GLOMAC BERHAD (Company No M) (Incorporated in Malaysia)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to take, you should consult your stockbroker, solicitor, accountant, bank manager or other professional advisers immediately. Bursa Malaysia Securities Berhad ( Bursa Securities ) has not perused this Circular prior to its issuance as it is an Exempt Circular pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. GLOMAC BERHAD (Company No M) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED BONUS ISSUE OF UP TO 74,817,531 NEW ORDINARY SHARES IN GLOMAC BERHAD ( GLOMAC OR THE COMPANY ) ( BONUS SHARE(S) ) ON THE BASIS OF 1 BONUS SHARE FOR EVERY 10 EXISTING ORDINARY SHARES IN GLOMAC HELD ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER AND EXTRACT OF RESOLUTIONS Adviser RHB Investment Bank Berhad (Company No P) (A Participating Organisation of Bursa Malaysia Securities Berhad) The Extract of Resolutions to be tabled at the Company s 33 rd Annual General Meeting ( AGM ) to be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, Kuala Lumpur on Wednesday, 27 September 2017 at a.m. is enclosed herein. The Proxy Form is set out in the Company s Annual Report 2017 and its abridged version which is despatched together with this Circular. The Proxy Form must be completed and lodged at the Registered Office of the Company at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, Kuala Lumpur, not less than 48 hours before the time stipulated for holding the AGM as indicated below. The lodging of the Proxy Form will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. Last date and time for lodging the Proxy Form...: Date and time of the AGM...: Monday, 25 September 2017 at a.m. Wednesday, 27 September 2017 at a.m. This Circular is dated 30 August 2017

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular:- Act : The Companies Act, 2016 AGM : Annual General Meeting Board : The Board of Directors of Glomac Bonus Share(s) : Up to 74,817,531 new Glomac Shares to be issued pursuant to the Proposed Bonus Issue Bursa Depository : Bursa Malaysia Depository Sdn Bhd (Company No W) Bursa Securities : Bursa Malaysia Securities Berhad (Company No W) Circular : This circular dated 30 August 2017 Director(s) Entitlement Date : Has the meaning given in Section 2(1) of the Capital Markets and Services Act, 2007 : The date as at the close of business (to be determined and announced later by the Board) on which shareholders of Glomac must be registered as a member and whose names appear in the Record of Depositors in order to participate in the Proposed Bonus Issue EPS : Earnings per share ESOS : Employees Share Option Scheme ESOS Options : A right to subscribe for new Glomac Shares under the ESOS ESS : Employees share scheme of Glomac comprising the ESOS and RSG governed by the ESS By-Laws ESS By-Laws : By-laws governing the ESS dated 31 March 2014 as amended, modified and/or supplemented from time to time FPE : Financial period ended/ending, as the case may be FYE : Financial year(s) ended/ending, as the case may be Glomac or the Company : Glomac Berhad (Company No M) Glomac Group or the Group : Collectively, Glomac, its subsidiaries and associated companies Glomac Share(s) or Share(s) : Ordinary share(s) in Glomac Listing Requirements : The Main Market Listing Requirements of Bursa Securities LPD Market Day(s) : 17 August 2017, being the latest practicable date prior to the printing and despatch of this Circular : Any day(s) between Monday to Friday (inclusive), excluding public holidays, and a day on which Bursa Securities is open for trading of securities NA : Net assets i

3 DEFINITIONS (Cont d) Outstanding ESOS Options : The outstanding ESOS Options granted and unexercised as at the LPD pursuant to the ESOS Proposed Bonus Issue : Proposed bonus issue of up to 74,817,531 Bonus Shares on the basis of 1 Bonus Share for every 10 existing Glomac Shares held on the Entitlement Date Record of Depositors RHB Investment Bank or the Adviser : A record of depositors established by Bursa Depository under the Rules of Bursa Depository, as amended from time to time : RHB Investment Bank Berhad (Company No P) RM and sen : Ringgit Malaysia and sen, respectively RSG : Restricted share grant(s) VWAP : Volume weighted average market price Words incorporating the singular shall, where applicable, include the plural and vice versa. Words incorporating the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Any reference to persons shall include corporations, unless otherwise specified. All references to you in this Circular are to the shareholders of Glomac. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be reference to Malaysian time, unless otherwise specified. Throughout this Circular, for ease of reading, certain figures have been rounded. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ii

4 TABLE OF CONTENTS PAGE LETTER TO THE SHAREHOLDERS OF GLOMAC CONTAINING:- 1. INTRODUCTION DETAILS OF THE PROPOSED BONUS ISSUE RATIONALE AND JUSTIFICATION FOR THE PROPOSED BONUS ISSUE EFFECTS OF THE PROPOSED BONUS ISSUE HISTORICAL SHARE PRICES APPROVALS REQUIRED INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION DIRECTORS RECOMMENDATION AGM FURTHER INFORMATION APPENDIX I. FURTHER INFORMATION EXTRACT OF RESOLUTIONS...ENCLOSED iii

5 GLOMAC BERHAD (Company No M) (Incorporated in Malaysia) Registered Office: Level 15, Menara Glomac Glomac Damansara Jalan Damansara Kuala Lumpur 30 August 2017 Board of Directors:- Tan Sri Dato Mohamed Mansor bin Fateh Din Datuk Richard Fong Loong Tuck Datuk Seri Fateh Iskandar bin Tan Sri Dato Mohamed Mansor Dato Ikhwan Salim bin Dato Hj Sujak Datuk Ali bin Tan Sri Abdul Kadir YB Datuk Seri Panglima Hj Abdul Azeez bin Hj Abdul Rahim Ms. Choo Shan Datuk Seri Johan bin Abdullah (Group Executive Chairman) (Group Executive Vice-Chairman) (Group Managing Director/Chief Executive Officer) (Senior Independent Non-Executive Director) (Independent Non-Executive Director) (Non-Independent Non-Executive Director) (Independent Non-Executive Director) (Non-Independent Non-Executive Director) (Alternate Director to YB Datuk Seri Panglima Hj Abdul Azeez bin Hj Abdul Rahim) To: The shareholders of Glomac Berhad Dear Sir / Madam, PROPOSED BONUS ISSUE 1. INTRODUCTION On 2 August 2017, RHB Investment Bank had, on behalf of the Board, announced that the Company proposes to undertake the bonus issue of up to 74,817,531 Bonus Shares on the basis of 1 Bonus Share for every 10 existing Glomac Shares held on the Entitlement Date. On 23 August 2017, on behalf of the Board, RHB Investment Bank announced that Bursa Securities had vide its letter dated 22 August 2017, approved the listing of and quotation for the Bonus Shares on the Main Market of Bursa Securities, subject to the conditions set out in Section 6 of this Circular. 1

6 THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH DETAILS ON THE PROPOSED BONUS ISSUE AND TO SEEK YOUR APPROVAL ON THE ORDINARY RESOLUTION PERTAINING TO THE PROPOSED BONUS ISSUE TO BE TABLED AT THE FORTHCOMING AGM. YOU ARE ADVISED TO READ AND CAREFULLY CONSIDER THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDIX CONTAINED HEREIN BEFORE VOTING ON THE ORDINARY RESOLUTION PERTAINING TO THE PROPOSED BONUS ISSUE TO BE TABLED AT THE FORTHCOMING AGM. 2. DETAILS OF THE PROPOSED BONUS ISSUE 2.1 Basis and number of Bonus Shares The Proposed Bonus Issue will entail an issuance of up to 74,817,531 Bonus Shares to be credited as fully paid-up, on the basis of 1 Bonus Share for every 10 existing Glomac Shares held by the entitled shareholders of the Company as at the close of business on the Entitlement Date. As at the LPD, the Company has:- (i) (ii) total number of issued shares of 727,821,313 (including 4,848,000 Glomac Shares held as treasury shares); and 20,354,000 Outstanding ESOS Options. The ESOS forms part of the Company s ESS which is governed by the ESS By-laws and is effective for a duration of 7 years. The Company does not intend to further grant any options under the ESOS to any eligible employees from the LPD until the completion of the Proposed Bonus Issue. Based on the above and assuming all treasury shares are resold and all Outstanding ESOS Options are exercised into new Glomac Shares prior to the implementation of the Proposed Bonus Issue, a maximum of 74,817,531 Bonus Shares may be issued pursuant to the Proposed Bonus Issue. The actual number of Bonus Shares to be issued will be based on the then number of issued shares (less any shares retained as treasury shares) of Glomac prior to the implementation of the Proposed Bonus Issue. Please refer to Section 4.1 of this Circular for an illustration of the Bonus Shares to be issued under the Proposed Bonus Issue. Fractional entitlements arising from the Proposed Bonus Issue, if any, shall be dealt with in such manner as the Board shall in their absolute discretion deem fit and expedient in the best interest of the Company. The Proposed Bonus Issue will not be implemented in stages. For illustration purposes, the theoretical ex-bonus share price of Glomac Shares are:- (i) (ii) RM0.61, based on the 5-day VWAP of Glomac Shares up to and including the LPD of RM0.67; and RM0.60, based on the 3-month VWAP of Glomac Shares up to and including the LPD of RM

7 2.2 Capitalisation of reserves The Proposed Bonus Issue shall be wholly capitalised from the share premium balance of Glomac at RM0.50 per Bonus Share, being the reference to the par value of Glomac Share immediately before the effective date of the Act, pursuant to Section 618(7) of the Act. Based on the Company s latest audited financial statements for the FYE 30 April 2017, the pro forma effect of the Proposed Bonus Issue on the share premium balance of Glomac is illustrated below based on the following scenarios:- Minimum Scenario : Maximum Scenario : Company level Assuming all the existing 4,848,000 treasury shares are retained in the Company and no Outstanding ESOS Options are exercised into new Glomac Shares prior to the implementation of the Proposed Bonus Issue. Assuming all the existing 4,848,000 treasury shares are resold to the market and all Outstanding ESOS Options are exercised into new Glomac Shares prior to the Entitlement Date of the Proposed Bonus Issue. Audited as at 30 April 2017 (RM 000) Minimum Scenario Maximum Scenario Share premium* 54,721 54,721 Less:- - Amount to be utilised for the Proposed Bonus Issue (36,149) (37,409) Balance after the Proposed Bonus Issue 18,572 17,312 Note:- Under the no par value regime of the Act which came into effect on 31 January 2017, the concept of share premium will no longer be applicable and any amount standing to the credit of the Company s share premium balance has been consolidated as part of its share capital. However, the Act provides that the Company may use its share premium balance to fully pay up the Bonus Shares within 24 months from 31 January The Board confirms that the Proposed Bonus Issue and the implementation of the Proposed Bonus Issue is and will be in full compliance with the Act and Practice Note 1/2017 issued by the Companies Commission of Malaysia on 8 February 2017 for the purposes of subsections 618(3) and (4) of the Act. The Board also confirms that the Company has adequate reserves available for the capitalisation of the Bonus Shares and such reserves are unimpaired by losses on a consolidated basis, based on the latest audited consolidated financial statements of the Company for the FYE 30 April The Proposed Bonus Issue will not be implemented in stages over a period of time. 2.3 Ranking of the Bonus Shares The Bonus Shares will, upon allotment and issuance, rank pari passu in all respects with the existing Glomac Shares, save and except that the Bonus Shares will not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid where the entitlement date for such distribution precedes the date of allotment and issuance of such new Bonus Shares. 3

8 2.4 Listing of and quotation for the Bonus Shares Glomac had received the approval from Bursa Securities for the listing of and quotation for the Bonus Shares on the Main Market of Bursa Securities via its letter dated 22 August 2017, subject to the conditions as stated under Section 6 of this Circular. The Bonus Shares will be listed and quoted on the Main Market of Bursa Securities on the next Market Day following the Entitlement Date. 3. RATIONALE AND JUSTIFICATION FOR THE PROPOSED BONUS ISSUE The Proposed Bonus Issue aims to reward the existing shareholders of the Company for their loyalty and continuing support, by enabling them to have a greater participation in the equity of the Company in terms of the increased number of Shares held, whilst maintaining their percentage of equity interest. In addition, the Proposed Bonus Issue will potentially improve the liquidity and marketability of Glomac Shares on Bursa Securities. 4. EFFECTS OF THE PROPOSED BONUS ISSUE 4.1 Share capital For illustrative purposes, the pro forma effects of the Proposed Bonus Issue on the share capital of Glomac are as follows:- Minimum Scenario No. of Shares ( 000) (RM 000) Maximum Scenario No. of Shares ( 000) (RM 000) Share capital as at the LPD 727,821 (1) 418, ,821 (1) 418,632 Less: Treasury shares (4,848) (4,273) - - Assuming the full exercise of the Outstanding ESOS Options 722, , , , ,354 (2) 18, , , , ,064 Bonus Shares to be issued 72,297 (3) - 74,818 (3) - Enlarged share capital 795, , , ,064 Notes:- (1) The Company s share premium balance of RM54,720,897 as at 30 April 2017 became part of Glomac s share capital pursuant to Section 618(2) of the Act. (2) Computed based on the respective exercise prices of the Outstanding ESOS Options as set out below:- No. of ESOS Options Exercise price Value of ESOS Options Grant 1 8,611,000 RM1.00 RM8,611,000 Grant 2 4,531,000 RM0.91 RM4,123,210 Grant 3 7,212,000 RM0.79 RM5,697,480 Total 20,354,000 RM18,431,690 (3) After the utilisation of the share premium balance for purposes of capitalisation of the Bonus Shares as set out in Section 2.2 this Circular. 4

9 4.2 NA per Share and gearing Based on the audited consolidated financial statements of Glomac Group as at 30 April 2017, the pro forma effects of the Proposed Bonus Issue on the NA per Share and gearing of Glomac Group are as follows:- Minimum Scenario Audited as at 30 April 2017 (RM 000) Pro forma I After the Proposed Bonus Issue (RM 000) Share capital (1) 418, ,632 Capital reserve Equity-settled employee benefits reserve 6,648 6,648 Foreign currency translation reserve Treasury shares (4,273) (4,273) Restricted shares grant reserve (238) (3) (253) Retained profits 655,520 (4) 655,420 Shareholders equity/ NA 1,077,462 1,077,347 Non-controlling interests 47,527 47,527 Total equity 1,124,989 1,124,874 No. of Shares issued ( 000) (2) 722, ,270 NA per Share (RM) Total borrowings ( 000) 530, ,351 Gearing (times) Notes: (1) Pursuant to Section 618(2) of the Act, the Company s share premium balance became part of Glomac s share capital. For the Proposed Bonus Issue, the Company may utilise the share premium balance of RM54,720,897 as at 30 April 2017 in the manner as allowed for under the transitional provisions of the Act within 24 months from 31 January (2) Excluding 4,848,000 treasury shares as at the LPD. (3) After taking into account the number of unvested Glomac Shares granted under the RSG held in trust as a result of the Proposed Bonus Issue. (4) After adjusting for the estimated expenses of RM100,000 for the Proposed Bonus Issue. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5

10 Maximum Scenario Pro forma I Pro forma II Assuming the resale of treasury shares and Audited as at 30 April 2017 assuming full exercise of the ESOS Options After the Proposed Bonus Issue (RM 000) (RM 000) (RM 000) Share capital (1) 418,632 (3) 437, ,064 Capital reserve Equity-settled employee benefits reserve 6,648 6,648 6,648 Foreign currency translation reserve Treasury shares (4,273) (4) - - Restricted shares grant reserve (238) (238) (5) (253) Retained profits 655, ,520 (6) 655,420 Shareholders equity/ NA 1,077,462 1,100,167 1,100,052 Non-controlling interests 47,527 47,527 47,527 Total equity 1,124,989 1,147,694 1,147,579 No. of Shares issued ( 000) (2) 722, , ,993 NA per Share (RM) Total borrowings ( 000) 530, , ,351 Gearing (times) Notes: (1) Pursuant to Section 618(2) of the Act, the Company s share premium balance became part of Glomac s share capital. For the Proposed Bonus Issue, the Company may utilise the share premium balance of RM54,720,897 as at 30 April 2017 in the manner as allowed for under the transitional provisions of the Act within 24 months from 31 January (2) Excluding 4,848,000 treasury shares as at the LPD. (3) Assuming full exercise of the Outstanding ESOS Options into 20,354,000 new Glomac Shares prior to the Entitlement Date. (4) Assuming the treasury shares are resold to the market at an average price of RM0.88 per Share, being the average purchase price of the 4,848,000 treasury shares. (5) After taking into account the number of unvested Glomac Shares granted under the RSG held in trust as a result of the Proposed Bonus Issue. (6) After adjusting for the estimated expenses of RM100,000 for the Proposed Bonus Issue. 4.3 Earnings and EPS The Proposed Bonus Issue is not expected to have any material effect on the earnings of the Group for the FYE 30 April However, there will be a corresponding dilution in the EPS of the Group as a result of the increase in the number of Shares arising from the Proposed Bonus Issue. 6

11 4.4 Substantial shareholders shareholdings The effects of the Proposed Bonus Issue on the shareholdings of the substantial shareholders of Glomac as at the LPD are as follows:- Minimum Scenario Pro forma I Shareholdings as at the LPD After the Proposed Bonus Issue Direct Indirect Direct Indirect (1) (1) (1) (1) Substantial shareholders No. of Shares % No. of Shares % No. of Shares % No. of Shares % (2) (2) Tan Sri Dato' Mohamed Mansor bin Fateh Din 146,267, ,010, ,893, ,611, Datuk Fong Loong Tuck 118,123, ,935, (2) (2) Datuk Seri Fateh Iskandar Bin Tan Sri Dato Mohamed 116,010, ,267, ,611, ,893, Mansor Lembaga Tabung Haji 74,343, ,777, Maximum Scenario Substantial shareholders Tan Sri Dato' Mohamed Mansor bin Fateh Din Shareholdings as at the LPD Pro forma I Pro forma II Assuming the resale of treasury shares and full exercise of the Outstanding ESOS Options (3) After the Proposed Bonus Issue Direct Indirect Direct Indirect Direct Indirect (1) (1) No. of Shares % No. of Shares % No. of Shares % No. of Shares % No. of Shares % No. of Shares % 146,267, (2) 116,010, ,600, (2) 117,729, ,360, (2) 129,502, Datuk Fong Loong Tuck 118,123, ,456, ,401, (2) (2) (2) Datuk Seri Fateh Iskandar 116,010, ,267, ,729, ,600, ,502, ,360, Bin Tan Sri Dato Mohamed Mansor Lembaga Tabung Haji 74,343, ,343, ,777, Notes:- (1) Excluding a total of 4,848,000 Glomac Shares bought-back by the Company and retained as treasury shares as at the LPD. (2) Deemed interested by virtue of their family relationship. (3) Assuming all 4,848,000 treasury shares are resold to the market and full exercise of the Outstanding ESOS Options. 7

12 4.5 Convertible securities As at the LPD, the Company has 20,354,000 Outstanding ESOS Options and 7,991,000 unvested RSG granted pursuant to the ESS. The Proposed Bonus Issue may give rise to adjustments to the exercise price and/ or number of the Outstanding ESOS Options as well as the adjustments to the number of unvested Glomac Shares granted under the RSG. Any necessary adjustment will be made in accordance with the provisions of the ESS By-laws to ensure that the status of the holders of the Outstanding ESOS Options and/or unvested RSG is not prejudiced after the completion of the Proposed Bonus Issue. Any such adjustment will only be finalised on the Entitlement Date and the holders of the ESOS Options and/or RSG will be notified in writing accordingly. 5. HISTORICAL SHARE PRICES The monthly highest and lowest transacted market prices of Glomac Shares for the past 12 months from August 2016 to July 2017 are as follows:- High RM Low RM 2016 August September October November December January February March April May June July Last transacted price of Glomac Shares on 1 August 2017 (being the date prior to the announcement of the Proposed Bonus Issue) Last transacted price of Glomac Shares on 25 August 2017 (being the latest date prior to the printing of this Circular) RM0.65 RM0.65 (Source: Bloomberg) THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 8

13 6. APPROVALS REQUIRED The Proposed Bonus Issue is subject to and conditional upon the following approvals being obtained:- (i) Bursa Securities, for the listing of and quotation for the Bonus Shares on the Main Market of Bursa Securities; Bursa Securities had vide its letter dated 22 August 2017, granted its approval in relation to the Proposed Bonus Issue subject to the following conditions:- No. Conditions Status of compliance 1. Glomac and RHB Investment Bank must fully comply with the Noted relevant provisions under the Listing Requirements pertaining to the implementation of the Proposed Bonus Issue; 2. Glomac and RHB Investment Bank to inform Bursa Securities To be complied upon the completion of the Proposed Bonus Issue; 3. Glomac to furnish Bursa Securities with a written confirmation To be complied of its compliance with the terms and conditions of Bursa Securities approval once the Proposed Bonus Issue is completed; 4. Glomac and RHB Investment Bank are required to make the To be complied relevant announcements pursuant to Paragraphs 6.35(2) and 6.35(4) of the Listing Requirements; and 5. Glomac to furnish Bursa Securities with a certified true copy of the resolution passed by its shareholders at the AGM approving the Proposed Bonus Issue. To be complied (ii) (iii) the shareholders of Glomac, for the Proposed Bonus Issue at the forthcoming AGM; and any other relevant authorities and/or parties, if required. The Proposed Bonus Issue is not conditional upon any other corporate exercise undertaken or to be undertaken by the Company. 7. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and major shareholders of the Company and/or persons connected to them has any interest, whether direct or indirect, in the Proposed Bonus Issue apart from their respective entitlement under the Proposed Bonus Issue, which are also available to all other shareholders of the Company. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 9

14 8. ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION The tentative timetable for the implementation of the Proposed Bonus Issue is set out below:- Month Event 27 September 2017 Convening of AGM to obtain the approval of shareholders of Glomac for the Proposed Bonus Issue December 2017 Announcement of the Entitlement Date for the Proposed Bonus Issue Completion of the Proposed Bonus Issue Barring any unforeseen circumstances, the Board expects the Proposed Bonus Issue to be completed by December CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION Save for the Proposed Bonus Issue (which is the subject matter of this Circular), the Board confirms that there are no other outstanding corporate exercises that have been announced by the Company, but not yet completed as at the LPD. 10. DIRECTORS RECOMMENDATION The Board, having considered all aspects of the Proposed Bonus Issue, is of the opinion that the Proposed Bonus Issue is in the best interest of the Company. As such, the Board recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Bonus Issue to be tabled at the forthcoming AGM of the Company. 11. AGM The Company s 33 rd AGM, will be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, Kuala Lumpur on Wednesday, 27 September 2017 at a.m. or any adjournment thereof for the purpose of considering and if thought fit, passing with or without modification, the resolution to give effect to the Proposed Bonus Issue, an extract of which is enclosed with this Circular. If you are unable to attend and vote in person at the AGM, please complete, sign and return the Proxy Form enclosed in the Company s Annual Report 2017 or its abridged version to the Registered Office of the Company at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, Kuala Lumpur so as to arrive not later than 48 hours before the time fixed for holding the AGM. The Proxy Form should be completed strictly in accordance with the instruction contained therein. The lodging of the Proxy Form will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 10

15 12. FURTHER INFORMATION You are advised to refer to Appendix I as set out in this Circular for further information. Yours faithfully, For and on behalf of the Board of GLOMAC BERHAD DATUK SERI FATEH ISKANDAR BIN TAN SRI DATO MOHAMED MANSOR Group Managing Director/Chief Executive Officer 11

16 APPENDIX I FURTHER INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and they individually and collectively accept full responsibility for the accuracy of the information contained herein and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no false or misleading statements, or omission of other facts which would make any statement contained herein false or misleading. 2. CONSENT RHB Investment Bank, being the Adviser for the Proposed Bonus Issue, has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references thereto in the form and context in which they appear in this Circular. 3. DECLARATION OF CONFLICT OF INTERESTS RHB Investment Bank, being the Adviser for the Proposed Bonus Issue (as set out in Part A of this Circular), confirms that there are no equity or financial relationship with Glomac, except as at the LPD, RHB Bank Berhad, the holding company of RHB Investment Bank and its related companies ( RHB Banking Group ) had, in its ordinary course of business, extended various credit and financing facilities with a combined limit of up to an aggregate amount of approximately RM6,750,000 to Glomac Group ( Credit Facilities ). RHB Investment Bank has given its written confirmation that there is no situation of conflict of interest that exists in relation to its role as the Adviser to Glomac for the Proposed Bonus Issue on the basis that:- (a) (b) (c) (d) (e) the Credit Facilities was granted on an arm s length basis and not material when compared to the RHB Banking Group s audited consolidated loans, advances and financing as at 31 December 2016; the facilities have been provided by RHB Banking Group in the ordinary course of business and are not conditional upon RHB Investment Bank being appointed as the Adviser for the Proposed Bonus Issue or upon any other proposal(s) being undertaken by any entity(ies) within the RHB Banking Group. Further, RHB Investment Bank s appointment as the Adviser to Glomac is in the ordinary course of its business as a licensed investment bank and RHB Investment Bank does not receive or derive any financial interest or benefit save for the professional fees received for its appointment as the Adviser for the Proposed Bonus Issue; the Company has no representative on the board of RHB Investment Bank save and except that Ms. Choo Shan, the Independent Non-Executive Director of Glomac also serves as independent director of RHB Asset Management Sdn Bhd and RHB Islamic International Asset Management Bhd. In addition, RHB Banking Group has no representative on the board of Glomac; the corporate finance division of RHB Investment Bank is required under its investment banking license to comply with strict policies and guidelines issued by the Securities Commission Malaysia, Bursa Securities and Bank Negara Malaysia governing its advisory operations. These guidelines require, among others, Chinese wall policies, clear segregation between dealing, lending and advisory activities and the formation of an independent committee to review its business operations; and the conduct of the RHB Banking Group s business is regulated strictly by the Financial Services Act, 2013, the Capital Markets and Services Act 2007 and RHB Banking Group s own internal controls and checks including segregation of reporting structures, in that its activities are monitored and reviewed by independent parties and committees. 12

17 APPENDIX I FURTHER INFORMATION (Cont d) 4. MATERIAL LITIGATION, CLAIMS OR ARBITRATION Save as disclosed below, as at the LPD, neither Glomac nor any of its subsidiaries is engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Directors of Glomac have no knowledge of any proceedings, pending or threatened against the Company and/or its subsidiaries or of any facts likely to give rise to any proceedings which may materially or adversely affect the financial position or business of Glomac Group:- Score Option Sdn Bhd (In Liquidation) v. Glomac Alliance Sdn Bhd (Kuala Lumpur High Court Case No. WA-22NCVC /2017) On 16 August 2017, Glomac Alliance Sdn Bhd ( GASB or the Defendant ), a wholly-owned subsidiary of Glomac received an Amended Writ and Amended Statement of Claim dated 10 August 2017 from Score Option Sdn Bhd (In Liquidation) ( SOSB or the Plaintiff ) arising from the joint venture agreement dated 17 January 2003 entered into between GASB and SOSB to jointly develop a part of the land ( Project Land ) ( Project ). In this suit, SOSB is claiming for RM107.8 million for the loss of the Project Land, an unspecified amount of loss of expenses of the Project, and 22% of gross development value of the Project or a minimum of RM47 million whichever the higher, together with interests and costs. In 2011, similar issues were brought up in a civil suit where it has been struck off by the high court and court of appeal. The Plaintiff and its directors have been declared insolvent. During the last case management for this matter on 21 August 2017, the High Court directed GASB to file their Statement of Defence on or before 22 September 2017, and the matter is fixed for further case management on 26 September GASB s solicitors are unable to advise on the probable outcome and the maximum exposure of liabilities at this stage as they are still in the process of going through the case files at this juncture. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 13

18 APPENDIX I FURTHER INFORMATION (Cont d) 5. MATERIAL COMMITMENTS AND CONTINGENT LIABILITIES (i) Material Commitments The Board is not aware of any material commitments incurred or known to be incurred by the Group which upon becoming enforceable may have a material impact on our financial results/position of our Group as at the LPD. (ii) Contingent Liabilities As at the LPD, the Board is not aware of any other contingent liabilities incurred or known to be incurred by the Group which upon becoming enforceable may have a material impact on the financial results or position of the Group. 6. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Company s Registered Office at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, Kuala Lumpur, during normal business hours (except public holidays) from the date of this Circular up to and including the date of the AGM:- (i) (ii) (iii) the Constitution of Glomac; the audited consolidated financial statements of Glomac for the past 2 years up to and including FYE 30 April 2017; letter of consent and declaration of conflict of interest referred to in Section 2 and Section 3 of this Appendix I; and (iv) the relevant cause papers in respect of the material litigation referred to in Section 4 of this Appendix I. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 14

19 GLOMAC BERHAD (Company No M) (Incorporated in Malaysia) EXTRACT OF RESOLUTIONS (TO BE TABLED AT THE FORTHCOMING 33 RD ANNUAL GENERAL MEETING) ORDINARY RESOLUTION 14 PROPOSED BONUS ISSUE OF UP TO 74,817,531 NEW ORDINARY SHARES IN GLOMAC ( BONUS SHARE(S) ) ON THE BASIS OF 1 BONUS SHARE FOR EVERY 10 EXISTING ORDINARY SHARES HELD IN GLOMAC ( GLOMAC SHARE(S) OR SHARE(S) ) ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER ( PROPOSED BONUS ISSUE ) THAT, subject to the approvals of all relevant regulatory authorities and parties for the listing of and quotation for the Bonus Shares, approval be and is hereby given to the Directors of the Company to capitalise an amount of up to RM37,408,766 out of the Company s share premium balance, and to apply the same for the purposes of issuing up to 74,817,531 Bonus Shares in the share capital of the Company, credited as fully paid-up to the entitled shareholders whose names appear in the Record of Depositors of the Company as at the close of business on the entitlement date to be determined by the Directors and announced later on the basis of 1 Bonus Share for every 10 existing Glomac Shares held; THAT fractional entitlements arising from the Proposed Bonus Issue, if any, shall be dealt in such manner as the Directors shall in their absolute discretion deem fit and expedient in the best interest of the Company; THAT the Bonus Shares shall, upon allotment and issuance, rank pari passu in all respects with the existing Glomac Shares, save and except that the Bonus Shares so issued will not be entitled to any dividends, rights, allotments and/or other distributions where the entitlement date precedes the date of allotment of such Bonus Shares; AND THAT the Directors be and are hereby authorised to sign and execute all documents to give effect to the Proposed Bonus Issue with full powers to assent to any conditions, modifications, variations and/or amendments in any manner as may be required by the relevant authorities and to deal with all matters relating thereto and to take all such steps and do all acts and things in any manner as they may deem necessary or expedient to implement, finalise and give full effect to the Proposed Bonus Issue.