MERCURIUS CAPITAL INVESTMENT LIMITED

(Incorporated in Singapore)
(Company Registration No. 198200473E)
(the “Company”)

RESPONSES TO SGX QUERIES

The Board of Directors of Mercurius Capital Investment Limited (the “Company”) refers to the
Company’s announcement dated 7 March 2023 in respect of the Company’s responses to the SGX
queries in relation to the Company’s full year financial results announcement (the "FS SGX Queries"),
and the following queries raised by the Singapore Exchange Securities Trading Limited and would like
to provide further information in relation to the Company’s announcement entitled “Receipt of Notice of
Demand” dated 7 March 2023 (the “Announcement”).

Unless otherwise defined, all terms and references used in this announcement shall bear the same
meaning as ascribed to them in the Announcement.

It is stated that the Notice of Demand was dated 15 February 2023.

SGX Query 1:

Please explain why the Company only disclosed the receipt of the notice of demand on 7 March 2023.

Company’s Response:

Notwithstanding that the Notice of Demand was dated 15 February 2023, the Company only received
the Notice of Demand from the Bank’s legal advisers on 21 February 2023. The Company was occupied
with the Board and board committees meeting and the Group’s financial reporting in February 2023 and
had inadvertently overlooked informing shareholders on this matter. Once the Company realised this,
it immediately consulted its advisers and announced a trading halt pending the release of an
announcement relating to the Notice of Demand.

SGX Query 2:

It is stated that the Company has assessed the current situation and is proposing to divest two
properties owned by Songmart Holdings to generate cashflow.

SGX Query 2a:

Please provide the timeline which the Company targets to complete the divestment.

Company’s Response:

The Company has engaged an agent to commerce the sale process and is also considering engaging
additional agents to assist in the proposed divestment. Based on enquiries with the Company’s banker
and publicly available sources, the Company understands that the sale process generally takes three
(3) to six (6) months to complete and the Company targets to complete the divestment within the
aforementioned timeframe once a buyer has been identified. It should be noted that this timeline is
indicative as the successful sale will be subject to other factors such as, but not limited to, property
market conditions, the interest rate environment, interested buyers and whether shareholders’ approval
will be required in connection with the sale of the properties.
SGX Query 2b:

Please also explain if the divestment requires the shareholders’ approval.

Company’s Response:

The Company will only be able to calculate the effect of each of the proposed disposals under Catalist
Rule 1006 once there is clarity on the sale prices, which is subject to, among others, market conditions
and negotiations with potential buyers. The Company will keep shareholders updated and will seek
shareholders’ approval if required under the applicable Catalist Rules.

SGX Query 3:

Please provide the Company’s plan should the bank commence formal legal proceedings.

Company’s Response:

As at the date of this announcement, formal discussions between the Bank, the Borrower and the
Company have commenced, and the Borrower has tabled a proposal on settlement for the Bank’s
approval, which is currently under consideration. The Company is committed to reach an agreement
between the parties by working closely with the Borrower and the Bank on a concrete repayment
proposal. However, should the Bank commence formal legal proceedings, the Company will appoint
professional advisers as may be necessary, and take appropriate actions accordingly.

SGX Query 4:

Songmart Holdings is the Group’s sole revenue generating business currently. Please provide Board’s
assessment, with supporting bases, the impact of the Notice of Demand on the Group’s:

(i) operations and

(ii) ability to operate as a going concern.

Company’s Response:

As set out in the Announcement, the Company has planned immediate follow-up actions to resolve the
Notice of Demand including, but not limited to, the intention to divest two properties owned by Songmart
Holdings, to generate cash flow for the Group, and plans to streamline its operational costs. The Group
does not otherwise envisage that the Notice of Demand or the proposed divestment will materially
impact the Group’s business and operations.

The Board has assessed the Group’s ability to operate as a going concern in the FS SGX Queries. The
bases for the assessment are set out in the FS SGX Queries and had also taken the Notice of Demand
into consideration. There is no change to the AC’s and the Board’s assessment as disclosed in the FS
SGX Queries.
SGX Query 5:

Please provide Board’s assessment on whether trading of the Company’s shares should be suspended
and the basis for such assessment.

Company’s Response:

As disclosed in the FS SGX Queries, the Board is of the view that trading in its securities can continue,
and there are no changes to its assessment. Please also refer to the Company’s FS SGX Queries.

SGX Query 6:

Please provide the Sponsor’s assessment with supporting bases, the impact of the Notice of Demand
on the Group’s:

(i) operations and

(ii) ability to operate as a going concern.

Sponsor’s Response:

The Sponsor notes that arising from the Notice of Demand, the Group intends to carry out certain
actions, including the proposed sale of two properties and streamlining its processes and reducing
operational costs as far as is practicable, and understands that these plans are targeted to improve the
Group’s business operations. The Sponsor’s assessment of the Group’s ability to operate as a going
concern, which was disclosed in the FS SGX Queries dated 7 March 2023, remains unchanged.

SGX Query 7:

Please provide the Sponsor’s opinion on whether trading of the Company’s shares should be
suspended and the basis for such opinion.

Sponsor’s Response:

The Sponsor’s assessment of whether trading of the Company’s securities may continue has been
disclosed in the FS SGX Queries dated 7 March 2023, and remains unchanged.

SGX Query 8:

Please provide the Board of Directors’ confirmation on whether sufficient information has been
disclosed to enable trading of the Company’s shares to continue in an orderly manner and the bases
for its views.

Company’s Response:

To the best of the knowledge of the Board, all material information has been disclosed and the Company
will continue to disseminate material information to shareholders in a timely manner. In view of the
foregoing, the Board confirms that sufficient information has been disclosed to enable trading of the
Company's shares to continue in an orderly manner.
SGX Query 9:

The Group had completed the acquisition of Songmart Holdings only in October 2022 (less than 5
months ago). Please elaborate on the due diligence performed by the Board and Management prior to
the acquisition, in particular the financial due diligence and assessment of business viability and
prospects.

Company’s Response:

The Board and the Management had assessed the business prospects and reviewed the financial
performance of Songmart Holdings prior to the acquisition by taking into the consideration the following:

1. legal due diligence carried out on Songmart Holdings, Songmart Malaysia Sdn Bhd, Tan Lee
Heng Import & Export Sdn Bhd and Granville Grocery Sdn Bhd;

2. The profits generated by Songmart Holdings with its unaudited pro forma condensed combined
financial statements for the financial year ended 31 December ("FY”) 2020 and the three-month
period ended 31 March 2021 (“1Q2021”), including the net tangible assets and the profit before
tax of approximately RM13.8 million and RM9.4 million respectively for FY2020 and RM16.1
million and RM2.4 million respectively for 1Q2021;

3. the historical financial results of Songmart Holdings;

4. the prevailing market valuation of the properties owned by Songmart Holdings; and

5. the prevailing economic conditions and the potential growth outlook of Songmart Holdings.

Based on the due diligence carried out, the Board was of the view that Songmart Holdings is a cash
generating business and based on its historical financial results, it was a profitable business and should
be allowed time to perform, as with all businesses, there will be fluctuations in earnings and profits. The
Board believes that Songmart Holdings will allow the Company to diversify and expand into other
business opportunities and to generate new revenue streams and operating cash flows of the Group.

BY ORDER OF THE BOARD

Chew Hai Chiene Hester Arthur

Group Chief Executive Officer and Executive Director
8 March 2023

This announcement has been prepared by the Company and reviewed by the Company’s sponsor,
Novus Corporate Finance Pte. Ltd. (the “Sponsor”), in compliance with Rule 226(2)(b) of the Singapore
Exchange Securities Trading Limited (the “SGX-ST”) Listing Manual Section B: Rules of Catalist.

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 Mr. Pong Chen Yih, Chief Operating Officer, at 7 Temasek
Boulevard, #18-03B, Suntec Tower 1, Singapore 038987, telephone (65) 69502188.