Raffles Interior Limited — Capital/Financing Update 2021

Jul 8, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Raffles Interior Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1376)

DISCLOSEABLE TRANSACTION TERMINATION OF DISCRETIONARY INVESTMENT MANAGEMENT AGREEMENTS AND DISPOSAL OF INVESTMENT

References are made to the announcements of the Company dated 23 March 2021, 24 March 2021 and 31 March 2021 (the ‘‘Announcements’’), in relation to, among other things, the Discretionary Investment Management Agreements.

Unless otherwise defined, capitalised terms used herein shall bear the same meanings as defined in the Announcements.

TERMINATION OF DISCRETIONARY INVESTMENT MANAGEMENT AGREEMENTS AND DISPOSAL OF INVESTMENT

On 1 March 2021, Ngai Chin served a notice of request (the ‘‘Termination Request’’) to Leo Asset Management to close its discretionary investment account maintained with Leo Asset Management (the ‘‘Account’’), and to early terminate the Discretionary Investment Management Agreements. On 8 March 2021, Leo Asset Management served an official termination notice on Ngai Chin terminating the Discretionary Investment Management Agreements (the ‘‘Termination’’). After several rounds of discussion and confirmation of various terms, the Termination was finally made effective on 30 June 2021. Leo Asset Management has liquidated the Portfolio in full by disposing of all the investments held under the Account (the ‘‘Disposal’’) and transferred a total amount of HK$9,571,405.31 to Ngai Chin on 8 July 2021.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) exceeds 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

– 1 –

The Board announces that on 1 March 2021, Ngai Chin served the Termination Request on Leo Asset Management to close the Account, and to early terminate the Discretionary Investment Management Agreements. On 8 March 2021, Leo Asset Management served an official termination notice on Ngai Chin regarding the Termination. After several rounds of discussion and confirmation of various terms, the Termination was finally made effective on 30 June 2021. Leo Asset Management has liquidated the Portfolio in full by disposing of all the investments held under the Account (the ‘‘Disposal’’) and transferred a total amount of HK$9,571,405.31 to Ngai Chin on 8 July 2021.

TERMINATION OF THE DISCRETIONARY INVESTMENT MANAGEMENT AGREEMENTS

Details of the Termination and Disposal are summarized as follows:

Key Parties: (a) Ngai Chin (b) Leo Asset Management To the Directors’ knowledge, information and belief, having made all reasonable enquiry, as at the date of this announcement, Leo Asset Management and its ultimate beneficial owner are Independent Third Parties. Date of Termination Request: 1 March 2021 Date of termination notice from 8 March 2021 Leo Asset Management: Date of closure of Account: 30 June 2021 Date of receiving the proceeds 8 July 2021 returned from Leo Asset Management: Net proceeds from the Disposal: HK$9,571,405.31, including the principal in the Account of HK$8,300,000, profits obtained from the Disposal of HK$389,305.31, plus remaining cash and prepaid management fee in the custody of Leo Asset Management of HK$932,100, less valuation report fee of HK$50,000. The principal and profits obtained from the Disposal represented the value of the Portfolio based on the market price at the time of Disposal.

– 2 –

FINANCIAL IMPACT OF THE DISPOSAL

Based on the unaudited management accounts of the Group, the carrying amount of the investment as at 31 December 2020 was approximately S$1,412,000 (equivalent to HK$8,300,000) (the ‘‘Carrying Amount’’). As a result of the Disposal, the Group is expected to recognise a profit of approximately S$66,000 (equivalent to HK$389,305.31 (before taxation and without deduction of expenses related to the Disposal), which is calculated based on the difference between the Carrying Amount and proceeds from the Disposal. The actual amount of gain or loss as a result of the Disposal to be recorded by the Group will be subject to the review and final audit by the auditor of the Company.

GENERAL INFORMATION OF THE PARTIES

Information of the Company

The Company is principally engaged in provision of interior fitting-out services, which include project management and construction management of interior fitting-out projects, construction and installation of interior fitting-out works, customizing, manufacturing and supply of carpentry/joiner and integral fixtures, and maintenance of projects that the Company has undertaken on an ad-hoc basis.

Information of Ngai Chin

Ngai Chin is a private company limited by shares that was incorporated in Singapore on 30 June 1986 and is a wholly-owned subsidiary of the Company.

Information of Leo Asset Management

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, Leo Asset Management is a private company limited by shares incorporated under the laws of Hong Kong, and licensed by the Securities and Futures Commission for Type 4 (advising on securities) and Type 9 (asset management) regulated activities. It was also the manager providing discretionary investment management services under the Discretionary Investment Management Agreements.

REASONS FOR AND BENEFITS OF THE TERMINATION AND DISPOSAL

As mentioned in the profit warning announcement dated 18 February 2021, the Group’s revenue has been adversely affected by the outbreak of COVID-19. The Company started to review its business performance, revenues and expenses, amongst others, the Discretionary Investment Management Agreements.

Considering the current development of the COVID-19 pandemic, the Company is of the view that there would be prolonged impact of the pandemic and that there may be need for more cash flow for the Group’s operation in the near future.

– 3 –

The Company believes that it is appropriate and in the best interest of the Company and its shareholders to terminate the Discretionary Investment Management Agreements with Leo Asset Management and realise the investments under the Account because the Disposal can help strengthen the liquidity of the Group. The Group intends to apply the proceeds as the general working capital of the Group.

As a result of the Disposal, all assets in the Portfolio were sold and converted into cash. A total amount of HK$9,571,405.31 have been transferred to Ngai Chin on 8 July 2021.

Having considered the factors above, the Directors consider that the terms of the Disposal are fair and reasonable so far as the Company and its shareholders are concerned and the Disposal is in the best interest of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) exceeds 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:

‘‘Board’’ the board of directors of the Company from time to time ‘‘Company’’ Raffles Interior Limited, a company incorporated in the Cayman Islands with its shares listed on The Stock Exchange of Hong Kong Limited (Stock Code: 1376) ‘‘Discretionary Investment the discretionary investment management agreement dated 23 July Management Agreements’’ 2020 (as amended and supplemented by the revised discretionary investment management agreement dated 21 August 2020), entered into between Ngai Chin (as client) and Leo Asset Management (as manager), pursuant to which Leo Asset Management agreed to provide discretionary investment management services according to the investment guidelines and restrictions stipulated in the agreement (as may be amended from time to time by Ngai Chin by written notice to Leo Asset Management) subject to and in compliance with applicable laws, rules and regulations. The investment amount was initially set at HK$12,200,000 and was subsequently reduced to HK$8,925,100 ‘‘Group’’ the Company and its subsidiaries ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

– 4 –

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China

• ‘‘Independent Third person(s) or company(ies) who/which is/are not connected with (within Party(ies)’’ the meaning of the Listing Rules) and is/are independent of the directors, chief executives and substantial shareholders of the Group or any of their respective associates

• ‘‘Leo Asset Management’’ Leo Asset Management Limited, a company incorporated under the laws of Hong Kong and the manager under the Discretionary Investment Management Agreements

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended from time to time

• ‘‘Ngai Chin’’ Ngai Chin Construction Pte Ltd, a private company limited by shares that was incorporated in Singapore on 30 June 1986 and is a wholly owned subsidiary of the Company

• ‘‘Portfolio’’ The portfolio of assets purchased and held at Ngai Chin’s discretionary investment account maintained with Leo Asset Management pursuant to the Discretionary Investment Management Agreements

• ‘‘S$’’ Singapore dollars, the lawful currency of Singapore ‘‘Singapore’’ The Republic of Singapore ‘‘%’’ per cent

Unless otherwise defined, for the purpose of this announcement and for the purpose of illustration only, S$ have been translated using the following rates: S$1.00:HK$5.88. Such translations should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate or at all.

By order of the Board Raffles Interior Limited

Chua Boon Par

Chairman, chief executive officer and executive director

Hong Kong, 8 July 2021

As at the date of this announcement, the Board comprises three executive directors, namely Mr. Chua Boon Par, Mr. Ding Hing Hui and Mr. Leong Wai Kit; and three independent non-executive directors, namely Mr. Chia Kok Seng, Mr. Gay Soon Watt and Mr. Wong Heung Ming Henry.

– 5 –