PART I - INFORMATION REQUIRED FOR QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR ANNOUNCEMENTS

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1 DECLOUT LIMITED (Registration No: W) UNAUDITED FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE SECOND QUARTER ENDED 30 JUNE 2017 ("2Q2017") This announcement has been prepared by the Company and its contents have been reviewed by the Company s sponsor, SAC Advisors Private Limited ( Sponsor ), 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 Lee Khai Yinn (Tel: (65) ) at 1 Robinson Road, #21-02 AIA Tower, Singapore SAC Capital Private Limited is the parent company of SAC Advisors Private Limited. PART I - INFORMATION REQUIRED FOR QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR ANNOUNCEMENTS 1(a) An income statement and statement of comprehensive income, or a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year. Group 2Q2017 1H Jun Jun-16 Change 30-Jun Jun-16 Change $'000 $'000 % $'000 $'000 % Revenue 67,326 75,003 (10.2) 130, ,673 (0.9) Cost of sales (51,012) (52,870) (3.5) (97,542) (96,033) 1.6 Gross profit 16,314 22,133 (26.3) 32,922 35,640 (7.6) Other items of income Other income 1,838 3,403 (46.0) 2,922 4,240 (31.1) Other items of expense Other charges, net (6,299) (314) N.M. (8,230) (1,201) N.M. Selling expenses (2,345) (2,964) (20.9) (5,071) (5,944) (14.7) Administrative expenses (13,221) (13,628) (3.0) (29,157) (26,599) 9.6 Finance costs (480) (1,360) (64.7) (995) (2,944) (66.2) Share of results of associates (1) (270) N.M. (1) (296) N.M. (Loss) / Profit before tax (4,194) 7,000 N.M. (7,610) 2,896 N.M. Income tax expense (346) (1,066) (67.5) (174) (1,444) (88.0) (Loss) / Profit, net of tax (4,540) 5,934 N.M. (7,784) 1,452 N.M. (Loss) / Profit, net of tax attributable to: Owners of the Company (2,987) 4,966 N.M. (5,649) 411 N.M. Non-controlling interests (1,553) 968 N.M. (2,135) 1,041 N.M. (4,540) 5,934 N.M. (7,784) 1,452 N.M. Excluding the financial effect relating to divestment of Acclivis Technologies and Solutions Pte Ltd ("ATS"): (Loss) / Profit net of tax attributable to owners of the Company (2,987) 4,966 N.M. (5,649) 411 N.M. Add/(Less): Profit contribution from ATS - (2,800) N.M. - (1,800) N.M. One-off downward adjustment and write-back of provisions pertaining to divestment of ATS 3,600 - N.M. 3,400 - N.M. Adjusted Profit / (Loss) net of tax attributable to owners of the Company 613 2,166 (71.7) (2,249) (1,389) 61.9 N.M. - Not meaningful Page 1 of 14

2 Statement of comprehensive income Group 2Q2017 1H Jun Jun-16 Change 30-Jun Jun-16 Change Note $'000 $'000 % $'000 $'000 % Other comprehensive income Foreign currency translation (993) N.M. (397) (2,585) (84.6) Other comprehensive income for the period, net of tax 363 (993) N.M. (397) (2,585) (84.6) Total comprehensive income for the period (4,177) 4,941 N.M. (8,181) (1,133) N.M. Total comprehensive income attributable to: Owners of the Company (2,826) 4,291 N.M. (5,908) (1,442) Non-controlling interests (1,351) 650 N.M. (2,273) 309 N.M. Total comprehensive income for the period (4,177) 4,941 N.M. (8,181) (1,133) N.M. Notes to Income Statement Note Other income Interest income Gain on disposal of a subsidiary - - N.M. 1 - N.M. Gain on remeasurement of an associate pursuant to a step-up acquisition - 2,898 N.M. - 2,898 N.M. Others 2 1, ,789 1, ,838 3,403 (46.0) 2,922 4,240 (31.1) Other charges, net (Write-back) / Allowance for impairment on trade receivables 3 (80) (115) (30.4) 120 (409) N.M. Plant and equipment written off Provision for stock obsolescence (4.7) Foreign exchange loss N.M. 1, Loss / (gain) on disposal of plant and equipment, net 64 (840) N.M. 77 (840) N.M. Amortisation of intangible assets (32.6) 1,038 1,282 (19.0) Others 7 4, N.M. 4,830 - N.M. 6, N.M. 8,230 1,201 N.M. Other items Amortisation of intangible assets (included in cost of sales) Depreciation of plant and equipment 8 2,690 1, ,494 3, Interest expenses ,360 (64.7) 995 2,944 (66.2) N.M. - Not meaningful Notes (1) Under other comprehensive income, the amounts represented foreign exchange differences which arose from the translation of the Group's net asset of foreign operations in America and Europe. The gain of $0.4m for 2Q2017 arose from the strengthening of British pound (GBP) against Singapore dollar ($), as compared to a loss of $1.0m in 2Q2016 whereby GBP weakened by 6.2%. The loss of $0.4m for 1H2017 relates primarily to the US dollar (USD) which weakened against $ by 4.3%, as compared to a loss of $2.6m in 1H2016 whereby GBP and USD weakened by 13.3% and 4.5% respectively. (2) Others increased by $1.3m and $1.5m for 2Q2017 and 1H2017 respectively, mainly due to the write-back of provisions no longer required in respect of the divestment of ATS in late (3) The write-back on impairment of trade receivables for 1H2016 arose mainly from the recovery of debts which were previously impaired. An allowance for impairment of $0.1m was made in 1H2017 in respect of certain trade receivables that are assessed to be potentially impaired. (4) The increase in provision for stock obsolescence for 1H2017 was mainly from Procurri Corporation Limited and together with its subsidiaries ("Procurri Group") due to provision made for aged inventory based on historical trend on net realisable value. (5) Foreign exchange losses of $1.2m arose from the revaluation of certain subsidiaries receivables denominated in USD which had weakened against $ during 2Q2017 and 1H2017. (6) Total amortisation expense for 2Q2017 and 1H2017 were lower than previous periods mainly due to the absence of costs from ATS which was divested in late 2016, partially offset by an increase in amortisation expense from additions to intangible assets arising mainly from the stepup acquisition of vcargo Cloud Pte Ltd ("VCC") in June 2016 from 30.0% to 50.01%. (7) The $4.8m incurred for 2Q2017 and 1H2017 comprised mainly the one-off downward adjustment to the total consideration pertaining to the divestment of ATS in late (8) The increase in depreciation of plant and equipment for 2Q2017 and 1H2017 were mainly due to an increase in new purchases of plant and equipment and also arising from the new joint venture company, Rockland Congruity LLC ("Rockland") under the Procurri Group in January (9) Interest expenses were lower for 2Q2017 and 1H2017 as the amounts for previous periods included imputed notional non-cash interest cost on the redeemable exchangeable bonds which were redeemed in July Page 2 of 14

3 1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Group Company 30-Jun Dec Jun Dec-16 $'000 $'000 $'000 $'000 Non-current assets Property, plant and equipment 38,460 23,381 2,031 2,577 Investment in subsidiaries ,718 69,718 Investment in associates - 2, Trade and other receivables - - 1,500 Intangible assets 57,234 57, Finance lease receivables 1,694 1, Other financial receivable 1,483 1, Deferred tax assets 3,359 3, Total non-current assets 102,230 89,941 73,249 72,295 Current assets Inventories 31,117 28, Trade and other receivables 92,214 90,866 57,429 59,150 Amount due from customers for contract work-in-progress 3,865 3, Amount due from an associate Finance lease receivables 768 1, Other assets 10,969 5, Cash and bank balances 26,994 65,413 2,524 19,376 Income tax recoverable Total current assets 165, ,481 60,245 78,864 Total assets 268, , , ,159 Equity Share capital 114, , , ,456 Treasury shares (5,948) - (5,948) - Retained earnings 12,896 18,545 8,275 10,264 Other reserves (12,120) (9,706) 2,361 4,961 Equity attributable to owners of the Company 109, , , ,681 Non-controlling interests 39,849 42, Total equity 149, , , ,681 Non-current liabilities Deferred tax liabilities 985 1, Trade and other payables Other liabilities 1,361 1, Loans and borrowings 13,177 9, Provisions 1,072 1, Total non-current liabilities 16,604 12, Current liabilities Trade and other payables 45,961 57,557 7,326 14,317 Amount due to customers for contract work-in-progress Other liabilities 18,281 4, Loans and borrowings 36,055 41,482 6,411 6,548 Income tax payables 1,949 1, Total current liabilities 102, ,407 13,737 20,865 Total liabilities 119, ,304 14,350 21,478 Total equity and liabilities 268, , , ,159 Page 3 of 14

4 1(b)(ii) In relation to the aggregate amount of the group's borrowings and debt securities, specify the following as at the end of the current financial period reported on with comparative figures as at the end of the immediately preceding financial year. As at 30-Jun-17 As at 31-Dec-16 Group Secured Unsecured Total Secured Unsecured Total $'000 $'000 $'000 $'000 $'000 $'000 Amount repayable in one year or less, on demand 16,265 19,790 36,055 17,650 23,832 41,482 Amount repayable after one year 2,993 10,184 13,177 2,453 6,560 9,013 19,258 29,974 49,232 20,103 30,392 50,495 Details of collaterals The above borrowings of $19.3m are secured by the following: 1. Term loans of $7.0m secured by charges over freehold properties and corporate guarantees issued by the Company and some of its subsidiaries. 2. Trade facilities of $9.9m comprising trust receipts and trade receivables factoring. Trust receipts are secured by fixed deposits and guaranteed by a corporate guarantee given by the Company. Trade receivables factoring is secured by a charge over trade receivable balances on a recourse basis. 3. Finance lease obligations of $2.4m secured by charges over the leased assets. Page 4 of 14

5 1(c) A statement of cash flows (for the Group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Group 2Q2017 1H Jun Jun Jun Jun-16 $'000 $'000 $'000 $'000 Cash flows from operating activities (Loss) / profit before tax (4,194) 7,000 (7,610) 2,896 Depreciation of plant and equipment 2,690 1,656 4,494 3,228 Amortisation of intangible assets ,338 1,572 Loss / (gain) on disposal of plant and equipment, net 64 (840) 77 (840) Plant and equipment written off Provision for stock obsolescence Share-based payments Interest income (62) (54) (132) (105) Interest expenses 480 1, ,944 Share of results of associates Gain on disposal of a subsidiary - - (1) - Gain on remeasurement of an associate pursuant to a step-up acquisition - (2,898) - (2,898) Exchange differences (77) (432) (1,505) (1,988) Operating cash flows before changes in working capital 647 7,787 (368) 6,430 Increase in inventories 208 (5,437) (3,501) (9,921) Increase in amount due from customers for contract work-in-progress (1,217) (271) (635) (1,788) Decrease / (increase) in trade and other receivables 428 (1,579) 493 2,966 Increase in amount due from associates (1) - (1) - Decrease / (increase) in finance lease receivables 7 (365) 652 (359) (Increase) / decrease in other assets (2,372) 178 (5,792) (2,088) Decrease in trade and other payables (6,273) (4,705) (12,028) (9,570) Increase / (decrease) in other liabilities 6,315 (628) 13,533 2,017 Cash used in operations (2,258) (5,020) (7,647) (12,313) Income taxes paid (1,598) (1,063) (1,754) (1,299) Net cash flows used in operating activities (3,856) (6,083) (9,401) (13,612) Cash flows from investing activities Purchase of property, plant and equipment (373) (4,325) (11,377) (6,338) Proceeds from disposal of plant and equipment 103 1, ,886 Additions to intangible assets - 3, Net cash outflows from acquisition of subsidiaries - (3,608) - (1,013) Net cash on disposal of a subsidiary Net cash on disposal of an associate 2,000-2,000 - Interest received Net cash flows generated from / (used in) investing activities 1,792 (2,694) (9,090) (5,360) Cash flows from financing activities Share issuance expense (11) (8) (118) (24) Purchase of treasury shares (1,735) - (8,977) - Acquisition of non-controlling interests (6) Dividends paid to non-controlling interests (701) - (701) - (Placement) / Release of fixed deposits pledged for bank facilities (193) (54) 1,694 (65) Proceeds from loans and borrowings 30,705 39,812 70,009 74,344 Repayments of loans and borrowings (32,889) (28,115) (78,813) (58,917) Interest paid (676) (164) (1,099) (1,172) Net cash flows (used in) / generated from financing activities (5,500) 11,471 (18,005) 14,160 Net (decrease) / increase in cash and cash equivalents (7,564) 2,694 (36,496) (4,812) Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of financial period 32,703 14,563 61,409 21,702 Cash and cash equivalents at end of financial period 25,232 17,262 25,232 17,262 Cash and cash equivalents comprise the following: Cash and bank balances 26,994 18,996 26,994 18,996 Less: Bank overdrafts - (1,279) - (1,279) Less: Fixed deposits pledged as collateral for banker's guarantee (185) (253) (185) (253) Less: Fixed deposits pledged as collateral for banking facilities (1,577) (202) (1,577) (202) Cash and cash equivalents 25,232 17,262 25,232 17,262 Page 5 of 14

6 1(d)(i) Group A statement (for the Issuer and Group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. For the second quarter ended 30 June Total Equity Attributable to Owners of the Company Share Capital Treasury Shares Other Reserves Retained Earnings Non- Controlling Interests $'000 $'000 $'000 $'000 $'000 $'000 At 1 April , , ,456 (4,202) (12,878) 15,883 41,901 Total comprehensive income for the period (4,177) (2,826) (2,987) (1,351) Purchase of treasury shares (1,735) (1,735) - (1,735) Dividends paid to non-controlling interests (701) (701) Share issuance expense (11) (11) - (11) Share-based payments At 30 June , , ,456 (5,948) (12,120) 12,896 39,849 At 1 April ,523 84, ,626 - (25,830) 6,232 21,495 Total comprehensive income for the period 4,941 4, (675) 4, Issuance of ordinary shares for acquisitions of subsidiaries 4,000 4,000 4, Share issuance expense (8) (8) (8) Share-based payments Changes in ownership interests in subsidiaries Acquisition of subsidiaries 2,947 1, ,215-1,732 Acquisition of non-controlling interests of a subsidiary without a change in control - (1,164) - - (1,164) - 1,164 At 30 June ,751 92, ,618 - (26,106) 11,198 25,041 For the first half year ended 30 June At 1 January , , ,456 - (9,706) 18,545 42,823 Total comprehensive income for the period (8,181) (5,908) - - (259) (5,649) (2,273) Purchase of treasury shares (8,977) (8,977) - (8,977) Transfer of treasury shares pursuant to DeClout Performance Share Plan ("PSP") ,147 (3,147) - - Dividends paid to non-controlling interests (701) (701) Share issuance expense (118) (118) - (118) Share-based payments At 30 June , , ,456 (5,948) (12,120) 12,896 39,849 At 1 January ,537 81,829 86,953 - (15,911) 10,787 21,708 Total comprehensive income for the period (1,133) (1,442) - - (1,853) Issuance of ordinary shares for acquisitions of subsidiaries 11,550 11,550 11, Issuance of ordinary shares pursuant to PSP - - 2,139 - (2,139) - - Share issuance expense (24) (24) (24) Share-based payments Changes in ownership interests in subsidiaries Acquisition of subsidiaries 3,173 1, ,215-1,958 Acquisition of non-controlling interests of a subsidiary without a change in control (6) (1,072) 7,000 - (8,072) - 1,066 At 30 June ,751 92, ,618 - (26,106) 11,198 25,041 Page 6 of 14

7 1(d)(i) Company A statement (for the Issuer and Group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. For the second quarter ended 30 June Total Share Treasury Other Retained Equity Capital Shares Reserves Earnings $'000 $'000 $'000 $'000 $'000 At 1 April , ,456 (4,202) 2,053 8,664 Total comprehensive income for the period (389) (389) Purchase of treasury shares (1,735) - (1,735) - - Share issuance expense (11) - (11) - - Share-based payments At 30 June , ,456 (5,948) 2,361 8,275 At 1 April , ,626-1,936 (7,693) Total comprehensive income for the period (2,729) (2,729) Issuance of ordinary shares for acquisitions of subsidiaries 4,000 4, Share issuance expense (8) (8) Share-based payments Changes in ownership interests in subsidiaries Acquisition of subsidiaries 1, ,215 - Acquisition of non-controlling interests of a subsidiary without a change in control At 30 June , ,618-3,499 (10,422) For the first half year ended 30 June At 1 January , ,456-4,961 10,264 Total comprehensive income for the period (1,989) (1,989) Purchase of treasury shares (8,977) - (8,977) - - Transfer of treasury shares pursuant to PSP - - 3,147 (3,147) - Share issuance expense (118) - (118) - - Share-based payments At 30 June , ,456 (5,948) 2,361 8,275 At 1 January ,559 86,953-3,769 (5,163) Total comprehensive income for the period (5,259) (5,259) Issuance of ordinary shares for acquisitions of subsidiaries 11,550 11, Issuance of ordinary shares pursuant to PSP - 2,139 - (2,139) - Share issuance expense (24) (24) Share-based payments Changes in ownership interests in subsidiaries Acquisition of subsidiaries 1, ,215 - Acquisition of non-controlling interests of a subsidiary without a change in control 7,000 7, At 30 June , ,618-3,499 (10,422) Page 7 of 14

8 1(d)(ii) Details of any changes in the Company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State the number of shares that may be issued on conversion of all the outstanding convertibles, if any, against the total number of issued shares excluding treasury shares and subsidiary holdings of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. State also the number of shares held as treasury shares and the number of subsidiary holdings, if any, and the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. A) Changes in share capital during the financial period Number of Ordinary Shares Issued and Paid-up Share Capital $'000 Balance as at 31 December 2016, 31 March 2017 and 30 June ,268, ,456 There were no changes to the issued and paid-up capital of the Company during 1H2017. B) Shares options - employee share option scheme Between 1 January 2017 and 30 June 2017, the Company did not issue any shares under the employee share option scheme ( ESOS ). Under ESOS, options to subscribe for 7,246,509 shares remained outstanding as at 30 June 2017 (30 June 2016: 7,581,393). Details of the outstanding options as at 30 June 2017 are as follows: Outstanding Options as at Exercise Price Exercisable Period 30-Jun-17 $ From To C) Performance share plan 1,506, May-15 9-May-23 1,506, May-16 9-May-23 2,232, May-17 9-May , Jan-15 1-Jan , Jan-16 1-Jan , Jan-17 1-Jan-24 7,246,509 As at 30 June 2017, the number of outstanding awards granted under the performance share plan ("PSP") was 11,188,400 (30 June 2016: 10,831,500). Between 1 January 2017 and 30 June 2017, the Company granted a total of 4,664,400 share awards and issued 9,991,000 shares under this PSP. The shares to be issued pursuant to the awards are subject to certain performance conditions to be satisfied by the respective participants. Once the performance conditions are satisfied, the shares shall be released to the respective participants after the respective performance periods. 1(d)(iii) 1(d)(iv) D) Treasury shares Total number of treasury shares As at 30 June 2017 As at 30 June ,999,488 - Total number of ordinary shares 671,268, ,850,590 % of treasury shares over total number of ordinary shares 3.4% - Save as disclosed above, the Company has no other outstanding convertibles and subsidiary holdings as at 30 June 2017 and 30 June Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. The total number of issued shares excluding treasury shares as at 30 June 2017 was 648,269,486 (31 December 2016: 671,268,974). The Company has no treasury shares as at 31 December A statement showing all sales, transfers, cancellation and/or use of treasury shares as at the end of the current financial period reported on. Number of Treasury Shares As at 1 January Purchase of treasury shares 32,990,488 8,977 Transfer of treasury shares pursuant to PSP (9,991,000) (3,147) Share issuance expense As at 30 June ,999,488 5,948 $'000 Page 8 of 14

9 1(d)(v) A statement showing all sales, transfers, cancellation and/or use of subsidiary holdings as at the end of the current financial period reported on. Not applicable. The Company does not have subsidiary holdings. 2 Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by the Company s auditors. 3 Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter). Not applicable. 4 Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The Group has consistently applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with those of the audited financial statements for the financial year ended 31 December 2016, except for the adoption of the Singapore Financial Reporting Standards ( SFRS ), including improvements to SFRS and Interpretations of FRS ( INT FRS ) that are mandatory for financial years beginning on or after 1 January 2017, during the second quarter ended 30 June 2017, where applicable. The adoption of these new / revised standards and interpretations applicable for the financial year beginning 1 January 2017 did not result in significant change to the Group s accounting policies and did not have a material impact on the Group s results. 5 If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. Please refer to item 4 above. 6 Earnings per ordinary share of the Group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Group 2Q2017 1H Jun Jun Jun Jun-16 Basic earnings per share (cents) (0.46) 0.83 (0.87) 0.07 Weighted average number of shares ('000) 652, , , ,689 Fully diluted earnings per share (cents) (0.46) 0.79 (0.87) 0.07 Weighted average number of shares ('000) 652, , , ,599 7 Net asset value (for the Issuer and Group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:- a) current financial period reported on; and b) immediately preceding financial year. Group Company 30-Jun Dec Jun Dec-16 Net asset value per share (cents) Number of shares in issue excluding treasury shares ('000) , , , ,269 Page 9 of 14

10 8 A review of the performance of the Group, to the extent necessary for a reasonable understanding of the Group s business. It must include a discussion of the following:- a) any significant factors that affected the turnover, costs, and earnings of the Group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and b) any material factors that affected the cash flow, working capital, assets or liabilities of the Group during the current financial period reported on. In 2Q2017, the Group s results were adversely impacted by an one-off downward adjustment of $4.9m to the total consideration in relation to the divestment of its subsidiary, ATS, in late 2016; and the losses from one of its portfolio companies, Procurri Group. Review of performance for second quarter ended 30 June 2017 ("2Q2017") Revenue ($'000) IT Infra VDC Total Gross Profit ($'000) IT Infra VDC Total Gross Profit Margin (%) IT Infra VDC Total 2Q2017 2Q2016 Change (%) 61,670 64,410 (4.3) 5,656 10,593 (46.6) 67,326 75,003 (10.2) 16,330 20,830 (21.6) (16) 1,303 N.M. 16,314 22,133 (26.3) 26.5% 32.3% -0.3% 12.3% 24.2% 29.5% The Group s revenue decreased 10.2% or $7.7m from $75.0m in 2Q2016 to $67.3m in 2Q2017. The revenue from the IT Infrastructure Sales and Services ("IT Infra") segment decreased 4.3% or $2.7m primarily due to the absence of revenue contribution from ATS which was divested in late 2016, and a lower revenue from the Lifecycle services segment in Procurri Group as its business model in the Americas shifted away from being primarily based on outsourcing to one which is integrated with in-house maintenance servicing capabilities. This change requires a straight line recognition of the maintenance service revenue over the contract period. However, this has resulted in higher deferred revenue and a stronger orderbook as at 30 June 2017 compared to a year ago. Excluding the revenue from ATS which amounted to $13.2m in the corresponding period of prior year and normalizing Procurri s Lifecycle services revenue consistent with previous year which amounted to $3.2m, the revenue for IT Infra segment and total revenue for the Group would have grown by 26.7% and 14.1% respectively. For the Vertical Domain Cloud ("VDC") segment, the decline in revenue arose mainly from an industry-wide slowdown in the games distribution industry, seasonal lull period and delay in the launch of blockbuster game titles. Gross profit for the Group decreased 26.3% or $5.8m from $22.1m for 2Q2016 to $16.3m for 2Q2017. Gross profit for the IT Infra segment decreased by $4.5m or 21.6% primarily due to the absence of contribution from ATS and lower revenue recognized from the Lifecycle services segment in Procurri Group. Excluding the gross profit of $4.8m from ATS and normalizing the gross profit of Procurri Group which amounted to $1.6m, the gross profits for IT Infra segment and the Group would have grown by 11.9% and 3.4% respectively. The VDC segment had a negative gross profit margin mainly due to discounts granted to partners in the form of sales rebates. On Group basis, gross profit margin ("GPM") declined by 5.3 percentage points primarily due to IT Infra's lower GPM arising from the exclusion of ATS which had a GPM of 35.0% in 2Q2016. The decrease in other income of $1.6m or 46.0% was due to the absence of a gain of $2.9m in 2Q2016 arising from the step-up acquisition of VCC in June 2016, partially offset by $1.3m write-back of provisions pertaining to the divestment of ATS in late Other charges increased by $6.0m from $0.3m in 2Q2016 to $6.3m in 2Q2017, mainly due to a one-off downward adjustment of $4.9m to the total consideration pertaining to the divestment of ATS in late 2016, an increase in foreign exchange losses of $0.5m from the revaluation of receivables denominated in USD which weakened against $ by 1.0% in 2Q2017, as well as a $0.8m gain on disposal of plant and equipment in 2Q2016 which did not recur in 2Q2017. Selling expenses decreased by 20.9% or $0.7m from $3.0m in 2Q2016 to $2.3m in 2Q2017, mainly due to absence of costs of $0.1m from ATS, as well as lower sales commission in tandem with the decline in gross profit. Administrative expenses decreased by 3.0% or $0.4m from $13.6m in 2Q2016 to $13.2m in 2Q2017. The decrease in administrative expenses comprised of: - the absence of costs of $2.3m from ATS and a net cost reduction of $4.9m arising mainly from the cancellation of planned staff-related incentives and development programs which provisions were made in previous year; partially offset by - an increase of $6.4m from Procurri Group, out of which $4.5m of the increase was due to the inclusion of the newly setup joint venture company, Rockland and a new subsidiary, EAF Supply Chain Holdings Limited which was acquired in November The remaining $1.9m resulted from an increase in headcount to support Procurri Group's expansion plans, as well as higher rental and other operating expenses incurred post-listing; and - an increase of $0.4m from VCC which was acquired in June 2016 via a step-up acquisition. Finance costs decreased by 64.7% or $0.9m from $1.4m in 2Q2016 to $0.5m in 2Q2017 mainly due to the non-recurrence of an imputed notional non-cash interest cost of $0.7m recorded in 2Q2016 in respect of the redeemable exchangeable bonds which were redeemed in July The remaining $0.2m resulted from a decrease in loans and borrowings. The Group recorded a loss before tax of $4.2m for 2Q2017 as compared to a profit of $7.0m for 2Q2016. The losses were mainly attributable to a net charge of $3.6m arising from ATS divestment, which comprised the one-off downward adjustment of $4.9m partially offset by the write-back of certain provisions. The remaining $0.6m was mainly due to the weak operational performance of IT Infra segment from the Procurri Group and the losses of the VDC segment, which was substantially offset by a cost reduction arising from the cancellation of planned staff-related incentives and development programs which provisions were made in previous year. Excluding the financial impact relating to ATS divestment, the loss before tax for 2Q2017 would have been $0.6m. The tax expense decreased by $0.7m or 67.5% due to a weaker performance as compared to 2Q2016. The loss after tax attributable to owners of the Company ("PATMI") is $3.0m for 2Q2017 as compared to a profit of $5.0m for 2Q2016. The differential of $8.0m included (i) a net charge of $3.6m arising from ATS divestment, which comprised the one-off downward adjustment of $4.9m partially offset by the write-back of certain related provisions, (ii) absence of profit contribution of $2.8m from ATS, and (iii) $1.6m from the weak operational performance of IT Infra segment from the Procurri Group and the losses of the VDC segment, partially offset by a cost reduction arising from the cancellation of planned staff-related incentives and development programs which provisions were made in previous year. Excluding the financial effect relating to ATS divestment, PATMI for 2Q2017 would have been a profit of $0.6m. Page 10 of 14

11 Review of performance for first half year ended 30 June 2017 ("1H2017") Revenue ($'000) IT Infra VDC Total Gross Profit ($'000) IT Infra VDC Total Gross Profit Margin (%) IT Infra VDC Total 1H2017 1H2016 Change (%) 114, , ,602 17,703 (11.9) 130, ,673 (0.9) 32,179 33,661 (4.4) 743 1,979 (62.5) 32,922 35,640 (7.6) 28.0% 29.5% 4.8% 11.2% 25.2% 27.1% The Group s revenue decreased 0.9% or $1.2m from $131.7m in 1H2016 to $130.5m in 1H2017. The revenue from the IT Infra segment only increased 0.8% or $0.9m primarily due to the absence of revenue contribution from ATS which was divested in late 2016, and a lower revenue from the Lifecycle services segment in Procurri Group as its business model in the Americas shifted away from being primarily based on outsourcing to one which is integrated with in-house maintenance servicing capabilities. This change requires a straight line recognition of the maintenance service revenue over the contract period. However, this has resulted in higher deferred revenue and a stronger orderbook as at 30 June 2017 compared to a year ago. Excluding the revenue from ATS which amounted to $22.7m in the corresponding period of prior year and normalizing Procurri s Lifecycle services revenue consistent with previous year which amounted to $3.6m, the revenue for IT Infra segment and total revenue for the Group would have grown by 29.8% and 23.0% respectively. For the VDC segment, the decline in revenue arose mainly from an industry-wide slowdown in the games distribution industry, seasonal lull period and delay in the launch of blockbuster game titles. Gross profit for the Group decreased 7.6% or $2.7m from $35.6m for 1H2016 to $32.9m for 1H2017. IT Infra segment decreased by $1.5m or 4.4% primarily due to the absence of contribution from ATS and lower revenue recognized from the Lifecycle services segment in Procurri Group. Excluding the gross profit of $6.8m from ATS and normalizing the gross profit of Procurri Group which amounted to $1.8m, the gross profits for IT Infra segment and Group would have grown by 26.5% and 20.4% respectively. VDC segment decreased by 62.5% primarily due to the industrywide slowdown in games and collectibles arising from the lack of blockbuster products in the market. On Group basis, GPM declined by 1.9 percentage points primarily due to IT Infra's lower GPM arising from the exclusion of ATS which had a GPM of 29.7% in 1H2016. The decrease in other income of $1.3m or 31.1% was due to the absence of a gain of $2.9m in 1H2016 arising from the step-up acquisition of VCC, partially offset by $1.5m write-back of provisions pertaining to the divestment of ATS in late Other charges increased by $7.0m from $1.2m in 1H2016 to $8.2m in 1H2017, mainly due to an one-off downward adjustment of $4.9m to the total consideration pertaining to the divestment of ATS in late 2016, an increase in foreign exchange losses of $0.7m from the revaluation of receivables denominated in USD which has weakened against $ by 4.3% in 1H2017, increase in provision for stock obsolescence totaling $0.8m from Procurri Group due to an increase in the average age of inventory, as well as a $0.8m gain on disposal of plant and equipment in 1H2016 which did not recur in 1H2017. Selling expenses decreased by 14.7% or $0.8m from $5.9m in 1H2016 to $5.1m in 1H2017, mainly due to absence of costs of $0.3m from ATS, cost savings from certain marketing events in 1H2016 which did not recur in 1H2017, as well as lower sales commission in tandem with the decline in gross profit. Administrative expenses increased by 9.6% or $2.6m from $26.6m in 1H2016 to $29.2m in 1H2017. The increase in administrative expenses comprised of: - an increase of $10.4m from Procurri Group, out of which $7.7m of the increase was due to the inclusion of the newly setup joint venture company, Rockland and a new subsidiary, EAF Supply Chain Holdings Limited which was acquired in November The remaining $2.7m resulted from an increase in headcount to support Procurri Group's expansion plans, as well as higher rental and other operating expenses incurred post-listing. - an increase of $1.0m from VCC which was acquired in June 2016 via a step-up acquisition; and - partially offset by absence of costs of $5.0m from ATS and a net cost reduction of $3.8m arising mainly from cancellation of planned staffrelated incentives and development programs which provisions were made in previous year. Finance costs decreased by 66.2% or $1.9m from $2.9m in 1H2016 to $1.0m in 1H2017 mainly due to the non-recurrence of an imputed notional non-cash interest cost of $1.5m recorded in 1H2016 in respect of the redeemable exchangeable bonds which were redeemed in July The remaining $0.4m resulted from a decrease in loans and borrowings. The Group recorded a loss before tax of $7.6m for 1H2017 as compared to a profit of $2.9m for 1H2016. The losses were mainly attributed to a net charge of $3.4m arising from ATS divestment, which comprised the one-off downward adjustment of $4.9m partially offset by the write-back of certain provisions. The remaining $4.2m was mainly due to the weak operational performance of IT Infra segment from Procurri Group and the losses of the VDC segment, which was partially offset by a cost reduction arising from the cancellation of planned staff-related incentives and development programs which provisions were made in previous year. Excluding the financial impact relating to ATS divestment, the loss before tax for 1H2017 would have been $4.2m. The tax expense decreased by $1.3m or 88.0% due to a weaker performance as compared to 1H2016. The PATMI is a loss of $5.6m for 1H2017 as compared to a profit of $0.4m for 1H2016. The differential of $6.0m included (i) a net charge of $3.4m arising from ATS divestment, which comprised the one-off downward adjustment of $4.9m partially offset by the write-back of certain related provisions, (ii) absence of profit contribution of $1.8m from ATS, and (iii) $0.8m from the weak operational performance of IT Infra segment from the Procurri Group and the losses of the VDC segment, partially offset by a cost reduction arising from the cancellation of planned staff-related incentives and development programs which provisions were made in previous year. Excluding the financial effect relating to ATS divestment, PATMI for 1H2017 would have been a loss of $2.2m. Page 11 of 14

12 Review of financial position Non-current assets a) Property, plant and equipment increased by $15.1m mainly due to maintenance parts acquired by the Procurri Group in line with its direction of setting up a Global Parts Centre ("GPC") in Singapore, to support the maintenance business under the Procurri Group, partially offset by depreciation charge for the period. b) The decrease in investment in associates of $2.0m relates to the disposal of AWS Distribution Phils Corp. in 2Q2017. c) The decrease in intangible assets of $0.7m arose mainly from amortisation charges. Current assets d) Inventories went up by $2.6m in line with the inclusion of Rockland under the Procurri Group, as well as an increase in inventory level to cater for expectation of increased sales demand in the next quarter. e) The increase in the net amount due from customers for contract work-in-progress of $0.6m represents the excess of progress billings over costs incurred and profits recognised for projects, during the period. f) Other assets increased by $5.8m mainly due to deposits to suppliers, as well as higher prepayments made by Procurri Group for the maintenance business in America. g) The movement in cash and bank balances is illustrated in the statement of cash flows and review of cash flows. Equity h) Share capital remained unchanged as compared to the amount as at 31 December i) Treasury shares of $5.9m comprised $7.2m purchased by the Company under the off-market Equal Access Offer and $1.7m purchased from the open market in 2Q2017, of which $3.1m was subsequently transferred out as share issuance pursuant to the PSP, plus the share issuance expense of $0.1m. j) The increase in negative other reserves of $2.4m is made up of (i) foreign currency translation loss under other comprehensive income of $0.3m, (ii) issuance of shares pursuant to the PSP of $3.1m, and partially offset by (iii) provision for share-based payments of $1.0m. Liabilities k) The decrease in loans and borrowings (both current and non-current) of $1.3m arose mainly from repayment of loans. l) Trade and other payables (current) decreased by $11.6m mainly due to the reversal of certain provisions from the cancellation of planned staffrelated incentives and development programs, as well as payments made to suppliers. m) Other liabilities (current) increased by $13.5m mainly due to higher maintenance services billed in advance to customers, which included an amount of $9.4m billed by Rockland. Review of cash flows During 1H2017, the Group's cash and cash equivalents decreased by $36.2m (after adjusting for the effect of exchange rate changes) from $61.4m as at 31 December 2016 to $25.2m as at 30 June The significant cash movements during 1H2017 were as follows: i) Net cash used in operating activities in 1H2017 amounted to $9.4m. This was mainly due to increases in inventories, contract work-in-progress and other assets of $9.9m, decrease in trade and other payables of $12.0m, an operating cash outflow (before changes in working capital) of $0.4m and taxes paid of $1.8m, partially offset by decreases in trade and other receivables and finance lease receivables of $1.2m, and increase in other liabilities of $13.5m mainly due to advance billings to customers in respect of maintenance services. ii) Net cash used in investing activities in 1H2017 was $9.1m. This was due to purchases of plant and equipment amounting to $11.4m by Procurri Group which comprised mainly maintenance parts acquired in line with the setting up of a GPC in Singapore, partially offset by an inflow of $2.0m from the disposal of an associate, interest received of $0.1m and proceeds of $0.1m from disposal of plant and equipment. iii) Net cash used in financing activities in 1H2017 was $18.0m. This was mainly due to net repayment of loans and borrowings of $8.8m, purchase of treasury shares of $9.0m, dividends of $0.7m paid to non-controlling interests of Procurri Group, share issuance expenses of $0.1m and interest paid of $1.1m, partially offset by an inflow of $1.7m from the release of fixed deposits pledged for bank facilities. Page 12 of 14

13 9 Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. The unaudited financial results for 2Q2017 set out in this announcement are in line with the profit guidance announcement released by the Company on 30 July A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next reporting period and the next 12 months. With the harvest of two portfolio companies Procurri and Acclivis in 2016, the growth momentum for the Group has been impacted as there has been a void in the Group s overall performance, left unfilled by the current portfolio companies. During this transition period, the Group s financial performance may be affected as the mature IT Infra portfolio companies, Procurri and Beaqon, seek to fill the gap. Consequently, measuring the Group s performance based on quarter-on-quarter earnings no longer reflect the true value of the Group. In the second half of 2017, the Group will undertake immediate cost rationalisation initiatives such as imposing tight operating cost control on nonperforming companies and implementing right-sizing exercise to improve operational efficiencies. In tandem with these efforts, the Group will undertake a comprehensive strategic business review of its portfolio companies, with the intent to unlock value for its shareholders under the IT Infra segment, comprising Procurri and Beaqon, which are already at their maturity stages, as well as to seek new talents to facilitate engagement with stakeholders at various levels, to create a sustainable and robust business model. Concurrently, the Group will continue to strengthen its existing portfolio of companies. Under the IT Infra segment, Procurri is building up its resilient recurring income through a steady maintenance order book, while Beaqon continues to garner momentum in enhancing its capabilities as a leading ICT infrastructure provider. In line with the Group s strategy to streamline the VDC segment, Corous360 will be undergoing a reorganisation of its business, to allow the respective units in Corous360 to pursue selective monetisation and growth opportunities. Simultaneously, VCC is set to expand its footprint internationally and will actively seek funding opportunities to grow its business. Going forward, the Group plans to demonstrate its core capabilities as a corporate accelerator to create valuable assets and capture any monetisation opportunities that may arise, to generate meaningful returns to shareholders. Given the Group s proven track record in portfolio expansion and priming companies for harvests, as well as ability to garner strong government s supports through various funding schemes, these will underpin DeClout s role as a corporate accelerator and veer the Group towards the next phase of growth. 11 Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? None. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? None. (c) Date payable Not applicable. (d) Book closure date Not applicable. 12 If no dividend has been declared (recommended), a statement to that effect. No dividend has been declared or recommended for the second quarter ended 30 June Page 13 of 14

14 13 If the Group has obtained a general mandate from shareholders for Interested Person Transactions (IPTs), the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. The Group has not obtained a general mandate from shareholders for IPTs. There was no IPT for the second quarter and first half year ended 30 June Confirmation pursuant to Rule 705 (5) of the Listing Manual To the best of our knowledge, nothing has come to the attention of the Board of Directors of DeClout Limited, which may render the unaudited interim financial statements of the Group and the Company for the second quarter and first half year ended 30 June 2017 to be false or misleading in any material aspect. 15 Confirmation pursuant to Rule 720 (1) of the Listing Manual The Company confirms that it has procured the Undertakings from all its Directors and Executive Officers in the format set out in Appendix 7H pursuant to Rule 720(1) of the Listing Manual. BY ORDER OF THE BOARD Teo Meng Keong Company Secretary 13 August 2017 Page 14 of 14