ADDENDUM DATED 3 AUGUST 2020

THIS ADDENDUM IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT CAREFULLY.

If you are in any doubt about the contents of this Addendum or the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.

Capitalised terms appearing on the cover of this Addendum have the same meanings as defined herein.

This Addendum is circulated to Shareholders of Boustead Singapore Limited ("Company") together with the Company's Notice of AGM dated 3 August 2020. The purpose of this Addendum is to provide information to Shareholders relating to, and to seek Shareholders' approval for, the proposed renewal of the Share Buy-Back Mandate to be tabled at the AGM of the Company to be held by electronic means on 25 August 2020 at 2.30 p.m.

If you have sold or transferred all your shares in the capital of Boustead Singapore Limited, you should immediately forward this Addendum to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Addendum.

BOUSTEAD SINGAPORE LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration Number: 197501036K)

ADDENDUM TO THE NOTICE OF ANNUAL GENERAL MEETING

IN RELATION TO

THE PROPOSED RENEWAL OF THE SHARE BUY-BACK MANDATE

CONTENTS

HEADINGS

PAGE

DEFINITIONS ....................................................................................................................................

3

LETTER TO SHAREHOLDERS

1.

INTRODUCTION...........................................................................................................................

7

2.

THE PROPOSED RENEWAL OF THE SHARE BUY-BACK MANDATE.......................................

7

3.

DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS.........................................

21

4.

DIRECTORS' RECOMMENDATION...........................................................................................

22

5.

ABSTENTION FROM VOTING...................................................................................................

22

6.

ACTION TO BE TAKEN BY SHAREHOLDERS..........................................................................

22

7.

DIRECTORS' RESPONSIBILITY STATEMENT..........................................................................

23

8.

DOCUMENTS AVAILABLE FOR INSPECTION..........................................................................

23

2

DEFINITIONS

Except where the context otherwise requires, the following definitions apply throughout the Addendum:

"ACRA"

: Accounting and Corporate Regulatory Authority.

"Addendum"

: This Addendum dated 3 August 2020.

"AGM"

: Annual general meeting of the Company.

"Approval Date"

: Has

the meaning ascribed to it in paragraph 2.2(a) of this

Addendum.

"Associate"

:

(a)

In relation to any Director, chief executive officer,

Substantial Shareholder or Controlling Shareholder

(being an individual) means:

(i)

his immediate family;

(ii)

the trustees of any trust of which he or his

immediate family is a beneficiary or, in the case

of a discretionary trust, is a discretionary object;

and

(iii)

any company in which he and his immediate

family together (directly or indirectly) have an

interest of thirty per cent (30%) or more.

(b)

In relation to a Substantial Shareholder or Controlling

Shareholder (being a company) means any company

which is its subsidiary or holding company or is a

subsidiary of such holding company or one in the equity

of which it and/or such other company or companies

taken together (directly or indirectly) have an interest of

thirty per cent (30%) or more.

"Average Closing Price"

: Has the meaning ascribed to it in paragraph 2.2(d)(iii) of this

Addendum.

"Board"

: The board of Directors of the Company as at the date of this

Addendum.

"CDP"

: The Central Depository (Pte) Limited.

"Companies Act"

:

Companies

Act, Chapter 50 of Singapore, as amended or

modified from time to time.

"Company"

:

Boustead Singapore Limited.

"Constitution"

: The memorandum and articles of association of the Company

currently in force.

"control"

: The capacity to dominate decision-making, directly or indirectly,

in relation to the financial and operating policies of a company.

3

DEFINITIONS

"Controlling Shareholder"

: A person who (a) holds directly or indirectly fifteen per cent

(15%) or more of the total number of all issued Shares (excluding

treasury shares and subsidiary holdings) in the Company (unless

the SGX-ST determines that such a person is not a controlling

shareholder of the Company); or (b) in fact exercises control over

the Company, as defined under the Listing Manual.

"Directors"

: The directors of the Company as at the date of this Addendum.

"EPS"

:

Earnings per Share.

"FY"

: Financial year ended 31 March.

"Group"

: The Company and its subsidiaries.

"immediate family"

: In relation to a person, means the person's spouse, child,

adopted child, step-child, sibling and parent.

"Latest Practicable Date"

: 9 July 2020, being the latest practicable date prior to the printing

of this Addendum.

"Listing Manual"

: The listing manual of the SGX-ST, as amended, modified or

supplemented from time to time.

"Listing Rules"

: The listing rules of the SGX-ST as set out in the Listing Manual.

"Market Day"

: A day on which the SGX-ST is open for trading in securities.

"Maximum Price"

: Has the meaning ascribed to it in paragraph 2.2(d)(ii) of this

Addendum.

"month"

:

A calendar month.

"NTA"

:

Net tangible assets.

"Off-Market Share Purchase" :

Has the meaning ascribed to it in paragraph 2.2(c)(i)(2) of this

Addendum.

"On-Market Share Purchase" :

Has the meaning ascribed to it in paragraph 2.2(c)(i)(1) of this

Addendum.

"Register of Members"

Register of members of the Company.

"Relevant Period"

: The period commencing from the date on which the last annual

general meeting was held and expiring on the date on which

the next annual general meeting is held or is required by law to

be held, or the date on which the purchases of Shares under

a Share Buy-Back Mandate are carried out to the full extent

mandated, whichever is earlier, unless prior to that, it is varied

or revoked by resolution of the shareholders of the Company in

general meeting.

"Rule 14"

: Has the meaning ascribed to it in paragraph 2.10(a) of this

Addendum.

4

DEFINITIONS

"SFA"

: The Securities and Futures Act (Chapter 289) of Singapore, as

amended or modified from time to time.

"SGX-ST"

: Singapore Exchange Securities Trading Limited.

"Share Buy-Back"

: The purchase or acquisition of Shares by the Company pursuant

to the Share Buy-Back Mandate.

"Share Buy-Back Mandate"

: A general mandate given by Shareholders to authorise the

Directors to purchase or otherwise acquire, on behalf of the

Company, Shares in accordance with the terms set out in this

Addendum, the provisions of the Companies Act (including the

rules and regulations promulgated thereunder), and the Listing

Rules.

"Shareholders"

: Persons who are registered as holders of Shares in the Register

of Members maintained by the Company, except where the

registered holder is CDP, the term "Shareholders" shall mean the

Depositors whose securities accounts maintained with the CDP

are credited with Shares.

"Shares"

: Ordinary shares in the share capital of the Company.

"SIC"

Securities Industry Council.

"subsidiary"

A corporation which is deemed to be a subsidiary of another

corporation within the meaning of Section 5 of the Companies

Act.

"subsidiary holdings"

: Shares held by subsidiaries of the Company in accordance with

the Companies Act.

"Substantial Shareholder"

: A person (including a corporation) who has an interest in not less

than five (5) per cent of the issued voting shares of the Company.

"Take-over Code"

: The Singapore Code on Take-overs and Mergers, as amended

or modified from time to time.

"S$" and "cents"

: Singapore dollars and cents, respectively.

"%" or "per cent."

: Percentage or per centum.

The terms "Depositor", "Depository Register" and "Depository Agent" shall have the meanings ascribed to them respectively in Section 81SF of the SFA.

The term "treasury shares" shall have the meaning ascribed to it in Section 4 of the Companies Act.

The term "subsidiary" shall have the meaning ascribed to it in Section 5 of the Companies Act.

Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa.

References to persons shall include corporations.

5

DEFINITIONS

The headings in this Addendum are inserted for convenience only and shall be ignored in construing this Addendum.

Any reference in this Addendum to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any term defined under the SFA, the Companies Act or the Listing Manual, or any statutory modification thereof, and used in this Addendum shall, where applicable, have the meaning ascribed to it under the SFA, the Companies Act or the Listing Manual, or such modification thereof, as the case may be, unless otherwise provided.

Any reference to a time of day in this Addendum shall be a reference to Singapore time unless otherwise stated.

Any discrepancies in figures included in this Addendum between the amounts listed and the totals thereof are due to rounding. Accordingly, figures shown as totals in this Addendum may not be an arithmetic aggregation of the figures that precede them.

6

LETTER TO SHAREHOLDERS

BOUSTEAD SINGAPORE LIMITED

(Incorporated in Singapore)

(Company Registration Number: 197501036K)

Directors:

Registered Office:

Mr Wong Fong Fui (Chairman & Group Chief Executive Officer)

82 Ubi Avenue 4, #08-01

Mr Wong Yu Loon (Executive Director & Deputy Group Chief Executive Officer)

Edward Boustead Centre

Dr Tan Khee Giap (Independent Non-Executive Director)

Singapore 408832

Mr Chong Ngien Cheong (Independent Non-Executive Director)

Mr Godfrey Ernest Scotchbrook (Independent Non-Executive Director)

Mr Liak Teng Lit (Independent Non-Executive Director)

3 August 2020

To: The Shareholders of Boustead Singapore Limited

Dear Sir/Madam,

THE PROPOSED RENEWAL OF THE SHARE BUY-BACK MANDATE

1. INTRODUCTION

  1. This Addendum is circulated to the Shareholders of the Company together with the Company's annual report for the financial year ended 31 March 2020 ("Annual Report"). The notice of AGM dated 3 August 2020 convening the AGM to be held on 25 August 2020 ("Notice of AGM") and proxy form in respect of the AGM to be held on 25 August 2020 are enclosed with the Annual Report.
  2. The proposed Ordinary Resolution 9 in the Notice of AGM seeks to obtain Shareholders' approval for the proposed renewal of the Share Buy-Back Mandate ("Proposed Resolution").
  3. The purpose of this Addendum is to provide Shareholders with information relating to the Proposed Resolution to be tabled at the forthcoming AGM to be held on 25 August 2020. This Addendum has been prepared solely for the purpose set out herein and may not be relied upon by any persons (other than the Shareholders to whom this Addendum is despatched by the Company) or for any other purpose.
  4. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Addendum.

2. THE PROPOSED RENEWAL OF THE SHARE BUY-BACK MANDATE

2.1 Rationale for the Proposed Renewal of the Share Buy-Back Mandate

It is a requirement under the Companies Act that a company which wishes to purchase or otherwise acquire its own shares should obtain the approval of its shareholders to do so at a general meeting of its shareholders. It is also a requirement under the Listing Manual that an issuer which wishes to purchase its own shares has to obtain approval from its shareholders

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LETTER TO SHAREHOLDERS

to do so at a general meeting of its shareholders. In this regard, the approval for the renewal of the Share Buy-Back Mandate was previously granted by the Shareholders at an EGM held on 26 July 2019. It is proposed that the approval of Shareholders be sought for the renewal of Share Buy-Back Mandate at the forthcoming AGM to be held on 25 August 2020.

The Share Buy-Back Mandate will provide the Directors with the ability to enhance Shareholders' value by providing them with the flexibility to purchase or acquire Shares as and when they are of the view that this would be in the best interests of the Company. In addition, the Share Buy-Back Mandate will allow the Directors to improve the return on equity and will, depending on the market conditions, lead to an enhancement of the EPS and the NTA per Share of the Company. The Share Buy-Back Mandate will also allow the Directors to exercise greater control over the Company's share capital structure and dividend payout.

The Share Buy-Back Mandate will give the Company a relatively expedient and cost-effective mechanism to facilitate the return of surplus cash reserves over and above its ordinary capital requirements. The Directors are also of the view that the Share Buy-Back Mandate will provide them with the means to mitigate short-term volatility in the price of the Shares, offset the effects of short-term speculation and bolster the confidence of investors and Shareholders.

The Share Buy-Back Mandate will enable the Directors to utilise the Shares which are purchased or acquired thereunder and held as treasury shares to be sold for cash, transferred as consideration for the acquisition of shares in or assets of another company or assets of a person, or issued to employees as a form of compensation, which may be less dilutive than if new Shares were issued for this purpose.

The Company will only purchase or acquire Shares as and when the circumstances permit and provided that it will be beneficial to the Company and Shareholders. Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Buy-Back Mandate may not be carried out to the full limit as authorised. No purchase or acquisition of Shares will be made in circumstances which would have or may have a material adverse effect on the liquidity and capital adequacy position of the Company as a whole and/or affect the listing status of the Company on the SGX-ST.

It should be noted that there is no assurance that the proposed Share Buy-Back Mandate will achieve the desired effect, nor is there assurance that such effect (if achieved) can be sustained in the longer term.

2.2 Authority and Limitations

The authority and limitations placed on purchases or acquisitions of Shares by the Company under the proposed Share Buy-Back Mandate, if approved, are set out below:

  1. Maximum Number of Shares
    Only Shares which are issued and fully paid-up may be purchased or acquired by the Company.
    The total number of Shares that may be purchased or acquired by the Company pursuant to the Share Buy-Back Mandate is limited to that number of Shares representing not more than ten per cent (10%) of the total number of issued Shares, ascertained as at the date of the resolution passed to approve the Share Buy-Back Mandate ("Approval Date"), unless the Company has effected a reduction of the share capital of the Company in accordance with the applicable provisions of the Companies Act at any time during the Relevant Period, in which event the total number of Shares shall be taken to be the total number of issued Shares as altered after such capital reduction.

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LETTER TO SHAREHOLDERS

For purposes of calculating the percentage of issued Shares above, treasury shares and subsidiary holdings will be disregarded. As at the Latest Practicable Date, the Company had 12,923,000 treasury shares and no subsidiary holdings.

For illustrative purposes only, based on the existing issued and paid-up share capital of the Company as at the Latest Practicable Date comprising 487,144,229 Shares (excluding treasury shares and subsidiary holdings), and assuming that no further Shares are issued on or prior to the Approval Date, not more than 48,714,422 Shares (representing ten per cent (10%) of the Shares as at that date excluding treasury shares and subsidiary holdings) may be purchased or acquired by the Company pursuant to the Share Buy-Back Mandate.

  1. Duration of Authority
    The purchase or acquisition of Shares may be made, at any time and from time to time, on and from the Approval Date up to the earliest of:
    1. the conclusion of the next annual general meeting;
    2. the date by which such annual general meeting is required by law to be held;
    3. the date on which the Share Buy-Backs are carried out to the full extent mandated pursuant to the Share Buy-Back Mandate; or
    4. the date on which the authority conferred by the Share Buy-Back Mandate is revoked or varied by the Shareholders in a general meeting.

The Share Buy-Back Mandate may be renewed at each annual general meeting or such other general meeting of the Company. When seeking the approval of Shareholders for such renewal, the Company is required to disclose details pertaining to purchases or acquisitions of Shares pursuant to the Share Buy-Back Mandate made during the previous 12 months, including the total number of Shares purchased or acquired, the purchase price per Share or the highest and lowest prices paid for such purchases or acquisitions of Shares, where relevant, and the total consideration paid for such purchases or acquisitions.

  1. Manner of Share Buy-Backs
    1. Pursuant to Rule 882 of the Listing Manual, Share Buy-Backs may be made by way of:
      1. on-marketshare purchases ("On-MarketShare Purchase"), transacted on the SGX-ST through the SGX-ST trading system, through one or more duly licensed stockbrokers appointed by the Company for the purpose; and/or
      2. off-marketshare purchases ("Off-MarketShare Purchase") effected in accordance with an equal access scheme pursuant to Section 76C of the Companies Act. The Directors may impose such terms and conditions which are not inconsistent with the Share Buy-Back
        Mandate, the Companies Act and the Listing Rules as they consider fit in the interests of the Company in connection with or in relation to an equal access scheme.
    2. An Off-Market Share Purchase scheme must, however, satisfy all the following conditions:

9

LETTER TO SHAREHOLDERS

      1. offers for the purchase or acquisition of Shares shall be made to every person who holds Shares, to purchase or acquire the same percentage of their Shares;
      2. all of the abovementioned persons shall be given a reasonable opportunity to accept the offers made; and
      3. the terms of all the offers shall be the same, except that there shall be disregarded:
        1. differences in consideration attributable to the fact that offers may relate to Shares with different accrued dividend entitlements;
        2. differences in consideration attributable to the fact that offers relate to Shares with different amounts remaining unpaid (if applicable); and
        3. differences in the offers introduced solely to ensure that each person is left with a whole number of Shares.
    1. In addition, the Listing Manual provides that, in making an Off-Market Share Purchase in accordance with an equal access scheme, the Company must issue an offer document to all Shareholders which must contain at least the following information:
      1. the terms and conditions of the offer;
      2. the period and procedures for acceptance;
      3. the reasons for the proposed share buy-back;
      4. the consequences, if any, of the share buy-back by the Company that will arise under the Take-over Code or other applicable take-over rules;
      5. whether the share buy-back, if made, would have any effect on the listing of the Shares on the SGX-ST;
      6. details of any share buy-back made by the Company in the previous 12 months (whether On-Market Share Purchases or Off-Market Share Purchases), giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for the purchases, where relevant, and the total consideration paid for the purchases; and
      7. whether the shares purchased by the Company will be cancelled or kept as treasury shares.
  1. Maximum Purchase Price
    1. The purchase price (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) to be paid for the Shares will be determined by the Directors.

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LETTER TO SHAREHOLDERS

  1. However, the purchase price to be paid for the Shares as determined by the Directors must not exceed:
    1. in the case of an On-Market Share Purchase, 105% of the Average
      Closing Price (as defined below); and
    2. in the case of an Off-Market Share Purchase, 120% of the Average
      Closing Price (as defined below),

(the "Maximum Price") in either case, excluding related expenses of the On- Market Share Purchase or Off-Market Share Purchase (as the case may be).

  1. For the above purposes:
    "Average Closing Price" means the average of the closing market prices of a
    Share over the last five (5) Market Days, on which transactions in the Shares were recorded, immediately preceding the date of making the On-Market Share Purchase or, as the case may be, the day of the making of an offer pursuant to the Off-Market Share Purchase, and deemed to be adjusted for any corporate action that occurs after the relevant five (5) Market Day period.
    "day of the making of an offer" means the day on which the Company announces its intention to make an offer for the purchase of Shares from Shareholders, stating the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Share Purchase.

2.3 Status of Purchased or Acquired Shares

  1. Cancellation
    Shares that are purchased or acquired by the Company shall, unless held as treasury shares to the extent permitted under the Companies Act (as set out below), be deemed cancelled immediately upon purchase or acquisition, and all rights and privileges attached to those Shares will expire on cancellation. The total number of Shares will be diminished by the number of Shares purchased or acquired by the Company and which are not held as treasury shares.
    All Shares purchased or acquired by the Company (other than treasury shares held by the Company to the extent permitted under the Companies Act) will be automatically de-listed by the SGX-ST, and (where applicable) certificates in respect thereof will be cancelled and destroyed by the Company as soon as reasonably practicable following settlement of any such purchase or acquisition.
    The Company may decide to cancel Shares which have been purchased or acquired by the Company or hold such Shares as treasury shares, depending on whether it is in the interests of the Company to do so. It is presently intended by the Company that Shares which are purchased or acquired by the Company will be held as treasury shares, up to the maximum number of treasury shares permitted by law to be held by the Company.

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LETTER TO SHAREHOLDERS

  1. Treasury Shares
    Under the Companies Act, Shares purchased or acquired by the Company may be held or dealt with as treasury shares. Some of the provisions on treasury shares under the Companies Act are summarised below:
    1. Maximum Holdings
      The number of Shares held as treasury shares cannot at any time exceed ten per cent (10%) of the total number of issued Shares. In the event that the Company holds more than ten per cent (10%) of the total number of its Shares as treasury shares, the Company shall cancel or dispose of the excess treasury shares in the manner set out under paragraph 2.3(b)(iii) below within six (6) months beginning with the day on which that contravention occurs, or such further period as the Registrar of Companies may allow.
    2. Voting and Other Rights
      The Company cannot exercise any right in respect of treasury shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Companies Act, the Company shall be treated as having no right to vote and the treasury shares shall be treated as having no voting rights.
      In addition, no dividend may be paid, and no other distribution (whether in cash or otherwise) of the Company's assets may be made, to the Company in respect of treasury shares. However, the allotment of shares as fully paid bonus shares in respect of treasury shares is allowed.
      A subdivision or consolidation of any treasury share into treasury shares of a larger or smaller amount (as the case may be) is also allowed so long as the total value of the treasury shares after the subdivision or consolidation is the same as before.
    3. Disposal and Cancellation
      Where Shares are held as treasury shares, the Company may at any time (but subject always to the Take-over Code):
      1. sell the treasury shares (or any of them) for cash;
      2. transfer the treasury shares (or any of them) for the purposes of or pursuant to any share scheme, whether for its employees, directors or other persons;
      3. transfer the treasury shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person;
      4. cancel the treasury shares (or any of them); or
      5. sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for Finance.

Under Rule 704(28) of the Listing Manual, an immediate announcement must be made of any sale, transfer, cancellation and/or use of treasury shares (in each case, the "usage"). Such announcement must include details such as

12

LETTER TO SHAREHOLDERS

the date of the usage, the purpose of the usage, the number of treasury shares comprised in the usage, the number of treasury shares before and after the usage, the percentage of the number of treasury shares comprised in the usage against the total number of issued shares (of the same class as the treasury shares) which are listed on the SGX-ST before and after the usage and the value of the treasury shares comprised in the usage.

The Board shall lodge with ACRA within 30 days of the cancellation or disposal of treasury shares the notice of the cancellation or disposal of treasury shares in the prescribed form with such particulars as may be required in the form, together with payment of the prescribed fee.

2.4 Source of Funds

The Company may only apply funds for Share Buy-Backs as provided in the Constitution and in accordance with the applicable laws in Singapore. Only funds legally available for purchasing Shares in accordance with the Companies Act shall be utilised. Under the Companies Act, any purchase or acquisition of the Shares may be made out of the Company's distributable profits which are available for payment as dividends or using capital if the Company is solvent.

Pursuant to Section 76F(4) of the Companies Act, a company is solvent if at the date of the payment the following conditions are satisfied:

  1. there is no ground on which the company could be found to be unable to pay its debts;
  2. if:-
    1. it is intended to commence winding up of the company within the period of 12 months immediately after the date of the payment, the company will be able to pay its debts in full within the period of 12 months after the date of commencement of the winding up; or
    2. it is not intended so to commence winding up, the company will be able to pay its debts as they fall due during the period of 12 months immediately after the date of the payment; and
  3. the value of its assets is not less than the value of its liabilities (including contingent liabilities) and will not, after any purchase or acquisition of Shares, become less than the value of its liabilities (including contingent liabilities).

In determining that the Company is solvent, the Directors must have regard to the most recently audited financial statements, other relevant circumstances, and may rely on valuations or estimates of liabilities that are reasonable in the circumstances. In determining the value of contingent liabilities, the Directors may take into account the likelihood of the contingency occurring, as well as any claims the Company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

The Company intends to use internal resources and/or external borrowings to finance the Company's purchase or acquisition of Shares pursuant to the Share Buy-Back Mandate. The Board will principally consider the availability of internal resources, and also the availability of external financing. However, in considering the option of external financing, the Board will particularly consider the prevailing gearing level of the Company. The Board will only make purchases or acquisitions of Shares pursuant to the Share Buy-Back Mandate in circumstances which they believe will not result in any material adverse effect on the financial condition of the Company. The purchase or acquisition of Shares will only be effected after considering relevant factors such as the working capital requirement, availability of financial resources, the expansion and investment plans of the Company and the prevailing market conditions.

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LETTER TO SHAREHOLDERS

The Directors do not propose to exercise the Share Buy-Back Mandate in a manner and to such extent that the liquidity, gearing levels and capital adequacy position of the Group would be materially adversely affected.

2.5 Financial Effects

  1. General
    Under the Companies Act, purchases or acquisitions of Shares by the Company may be made out of the Company's capital or profits so long as the Company is solvent.
    Where the total amount of the purchase price (excluding brokerage, commission, stamp duties, applicable goods and services tax, clearance fees and other related expenses) ("Purchase Price") paid by the Company for the purchase or acquisition of Shares is made out of profits, such Purchase Price will correspondingly reduce the amount available for the distribution of cash dividends by the Company. Where the Purchase Price paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount available for the distribution of cash dividends by the Company will not be reduced.
    Where the Company chooses not to hold the purchased Shares in treasury, such Shares shall be cancelled. The Company shall:
    1. reduce the amount of its share capital where the Shares were purchased or acquired out of the capital of the Company;
    2. reduce the amount of its profits where the Shares were purchased or acquired out of the profits of the Company; or
    3. reduce the amount of its share capital and profits proportionately where the Shares were purchased or acquired out of both the capital and the profits of the Company,

by the total amount of the Purchase Price paid by the Company for the Shares cancelled. Where the purchased Shares are held in treasury, the total number of issued Shares will remain unchanged.

Shareholders should note that the financial effects illustrated below are for illustration purposes only. In particular, it is important to note that the financial analysis set out below are based on the audited consolidated financial statements for FY2020 and are not necessarily representative of future financial performance of the Group. Although the proposed Share Buy-Back Mandate would authorise the Company to buy-back up to ten per cent (10%) of the Company's issued Shares, the Company may not necessarily buy back, or be able to buy back, ten per cent (10%) of the issued Shares in full.

  1. Financial Effects of the Share Buy-Back Mandate
    It is not possible for the Company to realistically calculate or quantify the impact of purchases or acquisitions that may be made pursuant to the Share Buy-Back Mandate on the NTA and EPS as the resultant effect would depend on factors such as the aggregate number of Shares purchased or acquired, the purchase prices paid at the relevant time, the amount (if any) borrowed by the Company to fund the purchases or acquisitions, whether the purchase or acquisition is made out of profits or capital, and whether the Shares purchased or acquired are held in treasury or cancelled.
    The Directors do not propose to exercise the Share Buy-Back Mandate to such an extent that it would have a material adverse effect on the working capital requirements

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LETTER TO SHAREHOLDERS

of the Group. The purchase or acquisition of Shares will only be effected after considering relevant factors such as the working capital requirement, availability of financial resources, the expansion and investment plans of the Group, and the prevailing market conditions.

Purely for illustrative purposes, on the basis of 487,144,229 Shares in issue (excluding 12,923,000 Shares held as treasury shares and subsidiary holdings) as at the Latest Practicable Date and assuming no further Shares are issued and no reduction of the share capital of the Company is effected on or prior to the Approval Date , the purchase by the Company of ten per cent (10%) of its issued Shares will result in the purchase of 48,714,422 Shares.

In the case of an On-Market Share Purchase by the Company and assuming that the Company purchases or acquires 48,714,422 Shares at the Maximum Price of S$0.686 for each Share (being the price equivalent to 105% of the Average Closing Price of the Shares for the five (5) consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition is approximately S$33.4 million.

In the case of an Off-Market Share Purchase by the Company and assuming that the Company purchases or acquires 48,714,422 Shares at the Maximum Price of S$0.784 for each Share (being the price equivalent to 120% of the Average Closing Price of the Shares for the five (5) consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition is approximately S$38.2 million.

For illustrative purposes only and on the basis of the assumptions set out above as well as the following:

  1. the Share Buy-Back Mandate had been effective on 31 March 2020; and
  2. such Share purchases are funded solely by internal resources and/or borrowings,

the financial effects on the audited consolidated financial results of the Group for FY2020, are set out below:

Group

Market Purchase

Off-Market Share Purchase

Before

After

Before

After

As at 31 March 2020

S$'000

S$'000

S$'000

S$'000

Share capital and reserves

342,632

309,031

342,632

304,230

Shares held in treasury

(9,309)

(42,710)

(9,309)

(47,482)

NTA(1)

340,738

307,137

340,738

302,336

Current assets

623,322

589,721

623,322

584,920

Current liabilities

390,138

390,138

390,138

390,138

Working capital

233,184

199,583

233,184

194,782

Total borrowings(2)

118,993

118,993

118,993

118,993

Profit attributable to owners

of the Company

30,872

30,672

30,872

30,643

Number of Shares, excluding

treasury shares ('000)

487,174

438,460

487,174

438,460

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LETTER TO SHAREHOLDERS

Group

Market Purchase

Off-Market Share Purchase

Before

After

Before

After

As at 31 March 2020

S$'000

S$'000

S$'000

S$'000

Financial Ratios

NTA per Share (cents)

69.94

70.05

69.94

68.95

Gearing (times)(3)

0.35

0.39

0.35

0.39

Current ratio (times)(4)

1.60

1.51

1.60

1.50

Basic EPS (cents)(5)

6.30

6.95

6.30

6.94

Notes:

  1. NTA equals share capital and reserves less goodwill and other intangible assets.
  2. Total borrowings refer to borrowings from financial institutions.
  3. Gearing ratio equals total borrowings divided by share capital and reserves.
  4. Current ratio means current assets divided by current liabilities.
  5. Basic EPS equals profit attributable to owners of the Company divided by the weighted average number of ordinary shares in issue.

The financial effects set out above are for illustrative purposes only. It should also be noted that the purchase or acquisition of Shares by the Company pursuant to the Share Buy-backMandate would only be made in circumstances where it is considered to be in the best interests of the Company. Although the Share Buy-BackMandate would authorise the Company to purchase up to ten per cent (10%) of the issued Shares, the Company may not necessarily purchase or be able to purchase the entire ten per cent (10%) of the issued Shares. In addition, the Company may cancel all or part of the Shares purchased or acquired, or hold all or part of the Shares purchased or acquired in treasury.

The Directors emphasise that they do not propose to exercise the Share Buy-Back Mandate to the extent that it will have a material adverse impact on the financial position of the Group. The Directors will be prudent in exercising the Share Buy-Back Mandate only to such extent which the Directors believe will achieve benefits to the Group and its Shareholders from time to time, giving consideration to the prevailing market conditions, the financial position of the Group and other relevant factors.

  1. Tax Implications
    Shareholders who are in doubt as to their respective tax positions or tax implications of a Share Buy-Back by the Company, or who may be subject to tax whether in or outside Singapore, should consult their own professional advisers.

2.6 Reporting Requirements

The Companies Act and the Listing Rules require the Company to make reports in relation to the Share Buy-Back Mandate as follows:

  1. within 30 days of the passing of a Shareholders' resolution to approve purchases or acquisitions of Shares by the Company, the Company must lodge a copy of such resolution with ACRA;
  2. the Company must notify ACRA, within 30 days of a purchase or acquisition of Shares on the SGX-ST or otherwise. Such notification in the form as may be prescribed by
    ACRA shall include details of the purchase or acquisition including the date of the

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LETTER TO SHAREHOLDERS

purchase or acquisition, the total number of Shares purchased or acquired by the Company, the number of Shares cancelled, the number of Shares held as treasury shares, the Company's issued share capital before the purchase or acquisition of Shares, the Company's issued share capital after the purchase or acquisition of Shares, the amount of consideration paid by the Company for the purchase or acquisition of Shares, whether the Shares were purchased or acquired out of profits or the capital of the Company and such other particulars as may be required; and

    1. purchases of Shares must be reported to the SGX-ST in the forms prescribed by the Listing Rules and announced to the public in the case of On-Market Share Purchases, not later than 9.00 a.m. on the Market Day following the day of purchase or acquisition of any of its Shares and in the case of Off-Market Share Purchases, not later than 9.00 a.m. on the second Market Day after the close of acceptances of the offer made by the Company.
  1. Suspension of Buy-Back of Shares
    The Listing Rules do not expressly prohibit any purchase or acquisition of shares by a listed company during any particular time(s). However, as the Company would be considered an "insider" in relation to any proposed purchase or acquisition of its Shares, the Company will not undertake any purchase or acquisition of Shares pursuant to the Share Buy-Back Mandate after a price sensitive development has occurred or has been the subject of a consideration and/or a decision of the Board until such time as the price sensitive information has been publicly announced. In particular, the Company will not purchase any Shares during the period commencing two (2) weeks before the announcement of the Company's financial statements for each of the first three (3) quarters of its financial year and one (1) month before the announcement of the Company's full year financial statements (if the Company announces its quarterly financial statements, whether required by the SGX-ST or otherwise), or one (1) month before the announcement of the Company's half year and full year financial statements (if the Company does not announce its quarterly financial statements), and ending on the date of announcement of the relevant results.
  2. Listing Status
    The Listing Rules require a listed company to ensure that at least ten per cent (10%) of the total number of issued shares excluding treasury shares (excluding preference shares and convertible equity securities) in a class that is listed is at all times held by the public. The "public", as defined in the Listing Rules, are persons other than the Directors, chief executive officer,
    Substantial Shareholders or Controlling Shareholders of the Company and its subsidiaries, as well as the Associates of such persons.
    As at the Latest Practicable Date, there is a public float of 229,817,564 Shares representing approximately 47.18% of the issued Shares (excluding treasury shares). Assuming the Company exercises the Share Buy-Back Mandate in full and purchases the maximum of ten per cent (10%) of its Shares through On-Market Share Purchases from the public, the public float would be reduced to approximately 41.31% of the issued Shares (excluding treasury shares). Accordingly, the Company is of the view that there is a sufficient number of the Shares in issue held by public Shareholders which would permit the Company to undertake Share Buy-Backs up to the full ten per cent (10%) limit pursuant to the Share Buy-Back Mandate without affecting the listing status of the Shares on the SGX-ST, and that the number of Shares remaining in the hands of the public will not fall to such a level as to cause market illiquidity or adversely affect the orderly trading of the Shares.
    In undertaking any Share Buy-Back, the Directors will use their best efforts to ensure that a sufficient number of Shares remain in public hands so that the Share Buy-Backs will not:

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LETTER TO SHAREHOLDERS

    1. adversely affect the listing status of the Shares on the SGX-ST;
    2. cause market illiquidity; or
    3. adversely affect the orderly trading of Shares.
  1. Share Buy-Backs during the last 12 months
    In the last 12 months preceding the Latest Practicable Date, the Company had purchased 7,624,700 Shares by way of Market Purchases pursuant to the Share Buy-Back Mandate granted at the EGM held on 26 July 2019. The highest and lowest price paid was S$0.78 and S$0.56 per Share respectively. The total consideration paid for all the purchases was approximately S$5,294,000.
  2. Take-overCode Implications
    1. Obligation to Make a Take-over Offer
      Pursuant to Appendix 2 of the Take-over Code, an increase of a shareholder's proportionate interest in the voting rights of the Company as a result of any purchase or acquisition of Shares by the Company will be treated as an acquisition for the purposes of Rule 14 of the Take-over Code ("Rule 14").
      Under Rule 14, a person will incur an obligation to make a mandatory take-over offer for the Company if, inter alia, he and persons acting in concert with him increase their voting rights in the Company to thirty per cent (30%) or more or, if they, together holding between thirty per cent (30%) and fifty per cent (50%) of the Company's voting rights, increase their voting rights in the Company by more than one per cent (1%) in any period of six (6) months.
      If, as a result of any purchase or acquisition by the Company of Shares, the proportionate interest in the voting capital of the Company of a Shareholder and persons acting in concert with him increases, such increase will be treated as an acquisition for the purposes of Rule 14. Consequently, a Shareholder or a group of Shareholders acting in concert with a Director could obtain or consolidate effective control of the Company and become obliged to make an offer under Rule 14.
    2. Persons acting in concert
      Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal), co- operate, through the acquisition by any of them of shares in a company to obtain or consolidate effective control of that company.
      Unless the contrary is established, the Take-over Code presumes, inter alia, the following persons to be acting in concert, namely:
      1. a company with any of its directors (together with their close relatives, related trusts and companies controlled by any of the directors, their close relatives and related trusts); and
      2. a company, its parent company, subsidiaries and fellow subsidiaries, and their associated companies and companies of which such companies are associated companies, all with each other. For this purpose, ownership or

18

LETTER TO SHAREHOLDERS

control of at least twenty per cent (20%) but not more than fifty per cent (50%) of the voting rights of a company will be regarded as the test of associated company status.

The circumstances under which Shareholders, including Directors and persons acting in concert with them, respectively, will incur an obligation to make a take-over offer after a purchase or acquisition of Shares by the Company are set out in Rule 14 and Appendix 2 of the Take-over Code.

2.11 Effect of Rule 14 and Appendix 2 of the Take-over Code

The effect of Rule 14 and Appendix 2 of the Take-over Code is that:

  1. unless exempted, Directors and persons acting in concert with them will incur an obligation to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Directors and persons acting in concert with them would increase to thirty per cent (30%) or more, or if the voting rights of such Directors and persons acting in concert with them fall between thirty per cent (30%) and fifty per cent (50%) of the Company's voting rights, the voting rights of such Directors and persons acting in concert with them would increase by one per cent (1%) in any period of six (6) months; and
  2. a Shareholder not acting in concert with the Directors will not be required to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Shareholder would increase to thirty per cent
    (30%) or more, or if such Shareholder holds between thirty per cent (30%) and fifty per cent (50%) of the Company's voting rights, the voting rights of such Shareholder would increase by more than one per cent (1%) in any period of six (6) months. Such Shareholder need not abstain from voting in respect of the resolution authorising the Share Buy-Back Mandate.

The statements in this Addendum do not purport to be a comprehensive or exhaustive description of all implications that may arise under the Take-over Code. Shareholders are advised to consult their professional advisers and/or the Securities Industry Council and/or the relevant authorities at the earliest opportunity as to whether an obligation to make a take-over offer would arise by reason of any purchase or acquisition of Shares by the Company pursuant to the Share Buy-back Mandate.

2.12 Application of the Take-over Code

The interests of the Directors and Substantial Shareholders of the Company in the Shares are disclosed in paragraph 3 of this Addendum.

As at the Latest Practicable Date, Mr Wong Fong Fui, a Director and Controlling Shareholder (the "Controlling Shareholder"), holds an aggregate shareholding in the Company of 205,798,032 Shares, which is equivalent to approximately 42.25% of the Company's issued Shares.

In the event that the Company undertakes any purchase or acquisition of Shares of up to the maximum limit of ten per cent (10%) of its issued Shares (excluding treasury shares) as permitted by the Share Buy-Back Mandate, the aggregate shareholdings and voting rights of the Controlling Shareholder in the Company will increase from approximately 42.25% to approximately 46.94%. Accordingly, if such increase in shareholding were to occur over any 6-month period, the shareholding of the Controlling Shareholder would have increased by

19

LETTER TO SHAREHOLDERS

more than one per cent (1%) and he would be required to make a general offer for the Shares held by the other Shareholders pursuant to Rule 14.1(b) of the Take-over Code.

The Controlling Shareholder and persons acting in concert with him will be exempted from the requirement to make an offer under Rule 14 of the Take-over Code, subject to the following conditions set out in Appendix 2 of the Take-over Code:

  1. the addendum to Shareholders on the resolution to approve the Share Buy-Back Mandate contains advice to the effect that by voting for the resolution, Shareholders are waiving their rights to a general offer at the required price from the Controlling Shareholder and persons acting in concert with him, who, as a result of the Company buying back its Shares, would increase their voting rights by more than one per cent (1%) in any 6-month period; and the names of the Controlling Shareholder and persons acting in concert with him, and their voting rights at the time of the resolution and after the proposed buy-back under the Share Buy-Back Mandate are disclosed in the same addendum;
  2. the resolution to authorise the Share Buy-Back Mandate is approved by a majority of the Shareholders present and voting at the AGM on a poll who could not become obliged to make an offer as a result of the Share Buy-Back under the Share Buy-Back Mandate;
  3. the Controlling Shareholder and persons acting in concert with him abstain from voting for and/or recommending Shareholders to vote in favour of the resolution to approve the Share Buy-Back Mandate;
  4. within seven (7) days after the passing of the resolution to approve the Share Buy- Back Mandate, the Controlling Shareholder is to submit to the SIC a duly signed Form 2 as set out in the Appendix to the SIC's Practice Statement on Share Buy-Back Guidance Note; and
  5. the Controlling Shareholder and persons acting in concert with him, together holding between thirty per cent (30%) and fifty per cent (50%) of the Company's voting rights, not to have acquired and not to acquire any Shares between the date on which they know that the announcement of the Share Buy-Back Mandate is imminent and the earlier of:
    1. the date on which the authority of the Share Buy-Back Mandate expires; and
    2. the date on which the Company announces it has bought back such number of Shares as authorised by Shareholders at the AGM in respect of the proposed Share Buy-Back Mandate or it has decided to cease buying back its Shares, as the case may be,

if such acquisitions, taken together with the Share Buy-Backs, would cause their aggregate voting rights to increase by more than one per cent (1%) in the preceding six (6) months.

It follows that where the aggregate voting rights held by the Controlling Shareholder and persons acting in concert with him increase by more than one per cent (1%) solely as a result of the Share Buy-Back and none of them has acquired any Shares during the relevant period defined above, then the Controlling Shareholder and persons acting in concert with him would be eligible for the exemption from the requirement to make a general offer under Rule 14, or where such exemption has been granted, would continue to enjoy the exemption.

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LETTER TO SHAREHOLDERS

Shareholders should note that by voting in favour of the Share Buy-Back Mandate, they are waiving their rights to a take-over offer at the required price from the Controlling Shareholder and persons acting in concert with him.

Save as disclosed above, the Directors are not aware of any facts or factors which suggest or imply that any particular person(s) and/or Shareholder(s) are, or may be regarded as, parties acting in concert such that their respective interests in voting shares in the capital of the Company should or ought to be consolidated, and consequences under the Take-over Code would ensue as a result of a Share Buy-Back pursuant to the Share Buy-Back Mandate.

Shareholders who are in doubt as to their obligations, if any, to make a mandatory take- over offer under the Take-over Code as a result of a Share Buy-Back should consult the SIC and/or their professional advisers at the earliest opportunity.

The Controlling Shareholder and persons acting in concert with him will abstain from voting at the EGM in respect of the proposed Share Buy-Back Mandate and will not accept nominations as proxy or otherwise for voting at the AGM in respect thereof, unless Shareholders appointing them as proxies give specific instructions in the relevant proxy forms on the manner in which they wish their votes be cast.

3. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS

Based on the Company's register of interest of Directors and register of Substantial Shareholders respectively, as at the Latest Practicable Date, the interests of Directors and Substantial Shareholders of the Company in the Shares before and after the purchase or acquisition of Shares pursuant to the Share Buy-Back Mandate, assuming (a) the Company purchases or acquires the maximum amount of ten per cent (10%) of the total number of issued Shares, and (b) there is no change in the number of Shares held by the Directors and the Substantial Shareholders or in which they are deemed interested, are as follows:

Before Share Buy-Back

Before

After

(No. of Shares)

Share

Share

Buy-Back

Buy-Back

Direct

Deemed

Total

(%)(1)

(%)(2)

Interest

Interest

Interest

Directors

Mr Wong Fong Fui

-

205,798,032 (3)

205,798,032

42.25

46.94

Mr Wong Yu Loon

-

-

-

-

-

Dr Tan Khee Giap

-

-

-

-

-

Mr Chong Ngien Cheong

-

-

-

-

-

Mr Godfrey Ernest Scotchbrook

-

1,052,783

1,052,783

0.22

0.24

Mr Liak Teng Lit

-

-

-

-

-

Substantial Shareholders (other than Directors)

FMR LLC

-

47,867,536

Fidelity Management &

Research Company LLC

-

43,506,301

  1. (4)
  1. (4)

47,867,536 9.83 10.92

43,506,301

8.93

9.92

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LETTER TO SHAREHOLDERS

Notes:-

    1. Based on 487,144,229 Shares in issue (excluding treasury shares and subsidiary holdings) as of the Latest Practicable Date.
    2. Based on 438,429,807 Shares in issue (excluding treasury shares and subsidiary holdings), assuming that the Company purchases the maximum number 48,714,422 Shares under the Share Buy-Back Mandate.
    3. The deemed interests of these Directors/Substantial Shareholders are held through nominees.
    4. FMR LLC is deemed to be interested in the Shares held indirectly by its subsidiary, Fidelity Management & Research Company LLC.
  1. DIRECTORS' RECOMMENDATION
    Save for Mr Wong Fong Fui who is required to abstain from recommending Shareholders to vote in favour of the proposed renewal of the Share Buy-Back Mandate, the Directors are of the opinion that the proposed renewal of the Share Buy-Back Mandate is in the best interests of the Company. Accordingly, save for Mr Wong Fong Fui, the Directors recommend that Shareholders vote in favour of the Ordinary Resolution relating to the proposed Share Buy- Back Mandate as set out in the Notice of AGM.
  2. ABSTENTION FROM VOTING
    Mr Wong Fong Fui has informed the Company that there are no parties acting in concert (as defined under the Take-over Code) with him for the purpose of the Ordinary Resolution relating to the proposed Share Buy-Back Mandate.
    Mr Wong Fong Fui will abstain, and will procure that his Associates abstain, from voting, whether by representative or proxy, on the Ordinary Resolution relating to the proposed Share Buy-Back Mandate.
    Mr Wong Fong Fui will not accept, and will procure that his Associates do not accept, nominations as proxy or otherwise vote at the EGM in respect of the proposed renewal of the Share Buy-Back Mandate unless Shareholders appointing them as proxies give specific instructions in the relevant proxy forms on the manner in which they wish their votes be cast for the Ordinary Resolution.
  3. ACTION TO BE TAKEN BY SHAREHOLDERS
    Due to the current COVID-19 restriction orders in Singapore, Shareholders will not be able to attend the forthcoming AGM to be held on 25 August 2020 in person.
    Instead, alternative arrangements have been put in place to allow Shareholders to participate at the forthcoming AGM by (a) watching the AGM proceedings through a "live" webcast comprising both video (audiovisual) and audio feeds; (b) submitting questions in advance of the AGM, and (c) voting by proxy at the AGM.
    Shareholders should refer to the Company's announcement dated 3 August 2020 entitled "Annual General Meeting" which has been uploaded together with this Addendum on SGXNET for further information, including the steps to be taken by Shareholders to participate at the forthcoming AGM to be held on 25 August 2020. Such announcement may also be accessed on the Company's website at https://www.boustead.sg/.

22

LETTER TO SHAREHOLDERS

  1. DIRECTORS' RESPONSIBILITY STATEMENT
    The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Addendum and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Addendum constitutes full and true disclosure of all material facts about the proposed renewal of the Share Buy-Back Mandate, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Addendum misleading. Where information in this Addendum 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 Addendum in its proper form and context.
  2. DOCUMENTS AVAILABLE FOR INSPECTION
    Subject to the prevailing laws and guidelines relating to safe distancing measures, copies of the following documents are available for inspection at the registered office of the Company at
    82 Ubi Avenue 4, #08-01 Edward Boustead Centre, Singapore 408832 during normal business hours on any weekday (public holidays excepted) up to and including the date of the AGM to be held on 25 August 2020:
    1. the Constitution of the Company; and
    2. the Annual Report.

Yours faithfully

BOUSTEAD SINGAPORE LIMITED

Mr Wong Fong Fui

Chairman & Group Chief Executive Officer

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Boustead Singapore Ltd. published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 09:46:03 UTC