Boustead Projects : FY2021 Longevity Report

FY2021 LONGEVITY REPORT

/ THE BOUSTEAD WAY /

Boustead Projects Limited

FY2021 Sustainability Report

01 BOUSTEAD PROJECTS LIMITED FY2O21 LONGEVITY REPORT

INTRODUCTION		LONGEVITY REPORTING		PURSUING BUSINESS WITH
	FRAMEWORK		A GREATER PURPOSE

DEVELOPING OUR BEST ASSET -		CONSERVING OUR COLLECTIVE		OTHER INFORMATION
BOUSTEAD PROJECTS EMPLOYEES		HOME - PLANET EARTH

CORPORATE PROFILE

Established in 1996 and listed on the SGX Mainboard, Boustead Projects Limited (SGX:AVM) is a leading provider of innovative real estate solutions with a regional presence across Singapore, China, Malaysia and Vietnam. Our core businesses are uniquely integrated to support the business park and industrial real estate ecosystem, comprising:

• Turnkey engineering, full-fledged integrated digital delivery ("IDD"), and project and construction management encompassing design-and-build;
• Real estate development, asset and leasing management; and
• Real estate fund management including being the sponsor and manager of Boustead Industrial Fund, a scalable private real estate trust platform for business park, logistics and industrial properties, and joint owner of Echo Base-BP Capital Pte Ltd, an Asia-centric fund management and services platform focused on smart buildings and integrated developments.

To date, we have constructed and/or developed more than 3,000,000 square metres of real estate for clients including Fortune 500, S&P 500 and Euronext 100 corporations, across diverse sectors like aerospace, business park, food, healthcare and pharmaceutical, high-tech manufacturing, logistics, research & development, technology and waste management, among others. Under the Boustead Development Partnership with a reputable Middle East sovereign wealth fund, we have developed or redeveloped more than half a million square metres of real estate in Singapore including landmark developments like ALICE@Mediapolis and GSK Asia House.

Our in-house capabilities are backed by core engineering expertise, the progressive

adoption of transformative methodologies including full-fledged IDD and Industry 4.0 technologies and augmented by strategic partnerships which enable the co-creation of smart, eco-sustainable and future-ready developments. Our wholly-owned engineering

• construction subsidiary in Singapore, Boustead Projects E&C Pte Ltd ("BP E&C") is the eco-sustainability leader in pioneering Green Mark Platinum-rated new private sector industrial developments under the Building
• Construction Authority ("BCA") Green Mark Programme and a national champion of best practices for quality, environmental and workplace safety and health ("WSH") management. BP E&C's related achievements include being the quality leader on the BCA CONQUAS all-time top 100 industrial projects list, one of only eight bizSAFE Mentors and also bizSAFE Star, receiving numerous awards for exemplary WSH performance.

We were also awarded the Singapore Corporate Governance Award in the Newly Listed Category at the Securities Investors Association (Singapore) Investors' Choice Awards 2017 and are one of only 92 SGX- listed corporations on the SGX Fast Track Programme - which aims to affirm listed issuers that have been publicly recognised for high corporate governance standards and for maintaining a good compliance track record

• with prioritised clearance for their corporate action submissions. We are also listed on the MSCI World Micro Cap Index and FTSE ST Fledgling Index.

Boustead Projects is a 53%-owned subsidiary of Boustead Singapore Limited (SGX:F9D),

a progressive global infrastructure-related engineering and technology group which is separately listed on the SGX Mainboard.

Visit us at www.bousteadprojects.com.

TABLE OF CONTENTS
SECTION 1 - INTRODUCTION
Corporate Profile	1
Defining Longevity	2
Letter to Stakeholders	3
The Boustead Way, Mission, Vision & Business Model	6
Longevity Reporting Framework	8
1.1 About this Report	8
1.2 Board Longevity Statement	10
1.3 Corporate Stewardship & Strategies	11
1.4 Environmental, Social & Governance Materiality Assessment	13
1.5 FY2021 Longevity Performance Summary	27
SECTION 2 - PURSUING BUSINESS WITH A GREATER PURPOSE
25 Years of Pioneership & Transforming Asia's Built Environment	32
2.1 Integrated Industrial Real Estate Solutions Provider	33
2.2 Smart Eco-Sustainable Solutions	37
2.3 Quality	42
2.4 Transformation Initiatives	45
2.5 FY2021 Direct Economic Value Generation & Distribution	52
SECTION 3 - DEVELOPING OUR BEST ASSET
- BOUSTEAD PROJECTS EMPLOYEES
A People-to-People Business	57
3.1 Code of Conduct	58
3.2 Team Development Programme	60
3.3 Positive Work Environment	67
3.4 Supply Chain Management	72
3.5 COVID-19 & Infectious Disease Outbreaks	73
SECTION 4 - CONSERVING OUR COLLECTIVE HOME
- PLANET EARTH
Planet Earth	78
4.1 Environmental Stewardship	79
4.2 Legal & Regulatory Compliance	87
4.3 Community Development	89
4.4 Conclusion	90
OTHER INFORMATION
GRI Content Index	91
Acknowledgements	98

02 BOUSTEAD PROJECTS LIMITED FY2O21 LONGEVITY REPORT

INTRODUCTION		LONGEVITY REPORTING		PURSUING BUSINESS WITH		DEVELOPING OUR BEST ASSET -		CONSERVING OUR COLLECTIVE
	FRAMEWORK		A GREATER PURPOSE		BOUSTEAD PROJECTS EMPLOYEES		HOME - PLANET EARTH

DEFINING LONGEVITY

LONGEVITY

1. Long life.
2. Long existence or service.

- Lexico Powered by Oxford1	14 YEARS	25 YEARS (SILVER JUBILEE)
	Average lifespan	Boustead Projects' age today and
	of S&P 500	counting
	corporation2

OTHER INFORMATION

193 YEARS

Boustead Group's age today and counting

Welcome to the Boustead Projects Limited FY2021 Longevity Report.

As Singapore's leading real estate solutions provider for smart, eco-sustainable and future-ready business park and industrial developments, we have demonstrated over two decades of pioneership and innovation in industrial real estate solutions including the engineering, construction and development of advanced facilities serving some of the world's best corporations. Our contributions to transforming Singapore and Asia's built environment sector have been accompanied by transformative technologies that are shaping all aspects of our business in an even more sustainable manner and enabling clients with custom- built, smart, eco-sustainable and future- ready developments founded upon

progressive Industry 4.0 transformation standards. We also share in the enduring heritage of the Boustead Group under Boustead Singapore Limited, which has contributed almost two centuries of progress and maintains their longstanding position as Singapore's oldest continuous organisation - a practical and symbolic reflection of longevity.

Sustainability reporting has taken centre stage among the world's latest corporate reporting initiatives. However, we prefer the term 'Longevity Reporting', being deeply rooted in the enduring heritage of the Boustead Group. This past year, we also tackled the challenging environment posed by the COVID-19 pandemic, an existential threat to the longevity and wellbeing of the world.

Regardless of how COVID-19 or any other major crises may change the way we operate, one thing is indelible - our distinct brand of entrepreneurialism, institutionalised in a corporate culture that links back to the Boustead Group's earliest days of trading. We embrace the Boustead Way, which prioritises the pursuit of business with a greater purpose. It is about creating sustainable shared socio-economic value instead of maximising short-term profit; promoting adaptability and resilience; and favouring longevity over sentimentality. It is also a position, a value, a commercial sensibility that runs through every layer of our organisation.

In this report, we hope that you gain an in-depth understanding of how we remain progressive and resilient, ensure our

longevity and protect the viability and long- term value of our businesses and the wider ecosystem that we are interconnected with. We also share how we strive towards what the Boustead Group has achieved in longevity over almost two centuries and how this translates to delivering sustainable shared socio-economic value and progress to key stakeholders, along with the communities that we reside in and our collective home - Planet Earth. Our performance, policies and practices on material economic, environmental, social and governance topics are explained. As a trustworthy corporate citizen, we are highly reflective about how our actions 'ripple upon the pond of life'.

1. "Meaning of Longevity in English."Lexico.com, Dictionary.com and Oxford University Press, www.lexico.com/definition/longevity. Accessed 28 July 2021.
2. Handscomb, Christopher and Shail Thaker. "Activate Agility: The Five Avenues to Success." McKinsey & Company, 1 February 2018, www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/activate-agility-get-these-five-things-right.Accessed 28 July 2021.

03 BOUSTEAD PROJECTS LIMITED FY2O21 LONGEVITY REPORT

INTRODUCTION		LONGEVITY REPORTING		PURSUING BUSINESS WITH
	FRAMEWORK		A GREATER PURPOSE

LETTER TO STAKEHOLDERS

DEVELOPING OUR BEST ASSET -		CONSERVING OUR COLLECTIVE		OTHER INFORMATION
BOUSTEAD PROJECTS EMPLOYEES		HOME - PLANET EARTH

John Lim Kok Min

Chairman

Dear Fellow Stakeholders,

It is our pleasure to present to you the

Boustead Projects Limited FY2021 Longevity Report for the financial year ended 31 March 2021.

FY2021 has been a milestone year, in which we delivered a record profit attributable to shareholders ("net profit") crossing the S$100 million mark for the first time and finishing 493% higher year-on-year at S$131.7 million. This significant accomplishment was underpinned by the successful launch of Boustead Industrial Fund ("BIF"), a value- unlocking event that had been anticipated by shareholders and which we prioritised to deliver. Nonetheless, hidden beneath this achievement was an environment fraught with the toughest challenges that we have had to face as an organisation, brought on by the COVID-19 pandemic.

Thomas Chu Kok Hong

Managing Director

Our total revenue was 29% lower year- on-year at S$301.4 million. Traditionally, our Engineering & Construction ("E&C") business segment has been the key driver of revenue and also a substantial profit contributor. However, during FY2021, the pandemic and ensuing spread of COVID-19 within the community and foreign labour dormitories, forced the Singapore Government to impose a four- month shutdown of the built environment sector, which affected all of our Singapore project sites. Following the reopening of the built environment sector, we enacted a gradual ramp-up in construction activities in line with government advisories and safe management measures, although this was far from our pre-pandemic peak.

Our record net profit of S$131.7 million was supported by BIF's value-unlocking

transaction one-off gain of S$134.8 million (the "BIF Value Unlocking Gain"), recorded following our sale of interests in 14 leasehold properties to BIF - full disposal of 11 properties and partial disposal of equity interests in a subsidiary and two joint ventures - selected from our portfolio of 25 leasehold properties. The BIF Value Unlocking Gain more than offset the E&C business segment's elevated pandemic-related costs, lower margins on current projects and lower quantum of cost savings from previously completed projects. Had net profit been adjusted to exclude the BIF Value Unlocking Gain, there would have been a net loss but this was contained at S$3.2 million, thanks to our entire team's commitment, progressive transformative technologies put in place in past years and a number of cost management measures implemented during FY2021.

FY2021 - A Tale of Two Businesses In FY2021, the fortunes of our two key business segments - E&C and Real Estate

• were a striking contrast which also revealed the effectiveness of our business model that unites the entire industrial real estate value chain.

E&C business segment revenue was 32% lower year-on-year at S$264.7 million, due to the prolonged closure of Singapore project sites and conditions imposed by and in response to the pandemic. E&C business segment profit before income tax ("PBT") was 84% lower year-on-year at S$3.1 million, hit by elevated pandemic- related costs on multiple fronts, although

this was buffered by this business segment's S$19.9 million share of the BIF Value Unlocking Gain, due to the reversal of previously eliminated construction margin attributable to the E&C business segment. FY2021 has been by far the most challenging year in our history since 1996. While the Asian Financial Crisis, Dot-com Bust and Global Financial Crisis significantly affected the E&C business segment during those crises, they were largely financial crises in nature that reduced foreign direct investments in Singapore and in turn the pipeline of enquiries for this business segment's solutions. In contrast, this pandemic has dented not only business development activities but has directly affected project execution, from prolonged project closures to significantly lower productivity and a severe shortage of foreign labour resources. This combination of multiple simultaneous impacts has left behind sector-wide repercussions.

During this crisis, priorities were first and foremost placed on safeguarding the wellbeing of our stakeholders including our team, subcontractors and their employees, clients and surrounding communities by implementing strict health checks, social distancing measures, split teams and remote working arrangements. Following the reopening of our offices and project sites, whether here in Singapore or overseas, the emphasis was placed on disinfecting, reconfiguring our mental frames of mind and physical spaces to ensure safe distancing and implementing strict safe

04 BOUSTEAD PROJECTS LIMITED FY2O21 LONGEVITY REPORT

INTRODUCTION		LONGEVITY REPORTING		PURSUING BUSINESS WITH		DEVELOPING OUR BEST ASSET -		CONSERVING OUR COLLECTIVE		OTHER INFORMATION
	FRAMEWORK		A GREATER PURPOSE		BOUSTEAD PROJECTS EMPLOYEES		HOME - PLANET EARTH

management measures. We also initiated difficult but important conversations with our team, clients and subcontractors on topics such as project schedule revisions, cost sharing and how to progress forward in the face of unprecedented challenges. Great efforts were expended to understand the positions of all key stakeholders to ensure that collectively we survive this pandemic.

We also proactively took several measures to mitigate the impact of delays and to protect the viability and long-term value of our businesses. Cost management measures included organisation-wide cost reviews, a salary freeze for our entire team and a reduction in Board fees and senior management salaries since June 2020. Our Board and executive directors took 10% reductions in directors' fees and base salaries respectively, while the rest of our senior management team was subjected to tiered 5% to 7.5% reductions in base salaries.

Following the reopening of Singapore project sites in mid-FY2021, the E&C business segment commenced on making up lost ground on several projects in Singapore including our two largest projects for JTC Kranji Green and Surbana Jurong Campus. By the end of FY2021, the E&C business segment was also able to secure the temporary occupation permits for joint development projects

• 351 on Braddell and Bombardier Singapore Service Centre Phase 2 - while another joint development, Razer SEA HQ

received its temporary occupation permit just after the end of FY2021.

While Singapore projects faced pandemic-related delays, specified extensions of time were also received under the COVID-19 (Temporary Measures) Act 2020. Overseas, the situation was much better for projects in China and Malaysia. Sizeable projects in these two overseas markets - including our largest project captured in FY2021 to design and build an advanced integrated high-tech manufacturing and office facility in Penang, Malaysia for a Fortune 500 technology corporation - progressed on schedule, facing only minor disruptions.

Technology continued to play a key role in mitigating risks associated with the pandemic, allowing for highly collaborative activities including integrated digital delivery ("IDD"), design, value engineering and construction to be conducted in a productive and safe manner.

During FY2021, our IDD Team continued to push forward with transformative technologies implementation and strengthened value propositions in 7D building information modelling ("BIM") by utilising 3D scanning, artificial intelligence and machine learning, augmented reality ("AR") and virtual reality ("VR"), data analytics and drone technology. Our team and stakeholders were able to tap on a combination of AR and VR and Cloud- based sharing platforms to review virtual 7D BIM models simultaneously, without

the need for stakeholders to be present in the same room.

Technologies were also implemented to enhance onsite safe management measures - among the world's strictest

• at project sites. In a partnership with TraceSafe under the Open Innovation Platform, we outfitted our team and subcontractors' employees at one project site with TraceSafe's wearable safety devices. Attached to helmets, these devices can withstand the rugged conditions of the built environment sector and are able to provide real-time contact tracing, safe distancing and geofencing capabilities onsite. These devices send signals to individual workers when they breach safe boundaries of separated work zones or are too close to one another, making everybody onsite safer. With the successful implementation at the first project site, TraceSafe is now being rolled out across all project sites.

In contrast to the impact on the E&C business segment, Real Estate business segment revenue was 7% higher year- on-year at S$36.7 million, mainly due to a full-year of rental contribution from the fully-leased Boustead Industrial Park Phase 1 in Vietnam, a short-term sublease for 36 Tuas Road and increased management fees from Boustead Development Partnership. Real Estate business segment PBT was exponentially higher after adding in this business segment's super majority share of the BIF Value Unlocking Gain, leading to our record net profit.

Other than being instrumental in the successful launch of BIF, the Real Estate business segment was also responsible for securing a number of sizeable leases for leasehold properties, both completed and under development. New leases totalled over 53,700 square metres of net lettable area - with the likes of Zuellig Pharma, NETS, Shopee, JustCo and a Fortune 500 corporation - over the course of FY2021. 351 on Braddell and Razer SEA HQ also achieved at least two-thirds committed occupancy prior to receiving temporary occupation permits.

Transforming Our Business Model with Boustead Industrial Fund

The Board had made the establishment of BIF a priority pre-pandemic but it was thanks to the commitment of our team that BIF was able to launch during the pandemic, even as stakeholder engagements had become more complex and global travel restrictions had taken effect. Had our team not gone through extraordinary efforts, any launch would likely have been delayed by another year.

BIF represents our maiden full-fledged private real estate trust. Strategically, BIF has transformed our business model and integrated platform that unites all parts of the industrial real estate value chain - from value-added capabilities spanning E&C and real estate development and asset management services to fund management services. This significantly enhances our offerings to clients and adds greater flexibility to our structuring of potential development opportunities.