PROPOSED ACQUISITION OF 12.45% EQUITY INTEREST IN DOMINANT OPTO TECHNOLOGIES SDN BHD, A SUBSIDIARY OF D&O; AND

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1 D & O GREEN TECHNOLOGIES BERHAD ( D&O OR COMPANY ) (I) (II) PROPOSED ACQUISITION OF 12.45% EQUITY INTEREST IN DOMINANT OPTO TECHNOLOGIES SDN BHD, A SUBSIDIARY OF D&O; AND PROPOSED AMENDMENT TO THE CONSTITUTION OF THE COMPANY (COLLECTIVELY REFERRED TO AS PROPOSALS ) 1. INTRODUCTION On behalf of the Board of Directors of D&O ( Board ), Maybank Investment Bank Berhad ( Maybank IB ) wishes to announce that D&O had issued offer letters to the remaining shareholders of Dominant Opto Technologies Sdn Bhd ( Dominant ) (other than Epistar Corporation, the strategic partner of Dominant, Tay Kheng Chiong, the Group Managing Director of D&O and Dominant and Low Tek Beng, the Chief Operating Officer of Dominant) ( Offerees ), to acquire their 30,750,000 ordinary shares in Dominant ( Dominant Shares ), representing approximately 27.95% of its equity interest, for a total purchase consideration of RM275,212,500 or RM8.95 per Dominant Share which is to be satisfied via the issuance of new irredeemable convertible preference shares in D&O ( ICPS ) ( Offer Letters ), subject to the terms and conditions of the share purchase agreement attached to the Offer Letters. Following the acceptance of the Offer Letters by Thames Electronics Sdn Bhd ( Thames ) and Cambrew Asia Limited ( Cambrew ) (collectively, the Vendors ), being two of the shareholders of Dominant, on behalf of the Board, Maybank IB wishes to announce that D&O has today entered into separate conditional share purchase agreements ( SPAs ) with Thames and Cambrew to acquire a total of 13,700,000 Dominant Shares ( Sale Shares ), representing approximately 12.45% equity interest in Dominant, for a total purchase consideration of RM122,615,000 ( Purchase Consideration ) or RM8.95 per Dominant Share ( Proposed Acquisition ). The Purchase Consideration will be satisfied via the issuance of 201,008,195 ICPS ( Consideration Securities ) at an issue price of RM0.61 per ICPS. As at 22 August 2017 ( LPD ), D&O holds a total of 68,025,000 Dominant Shares, representing approximately 61.84% equity interest in Dominant. Upon completion of the Proposed Acquisition, D&O will hold a total of 81,725,000 Dominant Shares, representing approximately 74.30% equity interest in Dominant. The offer by D&O to acquire the Dominant Shares via the Offer Letters remains open for acceptance until 5.00 p.m. (Malaysian time) on 10 October 2017, being 30 market days from the date of the Offer Letters. As such, in the event all the Offerees accept the offer and complete the sale of their Dominant Shares to D&O, D&O will hold a total of 98,775,000 Dominant Shares, representing approximately 89.80% equity interest in Dominant. Additionally, on behalf of the Board, Maybank IB wishes to announce that in conjunction with the Proposed Acquisition, D&O will also undertake the proposed amendment to its Constitution ( Proposed Amendment ). 1

2 2. DETAILS OF THE PROPOSALS 2.1 PROPOSED ACQUISITION Background information on the Proposed Acquisition The Proposed Acquisition entails the acquisitions by D&O of an aggregate of 13,700,000 Dominant Shares from the Vendors, representing approximately 12.45% equity interest in Dominant for a total purchase consideration of RM122,615,000 or RM8.95 per Dominant Share, to be satisfied by the issuance of the Consideration Securities. In summary, the Proposed Acquisition entails the following: Vendor No. of Dominant shares to be sold No. of ICPS to be issued Thames 7,700, ,975,409 Cambrew 6,000,000 88,032,786 D&O will settle the Purchase Consideration in full via the issuance and allotment of the Consideration Securities to the Vendors at the Completion Date (as defined in Section 2.1.4(v) of this Announcement) and there is no arrangement for the Purchase Consideration to be made on a deferred basis. The Proposed Acquisition is subject to the terms and conditions of the SPAs. The salient terms of the ICPS are set out in Appendix I of this Announcement Background information on Dominant Dominant was incorporated in Malaysia as a private limited company on 28 November 2000 and commenced its business in the same year. Dominant is involved in designing, developing and manufacturing of opto semiconductor components mainly light emitting diode ( LED ). It offers a comprehensive range of LED to cater for automotive, consumer, communications and industrial applications. As at the LPD, the issued share capital of Dominant is RM213,045,000 comprising 110,000,000 Dominant Shares. Based on the latest audited consolidated financial statements of Dominant for the financial year ended ( FYE ) 31 December 2016, Dominant registered profit after tax ( PAT ) attributable to the owners of Dominant of RM22.07 million while the audited net assets ( NA ) attributable to the owners of Dominant as at 31 December 2016 was RM million. Further information on Dominant is set out in Appendix II of this Announcement. 2

3 2.1.3 Background information on the Vendors (a) Thames Thames was incorporated in Malaysia on 30 January Thames is principally an investment holding company. As at the LPD, the total issued share capital of Thames is RM100,000 comprising 100,000 ordinary shares in Thames. The shareholders of Thames and their direct shareholdings in Thames as at the LPD are as follows: No. of Thames shares % Cheam Dau Peng 1, Chin Bee & Sons Sdn Bhd 4, Chu Beng Han 3, Datin Nonadiah Binti Abdullah 3, Foo Kah Heng Gary Lim Boon Cheong 1, Kema Development Sdn Bhd 8, Lim Thiam Cheok 4, Lim Thian Soo 4, Lim Soo Kiow 4, Low Swee Cheng 3, Mary Sze 1, Omega Riang Sdn Bhd ( Omega ) 21, Ong Chize Wee 3, Prima Utama Holdings Sdn Bhd PRT Capital Pte Ltd ( PRT ) 28, Tan Chee Hong Valerie Cheah Chui Mei Wee Hu Shing Yeong Toong Meng Total 100, As at the LPD, the directors of Thames are Goh Nan Yang ( GNY ) and Chu Beng Han. 3

4 (b) Cambrew Cambrew was incorporated in the British Virgin Islands on 12 November Cambrew is principally an investment holding company. As at the LPD, the total issued share capital of Cambrew is USD3,478,458 comprising 69,569,160 ordinary shares in Cambrew. Cambrew is wholly-owned by Astute Achieve Holdings Ltd and in turn Goh Nan Kioh ( GNK ) is a substantial shareholder of Astute Achieve Holdings Ltd. As at the LPD, the directors of Cambrew are GNK and Vincent Ang See Boon Salient terms of the SPAs The salient terms of the SPAs are as follows: (i) (ii) (iii) (iv) the Sale Shares will be acquired by D&O free from all encumbrances and with all attached or accrued rights on the Completion Date (as defined in Section 2.1.4(v) of this Announcement); the purchase price per Sale Share is RM8.95 ( Purchase Price Per Share ). The total purchase consideration for the Sale Shares to be sold by the respective Vendors shall be derived by multiplying the number of Sale Shares with the Purchase Price Per Share; the purchase consideration shall be satisfied by D&O by the issuance to the respective Vendors, such number of ICPS at the issue price of RM0.61 per ICPS, which is based on the 5-day volume weighted average market price ( VWAMP ) of the ordinary shares of D&O ( D&O Shares ) up to and including 23 August 2017 of RM0.61; the sale and purchase of the Sale Shares shall be conditional on the following being satisfied or waived on or before 15 January 2018 or such later date as may be notified by D&O to the respective Vendors: (a) (b) (c) (d) the submission of the SPAs for adjudication of stamp duty and the payment thereof; the approval of Bursa Malaysia Securities Berhad ( Bursa Securities ) for the listing and quotation of the D&O Shares arising from the conversion of the Consideration Securities on the Main Market of Bursa Securities, shall have been obtained without conditions or if with conditions, the conditions are determined by D&O in its sole and absolute discretion as acceptable; such corporate and shareholders approvals, where applicable, as may be required by D&O for (i) the acquisition of the Sale Shares and (ii) the allotment and issuance of the ICPS including the amendment of the Constitution, shall have been obtained by D&O; the approval of such other relevant authorities or other parties as may be required, if any, shall have been obtained without conditions or if with conditions, the conditions are acceptable to D&O; 4

5 (v) (vi) the completion of the respective SPAs shall be within 10 business days after the date when all of the conditions stated in Section 2.1.4(iv) above is satisfied and/or waived or such later date as may be notified by D&O to the respective Vendors ( Completion Date ); and without prejudice to any other claims or remedies available, if the respective Vendors fails to comply with their obligation under the respective SPAs, D&O shall be entitled to: (i) (ii) (iii) defer completion to a date not more than 14 days after the Completion Date; or proceed to complete the sale and purchase of the Sale Shares so far as practicable having regard to the defaults which have occurred and without prejudice to its rights; or rescind the relevant SPA. [The rest of this page has been intentionally left blank] 5

6 2.1.5 Basis and justification for the Purchase Consideration The Purchase Consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration the market capitalisation of D&O as at 23 August 2017 and D&O s existing 61.84% equity interest in Dominant since Dominant is the sole operating subsidiary of D&O. In justifying the Purchase Consideration, the Board has taken into consideration, among others, the following: (i) implied enterprise value ( EV )/earnings before interest, tax, depreciation and amortisation ( EBITDA ) and price-earnings ratio ( P/E ) of the Purchase Consideration compared to the EV/EBITDA and trading P/E of selected listed companies which are involved in the manufacturing of LED on foreign stock exchanges ( Selected Listed Companies ), the details of which are as follows: Company name Sanan Optoelectronics Co., Ltd Everlight Electronics Co., Ltd Country of incorporation China Taiwan Principal activities Operates in business of researching, producing, and selling of LED epitaxial wafers and wafers Manufactures and markets optoelectronic components. Its main products are surface mount device LED, super bright LED lamps, special purpose LEDs, dot matrix displays, and infrared LEDs Osram Light AG Germany Manufactures lights. It produces lamps, LEDs, light engines, lighting management systems, specialty lighting, indoor and outdoor LED luminaires, dimmers, and other related lighting products. It offers its products to customers around the world Seoul Semiconductor Co., Ltd South Korea Manufactures parts for electronic products. Its products include LED custom display, LED dot matrix, LED back light, photo diode, photo transistor, LED infrared lamp, LED display with controller and LED array Stanley Electric Co., Ltd Japan Manufactures lighting equipment including head lights, high intensity discharge (HID) assist lamps, and rear combination lamps for automobiles. It also produces liquid cristal display (LCD), and LED lamps for communication equipment, office automation equipment, and information displays EV/ EBITDA (times) P/E (times) Hongli Zhihui Group Co., Ltd China Operates as an appliance manufacturer. It develops, produces, and sells LED products and other related items, and also operates in the internet of vehicle industry

7 Company name Shenzhen Refond Optoelectronics Co., Ltd Country of incorporation China Principal activities Develops LED packaging technology, manufactures and sells LED packaging products and provides overall LED light solutions EV/ EBITDA P/E High Average Low (Source: Bloomberg as at the LPD) Dominant (1) (2) Notes: (1) Calculated based on the implied EV of RM million after taking into consideration the Purchase Consideration of RM8.95 per Dominant Share, and Dominant s non-controlling interest, total borrowings, fixed deposits with financial institutions, and cash and bank balances over the EBITDA of Dominant of RM57.90 million based on the latest audited consolidated financial statements of Dominant for the FYE 31 December (2) Calculated based on the purchase consideration of RM8.95 per Dominant Share over the audited earnings per share of Dominant for the FYE 31 December 2016 of RM0.20. (ii) (iii) rationale and benefits of the Proposed Acquisition as set out in Section 3 of this Announcement; and prospects of Dominant and its subsidiaries ( Dominant Group ) as set out in Section 4 of this Announcement. Based on the table above, the implied EV/EBITDA represented by the Purchase Consideration of times is slightly lower than the average trading EV/EBITDA of the Selected Listed Companies, whilst the implied P/E represented by the Purchase Consideration of times falls within the range of the trading P/E of the Selected Listed Companies. The Board wishes to highlight that Dominant Group is involved in manufacturing of packaging solutions of LED mainly for the automotive industry under its own Dominant brand name. Hence, there are no companies listed on Bursa Securities and foreign stock exchanges that are considered to be directly comparable to Dominant in terms of, among others, branding, composition of business activities and customers, scale of business operations, technological know-how, risk profile, asset base, profit track record, financial position, prospects and competitive environment. However, for illustration purposes only and in order to facilitate the evaluation and assessment of the Proposed Acquisition by the Company, the Board has selected the Selected Listed Companies which are all listed on foreign stock exchanges as there are no companies listed on Bursa Securities involved in similar activities. 7

8 2.1.6 Liabilities to be assumed D&O will not assume any liabilities, including contingent liabilities and guarantees, pursuant to the Proposed Acquisition Additional financial commitment There are no additional financial commitments required by D&O to put the assets/businesses of Dominant on-stream given that Dominant has been in operations since 2000 and has on-going income generating businesses Original cost of investment Thames investment in its 7,700,000 Dominant Shares was made on 15 June 2003 and 15 December 2003 at a total cost of RM7,700,000 or RM1.00 per Dominant Share. Cambrew s investment in its 6,000,000 Dominant Shares was made on 18 April 2011 at a total cost of RM6,000,000 or RM1.00 per Dominant Share Basis and justification for the issue price of the ICPS and conversion ratio The issue price of the ICPS is based on the 5-day VWAMP of D&O Shares up to and including 23 August 2017 of RM0.61. For avoidance of doubt, no consideration will be received by D&O upon conversion of the ICPS. The issue price and conversion ratio were determined after taking into consideration the following: (i) (ii) prevailing market price of D&O Shares; and the ICPS can be converted into new D&O Shares at any time, subject to D&O complying with the public shareholding spread requirement pursuant to the Vendors Undertaking (as defined in Section of this Announcement). A total of 201,008,195 new D&O Shares ( Conversion Shares ) will be issued upon full conversion of the ICPS Listing status of the ICPS and the Conversion Shares The ICPS will not be listed and quoted on the Main Market of Bursa Securities. The Conversion Shares will be listed and quoted on the Main Market of Bursa Securities Undertaking from the Vendors As the Vendors will receive the ICPS which can be converted into D&O Shares at any time, the Vendors, who are not public shareholders of D&O within the definition of the Main Market Listing Requirements of Bursa Securities ( Listing Requirements ), have given a written undertaking to the Board that they will not exercise their right of conversion as holder of ICPS, if upon conversion of the number of ICPS requested by them, the percentage of public shareholding in D&O will fall below or fall further below the public shareholding spread as allowed by Bursa Securities ( Vendors Undertaking ). 8

9 Ranking of the Conversion Shares The Conversion Shares to be issued shall, upon allotment and issuance, rank equally in all respects with the existing D&O Shares except that they shall not be entitled to any dividend, right, allotment and/or other distribution, the entitlement date of which is prior to the date of allotment of the Conversion Shares. 2.2 PROPOSED AMENDMENT The proposed amendment to the Constitution of the Company entails amendments to facilitate the issuance of the ICPS pursuant to the Proposed Acquisition. 3. RATIONALE AND BENEFITS OF THE PROPOSALS The Proposed Acquisition will enable D&O to further increase its equity interest in Dominant as the Board believes that the favourable prospects of the Dominant Group is expected to contribute positively to the future earnings of D&O and its subsidiaries ( D&O Group ). The issuance of the Consideration Securities will minimise any immediate cash outflow. In addition, any conversion of the ICPS in the future will further strengthen D&O s capital base. The Proposed Amendment is to facilitate the implementation of the Proposed Acquisition. 4. PROSPECTS OF THE DOMINANT GROUP In recent years, the Dominant Group has been gradually exiting from the highly competitive and less profitable LED markets for general lighting and LED television to focus on its core competency in the automotive segment. Although the sales volume and growth potential for general lighting and LED television markets are tremendous, investment and commercial risks are disproportionately high given that the margins are very thin, coupled with high capital requirements. With the business rationalisation to focus on the automotive segment, the profit before tax ( PBT ) of the Dominant Group grew from RM8.40 million in the FYE 31 December 2013 to RM31.86 million in the FYE 31 December 2016, representing a compounded annual growth rate ( CAGR ) of 55.95% while revenue increased from RM million in the FYE 31 December 2013 to RM million for the FYE 31 December 2016, representing a CAGR of 9.42%. Over the years, the Dominant Group has built itself to become a trusted and reliable partner to the major global automakers. Currently, the environmental friendly LED of Dominant are sold around the world through a global network of sales and after-sales services office in key automotive markets, including China, United States of America, Japan, Europe, Korea and India. The Board believes that the increased contribution from the Dominant Group coupled with the successful rationalisation to focus on the automotive segment will augur well for the D&O Group. The positive outlook of the automotive sector would benefit the D&O Group in the future as the majority of the sales of the Dominant Group is being exported to automotive customers. Based on research data from Grand View Research, Inc, report titled Automotive lighting market to grow at 12% CAGR from 2015 to 2022, automotive LED market is estimated to demonstrate considerable growth at a CAGR of over 12.0% from 2015 to 2022, buoyed by rising global car sales volume and increasing adoption of LED as the preferred lighting technology for both the interior and exterior lighting due to its efficiency, durability, flexibility and cost effectiveness. 9

10 5. RISK RELATING TO THE PROPOSED ACQUISITION The Proposed Acquisition is not expected to materially change the risk profile of the business of the D&O Group given that Dominant is already a subsidiary of D&O. However, there may be additional risk arising from the Proposed Acquisition as set out below, which is by no means exhaustive. Non-completion of the Proposed Acquisition The completion of the Proposed Acquisition is subject to the conditions precedent set out in Section 2.1.4(iv) of this Announcement, some of which may be beyond the control of D&O. Accordingly, there can be no assurance that the Proposed Acquisition can be completed as contemplated. In the event any of these conditions precedent is not fulfilled and/or waived, the SPAs will have to be terminated. 6. EFFECTS OF THE PROPOSALS The Proposed Amendment will not have any effect on the issued share capital and the shareholdings of the substantial shareholders of the Company, NA per D&O Share, gearing and earnings per Share ( EPS ) of the D&O Group. For illustrative purposes only, the proforma effects of the Proposed Acquisition on the issued share capital and the shareholdings of the substantial shareholders of the Company, NA per D&O Share, gearing and EPS of the D&O Group are shown based on the following scenarios: (i) (ii) assuming D&O acquires a total of 30,750,000 Dominant Shares, representing approximately 27.95% of the issued share capital of Dominant from the Offerees ( Maximum Scenario ); and assuming D&O acquires a total of 13,700,000 Dominant Shares, representing approximately 12.45% of the issued share capital of Dominant from Thames and Cambrew ( Minimum Scenario ). The illustration does not take into consideration the exercise of the outstanding options granted pursuant to D&O s employees share option scheme ( ESOS ) which was established in 2011 ( Options ). 6.1 Issued share capital For illustrative purposes, the proforma effect of the Proposed Acquisition on the issued share capital of D&O is as follows: Minimum Scenario No. of D&O Shares RM Maximum Scenario No. of D&O Shares As at the LPD 998,529, ,251, ,529, ,251,973 Upon full conversion of the ICPS Less: Estimated expenses relating to the Proposals Enlarged issued share capital 201,008, ,615, ,168, ,212,500 RM - (1,000,000) - (1,000,000) 1,199,538, ,866,973 1,449,698, ,464,473 10

11 6.2 Substantial shareholders shareholdings The Proposed Acquisition is not expected to have any immediate effect on the shareholdings of the substantial shareholders of the Company until such time when the ICPS are converted into new D&O Shares, subject to the Vendors Undertaking, the potential effect of which is also dependent on the issued share capital of the Company at the relevant point in time. For illustrative purposes, the proforma effect of the Proposed Acquisition on the shareholdings of the substantial shareholders of D&O as at the LPD is as follows: Minimum Scenario After the Proposed Acquisition and upon full As at the LPD conversion of the ICPS Direct Indirect Direct Indirect No. of No. of D&O Shares (%) D&O Shares (%) No. of D&O Shares (%) No. of D&O Shares (%) Goh Nan Kioh - - (1) 371,231, (1) 572,239, PRT 161,525, ,525, (2) 112,975, Keen Capital 153,470, ,470, Investments Limited ( Keen Capital ) Omega 112,783, ,783, ,975, Dato Mohammed Azlan 108,049, (2) 38,138, ,049, (2) 38,138, Hashim Datin Nonadiah Binti 33,554, (3) 112,633, ,554, (3) 112,633, Abdullah Lim Thiam Cheok 31,520, (4) 86,257, ,520, (4) 86,257, Lim Thian Soo 28,700, (4) 86,257, ,700, (4) 86,257, Lim Yam Poh 2,934, (4) 86,257, ,934, (4) 86,257, Lim Yam Chiew 2,927, (5) 138,271, ,927, (5) 251,247, Goh Nan Yang 133, (6) 112,783, , (6) 225,759,

12 Maximum Scenario After the Proposed Acquisition and upon full As at the LPD conversion of the ICPS Direct Indirect Direct Indirect No. of No. of D&O Shares (%) D&O Shares (%) No. of D&O Shares (%) No. of D&O Shares (%) Goh Nan Kioh - - (1) 371,231, (1) 572, 239, PRT 161,525, ,525, (2) 112,975, Keen Capital 153,470, ,470, Omega 112,783, ,783, (2) 112,975, Dato Mohammed Azlan 108,049, (3) 38,138, ,049, (3) 38,138, Hashim Datin Nonadiah Binti 33,554, (4) 112,633, ,554, (4) 112,633, Abdullah Lim Thiam Cheok 31,520, (5) 86,257, ,192, (5) 115,601, Lim Thian Soo 28,700, (5) 86,257, ,372, (5) 115,601, Lim Yam Poh 2,934, (5) 86,257, ,934, (5) 115,601, Lim Yam Chiew 2,927, (6) 138,271, ,927, (6) 456,656, Goh Nan Yang 133, (7) 112,783, , (7) 401,824, Notes: (1) Deemed interested by virtue of his shareholdings held through Keen Capital, PRT, Rubber Thread Industries (M) Sdn Berhad, Lanai Etika Sdn Bhd, Geo-Mobile Asia Sdn Bhd, Cambrew, Mega First Housing Development Sdn Bhd, RCI Ventures Sdn Bhd and Thames pursuant to Section 8 of the Companies Act, 2016 ( Act ). (2) Deemed interested by virtue of its shareholding in Thames pursuant to Section 8 of the Act. (3) Deemed interested by virtue of his shareholdings held through his spouse, Datin Nonadiah Binti Abdullah and her deemed interest in Magna Reserve Sdn Bhd pursuant to Section 8 of the Act. (4) Deemed interested by virtue of her shareholdings held through her spouse, Dato Mohammed Azlan Hashim and her deemed interest in Magna Reserve Sdn Bhd pursuant to Section 8 of the Act. (5) Deemed interested by virtue of his/her shareholdings held through Kema Development Sdn Bhd, Chin Bee & Sons Sdn Bhd, Geo-Mobile Asia Sdn Bhd, Lanai Etika Sdn Bhd, Rubber Thread Industries (M) Sdn Berhad, Mega First Housing Development Sdn Bhd and RCI Ventures Sdn Bhd pursuant to Section 8 of the Act. (6) Deemed interested by virtue of her shareholdings held through Omega, Chin Bee & Sons Sdn Bhd, Thames and Golden Horizon Resources Limited pursuant to Section 8 of the Act. (7) Deemed interested by virtue of his shareholdings held through Omega, Thames and Golden Horizon Resources Limited pursuant to Section 8 of the Act. 12

13 6.3 NA per D&O Share and gearing For illustrative purposes, based on the latest audited consolidated statements of financial position of D&O as at 31 December 2016 and on the assumption that the Proposed Acquisition had been effected on that date, the proforma effect of the Proposed Acquisition on the NA per D&O Share and gearing of the D&O Group are as follows. Minimum Scenario Audited as at 31 December 2016 (I) (II) (III) Subsequent adjustment (1) After (I) and the Proposed Acquisition (2) After (II) and upon full conversion of the ICPS (RM 000) (RM 000) (RM 000) (RM 000) Share capital 98, ,252 (6) 107,252 (6) 229,867 Share premium 5, ICPS ,615 - Employees share option reserve 12,372 10,850 10,850 10,850 Foreign exchange translation reserve (2,479) (2,479) (2,479) (2,479) Fair value reserve 12,694 12,694 12,694 12,694 Capital reserve 29,918 29,918 29,918 29,918 Retained profits / (accumulated losses) 39,942 39,942 (54,665)* (54,665)* Shareholders funds/na attributable to owners of the Company 197, , , ,185 Non-controlling interests 91,074 91,074 63,066 63,066 Total equity 288, , , ,251 No. of D&O Shares in issue ( 000) 989, ,530 1,199,538 1,199,538 Interest-bearing borrowings 48,865 48,865 48,865 48,865 NA per share (RM) (4) Gearing (times) (5)

14 Maximum Scenario Audited as at 31 December 2016 (I) (II) (III) Subsequent adjustment (1) After (I) and the Proposed Acquisition (3) After (II) and upon full conversion of the ICPS (RM 000) (RM 000) (RM 000) (RM 000) Share capital 98, ,252 (6) 107,252 (6) 382,465 Share premium 5, ICPS ,213 - Employees share option reserve 12,372 10,850 10,850 10,850 Foreign exchange translation reserve (2,479) (2,479) (2,479) (2,479) Fair value reserve 12,694 12,694 12,694 12,694 Capital reserve 29,918 29,918 29,918 29,918 Retained profits / (accumulated losses) 39,942 39,942 (172,406)** (172,406)** Shareholders funds/na attributable to 197, , , ,042 owners of the Company Non-controlling interests 91,074 91,074 28,209 28,209 Total equity 288, , , ,251 No. of D&O Shares in issue ( 000) 989, ,530 1,449,698 1,449,698 Interest-bearing borrowings 48,865 48,865 48,865 48,865 NA per share (RM) (4) Gearing (times) (5) Notes: (1) The subsequent events effected on or after 1 January 2017 up to and including the LPD are as follows: (a) Reclassification of share premium in the share capital of D&O arising from the migration to the no par value regime under the Act; and (b) Issuance of 8,704,000 new D&O Shares pursuant to the Options. (2) Assuming after issuance of 201,008,195 ICPS arising from the Proposed Acquisition (3) Assuming after issuance of 451,168,029 ICPS arising from the Proposed Acquisition (4) Calculated based on total NA attributable to owners of the Company divided by the total number of D&O Shares in issue. (5) Calculated based on total interest-bearing borrowings divided by total equity of the Company. (6) After deducting the estimated expenses relating to the Proposals of RM1.0 million * Included the effects of change in stake of approximately RM million, representing the difference between the purchase consideration and the additional share of NA of Dominant, charged to retained earnings in compliance with MFRS 10. ** Included the effects of change in stake of approximately RM million, representing the difference between the purchase consideration and the additional share of net asset of Dominant, charged to retained earnings in compliance with MFRS

15 6.4 Earnings and EPS The proforma effects of scenario I,II and III have been presented assuming the scenarios had been completed on 1 January 2016, being the beginning of the FYE 31 December Minimum Scenario Audited for the FYE 31 December 2016 Subsequent adjustment (1) I II III After I and the Proposed Acquisition After (II) and upon full conversion of the ICPS D&O Group Level RM'000 RM'000 RM'000 RM'000 PAT attributable to the owners of D&O 11,273 11,273 14,021 14,021 No. of D&O shares ( 000) 989, ,530 1,199,538 (2) 1,199,538 EPS (sen) Maximum Scenario Audited for the FYE 31 December 2016 Subsequent adjustment (1) I II III After I and the Proposed Acquisition After (II) and upon full conversion of the ICPS D&O Group Level RM'000 RM'000 RM'000 RM'000 PAT attributable to the owners of D&O 11,273 11,273 17,442 17,442 No. of D&O shares ( 000) 989, ,530 1,449,698 (3) 1,449,698 EPS (sen) Notes: (1) Issuance of 8,704,000 new D&O Shares pursuant to the exercise of the Options from 1 January 2017 up to and including the LPD (2) After taking in account the 201,008,195 ICPS to be issued under the Minimum Scenario (3) After taking in account the 451,168,029 ICPS to be issued under the Maximum Scenario 15

16 6.5 Convertible securities Save for the 86,090,400 Options, D&O does not have any other convertible securities in issue as at the LPD. Pursuant to the terms of the bylaws dated 7 September 2011 governing the ESOS, the Proposed Acquisition will not give rise to any adjustment to the price and number of outstanding Options. 7. APPROVALS REQUIRED The Proposals are subject to the following approvals being obtained: (i) (ii) (iii) Bursa Securities for the listing and quotation of the D&O Shares to be issued upon conversion of the Consideration Securities on the Main Market of Bursa Securities; non-interested shareholders of D&O at an Extraordinary General Meeting ( EGM ) of the Company to be convened; and any other relevant authorities and/or parties, where required. The Proposed Acquisition and the Proposed Amendment are inter-conditional upon each other. The Proposals are not conditional upon any other corporate exercise/scheme of D&O. 8. PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Listing Requirements is 62%, which was computed based on the Purchase Consideration, compared with the NA of the D&O Group as at 31 December 2016 of RM197,303, INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM Save as disclosed below, none of the other Directors and/or major shareholders of D&O or persons connected with them have any interest, direct or indirect, in the Proposals: (i) (ii) GNK, being a substantial shareholder of Cambrew, is deemed interested in the Proposals by virtue of him being a substantial shareholder of D&O via his shareholdings in PRT, Keen Capital, Cambrew, Rubber Thread Industries (M) Sdn Berhad, Lanai Etika Sdn Bhd, Mega First Housing Development Sdn Bhd, RCI Ventures Sdn Bhd and Geo-Mobile Asia Sdn Bhd; and GNY, being a substantial shareholder of Thames, is deemed interested in the Proposals by virtue of him being a substantial shareholder of D&O via his shareholdings in Omega. GNY is also an non-independent non-executive director of D&O. GNY has abstained and will continue to abstain from all deliberations and voting at the relevant Board meetings of D&O in relation to the Proposals. GNK and GNY will abstain from voting on the resolutions pertaining to the Proposals in respect of their direct and/or indirect shareholding in D&O at the EGM of the Company to be convened. They have also undertaken that they shall ensure that all persons connected to them will abstain from voting on the resolutions pertaining to the Proposals in respect of their direct and/or indirect shareholdings in D&O at the EGM of the Company to be convened. 16

17 10. ADVISERS Maybank IB has been appointed as Principal Adviser to the Company for the Proposals. The Proposed Acquisition is a related-party transaction pursuant to Chapter of the Listing Requirements. Accordingly, Mercury Securities Sdn Bhd ( Mercury Securities ) has been appointed to act as the Independent Adviser to undertake the following in relation to the Proposed Acquisition: (a) comment as to: (i) (ii) whether the Proposed Acquisition is fair and reasonable so far as the shareholders of D&O are concerned; whether the Proposed Acquisition is to the detriment of the non-interested shareholders of D&O, and such opinion must set out the reasons for, the key assumptions made and the factors taken into consideration in forming that opinion; (b) (c) advise the non-interested shareholders of D&O whether they should vote in favour of the Proposed Acquisition; and take all reasonable steps to satisfy itself that it has a reasonable basis to make the comments and advice in items (a) and (b) above. 11. DIRECTORS STATEMENT Having considered all aspects of the Proposals (including but not limited to the rationale and benefits of the Proposals, basis and justification for the Purchase Consideration, issue price of the ICPS and conversion ratio, salient terms of the SPAs and the effects of the Proposed Acquisition) and after careful deliberation, the Board (save for GNY) is of the opinion that the Proposals are in the best interest of D&O. 12. AUDIT COMMITTEE S STATEMENT The Audit Committee of D&O, having considered all aspects of the Proposals, including but not limited to the rationale and benefits of the Proposals, basis and justification for the Purchase Consideration, issue price of the ICPS and conversion ratio, salient terms of the SPAs and the effects of the Proposed Acquisition, is of the opinion that the Proposals are: (i) (ii) (iii) in the best interest of D&O; fair, reasonable and on normal commercial terms; and not detrimental to the interest of the non-interested shareholders of D&O. The Audit Committee has sought the opinion of Mercury Securities in forming its views in relation to the Proposed Acquisition. 17

18 13. TRANSACTIONS WITH RELATED PARTIES FOR THE PAST 12 MONTHS As at the date of this Announcement, save for the Proposed Acquisition and recurrent related party transactions, there is no transaction entered into between the D&O Group and the Vendors and/or persons connected with them for the 12 months preceding the date of this Announcement. 14. ESTIMATED TIMEFRAME FOR APPLICATION TO AUTHORITIES AND COMPLETION The application to the authorities are expected to be submitted within 2 months from the date of this Announcement. Barring unforeseen circumstances, the Proposals are expected to be completed in the first quarter of DOCUMENTS AVAILABLE FOR INSPECTION The Offer Letters and SPAs are available for inspection at the registered office of the Company at no. 15 Bukit Ledang, Off Jalan Duta, Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of 3 months from the date of this Announcement. This Announcement is dated 24 August

19 APPENDIX I SALIENT TERMS OF THE ICPS Issue size : Up to 451,168,029 ICPS Issue price : RM0.61 per ICPS Form and constitution : The ICPS will be issued in registered form and constituted by the Constitution of the Company. Listing status : The ICPS will not be listed on the Main Market of Bursa Securities. Dividend rate : Nil The Conversion Shares will be listed and quoted on the Main Market of Bursa Securities. However, if D&O declares, makes or pays any dividends and/or other distributions to the shareholders of D&O after the date of allotment and issuance of the ICPS, D&O shall declare the same dividends and/or distribution to the ICPS holder. Conversion rights : Subject to the ICPS holder being a shareholder within the definition of public under the Listing Requirements, the ICPS shall be convertible at any time to ordinary shares of D&O at the option of such ICPS holder, by giving D&O a written conversion notice, without the payment of any consideration (cash or otherwise) and in accordance with the conversation ratio. The conversion right for a holder of ICPS that is not public within the definition of the Listing Requirements ( Non-Public ICPS Holder ) shall be subject to D&O being satisfied that upon the conversion of the number of ICPS requested by the said holder, the percentage of public shareholding in D&O will not fall below or fall further below the public shareholding spread as allowed by Bursa Securities ( Public Shareholding Spread Requirement ). Each Non-Public ICPS Holder agrees that it shall not be entitled to exercise its right of conversion upon being informed by D&O in writing that the exercise of its right to convert will cause or result in a decrease or further decrease in the Public Shareholding Spread Requirement. 19

20 APPENDIX I Conversion ratio : Each ICPS shall be convertible into 1 D&O Share. The conversation ratio shall be subject to adjustments from time to time, at the determination of the Board, in the event of any alteration to D&O s share capital, whether by way of rights issue, capitalisation issue, consolidation of shares, subdivisions of shares or reduction of capital howsoever being effected, in accordance with the provisions of the Constitution. D&O shall give notice in writing to the holders of ICPS of its intention to make such adjustments to the conversion ratio. Notwithstanding the provisions referred to in this paragraph, in any circumstance where the directors consider that an adjustment should be made to the number of D&O Shares arising from a conversion or, if applicable, to be issued pursuant to a conversion, D&O may appoint an investment bank or auditor to consider whether for any reason whatsoever the adjustment ought to be made, or if the absence of any adjustment is inequitable and, if such investment bank or auditor shall consider this to be the case, adjustment shall be made in such manner as considered by such investment bank or auditor to be in its opinion appropriate. Redemption : The ICPS shall not be redeemable Transferability : The ICPS shall not be transferable, save and except for transfers between the holders of the ICPS, subject to the applicable laws, regulations and rules that would apply to the securities of D&O. Rights to receive notices, reports, and audited financial statements, and attend meetings and voting rights : The holders of ICPS shall be entitled to the same rights as D&O s ordinary shareholders as regards to the receipt of notices (including that of general meetings), reports and audited financial statements, to attend meetings and to receive shareholders resolutions in writing, but shall not be entitled to vote or approve any shareholders resolution or vote at any general meeting save and except in each of the following circumstances: (a) when the dividend or part of the dividend on the ICPS is in arrears for more than 6 months; (b) on a proposal to reduce D&O s share capital; (c) on a proposal for the disposal of the whole of the D&O s property, business and undertaking; (d) on a proposal that affects rights attached to the ICPS; (e) on a proposal to wind up D&O; (f) and during the winding-up of D&O. 20

21 APPENDIX I Ranking of the ICPS : The ICPS shall rank equally among themselves. Upon the liquidation, dissolution or winding up of D&O, a distribution in equal priority with the holders of the ordinary shares. The entitlement of ICPS holders to the distribution shall be calculated as follows : X = ( A B+1.2C ) X 1.2 Where A = Total net assets or surplus funds available for distribution B =Total number of ordinary shares in issue at the point in time C = Total number of ICPS in issue at the point in time X = Distribution entitlement per ICPS SAVE THAT in the event that X is more than the issue price of the ICPS, then the distribution shall be equal to the higher of, the issue price of the ICPS and Y based on following formula: Y = A B+C The ICPS shall rank subordinated to all D&O s creditors in respect of payment of debt and payments out of assets of D&O upon liquidation, dissolution, or winding-up of D&O. The directors of D&O shall not issue any preference shares (other than additional ICPS) which rank equally with or in priority to, the ICPS unless the issue of such securities has first been approved by the holders of ICPS by way of an ordinary resolution of such holders. The holders of ICPS shall not be entitled to participate in surplus capital or surplus profits. Ranking of the Conversion Shares : The new D&O Shares to be issued upon conversion of the ICPS shall upon allotment and issuance, rank equally in all respects with the then issued D&O Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such new D&O Shares. Governing law : Laws of Malaysia 21

22 APPENDIX II 1. SUBSIDIARIES As at the LPD, the subsidiaries of Dominant are as follows: Name Date and country of incorporation Issued and paid-up share capital Effective equity interest (%) Principal activities Dominant Opto Technologies (Shanghai) Co., Ltd 4 July 2011 / The People s Republic of China Renminbi (RMB) 15,612, Development of semiconductor application technology; installation, wholesale and retail of semiconductor devices, electronic components, electrical equipment or lighting, electronic display screen, lighting fittings; import and export of its related products Dominant Semiconductors Europe GmbH 8 April 2008 / Germany Euros (EUR) 25, Merchandising semiconductor components Dominant Opto Technologies Korea Inc 18 July 2005 / The Republic of Korea Korean Won (WON) 500,000, Merchandising semiconductor components Domilight Technologies Sdn Bhd 27 December 2002 / Malaysia RM1, Dormant Dominant Opto Technologies North America Inc 15 October 2012 / United States of America United States of America Dollar (USD) 100, Merchandising semiconductor components Dominant Semiconductors (Singapore) Pte Ltd Dominant Semiconductors (Lao) Sole Co., Ltd* ( Dominant Laos ) 8 October 2009 / Singapore 14 December 2009 / The Lao People s Democratic Republic USD1,000, An investment company USD2,000, Manufacturing electronic LEDs for export. Dominant Laos ceased its operations in year 2015 Note: *Interest held through Dominant Semiconductors (Singapore) Pte Ltd. As at the LPD, Dominant does not have any associated companies. 22

23 APPENDIX II 2. PRINCIPAL MARKETS FOR DOMINANT GROUP S PRODUCTS AND PERCENTAGE OF REVENUE The table below sets out the breakdown of Dominant Group s principal markets by region and the respective percentage of revenue for the FYE 31 December 2016: Region FYE 31 December 2016 RM 000 % Asia 298, Europe 87, United States 39,153 9 Others 5,021 2 Total revenue 430, FINANCIAL INFORMATION A summary financial information of Dominant based on its audited consolidated financial statements for the FYEs 31 December 2014 to 2016 and its unaudited consolidated financial statements for the 3- month financial period ended ( FPE ) 31 March 2017 is as follows: Unaudited 3-month FPE 31 Audited FYE 31 December March (RM million) (RM million) (RM million) (RM million) (RM million) Revenue Gross profit PBT PAT attributable to owners of the company ( PATAMI ) Gross EPS (RM) Net EPS (RM) Issued share capital NA attributable to owners of the company Total equity NA per Dominant Share (RM) Current ratio (times) Total borrowings Gearing (times)

24 APPENDIX II Commentaries on financial performance: FYE 31 December 2015 vs. FYE 31 December 2014 Gross profit increased by RM20.59 million or 34.1% for the FYE 31 December 2015 as compared to the FYE 31 December 2014 owing to the increase in the revenue from its automotive segment as a result of design wins, which demonstrates improving customer acceptance of Dominant s products and strengthening of the USD. As a result, PBT increased by RM12.06 million or 124.6% for the FYE 31 December 2015 as compared to the FYE 31 December 2014 and PATAMI increased by RM12.02 million or 164.0% for the FYE 31 December 2015 as compared to the FYE 31 December FYE 31 December 2016 vs. FYE 31 December 2015 Revenue decreased marginally because decrease in revenue from non-automotive segment was greater than increase in revenue from automotive segment during FYE 31 December However, gross profit increased by RM15.98 million or 19.7% for the FYE 31 December 2016 as compared to FYE 31 December 2015 due to Dominant s shift in focus from the highly competitive and volatile consumer electronic and general lighting to the automotive segment coupled with the weakening of the Ringgit Malaysia. As a result, PBT increased by RM10.12 million or 46.6% for the FYE 31 December 2016 as compared to the FYE 31 December 2015 and PATAMI increased by RM2.72 million or 14.1% for the FYE 31 December 2016 as compared to the FYE 31 December FPE 31 March 2017 vs. FPE 31 March 2016 Gross profit increased by RM7.89 million or 37% for the FPE 31 March 2017 as compared to the preceding year corresponding quarter mainly due to higher revenue, a favourable change in sales mix and a stronger USD against the Ringgit Malaysia. As a result, PBT increased by RM1.64 million or 35% for the FPE 31 March 2017 as compared to the FPE 31 March 2016 and PATAMI increased by RM0.94 million or 23% for the FPE 31 March 2017 as compared to the FPE 31 March