ADVENTA BERHAD (Company No M) (Incorporated in Malaysia under the Companies Act, 1965)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. Bursa Malaysia Securities Berhad ( Bursa Securities ) has not perused the relevant contents of this Circular relating to the Proposed Renewal of Authority for Share Buy-Back (as defined herein). 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. ADVENTA BERHAD (Company No M) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF ADVENTA BERHAD PART B PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE WHICH ARE NECESSARY FOR THE DAY TO DAY OPERATIONS The above proposals will be tabled as Special Business at Adventa Berhad s Tenth Annual General Meeting ( AGM ). The Form of Proxy and Notice of the AGM to be held at Dewan Sekebun Bunga, Grand Riverview Hotel, Jalan Post Office Lama, Kota Bharu, Kelantan Darul Naim on Monday, 29 April 2013 at 12:00 noon, is set out in the Annual Report of Adventa Berhad for the financial year ended 31 October You are entitled to attend and vote at the AGM or to appoint a proxy or proxies to attend and vote on your behalf. The completed Form of Proxy should be lodged at Securities Services (Holdings) Sdn Bhd, Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur not later than 48 hours before the time for holding the AGM or at any adjournment thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last date and time for lodging the Form of Proxy : Saturday, 27 April 2013 at 12:00 noon Date and time of the AGM : Monday, 29 April 2013 at 12:00 noon This Circular is dated 5 April 2013

2 DEFINITIONS In this Circular and the accompanying appendices, the following abbreviations shall have the following meanings unless otherwise stated:- Act : Companies Act, 1965 as amended from time to time and any re-enactment thereof Adventa or Company : Adventa Berhad ( M) Adventa Group or Group : Adventa and its subsidiaries Adventa Share(s) or Share(s) : Ordinary share(s) of RM0.35 each in Adventa AGM : Annual General Meeting Aspion : Aspion Sdn Bhd ( T) Aspion Group : Aspion and its subsidiaries Board : Board of Directors of Adventa Bursa Depository : Bursa Malaysia Depository Sdn Bhd ( W) Bursa Securities : Bursa Malaysia Securities Berhad ( W) Capital Reduction and Repayment : The capital reduction and repayment of RM61,114,308 to the entitled shareholders of Adventa on the basis of RM0.40 for each ordinary share of RM0.50 each held on 8 January 2013 which was completed on 21 January 2013 Code Disposal : Malaysian Code on Take-Overs and Mergers, 2010 and any amendments made from time to time : Disposal of the Specified Business to Aspion for a disposal consideration of RM320,850,117 or RM2.10 per ordinary share of RM0.50 each which was completed on 30 November 2012 EPS : Earnings per Share Excluded Business : The excluded business means:- All of the shares in the capital of Sun Healthcare (M) Sdn Bhd held by Adventa; and All of the shares in the capital of Electron Beam Sdn Bhd held by Adventa FYE : Financial year ended/ ending 31 October, as the case may be Listing Requirements : Main Market Listing Requirements of Bursa Securities, as amended from time to time LPD : 21 March 2013, being the latest practicable date prior to printing of this Circular Mandated Related Party : The Aspion Group NA : Net assets i

3 DEFINITIONS (cont d) Proposals Proposed Renewal of Authority for Share Buy-Back or Proposed Share Buy-Back : The Proposed Renewal of Authority for Share Buy-Back and Proposed Shareholders Mandate collectively : Proposed renewal of authority from the shareholders of the Company to enable Adventa to purchase and/or hold up to 10% of the issued and paid-up share capital of Adventa pursuant to Section 67A of the Act Proposed Shareholders Mandate : Proposed shareholders mandate for the Adventa Group to enter into the Recurrent Transactions as set out in Section 2.4 of Part B of this Circular from the date of the forthcoming AGM to the next AGM Purchased Shares Recurrent Transactions : Shares purchased pursuant to the Proposed Share Buy- Back : Recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations and are entered into by any of the companies in the Adventa Group with the Mandated Related Party in the ordinary course of business which involves the interest, direct or indirect, of the Mandated Related Party RM and sen : Ringgit Malaysia and sen respectively Specified Business : All of the business and undertaking of Adventa other than the Excluded Business Treasury Shares : Purchased Shares retained in treasury All references to you in this Circular are to the shareholders of the Company. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise stated. Any discrepancies in the tables included in this Circular between the amounts listed, actual figures and the totals thereof are due to rounding. [The rest of this page is intentionally left blank] ii

4 CONTENTS PAGE PART A LETTER TO THE SHAREHOLDERS OF ADVENTA IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK CONTAINING:- 1. INTRODUCTION PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK Details of the Proposed Renewal of Authority for Share Buy-Back Quantum Funding Public Shareholding Spread Treatment of Shares Purchased Pricing POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK RISK FACTORS OF THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK HISTORICAL SHARE PRICES RATIONALE FOR THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK EFFECTS OF THE PROPOSED SHARE BUY-BACK Share Capital NA Working Capital EPS Dividends DIRECTORS AND SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS IMPLICATIONS ON THE CODE PURCHASE, RESALE AND CANCELLATION OF THE ADVENTA SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST APPROVAL REQUIRED DIRECTORS RECOMMENDATION TENTH AGM FURTHER INFORMATION iii

5 CONTENTS (cont d) PAGE PART B LETTER TO THE SHAREHOLDERS OF ADVENTA IN RELATION TO THE PROPOSED SHAREHOLDERS MANDATE CONTAINING:- 1. INTRODUCTION PROPOSED SHAREHOLDERS MANDATE Details of the Proposed Shareholders Mandate The Companies Within the Adventa Group in which the Proposed Shareholders' Mandate is Applicable The Mandated Related Party in which the Proposed Shareholders' Mandate is Applicable Nature of Recurrent Transactions Contemplated under the Proposed Shareholders' Mandate Review and Disclosure Procedures on the Recurrent Related Party Transactions and Thresholds Authority Statement by Audit Committee RATIONALE AND BENEFITS OF THE PROPOSED SHAREHOLDERS' MANDATE EFFECTS OF THE PROPOSED SHAREHOLDERS' MANDATE CONDITIONS OF THE PROPOSED SHAREHOLDERS' MANDATE DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST DIRECTORS' RECOMMENDATION TENTH AGM FURTHER INFORMATION APPENDICES APPENDIX I - FURTHER INFORMATION APPENDIX II - EXTRACT OF NOTICE OF TENTH ANNUAL GENERAL MEETING [The rest of this page is intentionally left blank] iv

6 PART A LETTER TO THE SHAREHOLDERS OF ADVENTA IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

7 ADVENTA BERHAD (Company No M) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office:- 1, Jalan 8 Pengkalan Chepa 2 Industrial Zone Kota Bahru Kelantan 5 April 2013 Directors Edmond Cheah Swee Leng (Chairman/ Senior Independent Non-Executive Director) Low Chin Guan (Managing Director) Kwek Siew Leng (Executive Director) Toh Seng Thong (Independent Non-Executive Director) Dato Dr. Norraesah Binti Haji Mohamad (Independent Non-Executive Director) To: The shareholders of Adventa Berhad Dear Sir/ Madam, PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK 1. INTRODUCTION On 18 March 2013, the Board had announced that the Company proposes to seek the renewal of the authority to purchase its own Shares of up to 10% of the prevailing total issued and paid-up share capital of the Company. The purpose of this Circular is to provide you with the details of the Proposed Renewal of Authority for Share Buy-Back and to seek your approval on the ordinary resolution to be tabled as Special Business at the forthcoming AGM of the Company. SHAREHOLDERS OF ADVENTA ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK AT THE FORTHCOMING AGM. 2. PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK 2.1 Details of the Proposed Renewal of Authority for Share Buy-Back At the AGM held on 26 March 2012, the Company had obtained the mandate from the Company s shareholders to purchase its own Shares of up to 10% of the prevailing total issued and paid-up share capital of the Company. The aforesaid approval will continue to be in force until the conclusion of the forthcoming AGM which will be held on 29 April

8 A new mandate is required from the shareholders of the Company to renew the authority to purchase its own Shares of up to 10% of the prevailing total issued and paid-up share capital of the Company subject to compliance with Section 67A of the Act and any prevailing laws, rules and regulations, orders, guidelines and requirements issued by the relevant authorities including the public shareholding spread as allowed by Bursa Securities. The purchase of Shares will be carried out through Bursa Securities via the stockbroker(s) appointed by the Company. The authority from the shareholders of the Company, if renewed, shall be effective upon passing of the ordinary resolution for the Proposed Renewal of Authority for Share Buy-Back at the forthcoming Tenth AGM and will continue to be in force until:- the conclusion of the next AGM of the Company following the general meeting at which such resolution was passed at which time it will lapse unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or the expiration of the period within which the next AGM after that date is required by law to be held; or the authority is revoked or varied by an ordinary resolution passed by the shareholders of the Company in a general meeting, whichever occurs first ( Proposed Authorised Period ). The Proposed Renewal of Authority for Share Buy-Back will allow the Board to exercise the power of the Company to purchase and/or hold its own Shares at any time within the Proposed Authorised Period using the internally generated funds of the Company and/or external borrowings. The actual number of Shares to be purchased, the total amount of internally generated funds and/or external borrowings involved for each purchase and the timing of the purchase will only be determined later depending on the availability of internally generated funds, the repayment capabilities, the actual number of Shares to be purchased and other relevant cost factors. In accordance with Section 67A of the Act and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by the relevant authorities, the number of Shares to be purchased and timing of the purchase will depend on the market conditions and sentiments of the share market together with, inter-alia, the amount of funds (share premium and/or retained profits) and financial resources available to the Company. In the event that the Company intends to purchase its own Shares using external borrowings, the Board shall ensure that the Company shall have sufficient funds to repay the external borrowings and that the repayment would have no material effect on the cash flow of the Company. The Board may deal with the Purchased Shares in accordance with Section 67A of the Act in the following manner:- cancel the Purchased Shares; and/or retain the Purchased Shares as Treasury Shares for distribution as dividends to the shareholders and/or to be resold on Bursa Securities in accordance with the rules of Bursa Securities and/or to be subsequently cancelled; and/or retain part of the Purchased Shares as Treasury Shares and cancel the remainder. 2

9 2.2 Quantum Based on the issued and paid-up share capital of the Company of RM53,475,019 comprising 152,785,770 Shares as at LPD, the number of Shares that can be purchased is up to 15,278,500 Shares representing approximately 10% of the issued and paid-up share capital of the Company. The actual number of Shares to be purchased by the Company pursuant to the Proposed Share Buy-Back, the total amount of funds involved for each purchase and the timing of the purchase(s) will depend on inter-alia, the market conditions and sentiments of the share market as well as the availability of financial resources of the Company and the availability of the share premium and/or retained profits of the Company. 2.3 Funding In compliance with Paragraph 12.10(1) of the Listing Requirements, the maximum amount of funds to be utilised for the Proposed Share Buy-Back shall not exceed the aggregate of the share premium and/or retained profits of the Company or both, subject to compliance with Section 67A of the Act and any prevailing laws, including compliance with at least 25% of its total listed shares (excluding Treasury Shares) or such lower percentage of shareholding spread as may be allowed by Bursa Securities, as required by Paragraph 8.02(1) of the Listing Requirements. The details of the share premium and/or retained profits of Adventa are as follows:- Company Level (I) (II) After I and the Capital Audited After Reduction and FYE 2012 the Disposal Repayment RM RM RM Share premium 43,026,232 43,026,232 4,829,789 Retained profits 4,167, ,571,508 4,950,007 Total 47,193, ,597,740 9,779,796 Based on the above, the Company shall allocate an amount not exceeding RM9,779,796 (being the total of the share premium and/or retained profits after the completion of the Disposal and Capital Reduction and Repayment) in accordance with Paragraph 12.10(1) of the Listing Requirements and Section 2.2 of Part A of this Circular for the Proposed Share Buy-Back. The Proposed Share Buy-Back would allow the Board to exercise the power of the Company to purchase its own Shares at any time within the time period mentioned in Section 2.1 of Part A of this Circular, using internally generated funds and/or external borrowings. The Board will ensure that Adventa has sufficient funds to repay the external borrowings and that the repayment will not have a material effect on the cash flow of the Company. The amount of the funds to be utilised would only be determined later depending on the actual number of Shares to be purchased, the availability of funds at the time of purchase(s), the market conditions and sentiments of the share market. 2.4 Public Shareholding Spread The Company will not undertake any Proposed Share Buy-Back if that will result in breach of Paragraph 8.02(1) of the Listing Requirements, which requires the Company to maintain a public shareholding spread of at least 25% of its total listed shares (excluding Treasury Shares) or such lower percentage of public shareholding spread as may be allowed by Bursa Securities. The Board is mindful of the public shareholding spread requirement and will continue to be mindful of such requirement when making any purchase of Shares by the Company. 3

10 As at LPD, the public shareholding spread of Adventa was approximately 55.65%. The effects of the Proposed Share Buy-Back on the public shareholding spread are illustrated as below:- As at LPD After Proposed Share Buy-Back Number of Shares purchased - 15,278,500 Percentage of issued and paid-up share capital (%) Issued and paid-up share capital after the Proposed Share Buy-Back 152,785, ,507,270 Public shareholding spread (%) The Company would endeavour to ensure that the Proposed Share Buy-Back will not breach Paragraph of the Listing Requirements, which states that a listed corporation must not purchase its own Shares if the purchase(s) would result in the listed corporation being in breach of Paragraph 8.02(1) of the Listing Requirements. 2.5 Treatment of Shares Purchased The Board may decide to cancel the Purchased Shares if it is of the opinion that, in the foreseeable future, there are no investment opportunities that would result in an enhanced investment to Adventa and hence the value of the Adventa Shares. If the Purchased Shares are cancelled, the issued and paid-up share capital of Adventa shall be diminished by the cancellation of the Shares so purchased and the amount by which the Company s issued and paid-up share capital is diminished shall be transferred to a capital redemption reserve. If the Board decides to retain the Purchased Shares as Treasury Shares, it may distribute the Treasury Shares as share dividends to the shareholders and/or resell the Purchased Shares on Bursa Securities and utilise the proceeds for any feasible investment opportunity arising in the future, or as working capital. The treatment of the Purchased Shares to be held as Treasury Shares, either to be distributed as share dividends or resold on Bursa Securities by the Company, or both, or subsequently to be cancelled will depend on the availability of the share premium and/or retained profits. In the event that the Company decides to purchase its own Shares, the Company will announce on the day the purchase is made providing details of the description of the Shares purchased, the number of the Shares purchased, the price of each Share or, where relevant, the highest and lowest price paid, the total consideration paid and whether the Shares purchased are either held as Treasury Shares or proposed to be cancelled. In the event that the Company decides to resell the Company s Treasury Shares, the Company will announce on the day the resale is made providing details of the description of the Shares resold, the number of the Shares resold, the resale price of each Share resold or, where relevant, the highest and lowest resale price paid and the total consideration received. In the event that the Company decides to cancel the Company s Treasury Shares, the Company will announce on the day the cancellation is made providing details of the number of Treasury Shares cancelled, the date of cancellation and the outstanding and the issued and paid-up share capital of the Company after the cancellation. 4

11 While the Purchased Shares are held as Treasury Shares, the rights attached to them in relation to voting, dividends and participation in any other distributions or otherwise are suspended and the Treasury Shares shall not be taken into account in calculating the number or percentage of Shares or of a class of Shares in the Company for any purposes including substantial shareholdings, take-overs, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting. 2.6 Pricing Pursuant to the provisions of Paragraph of the Listing Requirements, the Company may only purchase its own Shares at a price which is not more than 15% above the weighted average market price of the Adventa Shares for the five (5) market days immediately before the date of the purchase(s). Pursuant to the provisions of Paragraph of the Listing Requirements, the Company may only resell the Purchased Shares held as Treasury Shares on Bursa Securities at:- a price which is not less than the weighted average market price of the Adventa Shares for the five (5) market days immediately before the resale(s); or a discounted price of not more than 5% to the weighted average market price of the Adventa Shares for the five (5) market days immediately before the resale provided that:- (i) (ii) the resale takes place not earlier than thirty (30) days from the date of purchase; and the resale price is not less than the cost of purchase of the Adventa Shares being resold. 3. POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK The potential advantages of the Proposed Renewal of Authority for Share Buy-Back to the Company and its shareholders are as follows:- (d) (e) The EPS of the Adventa Group would be enhanced (all things being equal); The proposed purchase will result in a reduction of the issued and paid-up share capital base which will reduce the cash outflow on the dividend payout (all things being equal, i.e. if the Adventa Group was to maintain the same dividend rate); If the Purchased Shares are retained as Treasury Shares, it will provide the Board an option to sell the Purchased Shares at a higher price and therefore make an exceptional gain for the Company. Alternatively, the Purchased Shares can be distributed as share dividends to shareholders; Provides the Company flexibility in achieving the desired capital structure, in terms of debt and equity composition and size of equity; and Allows the Company to take preventive measures against speculations particularly when its Shares are under valued which would in turn, stabilise the market price of the Adventa Shares and hence, enhance investors confidence. 5

12 The potential disadvantages of the Proposed Renewal of Authority for Share Buy-Back to the Company and its shareholders are as follows:- It will reduce the financial resources of the Company and may result in the Company foregoing better investment opportunities in future or, at least deprive the Company of interest income that can be derived from the funds utilised for the Proposed Renewal of Authority for Share Buy-Back; and As the Proposed Renewal of Authority for Share Buy-Back can only be made out of the share premium and/or retained profits of the Company, it may result in the reduction of financial resources available for distribution to shareholders in the immediate future. 4. RISK FACTORS OF THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY- BACK The Board is not aware of any risk factors relating to the Proposed Renewal of Authority for Share Buy-Back which could have a material adverse effect on the business or financial position of the Adventa Group. 5. HISTORICAL SHARE PRICES The monthly highest and lowest prices of the shares of Adventa as traded on Bursa Securities for the past twelve (12) months from March 2012 to February 2013 are as follows:- Month High Low (RM) (RM) 2012 March (1) April (1) May (1) June (1) July (1) August (1) September (1) October (1) November (1) December (1) January (2) February (2) (Source: Bloomberg) Notes:- (1) Ordinary shares of RM0.50 each. (2) Ordinary shares of RM0.35 each after adjusting for the Capital Reduction and Repayment on 21 January The last transacted price of the Adventa Shares as at the LPD was RM

13 6. RATIONALE FOR THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK The Proposed Renewal of Authority for Share Buy-Back is expected to potentially benefit the Company and its shareholders in the following manner:- The Company is expected to stabilise the supply and demand of its Shares in the open market and thereby support its fundamental values; If the Purchased Shares are cancelled, it would enhance the EPS of the Company and thereby long term investors are expected to enjoy a corresponding increase in the value of their investments in the Company; and As permitted under Section 67A of the Act, the Purchased Shares may be held as Treasury Shares and/or resold on Bursa Securities with potential gain without affecting the total issued and paid-up share capital of the Company. Alternatively, the Purchased Shares can be distributed as share dividends to reward the shareholders of the Company. The Proposed Renewal of Authority for Share Buy-Back is not expected to have any potential material disadvantages to the Company and its shareholders as it will be exercised only after in-depth consideration of the financial resources of the Adventa Group and of the resultant impact on its shareholders. The Board, in exercising any decision on the Proposed Renewal of Authority for Share Buy-Back, will be mindful of the interest of the Company and its shareholders. 7. EFFECTS OF THE PROPOSED SHARE BUY-BACK On the assumption that the Proposed Share Buy-Back is carried out in full, the effects on the share capital, NA, working capital and EPS of the Company and/or the Group (whichever is applicable) are set out below:- 7.1 Share Capital The effects of the Proposed Share Buy-Back are dependent on whether the Purchased Shares are cancelled or alternatively retained as Treasury Shares. Based on the assumption that the maximum number of Shares authorised under the Proposed Share Buy-Back are purchased and cancelled, the effect on the issued and paid-up share capital of Adventa would be as follows:- No. of Shares Share Capital RM Issued and paid-up share capital as at LPD 152,785,770 53,475,019 Less: Maximum number of Shares that may be purchased (15,278,500) (5,347,475) Issued and paid-up share capital after the Proposed Share Buy-Back 137,507,270 48,127,544 The Proposed Share Buy-Back will result in the reduction of the Company s issued and paid-up share capital if the Shares so purchased are cancelled. However, the Proposed Share Buy-Back would have no effect on the issued and paid-up share capital of Adventa assuming all Purchased Shares are to be retained as Treasury Shares, resold or distributed as share dividends to shareholders but the rights attaching to the Treasury Shares in relation to voting, dividends and participation in any other distributions or otherwise are suspended. 7

14 7.2 NA The effects of the Proposed Share Buy-Back on the NA per Share of the Adventa Group are dependent on the number of Shares which the Company will buy-back, purchase prices of the Adventa Shares at the time of buy-back, the treatment of the Shares so purchased and the funding cost, if any. If all the Adventa Shares so purchased are cancelled, the NA per Share of the Adventa Group is likely to be reduced if the purchase price exceeds the NA per Share of the Adventa Group, whereas the NA per Share of the Adventa Group will increase if the purchase price is less than the NA per Share of the Adventa Group at the time of purchase. For Purchased Shares which are kept as Treasury Shares, upon resale, the NA per Share of the Adventa Group would increase assuming that a gain has been realised or decrease if a loss is realised. If the Treasury Shares are distributed as share dividends, the NA of the Adventa Group would decrease by the cost of the Treasury Shares. 7.3 Working Capital 7.4 EPS The Proposed Share Buy-Back will reduce the working capital of the Adventa Group, the quantum of which depends on the purchase prices and the number of Shares that would be purchased pursuant to the Proposed Share Buy-Back. For Purchased Shares which are kept as Treasury Shares, upon its resale, the working capital of the Company would increase assuming that a gain has been realised. Again, the quantum of the increase in the working capital would depend on the actual selling price of the Treasury Shares and the number of Treasury Shares resold. Assuming that the Purchased Shares under the Proposed Share Buy-Back are cancelled, the Proposed Share Buy-Back may increase the EPS of the Adventa Group. Similarly, on the assumption that the Purchased Shares are treated as Treasury Shares and subsequently resold, the extent of the effect on the earnings of the Adventa Group will depend on the actual selling price, the number of Treasury Shares resold and the effective gain arising. In the event the Purchased Shares are held as Treasury Shares, i.e. neither cancelled nor resold, the effective reduction in the issued and paid-up share capital of Adventa pursuant to the Proposed Share Buy- Back would generally, all else being equal, increase the EPS of the Adventa Group. 7.5 Dividends Assuming the Proposed Share Buy-Back is implemented in full and the Company s quantum of dividends is maintained at historical levels, the Proposed Share Buy-Back will have the effect of increasing the dividend rate of the Company as a result of the reduction in the issued and paid-up share capital of the Company. The Proposed Share Buy-Back may have an adverse impact on the Company s dividend, if any, as it would reduce the cash available, which may otherwise be used for dividend payment. Nonetheless, the Purchased Shares may be distributed as dividends to shareholders of the Company, if the Company so decides. 8

15 8. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS Based on the Register of Directors Shareholdings and Register of Substantial Shareholders as at LPD, assuming that the Proposed Share Buy-Back is implemented in full and that the Purchased Shares are from shareholders other than the Directors and substantial shareholders, the effect of the Proposed Share Buy-Back on the shareholdings of the existing Directors and substantial shareholders of Adventa are set out as below:- Directors As at LPD After Proposed Share Buy-Back Direct Indirect Direct Indirect No. of Shares % No. of Shares % No. of Shares % No. of Shares % Edmond Cheah Swee Leng 140, , Low Chin Guan 58,446, ,960, ,446, ,960, Kwek Siew Leng 928, , Toh Seng Thong 140, , Dato Dr. Norraesah Binti Haji Mohamad 140, , Substantial Shareholders Low Chin Guan 58,446, ,960, ,446, ,960, Wong Koon Wong Kwan Mooi 3,460, ,947, ,460, ,947, Low Lea Kwan 4,500, ,906, ,500, ,906, Lembaga Tabung Haji 14,323, ,323, Notes:- Deemed interested by virtue of the family relationships between Mr Low Chin Guan and Madam Wong Koon Wong Kwan Mooi, who is his mother and Ms Low Lea Kwan, who is his sister. Deemed interested by virtue of the family relationships between Madam Wong Koon Wong Kwan Mooi and Mr Low Chin Guan, who is her son and Ms Low Lea Kwan, who is her daughter. Deemed interested by virtue of the family relationships between Ms Low Lea Kwan and Mr Low Chin Guan, who is her brother and Madam Wong Koon Wong Kwan Mooi, who is her mother. 9. IMPLICATIONS ON THE CODE In the event the number of Shares bought back subsequent to the date of this Circular result in any substantial shareholder(s) and/or parties acting in concert triggering the Code, such substantial shareholder(s) and/or parties acting in concert may consider seeking an exemption from the obligation to undertake a mandatory offer under Practice Note 9 of the Code. It is the intention of Adventa to implement the Proposed Share Buy-Back in a manner that will not result in any of the shareholders of Adventa having to undertake a mandatory offer pursuant to the Code. 10. PURCHASE, RESALE AND CANCELLATION OF THE ADVENTA SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS As at the LPD, Adventa does not have any Treasury Shares. There was no subsequent purchase, resale and cancellation made in the previous twelve (12) months up to the LPD. 9

16 11. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST Save as disclosed in the Section 8 of Part A of this Circular, none of the Directors and/or substantial shareholders of the Company and/or persons connected to them have any interest, direct or indirect, in the Proposed Share Buy-Back. 12. APPROVAL REQUIRED The Proposed Share Buy-Back is subject to the approval of the shareholders of Adventa at the forthcoming Tenth AGM to be convened. 13. DIRECTORS RECOMMENDATION The Board, having considered all aspects of the Proposed Renewal of Authority for Share Buy-Back, is of the opinion that Proposed Share Renewal of Authority for Share Buy-Back is in the best interest of the Company and the Board therefore recommends that you vote in favour of the resolution pertaining to the Proposed Renewal of Authority for Share Buy-Back to be tabled at the forthcoming Tenth AGM. 14. TENTH AGM The Notice of Tenth AGM that contains the ordinary resolution pertaining to the Proposed Renewal of Authority for Share Buy-Back, an extract of which is attached as Appendix II in this Circular, has been incorporated into the Company's Annual Report 2012 for the FYE 2012 which is being circulated to you together with this Circular. The Tenth AGM will be held at Dewan Sekebun Bunga, Grand Riverview Hotel, Jalan Post Office Lama, Kota Bharu, Kelantan Darul Naim on Monday, 29 April 2013 at 12:00 noon to consider, and if thought fit, to pass the ordinary resolution pertaining to the Proposed Renewal of Authority for Share Buy-Back. 15. FURTHER INFORMATION Shareholders are requested to refer to the attached Appendix I for further information. Yours faithfully, For and on behalf of the Board of Directors of ADVENTA BERHAD EDMOND CHEAH SWEE LENG Chairman/ Senior Independent Non-Executive Director 10

17 PART B LETTER TO THE SHAREHOLDERS OF ADVENTA IN RELATION TO THE PROPOSED SHAREHOLDERS MANDATE

18 ADVENTA BERHAD (Company No M) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office:- 1, Jalan 8 Pengkalan Chepa 2 Industrial Zone Kota Bahru Kelantan 5 April 2013 Directors Edmond Cheah Swee Leng (Chairman/ Senior Independent Non-Executive Director) Low Chin Guan (Managing Director) Kwek Siew Leng (Executive Director) Toh Seng Thong (Independent Non-Executive Director) Dato Dr. Norraesah Binti Haji Mohamad (Independent Non-Executive Director) To: The shareholders of Adventa Berhad Dear Sir/ Madam, PROPOSED SHAREHOLDERS MANDATE 1. INTRODUCTION On 18 March 2013, the Company announced that the Adventa Group had in the ordinary course of business entered and would likely enter into Recurrent Transactions with the Mandated Related Party for the period from 30 November 2012 until the forthcoming AGM of the Company pursuant to the Paragraph 10.09(1) of the Listing Requirements. On 18 March 2013, the Board had also announced that the Company proposes to seek the approval of its shareholders on the Proposed Shareholders Mandate. The purpose of this Circular is to provide you with the details of the Proposed Shareholders Mandate and to seek your approval on the ordinary resolution to be tabled as Special Business at the forthcoming AGM of the Company. The notice of the AGM and the Form of Proxy are incorporated in the Annual Report of the Company for the FYE SHAREHOLDERS OF ADVENTA ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED SHAREHOLDERS MANDATE AT THE FORTHCOMING AGM. 11

19 2 PROPOSED SHAREHOLDERS MANDATE 2.1 Details of the Proposed Shareholders Mandate Under Paragraph 10.09(2), Part E of Chapter 10 of the Listing Requirements, where there are related party transactions of a revenue or trading nature which are necessary for its day-to-day operations, the Company may seek its shareholders mandate in respect of such transactions subject to the following:- (d) (e) The transactions are in the ordinary course of business and are on terms not more favourable to the related party than those generally available to the public; The shareholders mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders mandate during the financial year where the aggregate value is equal to or more than the threshold prescribed under Paragraph 10.09(1), Part E of Chapter 10 of the Listing Requirements; The Company's circular to shareholders for the shareholders mandate includes the information as may be prescribed by Bursa Securities; The interested Director, interested major shareholder or interested person connected with a Director or major shareholder and where it involves the interest of an interested person connected with a Director or major shareholder, such Director or major shareholder and the interested person, must not vote on the resolution approving the transactions. An interested Director or interested major shareholder must ensure that persons connected with the interested Director or interested major shareholder abstain from voting on the resolution approving the transactions; and The Company immediately announces to Bursa Securities when the actual value of a Recurrent Transactions entered into by the Company, exceeds the estimated value of the Recurrent Transactions disclosed in the Circular by 10% or more and must include information as may be prescribed by Bursa Securities in its announcement. Where the Company has procured the shareholders mandate pursuant to the above, the provisions of Paragraph of the Listing Requirements shall not apply during the period of validity of the shareholders mandate. 2.2 The Companies Within the Adventa Group in which the Proposed Shareholders' Mandate is Applicable The principal activities of Adventa are investment holding and provision of management services to its subsidiaries whilst the principal activities of its subsidiaries are as follows:- Name of Companies Effective Equity Interest Principal Activities (%) Electron Beam Sdn Bhd 100% Providing industrial and commercial sterilisation services Luxencia (M) Sdn Bhd 100% Provision of home dialysis treatment (dormant) Sun Healthcare (M) Sdn Bhd 100% Trading in medical and healthcare equipment and appliances The Adventa Group has entered into ordinary course of business transactions with the Mandated Related Party as set out in Section 2.3 of Part B of this Circular. 12

20 2.3 The Mandated Related Party in which the Proposed Shareholders' Mandate is Applicable The Mandated Related Party in which the Proposed Shareholders Mandate is applicable is as follows:- Mandated Related Party Principal Activities Relationship Aspion Group Manufacturing and distribution of medical gloves and other healthcare related products Mr Low Chin Guan is the Managing Director and major shareholder of Adventa. He is also a Director and an indirect major shareholder of Aspion by virtue of his 30% equity interest in the holding company of Aspion, namely Adventa Capital Pte Ltd. Madam Wong Koon Wong Kwan Mooi is a major shareholder of Adventa. She is deemed interested in the Proposed Shareholders Mandate by virtue of her family relationships with Mr Low Chin Guan, who is her son and Ms Low Lea Kwan, who is her daughter. Ms Low Lean Kwan is a major shareholder of Adventa. She is deemed interested in the Proposed Shareholders Mandate by virtue of her family relationships with Mr Low Chin Guan, who is her brother and Madam Wong Koon Wong Kwan Mooi, who is her mother. 2.4 Nature of Recurrent Transactions Contemplated under the Proposed Shareholders' Mandate The Recurrent Transactions which will be covered by the Proposed Shareholders' Mandate and the benefits to be derived from them are the general transactions by the Adventa Group relating to the provision of, or obtaining from, the Mandated Related Party, products and services in the normal course of business of the Adventa Group. The Proposed Shareholders' Mandate is intended to facilitate transactions in the normal course of business of the Adventa Group which are transacted from time to time with the Mandated Related Party, provided that they are consistent with the Adventa Group's normal business practices and policies and are on transaction prices and terms which are not more favourable to the Mandated Related Party than those generally available to the public and are not to the detriment of the minority shareholders of the Company. The details of the nature and estimated value of the Recurrent Transactions in respect of which the Adventa Group is seeking mandate from its shareholders as contemplated under the Proposed Shareholders Mandate are as follows:- Mandated Related Party Nature of Transactions (1) Estimated Transaction Value From the AGM to Next AGM RM 000 Aspion Group Purchases of gloves from the Aspion Group 5,000 Provision of sterilisation and warehouse services to the 6,500 Aspion Group (2) Sales of non-gloves products to the Aspion Group 500 Total 12,000 13

21 Notes:- (1) The estimated value of the transactions for the period from the date of the forthcoming AGM to the date of the next AGM is based on past transactions and/or management estimates and on the assumption that current levels of operations will continue and all external conditions remain constant. Due to the nature of the transactions, the actual value of the transactions may vary from the estimated value disclosed above. (2) The provision of warehouse services by the Adventa Group to the Aspion Group include, amongst others, the provision of handling, loading and unloading of the goods and rental of warehouse space for the goods prior to their shipment or delivery. The transaction amount is determined based on the duration and quantity of carton handled by the Adventa Group for the Aspion Group and is charged on monthly basis to the Aspion Group. The warehouse of the Adventa Group is located at Lot 7, Jalan Sungai Pinang 4/3, Taman Perindustrian Pulau Indah (Fasa 2), Port Klang, Selangor. Where practical and/or feasible, at least two (2) other contemporaneous transactions with unrelated third parties for similar products and/or quantities will be used as comparison for determining the price and terms offered by/to the Mandated Related Party are fair and reasonable as compared with those offered by/to unrelated third parties. In the event that quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be determined based on those offered by/to other unrelated parties for substantially similar types of transactions to ensure that the Recurrent Transactions are not detrimental to the Adventa Group. There is no amount due to and owing by the Mandated Related Party to the Adventa Group pursuant to the Recurrent Transactions which exceeds the credit terms. 2.5 Review and Disclosure Procedures on the Recurrent Related Party Transactions and Thresholds Authority The Adventa Group has established various procedures to ensure that the recurrent related party transactions are undertaken at arm's length basis and on normal commercial terms which are consistent with the Adventa Group's normal business practices and policies, on transaction prices and terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders. The review and disclosure procedures with regard to the recurrent related party transactions are as follows:- (d) The Adventa Group will be notified of the related parties and will be required prior to entering into such transactions to ensure that all the recurrent related party transactions are consistent with the Adventa Group's normal business practices and policies which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders; The Board and/or the Audit Committee shall review the internal audit reports which are normally conducted at least once a year to ascertain that the guidelines and procedures established to monitor recurrent related party transactions have been complied with; Records will be maintained by the Adventa Group to capture all the recurrent related party transactions which are entered into pursuant to the shareholders' mandate; The Board and the Audit Committee shall have overall responsibility for the determination of the review procedures including addition of new review procedures where applicable. The Board and the Audit Comittee may also appoint individuals and committees within the Adventa Group to examine the recurrent related party transactions as they deem appropriate. If a member of the Board or the Audit Committee has an interest, he or she will abstain from any deliberation and decision-making by the Board and/or the Audit Committee in respect of the said transaction; and 14

22 (e) Disclosure will be made in the Annual Report of the aggregate value of recurrent related party transactions conducted pursuant to the shareholders' mandate during the financial year. As for the thresholds authority, the Adventa Group has in place internal charts of authority governing all business transactions. Since the recurrent related party transactions are conducted in the ordinary course of business, these are also covered under the charts of authority as there is no specific formal document in respect of thresholds authority for recurrent related party transactions. 2.6 Statement by Audit Committee The Audit Committee of Adventa has seen and reviewed the procedures mentioned in Section 2.5 of Part B of this Circular and is of the view that the said procedures are sufficient to ensure that the Recurrent Transactions are not more favourable to Mandated Related Party than those generally available to the public and are not to the detriment of the minority shareholders. The Audit Committee is of the further view that the Adventa Group has in place adequate procedures and processes to monitor, track and identify the Recurrent Transactions in a timely and orderly manner and of which the procedures and processes would be reviewed annually or whenever the need arises. 3. RATIONALE AND BENEFITS OF THE PROPOSED SHAREHOLDERS' MANDATE The rationale for and benefits of the Proposed Shareholders Mandate to the Adventa Group are as follows:- (d) The Proposed Shareholders' Mandate will facilitate transactions with the Mandated Related Party which are carried out in the ordinary course of business of the Adventa Group and are made on an arm s length basis and on transaction prices and terms not more favourable to the Mandated Related Party than those generally available to the public and not in the Company s opinion detrimental to the minority shareholders; The Proposed Shareholders Mandate will enhance the Adventa Group s ability to pursue business opportunities which may be of time sensitive in nature and it may not be practical to seek shareholders approval on a case-by-case basis before entering into such transactions; The Proposed Shareholders Mandate will allow the Adventa Group more efficient utilisation of existing resources, prompt delivery and better bargaining power from reliable suppliers; and The Proposed Shareholders Mandate will eliminate the need to make regular announcements or convene separate general meetings from time to time to seek shareholders mandate approval as and when potential Recurrent Transactions with the Mandated Related Party arise, thereby reducing the administrative time and cost in convening such meetings without compromising the corporate objectives and adversely affecting the business opportunities available to the Adventa Group. 4. EFFECTS OF THE PROPOSED SHAREHOLDERS' MANDATE The Proposed Shareholders' Mandate does not have any effect on the issued and paid-up share capital of Adventa, the shareholdings of the substantial shareholders of Adventa and is not expected to have any effect on the NA, EPS and gearing of the Company and/or the Group (whichever is applicable). 15

23 5. CONDITIONS OF THE PROPOSED SHAREHOLDERS' MANDATE The Proposed Shareholders' Mandate is subject to the approval of the shareholders of Adventa at the forthcoming Tenth AGM to be convened. 6. DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST Save as disclosed below, none of the other Directors, major shareholders and/or persons connected to them has any direct and/or indirect interest in the Proposed Shareholders Mandate. Mr Low Chin Guan is the Managing Director and a major shareholder of Adventa. He is also a Director and an indirect major shareholder of Aspion through his 30% equity interest in the holding company of Aspion, namely Adventa Capital Pte Ltd. Thus, Mr Low Chin Guan is deemed interested in the Proposed Shareholders Mandate. As at LPD, the direct and indirect shareholdings of Mr Low Chin Guan and persons connected with him in Adventa are as follows:- Direct Indirect Names No. of Shares % No. of Shares % Low Chin Guan 58,446, Wong Koon Wong Kwan Mooi 3,460, Low Lea Kwan 4,500, ,960, ,947, ,906, Notes:- Deemed interested by virtue of the family relationships between Mr Low Chin Guan and Madam Wong Koon Wong Kwan Mooi, who is his mother and Ms Low Lea Kwan, who is his sister. Deemed interested by virtue of the family relationships between Madam Wong Koon Wong Kwan Mooi and Mr Low Chin Guan, who is her son and Ms Low Lea Kwan, who is her daughter. Deemed interested by virtue of the family relationships between Ms Low Lea Kwan and Mr Low Chin Guan, who is her brother and Madam Wong Koon Wong Kwan Mooi, who is her mother. Mr Low Chin Guan has abstained and will continue to abstain from all deliberations and voting at the relevant board meetings of Adventa in respect of the Proposed Shareholders Mandate. Mr Low Chin Guan, Madam Wong Koon Wong Kwan Mooi and Ms Low Lea Kwan will abstain from voting in respect of their direct and/or indirect shareholdings in Adventa on the resolution pertaining to the Proposed Shareholders Mandate to be tabled at the forthcoming AGM to be convened. In addition, Mr Low Chin Guan, Madam Wong Koon Wong Kwan Mooi and Ms Low Lea Kwan have undertaken to ensure that persons connected with them (if any) will abstain from voting in respect of their direct and/or indirect shareholdings (if any) in Adventa on the resolution pertaining to the Proposed Shareholders' Mandate to be tabled at the forthcoming AGM to be convened. 16