PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARES OF SCIENTEX (EXCLUDING TREASURY SHARES) ("PROPOSED PRIVATE PLACEMENT")

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1 SCIENTEX BERHAD ("SCIENTEX" OR THE "COMPANY") PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARES OF SCIENTEX (EXCLUDING TREASURY SHARES) ("PROPOSED PRIVATE PLACEMENT") 1. INTRODUCTION On behalf of the Board of Directors of Scientex ("Board"), RHB Investment Bank Berhad ("RHBIB") wishes to announce that the Company proposes to undertake a private placement of up to 10% of the total number of issued shares of Scientex (excluding treasury shares) to third party investors to be identified later. Further details of the Proposed Private Placement are set out in the ensuing sections. 2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT The Company had obtained the approval from its shareholders at the last annual general meeting ("AGM") convened on 15 December 2016, whereby pursuant to Section 132D of the Companies Act, 1965, the Board has been authorised to issue new shares in Scientex provided that the number of new Scientex shares does not exceed 10% of the total number of issued shares of the Company (excluding treasury shares). The authority shall continue to be in force until the conclusion of the next AGM of the Company. 2.1 Placement size The Proposed Private Placement involves an issuance of up to 10% of the total number of issued ordinary shares of Scientex ("Scientex Share(s)" or "Share(s)") (excluding treasury shares). As at 21 April 2017, being the latest practicable date of this announcement ("LPD"), the total number of issued shares of Scientex was 463,558,000 Scientex Shares, including 100 treasury shares. Assuming all the 100 treasury shares are re-sold in the open market at their respective acquisition prices prior to the implementation of the Proposed Private Placement, a total of up to 46,355,800 new Scientex Shares ("Placement Share(s)"), representing 10% of the number of issued shares of Scientex, may be issued pursuant to the Proposed Private Placement. The actual number of Placement Shares to be issued pursuant to the Proposed Private Placement will depend on the total number of issued shares of the Company (excluding treasury shares) on a date to be determined and announced later, after receipt of all relevant approvals for the Proposed Private Placement. 2.2 Basis of determining the issue price of the Placement Shares The issue price of the Placement Shares will be determined and fixed by the Board at a later date after receipt of all relevant approvals for the Proposed Private Placement. The Placement Shares will be issued at a price of not more than 10% discount to the 5-day volume weighted average market price ("VWAMP") of Scientex Shares immediately preceding the price-fixing date. For illustrative purposes only, the indicative issue price of the Placement Shares is assumed at RM7.80 per Placement Share, which represents a discount of approximately 6.81% to the 5-day VWAMP of Scientex Shares up to and including the LPD of RM8.37 per Scientex Share. 1

2 2.3 Ranking of the Placement Shares The Placement Shares will, upon allotment and issuance, rank pari passu in all respects with the then existing Scientex Shares, save and except that the Placement Shares will not be entitled to any dividends, rights, allotments and/ or any other forms of distribution that may be declared, made or paid for which the entitlement date precedes the date of allotment and issuance of the Placement Shares. 2.4 Listing of and quotation for the Placement Shares An application will be made to Bursa Malaysia Securities Berhad ("Bursa Securities") for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities. 2.5 Allocation to placees The Placement Shares will be placed out to third party investors to be identified at a later stage, where such investor(s) shall be person(s) who/ which qualify under Schedules 6 and 7 of the Capital Markets and Services Act, RHBIB has been appointed as the placement agent for the Proposed Private Placement. In accordance with Paragraph 6.04(c) of the Main Market Listing Requirements of Bursa Securities, the Placement Shares will not be placed out to the following parties:- i. The director, major shareholder, chief executive of Scientex or a holding company of Scientex, or a person connected with the director, the major shareholder or the chief executive; and ii. Nominee corporations, unless the names of the ultimate beneficiaries are disclosed. In any event that the Board is unable to identify sufficient placees to subscribe for the entire portion of the Placement Shares at one time, the Proposed Private Placement may be implemented in tranches within 6 months from the date of approval of Bursa Securities for the Proposed Private Placement or any extended period as may be approved by Bursa Securities. 2.6 Utilisation of proceeds Assuming all the 100 treasury shares are re-sold in the open market at their respective acquisition prices prior to the implementation of the Proposed Private Placement and based on the indicative issue price of RM7.80 per Placement Share, the Proposed Private Placement is expected to raise gross proceeds of up to approximately RM million. The proceeds are intended to be utilised by Scientex and its subsidiary companies ("Scientex Group" or the "Group") in the manner set out below:- Details of utilisation Timeframe for utilisation Amount of proceeds RM'mil Property development projects and expansion Within 24 months of landbanks *1 Working capital of manufacturing business *2 Within 24 months

3 Details of utilisation Timeframe for utilisation Amount of proceeds RM'mil Expansion of manufacturing business *3 Within 24 months Total Notes:- *1 *2 *3 Scientex Group intends to utilise RM million to fund its existing and future property development projects and expansion of landbanks, which have yet been determined as at this juncture. Such utilisation will include, amongst others, payments to contractors, suppliers, consultants, and payment to the relevant authorities. Scientex Group intends to utilise RM million to fund the working capital requirements of the manufacturing segment of Scientex Group such as purchase of raw materials, business development expenses, repayment of trade creditors and other general expenses. In line with the business expansion plan of the manufacturing segment, RM81.58 million has been earmarked for the expansion of industrial packaging segment and consumer packaging segment such as to finance production lines or to seek potential mergers and acquisitions. The industrial packaging segment will continue its effort in expanding its presence in its existing markets whilst opening up new markets. As such, part of the proceeds shall be utilised to improve the Group's current production capacity for its range of stretch films, polypropylene strapping band, raffia and woven bags. The consumer packaging segment is expected to see greater demand for its flexible plastic packaging products. As such, part of the proceeds shall be utilised to improve the Group's current production capacity for its flexible plastic packaging products, especially polyethylene and biaxially oriented polypropylene film. The actual gross proceeds to be raised from the Proposed Private Placement is dependent on the issue price and the number of Placement Shares to be issued. Any variance in the actual gross proceeds raised and the intended gross proceeds to be raised will be adjusted against the amount allocated for the expansion of the manufacturing business of the Group. Pending the utilisation of proceeds from the Proposed Private Placement for the above purposes, the proceeds would be placed as deposits with financial institutions or short-term money market instruments. 3. RATIONALE AND JUSTIFICATIONS FOR THE PROPOSED PRIVATE PLACEMENT The Proposed Private Placement is to facilitate the business expansion of Scientex Group and after due consideration of the various methods of fund raising, the Board is of the view that the Proposed Private Placement is the most appropriate avenue of fund raising as the Proposed Private Placement:- i. Provides the Company an expeditious way of raising funds from the capital market as opposed to other forms of fund raising; ii. iii. Increases the size and strength of the Company's shareholders' funds to reflect Scientex Group's enlarged operations; and To promote greater participation by institutional investors. 3

4 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT Based on the assumption that all the 100 treasury shares are re-sold in the open market at their respective acquisition prices prior to the implementation of the Proposed Private Placement and the number of Placement Shares issued amounts up to 10% of the total number of issued shares, the effects of the Proposed Private Placement are set out below:- 4.1 Issued share capital The pro forma effects of the Proposed Private Placement on the issued share capital of Scientex are set out below:- No. of Shares RM Issued share capital as at the LPD (including 100 treasury shares) Shares to be issued pursuant to the Proposed Private Placement 463,558, ,779,000 46,355, ,575,240 Enlarged issued share capital 509,913, ,354, Net asset ("NA") per Share and gearing Based on the latest audited consolidated statements of financial position of Scientex Group as at 31 July 2016, the pro forma effects of the Proposed Private Placement on the NA per Share and gearing of the Group are set out below:- Pro forma I Pro forma II Audited as at 31 July 2016 After adjusting for subsequent events up to the LPD *1 After the Proposed Private Placement RM'000 RM'000 RM'000 Share capital 115, , ,354 *2 Share premium 104,324 21,419 21,319 *3 Capital redemption reserve 17,882 17,882 17,882 Property revaluation surplus 55,799 55,799 55,799 Foreign currency translation reserve 8,683 8,683 8,683 Treasury shares - (1) - Other reserves Retained earnings 873, , ,860 Shareholders' funds/ NA 1,175,167 1,151,882 1,513,358 No. of Shares in issue (excluding treasury shares) ('000) 230, , ,914 NA per Share (RM) Total borrowings ('000) 471, , ,608 Gearing ratio (times)

5 Notes:- *1 After adjusting for the following events:- i. Issuance and allotment of 230,000,000 new Shares pursuant to the bonus issue of shares ("Bonus Issue") which was completed on 15 August The amount capitalised pursuant to the Bonus Issue was RM million and RM10.68 million from the share premium and retained earnings of Scientex, respectively. The expenses of RM0.13 million pursuant to the Bonus Issue were deducted from the retained earnings of Scientex ii. iii. iv. Issuance and allotment of 3,558,000 new Shares at an issue price of RM6.52 to the selected eligible employees of Scientex Group pursuant to the Scientex Berhad Share Grant Plan Buy back of 100 Shares held as treasury shares from the open market for a total purchase consideration of approximately RM720 Single tier final dividend of 10 sen per Scientex Share in respect of the financial year ended 31 July 2016 amounting to RM46.36 million which has been paid on 13 January 2017 *2 *3 Assuming 46,355,800 Placement Shares to be issued at an indicated price of RM7.80 After deducting estimated expense of RM100,000 in relation to the Proposed Private Placement 4.3 Earnings and earnings per Share ("EPS") The Proposed Private Placement is not expected to have any material effect on the earnings of Scientex Group for the financial year ending 31 July However, as the Proposed Private Placement is expected to be completed in the second quarter of 2017, there will be a reduction in the EPS of Scientex Group for the financial year ending 31 July 2017 due to the increase in the number of Scientex Shares arising from the Proposed Private Placement. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5

6 4.4 Substantial shareholding structure The pro forma effects of the Proposed Private Placement on the substantial shareholders' shareholdings of the Company as at the LPD are set out below:- Pro forma I Shareholdings as at the LPD After the Proposed Private Placement *2 < Direct Interest > < Deemed Interest > < Direct Interest > < Deemed Interest > Substantial shareholders No. of Shares % *1 No. of Shares % *1 No. of Shares % No. of Shares % Lim Teck Meng 150, ,071,118 * , ,071,118 * Lim Peng Jin 2,356, ,706,518 * ,356, ,706,518 * Lim Peng Cheong 228,600 * ,777,518 * ,600 * ,777,518 * Scientex Holdings Sdn Berhad 100,695, ,695, Scientex Leasing Sdn Bhd 46,562, ,562, Scientex Infinity Sdn Bhd (formerly known as Lim Teck Meng Sdn Bhd) 37,733,356 * ,733,356 * TM Lim Sdn Bhd 24,384, ,384, Sim Swee Tin Sdn Bhd 24,000, ,000, Notes:- *1 *2 *3 Computed based on the total issued number of shares as at the LPD of 463,557,900 (excluding 100 treasury shares) This pro forma effects of the Proposed Private Placement on the substantial shareholding structure of the Company is based on the assumption that the Proposed Private Placement does not give rise to the emergence of any new substantial shareholder(s) in the Company Deemed interests through Scientex Holdings Sdn Berhad, Scientex Leasing Sdn Bhd, Scientex Infinity Sdn Bhd (formerly known as Lim Teck Meng Sdn Bhd), TM Lim Sdn Bhd, Malacca Securities Sdn Bhd and Mplusonline Sdn Bhd 6

7 *4 *5 *6 Deemed interests through Scientex Holdings Sdn Berhad, Scientex Leasing Sdn Bhd, Scientex Infinity Sdn Bhd (formerly known as Lim Teck Meng Sdn Bhd), TM Lim Sdn Bhd, Sim Swee Tin Sdn Bhd, Malacca Securities Sdn Bhd, Progress Innovations Sdn Bhd and Mplusonline Sdn Bhd Includes shareholdings held through nominee company(ies) Deemed interests through Scientex Holdings Sdn Berhad, Scientex Leasing Sdn Bhd, Scientex Infinity Sdn Bhd (formerly known as Lim Teck Meng Sdn Bhd), TM Lim Sdn Bhd, Sim Swee Tin Sdn Bhd, Malacca Securities Sdn Bhd, Mplusonline Sdn Bhd and Paradox Corporation Sdn Bhd THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 7

8 4.5 Convertible securities As at the LPD, the Company does not have any convertible securities. 5. APPROVALS REQUIRED The Proposed Private Placement is subject to the following approvals being obtained:- i. Bursa Securities, for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities; and ii. Any other relevant authority, if required. The Proposed Private Placement is not conditional upon any other proposals undertaken or to be undertaken by the Company. 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS CONNECTED TO THEM None of the Directors and/ or major shareholders of Scientex and/ or persons connected to them have any interest, whether direct or indirect, in the Proposed Private Placement. 7. DIRECTORS' STATEMENT The Board, having considered all aspects of the Proposed Private Placement, is of the opinion that the Proposed Private Placement is in the best interest of the Company. 8. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances and subject to all required approvals being obtained, the Proposed Private Placement is expected to be completed by the second quarter of APPLICATION TO THE AUTHORITIES The application to the relevant authorities shall be made within 1 month from the date of this announcement. 10. ADVISER RHBIB has been appointed as the Adviser for the Proposed Private Placement. This announcement is dated 27 April