DECLOUT LIMITED (Incorporated in the Republic of Singapore on 21 August 2010) (Company Registration Number: W)

Transcription

1 DECLOUT LIMITED (Incorporated in the Republic of Singapore on 21 August 2010) (Company Registration Number: W) PROPOSED INCREASE IN SHAREHOLDING IN AN ASSOCIATED COMPANY TO A SUBSIDIARY 1. INTRODUCTION The board of directors (the "Board" or "Directors") of DeClout Limited (the "Company", and together with its subsidiaries, the "Group") wishes to announce that the Company is proposing to increase its shareholding in its associated company, vcargo Cloud Pte. Ltd. ("Target"), to a subsidiary, through a series of transactions, the details of which are set out below. 2. BACKGROUND The Company, through its subsidiary, Corous360 Pte. Ltd. ("Corous360"), acquired 30.0% of the issued and paid-up share capital of the Target pursuant to a sale and purchase agreement dated 10 July 2015 ("Initial Acquisition"). The Initial Acquisition was completed on 30 July Please refer to the announcement dated 10 July 2015 released by the Company for more details on the Initial Acquisition ("Initial Acquisition Announcement") and the announcement dated 30 July 2015 released by the Company for more details on the completion of the Initial Acquisition. 3. INFORMATION ON THE TARGET The Target was incorporated in Singapore on 20 February As at the date of this announcement, the Target has an issued and paid-up share capital of S$3,333,000 comprising 3,333,000 ordinary shares. The Target is primarily engaged in the business of providing e-trade services and cargo cloud solutions which enable a myriad of stakeholders in the trade, logistics and supply chain industry (such as shippers, freight forwarders and consignees) to converge and leverage on a unified and secured platform. Based on the management accounts of the Target for the financial year ended 31 December 2015, the net profit before tax of the Target was approximately S$28,000, and the net asset value and net tangible liabilities of the Target as at 31 December 2015 were approximately S$1,398,000 and S$88,000 respectively. Based on the latest management accounts of the Target for the four-month financial period ended 30 April 2016, the net loss before tax of the Target was approximately S$382,000, and the net asset value and net tangible liabilities of the Target as at 30 April 2015 were approximately S$1,029,000 and S$386,000 respectively. No independent valuation was conducted on the Target. The directors of the Target are Chan Allen, Tay Koong Phong and Tay Chia Ping. 1

2 4. SUMMARY OF THE PROPOSED TRANSACTIONS The Company intends to increase its shareholding in the Target by undertaking the proposed transactions in the following manner: the Proposed Internal Restructuring (as defined below), details of which are set out in paragraph 5 of this announcement; and the Proposed Acquisition (as defined below) and the Proposed Subscription (as defined below), details of which are set out in paragraph 6 of this announcement, (collectively, the Proposed Transactions ). 5. PROPOSED INTERNAL RESTRUCTURING 5.1 Internal Restructuring SPA The Company has, on 3 June 2016, entered into a sale and purchase agreement ("Internal Restructuring SPA") with Corous360, pursuant to which Corous360 will transfer its entire shareholding interest of 999,900 issued and paid-up ordinary shares in the Target (representing 30.0% of the issued and paid-up share capital of the Target as at the date of this announcement and prior to the Additional Subscription (as defined below)) ("Internal Restructuring Sale Shares") to the Company, on the terms and subject to the conditions of the Internal Restructuring SPA (the "Proposed Internal Restructuring"). 5.2 Consideration The consideration for the sale and purchase of the Internal Restructuring Sale Shares is S$6,480,000 and shall be satisfied in full as follows: S$4,500,000 by way of a partial-offset against the outstanding amount owing from Corous360 to the Company on the completion date; and the remaining S$1,980,000 by way of a partial-offset against the outstanding amount owing from Corous360 to the Company within 180 days of the completion date (or such later day as may be agreed between the parties to the Internal Restructuring SPA). The consideration for the sale and purchase of the Internal Restructuring Sale Shares was determined based on arm's length negotiations between the Company and Corous360, and arrived at on a willing buyer, willing seller basis, after taking into account, inter alia, the factors similar to the determination of the consideration for the Proposed Acquisition and the Proposed Subscription as described in paragraph 9 of this announcement. 5.3 Completion of the Proposed Internal Restructuring Upon completion of the Proposed Internal Restructuring, the Company will hold 30.0% of the issued and paid-up share capital of the Target directly and Corous360 will cease to be a shareholder of the Target. 2

3 6. PROPOSED ACQUISITION AND ADDITIONAL SUBSCRIPTION In conjunction with the Proposed Internal Restructuring as described above, the Company has, on 3 June 2016, entered into the Acquisition Agreement (as defined below) and the Subscription Agreement (as defined below) to increase its shareholding in the Target from 30.0% to 50.01% by way of acquisition of additional existing shares in the capital of the Target as well as subscription for new shares in the capital of the Target for an aggregate consideration of up to S$9,000,000, comprising (i) consideration for the Proposed Acquisition of up to S$6,700,000; and (ii) subscription proceeds for the Proposed Subscription of S$2,300,000. Please refer to paragraph 9 of this announcement for further information on the bases for the aggregate consideration for the Proposed Acquisition and the Proposed Subscription. 6.1 Proposed Acquisition The Company has, on 3 June 2016, entered into a sale and purchase agreement ("Acquisition Agreement") with Visiflex Pte. Ltd. ("Vendor"), Chan Allen and Tay Koong Phong (Chan Allen and Tay Koong Phong being collectively, the "Warrantors"), pursuant to which the Company will acquire 266,900 existing shares in the capital of the Target ("Sale Shares"), representing approximately 8.01% of the issued and paid-up share capital of the Target (as at the date of this announcement and prior to the Additional Subscription) from the Vendor, on the terms and subject to the conditions of the Acquisition Agreement ("Proposed Acquisition"). Pursuant to the Acquisition Agreement, each of the Vendor and the Warrantors jointly and severally warrants to and undertake with the Company on certain warranties in connection with the Proposed Acquisition. The shareholders of the Vendor are Chan Allen, Tan Wei Meng and Tay Koong Phong, who were the same vendors in the Initial Acquisition. Tan Wei Meng is also an executive officer of the Company and a director of Procurri Singapore Pte Ltd, Procurri Malaysia Sdn Bhd and Procurri Asia Pacific Pte. Ltd. as well as the legal representative of Procurri (Beijing) Co., Ltd., all of which are subsidiaries of the Company. The Vendor and its shareholders are not associates of, or related to, the Directors, controlling shareholders of the Company and their respective associates Consideration for the Proposed Acquisition The aggregate consideration for the Proposed Acquisition is up to S$6,700,000, subject to the satisfaction of the targets described in paragraph below by the Target. Subject to the receipt of the listing and quotation notice from the Singapore Exchange Securities Trading Limited ("SGX-ST"), the consideration for the Proposed Acquisition shall be fully satisfied by way of the allotment and issue of 20,000,000 new ordinary shares in the capital of the Company ( Consideration Shares ) at an issue price of S$0.20 per Consideration Share ("Issue Price") to the Vendor. The Issue Price represents a discount of approximately 7.7% of the volume weighted average price ( VWAP ) of S$ of the Company s shares ( Shares ) for trades done on the SGX-ST on the date of the Acquisition Agreement (being 3 June 2016) New KPI Targets pursuant to the Proposed Acquisition Pursuant to the Proposed Acquisition, the parties to the Initial Acquisition (being the shareholders of the Vendor and the Company) have agreed that the new Shares to be allotted and issued to the previous shareholders of the Target as at the date of the Initial Acquisition 3

4 (being the shareholders of the Vendor) pursuant to the satisfaction of the First Target, the Second Target and the Third Target (as defined and as set out in paragraph 3.2 of the Initial Acquisition Announcement) shall be waived, and new targets pursuant to the terms and conditions set out in the Acquisition Agreement (the "New KPI Targets") shall apply to the Proposed Acquisition. The New KPI Targets are similar to and based on the First Target, Second Target and Third Target for the Initial Acquisition. In the event the New KPI Targets are met, the Vendor shall be allotted and issued such number of additional new Shares ("Additional Consideration Shares") in the following manner: (c) subject to the Target securing 50 new freight forwarders or shippers or a combination of both for the Target's e-freight solution by 31 October 2017 ("First New Target"), 3,375,000 Additional Consideration Shares at the Issue Price per Additional Consideration Share shall be allotted and issued within 30 days of the Target notifying the Company of the satisfaction of the First New Target; subject to the Target securing another 50 new freight forwarders or shippers or a combination of both for the Target's e-freight solution by 31 October 2017 ("Second New Target"), 3,375,000 Additional Consideration Shares at the Issue Price per Additional Consideration Share shall be allotted and issued within 30 days of the Target notifying the Company of the satisfaction of the Second New Target; and subject to the Target establishing a platform for its trade and cargo cloud solution for two (2) new ports (excluding China and Mauritius) by 31 October 2017 ("Third New Target"), 6,750,000 Additional Consideration Shares at the Issue Price per Additional Consideration Share shall be allotted and issued within 30 days of the Target notifying the Company of the satisfaction of the Third New Target. For the avoidance of doubt, in the event that none of the New KPI Targets are achieved by the Target, the aggregate consideration payable by the Company for the Sale Shares shall be S$4,000,000 and only 20,000,000 Consideration Shares pursuant to the Proposed Acquisition shall be allotted and issued to the Vendor Consideration Shares and Additional Consideration Shares The Consideration Shares and the Additional Consideration Shares represent approximately 5.4% of the existing issued and paid-up share capital of the Company as at the date of this announcement, and 5.1% of the enlarged issued and paid-up share capital of the Company upon completion of the Proposed Transactions and assuming all the Additional Consideration Shares are allotted and issued and no further new Shares are issued by the Company. The Consideration Shares and the Additional Consideration Shares will be allotted and issued pursuant to the general share issue mandate ( 2016 Share Issue Mandate ) granted by shareholders of the Company at the annual general meeting of the Company held on 28 April 2016 ( 2016 AGM ). As at the date of the 2016 AGM, the total number of issued Shares (excluding treasury Shares) was 618,850,590. Accordingly, the Company could issue up to 618,850,590 new Shares on a pro-rata basis and up to 309,425,295 new Shares on a non pro-rata basis under the 2016 Share Issue Mandate. As at the date of this announcement, the Company has not issued any new Shares on a non pro-rata basis pursuant to the 2016 Share Issue Mandate. Accordingly, the proposed allotment and issuance of the Consideration Shares and the Additional Consideration Shares falls within the limit of the 2016 Share Issue Mandate. The Consideration Shares and the Additional Consideration Shares, when allotted and issued, 4

5 shall be credited as fully paid for, free and clear of all encumbrances and shall rank pari passu in all respects with the existing issued Shares, save for any dividends, rights, allotments or any distribution, the record date of which falls before the respective date of issue of the Consideration Shares and the Additional Consideration Shares. The Company will be making an application to the SGX-ST through its sponsor, Canaccord Genuity Singapore Pte. Ltd. ( Sponsor ), for the listing and quotation of the Consideration Shares and the Additional Consideration Shares on the Catalist board of the SGX-ST ( Catalist ) in due course. The Company will make the relevant announcement upon receipt of the listing and quotation notice from the SGX-ST Completion of the Proposed Acquisition Upon completion of the Proposed Acquisition, assuming none of the New KPI Targets are achieved by the Target, the Vendor will hold approximately 3.1% of the total issued and paidup share capital of the Company (being 638,850,590 Shares). Assuming all the New KPI Targets are achieved by the Target, the Vendor will hold 5.1% of the total issued and paid-up share capital of the Company (being 652,350,590 Shares) Other salient terms of the Acquisition Agreement Pursuant to the terms of the Acquisition Agreement, the Company will be entitled to appoint the majority of the board seats of the Target. In addition, the Vendor undertakes to vote in the same manner as the Company in relation to all major transactions of the Target. The Acquisition Agreement also includes pre-emption rights, drag-along rights and tag-along rights with respect to the Target, details as follows: (i) (ii) (iii) Pre-emption rights: No shareholder of the Target shall transfer shares held by it or otherwise sell, dispose of or deal with all or any part of its interest in such shares unless and until all pre-emption rights have been exhausted. The selling shareholder will have to give notice in writing to the Target and other shareholders that it desires to sell such shares, and such notice shall constitute an offer of such shares to the other shareholders. The other shareholders shall be entitled to accept the offer itself or nominate another person to accept such offer within 14 days. Tag-along rights: If a third party offers to acquire any of the issued and outstanding capital of the Target held by shareholders holding in aggregate 50% or more of the issued and paid up share capital of the Target, such shareholder shall give notice to the Target and the other shareholders setting out the number of shares being the subject of the offer, the name of the third party purchaser, the price payable per share and the completion date thereof. The other shareholders shall have the right to participate with the selling shareholder in such sale upon the same terms and conditions as have been offered to the selling shareholder. Drag-along rights: If shareholders holding at least 50% of the voting rights in the Target receives an outside offer from any third party to purchase all its shares or all the shares of the Target, such shareholders shall be entitled to require the other shareholders to join with them in accepting the outside offer on the same terms and conditions as have been offered to the selling shareholders. 5

6 6.2 Proposed Subscription The Warrantors, the Vendor, the Company and the Target have also entered into a subscription agreement on 3 June 2016 ("Subscription Agreement"), pursuant to which the Vendor and the Company (collectively, the "Subscribers") shall subscribe for additional new ordinary shares in the capital of the Target ("Additional Shares") ("Additional Subscription") as follows: 1,150,000 Additional Shares to be subscribed for by the Company at a subscription price of S$2.00 per Additional Share with the subscription proceeds of S$2,300,000 to be paid fully in cash ( Proposed Subscription ); and 350,000 Additional Shares to be subscribed for by the Vendor at a subscription price of S$2.00 per Additional Share with the subscription proceeds of S$700,000 to be offset against an existing amount owing to the Vendor by the Target. The Company intends to fund the Proposed Subscription by internal resources and/or bank borrowings. 7. CONDITIONS PRECEDENT TO THE PROPOSED TRANSACTIONS The respective salient conditions precedent in the Internal Restructuring SPA, the Acquisition Agreement and the Subscription Agreement are set out as follows: (c) (d) (e) all approvals, waivers or consents as may be required for the sale of the Internal Restructuring Sale Shares, to enable the Company to be registered as holder(s) of all of the Internal Restructuring Sale Shares, and to give effect to the transactions contemplated hereunder (including without limitation, under all applicable laws and such waivers as may be necessary of terms which would otherwise constitute a default under any instrument, contract, document or agreement to which the Target is a party or by which the Target or its assets are bound) being obtained and where any waiver, consent or approval is subject to conditions, such conditions being satisfactory to the Company in its sole and absolute discretion and if required to be fulfilled by a particular date, being so fulfilled, and such approvals, waivers or consents remaining valid and in full force and effect; the parties not having received notice of any claim, action, injunction, order, directive or notice restraining or prohibiting the entering into or the consummation of the transactions contemplated by the Internal Restructuring SPA or seeking damages or other recourse in respect thereof, or notice that any of the foregoing is pending or threatened; the relevant authorities not having enacted, amended or proposed any law or legislation (including any subsidiary legislation) which would prohibit, materially restrict or materially delay the implementation of the transactions contemplated in the Internal Restructuring SPA or the operations of the Target; all necessary approvals from the boards of directors of each of party in respect of the transactions contemplated by the respective agreements having been obtained; the Company having been satisfied at its sole discretion with the due diligence conducted on the Target's title to its assets and all aspects of the Target, including but not limited to financial, legal, tax and other commercial due diligence as would be required for transactions of such nature; 6

7 (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) the SGX-ST having granted in-principle approval pursuant to an additional listing application for the listing and quotation of the Consideration Shares and the Additional Consideration Shares on Catalist, and such approval not having been revoked or amended, and if the approval is granted subject to conditions, such conditions being satisfied or waived by the SGX-ST and save for any moratorium over the Consideration Shares and the Additional Consideration Shares that may be required by the SGX-ST, the SGX-ST not having made any ruling the effect of which is to restrict or impede the listing and quotation of the Consideration Shares and the Additional Consideration Shares; all approvals, consents and permits (if any) as may be necessary from any third party, governmental or regulatory body or competent authority having jurisdiction over the transactions contemplated under the Acquisition Agreement and the Subscription Agreement or to the entry into and completion of the Acquisition Agreement and the Subscription Agreement by the parties (including but not limited to the SGX-ST), being granted or obtained, and being in full force and effect and not having been withdrawn, suspended, amended or revoked, and if such consents or approvals are granted or obtained subject to any conditions, such conditions being reasonably acceptable to the parties; each of the Vendor and the Warrantors having performed, satisfied and complied with all covenants, agreements and conditions required by the Acquisition Agreement to be performed or complied with by each of the Vendor and/or Warrantors; the approval of the shareholders of the Target having been obtained for, amongst others, the issue and allotment of the Additional Shares to the Subscribers upon the terms and conditions set out herein in accordance with section 161 of the Companies Act (Section 50 of Singapore); the waiver by each existing shareholder of the Target of all rights of pre-emption and any other rights which he may have in respect of the issue and allotment of the Additional Shares to the Subscribers under the Subscription Agreement, whether pursuant to the Constitution of the Target or otherwise; the warranties under the Acquisition Agreement and the Subscription Agreement made jointly and severally by the Vendor (where applicable) and the Warrantors under the Acquisition Agreement and the Subscription Agreement being true and correct on and as of the completion date as though made on, applicable at, and updated through and including, that time; the execution and performance of the Acquisition Agreement and the Subscription Agreement by the respective parties not being prohibited or restricted, curtailed, hindered, impaired or otherwise affected to a material adverse extent, by any relevant statute, order, rule, directive or regulation promulgated by any legislative or regulatory body or authority after the date of the Acquisition Agreement and the Subscription Agreement; there being no breach of any of the terms and conditions of the Acquisition Agreement and the Subscription Agreement; there being no material adverse change to assets, business, financial condition, prospects or results of operations of the Target as a whole having occurred; the Target not being wound up, in receivership, under judicial management or administration, or subject to any scheme of arrangement; and 7

8 (p) there being no litigation, winding up (whether initiated by creditors or otherwise), judicial management, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened by or against or remaining outstanding against the Target which could have a material adverse effect on the Target. For the avoidance of doubt, the Proposed Internal Restructuring, the Proposed Acqusition and the Proposed Subscription are not inter-conditional upon each other. 8. COMPLETION OF THE PROPOSED TRANSACTIONS Upon completion of the Proposed Transactions and the subscription by the Vendor under the Additional Subscription, (i) the issued and paid-up share capital of the Target will increase from S$3,333,000 comprising 3,333,000 ordinary shares to S$6,333,000 comprising 4,833,000 ordinary shares; and (ii) the Company's effective shareholdings in the Target will increase to 50.01% and the Target will be a subsidiary of the Company. The following are the Target's shareholding structures before and after the Proposed Transactions and the subscription by the Vendor under the Additional Subscription: Before the Proposed Transactions and the subscription by the Vendor under the Additional Subscription After the Proposed Transactions and the subscription by the Vendor under the Additional Subscription Number of Shares % Shareholding Number of Shares % Shareholding The Vendor 2,099, % 2,182, % Corous , % - - Tjhie Tje Fie 233, % 233, % The Company - - 2,416, % Total 3,333, % 4,833, % Please refer to Annex A of this announcement for a diagrammatic representation of the Proposed Transactions. 9. BASES FOR THE AGGREGATE CONSIDERATION FOR THE PROPOSED ACQUISITION AND THE PROPOSED SUBSCRIPTION The aggregate consideration for the Proposed Acquisition and the Proposed Subscription of up to S$9,000,000 was determined based on arm's length negotiations between the Company and the Vendor, and arrived at on a willing buyer, willing seller basis, after taking into account, inter alia:- the growth potential of the Target including additional overseas business prospects and expansion since the completion of the Initial Acquisition; (c) (d) the high barrier of entry to the Target's business which requires accreditation from the government; the premium required to acquire majority control of the Target; and the advantages to the Group in acquiring majority control of the Target. 8

9 10. RATIONALE FOR THE PROPOSED TRANSACTIONS The Company is of the view that the Proposed Transactions are in the best interests of the Group based on the following rationale: (c) (d) the Proposed Transactions allow the Group to acquire a majority stake in the Target in line with the Group's plans to diversify and expand into the e-logistics business domain within the Group's Vertical Domain Cloud segment; the Proposed Transactions will allow the Group to gain a stronger foothold in the Business-To-Business ("B2B") and Business-To-Government ("B2G") e-commerce segments via the platform which the Target has established for its cargo cloud solutions; the Proposed Transactions will allow the Group to tap on the Target's valuable assets and resources, in particular its technology or solutions developed or to be developed and also allow the Target to leverage, as a subsidiary, on resources of the Group which is a global builder of next-generation cloud, data centres, e-commerce and marketplace companies; and the Proposed Transactions will allow the Group to cross sell the different information technology and telecommunication products of other subsidiaries in the Group. 11. RELATIVE FIGURES UNDER RULE 1006 OF THE CATALIST RULES As the shareholders of the Vendor for the Proposed Acquisition are the same vendors for the Initial Acquisition, the Company has aggregated the Initial Acquisition, the Proposed Acquisition and the Proposed Subscription and treat them as if they were one transaction for the computation of the relative figures under Rule 1006 of the Listing Manual Section B: Rules of Catalist of the SGX-ST ( Catalist Rules ). Based on the latest announced unaudited consolidated financial statements of the Group for the three-month financial period ended 31 March 2016 ("1Q2016") and the management accounts of the Target for 1Q2016, the relative figures for the Initial Acquisition, the Proposed Acquisition and the Proposed Subscription computed on the bases set out in Rule 1006 of the Catalist Rules are set out in the table below. Rule 1006 Net asset value of the assets to be disposed of, compared with the Group s net asset value (S$ '000) Not applicable Rule 1006 Net profits (1) attributable to the Target s shares acquired by the Group (245) Group s net profits (1) (4,104) Relative figure 6.0% Rule 1006(c) Aggregate consideration paid for the Initial Acquisition, the Proposed Acquisition and the Proposed Subscription 13,500 Market capitalisation (2) of the Company as at 2 June ,147 9

10 Relative figure 9.9% Rule 1006(d) Number of Consideration Shares (including those issued for the Initial Acquisition) and Additional Consideration Shares, based on the Issue Price Number of Shares in the Company in issue as at the date of this announcement 52,250, ,850,590 Relative figure 8.4% Rule 1006(e) Aggregate volume or amount of proven and probable reserves to be disposed of, compared with the aggregate of the Group s proven and probable reserves Not applicable Notes: (1) Under Rule 1002(3) of the Catalist Rules, "net profits" means profit or loss before income tax, minority interests and extraordinary items. (2) Under Rule 1002(5) of the Listing Manual, the market capitalisation of the Company is determined by multiplying the number of shares in issue by the weighted average price of such shares transacted on the market day preceding the date of the execution of the sale and purchase agreement, being 3 June Having regard to the above, as the relative figures computed on the bases set out in Rule 1006 of the Catalist Rules exceed 5% but do not exceed 75%, the Proposed Acquisition and the Proposed Subscription (aggregated with the Initial Acquisition) constitute a "discloseable transaction" under Rule 1010 of the Catalist Rules. However, pursuant to Practice Note 10 paragraph 11 of the Catalist Rules, tests based on assets and profits may not give a meaningful indication of the significance of a transaction to the issuer, in stance where, for example, the issuer is loss making. In such instance, the Sponsor should consult the SGX-ST. As both the Group and the Target are loss making for 1Q2016, the relative figure computed based on Rule 1006 may not be meaningful and accordingly, the Sponsor will, on behalf of the Company, consult the SGX-ST on the necessity to obtain the Company s shareholders approval for the Proposed Acquisition and the Proposed Subscription. The Company will update its shareholders on the outcome of the consultation with the SGX-ST in due course. 12. FINANCIAL EFFECTS OF THE PROPOSED TRANSACTIONS The financial effects of the Proposed Transactions are for illustration purposes only and do not reflect the actual full financial position of the Group after completion of the Proposed Transactions. The financial effects of the Proposed Transactions have been prepared based on the audited consolidated financial statements of the Group for the financial year ended 31 December 2015 ("FY2015") and on the following bases and assumptions: the Target is accounted for as a subsidiary of the Group for the presentation of the consolidated financial statements of the Group; the completion of the subscription by the Vendor under the Additional Subscription; 10

11 (c) (d) the excess between the aggregate consideration for the Proposed Acquisition and the Proposed Subscription and the identifiable net assets are allocated to goodwill; and the expenses incurred in relation to the Proposed Transactions are negligible Net tangible assets ( NTA ) per Share Assuming that the Proposed Transactions had been completed on 31 December 2015, the effect of the Proposed Transactions on the Group s NTA per Share as at 31 December 2015 would have been: Before the Proposed Transactions After the Proposed Transactions (assuming all the New KPI Targets are not met and the Additional Consideration Shares are not issued) After the Proposed Transactions (assuming all the New KPI Targets are met and all the Additional Consideration Shares are issued) NTA (1) of the Group (S$ 000) 29,050 23,094 23,094 Number of Shares 538,617, ,617, ,117,530 NTA per Share (cents) Note: (1) NTA means total assets less the sum of total liabilities, non-controlling interest and intangible assets (net of noncontrolling interest) Earnings per Share ( EPS ) Assuming that the Proposed Transactions had been completed on 1 January 2015, the effect of the Proposed Transactions on the EPS for FY2015 would have been: Before the Proposed Transactions After the Proposed Transactions (assuming all the New KPI Targets are not met and the Additional Consideration Shares are not issued) After the Proposed Transactions (assuming all the New KPI Targets are met and all the Additional Consideration Shares are issued) Net profits attributable to shareholders of the Company for FY2015 (S$ 000) 4,978 4,768 4,768 11

12 Weighted average number of Shares 460,706, ,706, ,206,294 EPS (cents) INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the Directors and their respective associates has any interest, direct or indirect, in the Proposed Transactions (other than through their respective shareholding interests in the Company, if any). The Directors have not received any notification of interest in the Proposed Transactions from any controlling shareholders of the Company and their respective associates, and are not aware of any controlling shareholders of the Company and their respective associates who has any interest, direct or indirect, in the Proposed Transactions (other than through their respective shareholding interests in the Company). 14. DIRECTORS' SERVICE CONTRACTS No person is proposed to be appointed as a director of the Company in connection with the Proposed Transactions. Accordingly, no service contract is proposed to be entered into between the Company and any such person in connection with the Proposed Transactions. 15. DOCUMENTS AVAILABLE FOR INSPECTION The Internal Restructuring SPA, the Acquisition Agreement and the Subscription Agreement are available for inspection during normal business hours at the registered office of the Company at 29 Tai Seng Avenue, #05-01 Natural Cool Lifestyle Hub, Singapore for a period of three (3) months from the date of this announcement. 16. DIRECTORS' RESPONSIBILITY STATEMENT The Directors of the Company (including those who may have delegated detailed supervision of this announcement) collectively and individually accept full responsibility for the accuracy of the information given in this announcement and confirm, after making all reasonable enquiries, that to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the Proposed Transactions, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this announcement misleading. Where information in this announcement has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this announcement in its proper form and context. 17. FURTHER ANNOUNCEMENTS Further announcements on the Proposed Transactions will be made in due course as and when appropriate. 12

13 BY ORDER OF THE BOARD DECLOUT LIMITED Wong Kok Khun Chairman and Group Chief Executive Officer 4 June 2016 This announcement has been prepared by the Company and its contents have been reviewed by the Company's sponsor ("Sponsor"), Canaccord Genuity Singapore Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited ("SGX-ST"). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made, or reports contained in this announcement. The contact person for the Sponsor is Ms Goh Mei Xian, Associate Director, Corporate Finance, Canaccord Genuity Singapore Pte. Ltd. at 77 Robinson Road #21-02 Singapore , telephone (65)

14 Annex A: Diagrammatic representation of the Proposed Transactions Current Structure The Company 75.3% The Vendor Corous360 Tjhie Tje Fie 63.0% 30.0% 7.0% The Target After the Proposed Internal Restructuring The Vendor The Company Tjhie Tje Fie 63.0% 30.0% 7.0% The Target After the Proposed Acquisition The Vendor The Company Tjhie Tje Fie 54.99% 38.01% 7.0% The Target After the Additional Subscription The Vendor The Company Tjhie Tje Fie 45.17% 50.01% 4.83% The Target 14