Chuan : SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO THE ANNUAL REPORT

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.

Chuan Holdings Limited

川 控 股 有 限 公 司 *

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1420)

SUPPLEMENTAL ANNOUNCEMENT

IN RELATION TO THE ANNUAL REPORT

References are made to the section headed "Use of proceeds" of the annual report of Chuan Holdings Limited (the "Company", together with its subsidiaries, the "Group") for the year ended 31 December 2019 (the "2019 Annual Report") published on 22 April 2020, the section headed "Future plans and use of proceeds" of the prospectus of the Company dated 25 May 2016 (the "Prospectus"), the circular of the Company dated 7 March 2018 (the "Circular") and the announcement of the Company dated 23 January 2019 (the "Announcement"). Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the 2019 Annual Report.

This announcement is made to provide supplemental information to the 2019 Annual Report and an update to the use of proceeds from the listing of the Company's shares on The Stock Exchange of Hong Kong Limited on 8 June 2016 (the "Listing").

The net proceeds of the Listing (after deducting the underwriting fees, commissions and all related expenses payable by the Group in connection to the Listing) amounted to approximately S$26.5 million (the "Net Proceeds"). As at 31 December 2019, a total amount of approximately S$15.1 million out of the Net Proceeds had been utilised by the Group according to the allocation set out in the Prospectus, the Circular and the Announcement and the remaining balance of approximately S$11.4 million was expected to be utilised as intended.

• For identification purposes only

1

In addition to the information disclosed under the section headed "Use of proceeds" in the 2019 Annual Report, the Board would like to provide additional information pursuant to paragraphs 11(8) of Appendix 16 to the Listing Rules in relation to the use of the Net Proceeds as follows:

						Expected
						timeline of full
			Amount			utilisation of
			utilised			the remaining
		Amount	during the	Amount	Unutilised	unutilised Net
	Planned	utilised up to	year ended	utilised up to	balance up to	Proceeds as at
	use of the	31 December	31 December	31 December	31 December	31 December
	Net Proceeds	2018	2019	2019	2019	2019
	S$'000	S$'000	S$'000	S$'000	S$'000	(Note 2)
Purchase of excavation machines	17,736	6,911	814	7,725	10,011	On or before
and tipper trucks (Note 1)						31 December
						2022
Purchase of softwares	2,085	502	213	715	1,370	On or before
						31 December
						2022
Secure earth filling projects
(Note 1)	-	-	-	-	-
Expand workforce	4,414	4,414	-	4,414	-
Working capital	2,247	2,247	-	2,247	-

Notes:

1. As disclosed in the Prospectus and the Circular, since the Company did not enter into any agreement for securing earth filling project by 31 October 2017, the untilised Net Proceeds of approximately S$6,607,000 originally assigned to securing earth filling project (the "Reallocated Proceeds") would be reassigned to the purchase of additional excavation machines and tipper trucks. After taking into the then business scale and projects of the Company, the number of tipper trucks, excavators acquired by the Group since the listing of shares of the Company in 2016 and the average replacement cycle of tipper truck, excavator and telescopic excavator, the Group decided to reassign the Reallocated Proceeds to partially finance the second deposit for the acquisition of the entire issued share capital of Cosmic Achiever Holdings Limited (the "Major Transaction") in March 2018. As disclosed in the Announcement, since the Major Transaction subsequently lapsed on 31 December 2018, the Reallocated Proceeds were further reassigned to the purchase of excavation machines and tipper trucks in January 2019.
2. The expected timeline for utilising the unutilised Net Proceeds is based on the best estimation of the future market conditions made by the Group. It may be subject to change based on the current and future development of market conditions.

2

As at 31 December 2019, the Group has not fully utilised the planned Net Proceeds to purchase excavation machines and tipper trucks since the Group has been offered favourable interest rate to finance the purchases by banks and decided to purchase excavation machines and tipper trucks by hire purchase instead of cash purchase since June 2016. The hire purchase only required 10% of cash payment, which was financed by the Net Proceeds. As a result, there was a delay in fully utilising the Net Proceeds assigned to purchase excavation machines and tipper truck. It is expected the unutilised amount will be fully utilised on or before 31 December 2022.

As for the unutilised planned Net Proceeds to purchase softwares, the Group had purchased softwares from a vendor which charged the Group at a lower price than originally quoted, resulting in a huge saving to the Company. As a result, there was a delay in fully utilising the Net Proceeds assigned to purchase softwares. It is expected the unutilised amount will be fully utilised on or before 31 December 2022.

Apart from the abovementioned changes, during the year ended 31 December 2019, the Net Proceeds were used in accordance with the intended purposes as previously disclosed in the Prospectus, the Circular and the Announcement and there was no material change in the use of proceeds. The unutilised amount is expected to be used in accordance with the intended purposes as disclosed in the Prospectus, the Circular and the Announcement and stated above.

The Board confirmed that the supplementary information provided in this announcement does not affect any other information contained in the 2019 Annual Report and, save as disclosed above, the content of the 2019 Annual Report remains unchanged.

By order of the Board

Chuan Holdings Limited

Lim Kui Teng

Chairman and Executive Director

Hong Kong, 20 August 2020

As at the date of this announcement, the Board comprises Mr. Lim Kui Teng, Mr. Quek Sze Whye, Mr. Bijay Joseph and Mr. Lau Yan Hong as executive Directors; and Mr. Chan Po Siu, Mr. Phang Yew Kiat and Mr. Wee Hian Eng, Cyrus as independent non-executive Directors.

3