAH (ASX:VAH) was incorporated in Queensland, Australia on

27 May 2002 and has since established itself as a contemporary, full service airline, with a reputation for exceptional customer service. The airline employs more than 8,000 people in Australia, New Zealand and the United States. Virgin Australia has strategic alliances with four key airline partners: Air New Zealand, Delta Air Lines, Etihad Airways and Singapore Airlines, providing customers with access to over 400 destinations worldwide. Its domestic and international operations are complemented by Virgin Samoa, a joint venture airline with the Government of Samoa. Virgin Australia operates a fleet of 108 modern Airbus A330, Boeing 777, Boeing 737, Embraer E-Jet and ATR-72 turboprop aircraft to 34 Australian ports and 17 international destinations including the USA, UAE, New Zealand, Indonesia, Thailand, Papua New Guinea, Solomon Islands, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands. On 30 October 2012, Virgin Australia announced that it had entered into a share purchase agreement to acquire 60 per cent. of the existing shares in Tiger Airways Australia Pty Limited (“Tiger Australia”) from Tiger Airways Holdings Limited (“Tiger Airways”). The transaction is subject to conditions and regulatory approvals, including Australian Competition and Consumer Commission clearance and Foreign Investment Review Board approval. As part of the transaction, Virgin Australia and Tiger Airways propose to enter into a shareholders’ agreement, a brand licensing agreement and services agreement. Tiger Australia will be managed as a standalone entity, with its own AOC and a separate board and management team. Tiger Australia will continue to operate under the Tiger Airways brand as a low cost carrier providing domestic air travel services in Australia with a fleet of Airbus A320 aircraft. The VAH Shares are admitted to trading on ASX.

2.3 Registered Office. The registered office of VAH is 56 Edmondstone Road, Bowen Hills,

Queensland, Australia.

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2.4 Share Capital.

(i) Ordinary Shares. As at the Latest Practicable Date, there is only one class of

shares in the capital of VAH. As at the Latest Practicable Date, VAH has a share capital comprising 2,455,775,111 VAH Shares.

(ii) Rights in Respect of Voting, Dividend and Capital. The rights of the shareholders of VAH (“VAH Shareholders”) in respect of voting, dividends and capital set out in the Constitution of VAH are reproduced, without amendment, below:

(a) Rights in respect of Voting

“36. Voting at General Meetings

(a) The Chair may determine that any question to be submitted to a general meeting be determined by a poll without first submitting the question to the meeting to be decided by a show of hands.

(b) Unless the Chair makes the determination referred to in rule 36(a) each question submitted to a general meeting is to be decided in the first instance by a show of hands.

(c) In the case of an equality of votes either on a show of hands or on a poll, the Chair does not have a casting vote in addition to the vote or votes to which the Chair may be entitled as a shareholder or as a proxy, attorney or properly appointed representative of a shareholder.

(d) Unless a poll is demanded, a declaration by the Chair following a vote on a show of hands that a resolution has been passed or lost is conclusive, without proof of the number or proportion of the votes recorded in favour of or against the resolution.

(e) A poll may be demanded by a shareholder in accordance with the Corporations Act (and not otherwise) or by the Chair. No poll may be demanded on the election of a Chair of a meeting or, unless the Chair otherwise determines, the adjournment of a meeting. A demand for a poll may be withdrawn.

38. Procedure for Polls

(a) When demanded, a poll may be taken in the manner and at the time the Chair directs.

(b) The result of a poll may be announced in the manner and at the time (whether during the relevant meeting or afterwards)

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as the Chair considers appropriate. The Chair may determine any dispute as to the admission or rejection of a vote and a determination made in good faith is final and conclusive.

(c) The result of the poll is the resolution of the meeting at which the poll was demanded.

(d) The demand for a poll does not prevent a meeting from continuing for the transaction of any business other than that on which a poll has been demanded. A poll demanded on any question of adjournment is to be taken at the meeting and without adjournment.

39. Representation and Voting of Shareholders

Subject to this Constitution and any rights or restrictions for the time being attached to any class or classes of shares: (a) at meetings of shareholders or classes of shareholders

each shareholder entitled to attend and vote may attend and vote in person or by proxy, by attorney or (where the shareholder is a body corporate) by representative;

(b) on a show of hands: (i) subject to rule 39(b)(ii) and (iii), each Shareholder

Present has 1 vote;

(ii) where a shareholder has appointed more than 1 person as representative, proxy or attorney for the shareholder, none of the representatives, proxies or attorneys is entitled to vote; and

(iii) where a person is entitled to vote because of rule

39(b)(i) in more than 1 capacity, that person is entitled only to 1 vote;

(c) on a poll, subject to rule 39(d), only Shareholders Present

may vote and every Shareholder Present having the right to vote on the resolution has: (i) 1 vote for each fully paid share they hold; and

(ii) in the case of a partly paid share, that fraction of a

vote equivalent to the proportion which the amount paid up (not credited) on that shareholder's share bears to the total amount paid and payable for that share (excluding amounts credited). Amounts paid in

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advance of a call are ignored when calculating the proportion; and

(d) where the Directors have approved, consistently with the

Corporations Act other means (including electronic) for the casting and recording of votes by shareholders on any resolution to be put to a general meeting, every shareholder having the right to vote on the resolution has: (i) 1 vote for each fully paid share they hold; and

(ii) in the case of a partly paid share, that fraction of a

vote equivalent to the proportion which the amount paid up (not credited) on that shareholder's share bears to the total amount paid and payable for that share (excluding amounts credited). Amounts paid in advance of a call are ignored when calculating the proportion.

40. Restriction on Voting Rights

A shareholder is not entitled to vote at a general meeting or to be counted for the purpose of constituting a quorum unless all calls and other sums presently payable by the shareholder in respect of shares have been paid.

41. Form of Proxy

(a) A shareholder who is entitled to attend and vote at a meeting of the company may appoint a person as a proxy to attend and vote for the shareholder in accordance with the Corporations Act but not otherwise. A proxy appointed in accordance with the Corporations Act to attend and vote may exercise the rights of the shareholder on the basis and subject to the restrictions provided in the Corporations Act but not otherwise.

(b) A form of appointment of a proxy is valid if it is in accordance with the Corporations Act or in any form (including electronic) which the Directors may prescribe or accept.

(c) Subject to the Listing Rules, any appointment of proxy under this rule 41 which is incomplete may be completed by the Secretary on the authority of the Directors and the Directors may authorise completion of the proxy by the insertion of the name of any Director as the person in whose favour the proxy is given.

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(d) Where a notice of meeting provides for electronic

lodgement of proxies, a proxy lodged at the electronic address specified in the notice is taken to have been received at the registered office and validated by the shareholder if there is compliance with the requirements set out in the notice.

42. Validity of Proxies

(a) A vote exercised in accordance with the terms of an instrument of proxy, a power of attorney or other relevant instrument of appointment is valid despite: (i) the previous death or unsoundness of mind of the

principal;

(ii) the revocation of the instrument (or of the authority under which the instrument was executed) or the power; or

(iii) the transfer of the share in respect of which the

instrument or power is given, if no notice in writing of the death, unsoundness of mind, revocation or transfer (as the case may be) has been received by the company at its registered office at least 48 hours (or any shorter period as the Directors may permit or specified by the Corporations Act) before the commencement of the meeting, or adjourned meeting at which the instrument is used or the power is exercised.

(b) A proxy is not revoked by the principal attending and taking

part in the meeting unless the principal actually votes at the meeting on a resolution for which the proxy is proposed to be used.

(c) Voting instructions given by a shareholder to a Director or employee of the company who is held out by the company in material sent to shareholders as willing to act as proxy who is appointed as proxy (Company Proxy) are valid only if contained in the form of appointment of the Company Proxy. If a shareholder wishes to give a Company Proxy appointed by the shareholder new instructions or variations to earlier instructions, the new or varied instructions are only valid if either they are received at the registered office of the company at least 48 hours before the meeting or adjourned meeting by a notice in writing signed by the shareholder or they are otherwise validated by the shareholder in a manner

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acceptable to the Directors in their discretion prior to the commencement of the meeting.

(b) Rights in respect of Dividends

Dividends, Interest and Reserves

63. Powers to Determine Dividends and Pay Interest

(a) The Directors may from time to time determine that a Dividend is payable. The Directors may fix the amount, the time for payment and the method of payment of a Dividend. The method of payment may include the payment of cash, the issue of shares, the grant of options and the transfer of assets, including shares or other Securities in another body corporate (or any combination of them).

(b) No Dividend bears interest against the company.

64. Crediting of Dividends

(a) Subject to any special rights or restrictions attached to any shares, every Dividend on a share in the company is to be paid as follows, unless otherwise determined by the Directors: (i) if the share to which a particular Dividend relates is

fully paid and was fully paid during the whole period in respect of which the Dividend is to be paid, that Dividend is equal to the Dividend paid on each other share which was fully paid during the whole period in respect of which the Dividend is to be fully paid; and

(ii) if the share to which a particular Dividend relates is partly paid, or is fully paid but was not fully paid during the whole of the period in respect of which the Dividend is to be paid, that Dividend is apportioned, and paid proportionately to the amounts paid (not credited) on the share in respect of which the Dividend is to be paid with respect to the issue price of the share (excluding amounts credited) during any part or parts of the period in respect of which the Dividend is to be paid.

(b) An amount paid on a share in advance of a call is not taken

for the purposes of rule 64(a)(ii) to be paid on the share.

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(c) Subject to any special rights or restrictions attached to any shares, the Directors may from time to time resolve that Dividends are to be paid out of a particular source or particular sources, and in those circumstances the Directors may in their absolute discretion: (i) allow each or any shareholder to elect from which

specified sources that particular shareholder's Dividend may be paid by the company; and

(ii) where elections are permitted and any shareholder fails to make an election, identify the particular source from which Dividends are payable.

65. Deduction of Unpaid Amounts

The Directors may apply any part of any Dividend otherwise payable to a shareholder towards satisfaction of all sums of money presently payable by the shareholder to the company on account of calls or otherwise in relation to shares in the company.

66. Distributions in Kind

If the Directors have determined to pay a Dividend or to return capital by a reduction of capital, a buy-back or otherwise, wholly or partly by the distribution of specific assets (including by the issue of shares or other financial products or by the transfer of shares or financial products), the Directors may do 1 or more of the following: (a) if a difficulty arises in regard to that distribution, settle the

matter as they determine and fix the value for distribution of the specific assets or any part of those assets;

(b) decide that cash payments may be made, and make the payments to any shareholders on the basis of the value fixed by them in order to appropriately adjust the rights of all shareholders as the Directors determine in their discretion;

(c) vest any specific assets in trustees; and

(d) authorise any person to make, on behalf of all the shareholders entitled to any financial products, an agreement with the company (or other relevant body corporate) providing for the issue or transfer to them of any further financial products and, in executing the document, the officer acts as agent and attorney for the shareholders.

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67. Payment of Distributions

(a) Any Dividend, interest or other money payable in cash in respect of Securities may be paid by any of the following means, in the company’s discretion, at the sole risk of the intended recipient: (i) by cheque sent through the post directed to:

(A) the address of the Security holder as shown

in the Securities register or, in the case of joint holders, to the address shown in the Securities register as the address of the joint holder first named in that Securities register; or

(B) to any other address as the Security holder or joint holders in writing directs or direct; or

(ii) by electronic funds transfer to an account with a

bank or other financial institution nominated by the Security holder and acceptable to the company; or

(iii) by any other means determined by the Directors; or otherwise be disposed of according to law.

(b) Payments of Dividends and other distributions by the

company may be made in Australian dollars or any other currency determined by the Directors in their discretion. Payments in different currencies may be made to different Security holders as determined by the Directors in their discretion. If a payment is made in a currency other than Australian dollars the Directors may determine in their discretion the appropriate exchange rate and the time of calculation to calculate the amount payable in the relevant currency. The determinations of the Directors are, in the absence of manifest error, final.

(c) Subject to law, all Dividends unclaimed may be invested or otherwise used by the Directors for the benefit of the company until claimed or otherwise disposed of according to law.

Capitalisation of Profits

68. Capitalisation of Profits

(a) The company in general meeting or the Directors may resolve:

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(i) to capitalise any sum, being the whole or a part of

the amount for the time being standing to the credit of any reserve account, profit and loss account or otherwise available for distribution to Security holders; and

(ii) that the sum referred to in rule 68(a)(i) be applied, in any of the ways mentioned in rule 68(b), for the benefit of Security holders in full satisfaction of their interest in the capitalised sum, in the proportions to which those Security holders would have been entitled in a distribution of that sum by way of Dividend or if there is no proportional entitlement, as the Directors determine.

(b) The ways in which a sum may be applied for the benefit of

Security holders under rule 68(a) are: (i) in paying up any amounts unpaid on Securities held

by Security holders;

(ii) in paying up in full unissued Securities to be issued to Security holders as fully paid;

(iii) partly as mentioned in rule 68(b)(i) and partly as

mentioned in rule 68(b)(ii); or (iv) any other application permitted by law or the Listing

Rules.

(c) Where the conditions of issue of a partly paid Security provide, the holder is entitled to participate in any application of a sum under rule 68(b) to a greater extent than would have been the case had those funds been distributed by Dividend but not to any greater extent than permitted by the terms of issue.

(d) The Directors may do all things they consider necessary to give effect to the resolution and, in particular, to the extent they consider necessary to adjust the rights of the Security holders amongst themselves, may: (i) fix the value for distribution of the specific assets or

any part of those assets;

(ii) determine that fractions may be disregarded or that any fractional entitlements are to be increased to the next whole number;

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(iii) vest any cash or specific assets in trustees on trust for the persons entitled as they determine; and

(iv) authorise any person to make, on behalf of all the

Security holders entitled to any further Securities on the capitalisation, an agreement with the company providing for the issue to them, credited as fully paid up, of any further Securities or for the payment by the company on their behalf the amounts or any part of the amounts remaining unpaid on their existing Securities by the application of their respective proportions of the sum resolved to be capitalised and any agreement made under that authority is effective and binding on all the Security holders concerned.

(c) Rights in respect of Capital

Capital

4. Issue of Securities

(a) Without affecting any special rights conferred on the holders of any Securities, any Securities may be issued with preferred, deferred or other special rights, obligations or restrictions, whether in regard to dividends, voting, return of share capital, payment of calls or otherwise, as the Directors may determine and on any terms the Directors consider appropriate.

(b) Unless otherwise provided by the terms of issue, the issue of any new Securities ranking equally with existing Securities is not a variation of the rights conferred on the holders of the existing Securities.

5. Preference Shares

If the company at any time proposes to create and issue any preference shares: (a) the preference shares may be issued on the terms that they

are, or at the option of either or both the company and the holder are, liable to be redeemed, whether out of share capital, profits or otherwise;

(b) the preference shares are to confer on the holders the right to convert the preference shares into ordinary shares if and on the basis the Directors determine at the time of issue of the preference shares;

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(c) (i) the preference shares are to confer on the holders a right to receive out of the profits of the company available for Dividend a preferential Dividend at the rate or of the amount (which may be subject to an index) and on the basis determined by the Directors at the time of issue of the preference shares; (ii) in addition to the preferential Dividend, the preference shares may participate with the ordinary shares in Dividends declared by the Directors if and to the extent the Directors determine at the time of issue of the preference shares; and (iii) the preferential Dividend may be cumulative if and to

the extent the Directors determine at the time of issue of the preference shares;

(d) the preference shares are to confer on the holders:

(i) the right on redemption and in a winding up to

payment in cash in priority to any other class of shares of: (A) the amount paid or agreed to be considered

as paid on each of the preference shares; and

(B) the amount (if any) equal to the aggregate of any Dividends accrued (whether determined or not) but unpaid and of any arrears of Dividends; and

(ii) the right, in priority to any payment of Dividend on

any other class of shares, to the preferential Dividend;

(e) the preference shares do not confer on the holders any

further rights to participate in assets or profits of the company;

(f) the holders of the preference shares have the same rights as the holders of ordinary shares to receive notices, reports and accounts and to attend and be heard at all general meetings, but are not to have the right to vote at general meetings except as follows: (i) on any question considered at a meeting if, at the

date of the meeting, the Dividend on the preference shares is in arrears;

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(ii) on a proposal:

(A) to reduce the share capital of the company;

(B) that affects rights attached to the preference shares;

(C) to wind up the company;

(D) for the disposal of the whole of the property,

business and undertaking of the company; (iii) on a resolution to approve the terms of a buy-back

agreement; and

(iv) on any question considered at a meeting held during the winding up of the company; and

(g) the company may issue further preference shares ranking

pari passu in all respects with (but not in priority to) other preference shares already issued and the rights of the issued preference shares are not to be taken to have been varied by the further issue.

6. Recognition of Third Party Interests

(a) Except as required by law, the company is not bound to recognise a person as holding a Security on any trust.

(b) Whether or not it has notice of the rights or interests concerned, the company is not bound to recognise: (i) any equitable, contingent, future or partial claim to,

or interest in, any Security or unit of a Security; or

(ii) any other right in respect of a Security, except an absolute right of ownership of the Security holder or as otherwise provided by this Constitution or by law.

7. Surrender of Securities

In their discretion, the Directors may accept a surrender of Securities by way of compromise of any question as to whether or not those Securities have been validly issued or in any other case where the surrender is within the powers of the company. Any Securities surrendered may be sold or re-issued in the same manner as forfeited shares.

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8. Joint Holders

Where 2 or more persons are registered as the holders of any Securities, they are considered to hold the Securities as joint tenants with benefits of survivorship subject to the following provisions: (a) the company is not bound to register more than 3 persons

as the holders of the Securities;

(b) the joint holders of the Securities are liable severally as well as jointly in respect of all payments which ought to be made in respect of the Securities;

(c) on the death of any 1 of the joint holders, the remaining joint holders are the only persons recognised by the company as having any title to the Securities but the Directors may require evidence of death and the estate of the deceased joint holder is not released from any liability in respect of the Securities;

(d) any 1 of the joint holders may give a receipt for any Dividend, bonus or return of capital payable to the joint holders in respect of the Securities;

(e) only the person whose name stands first in the Securities register as 1 of the joint holders of the Securities is entitled, if the company determines to issue certificates for Securities, to delivery of a certificate relating to the Securities or to receive notices from the company and any notice given to that person is considered notice to all the joint holders; and

(f) any 1 of the joint holders may vote at any meeting of the company either personally or by properly authorised representative, proxy or attorney, in respect of the Securities as if that joint holder was solely entitled to the Securities. If more than 1 of the joint holders are present personally or by properly authorised representative, proxy or attorney, only the vote of the joint holder whose name appears first in the Securities register counts.

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Alteration of Capital

28. Power to Alter Share Capital

The company in general meeting may reduce or alter its share capital in any manner provided for by the Corporations Act. The Directors may do anything which is required to give effect to any resolution authorising reduction or alteration of the share capital of the company.”

(iv) Issue of Shares. Since 30 June 2012, 245,577,511 new VAH Shares have been issued

by VAH to Singapore Airlines Limited (“SIA”) pursuant to a subscription agreement dated 30 October 2012 entered into between VAH and SIA.

(v) Convertible Instruments. As at the Latest Practicable Date and save as disclosed

below and as provided under the SIA Anti-Dilution Right (as defined in paragraph 2.7 below), there are no outstanding instruments convertible into, rights to subscribe for, and options in respect of, the VAH Shares which carry voting rights affecting the VAH Shares.

As at the Latest Practicable Date, there are options (“VAH Options”) granted by VAH pursuant to the VAH Senior Executive Option Plan (“SEOP”) and the VAH CEO Co-Investment Scheme (“CEOIS”, and together with the SEOP, the “VAH Option Schemes”) entitling holders of VAH Options (“VAH Optionholders”) to subscribe for a total of 39,379,487 new VAH Shares as follows:

VAH Optionholder

Name of VAH Option

Scheme

No. of VAH Shares under

the VAH Options

Date of Grant

Exercise Period / Date

Exercise Price (A$)

VAH Directors

Mr John Borghetti CEOCIS 658,544 10 May 2010 30 June 2013 to 30 June 2014

Nil

Mr John Borghetti SEOP Issue 13 4,115,903 29 March 2011

8 May 2013 to 30 June 2014

Nil

Mr John Borghetti SEOP Issue 16 4,941,481 29 February 2012

1 July 2014 to 30 June 2016

Nil

Employees

Various SEOP Issue 12 13,827,002 29 March 2011

27 August 2013 to 30 June 2014

Nil

Mr Sankar Narayan

SEOP Issue 14 413,614 11 October 2011

29 August 2013 to 30 June 2014

Nil

Various SEOP Issue 15 16,081,487 29 February 2012

1 July 2014 to 30 June 2015

Nil

(vi) Re-organisation of Share Capital. On 23 February 2012, VAH announced a

restructuring of its business to ensure ongoing compliance with the Air Navigation Act of Australia (“ANA”) which limits foreign ownership of Australian international airlines to 49 per cent. To secure majority Australian ownership in VAH’s international airline business by changing the shareholding and governance structure of VAH’s international airline business to comply with the ANA and to facilitate overseas

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institutional investment in the domestic airline business, a new entity, Virgin Australia International Holdings Pty Ltd (“VAIH”), was created to hold the international airline business of VAH. VAH thereafter effected a distribution of the entire issued share capital of VAIH to VAH Shareholders (save for one (1) ordinary share in VAIH) by way of a dividend in specie to VAH Shareholders on the basis of one (1) VAIH Share for one (1) VAH Share (the “Dividend in Specie”). The Dividend in Specie effectively gave each VAH Shareholder a beneficial interest in VAIH Shares which are administered by a trust. The Dividend in Specie was effected on 30 March 2012. VAIH is governed by a separate board of directors, independent of VAH, majority of whom are independent directors, including an independent chairman. The VAIH Shares are not listed on any securities exchange, may not be traded and may only be sold in limited circumstances. VAH and VAIH have entered into a long term service agreement and loan agreement, pursuant to which VAH provides VAIH with aircraft, fully trained crew, maintenance and back office services. VAIH is charged a management fee for such services.

2.5 Financial Information on the VAH Group.

(i) Profit and Loss Accounts. Set out below is a summary of the audited consolidated

income statements of the VAH Group for its financial years ended 30 June 2010, 30 June 2011 and 30 June 2012. Consolidated Income Statement 12 months ended 30 June 2010 2011 2012

A$m A$m A$m

Revenue and income 2,981.8 3,271.0 3,919.5

Operating expenditure

Fuel and oil 782.1 906.0 1,043.8

Labour and staff related costs 639.8 742.1 841.4

Airport charges, navigation and station operations

591.2 616.1 669.0

Depreciation and amortization 203.8 225.8 246.9

Other 687.0 799.4 1,013.1

Total operating expenses 2,903.9 3,289.4 3,814.2

Profit/(loss) before tax expense, net finance costs, ineffective cash flow hedges and non-designated derivatives

77.9 (18.4) 105.3

Ineffective cash flow hedges and non-designated derivatives

12.6 (28.2) (38.4)

Profit/(loss) before related income tax expense and net finance costs

90.5 (46.6) 66.9

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2010 2011 2012

A$m A$m A$m

Net finance costs (56.2) (48.2) (39.7)

Profit/(loss) before income tax expense/(benefit)

34.3 (94.8) 27.2

Net profit/(loss) attributable to the owners of Virgin Australia Holdings Limited

21.3 (67.8) 22.8

Basic earnings per share – profit /(loss) 1.0 cent (3.1) cent 1.0 cent

Net dividends per share - - -

This summary financial information should be read together with the audited consolidated financial statements of VAH and its subsidiaries for the relevant years and related notes thereto, copies of which are available for inspection at the offices of Allens at Riverside Centre, 123 Eagle Street, Brisbane, Queensland 4000, Australia, or which may be obtained from the website of VAH at www.virginaustralia.com.

(ii) Statement of Assets and Liabilities. A summary of the audited consolidated

statement of assets and liabilities of the VAH Group, based on its audited consolidated balance sheet as at 30 June 2012, is set out below: Consolidated statement of financial position 30 June 2012

A$m

Assets

Cash and cash equivalents 802.6

Trade and other receivables 210.8

Property, plant and equipment 2,769.0

Other assets 212.8

Total assets 3,995.2

Liabilities

Trade and other payables 508.3

Interest-bearing liabilities 1,674.1

Unearned revenue 691.9

Other liabilities 191.2

Total liabilities 3,065.5

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This summary financial information should be read together with the audited consolidated financial statements of VAH and its subsidiaries for FY2012 and related notes thereto, a copy of which is available for inspection at the offices of Allens at Riverside Centre, 123 Eagle Street, Brisbane, Queensland 4000, Australia, or which may be obtained from the website of VAH at www.virginaustralia.com.

(iii) Audited Consolidated Financial Information. A copy of the latest audited

consolidated financial statements of the VAH Group for the financial year ended 30 June 2012 (“FY2012”) is available for inspection at the offices of Allens at Riverside Centre, 123 Eagle Street, Brisbane, Queensland 4000, Australia, for a period of three (3) months commencing from the date of the Scheme Document or up to the Effective Date, whichever is later.

(iv) Significant Accounting Policies. Please refer to Notes 1 to 4 of the audited consolidated financial statements of VAH for FY2012, a copy of which is available for inspection at the offices of Allens at Riverside Centre, 123 Eagle Street, Brisbane, Queensland 4000, Australia.

(v) Changes in Accounting Policies. As at the Latest Practicable Date, there are no

changes to the accounting policies of VAH since the last audited consolidated financial statements of the VAH Group for FY2012 which will cause the figures disclosed in this Letter not to be comparable to a material extent.

(vi) Material Changes. Save as disclosed in this Letter, as at the Latest Practicable

Date, there are no publicly known material changes in the financial position of the VAH Group since its last published audited financial statements for FY2012.

(vii) Liabilities. As at 30 June 2012, VAH and its subsidiaries had the following bank

loans and overdrafts, obligations under finance leases, contingent liabilities, as well as bank balances, deposits and cash:

30 June 2012

A$m

Assets

Bank balances, deposits and cash 802.6

Liabilities

Current interest-bearing liabilities 254.0

Non-current interest-bearing liabilities 1,420.1

Save as disclosed above, and apart from intra-group indebtedness and guarantees, as at 30 June 2012, neither VAH nor any of its subsidiaries had any outstanding loan capital (whether issued or created by unissued), nor any term loans, nor any other borrowings or indebtedness in the nature of borrowing, including bank overdrafts and liabilities under acceptances (other than normal trade bills), or acceptance credits, mortgages, charges, hire purchase commitments and obligations under finance leases nor any material contingent liabilities or guarantees.

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2.6 Material Litigation. As at the Latest Practicable Date, the VAH Directors are not aware of any litigation, claims, arbitration or other proceedings pending or threatened against VAH or any of its subsidiaries or of any facts likely to give rise to any litigation, claims, arbitration or other proceedings which may materially and adversely affect the financial position of the VAH Group taken as a whole.

2.7 Material Contracts. Save as disclosed in this paragraph 2.7, there are no material contracts entered into by the VAH Group (not being a contract entered into in the ordinary course of business) with interested persons during the period of three (3) years before the First Announcement Date.

Agreement to issue new VAH Shares to Singapore Airlines Limited

On 30 October 2012, VAH entered into a subscription agreement (“Subscription Agreement”) with SIA pursuant to which VAH agreed to issue, and SIA agreed to subscribe for, 245,577,511 new VAH Shares (the “Placement”), representing approximately 10 per cent. of the enlarged issued share capital of VAH following the Placement, at an issue price of A$0.4288 for each new VAH Share. The Placement was completed, and the new VAH Shares were issued to SIA, on 19 November 2012. Pursuant to the terms of the Subscription Agreement, VAH has also granted SIA a right to subscribe for new VAH Shares at an issue price of A$0.4288 to maintain its 10 per cent. interest in the capital of VAH, in the event of any issue of new VAH Shares pursuant to the Scheme (the “SIA Anti-Dilution Right”). Upon the Scheme becoming effective, pursuant to such SIA Anti-Dilution Right, SIA will have the right to subscribe for an additional 12,545,689 new VAH Shares.

3. DISCLOSURE OF HOLDINGS AND DEALINGS IN SECURITIES

3.1 Holdings of Skywest Securities. Save as disclosed below and in this Letter, as at the

Latest Practicable Date, none of VAH Sub, VAH, the directors of VAH Sub or, to the best of the knowledge and belief of VAH and VAH Sub, none of the parties acting in concert with VAH Sub owns, controls or has agreed to acquire (other than pursuant to the Implementation Agreement) any (i) Skywest Shares or securities which carry voting rights and (ii) convertible securities, warrants, options and derivatives in respect of (i) (collectively, “Skywest Securities”). As at the Latest Practicable Date, VB Investco Pty Ltd, a wholly-owned subsidiary of VAH, holds (a) 6,410,000 warrants which are exercisable at any time into 6,410,000 new Skywest Shares at an exercise price of A$0.45 for each new Skywest Share and (b) a A$8,000,000 convertible loan note which is convertible at any time into new Skywest Shares at a conversion price of A$0.45 for each new Skywest Share.

3.2 Holdings of VAH Securities. Save as disclosed below and in this Letter, as at the Latest Practicable Date, none of VAH Sub, VAH, the directors of VAH Sub or, to the best of the knowledge and belief of VAH and VAH Sub, none of the parties acting in concert with VAH Sub, owns, controls or has agreed to acquire any (i) VAH Shares or securities which carry voting rights and (ii) convertible securities, warrants, options and derivatives in respect of (i) (collectively, “VAH Securities”).

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Name No. of VAH

Shares

Percentage (%) of total VAH

Shares in issue

Total No. of VAH Options under

VAH Option Schemes

Mr John Borghetti 296,296 0.012 9,715,928

BT Portfolio Services Limited <Borghetti Family Account>(1)

572,811 0.023 -

Mr Neil Chatfield 1,000,392 0.041 -

Mrs Jennifer Chatfield(2) 4,664 n.m.(5) -

Mr David Baxby 40,000 0.002 -

Mr Robert Bain Thomas 21,632 0.001 -

Rob Thomas Super Fund(3) 450,000 0.018 -

Thomas Family Account(3) 14,288 0.001 -

Wendmar-Vaile Superfund(4) 30,000 0.001 -

Ms Samantha Mostyn 100,000 0.004 -

Mr Keith Roberts 12,000 n.m. -

Mr Sankar Narayan 39,767 0.002 1,474,059

Mr Mark Pitt - - 835,980

Mr Sean Donohue 115,854 0.005 1,578,942

Mr Graham John Bradley 30,000 0.001 -

Goldman Sachs Financial Markets Pty Ltd

1,873,318 0.076 -

Notes:

(1) Indirect shareholding of Mr John Borghetti. (2) Mrs Jennifer Chatfield is the spouse of Mr Neil Chatfield.

(3) Indirect shareholdings of Mr Robert Bain Thomas.

(4) Indirect shareholding of The Hon. Mark Vaile A.O. (5) Not meaningful.

3.3 Dealings in Skywest Securities. As at the Latest Practicable Date, none of VAH Sub, VAH,

the directors of VAH Sub or, to the best of the knowledge and belief of VAH and VAH Sub, none of the parties acting in concert with VAH Sub, has dealt for value in any Skywest Securities during the period commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

3.4 Dealings in VAH Securities. Save as disclosed below and in this Letter, as at the Latest Practicable Date, none of VAH Sub, VAH, the directors of VAH Sub or, to the best of the knowledge and belief of VAH and VAH Sub, none of the parties acting in concert with VAH Sub, has dealt for value in any VAH Securities during the period commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

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Date Name

No. of VAH Shares

Purchased / (Sold)

Percentage (%) of total VAH

Shares in issue

Transaction Price (A$) per

VAH Share

31 August 2012 Jennifer Chatfield (80,000) 0.003 0.485

17 December 2012 Goldman Sachs Australia Pty Ltd

20,740 0.0008 0.415

17 December 2012 Goldman Sachs Australia Pty Ltd

(20,740) 0.0008 0.415

3.5 Arrangements relating to the Skywest Securities. Save as disclosed in this Letter or the

Scheme Document, as at the Latest Practicable Date, there were no Skywest Securities held by any persons with whom VAH or, to the best of the knowledge and belief of VAH Sub and VAH, any of the parties acting in concert with VAH for the purposes of the Scheme has any arrangement, including any indemnity or option arrangements, and any agreement or understanding, formal or informal, of whatever nature, relating to the Skywest Securities which may be an inducement to deal or refrain from dealing.

3.6 Other Security Interests. Save as disclosed in this Letter or the Scheme Document, as at the Latest Practicable Date, none of VAH Sub, VAH or, to the best of the knowledge and belief of VAH and VAH Sub, none of any of the parties acting in concert with VAH for the purposes of the Scheme has (i) granted any security interest in any Skywest Securities to another person, whether through a charge, pledge or otherwise, (ii) borrowed any Skywest Securities from another person (excluding borrowed securities which have been on-lent or sold) or (iii) lent to another person any Skywest Securities.

4. SHAREHOLDINGS OF VAH PRIOR TO, AND FOLLOWING, THE SCHEME

Based on the holdings of Skywest Securities by VAH as at the Latest Practicable Date, the shareholdings of VAH in Skywest prior to, and following, the completion of the Scheme are as follows:

Prior to the Completion of the

Scheme Following the Completion of

the Scheme

Skywest Shares held directly and indirectly

Skywest Shares held directly and indirectly

No. % No. %

VAH - - 213,040,000 100

5. MARKET QUOTATIONS – SKYWEST 5.1 Transacted Prices. The high, low and last transacted prices and transacted volume of the

Skywest Shares on AIM and ASX (as reported by Bloomberg) on a monthly basis from May 2012 to January 2013 and on a daily basis from 1 February 2013 to the Latest Practicable Date, are set out below:

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High Low Last Done Volume

AIM ASX AIM ASX AIM ASX AIM ASX

£ A$ £ A$ £ A$ No. of

Shares

No. of

Shares

Monthly Trades

May 2012 0.233 0.390 0.206 0.350 0.215 0.380 965,141 141,096

June 2012 0.215 0.350 0.193 0.315 0.193 0.350 1,004,699 222,190

July 2012 0.193 0.300 0.175 0.270 0.175 0.270 8,188,451 307,529

August 2012 0.199 0.285 0.175 0.220 0.199 0.285 1,496,819 287,875

September 2012 0.199 0.330 0.185 0.280 0.188 0.300 752,134 86,304

October 2012 0.270 0.440 0.183 0.275 0.268 0.430 21,247,938 7,533,710

November 2012 0.283 0.450 0.263 0.415 0.274 0.425 30,677,168 18,737,824

December 2012 0.276 0.430 0.263 0.415 0.268 0.420 11,748,622 41,837,756

January 2013 0.291 0.445 0.268 0.420 0.290 0.445 3,251,064 9,877,091

Daily Trades

1 February 2013 0.300 0.443 0.291 0.440 0.300 0.443 403,493 597,064

4 February 2013 0.300 0.443 0.294 0.440 0.294 0.440 140,199 991,151

5 February 2013 0.290 0.445 0.290 0.440 0.290 0.440 45,000 716,776

6 February 2013 0.295 0.460 0.279 0.440 0.295 0.455 1,072,441 2,611,508

7 February 2013 0.295 0.455 0.294 0.455 0.295 0.455 361,800 0

8 February 2013 0.295 0.450 0.290 0.445 0.290 0.445 21,417 284,606

11 February 2013 0.290 0.445 0.290 0.445 0.290 0.445 0 348,316

12 February 2013 0.290 0.450 0.286 0.440 0.288 0.440 2,456,583 28,800

13 February 2013 0.289 0.450 0.288 0.445 0.289 0.450 168,477 252,000

5.2 Closing Prices. The closing prices of the Skywest Shares on AIM and ASX (as reported by

Bloomberg) on (i) the last trading day prior to the First Announcement Date was £0.186 and A$0.280 respectively, and (ii) the Latest Practicable Date was £0.289 and A$0.450 respectively.

5.3 Highest and Lowest Prices. During the period commencing six months prior to the First Announcement Date and ending on the Latest Practicable Date, the highest closing price of the Skywest Shares on AIM (as reported by Bloomberg) was transacted on 1 February 2013 at £0.300 and the highest closing price on ASX (as reported by Bloomberg) was transacted on 6 February 2013 at A$0.460. The lowest closing price of the Skywest Shares on AIM (as reported by Bloomberg) were transacted on 31 July 2012, 1 August 2012 and 2 August 2012 at £0.175 and the lowest closing price of the Skywest Shares on ASX (as reported by Bloomberg) was transacted on 27 August 2012 at A$0.220.

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6. MARKET QUOTATIONS – VAH

6.1 Transacted Prices. The high, low and last transacted prices and transacted volume of the VAH Shares on ASX (as reported by Bloomberg) on a monthly basis from May 2012 to January 2013 and on a daily basis from 1 February 2013 to the Latest Practicable Date, are set out below:


A$ A$ A$ No. of Shares

Monthly Trades

May 2012 0.435 0.385 0.425 249,629,123

June 2012 0.425 0.370 0.390 99,457,464

July 2012 0.415 0.375 0.405 64,511,058

August 2012 0.505 0.405 0.450 216,251,533

September 2012 0.450 0.405 0.405 108,106,272

October 2012 0.490 0.405 0.490 90,983,220

November 2012 0.510 0.440 0.440 249,651,113

December 2012 0.445 0.400 0.420 86,193,998

January 2013 0.440 0.420 0.430 71,410,641

Daily Trades

1 February 2013 0.430 0.425 0.425 1,629,757

4 February 2013 0.430 0.425 0.425 3,418,871

5 February 2013 0.435 0.425 0.430 3,514,811

6 February 2013 0.455 0.430 0.450 10,977,656

7 February 2013 0.445 0.435 0.435 4,208,544

8 February 2013 0.440 0.430 0.430 1,375,445

11 February 2013 0.440 0.430 0.430 2,959,438

12 February 2013 0.440 0.430 0.435 1,918,063

13 February 2013 0.445 0.435 0.445 2,529,273

6.2 Closing Prices. The closing prices of the VAH Shares on ASX (as reported by Bloomberg) on (i) the last trading day prior to the First Announcement Date was A$0.460 and (ii) the Latest Practicable Date was A$0.435.

6.3 Highest and Lowest Prices. During the period commencing six months prior to the First Announcement Date and ending on the Latest Practicable Date, the highest closing price of the VAH Shares on ASX (as reported by Bloomberg) was transacted on 7 November 2012 at A$0.510 and the lowest closing price of the VAH Shares on ASX (as reported by Bloomberg) was transacted on 25 June 2012 at A$0.370.

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SCHEDULE 3

ASSUMPTIONS IN RELATION TO STATEMENT OF PROSPECTS 1. STATEMENT OF PROSPECTS

At its 2012 Annual General Meeting and in its announcement dated 20 November 2012 in relation to its 2012 Annual General Meeting, VAH made the following statement as to its prospects for the year ending 30 June 2013 (the “Statement of Prospects”):

“We maintain the same guidance we provided at our Financial Results in August of 8-9 per cent domestic capacity growth in the first half of the 2013 Financial Year. While Virgin Australia currently anticipates an improved Underlying Profit before Tax in Financial Year 2013 compared to Financial Year 2012 (excluding the impact of the proposed Skywest and Tiger acquisitions), the uncertainty in economic conditions and the particularly competitive environment precludes us from providing a profit guidance for the year. Virgin Australia expects a more balanced mix between the First Half and Second Half trading outcomes than has been achieved historically.”

The Statement of Prospects was not made in connection with the Scheme. The directors of VAH (“VAH Directors”) have not issued a profit forecast for VAH in connection with the Scheme.

2. ASSUMPTIONS

The Statement of Prospects, of which the VAH Directors are solely responsible, was arrived at on bases consistent with the accounting policies normally adopted by VAH and has been made on the following assumptions:

(a) That the reference to historical trading performance in the Statement of Prospects

refers to the first half and second half of financial year ended 30 June 2012 only.

(b) There are no material changes in the existing political, legal or regulatory conditions affecting the activities of VAH, the industry and the jurisdictions in which VAH operates.

(c) There will be no material changes in the competitive environment in which VAH operates in.

(d) There will be no material change in the fuel, foreign currency and interest rate environment in which VAH operates in.

(e) There will be no material change in the principal activities, safety performance, management and organisational structure of VAH. There will be no material effects arising from any disputes or litigation, or any material financial penalties incurred by VAH arising from investigations undertaken by regulatory authorities.

(f) There will be no material impairment to the carrying values of the assets.

(g) There will be no exceptional circumstance that requires material provisions to be made by VAH in respect of any contingent liability or arbitration threatened or otherwise or unexpected termination of contracts.

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(h) There will be no material change in the accounting policies and applicable accounting standards of VAH. However, the VAH Group continually assesses the estimates used in the areas of uncertainty and amends these estimates as necessary. Areas of significant estimate changes in the current reporting period are as documented in the Interim Financial Report for the half-year ended 31 December 2012 which are available at http://www.asx.com.au/.

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SCHEDULE 4

LETTER FROM KPMG IN RELATION TO THE STATEMENT OF PROSPECTS

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SCHEDULE 5

LETTER FROM GOLDMAN SACHS IN RELATION TO THE STATEMENT OF PROSPECTS

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GENERAL INFORMATION RELATING TO THE COMPANY

120

1. DIRECTORS The names, addresses and designations of the Directors as at the Latest Practicable Date are set out below:

Name Address Designation Mr Robert Jeffries Chatfield

357J Holland Road Singapore (275829)

Group Executive Chairman


15 Hart Street, Caulfield, 3161 Northern Victoria, Australia


Mr Seah Kian Peng

66 Ripley Crescent, Serangoon Garden Estate, Singapore (556238)



Unit 2, 33 Davies Road, Claremont WA 6010 Australia


2. PRINCIPAL ACTIVITIES Skywest Airlines operates flights across regional Western Australia as well as to Darwin, Melbourne and internationally to Denpasar, Bali. With a strong presence in the corporate charter, ‘fly-in fly-out’ mining market and regular passenger transport, the airline carries approximately 800,000 passengers annually, servicing business travellers, tourists and regional communities.

3. SHARE CAPITAL OF THE COMPANY

3.1 Skywest Shares As at the Latest Practicable Date, the issued and fully paid-up share capital of the Company is as follows:

As at the Latest Practicable Date No. of ordinary shares Paid-up capital

Issued and fully paid-up Skywest Shares

213,040,000 S$50,002,606

3.2 Rights of the Shareholders in respect of Capital, Dividends and Voting

Selected texts of the Articles of Association relating to the rights of the Shareholders in respect of capital, dividends and voting have been extracted and reproduced in Appendix 5 to this Scheme Document.

3.3 Issue of Skywest Shares Since the end of FY2012 to the Latest Practicable Date, the Company has issued 3,300,000 Skywest Shares pursuant to the exercise of warrants.

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3.4 Convertible Instruments Save as disclosed below and as at the Latest Practicable Date, there are no outstanding instruments convertible into, rights to subscribe for, and options in respect of, the Skywest Shares or securities which carry voting rights affecting the Skywest Shares.



Warrant



3,000,000 12 December

2011 11 December

2013 25.78 pence


300,000 12 December

2011 11 December

2013 25.78 pence

Mr Mark Shelton 1,200,000 17 February

2012 1 January 2014 25.78 pence

Mr Brian O'Dwyer 1,000,000 8 November

2012 11 December

2013 25.78 pence

Mr Jason Bitter 600,000 8 November

2012 11 December

2013 25.78 pence

Mr Duncan Scott 400,000 8 November

2012 11 December

2013 25.78 pence

As at the Latest Practicable Date, there are 6,500,000 outstanding Skywest Warrants granted to the Skywest Warrant Holders, entitling the Skywest Warrant Holders to subscribe for a total of 6,500,000 new Skywest Shares.

3.5 Share Prices

The high, low and last transacted prices and transacted volume of the Skywest Shares on AIM and ASX on a monthly basis from May 2012 to January 2013 and on a daily basis from 1 February 2013 to the Latest Practicable Date, are set out below:


AIM ASX AIM ASX AIM ASX AIM ASX

£ A$ £ A$ £ A$ No. of Shares

No. of Shares

Monthly Trades

May 2012 0.233 0.390 0.206 0.350 0.215 0.380 965,141 141,096

June 2012 0.215 0.350 0.193 0.315 0.193 0.350 1,004,699 222,190

July 2012 0.193 0.300 0.175 0.270 0.175 0.270 8,188,451 307,529

August 2012 0.199 0.285 0.175 0.220 0.199 0.285 1,496,819 287,875

September 2012 0.199 0.330 0.185 0.280 0.188 0.300 752,134 86,304

October 2012 0.270 0.440 0.183 0.275 0.268 0.430 21,247,938 7,533,710

November 2012 0.283 0.450 0.263 0.415 0.274 0.425 30,677,168 18,737,824

December 2012 0.276 0.430 0.263 0.415 0.268 0.420 11,748,622 41,837,756

January 2013 0.291 0.445 0.268 0.420 0.290 0.445 3,251,064 9,877,091

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Daily Trades

1 February 2013 0.300 0.443 0.291 0.440 0.300 0.443 403,493 597,064

4 February 2013 0.300 0.443 0.294 0.440 0.294 0.440 140,199 991,151

5 February 2013 0.290 0.445 0.290 0.440 0.290 0.440 45,000 716,776

6 February 2013 0.295 0.460 0.279 0.440 0.295 0.455 1,072,441 2,611,508

7 February 2013 0.295 0.455 0.294 0.455 0.295 0.455 361,800 0

8 February 2013 0.295 0.450 0.290 0.445 0.290 0.445 21,417 284,606

11 February 2013 0.290 0.445 0.290 0.445 0.290 0.445 0 348,316

12 February 2013 0.290 0.450 0.286 0.440 0.288 0.440 2,456,583 28,800

13 February 2013 0.289 0.450 0.288 0.445 0.289 0.450 168,477 252,000

4. FINANCIAL INFORMATION

4.1 Financial Information of the Group

(a) Income Statement

Set out below are certain financial information of the Group extracted from the financial statements for FY2010, FY2011 and FY2012.

FY2012

S$

FY2011

S$

FY2010

S$

Revenue 303,316,386 239,910,036 215,204,636

Other income 6,684,263 2,424,079 830,297

Aircraft operating costs (excluding fuel costs) (35,086,296) (35,919,376) (37,213,545)

Fuel costs (68,638,059) (56,044,417) (45,514,935)

Aircraft lease rental and hire charges (35,430,930) (18,924,001) (22,810,036)

Employee benefits (88,828,822) (60,502,807) (46,461,429)

Sales and marketing costs (3,696,577) (4,944,585) (5,484,762)

Engineering and maintenance costs (24,694,081) (21,631,229) (19,593,403)

Office and general administration costs (9,764,275) (8,984,409) (6,434,474)

Depreciation of property, plant and equipment (21,544,632) (18,775,787) (14,859,315)

Other expenses (13,098,360) (2,304,205) (2,759,237)

Finance costs (2,492,899) (746,632) (886,310)

Profit before tax 6,725,718 13,556,667 14,017,487

Income tax benefit/(expense) 391,390 (3,707,463) (4,783,610)

Profit for the year attributable to owners of the Company

7,117,108 9,849,204 9,233,877

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Other comprehensive income

Gain/(loss) on cash flow hedges 61,310 (579,275) -

Foreign currency translation (606,912) 3,267,536 345,664

Other comprehensive income for the year, net of tax

(545,602) 2,688,261 345,664

Total comprehensive income for the year attributable to owners of the Company

6,571,506 12,537,465 9,579,541

Earnings per share

- Basic (in cents) 3.50 4.93 4.71

- Diluted (in cents) 3.50 4.89 4.69

(b) Balance Sheet

The following table summarises the audited consolidated balance sheets of the Group as at 30 June 2011 and 30 June 2012:

Group 2012 2011 S$ S$ ASSETS Non-current assets Property, plant and equipment 82,685,163 62,782,427

Intangible assets 17,189,507 17,189,507

Subsidiaries – –

Other receivables 6,041,527 3,061,547

Prepayments 3,519,639 4,769,019

109,435,836 87,802,500

Current assets Inventories 5,126,307 5,128,926

Trade and other receivables 41,120,979 31,820,245

Prepayments 5,244,649 6,896,885

Other investments 342,346 466,333

Cash and cash equivalents 24,727,772 9,966,329

76,562,053 54,278,718

Total assets 185,997,889 142,081,218

EQUITY AND LIABILITIES Current liabilities Provisions 9,837,206 6,628,680

Income tax payable 6,742,440 3,130,843

Borrowings 7,103,428 1,240,017

Trade and other payables 45,098,289 30,458,047

Revenue received in advance 10,320,843 12,507,276

Finance lease liabilities 1,702,246 367,470

Derivative financial instruments 739,952 827,535

81,544,404 55,159,868

Net current (liabilities)/assets (4,982,351) (881,150)

Non-current liabilities Provisions 665,154 1,106,736

Borrowings 9,825,847 2,665,269

Derivative financial instruments 1,177,377 –

Other payables 3,636,870 –

Finance lease liabilities 2,573,849 933,988

Deferred tax liabilities 7,542,770 11,917,822

25,421,867 16,623,815

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Total liabilities 106,966,271 71,783,683

Net assets 79,031,618 70,297,535

Equity attributable to owners of the parent

Share capital 48,382,289 43,927,891

Treasury shares (229,870) Reserves 4,328,218 4,474,575

Retained earnings 26,550,981 21,895,069

Total equity 79,031,618 70,297,535

Total equity and liabilities 185,997,889 142,081,218

The summary financial information of the Group in this paragraph 4.1 of this Appendix 3 is extracted from, and should be read together with, the audited consolidated financial statements of the Group for the relevant financial periods and the notes related thereto copies of which are available for inspection at the registered office of the Company at 510 Thomson Road, #12-04 SLF Building, Singapore 298135.

4.2 Material Changes in Financial Position Save as disclosed in the Scheme Document, the Audited Consolidated Financial Statements of the Group for FY2012 and any other information on the Group released by the Company on AIM and ASX, including without limitation the release of its monthly operating statistics, there have been no material changes to the financial position of the Company since 30 June 2012, being the date of the last published audited consolidated accounts of the Group.

4.3 Accounting Policies The significant accounting policies for the Group are set out in the notes to the Audited Consolidated Financial Statements of the Group for FY2012, a copy of which is available for inspection at the Company's Registered Office up to the date of the Scheme Meeting or may be obtained from the Company's website (http://www.skywest.com.sg). There are no changes in the accounting policy of the Group which will cause the figures disclosed in paragraph 4.1 of this Appendix 3 not to be comparable to a material extent.

5. DISCLOSURE OF INTERESTS

5.1 Holdings of Offeror Securities by the Company As at the Latest Practicable Date, the Company does not own or control, nor has it agreed to acquire, any Offeror Securities.

5.2 Interests of the Directors in Offeror Securities As at the Latest Practicable Date, none of the Directors has any direct or indirect interest in

any Offeror Securities.

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5.3 Interests of the Directors in Company Securities As at the Latest Practicable Date, save as disclosed in this paragraph 5.3 of this Appendix 3

and this Scheme Document, as well as based on the register of directors maintained by the Company, none of the Directors owns, controls or has agreed to acquire, or has any interest, direct or indirect, in the Company Securities:

Name

No. of Skywest Shares

Direct Interest Deemed Interest

No. of Skywest

Shares

% of total issued

Skywest Shares(1)

No. of Skywest

Shares

% of total issued

Skywest Shares(1)


2,400,100 1.13 33,720,855 15.83


27,250 0.01 4,675,412 2.19

Mr Seah Kian Peng

2,050,000 0.96 - -


200,000 0.09 - -

Note:

(1) Based on the issued share capital of 213,040,000 Skywest Shares as at the Latest Practicable Date.

6. DEALINGS IN SECURITIES

6.1 Dealings in Offeror Securities by the Company The Company has not dealt for value in the Offeror Securities during the period commencing

three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

6.2 Dealings in Offeror Securities by the Directors None of the Directors has dealt for value in the Offeror Securities during the period

commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

6.3 Dealings in Company Securities by the Directors

None of the Directors has dealt for value in any Company Securities during the period commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

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7. INTERESTS OF THE INDEPENDENT FINANCIAL ADVISER

7.1 Interest of the IFA in Company Securities As at the Latest Practicable Date, none of the IFA, its related corporations or funds whose

investments are managed by the IFA or its related corporations on a discretionary basis, owns or controls any Company Securities.

7.2 Dealings in Company Securities by the IFA

None of the IFA, its related corporations or funds whose investments are managed by the IFA or its related corporations on a discretionary basis has dealt for value in the Company Securities during the period commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

7.3 Interest of the IFA in Offeror Securities

As at the Latest Practicable Date, none of the IFA, its related corporations or funds whose

investments are managed by the IFA or its related corporations on a discretionary basis, owns or controls any Offeror Securities.

7.4 Dealings in Offeror Securities by the IFA

None of the IFA, its related corporations or funds whose investments are managed by the IFA or its related corporations on a discretionary basis has dealt for value in the Offeror Securities during the period commencing three (3) months prior to the First Announcement Date and ending on the Latest Practicable Date.

8. ARRANGEMENTS AFFECTING THE DIRECTORS

8.1 No Payment or Benefit to the Directors

As at the Latest Practicable Date, there is no agreement, arrangement or understanding for any payments or other benefits to be made or given to any Director or to any director of any related corporation as compensation for loss of office or otherwise in connection with the Scheme.

8.2 No Agreement Conditional upon Outcome of the Scheme

As at the Latest Practicable Date, save as disclosed in this Scheme Document, there is no agreement or arrangement made between any Director and any other person in connection with or which is conditional upon the outcome of the Scheme.

8.3 No Material Interest in Material Contracts As at the Latest Practicable Date, and save as disclosed in the Audited Consolidated Financial Statements of the Group for FY2012, none of the Directors has a personal interest, whether direct or indirect, in any material contract entered into by the Offeror.

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9. MATERIAL LITIGATION As at the Latest Practicable Date: (a) none of the Company or its subsidiaries is engaged in any material litigation or

arbitration proceedings, as plaintiff or defendant, which might materially and adversely affect the financial position of the Group taken as a whole; and

(b) the Directors are not aware of any litigation, claim or other proceedings pending or threatened against any of the Company or its subsidiaries or of any facts likely to give rise to any litigation, claim, arbitration or other proceedings which might materially and adversely affect the financial position of the Group taken as a whole.

10. GENERAL DISCLOSURE

10.1 Financial Statements for FY2012

The Audited Consolidated Financial Statements of the Group for FY2012 are available for inspection at the Company Registered Office up to the date of the Scheme Meeting or may be obtained from the Company's website (http://www.skywest.com.sg).

10.2 Directors' Service Contracts

There are (a) no service contracts between any Director or proposed director with the Company or its subsidiaries with more than 12 months to run, which the employing company cannot, within the next 12 months, terminate without payment of compensation; and (b) no such service contracts entered into or amended between any of the Directors or proposed director and any Company or its subsidiaries during the period between the start of the six (6) months immediately preceding the First Announcement Date and the Latest Practicable Date.

10.3 Material Contracts with Interested Persons

Save as disclosed in the Audited Consolidated Financial Statements of the Group for FY2012, there are no material contracts entered into by the Company or its subsidiaries in which any Director has a material personal interest, whether direct or indirect. Save as disclosed in the Audited Consolidated Financial Statements of the Group for FY2012, there are also no material contracts (not being a contract entered into in the ordinary course of business) entered into by the Company or its subsidiaries with other interested persons (as defined in the Note on Rule 23.12 of the Code and reproduced below) during the period beginning three (3) years before the First Announcement Date.

An interested person is:-

(a) a director, chief executive officer, or substantial shareholder of the Company;

(b) the immediate family of a director, the chief executive officer, or a substantial shareholder (being an individual) of the Company;

(c) the trustees, acting in their capacity as such trustees, of any trust of which a director,

the chief executive officer or a substantial shareholder (being an individual) and his immediate family is a beneficiary;

(d) any company in which a director, the chief executive officer or a substantial

shareholder (being an individual) together and his immediate family together (directly or indirectly) have an interest of 30% or more;

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(e) any company that is the subsidiary, holding company or fellow subsidiary of the

substantial shareholder (being a company); or (f) any company in which a substantial shareholder (being a company) and any of the

companies listed in (e) above together (directly or indirectly) have an interest of 30% or more.

10.4 Transfer Restrictions

The memorandum of association and articles of association of the Company do not contain any restrictions on the right to transfer the Skywest Shares, which have the effect of requiring holders of such Skywest Shares, before transferring them, to offer them for purchase to members of the Company or to any person.

10.5 Costs and Expenses

The Offeror shall reimburse the Company all legal, professional and other costs and expenses (including the fees of the IFA) reasonably incurred by the Company in relation to the Agreement up to the amount of A$750,000 in the event the Acquisition cannot be effected as a result of the non-fulfillment of certain condition precedents and/or the breach by the Offeror of its obligations under the terms and conditions of the Agreement. Other than as disclosed above, in the event that the Scheme does not become effective for any reason, the expenses and costs incurred by the Company in connection with the Scheme will be borne by the Company.

10.6 Termination Payment

In the event the Offeror terminates the Agreement by reason of a Company Prescribed Occurrence resulting in the non-fulfilment of the condition precedent set out in paragraph 7.1(f) of the Explanatory Statement, the Offeror shall pay the Company a lump sum of A$3,250,000 (without withholding or set off) within 10 Business Days of the date of termination of the Agreement.

10.7 All Directors to Vote in Favour of the Scheme

All Directors who have legal and beneficial shareholdings in the Company, for the purposes of voting on the Scheme, will vote in favour of the Scheme.

11. CONSENTS

11.1 General

The Share Registrars have each given and have not withdrawn their respective written consents to the issue of this Scheme Document with the inclusion herein of their names and all references to their names, in the form and context in which they respectively appear in this Scheme Document.

11.2 DMG & Partners Securities Pte Ltd

DMG & Partners Securities Pte Ltd (as independent financial adviser to the Directors in connection with the Scheme) has given and has not withdrawn its written consent to the issue of this Scheme Document with the inclusion of its name and its letter dated 26 February 2013,

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setting out, inter alia, its advice to the Directors in respect of the Scheme and all references to its name in the form and context in which it appears in this Scheme Document.

12. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the office of the Company at 510 Thomson Road, #12-04 SLF Building, Singapore 298135 during normal business hours on any Business Day for three (3) months from the date of this Scheme Document or up until the Effective Date, whichever is the later: (a) the memorandum of association and articles of association of the Company;

(b) the Scheme Letter;

(c) the annual reports of the Company for FY2010, FY2011 and FY2012; and

(d) the letters of consent referred to in paragraph 11 of this Appendix 3 above.

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RELEVANT EXCERPTS FROM THE AGREEMENT

130

Part A: Offeror Representations and Warranties The representations and warranties of the Offeror in the Agreement are reproduced in this Part A of Appendix 4. All capitalised terms used herein shall have the same meanings given to them in the Agreement, a copy of which is available for inspection at the registered office of the Company during normal business hours until the Effective Date. The Offeror represents and warrants that: "1. VAH Group Companies

1.1 Incorporation

Each of the VAH Group companies is a company duly incorporated and validly existing under its law of incorporation. VAH and/or the respective VAH Group company, as the case may be, is the legal and beneficial owner of the equity interest (as such percentage equity interests are disclosed in the latest annual report of VAH for FY2012) of the VAH Group companies (other than VAH or as disclosed in the audited FY2012 financial statements of VAH) held by the VAH Group.

1.2 VAH Shares All the issued VAH Shares have been duly authorised and validly issued, and are fully paid-up and rank pari passu in all respects with each other. All the Consideration Shares, when issued, shall be duly authorised and validly issued.

1.3 Solvency Each VAH Group company is solvent and no resolutions have been passed nor has any other step been taken or legal proceedings commenced or threatened against any VAH Group company for the winding up, dissolution or termination of that VAH Group company or for the appointment of a liquidator, receiver, administrator, or similar officer over any or all of VAH Group company's assets

2. Accounts As far as the Acquiror is aware and save as disclosed, there have been no material adverse changes in the financial position of the VAH Group since 28 September 2012.

3. Legal Matters

3.1 Compliance with Laws Each of VAH, VAA and the Acquiror has carried on and is carrying on its business and operations so that there have been no breaches in any material respect of applicable laws, regulations and bye-laws in each country in which they are carried on that would have a material adverse effect upon the VAH Group and its business taken as a whole, except that where any breach arises by reason only of any law, regulation and/or bye-law having been enacted after the date of this Agreement which has retrospective effect, such company shall not be regarded as having been in breach of this paragraph 3.1 to the extent that such company (i) takes all reasonable steps to comply with, and/or (ii) seeks a waiver from having to comply with, such law, regulation and/or bye-law.

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3.2 Licences and Consents All statutory, municipal and other licences, consents, authorisations, orders, warrants, confirmations, permissions, certificates, approvals and authorities ("VAH Licences") necessary for the carrying on of the businesses and operations of each of the Acquiror Group companies have been obtained, are in full force and effect and all conditions applicable to any such VAH Licence have been and are being complied with in all material respects, unless the failure to obtain any such VAH Licence does not have a material adverse effect upon the VAH Group and its business taken as a whole.

4. Litigation

4.1 As of the date of this Agreement, no litigation, arbitration or administrative proceeding which has or could have a material adverse effect upon the VAH Group and its business taken as a whole, is current or pending or, so far as the Acquiror is aware, threatened, to restrain the entry into, exercise of the Acquiror’s or VAH’s rights under and/or performance or enforcement of or compliance with its obligations under this Agreement.

4.2 No litigation, arbitration or administrative proceeding is current or pending or, so far as the Acquiror is aware, threatened, which has or could have a material adverse effect upon the VAH Group and its business taken as a whole.

5. Contractual Arrangements

The Acquiror is not aware of any circumstances that exist which may entitle the Civil Aviation Safety Authority to withdraw or suspend VAH’s AOC or impose any new restrictions on the AOC.

6. Power Each of the Acquiror and VAH has the corporate power to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated by this Agreement.

7. Authority

Each of the Acquiror and VAH has taken all necessary corporate action and obtained all necessary corporate approval to authorise the entry into this Agreement and the performance of this Agreement and to carry out the transactions contemplated in this Agreement.

8. Binding Obligation Each of the Acquiror’s and VAH’s obligations under this Agreement are valid, legally binding and enforceable in accordance with its terms.

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9. No Breach Neither the execution nor performance by the Acquiror of this Agreement nor any transaction contemplated under this Agreement will violate any provision of their constitutive documents, any order, writ, injunction or decree of any Governmental Agency applicable to the VAH, the Acquiror or its assets, or any agreement or instrument to which the Acquiror or VAH is a party or by which the Acquiror, VAH or its assets are bound."

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Part B: Company Representations and Warranties The representations and warranties of the Company in the Agreement are reproduced in this Part B of Appendix 4. All capitalised terms used herein shall have the same meanings given to them in the Agreement, a copy of which is available for inspection at the registered office of the Company during normal business hours until the Effective Date. The Company represents and warrants that: "1. Group Companies

1.1 Incorporation

Each of the Group Companies is a company duly incorporated and validly existing under its law of incorporation. The Company and/or the respective Group Company, as the case may be, is the legal and beneficial owner of the equity interest (as such percentage equity interests are disclosed in the latest annual report of the Company for FY2012) of the Group Companies (other than the Company or as disclosed in the Audited FY2012 Financial Statements) held by the Group and holds such equity interest-free from any Encumbrances.

1.2 Company Shares 1.2.1 All the issued Company Shares have been duly authorised and validly issued, and

are fully paid-up and rank pari passu in all respects with each other. The Company is not subject to any actual or contingent obligation to issue or convert securities except as required or contemplated by this Agreement or in accordance with the terms of the Company Warrants.

1.2.2 As at the date of this Agreement, there are (i) 6,500,000 unexercised Company

Warrants and (ii) 6,410,000 warrants owned by VB Investco Pty Ltd to subscribe for Company Shares. For the avoidance of doubt the aggregate number of Company Shares to be issued pursuant to the Company Warrants shall not exceed 6,500,000 Company Shares.

1.3 Solvency Each Group Company is solvent and no resolutions have been passed nor has any other step been taken or legal proceedings commenced or threatened against any Group Company for the winding up, dissolution or termination of that Group Company or for the appointment of a liquidator, receiver, administrator, or similar officer over any or all of that Group Company's assets.

2. Full Disclosure

All information contained in this Agreement and the Disclosure Letter and all other information which has been given in writing by or on behalf of the Group to the Acquiror or its agents, directors, officers, representatives and advisers in the course of due diligence or other investigations carried out by or on behalf of the Acquiror prior to entering into this Agreement was when given true and accurate in all material respects and not misleading in any material respect and as of the date of this Agreement, so far as the Company is aware, there is no fact, matter or circumstance in existence which renders or will render any such document and/or information untrue, inaccurate or misleading in any material respect.

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3. Accounts

3.1 Accounts The Audited FY2012 Financial Statements have been properly drawn up in accordance with the Companies Act and the International Financial Reporting Standards. The Audited FY2012 Financial Statements give a true and fair view of the state of affairs of the Group as at 30 June 2012, and the results of operations and the cash flow of the Group for the year ended 30 June 2012, and as at that date make adequate provision for all actual liabilities and proper provision for all contingent liabilities, including but not limited to, adequate maintenance and end-of-lease provisions for all aircraft owned or leased by the Group.

3.2 Changes since 30 June 2012 As far as the Company is aware and save as disclosed, there have been no material adverse changes in the financial position of the Group since 30 June 2012 and, in particular: 3.2.1 its business has been carried on solely in the ordinary and usual course, without any

material interruption or alteration in its nature, scope or manner, and so as to maintain the same as a going concern, save and except for events that may occur as a result of an act of God;

3.2.2 it has not entered into any material transaction or assumed or incurred any material liabilities (including contingent liabilities) or made any material payment or given any guarantee, indemnity or suretyship not provided for in the Audited FY2012 Financial Statements otherwise than in the ordinary and usual course of carrying on its business;

3.2.3 it has not entered into any unusual, long term and onerous commitments and

contracts that would have a material adverse effect on the business, operations, assets and/or financial condition of the Group taken as a whole; and

3.2.4 none of the Group Companies has entered into or proposed to enter into any capital

commitments other than in the ordinary course of business. 3.3 Absence of Undisclosed Liabilities

There are no material liabilities (including contingent liabilities) of any of the Group Companies which are outstanding on the part of such Group Company, other than (i) liabilities disclosed or provided for in the Audited FY2012 Financial Statements; (ii) liabilities disclosed elsewhere in this Agreement; or (iii) liabilities incurred in the ordinary and usual course of business, since 30 June 2012, none of which is material.

4. Legal Matters

4.1 Compliance with Laws 4.1.1 Each of the Group Companies has carried on and is carrying on its business and

operations so that there have been no breaches in any material respect of applicable laws, regulations and bye-laws in each country in which they are carried on that where any breach arises by reason only of any law, regulation and/or bye-law having been enacted after the date of this Agreement which has retrospective effect, such Group Company shall not be regarded as having been in breach of this paragraph 4.1

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to the extent that such Group Company (i) takes all reasonable steps to comply with, and/or (ii) seeks a waiver from having to comply with, such law, regulation and/or bye-law.

4.1.2 There have not been and there are no material breaches by any Group Company of its constitutional documents.

4.1.3 As at the date of this Agreement, the Company is not aware of any investigation or

enquiry by, or order, decree, decision or judgment of, any court, tribunal, arbitrator, governmental agency or regulatory body outstanding or anticipated by any Group Company or any person for whose acts or defaults it may be vicariously liable which has had or may have a material adverse effect upon its assets or business.

4.1.4 As of the date of this Agreement, there is no notice or other communication (official or

otherwise) from any court, tribunal, arbitrator, governmental agency or regulatory body with respect to an alleged, actual or potential violation of and/or failure to comply with any such applicable law, regulation, bye-law or constitutional document, or requiring it to take or omit any action which has had or may have a material adverse effect upon its assets or business.

4.2 Licences and Consents

4.2.1 All statutory, municipal and other licences, consents, authorisations, orders, warrants,

confirmations, permissions, certificates, approvals and authorities ("Company Licences") necessary for the carrying on of the businesses and operations of each of the Group Companies have been obtained, are in full force and effect and all conditions applicable to any such Company Licence have been and are being complied with in all material respects, unless the failure to obtain any such Company Licence does not have a material adverse effect upon the assets or business of the relevant Group Company.

4.2.2 As of the date of this Agreement, as far as the Company is aware, there is no investigation, enquiry or proceeding outstanding or anticipated which will or is likely to result in the suspension, cancellation, modification or revocation of any of the Company Licences.

4.2.3 None of the Company Licences has been breached or, as far as the Company is

aware, is likely to be suspended, cancelled, refused, modified or revoked (whether as a result of the entry into this Agreement or otherwise), except that where any breach arises by reason only of any changes to the Company Licence imposed by the relevant authority and/or any changes to any applicable law, regulation and/or bye-law between the date of this Agreement and the Record Date which has retrospective effect, such Group Company shall not be regarded as having been in breach of this paragraph 4.2.3 if such Group Company takes all reasonable steps to comply with such changes to the Company Licence immediately thereafter.

4.2.4 Except as expressly provided for in this Agreement and save as otherwise disclosed

in the Disclosure Letter, all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of consents from third parties) in order (a) to enable each Group Company lawfully to enter into, exercise its rights and perform and comply with its obligations under this Agreement and (b) to ensure that those obligations are valid, legally binding and enforceable have been taken, fulfilled and done.

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4.3 Litigation 4.3.1 As of the date of this Agreement, no litigation, arbitration or administrative proceeding

is current or pending or, so far as the Company is aware, threatened, to restrain the entry into, exercise of the Company’s rights under and/or performance or enforcement of or compliance with its obligations under this Agreement.

4.3.2 No litigation, arbitration or administrative proceeding is current or pending or, so far as the Company is aware, threatened, which has or could have a material adverse effect on the Group taken as a whole.

4.4 Power

The Company has the corporate power to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated by this Agreement.

4.5 Authority The Company has all the necessary corporate power and authority to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated by this Agreement.

4.6 Binding Obligation The Company’s obligations under this Agreement are valid, legally binding and enforceable in accordance with its terms.

5. Contractual Arrangements

5.1 Capital Commitments Between 30 June 2012 and the date of this Agreement, there are no capital commitments entered into or proposed by any of the Group Companies in excess of A$500,000 other than in the ordinary course of business.

5.2 Debts, Contracts and Arrangements with Connected Persons etc. Save as disclosed in the Disclosure Letter and in the Audited FY2012 Financial Statements, there is no related party transaction between any Group Company and a related party of the Company.

5.3 Effect of the Acquisition Save as disclosed in the Disclosure Letter, the execution and delivery of, and the performance by the Company of its obligations under this Agreement and the transactions contemplated hereunder: 5.3.1 do not and will not result in a breach of any provision of the Memorandum or Articles

of Association or the constitutional documents of any Group Company; 5.3.2 do not and will not conflict with or result in the breach of or constitute a default under

any agreement or instrument to which any Group Company is now a party, or any loan to or mortgage created by any Group Company, or relieve any other party to a

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contract with any Group Company of its obligations under such contract, or entitle such party to terminate or modify such contract, whether summarily or by notice, or result in the creation of any Encumbrance under any agreement, licence or other instrument, or result in a breach of any order, judgment or decree of any court, governmental agency or regulatory body to which any Group Company is a party or by which any Group Company or any of their respective assets is bound unless such conflict, breach or default does not result in a material adverse effect upon its assets or business; or

5.3.3 will not result in any amount or benefits which are paid or given or will be paid or

given by any member of the Group to any of its directors or employees which in aggregate will result in a material adverse effect upon its assets or business.

5.4 Contracts

5.4.1 No Group Company is, or has been, a party to any contract or transaction which:

(i) is outside the ordinary and usual course of business;

(ii) is not wholly on an arm’s length basis; and

(iii) is of a loss-making nature (that is, known to be likely to result in a material

loss on completion of performance).

5.4.2 Save as disclosed in the Disclosure Letter, none of the Group Companies: (i) is, or has agreed to become a party to any agency, distributorship, marketing,

purchasing, manufacturing or licensing agreement or arrangement or any agreement or arrangement which restricts its freedom to carry on its business in any part of the world in such manner as it thinks fit;

(ii) is, or has agreed to become, a member of any joint venture, consortium, partnership or other unincorporated association; or

(iii) is, or has agreed to become, a party to any agreement or arrangement for

participating with others in any business, sharing commissions or other income, otherwise than in the ordinary course of business.

5.5 Compliance with Agreements

5.5.1 All the contracts and all leases, tenancies, licences, concessions and agreements

(breach of which will have a material adverse effect on the relevant Group Company) to which any of the Group Companies is a party are valid, binding and enforceable obligations of the relevant Group Company, and the terms thereof have been complied with by the relevant Group Company.

5.5.2 The Company is not aware of any circumstances that exist which may entitle the Civil Aviation Safety Authority to withdraw or suspend the Company's AOC or impose any new restrictions on the AOC. Save as disclosed, all aircraft owned, leased or utilised by any Group Company pursuant to any other arrangement are available for operations as authorised under the Company’s AOC.

5.5.3 As of the date hereof, there are no circumstances likely to give rise to any breach of

such terms, breach of which has had a material adverse effect upon the assets and

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business of the relevant Group Company, and the Group Company has not done or omitted to do anything which gives rise to grounds for rescission, avoidance or repudiation of any of the contracts or such leases, tenancies, licences, concessions or agreements and no notice of termination or of intention to terminate has been received in respect of any thereof.

5.6 Guarantees etc.

Save as disclosed in the Audited FY2012 Financial Statements, there is not outstanding any guarantee, indemnity, suretyship or comfort (whether or not legally binding) given by or for the benefit of any Group Company, other than in the ordinary course of business.

6. No Breach Neither the execution nor performance by the Company of this Agreement nor any transaction contemplated under this Agreement will violate or accelerate the obligations of it or of any of its subsidiaries under any order, writ, injunction or decree of any Governmental Agency applicable to the Company or its assets, the effect of which has had or may have a material adverse effect upon the assets or business of the Company.

7. Taxation Matters

7.1 Returns, Information and Clearances 7.1.1 Each Group Company has complied in all material respects with all applicable tax laws,

regulations, concessions, consents and/or clearances imposed by the relevant Taxation authorities.

7.1.2 As of the date of this Agreement, no Group Company has done or omitted to do

anything since any application for any concession, consent or clearance from any Taxation authority that was made which might reasonably be expected to cause such concession, consent or clearance to be or become invalid, or to be withdrawn by the relevant Taxation authorities.

7.1.3 The Company will not take or omit to take any action that will cause such consent

or clearance to be or become invalid, or to be withdrawn by the relevant Taxation authorities.

7.2 Company Residence

Each Group Company has been resident for tax purposes in its country of incorporation and nowhere else at all times since its incorporation, and will be so resident at the Record Date.

8. Assets (including Properties)

8.1 Subsidiaries, Associates and Branches Save as disclosed in the Disclosure Letter and save as permitted under this Agreement, no Group Company:

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8.1.1 is the holder or beneficial owner of, or has agreed to acquire, any share or loan capital of any other company (whether incorporated in Singapore or elsewhere); or

8.1.2 has any branch, agency, division, establishment or operations outside the jurisdiction

in which it is incorporated.

8.2 Title to Assets 8.2.1 All assets of each Group Company which are included in the Audited FY2012

Financial Statements are the absolute property of such Group Company and all such assets and all assets and debts which have subsequently been acquired or arisen are the absolute property of such Group Company and none is the subject of any assignment or Encumbrance (excepting only liens arising by operation of law in the normal course of trading), or the subject of any factoring arrangement, hire purchase, conditional sale or credit sale agreement.

8.2.2 All such assets are, where capable of possession, in the possession of or under the control of the relevant Group Company, or the relevant Group Company is entitled to take possession or control of such assets.

8.2.3 Any assets held under lease by a Group Company is held under a valid, subsisting

and enforceable lease agreement and such Group Company is in compliance in all respects with the terms of such leases.

8.3 Insurance

All the assets of each of the Group Companies which are capable of being insured have at all material times been, and are insured to the full replacement value thereof against fire and other risks normally insured against by companies carrying on similar businesses or owning assets of a similar nature.

8.4 Title to Properties 8.4.1 The title to all real property owned by each Group Company is good and properly

deduced, and in each case free from any Encumbrances. 8.4.2 Any real property in Singapore and elsewhere which is held under lease by a Group

Company, is held under a valid, subsisting and enforceable lease/tenancy agreement with such exceptions as do not materially interfere with the use or proposed use of such property and buildings."

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Part C: Company Prescribed Occurrences The Company Prescribed Occurrences in the Agreement are reproduced in this Part C of Appendix 4. All capitalised terms used herein shall have the same meanings given to them in the Agreement, a copy of which is available for inspection at the registered office of the Company during normal business hours until the Effective Date. For the purpose of the Agreement, Company Prescribed Occurrence in relation to the Company and its subsidiaries means any of the following: "(1) Conversion of Company Shares: the Company converting all or any of its shares into a

larger or smaller number of shares; (2) Share Buy-back: the Company entering into a share buy-back agreement or resolving to

approve the terms of a share buy-back agreement under the Companies Act or the equivalent companies or securities legislation;

(3) Reduction of Share Capital: the Company resolving to reduce its share capital in any way; (4) Issuance of Debt Securities: the Company (or any subsidiary of the Company), issuing, or

agreeing to issue, convertible notes or other debt securities; (5) Injunctions: an injunction or other order issued by any court of competent jurisdiction or other

legal restraint or prohibition preventing the consummation of the Scheme or the Acquisition or any part thereof by the Company;

(6) Resolution for Winding Up: the Company (or any subsidiary of the Company) resolving that

it be wound up; (7) Appointment of Liquidator and Judicial Manager: the appointment of a liquidator,

provisional liquidator, judicial manager, provisional judicial manager and/or other similar officer of the Company (or of any subsidiary of the Company);

(8) Order of Court for Winding Up: the making of an order by a court of competent jurisdiction

for the winding up of the Company (or of any subsidiary of the Company); (9) Composition: the Company (or any subsidiary of the Company) entering into any

arrangement or general assignment or composition for the benefit of its creditors generally; (10) Appointment of Receiver: the appointment of a receiver or a receiver and manager, in

relation to the property or assets of the Company (or of any subsidiary of the Company); (11) Insolvency: the Company becoming or being deemed by law or a court to be insolvent, and

in relation to any subsidiary of the Company, the Company withdrawing its financial support such that the said subsidiary becomes or is deemed by law or a court to be insolvent;

(12) Cessation of Business: the Company (or any subsidiary of the Company) ceases or

threatens to cease for any reason to carry on business in the usual course; (13) Disposal of Share Capital: the Company (or any subsidiary of the Company) disposes, or

agrees to dispose, of shares in a Group Company; (14) Deregistration: the Company (or any subsidiary of the Company) is deregistered as a

company or otherwise dissolved;

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(15) Material Adverse Event: any event, occurrence, fact or matter occurring between the Acquisition Announcement Date and up to the Record Date which individually or when aggregated with all such events, occurrences, facts or matters in each case diminishes, or is reasonably likely to diminish, (whether now or in the future) the consolidated net assets of the Group by an amount equal to 20 per cent. or more, as compared to the consolidated net assets of the Group as at 30 June 2012 reported in the Company's financial statements for the financial year ended 30 June 2012 (the "Relevant Financial Statements") (each a "Material Adverse Event") other than an issue, event, occurrence, fact, circumstance or matter:

(1) required to be undertaken or procured by the Group pursuant to the Scheme or this

Agreement;

(2) to the extent that issue, event, occurrence, fact or matter was fairly disclosed to the Acquiror prior to the date of this Agreement;

(3) to the extent that event, occurrence, fact or matter was known to the Acquiror prior to the date of this Agreement (which does not include knowledge of the risk of an event, occurrence or matter happening);

(4) to the extent that issue, event, occurrence, fact or matter was caused directly by the

entry into this Agreement; or

(5) to the extent that issue, event, occurrence, fact or matter was caused directly by the Acquiror and/or VAH,

provided that for the purposes of this paragraph 15, in determining whether a Material Adverse Event under paragraph 15 has occurred, the Company shall require the Auditors to prepare and deliver to the Acquiror, within 15 Business Days of the Material Adverse Event or the receipt of notification from the Acquiror of a Material Adverse Event, using the same accounting standards, policies and principles adopted for the preparation of the Relevant Financial Statements, the proforma consolidated balance sheet and consolidated profit and loss statement for the same financial period as the Relevant Financial Statements, assuming that such Material Adverse Event had, for the purposes of the proforma consolidated balance sheet occurred as at the end of such financial period, and for the purposes of the proforma profit and loss statement, occurred as at the beginning of such financial period;

(16) AOC: if any AOC held by any Group Company is withdrawn, suspended or is made subject to

any new material restrictions after the date of this Agreement and any such withdrawal, suspension or such new restrictions is not removed, lifted or reinstated within 10 Business Days;

(17) Warranties: if any of the representations and warranties set out in paragraphs 1.1, 1.2.1, 1.3,

2, 3, 4.1.1, 4.1.2, 4.2, 4.3.2, 4.4, 4.5, 4.6, 5.1, 5.3, 5.4.1(i), 5.4.1(ii), 5.5.1, 5.5.2, 5.6 and 8 of Schedule 2 are not true and correct in all material respects as at the Record Date; or

(18) Analogous Event: any event occurs which, under the laws of any jurisdiction, has an

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Part D: VAH Prescribed Occurrences The VAH Prescribed Occurrences in the Agreement are reproduced in this Part D of Appendix 4. All capitalised terms used herein shall have the same meanings given to them in the Agreement, a copy of which is available for inspection at the registered office of the Company during normal business hours until the Effective Date. For the purpose of the Agreement, VAH Prescribed Occurrence in relation to VAH or the Offeror means any of the following: "(1) Conversion of Company Shares: VAH converting all or any of its shares into a larger or

smaller number of shares; (2) Share Buy-back: VAH entering into a share buy-back agreement or resolving to approve the

terms of a share buy-back agreement under the Corporations Act or the equivalent companies or securities legislation;

(3) Reduction of Share Capital: VAH resolving to reduce its share capital in any way; (4) Injunctions: an injunction or other order issued by any court of competent jurisdiction or other

legal restraint or prohibition preventing the consummation of the Scheme or the Acquisition or any part thereof by VAH or the Acquiror;

(5) Resolution for Winding Up: VAH, VAA or the Acquiror resolving that it be wound up; (6) Appointment of Liquidator and Judicial Manager: the appointment of a liquidator,

provisional liquidator, judicial manager, provisional judicial manager and/or other similar officer of VAH, VAA or the Acquiror;

(7) Order of Court for Winding Up: the making of an order by a court of competent jurisdiction

for the winding up of VAH, VAA or the Acquiror; (8) Composition: VAH, VAA or the Acquiror entering into any arrangement or general

assignment or composition for the benefit of its creditors generally; (9) Appointment of Receiver: the appointment of a receiver or a receiver and manager, in

relation to the property or assets of VAH, VAA or the Acquiror; (10) Insolvency: VAH, VAA or the Acquiror becoming or being deemed by law or a court to

be insolvent; (11) Cessation of Business: VAH, VAA or the Acquiror ceases or threatens to cease for any

reason to carry on business in the usual course; (12) Deregistration: VAH, VAA or the Acquiror is deregistered as a company or otherwise

dissolved; or (13) Analogous Event: any event occurs which, under the laws of any jurisdiction, has an

analogous or equivalent effect to any of the foregoing event(s)."

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RELEVANT EXCERPTS FROM THE COMPANY'S ARTICLES OF ASSOCIATION

143

The selected texts of the Articles of Association relating to the rights of the Shareholders in respect of capital, dividends and voting are extracted and set out below. All capitalised terms used in the following extracts shall have the same meanings given to them in the Articles of Association of the Company, a copy of which is available for inspection at the Company Registered Office during normal business hours on any Business Day for three (3) months from the date of this Scheme Document or up until the Effective Date, whichever is the later.

"SHARE CAPITAL AND VARIATION OF RIGHTS

4. (1) Subject to the Statutes, the Stock Exchange Rules and the provisions of these Articles, the Directors may allot and issue shares in the Company to such persons on such terms and conditions and at such times as the Directors think fit, but so that no shares shall be issued at a discount except in accordance with Section 68 of the Act.

(2) Any partly paid share on issue must be reorganised in the same proportion as the other classes of shares. The reorganisation must not include cancellation or reduction of the total amount payable and unpaid by the member.

(3) Subject to the Statutes and the provisions of these Articles and in accordance with the Stock Exchange Rules, any preference shares may be issued on terms that it is, or at the option of the Company is liable to be, redeemed.

(4) The holder of a preference share is entitled to return of capital in preference to holders of ordinary shares when the Company is wound up but shall not be entitled to participate in any surplus assets of the Company.

(5) The holder of a preference share is entitled to a dividend at a commercial rate, as determined by the Board at the time of issue, in preference to ordinary share holders.

(6) Subject to these Articles, the Statutes and the Stock Exchange Rules, the holder of a preference share has the right to vote at any general meeting of the Company in each of the following circumstances and in no others:

(a) during a period which a dividend (or part of a dividend), in respect of the share, is in arrears;

(b) on a proposal to reduce the Company's share capital;

(c) on a resolution to approve the terms of a buy back agreement;

(d) on a proposal that affects rights attached to the share;

(e) on a proposal to wind up the Company;

(f) on a proposal for the disposal of the whole of the Company's property, business and undertaking; and

(g) during the winding up of the Company.

(7) Holders of preference shares have the same rights as holders of ordinary shares in relation to receiving notices, reports and audited accounts, and attending general meetings of the Company.

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(8) Every application for shares in the Company shall be made in writing in a form approved by the Company. Every application shall be signed by the applicant if he is an individual and made under seal if it is a corporation.

5. The Company is a public company.

6. Where any shares are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a lengthened period, the Company may pay interest on so much of such share capital as is for the time being paid up for the period and subject to the conditions and restrictions mentioned in Section 78 of the Act and may charge the same to capital as part of the cost of construction or provision of the works, buildings or plant.

7. If two or more persons are registered as joint holders of any share, any one of such persons may give effectual receipts for any dividends or other moneys payable in respect of such share.

8. No person shall be recognized by the Company as holding any share upon any trust, and the Company shall not be bound by or required to recognize any equitable, contingent, future or partial interest in any share or any right whatsoever in respect of any share other than an absolute right to the entirety thereof in the registered holder, except as by these Articles otherwise expressly provided or as by Statute required or pursuant to any order of Court.

9. (1) In respect of a Certificated Share, every member shall be entitled, without payment, to receive within one month after allotment or lodgement of transfer one certificate for all the Certificated Shares registered in his name ("Share Certificate"), specifying the number and denoting numbers of the shares in respect of which it is issued and the amount paid thereon.

(2) Notwithstanding any other Article, the Directors may from time to time determine, either generally or in any particular case, the method by which any Share Certificate issued by the Company in respect of the Certificated Shares shall be authenticated or executed by or on behalf of the Company and, in particular:

(a) the Directors may dispense with the need to affix the Seal to such Share Certificate;

(b) the Directors may determine, and by whom, any such Share Certificate is to be signed, and may dispense with the need for such Share Certificate to be signed or executed in any way;

(c) the Directors may permit the signature or a facsimile copy of the signature of any person to be applied to such Share Certificate by any mechanical or electronic means in place of that person’s actual signature; and

(d) any Share Certificate issued in accordance with the requirements of the Directors shall, as against the Company, be prima facie evidence of the title of the person named in that Share Certificate to the shares comprised in it.

(3) If at any time the share capital of the Company is divided into different classes of shares, every Share Certificate issued at that time shall comply with Section 123 of the Act, and no Share Certificate shall be issued in respect of more than one class of shares.

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(4) In the case of joint holders, the Company shall not be bound to issue more than one Share Certificate to all the joint holders, and delivery of such Share Certificate to any one of them shall be sufficient delivery to all.

10. If any share certificate shall be defaced, worn out, destroyed or lost, it may be renewed on such evidence being produced and such indemnity (if any) being given as the Directors shall require, and (in case of defacement or wearing out) on delivery up of the old certificate, and in any case on payment of such sum (not exceeding twenty dollars) as the Directors may from time to time require.

LIEN 11. The Company shall have a first and paramount lien upon all shares (whether fully paid or

not) registered in the name of any member, either alone or jointly with any other person where:,

(a) an unpaid call or instalment is due but unpaid on that share;

(b) the share was acquired under an employee incentive scheme and an amount is owed to the Company for acquiring that share; or

(c) the Company is required by law to pay (and has paid) an amount in respect of that share (whether held by a member or deceased former member),

for the member’s debts, liabilities and engagements, whether solely or jointly with any other person, to or with the Company, whether the period for the payment, fulfilment or discharge thereof shall have actually arrived or not, and such lien shall extend to all dividends from time to time declared in respect of such shares.

12. The Directors may at any time declare any share to be exempt, wholly or partially, from the provisions of Article 11.

13. Subject to any additional requirements of the Stock Exchange Rules and the ASTC Settlement Rules, the Directors may sell the shares subject to any such lien at such time or times and in such manner as they think fit, but no sale shall be made until such time as the moneys in respect of which such lien exists or some part thereof are or is presently payable or the liability or engagement in respect of which such lien exists is liable to be presently fulfilled or discharged, and until a demand and notice in writing stating the amount due or specifying the liability or engagement and demanding payment or fulfilment or discharge thereof and giving notice of intention to sell in default shall have been served on such member or the persons (if any) entitled by transmission to the shares, and default in payment, fulfilment or discharge shall have been made by him or them for seven days after such notice.

14. The net proceeds of any such sale shall be applied in or towards satisfaction of the amount due to the Company, or of the liability or engagement, as the case may be, and the balance (if any) shall be paid to the member or the person (if any) entitled by transmission to the shares so sold.

15. Upon any such sale as aforesaid, the Directors may authorize some person to transfer the shares sold to the purchaser and may enter the purchaser’s name in the Register as holder of the shares, and the purchaser shall not be bound to see the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

16. No member shall be entitled to receive any dividend or to exercise any privilege as a member until he shall have paid all calls for the time being due and payable on every share held by him whether alone or jointly with any other person, together with interest and expenses (if any).

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17. The Company may do all such things as may be necessary or appropriate for it to do under the ATSC Settlement Rules to protect any lien, charge or other right to which it may be entitled under any Statute or these Articles.

CALLS ON SHARES

18. The Directors may, subject to the provisions of these Articles, the Stock Exchange Rules,

the ASTC Settlement Rules and the Act, from time to time make such calls upon the members in respect of all moneys unpaid on their shares as they think fit, provided that fourteen days’ notice at least is given of each call (or such longer notice as is required by the Stock Exchange Rules) and each member shall be liable to pay the amount of every call so made upon him to the persons, by the instalments (if any) and at the times and places appointed by the Directors.

19. A call shall be deemed to have been made at a time when the resolution of the Directors authorizing such call was passed.

20. The joint holders of a share shall be jointly and severally liable for the payment of all calls and instalments in respect thereof.

21. If before or on the day appointed for payment thereof a call or instalment payable in respect of a share is not paid, the person from whom the payment is due shall pay interest on the amount of the call or instalment at such rate not exceeding ten per cent per annum as the Directors shall fix from the day appointed for payment thereof to the time of actual payment, but the Directors may waive payment of such interest wholly or in part.

22. Any sum which by the terms of allotment of a share is made payable upon allotment or at any fixed date, whether on account of the amount of the share or by way of premium, shall, for all purposes of these Articles, be deemed to be a call duly made and payable on the date fixed for payment, and in case of non- payment, the provisions of these Articles as to payment of interest and expenses, forfeiture and the like, and all other relevant provisions of these Articles, shall apply as if such sum were a call duly made and notified as hereby provided.

23. The Directors may, from time to time, make arrangements on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and in the time of payment of such calls.

24. The Directors may, if they think fit, receive from any member willing to advance the same all or any part of the moneys due upon his shares beyond the sums actually called up thereon, and upon the moneys so paid in advance, or so much thereof as exceeds the amount for the time being called up on the shares in respect of which such advance has been made, the Directors may pay or allow such interest as may be agreed between them and such member, in addition to the dividend payable upon such part of the share in respect of which such advance has been made as is actually called up.

TRANSFER OF SHARES

25. Subject to the restrictions of these Articles, shares shall be transferable, but every transfer

of a Certificated Share must be in writing in the usual common form, or in such other form as the Directors shall from time to time approve, and must be left at the Office, accompanied by the certificate of the shares to be transferred and such other evidence (if any) as the Directors may require to prove the title of the intending transferor.

26. No share shall in any circumstances be knowingly transferred to any infant, bankrupt or person of unsound mind.

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27. The instrument of transfer of a Certificated Share shall be executed both by the transferor and the transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof.

28. The Company shall provide a register of transfers, which shall be kept by the Secretary under the control of the Directors, and in which shall be entered the particulars of every transfer or transmission of every share.

29. The Company must not charge for any fee relating to the administration of a transfer as set out in the Stock Exchange Rules, including, but not limited to, registering transfer documents and noting transfer forms.

30. (1) Subject to paragraph (2) hereunder, the Board may, in its absolute discretion, refuse to register any transfer of shares provided:

(i) it is not in respect of a share which is fully paid up;

(ii) it is not in respect of a share on which the Company has no lien;

(iii) it is not in respect of only one class of share;

(iv) it is in favour of more than three joint transferees;

(v) in the case of Certificated Shares:

(A) When a validly executed transfer form ("Transfer Form") has not been delivered for registration to the Office or such other place as the Board may from time to time determine; and

(B) The Transfer Form is neither stamped nor adjudicated to be exempt from stamp duty by the Commissioner of Stamp Duties, Inland Revenue Authority of Singapore or other relevant stamping authority; and

(C) it is not accompanied (except in the case of a transfer by a Recognised Clearing House where a certificate has not been issued) by the Share Certificate for the shares to which it relates and such other evidence as the Board may reasonably require to prove the title of the transferor and the due execution by him of the transfer or, if the transfer is executed by some other person on his behalf, the authority of that person to do so;

(2) The Board shall not exercise its discretion under paragraph (1) above, in such a way as to prevent dealings in shares admitted to trading on a Stock Exchange taking place on an open and proper basis.

31. The Board may do anything permitted by Statutes, the Listing Rules and the ASTC Settlement Rules which it considers necessary or appropriate in connection with the participation by the Company in any computerised or electronic system established or recognised by Statutes, the Listing Rules or the ASTC Settlement Rules for the purpose of facilitating dealings in marketable securities.

32. Notwithstanding Article 30(1)(v), the Board may refuse to approve the transfer of fully paid Certificated Shares in an exceptional circumstances approved by the ASX or the United Kingdom Listing Authority and AIM (as the case may be).

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33. (1) Restricted Securities cannot be disposed of by the holder of those Restricted Securities during the escrow period except as permitted by the Listing Rules or the ASX.

(2) The Company will refuse to acknowledge a disposal of Restricted Securities during the escrow period except as permitted by the Listing Rules or the ASX.

(3) During a breach of the Listing Rules relating to Restricted Securities, or a breach of a restriction agreement, the holder of the Restricted Securities is not entitled to any dividend or distribution, or voting rights, in respect of the Restricted Securities.

34. (1) Subject to the Statutes and the Stock Exchange Rules, the Company may, once in any 12 month period, sell the shares of a member who has less than a Marketable Parcel of those shares if:

(a) the Company has notified the holder in writing of its intention to sell those shares;

(b) the shareholder has been given at least 6 weeks from the date the notice referred to in Clause 34(1)(a) is sent in which to advise the Company that the holder wishes to retain the holding;

(c) the member has not notified the Company (pursuant to sub-paragraph Clause 34(1)(b)) that the member wishes to retain the holding; and

(d) neither a takeover offer nor a takeover announcement has been made in respect of the Company or, if one has been made in respect of the Company, the offers made, under that takeover offer or takeover announcement, have been closed.

(2) The costs of sale of the shares of a member who has less than a Marketable Parcel of those shares under Clause 34(1) must be paid by the Company or the purchaser of the shares.

(3) In respect of shares, the proceeds of the sale of the shares of a member who has less than a Marketable Parcel of those shares will not be sent to the member until the Company has received the certificate of title (if any) issued in respect of those shares (or is satisfied that the certificate has been lost or destroyed).

TRANSMISSION OF SHARES

35. In the case of the death of a member, the survivors or survivor, where the deceased was a

joint holder, and the executors or administrators of the deceased where he was a sole or only surviving holder, shall be the only persons recognized by the Company as having any title to his shares, but nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share jointly held by him.

36. A person entitled to a share by transmission shall be entitled to receive and may give a discharge for any dividends or other moneys payable in respect of the share, but he shall not be entitled in respect of it to receive notices of, or to attend or vote at meetings of the Company, or, save as aforesaid, to exercise any of the rights or privileges of a member, unless and until he shall become a member in respect of the share.

FORFEITURE OF SHARES

37. If any member fails to pay the whole or any part of any call or instalment of a call on or

before the day appointed for the payment thereof, the Directors may at any time thereafter, during such time as the call or instalment or any part thereof remains unpaid, serve a notice on him or on the person entitled to the share by transmission requiring him to pay such call

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or instalments, or such part thereof as remains unpaid together with interest at such rate not exceeding ten per cent per annum as the Directors shall determine, and any expenses that may have accrued by reason of such non- payment.

38. The notice shall name a further day (not earlier than the expiration of seven days from the date of the notice) on or before which such call or instalment or such part as aforesaid and all interest and expenses that have accrued by reason of such non-payment, are to be paid. It shall also name the place where payment is to be made, and shall state that, in the event of non- payment at or before the time and at the place appointed, the shares in respect of which such call was made will be liable to be forfeited.

39. If the requisitions of any such notice aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the holders of ordinary shares to that effect. A forfeiture of shares shall include all dividends in respect of the shares not actually paid before the forfeiture, notwithstanding that they shall have been declared.

40. When any share has been forfeited in accordance with these Articles, notice of the forfeiture shall forthwith be given to the holder of the share or to the person entitled to the share by transmission as the case maybe, and an entry of such notice having been given, and of the forfeiture with the date thereof, shall forthwith be made in the Register in respect of the share; but the provisions of this Article are directory only, and no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.

41. Notwithstanding any such forfeiture as aforesaid, the Directors may, at any time before the forfeited share has been otherwise disposed of, annul the forfeiture, upon the terms of payment of all calls and interest due thereon and all expenses incurred in respect of the share and upon such further terms (if any) as they shall see fit.

42. Every share which shall be forfeited may be sold, re-allotted, or otherwise disposed of, either to the person who was before forfeiture the holder thereof, or entitled thereto, or to any other person upon such terms and in such manner as the Directors shall think fit, and the Directors may, if necessary, authorize some person to transfer the same to such other person as aforesaid.

43. A member whose shares have been forfeited shall notwithstanding be liable to pay to the Company all calls made and not paid on such shares at the time of forfeiture, and interest thereon to the date of payment, in the same manner in all respects as if the shares had not been forfeited, and to satisfy all (if any) the claims and demands which the Company might have enforced in respect of the share at the time of forfeiture, without any deduction or allowance for the value of the shares at the time of forfeiture.

44. The forfeiture of a share shall involve the extinction at the time of forfeiture of all interest in and all claims and demands against the Company in respect of the share, and all other rights and liabilities incidental to the shares as between the member whose share is forfeited and the Company, except only such of those rights and liabilities as are by these Articles expressly saved, or as are by the Statute given or imposed in the case of past members.

45. A statutory declaration in writing that the declarant is a Director of the Company, and that a share has been duly forfeited in pursuance of these Articles, and stating the date upon which it was forfeited shall as against all persons claiming to be entitled to the share adversely to the forfeiture thereof be conclusive evidence of the fact therein stated, and such declaration, together with the receipt of the Company for the consideration (if any) given for the share on the sale or disposition thereof, and a certificate of proprietorship of the share under the Seal delivered to the person to whom the same is sold or disposed of shall constitute a good title to the share, and (subject to the execution of any necessary

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transfer) such person shall be registered as the holder of the share and shall be discharged from all calls made prior to such sale or disposition, and shall not be bound to see to the application of the purchase money (if any), nor shall his title to the share be affected by any act, omission or irregularity relating to or connected with the proceedings in reference to the forfeiture, sale, reallotment or disposal of the share.

PURCHASE OF SHARES

46. The Company may acquire or purchase its own shares in accordance with Sections 76B to

76G of the Act.

ALTERATION OF CAPITAL 47. Subject to the provisions of these Articles, the Company may alter the conditions of its

Memorandum of Association as by ordinary resolution:

(a) to consolidate and divide its share capital into shares of larger amount than its existing share or

(b) to cancel any shares not taken or agreed to be taken by any person or

(c) to divide its share capital or any part thereof into shares of smaller amount than is fixed by its Memorandum of Association by subdivision of its existing shares or any of them, subject nevertheless to the provisions of the Statutes and so that as between the resulting shares one or more of such shares may by the resolution by which such subdivision is effected be given any preference or advantage as regards to dividend, capital, voting or otherwise over the others or any other of such shares.

REDUCTION OF CAPITAL

48. The Company may alter the conditions of its Memorandum of Association to reduce its

capital and any capital redemption reserve fund in any manner authorized and subject to any conditions prescribed by the Statutes.

INCREASE OF CAPITAL

49. Subject to the provisions of these Articles, the Company in General Meeting may from time

to time, whether all the shares for the time being authorised shall have been issued or all the shares for the time being issued shall have been fully paid or not, increase its share capital by the creation of new shares, such new capital to be of such amount and to be divided into shares of such respective amounts and (subject to any special rights for the time being attached to any existing class of shares) to carry such preferential, deferred or other special rights (if any) or to be subject to such conditions or restrictions (if any), in regard to dividend, return of capital, voting or otherwise, as the General Meeting resolving such increases directs by ordinary resolution.

50. Except so far as otherwise provided by or pursuant to these Articles or by the conditions of issue, any new share capital shall be considered as part of the original share capital of the Company, and shall be subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the original share capital.

MODIFICATION OF CLASS RIGHTS

51. Subject to the provisions of Section 74 of the Act, the Statutes and these Articles all or any

of the rights, privileges or conditions for the time being attached or belonging to any class of shares for the time being forming part of the capital of the Company may from time to time be modified, affected, varied, extended or surrendered in any manner with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or with

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the sanction of a special resolution passed at a separate meeting of the members of that class. To any such separate meeting all the provisions of these Articles as the General Meetings of the Company shall mutatis mutandis apply, but so that the necessary quorum shall be members of the class holding or representing by proxy one-third of the capital paid or credited as paid on the issued shares of the class, and every holder of shares of the class in question shall be entitled on a poll to one vote for every such share held by him.

UNTRACED MEMBERS

52. (a) Subject to the Stock Exchange Rules, the Company shall be entitled to sell any

share of a member, or any share to which a person is entitled by transmission, if and provided that:

(i) during the period of twelve years prior to the date of the publication of the advertisements referred to in paragraph (ii) below (or, if published on different dates, the earlier or earliest thereof) no cheque, order or warrant in respect of such shares sent by the Company through the post in a pre-paid envelope addressed to the member or to the person entitled to transmission to the share, at his address on the Register or other last known address given by the member or that person to which cheques, orders or warrants in respect of such share are to be sent has been cashed and the Company has received no communications in respect of such share from such member or person, provided that during such period of twelve years the Company has paid at least three dividends (whether interim or final) and no such dividend has been claimed by the person entitled to it;

(ii) on expiry of the said period of twelve years the Company has given notice of its intention to sell such shares by advertisements appearing in both a national newspaper and in a newspaper circulating in the area in which the address referred to in paragraph (i) is located;

(iii) the said advertisements, if not published on the same day, shall have been published within thirty days of each other;

(iv) during the further period of three months following the date of publication of the said advertisements (or, if published on different dates, the later or latest thereof) and prior to the exercise of the power of sale the Company has not received any communication in respect of such share from the member or person entitled by transmission; and

(v) if shares of the class concerned are listed or dealt on the Stock Exchange, the Company has given notice to the Stock Exchange of its intentions to make such sale.

(b) The manner, timing and terms of any sale of shares pursuant to this Article (including but not limited to the price or prices at which the same is made) shall be such as the Board determines, based upon advice from such bankers, brokers or other persons as the Board considers appropriate, to be reasonably practicable having regard to all the circumstances including the number of shares to be disposed of and the requirement that the disposal be made without delay and the Board shall not be liable to any person for any of the consequences of reliance on such advice.

(c) To give effect to any sale of shares pursuant to this Article, the Board may authorise such person as it sees fit to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the Register notwithstanding the absence of any share certificate being lodged in respect thereof and may issue a new certificate to the transferee and an

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instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of, or person entitled by transmission to, the shares. The purchaser shall not be bound to see to the application of the purchase moneys nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

(d) If during the period of twelve years referred to in Article 52(a) above, or during any period ending on the date when all the requirements of paragraphs (i) to (iv) of Article 52(a) above have been satisfied, any additional shares have been issued in respect of those held at the beginning of, or previously so issued during any such period and all the requirements of paragraphs (ii) to (iv) of Article 52(a) above have been satisfied in relation to such additional shares, the Company shall also be entitled to sell the additional shares.

(e) The Company shall account to the member or other person entitled to such share for the net proceeds of such sale by crediting all moneys in respect thereof to a separate account. The Company shall be deemed to be a debtor to, and not a trustee for, such member or other person in respect of such moneys. Moneys credited to such separate account may either be employed in the business of the Company or invested in such investments as the Board may from time to time think fit. No interest shall be payable to such member or other person in respect of such moneys and the Company shall not be required to account for any money earned on them.

GENERAL MEETINGS

53. A General Meeting shall be held once in every calendar year, at such time and place as may

be determined by the Directors, but so that no more than fifteen months shall be allowed to elapse between any two such General Meetings.

54. The above-mentioned General Meetings shall be called Annual General Meetings. All other General Meetings shall be called Extraordinary General Meeting.

55. The Directors may call an Extraordinary General Meeting whenever they think fit and at such place as the Directors shall determine, and the Extraordinary General Meetings shall also be convened on such requisitions, or in default may be convened by such requisitions, as provided by Section 176 of the Act.

56. Subject to the provisions of the Statutes, the ASTC Settlement Rules and the Stock Exchange Rules relating to special notice and the convening of meetings to pass special resolutions, fourteen days’ notice at the least, specifying the place, the day and the hour of meeting, and in the case of special business the general nature of such business, shall be given in manner hereinafter mentioned to such persons as are under the provisions of these Articles entitled to receive notices of General Meetings from the Company, (which for the avoidance of doubt shall also include each DI Holder), but with the consent of all persons for the time being entitled as aforesaid, a meeting may be convened upon a shorter notice, and in such manner as such persons may approve. The accidental omission to give such notice to or to send a form of proxy where required by the Statutes, Stock Exchange Rules or these Articles, or to send a DI Voting Notice or the non- receipt of any of the foregoing by, any such person shall not invalidate any resolution passed or proceeding had at any such meeting.

57. The contents of any prepared announcement (including any prepared announcement by the chairperson) that will be delivered at any General Meeting must be given to ASX prior to the start of the meeting.

58. Details of the outcome of each resolution put to any General Meeting must be provided to ASX in accordance with the Listing Rules.

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PROCEEDINGS AT GENERAL MEETING

59. Subject to the Stock Exchange Rules, all business shall be deemed special that is

transacted at an Extraordinary General Meeting, and all that is transacted at an Annual General Meeting shall also be deemed special, with the exception of sanctioning a dividend, the consideration of the accounts and balance sheets and the reports of the Directors and Auditors, and any other documents annexed to the balance sheets, the election of Directors in place of those retiring and the appointment and fixing of the remuneration of the Auditors.

60. No business shall be transacted at any General Meeting unless a quorum is present when the meeting proceeds to business. For all purposes, the quorum shall be two members personally present or by proxy or representative. This provision shall have no effect if, at any time, all the issued shares are held by one corporation, in which instance the provisions of Section 179 of the Act shall have effect.

61. (a) For the purpose of controlling the level of attendance at any place specified for the holding of a General Meeting, the Board may from time to time make such arrangements (whether involving the issue of tickets, on a basis intended to afford to all members otherwise entitled to attend such meeting an equal opportunity of being admitted to that meeting, or the imposition of some random means of selection, or otherwise, as the Board shall in its absolute discretion consider to be appropriate) and may from time to time vary any such arrangements or make new arrangements in place therefor. The entitlement of any member or proxy to attend a General Meeting at such place shall be subject to any such arrangements as may be for the time being in force and by the notice of meeting stated to apply to that meeting. In the case of any General Meeting to which such arrangements apply the Board shall, and in the case of any other General Meeting the Board may, when specifying the place of the General Meeting:

(i) direct that that meeting shall be held at a place specified in the notice at which the chairman of that meeting shall preside ("Principal Place"); and

(ii) make arrangements for simultaneous attendance and participation at other places by members otherwise entitled to attend the General Meeting but excluded therefrom under the provisions of this Article, or who wish to attend at any of such other places, provided that persons attending at the Principal Place and at any other such places shall be able to see and hear and be seen and heard by persons attending at the Principal Place and at such other places.

(b) Such arrangements for simultaneous attendance may include arrangements for controlling the level of attendance in any manner aforesaid at any of such other places, provided that they shall operate so that any such excluded members as aforesaid are able to attend at one of such other places. For the purposes of all other provisions of these Articles any such meeting shall be treated as being held and taking place at the Principal Place.

62. If within half an hour from the time appointed for the holding of a General Meeting a quorum is not present, the meeting, if convened on the requisition of members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week at the same time and place, and if at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the member/members present shall be permitted to proceed as if a quorum was present.

63. The Chairman (if any) of the Board of Directors shall preside at every General Meeting, but if there by no such Chairman, or if at any meeting he shall not be present within fifteen minutes after the time appointed for holding the same, or shall be unwilling to act as Chairman, the members present shall choose some Director, or if no Director be present, or

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if all the Directors present decline to take the chair, they shall choose some member present to be Chairman of the meeting.

64. The Chairman may, with the consent of any meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn any meeting from time to time and from place to place as the meeting shall determine. Whenever a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given in the same manner as in the case of an original meeting. Save as aforesaid, no member shall be entitled to any notice of an adjournment or of the business to be transacted at an adjourned meeting. No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.

65. At all General Meetings, resolutions put to the vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll be demanded in writing by the Chairman or by any person for the time being entitled to vote at the meeting, and unless a poll be so demanded a declaration by the Chairman of the meeting that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority, shall be conclusive and an entry to that effect in the minute book of the Company shall be conclusive evidence thereof, without proof of the number or proportion of the votes recorded in favour of or against such resolution.

66. If a poll be demanded in the manner aforesaid, it shall be taken at such time and place, and in such manner, as the Chairman shall direct, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

67. No poll shall be demanded on the election of the Chairman of a meeting, or on any question of adjournment.

68. In the case of any equality of votes, either on a show of hands or on a poll, the Chairman of the meeting shall not be entitled to a second or casting vote.

69. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business, other than the question on which a poll has been demanded.

VOTES OF MEMBERS

70. Subject and without prejudice to any special privileges or restrictions as to voting for the

time being attached to any special class of shares for the time being forming part of the capital of the Company, every member shall have one vote on a show of hands and in case of a poll shall have one vote for every share of which he is the holder.

71. (a) If the Company is admitted to listing on AIM or the ASX, the Board shall establish and (for so long as the Company remains so listed) maintain the DI Registers.

(b) For so long as the Company remains listed on AIM or the ASX, the provisions of these Articles shall govern the relationship between DI Holders and the Company as well as the relationship between the DI Holders and a Depository Nominee pursuant to any trust deed created by a Depository Nominee in relation to the DIs from time to time. Notwithstanding any provisions of these Articles, the Board shall be authorised to vary or depart from any provision of these Articles concerning the holding of the DIs if and to the extent necessary to comply with the Stock Exchange Rules, ASTC Settlement Rules and any trust deed established by a Depository Nominee.

(c) Except as required by law, no DI Holder shall be recognised by the Company as holding any interest in DIs upon any trust and the Company shall be entitled to treat any person entered in a DI Register as the only person (other than a Depository Nominee) who has any interest in the DIs standing to the name of that DI Holder.

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(d) Subject to paragraph (e), at every general meeting of the Company each person who is a DI Holder at the relevant DI Record Date shall have the right, in respect of the number of DIs held by them at the relevant DI Record Date to direct the Depositary Nominee:

(i) as to how it should vote with respect to resolutions described in a notice of general meeting;

(ii) to appoint him as its proxy; or

(iii) to appoint as its proxy a person nominated by him, each to be known as a DI Voting Instruction.

(e) The Company shall send a notice (DI Voting Notice) to each DI Holder on the DI Registers at the relevant DI Record Date informing them of their rights under paragraph (d) and of the time by which the DI Voting Instructions must be received by the Company (DI Voting Instruction Receipt Time). Any DI Voting Instruction received after the DI Voting Instruction Receipt Time shall be void.

(f) Subject to these Articles, a proxy appointed by a Depository Nominee shall have the same rights (and be subject to the same restrictions) as a proxy appointed by any other member.

(g) Where DI Voting Instructions are received by the DI Voting Instruction Receipt Time then:

(i) in the case where a DI Holder has given directions pursuant to paragraph (d)(i), the number of votes that shall be cast by a Depository Nominee on a poll on their behalf shall be equal to the number of DIs in respect of which that direction has been given or, if less, the number of DIs standing to the name of that DI Holder in a DI Register at the relevant DI Record Date; and

(ii) in the case where a DI Holder has given a direction in accordance with paragraph (d)(ii) or (d)(iii) to the effect that he or (as the case may be) some other person should be appointed as a proxy of a Depository Nominee, a Depository Nominee shall appoint the person so nominated as its proxy and the number of votes that may be cast by that proxy on a poll shall be equal to the number of DIs in respect of which the direction has been given or, if less, the number of DIs standing to the name of that DI Holder in a DI Register at the relevant DI Record Date.

(h) If it appears in relation to a particular resolution at a particular meeting that the aggregate number of votes cast by or on behalf of a Depository Nominee would without an adjustment exceed a Depository Nominee’s Overall Holding then such adjustments shall be made to the aggregate number of votes cast for or against the resolution so that the total number of votes cast by or on behalf of a Depository Nominee does not exceed that Depository Nominee’s Overall Holding. The chairman of the meeting has discretion to make such adjustments as are fair and equitable and any such adjustments made in good faith shall be conclusive and binding on all persons interested. For the avoidance of doubt, votes cast by or on behalf of the relevant Depository Nominee shall include votes cast by any proxy appointed by it.

(i) Subject and without prejudice to the requirements of the provisions of paragraph (d) above and Article 70, if in any circumstances other than those provided for in those Articles any question shall arise as to whether any person has been validly appointed to vote (or exercise any other right) in respect of a holding of DIs or as to the number of DIs in respect of which he is entitled to do so, then:

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(A) if such a question arises at or in relation to a general meeting it shall be determined by the chairman of the meeting; and

(B) if it arises in any other circumstances it shall be determined by the Board and any such determination if made in good faith shall be final and conclusive and binding on all persons interested.

72. If any member be a lunatic, idiot or non-compos mentis he may vote by his committee, receiver, curator bonis or other legal curator, and such last mentioned persons may give their votes either personally or by proxy.

73. If two or more persons are jointly entitled to a share, then in voting upon any question the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other registered holders of the share, and for the purpose seniority shall be determined by the order in which the names stand in the register of members.

74. Save as herein expressly provided, no person other than a member duly registered and who shall have paid everything for the time being due from him and payable to the Company in respect of his shares, shall be entitled to be present or to vote on any question either personally or by proxy, or to be reckoned in a quorum, at any General Meeting.

75. Subject to any special terms as to voting upon which any shares may for the time being be held, upon a show of hands every member present in person or by proxy or representative shall have one vote and upon a poll every such member shall have one vote for every share held by him. A proxy or representative need not be a member of the Company.

76. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if such appointor is a corporation under its common seal, if any, and if none, than under the hand of some officer duly authorised in that behalf. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power of demand or concur in demanding a poll on behalf of the appointor.

77. The instrument appointing a proxy, together with the power of attorney (if any) under which it is signed or a certified copy thereof, shall be deposited at the Office or sent there by facsimile transmission at least twenty-four hours before the time appointed for holding the meeting or adjourned meeting at which the person named in such instrument proposes to vote; otherwise the person so named shall not be entitled to vote in respect thereof.

78. Any instrument appointing a proxy shall be in writing in the common form or any form approved by the Directors under the hand of the appointor or his attorney duly authorised in writing.

…

DIVIDENDS AND RESERVE FUND 107. The Company in General Meeting may declare dividends, but no dividend shall exceed the

amount recommended by the Directors.

108. The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company.

109. No dividend shall be paid otherwise than out of profits.

110. The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments

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(other than shares of the Company) as the Directors may from time to time think fit. The Directors may also without placing the same to reserve carry forward any profits which they may think prudent not to be divide.

111. Subject to the right of the persons, if any, entitled to shares with special rights as to dividend or an issue of bonus shares, all dividends or issues of bonus shares shall be declared and paid according to the number of issued shares in respect whereof the dividend is paid. All dividends or an issue of bonus shares shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for dividend as from a particular date such share shall rank for dividend accordingly.

112. The Directors may deduct from any dividend payable to any member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company.

113. Any General Meeting declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways, and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payment shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Directors.

114. Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of that one of the joint holders who is first named on the register of members or to such person and to such address as the holder or joint holder may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends bonuses or other moneys payable in respect of the shares held by them as joint holders.

115. No dividend shall bear interest against the Company.

116. Any dividend unclaimed for a period of more than six years from the date of declaration thereof may at any time thereafter be forfeited by resolution of the Directors.

117. Notwithstanding any other Article, when paying a dividend, the Board must follow any time limits specified in the Stock Exchange Rules.

CAPITALISATION OF RESERVES, ETC.

118. The Company in General Meeting, may at any time and from time to time pass a resolution

that any sum not required for the payment or provision of any fixed preferential dividend, and (a) being any part of the undivided profits in the hands of the Company or (b) for the time being standing to the credit of any reserve fund or reserve account of the Company, including premiums received on the issue of any shares or debentures of the Company, and/or accretion to capital accruing on sale or shown by a valuation or revaluation of any property or assets of the company, be capitalised, and that such sum be appropriated as capital to and amongst the ordinary shareholders in the proportions in which they would have been entitled thereto if the same had been distributed by way of dividend on the ordinary shares, and in such manner as the resolution may direct, and such resolution shall be effective; and the Directors shall in accordance with such resolution apply such sum in paying up in full any unissued shares or debentures of the Company on behalf of the

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ordinary shareholders aforesaid, and appropriate such shares or debentures and distribute the same credited as fully paid up to and amongst such shareholders in the proportions aforesaid in satisfaction of the shares and interests of such shareholders in the said capitalised sum or shall apply such sum or any part thereof on behalf of the shareholders aforesaid in paying up the whole or part of any uncalled balance which shall for the time being be unpaid in respect of any issued ordinary shares held by such shareholders or otherwise deal with such sum as directed by such resolution. Where any difficulty arises in respect of any such distribution, the Directors may settle the same as they think expedient, and in particular they may issue fractional certificates, fix the value for distribution of any fully paid-up shares or debentures, make cash payments to any shareholders on the footing of the value so fixed in order to adjust rights, and vest any such shares or debentures in trustees upon such trusts for the persons entitled to share in the appropriation and distribution as may seem just and expedient to the Directors. When deemed requisite a proper contract for the allotment and acceptance of any shares to be distributed as aforesaid shall be delivered to the Registrar of Companies for registration in accordance with Section 63(4) of the Act and the Directors may appoint any person to sign such contract on behalf of the persons entitled to share in the appropriation and distribution and such appointment shall be effective."

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THE SCHEME

159

IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE Originating Summons ) No. 139 of 2013 )

In the Matter of SKYWEST AIRLINES LTD. (Company Registration No. 199708548K)

And In the matter of Section 210 of the Companies Act (Chapter 50 of Singapore)

SCHEME OF ARRANGEMENT under Section 210

of the Companies Act (Chapter 50 of Singapore)

Between


And

SHAREHOLDERS (as defined herein)

And

VAH NEWCO NO.2 PTY LTD (ACN 160 881 354)

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PRELIMINARY (A) In this Scheme, except to the extent that the context requires otherwise:

(i) the following expressions shall bear the following meanings: "Acquisition" : Shall have the meaning ascribed to it in paragraph

(D) of the Scheme in this Appendix 6 to the Scheme Document

"ACRA" : The Accounting and Corporate Regulatory Authority of Singapore



"Books Closure Date" : A date and time (before the Effective Date) to be announced by the Company, at which time the share transfer books and the Register of Members will be closed to determine the entitlements of Shareholders in respect of the Scheme

"Business Day" : A day (other than a Saturday or Sunday or public holiday) on which commercial banks are open for business in Singapore

"CHESS"

: The clearing house electronic subregister system operated by the ASX Settlement

"Companies Act"

: Companies Act (Chapter 50 of Singapore)

"Company" : Skywest Airlines Ltd. (formerly known as Advent Air Ltd.)

"Court"

: The High Court of the Republic of Singapore

"Court Order" : The order of Court sanctioning the Scheme under Section 210 of the Companies Act

"CREST" : The computerised settlement system to facilitate the transfer of title of shares in uncertificated form operated by Euroclear UK and Ireland Limited

"DI Holders"

: Collectively, the CHESS depository interest holders and CREST depository interest holders

"Effective Date" : The date on which the Scheme, if approved, becomes effective in accordance with the terms of the Scheme

"Encumbrance" : Means any charge, mortgage, lien, hypothecation, hire purchase, judgment, encumbrance, easement, security, title retention, preferential right, trust arrangement or other security interest

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"Entitled Shareholders" : Shareholders, other than the Offeror and its related corporations, as at 5.00 p.m. (Singapore time) on the Books Closure Date

"Joint Announcement" : Shall have the meaning ascribed to it in paragraph 1.1 of the Letter from the Board to the Shareholders

"Joint Announcement Date"


"Latest Practicable Date" : 13 February 2013, being the latest practicable date prior to the printing of the Scheme Document

"Offeror" or "VAH Sub" : VAH Newco No.2 Pty Ltd (ACN 160 881 354), a wholly-owned subsidiary of VAH

"Prevailing Exchange Rate" : The prevailing rate of exchange between Pounds Sterling and Australian Dollars as at 12.00 p.m. (Singapore time) five (5) Business Days prior to the date of settlement of the Scheme Cash and Securities Consideration

"Register of Members" : The register of members of the Company

"Relevant Australian Custodian"

: Shall have the meaning ascribed to it in paragraph 3.2(b)(i) of the Scheme in this Appendix 6 to the Scheme Document

"Relevant Australian Custodian Details"

: Shall have the meaning ascribed to it in paragraph 3.2(b)(i) of the Scheme in this Appendix 6 to the Scheme Document

"Scheme" : This scheme of arrangement in its present form or

with or subject to any modification thereof or addition thereto in accordance with Clause 4.3 of this Scheme or condition(s) approved or imposed by the Court

"Scheme Cash and Securities Consideration"

: Shall have the meaning ascribed to it in paragraph 4.1(b) of the Letter from the Board to the Shareholders

"Scheme Cash Consideration"

: Shall have the meaning ascribed to it in paragraph 4.1(b)(i) of the Letter from the Board to the Shareholders

"Scheme Document" : The scheme document dated 26 February 2013 despatched by the Company to its Shareholders and containing, inter alia, information on the Acquisition, the Scheme, the Explanatory Statement complying with the requirements of Section 211 of the Companies Act, the notice of Scheme Meeting, the Proxy Form and the Voting Instruction Form

"Scheme Letter" : The proposal letter dated 26 February 2013 from the Offeror to the Shareholders in relation to the implementation of the Scheme at Appendix 2 to this Scheme Document

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"Scheme Shares" : All outstanding Skywest Shares not held directly or

indirectly by the Offeror or its related corporations

"Scheme Shareholders" : All the Shareholders other than the Offeror or its related corporations

"Share Registrars" : Collectively, the Australian Share Registrar and the UK Share Registrar


"Skywest Shares" : Issued and paid-up ordinary shares in the share capital of the Company


: The United Kingdom share registrar of the Company, Computershare Investor Services PLC, whose address is at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom

"VAH" or "Virgin Australia" : Virgin Australia Holdings Limited (ACN 100 686 226)

"VAH Consideration Shares" : Shall have the meaning ascribed to it in paragraph 4.1(b)(ii) of the Letter from the Board to the Shareholders

"Australian Dollars" or "A$" : Australian dollars, being the lawful currency of Australia

"Singapore Dollars" or "S$" : Singapore dollars, being the lawful currency of the Republic of Singapore

"%" or "per cent." : Percentage or per centum

(ii) words importing the singular shall, where applicable, include the plural and vice versa

and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations;

(iii) a reference to an enactment or statutory provision shall include a reference to any

subordinate legislation made under the relevant enactment or statutory provision and is a reference to that enactment, statutory provision or subordinate legislation as from time to time amended, consolidated, modified, re-enacted or replaced; and

(iv) any reference to a time of day or date shall be a reference to Singapore time and

date, as the case may be, unless otherwise stated. (B) The Company is a public company incorporated in Singapore and is a diversified airline,

aerospace and investment group. Its current principal subsidiary, Skywest Airlines, is a high capacity airline operator and holiday package supplier in the Australasian region, which holds an Australian High Capacity Air Operator’s Certificate enabling the operation of large commercial aircraft for charter and regular scheduled air passenger traffic.

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(C) As at the Latest Practicable Date, the Company has an issued and paid-up share capital of S$50,002,606, comprising an aggregate of 213,040,000 Skywest Shares.

(D) The primary purpose of this Scheme is the acquisition by the Offeror of all the Skywest Shares not held directly or indirectly by the Offeror by way of the Scheme and for the Offeror to own 100% of the Skywest Shares upon the Scheme becoming effective in accordance with its terms (the "Acquisition").

(E) The Offeror has agreed to appear by counsel at the hearing of the originating summons to sanction this Scheme, and to consent thereto, and to undertake to the Court to be bound thereby and to execute and do and procure to be executed and done all such documents, acts and things as may be necessary or desirable to be executed or done by it for the purpose of giving effect to this Scheme.

PART I CONDITIONS PRECEDENT

1. The Acquisition and the Scheme are conditional upon each condition precedent set out in

paragraph 7.1 of the Explanatory Statement in the Scheme Document being satisfied or, subject to the terms of the Scheme Letter, being waived.

PART II TRANSFER OF SKYWEST SHARES

2.1 Pursuant to the Scheme, the Scheme Shares are to be transferred by the Scheme

Shareholders to the Offeror (a) fully paid; (b) free from Encumbrances; and (c) together with all rights, benefits and entitlements as at the Joint Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared by the Company on or after the Joint Announcement Date.

2.2 In order to effect the transfer of the Scheme Shares provided in Clause 2.1 of this Scheme,

the Company shall authorise any person to execute or effect on behalf of all such Scheme Shareholders, an instrument or instruction of transfer of all the Scheme Shares held by such Scheme Shareholders, and every such instrument or instruction of transfer so executed shall be effective as if it had been executed by the relevant Scheme Shareholders.

PART III CONSIDERATION

3.1 In consideration of the transfer of the Scheme Shares provided for in Clause 2.1 of this

Scheme, the Scheme Shareholders will receive the Scheme Cash and Securities Consideration from the Offeror and/or VAH.

3.2 The Offeror and/or VAH shall, not later than 10 calendar days after the Effective Date, against

the transfer of the Scheme Shares provided for in Clause 2.1 of this Scheme, pay the Scheme Cash and Securities Consideration to Entitled Shareholders in the following manner:

(a) Scheme Cash Consideration

(i) by sending a cheque for the aggregate Scheme Cash Consideration drawn

on an Australian bank and in Australian Dollars payable to and made out in favour of each such Entitled Shareholder by ordinary post to his address in

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the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder, or in the case of joint Entitled Shareholders, to the first named Entitled Shareholder; or

(ii) by crediting the Pounds Sterling equivalent of the aggregate Scheme Cash

Consideration, determined based on the Prevailing Exchange Rate, through CREST; or

(iii) by crediting the Scheme Cash Consideration in Australian dollars, to the

relevant bank account(s) designated by Entitled Shareholders to receive cash distributions from the Company in Australian Dollars; and

(b) VAH Consideration Shares

(i) where any Entitled Shareholder has not successfully provided the Share

Registrars with details of any account(s) with any depository company or custodian in Australia (the "Relevant Australian Custodian") who has consented to receive and/or hold the VAH Consideration Shares on such Entitled Shareholders’ behalf (the "Relevant Australian Custodian Details"), by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of such Entitled Shareholder and the despatch of a statement of confirmation of such allotment and issue to such Entitled Shareholder, regardless of whether such Entitled Shareholder holds the Scheme Shares as custodian or nominee or otherwise, by ordinary post to his address in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder, or in the case of joint Entitled Shareholders, to the first named Entitled Shareholder, by ordinary post to his address as appearing in the Register of Members on the Books Closure Date, at the sole risk of such Entitled Shareholder; or

(ii) where any Entitled Shareholder has successfully provided the Share

Registrars with the Relevant Australian Custodian Details, by the allotment and issue of the relevant VAH Consideration Shares which such Entitled Shareholder is entitled to in uncertificated form in the name of the Relevant Australian Custodian, and the despatch of a statement of confirmation of such allotment and issue to such Relevant Australian Custodian by ordinary post, at the sole risk of such Entitled Shareholder.

The despatch of payment of the Scheme Cash Consideration and statement(s) of confirmation of the allotment and issue of the VAH Consideration Shares by VAH and/or VAH Sub to each Entitled Shareholder in accordance with the above shall discharge VAH and/or VAH Sub of any liability in respect of the delivery of those payments and the VAH Consideration Shares.

3.4 (a) On or after the day being six (6) calendar months after the posting of such cheques

relating to the Scheme Cash Consideration by the Offeror and/or VAH, the Offeror and/or VAH shall have the right to cancel or countermand payment of any such cheque which has not been cashed (or has been returned uncashed) and shall place the Scheme Cash Consideration monies in a bank account in the Company's name in respect of the Scheme Cash Consideration monies with a licensed bank in Singapore or Australia selected by the Company.

(b) The Company or its successor entity shall hold such monies until the expiration of six (6) years from the Effective Date and shall prior to such date make payments

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therefrom of sums payable pursuant to Clause 3.2 of the Scheme to persons who satisfy the Company or its successor entity that they are respectively entitled thereto and that the cheques referred to in Clause 3.2 of the Scheme for which they are payees have not been cashed. Any such determination shall be conclusive and binding upon all persons claiming an interest in the relevant monies, and any payments made by the Company hereunder shall not include any interest accrued on the sums to which the respective persons are entitled pursuant to Clause 3.1 of the Scheme.

(c) On the expiry of six (6) years from the Effective Date, each of the Company and the

Offeror shall be released from any further obligation to make any payments of the Scheme Cash Consideration under the Scheme and the Company or its successor entity shall transfer to the Offeror the balance (if any) of the sums then standing to the credit of the bank account referred to in Clause 3.4(a) of the Scheme including accrued interest, subject, if applicable, to the deduction of interest, tax or any withholding tax or any other deduction required by law and subject to the deduction of any expenses.

(d) Clause 3.4(c) of this Scheme shall take effect subject to any prohibition or condition

imposed by law.

3.5 From the Effective Date, all existing share certificates relating to the Scheme Shares held or owned by the Scheme Shareholders will be cancelled and cease to be evidence of title to the Scheme Shares represented thereby whether or not they are returned to the Company for cancellation.

PART IV EFFECTIVE DATE

4.1 Subject to the satisfaction of the conditions precedent as mentioned in Clause 1 of this

Scheme, this Scheme shall become effective upon a copy of the Court Order sanctioning this Scheme under Section 210 of the Companies Act being duly lodged with ACRA for registration.

4.2 Unless this Scheme shall have become effective as aforesaid on or before 30 April 2013 (or

such later date as the Court on the application of the Company or the Offeror allows), this Scheme shall lapse.

4.3 The Company and the Offeror may jointly consent, for and on behalf of all concerned, to any

modification of, or amendment to, this Scheme or to any condition which the Court may think fit to approve or impose.

4.4 Save as disclosed in paragraph 10.5 of Appendix 3 to the Scheme Document, in the event

that the Scheme does not become effective for any reason, the costs and expenses incurred by the Company in connection with the Scheme will be borne by the Company.

4.5 This Scheme shall be governed by, and construed in accordance with, the laws of Singapore,

and the Company, the Offeror and the Shareholders submit to the non-exclusive jurisdiction of the Courts of Singapore. Save as provided for in this Scheme, a person who is not a party to this Scheme has no rights under the Contracts (Rights of Third Parties) Act (Chapter 53B of Singapore), to enforce any term or provision of this Scheme.

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APPENDIX 7

NOTICE OF SCHEME MEETING

166


IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE

Originating Summons ) No. 139 of 2013 )

In the Matter of SKYWEST AIRLINES LTD. (Company Registration No. 199708548K)

And

In the matter of Section 210 of the Companies Act (Chapter 50 of Singapore)

SCHEME OF ARRANGEMENT

under Section 210 of the Companies Act (Chapter 50 of Singapore)

Between


And

SHAREHOLDERS (as defined herein)

And

VAH NEWCO NO.2 PTY LTD


NOTICE IS HEREBY GIVEN that by a Court Order dated 22 February 2013 made in the above matter, the High Court of the Republic of Singapore (the "Court") has directed a meeting (the "Scheme Meeting") to be convened of the Shareholders (as defined in the Schedule hereto) of Skywest Airlines Ltd. (the "Company"), and such Scheme Meeting shall be held at 510 Thomson Road, #12-04 SLF Building, Singapore 298135 on 13 March 2013 at 10.00 a.m., for the purpose of considering, and if thought fit, approving (with or without modification) the following resolution:

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"That the Scheme dated 26 February 2013 proposed to be made pursuant to Section 210 of the Companies Act (Chapter 50 of Singapore), between (a) the Company; (b) the Shareholders (as defined therein); and (c) VAH Newco No.2 Pty Ltd, a copy of which has been circulated with the Notice convening this Scheme Meeting, be and is hereby approved."

A copy of the said Scheme and the Explanatory Statement required to be furnished pursuant to Section 211 of the Companies Act (Chapter 50 of Singapore) are incorporated in the printed document of which this Notice forms part. Copies of the printed document of which this Notice forms part may be obtained on request at the registered office of the Company situated at 510 Thomson Road, #12-04 SLF Building, Singapore 298135, or at the office of the Company's share registrars, the UK Share Registrar (for CREST DI Holders) at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom or the Australian Share Registrar (for CHESS DI Holders) at 117 Victoria Street, West End QLD 4101, Australia during usual business hours on any day (other than a public holiday, Saturday or Sunday) prior to the day appointed for the Scheme Meeting. Certificate Shareholders may vote in person at the Scheme Meeting or may appoint another person, whether a member of the Company or not, as his proxy to attend and vote in his stead. A form of proxy applicable for the Scheme Meeting is enclosed with the printed document of which this Notice forms part. It is requested that forms appointing proxies be lodged at the the UK Share Registrar, Computershare Investor Services plc at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or using one of the alternative lodgement methods outlined on the Proxy Form), not less than forty-eight (48) hours before the time appointed for the Scheme Meeting. CREST DI Holders and CHESS DI Holders may vote at the Scheme Meeting by instructing their respective share registrar. A form of voting instruction applicable for the Scheme Meeting is enclosed with the printed document of which this Notice forms part. It is requested that voting instruction forms be lodged at the UK Share Registrar, Computershare Investor Services plc at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom (or using one of the alternative lodgement methods outlined on the Voting Instruction Form) (for CREST DI Holders) and at the Australian Share Registrar at GPO Box 242, Melbourne, Victoria 3001 (or one of the alternative lodgement methods outlined on the Voting Instruction Form) (for CHESS DI Holders) not later than seventy-two (72) hours before the time appointed for the Scheme Meeting.

In the case of joint Shareholders, any one of such persons may vote but if more than one of such persons shall be present at the Scheme Meeting, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote or votes of the other joint holder or holders, and for this purpose seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the Share. By the Court Order, the Court has appointed Mr Robert Jeffries Chatfield, or failing him, Mr John Leonard Jost, to act as the Chairman of the Scheme Meeting and has directed the Chairman to report the results thereof to the Court. Shareholders voting in favour of the Scheme should note that the Company will be a wholly-owned subsidiary of VAH Newco No.2 Pty Ltd and Virgin Australia Holdings Limited and that the Company’s admission to trading on AIM and ASX will be cancelled if the Scheme becomes effective. The Scheme will be subject to the subsequent approval of the Court.

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THE SCHEDULE Expression Meaning



"Certificate Shareholders"

: Holders of certificate shares

"CHESS DI Holders" : Holders of CHESS depository interests registered with the Australian Share Registrar as at the books closure date

"CREST DI Holders" : Holders of CREST depository interests registered with the UK Share Registrar as at the books closure date

"DI Holders"

: Collectively, the CHESS DI Holders and CREST DI Holders



: The United Kingdom share registrar of the Company, Computershare Investor Services plc, whose address is at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom

Dated this 26th day of February 2013

WongPartnership LLP One George Street

#20-01 Singapore 049145 Solicitors for Skywest Airlines Ltd.

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VIRGIN AUSTRALIA HOLDINGS LIMITED (ASX:VAH) · VIRGIN AUSTRALIA HOLDINGS LIMITED (ASX:VAH) ......

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