General Announcement::PROPOSED CAPITALISATION OF AGGREGATE S$80,000 OUTSTANDING DIRECTORS' FEES

SMI VANTAGE LIMITED

(Incorporated in Singapore)

(Company Registration No. 200505764Z)

PROPOSED CAPITALISATION OF AGGREGATE S$80,000 OUTSTANDING DIRECTORS' FEES OWED AND PAYABLE TO MR WONG YEN SIANG AND MR WEE SUNG LENG FOR FY2020

PROPOSED CAPITALISATION OF AGGREGATE S$80,000 OUTSTANDING DIRECTORS' FEES OWED AND PAYABLE TO THE INDEPENDENT DIRECTORS FOR FY2020

1. At the annual general meeting of the Company held on 27 October 2020, the shareholders of the Company ("Shareholders") had approved, inter alia, the payment of S$40,000 each or an aggregate S$80,000 to two independent Directors of the Company ("Independent Directors"), Mr Wong Yen Siang and Mr Wee Sung Leng, as Director's fees for FY2020 in the proportions as set out below, which amounts remain owing and payable to Mr Wong Yen Siang and Mr Wee Sung Leng to-date ("Outstanding Directors' Fees").
2. The Board of Directors ("Board") of SMI Vantage Limited ("Company" and together with its subsidiaries, "Group") wishes to announce that based on the mutual proposal and agreement between the Company, Mr Wong Yen Siang and Mr Wee Sung Leng, the Company is proposing to capitalise the Outstanding Directors' Fees and allot and issue to Mr Wong Yen Siang and Mr Wee Sung Leng, an aggregate 727,272 new ordinary shares in the paid-up equity share capital of the Company ("Shares"), credited as fully-paid up, at the issue price of S$0.11 per Share ("Conversion Price") and equivalent in value to the Outstanding Directors' Fees of S$80,000 ("Conversion Shares"), in full and final discharge and settlement of the Company's obligation to pay each of Mr Wong Yen Siang and Mr Wee Sung Leng his respective share of the Outstanding Director's Fees in cash ("Proposed Capitalisation of Directors' Fees").

Name of Independent	Outstanding Directors'	Number of Conversion	% Interest in entire
Director	Fees owed and	Shares Proposed to	Enlarged Share
	payable by the	be Allotted and Issued	Capital1
	Company for FY2020
Wong Yen Siang	S$40,000	363,636	0.07%
Wee Sung Leng	S$40,000	363,636	0.07%
Total	S$80,000	727,272	0.14%

Please refer to the Schedule of this announcement for the shareholding effects of, inter alia, the Proposed Capitalisation of Directors' Fees on the shareholdings of the existing Shareholders.

3. Conversion Price. The Conversion Price is at a 10.0% premium over the volume weighted average price of Shares traded ("VWAP") on the Mainboard of the Singapore Exchange Securities Trading ("SGX-ST") of S$0.10 per Share for the full 20 market days on which the Shares were traded on the Mainboard prior to this announcement, taking into account factors such as the general share price and net asset value of the Company as well as the extent of potential dilution to the minority Shareholders, and to align the two Independent Directors to the future plans, viability and anticipated performance of the Group.

1. The Company's entire issued and fully paid-up share capital including all the Conversion Shares and the The9 Consideration Shares pursuant to the Proposed Allotment and Issuance of The9 Consideration Shares as announced by the Company on

1. November 2021.

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4. Authority. The allotment and issuance of the Conversion Shares to Mr Wong Yen Siang and Mr Wee Sung Leng pursuant to the Proposed Capitalisation of Directors' Fees will constitute:

1. an issuance of Shares to a Director pursuant to Rules 804 and 805 of the Listing Manual of the SGX-ST ("Listing Rules"); and
2. an issuance of Shares to a Director pursuant to Rule 812(1)(a) of the Listing Rules.

Accordingly, the Proposed Capitalisation of Directors' Fees and the allotment and issuance of the Conversion Shares is subject to, inter alia:

(i.)	specific approval from Shareholders to be sought at an extraordinary general meeting of the
	Company ("EGM") in accordance with Rules 804, 805 and 812(2) of the Listing Rules and section
	161 of the Companies Act (Cap 50) of Singapore ("Act"), and
(ii.)	approval-in-principle of the SGX-ST for the listing and quotation of the Conversion Shares on the
	Mainboard.

The Proposed Capitalisation of Directors' Fees and allotment and issuance of the Conversion Shares will not result in any transfer of controlling interest in the Company as described in Rule 803 of the Listing Rules.

1. IPT. Notwithstanding that Mr Wong Yen Siang and Mr Wee Sung Leng are interested persons under Rule
   904 of the Listing Rules, the Proposed Capitalisation of Directors' Fees is not an interested person transaction requiring Shareholders' approval under Rule 906(1) of the Listing Rules as:
2. 1. pursuant to Rule 906(2) of the Listing Rules, the Outstanding Directors' Fees to be paid by the Company to each of Mr Wong Yen Siang and Mr Wee Sung Leng is S$40,000, ie. less than S$100,000;
   2. Mr Wong Yen Siang and Mr Wee Sung Leng are not immediate family members and not associates of each other and accordingly, the allotment and issuance of their respective Conversion Shares under the Proposed Capitalisation of Directors' Fees is not aggregated under Rule 908 of the Listing Rules, and
   3. the allotment and issuance of the respective Conversion Shares to each of Mr Wong Yen Siang and Mr Wee Sung Leng is in lieu of payment in cash by the Company to each of them for their respective share of the Outstanding Directors' Fees which is already owed to them by the Company and already exempted from Rule 906 pursuant to Rule 915(8) of the Listing Rules.
3. Securities and Futures Act (Cap. 289) ("SFA"). The Proposed Capitalisation of Directors' Fees and the allotment and issuance of the Conversion Shares to Mr Wong Yen Siang and Mr Wee Sung Leng, will be made pursuant to the 'safe harbour' exemptions for a private placement under section 272B of the SFA and in compliance with the conditions of these exemptions in the SFA. Mr Wong Yen Siang and Mr Wee Sung Leng are not accepting the Company's offer of the Conversion Shares with a view to such offer being subsequently offered to another person in Singapore, where such subsequent offer is contrary to the provisions of the SFA. No prospectus, offer information statement or offer document will be issued by the Company or registered with the Monetary Authority of Singapore for the Proposed Capitalisation of
   Directors' Fees.
4. Status. The Conversion Shares shall be allotted and issued (a) free from all encumbrances, (b) ranking pari passu in all respects with and carry all rights similar to the existing Shares, except that they will not rank for any dividend, right, allotment or other distribution, accruing on a record date which falls on or before the completion of the Proposed Capitalisation of Directors' Fees, and (c) not subject to any rights of pre- emption or first refusal or any restriction on disposal placed by any party or by contractual undertaking or otherwise or under any restrictions by any law or authority restricting the sale and transfer of the Conversion Shares.
5. No Other Entitlements. The Proposed Capitalisation of Directors' Fees does not confer on Mr Wong Yen Siang and Mr Wee Sung Leng, any rights or entitlements to participate in any distributions and/or offers of further securities made by the Company.

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1. Independent Directors' Undertakings. Each of Mr Wong Yen Siang and Mr Wee Sung Leng has undertaken to the Company, inter alia, that:
2. 1. the allotment and issuance of the Conversion Shares to him is subject to specific approval of the Shareholders at the EGM and approval of the SGX-ST for the listing and quotation of the Conversion Shares on the Mainboard and pending the aforesaid approvals and completion of the allotment and issuance of the Conversion Shares to him, he will not take any action to enforce his right to payment of the Outstanding Director's Fees from the Company;
   2. he acknowledges that the Conversion Shares to be allotted and issued to him pursuant to the Company's reliance on the 'safe harbour' exemptions for a private placement under section 272B of the SFA and in compliance with all the conditions of these exemptions in the SFA therein;
   3. he is an accredited investor as defined in the SFA and is subscribing for his respective Conversion Shares as principal for his own benefit and will not be holding his respective Conversion Shares on trust or for the benefit of other parties;
   4. he shall comply with all the conditions of the 'safe harbour' exemptions for a private placement under section 272B of the SFA and is not accepting the Company's offer of his respective Conversion Shares with a view to such offer being subsequently offered to another person in Singapore, where such subsequent offer is contrary to the provisions of the SFA;
   5. save as disclosed in this announcement and his position as an Independent Director, he has no other relationships, businesses or dealings with the Company, have not entered into transactions of any kind with the Company as a counterparty or beneficiary, and are not a person acting in concert, within the meaning of the Singapore Code on Take-overs and Mergers, with any other Shareholder;
   6. he is not an immediate family member of or an associate of any other Independent Director;
   7. he has recused and will recuse himself from all of the Directors' deliberations and decision-making processes relating to any matter concerning the Proposed Capitalisation of Directors' Fees, and he and his associates will abstain from voting on or being appointed as proxies for the ordinary resolution in relation to the Proposed Capitalisation of Directors' Fees at the EGM;
   8. no steps have been taken, nor have any proceedings, applications, petitions or summonses been started or threatened with a view to his insolvency or bankruptcy, or for the appointment of a receiver, trustee, manager, assignee or similar officer over him and/or his businesses, undertakings, properties or assets or any of them, and
   9. he has no other legal or beneficial interests in Shares.
3. Rationale and Use of Proceeds. The allotment and issuance of the Conversion Shares by the Company to Mr Wong Yen Siang and Mr Wee Sung Leng under the Proposed Capitalisation of Directors' Fees is in lieu of cash payment by the Company to them for the Outstanding Directors' Fees and accordingly, no cash proceeds will be received by the Company from Mr Wong Yen Siang and Mr Wee Sung Leng. Subject to and upon completion of the allotment and issuance of the Conversion Shares to Mr Wong Yen Siang and Mr Wee Sung Leng under the Proposed Capitalisation of Directors' Fees, the Company's obligation to pay the Outstanding Directors' Fees to them in cash shall be irrevocably and unconditionally terminated and settled, and the Company shall be fully, absolutely, finally and forever exonerated, released and discharged from the obligation to pay the Outstanding Directors' Fees in cash to Mr Wong Yen Siang and Mr Wee Sung Leng, and they shall have no further or other claims of any nature whatsoever against the Company, arising out of or in relation to the Outstanding Directors' Fees.
   The Proposed Capitalisation of Directors' Fees will enable the Group to augment its capital base by converting the Outstanding Directors' Fees into equity of the Company, strengthen the Group's balance sheet and improve its debt-equity position. The short-term obligation to pay the Outstanding Directors' Fees would be settled and the Group's cash can be conserved for other purposes.
   No placement agent was appointed by the Company for the Proposed Capitalisation of Directors' Fees. In view of the specific purpose of discharging and releasing the Company from the obligation to pay the Outstanding Directors' Fees to Mr Wong Yen Siang and Mr Wee Sung Leng, there is no underwriting arrangement for the Proposed Capitalisation of Directors' Fees.

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The Board (with Mr Wong Yen Siang and Mr Wee Sung Leng abstaining) has weighed the benefits against the potential costs to the Company as elaborated above and is of the view that the Proposed Capitalisation of Directors' Fees is beneficial to and in the interests of the Company and enables the Group to improve its working capital position and reduce its indebtedness and gearing while conserving its cash resources.

11. Independence. The Board (with Mr Wong Yen Siang and Mr Wee Sung Leng abstaining) has considered and is satisfied that the Proposed Capitalisation of Directors' Fees will not affect the independence of Mr Wong Yen Siang and Mr Wee Sung Leng in consideration that (i.) each of them will have an individual aggregate direct and indirect interest of no more than 5% of the Enlarged Share Capital of the Company,

(ii) the Proposed Capitalisation of the Directors' Fees relates to the settlement of existing debt obligations owed by the Company to them, and (iii) the Proposed Capitalisation of the Directors' Fees does not subject them to further obligations or result in a change in their scope of work or responsibility as Independent Directors.

FURTHER INFORMATION ON THE PROPOSED CAPITALISATION OF DIRECTORS' FEES

12. Opinion of the Board. The Board is of the opinion that after taking into consideration, the present financial position of the Group, including its banking facilities, its bank and cash balances together with the support of the major shareholders, the working capital available to the Group is sufficient to meet its present requirements.

1. Additional Listing Application. The Company will submit an additional listing application ("ALA") to SGX- ST for the listing and quotation of the Conversion Shares on the Mainboard.
2. Outstanding Share Options under SMIV ESOS. The Company has awarded options which may be exercised to take up unissued Shares pursuant to the The SMI Vantage Employee Share Option Scheme (formerly known as the Singapore Myanmar Investco Limited Employee Share Option Scheme) ("SMIV ESOS") approved by Shareholders at the extraordinary general meeting of the Company on 10 July 2017. As at the date of this announcement, 1,363,900 options under the SMIV ESOS still remain outstanding and unexercised.
3. Outstanding Share Awards under the SMIV PSP. As at the date of this announcement, there are no unvested Share awards under the SMIV SMI Vantage Performance Share Plan (formerly known as the SWH Performance Share Plan) ("SMIV PSP") approved and adopted by Shareholders at the extraordinary general meeting of the Company on 30 July 2014.

FINANCIAL EFFECTS OF THE PROPOSED ALLOTMENT AND ISSUANCE OF THE9 CONSIDERATION SHARES2 AND PROPOSED CAPITALISATION OF DIRECTORS' FEES

16. As at the date of this announcement, the issued and paid-up share capital of the Company is S$96,648,628 comprising 513,535,187 Shares. For illustration only, the pro forma effects on the share capital and the financial effects of the Proposed Allotment and Issuance of The9 Consideration Shares and the Proposed Capitalisation of Directors' Fees are set out below and are prepared based on the following bases and assumptions:

1. the effects on the share capital are computed as at the date of this announcement;
2. the financial effects on the net tangible assets ("NTA") and gearing are computed based on the latest announced audited consolidated financial results of the Group for FY2021 and the assumption that the Proposed Allotment and Issuance of The9 Consideration Shares and the
   Proposed Capitalisation of Directors' Fees had been effected on 31 March 2021; and
3. the financial effects on the loss per Share ("LPS") are computed based on the latest announced audited consolidated financial results of the Group for FY2021 and the assumption that the Proposed Allotment and Issuance of The9 Consideration Shares and the Proposed Capitalisation of Directors' Fees had been effected on 1 April 2020 and the basic weighted average number of shares is computed as at the date of this announcement, and
4. an exchange rate of US$1.00 : S$1.36 and S$1.00 : RMB4.68.

2 As announced by the Company on 24 November 2021.

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Share Capital

	As at the date of	After the Proposed	After the Proposed
	this announcement	Allotment and	Capitalisation of
		Issuance of The9	Directors' Fees
		Consideration
		Shares
No. of Shares	513,535,187	521,369,944	522,097,216
Paid-up capital (S$)	96,648,628.43(1)	97,353,756.64	97,433,756.64

NTA

	As at the date of	After the Proposed	After the Proposed
	this announcement	Allotment and	Capitalisation of
		Issuance of The9	Directors' Fees
		Consideration
		Shares
NTA (US$'000)	15,932(2)	16,450	16,509
No. of Shares	513,535,187	521,369,944	522,097,216
NTA per Share	3.10	3.16	3.16
(US cents)
NTA per Share	4.22	4.30	4.30
(Singapore cents)
LPS
	As at the date of	After the Proposed	After the Proposed
	this announcement	Allotment and	Capitalisation of
		Issuance of The9	Directors' Fees
		Consideration
		Shares
Loss attributable to	(5,375)	(5,375)	(5,375)
owners of the
Company (US$'000)
Basic weighted	419,829,207	427,663,964	428,391,236
average number of
Shares
LPS (US cents)	(1.28)	(1.26)	(1.25)
LPS (Singapore	(1.74)	(1.71)	(1.70)
cents)(3)

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