DATAPULSE TECHNOLOGY LIMITED ANNUAL

Letter to Shareholders

LETTER TO SHAREHOLDERS continued SHARE CONSOLIDATION During the financial year, the Company carried out a share consolidation exercise (Share Consolidation) for the consolidation of every three (3) ordinary shares into one (1) ordinary share in the capital of the Company, fractional entitlements to be disregarded. The Share Consolidation was to comply with the requirement introduced by the SGX-ST and Monetary Authority of Singapore of a minimum trading price of $0.20 for Mainboard- listed stock as a continuing listing condition. The Share Consolidation was completed on 1 December 2015 and did not have any impact on the issued and paid-up capital of the Company. OUTLOOK The outlook for the Singapore manufacturing sector remains weak on the back of global economic uncertainties. Operating environment remains challenging due to weak demand, pricing pressure and keen competition. The economic uncertainties around the world are dampening corporate and consumer spending, thus affecting demand for the Group’s digital storage products and services. Any adverse changes in the macroeconomic environment might further impact the demand for the Group’s digital storage products and services. The Group will continue to focus on increasing its revenue base through an expansion of its customer base and providing more value added services to its customers and controlling its operating costs by improving yield and production efficiencies. It will also be keeping a close tab on the technological and business developments within the digital storage industry and explore other investment and business opportunities. The Group has completed the divestment of its entire shareholding in OGI in August 2016 and will realize a gain on disposal of subsidiary of approximately $5.6 million. We will continue to re-define our strategies and operating processes, and explore measures to optimize utilization of our resources efficiently. A WORD OF THANKS On behalf of the Board, I would like to take this opportunity to thank our management and staff for their hard work, contributions and loyalty over these years. I would also like to express our sincere appreciation to our customers, vendors, as well as government agencies for their valued support. To the shareholders, I thank them for the confidence they have in us. I would also like to thank my fellow directors for their guidance and contributi