THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

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 independent adviser immediately. Bursa Malaysia Securities Berhad has not perused the contents of this Circular, 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. (Company No: T) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR THE AUTHORITY TO THE COMPANY TO PURCHASE ITS OWN SHARES OF UP TO TEN PER CENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL Adviser: The resolution in respect of the above proposal will be tabled as Special Business at the Twelfth (12 th ) Annual General Meeting ( AGM ) of the Company to be held at Green II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Off Jalan Tropicana Utama, Petaling Jaya, Selangor on Thursday, 2 June 2016 at a.m. or at any adjournment thereof. The Notice of AGM, together with the Form of Proxy is enclosed in the Annual Report of the Company for the financial year ended 31 December An extract of the relevant resolution in the Notice of AGM convening the Twelfth (12 th ) AGM of the Company is set out in this Circular. The Form of Proxy should be lodged at Tricor Investor & Issuing House Services Sdn Bhd, Share Registrar office of the Company at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No 8, Jalan Kerinchi, Kuala Lumpur, Wilayah Persekutuan, Malaysia not less than forty-eight (48) hours before the time appointed for holding the meeting. This Circular is dated 29 April 2016

2 DEFINITIONS Unless otherwise indicated, the following definitions apply throughout this Circular:- Act : The Companies Act, 1965 AGM : Annual General Meeting of EURO Board : Board of Directors of EURO Bursa Securities : Bursa Malaysia Securities Berhad CMSA : The Capital Markets and Services Act, 2007 Code : Malaysian Code on Take-over and Mergers, 2010 as amended from time to time Director : A director as defined in Section 2(1) of the CMSA and includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a director of EURO or any other company which is its subsidiary or holding company or a chief executive officer of the Company, its subsidiary or holding company EURO or the Company : EURO Holdings Berhad EURO Group or the Group : EURO and its subsidiaries, collectively FYE : Financial year ended Listing Requirements : Main Market Listing Requirements of Bursa Securities LPD : The latest practicable date prior to the issuance of this Circular, being 4 April 2016 Major Shareholder : A person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, a person who has an interest or interests in one or more voting shares in EURO, its subsidiary company or its holding company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares is:- (a) equal to or more than 10% of the aggregate of the nominal amounts of all the voting shares in the company; or (b) equal to or more than 5% of the aggregate of the nominal amounts of all the voting shares in the company where such person is the largest shareholder of the company. Market Day : Any day from Mondays to Fridays (both inclusive) which Bursa Securities is open for the trading of securities NA : Net assets Proposed SBB Renewal or Proposal : Proposed renewal of shareholders mandate for the authority to the Company to purchase its own shares of up to ten per cent (10%) of the issued and paid-up share capital Purchased Shares : Shares purchased pursuant to the Proposed SBB Renewal RM and sen : Ringgit Malaysia and sen, the legal currency in Malaysia SBB : Share buy-back / purchase of own shares Share(s) : Ordinary shares(s) of RM0.10 each in EURO Shareholders : Shareholders of EURO Substantial shareholder : A person who has an interest or interests in one or more voting shares in a company and the nominal amount of those shares, is not less than 5% of the aggregate of the nominal amounts of all the voting shares in the company. For the purpose of this definition, interest in shares shall have the meaning given in Section 6A of the Act. i

3 TABLE OF CONTENTS LETTER TO THE SHAREHOLDERS OF EURO CONTAINING: PAGE 1. INTRODUCTION 1 2. PROPOSED SBB RENEWAL 2 3. RATIONALE FOR THE PROPOSED SBB RENEWAL 6 4. FINANCIAL EFFECTS OF THE PROPOSED SBB RENEWAL 6 5. CONDITIONS OF THE PROPOSED SBB RENEWAL 8 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS 8 7. DIRECTORS RECOMMENDATION 8 8. AGM 9 9. FURTHER INFORMATION 9 APPENDIX I FURTHER INFORMATION 10 APPENDIX II EXTRACT OF RESOLUTION ON THE PROPOSED SBB RENEWAL 13 ii

4 EURO HOLDINGS BERHAD (Company No: T) (Incorporated in Malaysia) Registered Office: Suite 10.03, Level 10 The Gardens South Tower Mid Valley City Lingkaran Syed Putra Kuala Lumpur 29 April 2016 Board of Directors:- Dato Sri Mohd Haniff bin Abd Aziz (Chairman/ Independent Non-Executive Director) Dato Sri Choong Yuen Tong Yuen Keong (Group Managing Director) Dato' Tong Yun Mong (Executive Director) Datuk Dr Syed Muhamad bin Syed Abdul Kadir (Independent Non-Executive Director) Tan Poh Ling (Independent Non-Executive Director) Kevin Sathiaseelan A/L Ramakrishnan (Independent Non-Executive Director) To the Shareholders of EURO, Dear Sir/Madam, PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR THE AUTHORITY TO THE COMPANY TO PURCHASE ITS OWN SHARES OF UP TO TEN PER CENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL 1. INTRODUCTION On 25 June 2015, the Company had obtained the mandate from its shareholders for the EURO Group for the authority to purchase its own shares of up to ten per cent (10%) of its issued and paid-up share capital. The existing shareholders mandate shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM unless authority for its renewal is obtained from the shareholders of the Company at the forthcoming AGM. On 11 April 2016, the Company announced its intention to seek its Shareholders approval for the Proposed SBB Renewal. The purpose of this Circular is to set out the relevant details of the Proposed SBB Renewal and to seek your approval for the resolution to be tabled at the forthcoming AGM. 1

5 2. PROPOSED SBB RENEWAL 2.1 Details Of The Proposed SBB Renewal The Board is seeking the approval of the Shareholders to purchase up to ten per cent (10%) of the issued and paid-up share capital of EURO through stockbroker(s) appointed/ to be appointed at a later date, subject to the Act, Listing Requirements and any prevailing laws, rules, regulations and guidelines issued by the relevant authorities at the time of purchase. The approval from the shareholders for the Proposed SBB Renewal would be effective immediately upon the passing of the ordinary resolution for the Proposed SBB Renewal at the forthcoming AGM and shall be valid until:- (a) the conclusion of the next AGM of the Company following the general meeting at which such mandate was passed, at which time it will lapse, unless by an ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; (b) the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of Act); or (c) revoked or varied by ordinary resolution passed by the shareholders in general meeting, whichever occurs first. 2.2 Quantum The maximum aggregate number of Shares which may be purchased by the Company shall not exceed ten per cent (10%) of the issued and paid-up ordinary share capital of the Company at any point in time. Based on the issued and paid-up share capital of EURO of RM24,300,000 comprising 243,000,000 Shares as at LPD, a maximum of 24,300,000 Shares, representing 10% of the issued and paid-up share capital of EURO, may be repurchased by the Company pursuant to the Proposed SBB Renewal. Nevertheless, the actual number of Shares in EURO to be purchased by the Company pursuant to the Proposed SBB Renewal, 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 stock market as well as the availability of financial resources of the Company and the availability of the retained profits reserve and the share premium reserve of the Company. 2.3 Maximum Amount Of Funds To Be Allocated And The Source Of Funds The shareholders approval for the Proposed SBB Renewal does not impose an obligation on the Company to purchase its own shares on Bursa Securities. Rather, the Proposed SBB Renewal will allow the Board to exercise the power of the Company to purchase its own ordinary shares at any time within the above-mentioned time period using internally generated funds and/or external borrowings. The amount of internally generated funds and/or external borrowings to be utilised will only be determined later depending on the availability of internally generated funds and bank borrowings at the time of the purchase(s), actual number of EURO Shares to be purchased, the economic and market conditions and other cost factors. Should the Proposed SBB Renewal be financed through bank borrowings, the Company will ensure that it will have sufficient funds to repay such borrowings as and when they are due. The Proposed SBB Renewal is expected to reduce the cash flow of the EURO Group. 2

6 The actual number of EURO Shares to be purchased will depend on the market conditions as well as the retained profits, share premium and financial resources available to the Company. The maximum funds to be utilized for the Proposed SBB Renewal shall not exceed the aggregate of audited retained profits and/or share premium accounts of the Company. Based on the latest audited financial statements for the financial year ended 31 December 2015, the retained profit and share premium reserves of EURO were RM3,981,290 and 19,728,254 respectively, giving an aggregate of RM23,709,544. As at the date of this Circular, the results for the first quarter ended 31 March 2016 has yet to be released. 2.4 Treatment Of Purchased Shares In accordance with Section 67A of the Act, the Directors are able to deal with any EURO Shares bought pursuant to the Proposed SBB Renewal in the following manner: (i) (ii) (iii) to cancel the EURO Shares so purchased; or to retain the EURO Shares so purchased as treasury shares for distribution as dividends to shareholders and/or resell through Bursa Securities in accordance with the relevant rules of Bursa Securities; or combination of (i) and (ii) above. Upon each purchase of the Shares, an immediate announcement will be made to Bursa Securities in respect of the intention of the Board on the treatment of the Purchased Shares. An immediate announcement will also be made to Bursa Securities of any resale or cancellation of Shares. As at the date of the Circular, the Board has yet to make any decision with regards to the treatment of the Shares so purchased in the future. Where the Directors resolve to cancel the Shares so purchased, the Company s issued and paid-up share capital shall be diminished by the cancellation of the Shares so purchased and the amount by which the Company s issued share capital is diminished shall be transferred to a capital redemption reserve. It is pertinent to note that the cancellation of Shares made pursuant to Section 67A of the Act shall not be deemed to be a reduction in share capital as the capital redemption reserve shall be treated as if it were part of shareholders funds. 2.5 Ranking While the Shares so purchased are held as treasury shares, the rights attached to them as to voting, dividends and participation in any other distribution or otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of Shares for any purpose including substantial shareholding, takeovers, notices, the requisition of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting. 2.6 Purchase Price In compliance with the Listing Requirements, EURO may only purchase its own Shares at a price, which is not more than fifteen per cent (15%) above the weighted average market price for the five (5) market days immediately before the purchase. 3

7 2.7 Resale Price In the case of a resale of treasury shares, the Company may only resell the Shares at a price which is:- (i) not less than the weighted average market price of EURO Shares for the five (5) market days immediately before the resale; or (ii) a discounted price of not more than five per cent (5%) to the weighted average market price of EURO Shares for five (5) market days immediately before the resale provided that: (a) the resale takes place not earlier than 30 days from the date of purchase; and (b) the resale price is not less than the cost of purchase of EURO Shares being resold. 2.8 Advantages and Disadvantages of the Proposed SBB Renewal Advantages (i) The Proposed SBB Renewal, if implemented, will enable the Company to stabilise the supply and demand of EURO Shares on the Bursa Securities and thereby support the Company s fundamental value; (ii) It provides flexibility for the Company in attaining its desired capital structure, in terms of the debt and equity composition and the size of equity; (iii) It allows the Company to take preventive measures against excessive speculation, particularly when the Shares are undervalued which would in turn stabilize the market price of Shares to enhance investors confidence; (iv) The resultant reduction of share capital base (in respect of Shares so purchased are then cancelled) is expected to improve the EPS, and may improve the NA per Share as well as the probability of permitting the Company to declare a higher quantum of dividend in future; (v) The Board would have the opportunity to utilise its financial resources not immediately required for other use to purchase EURO Shares. EURO may have the opportunity for potential gains if the purchased EURO shares which are retained as treasury shares are resold at prices higher than their purchase price and consequently increase the working capital and NA of the Company; and (vi) In the event that the treasury shares are distributed as dividends by the Company, it may then serve to reward the Shareholders of EURO Disadvantages (i) The purchases may result in a reduction of the quantum of reserves available for distribution as dividends and/or bonus issue(s) to the Shareholders if the Shares so purchased are cancelled; (ii) The purchase of existing Shares will reduce the financial resources of the Company which may otherwise be retained in the business to generate further profits; (iii) The funds allocated for the Proposed SBB Renewal may result in the EURO Group foregoing other investment opportunities that may emerge in the future; and 4

8 (iv) The working capital of the Group may also be affected, as any purchase of EURO Shares will reduce the Group s working capital depending on the actual number of shares purchased and their purchase price. However, the working capital of the EURO Group may recover and increase upon the reselling of the purchased shares held as treasury shares. The Board will be mindful of the interests of the Group and the shareholders in implementing the Proposed SBB Renewal Implications relating to the Code As it is not intended for the Proposed SBB Renewal to trigger the obligation to undertake a mandatory general offer under the Code for any of its substantial shareholders and/or parties acting in concert with them, the Board will ensure that such number of Shares are purchased, retained as treasury shares, cancelled or distributed such that the Code will not be triggered. Nonetheless, if the obligation to undertake a mandatory general offer under the Code is expected to be triggered, the substantial shareholders and their respective parties acting in concert will apply for an exemption from the SC. Such exemption may be granted by the SC under Practice Note of the Code, subject to there being no disqualifying transaction, approval has been obtained from the independent shareholders of EURO at a meeting to waive their rights to receive the mandatory offer from the substantial shareholders and their respective parties acting in concert; and the names of the parties that have abstained from voting at the meeting have been submitted to the SC Other Regulatory Requirements Based on the Listing Requirements, the Proposed SBB Renewal is subject to, inter-alia, the following rules: (i) The Proposed SBB Renewal shall only be effected on the market of Bursa Securities via its automated trading system and shall exclude any direct business transactions as defined according to the rules of Bursa Securities; (ii) The Company shall appoint not more than two (2) stockbroking companies and ensure that all dealings in relation to the Proposed SBB Renewal are made through the appointed stockbroking companies only; (iii) An immediate announcement will be made to Bursa Securities on any purchase of Shares as well as any resale or cancellation of Purchased Shares; and (iv) As at LPD, the Record of Depositors of EURO showed that 115,509,000 Shares representing approximately 47.54% of the issued and paid-up share capital were held by public shareholders. Assuming that the Proposed SBB Renewal is carried out in full, the public shareholding spread of the Company would be potentially reduced to 41.71%. The Board undertakes that the Proposed SBB Renewal will be conducted in accordance with the laws prevailing at the time of the purchase including compliance with the Listing Requirements that a public shareholding spread of 25% in the hands of public shareholders. 5

9 3. RATIONALE FOR THE PROPOSED SBB RENEWAL The Proposed SBB Renewal is to permit a stabilising factor on the supply and demand as well as the price of the Shares of EURO on Bursa Securities. Consequently, the fundamental value of the Company may be preserved which may in turn have a favourable impact on the share price of the Company. It is to be carried out when the share price is transacted at levels which do not reflect the potential earnings capabilities and/or underlying asset value of the Group. The Proposed SBB Renewal will also enable EURO to utilise its surplus financial resources to purchase the EURO Shares as and when the Board deems fit in the interest of its shareholders during the tenure the authority granted is in effect. In addition, the Purchased Shares may be held as treasury shares and resold on Bursa Securities with the intention of realising a potential gain without affecting the total issued and paid-up share capital of the Company. Should any treasury shares be distributed as share dividends, this would serve to reward the shareholders of the Company. 4. FINANCIAL EFFECTS OF THE PROPOSED SBB RENEWAL In the event that the Company purchases ten per cent (10%) of its issued and paid-up share capital as at LPD, and the shares repurchased are cancelled or alternatively retained as treasury shares or a combination of both, the effects of the Proposed SBB Renewal on the share capital, Substantial Shareholders and Directors shareholdings, NA, working capital and cash flow, earnings and dividends are set out below:- 4.1 Share Capital In the event that the Proposed SBB Renewal is implemented in full and all the Purchased Shares are subsequently cancelled, the proforma effects on the issued and paid-up share capital of the Company, are as follows:- No. of Shares ( 000) RM ( 000) Issued and paid-up capital as at LPD 243,000 24,300 Less: Maximum number of Shares that may be purchased pursuant to the Proposed SBB Renewal (assuming all purchased Shares are cancelled) (24,300) (2,430) Issued and paid-up share capital after the Proposed SBB Renewal and cancellation 218,700 21,870 If all the EURO Shares purchased are retained as treasury shares, the share repurchase would not have any effect on the share capital of EURO, although the rights attached to the treasury shares as to voting, dividends and participation in other distribution or otherwise would be suspended. The treasury shares shall not be taken into account in calculating the percentage of shares or of a class of shares in the Company for any purpose including, without limiting the generality of this provision, the provisions of any law or requirements of the Articles or the Listing Requirements on substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of vote on resolution at a meeting. 6

10 4.2 Substantial Shareholders And Directors Shareholdings Assuming the Proposed SBB Renewal is carried out in full by the Company, the effects of the share repurchase on the shareholdings of Directors and Substantial Shareholders based on the Register of Directors Shareholdings and the Register of Substantial Shareholders respectively as at LPD are as follows:- Directors and Substantial Shareholders Dato Sri Choong Yuen Tong Yuen Keong No. of shares ( 000) Shareholding as at the LPD After the Proposed SBB Renewal # Direct Indirect Direct Indirect % of No. of % of No. of % of No. of share shares share shares share shares capital ( 000) capital ( 000) capital ( 000) % of share capital 55, , Dato Tong Yun Mong 30, , Directors Dato Sri Mohd Haniff bin Abd Aziz 11, , Datuk Dr Syed Muhamad bin Syed Abdul Kadir Tan Poh Ling Kevin Sathiaseelan A/L Ramakrishnan Substantial Shareholder Tee Wee Sien 30, , Note: # On the assumption that the Company repurchases the maximum 24,300,000 EURO Shares, representing ten per cent (10%) of its issued and paid-up share capital of RM24,300,000 comprising 243,000,000 EURO Shares and that the Directors shareholdings do not vary. 4.3 NA The effect of the Proposed SBB Renewal on the NA of the EURO Group is dependent on the number of EURO Shares which the Company will buy-back, the purchase price of the EURO Shares at the time of buy-back, the treatment of the shares so purchased and the funding cost, if any. If the maximum allowable number of EURO Shares are purchased and cancelled, the Proposed SBB Renewal would reduce the NA per share of the EURO Group if the purchase price exceeds the NA per share at the relevant point in time. Conversely, the NA per share of the EURO Group would increase if the purchase price is less than the NA per share at the relevant point in time. If the treasury shares are resold on the Bursa Securities, the NA per share will increase if the Company realises a gain from the resale, and vice versa. If the treasury shares are distributed as share dividends, the NA per share will decrease by the cost of the treasury shares. 7

11 4.4 Working Capital And Cash Flow The share repurchase will result in an outflow of cash and thereby reduce the working capital of the EURO Group. The quantum of the reduction in working capital is dependent on the purchase prices of the EURO Shares and the number of EURO Shares repurchased and the funding cost, if any. However, for the Share so purchased and kept as treasury shares, upon resale, the working capital and cash flow of the Company will increase. Again, the quantum of the increase in the working capital and cash flow will depend on the actual selling price of the treasury shares and the number of treasury shares resold. 4.5 Earnings The effect of the Proposed SBB Renewal on the EPS of the EURO Group is dependent on the purchase price of EURO Shares, the effective funding cost and/or loss in interest income to the Group thereof. Further, the purchase of the EURO Shares will result in a lower number of shares being taken into account for purposes of EPS computation. Assuming that any EURO Shares purchased and retained as treasury shares are sold, the effects on the earnings of the EURO Group will depend on the actual selling price, the number of treasury shares sold and the effective gain or interest savings arising from the exercise. 4.6 Dividends No dividend was proposed for the financial year ended 31 December Barring any unforeseen circumstances, any future dividends which may be declared would depend on, amongst others, the profitability and cashflow position of the EURO Group. The Proposed SBB Renewal may impact the Company s dividend payouts as it would reduce the cash available which may otherwise be used for dividend payment. Nonetheless, the treasury shares purchased may be distributed as dividends to shareholders of the Company, if the Company so decides. 5. CONDITIONS OF THE PROPOSED SBB RENEWAL The Proposed SBB Renewal is conditional upon approval being obtained from the shareholders of the Company at the forthcoming AGM. The Proposed SBB Renewal is not conditional upon any other proposals. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS Save for the proportionate increase in the percentage of shareholdings and/or voting rights in their capacities as the shareholders of the Company pursuant to the Proposed SBB Renewal, none of the Directors or Substantial Shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposed SBB Renewal and resale of treasury shares, if any. 7. DIRECTORS RECOMMENDATION The Board, having taken into consideration all aspects of the Proposed SBB Renewal (including the rationale) is of the opinion that the Proposed SBB Renewal is in the best interest of the EURO Group and its shareholders. Accordingly, the Board recommends that you vote in favour of the respective resolution pertaining to the Proposed SBB Renewal and to be tabled at the forthcoming AGM. 8

12 8. AGM The resolution in respect of the Proposed SBB Renewal will be tabled as Special Business at the Twelfth (12 th ) AGM of the Company which will be held at Green II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Off Jalan Tropicana Utama, Petaling Jaya, Selangor on Thursday, 2 June 2016 at a.m. or at any adjournment thereof. The Notice of AGM, together with the Form of Proxy, is enclosed in the Annual Report of the Company for the financial year ended 31 December If you are unable to attend and vote at the AGM, you are requested to complete, sign and return the enclosed Form of Proxy in accordance with the instructions contained therein so as to arrive at Tricor Investor & Issuing House Services Sdn Bhd, Share Registrar office of the Company at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No 8, Jalan Kerinchi, Kuala Lumpur, Wilayah Persekutuan, Malaysia as soon as possible and in any event not later than forty-eight (48) hours before the time fixed for the AGM, or any adjournment thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. 9. FURTHER INFORMATION Shareholders are requested to refer to the Appendices for further information. Yours faithfully, for and on behalf of the Board of Directors of EURO HOLDINGS BERHAD DATO SRI MOHD HANIFF BIN ABD AZIZ Chairman / Independent Non-Executive Director 9

13 APPENDIX I APPENDIX I - FURTHER INFORMATION 1. RESPONSIBILITY STATEMENT The Directors of EURO have seen and approved the contents of this Circular and they collectively and individually accept full responsibility for the accuracy of the information given herein and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no other material facts the omission of which would make any information or statement herein misleading. 2. CONSENT The written consent of cfsolutions Sdn Bhd to the inclusion in this Circular of its name and all references thereto, as the case may be, in the form and context in which it appears, has been given prior to the issuance of this Circular and has not subsequently been withdrawn. Furthermore, cfsolutions Sdn Bhd is of the view that there is no existing and potential conflict of interest situation in their role as the Adviser in respect of the Proposed SBB Renewal. 3. MATERIAL LITIGATION, CLAIMS OR ARBITRATION EURO and its subsidiary companies are not engaged in any material litigation, claims or arbitration either as plaintiff or defendant, or any material claims against the Company or its subsidiary companies, or material arbitration proceedings, which have a material effect on the business or financial position of the Company or its subsidiary companies and the Board does not know of any proceedings pending or threatened or of any facts likely to give rise to any proceedings which might materially affect the business or financial position of the Company or its subsidiary companies, save for the following:- (i) Kuala Lumpur High Court Suit No.: 12BNCVC /2015 Euro Chairs System Sdn Bhd ( ECS ), a wholly-owned subsidiary of the Company, filed a suit against URC Engineering Sdn Bhd ( URC Engineering ) vide a Writ of Summons and Statement of Claim dated 19 March 2015 and 20 March 2015 respectively for the total sum of RM124,320.00, being the price for the supply, installation and delivery of auditorium chairs and related accessories due and owing by URC Engineering to ECS. Subsequently, URC Engineering filed a Defence and a Counterclaim dated 23 April 2015 to defend ECS s recovery of the aforesaid debt and made a counter-claim for, amongst other, a sum of RM88, together with other damages and losses allegedly suffered by URC Engineering. Upon completion of trial, the Session Court Judge found in favour of URC Engineering and hence dismissed ECS claims and allowed URC Engineering s claims against ECS, inter alia, in the amount of RM88, with costs. ECS has since appealed to the Kuala Lumpur High Court vide a Notice of Appeal dated 10 October The Court has directed parties to file in their respective written submissions and bundle of authorities on or before 8 April Both parties have complied with the directions. However, the hearing date is yet to be fixed and the Court will write to the respective solicitors and inform the parties the hearing date. The ECS s solicitors are of the opinion that ECS has a good chance of success in this appeal before the High Court. 10

14 APPENDIX I APPENDIX I - FURTHER INFORMATION (ii) Kuala Lumpur Sessions Court Suit No.: A52NCC /2014 ECS filed a suit against Mudzaffar Bin Othman (trading under the name and style of Idzi Design) and Faezah Binti Kamisan (formerly trading under the name and style of Idzi Design) ( Defendants ) via a Writ of Summons dated 10 February 2014 to recover the amount of RM156, for the purchase, supply, delivery and installation of office furniture and workstations. The Defendants did not appear nor had taken any steps to defend the action hence Judgment in Default of Appearance was entered on 25 March ECS has proceeded with execution proceedings in an attempt to recover the outstanding amount under the Judgement by way of Garnishee proceedings. Upon obtaining the Show Cause Order and serving it on Public Bank Berhad, CIMB Bank, Hong Leong Bank Berhad and Malayan Banking Berhad, the solicitors of ECS were informed that the Defendants do not have active accounts with them. As such, the solicitors were obliged to withdraw the said matter against all the Banks concerned on the last case management date of 28 March To date, the management is in the midst of considering and deciding on the other available avenues or resources available to ECS to enforce the judgement obtained against the Defenders. 4. MATERIAL CONTRACTS EURO and its subsidiary companies have not entered into any material contracts (not being contracted entered into in the ordinary course of business) within the two (2) years preceding the date of this Circular. 5. PURCHASES, RESALE AND CANCELLATION OF EURO SHARES MADE IN THE PREVIOUS 12 MONTHS The Company has not made any purchase of own shares, resale or cancellation of treasury shares made by EURO in the previous 12 months preceding the date of this Circular. As at the date of this Circular, the Company does not hold any treasury shares. 11

15 APPENDIX I APPENDIX I - FURTHER INFORMATION 6. MARKET PRICE OF THE COMPANY S SHARES The following table sets out the monthly highest and lowest market prices of EURO s Shares traded on the Bursa Securities for the past twelve months up to March 2016: Highest (RM) Lowest (RM) 2015:- April May June July August September October November December :- January February March (Source: Bloomberg) The last transacted market price of EURO Shares on 11 April 2016 (being the date of the announcement of the Proposed SBB Renewal) was RM0.23. The last transacted market price of EURO Shares on 4 April 2016 (being the latest practicable date prior to the issuance of this Circular) was RM (Source: Bloomberg) 7. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection by members of the Company at the registered office of the Company at Suite 10.03, Level 10, The Gardens South Tower, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur during business hours from Mondays to Fridays (except Public Holidays) from the date of this Circular up to and including the date of the AGM:- (i) (ii) the Memorandum and Articles of Association of EURO; the written consent referred to in Section 2 above; (iii) the relevant cause papers in respect of material litigation referred to in Session 3 above; and (iv) the audited consolidated financial statements of EURO for the past two (2) financial years ended 31 December 2014 and 31 December

16 APPENDIX II APPENDIX II - EXTRACT OF RESOLUTION ON THE PROPOSED SBB RENEWAL As Special Business, to consider and if thought fit, to pass the following resolution as: ORDINARY RESOLUTION 7 PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR THE COMPANY TO PURCHASE ITS OWN SHARES OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY PURSUANT TO SECTION 67A OF THE COMPANIES ACT, 1965 ( PROPOSED SBB RENEWAL ) THAT subject to compliance with the Act, the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Securities and all other applicable laws, regulations and guidelines and the approvals of all relevant governmental and/or regulatory authorities, the Company be and is hereby authorised to allocate an amount not exceeding the total of audited share premium reserve and retained profit of the Company for the purpose of and to purchase such amount of ordinary shares of RM0.10 each in the Company ( EURO Shares ) as may be determined by the Directors of the Company provided that the aggregate number of EURO Shares purchased and/or held as treasury shares pursuant to this resolution does not exceed ten percent (10%) of the total issued and paid-up share capital of the Company as quoted on Bursa Securities at any point in time; THAT upon completion of the purchase by the Company of its own shares, the Directors are authorised to deal with the EURO Shares in the following manner:- i) to cancel the EURO Shares so purchased; or ii) to retain the EURO Shares so purchased as treasury shares for distribution as dividends to shareholders and/or resell through Bursa Securities in accordance with the relevant rules of Bursa Securities; or iii) combination of (i) and (ii) above; and in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of Bursa Securities and any other relevant authority for the time being in force; AND THAT the Directors be and are hereby empowered to carry out the above immediately upon the passing of this resolution and from the date of the passing of this resolution until:- i) the conclusion of the next AGM of the Company following the general meeting at which this resolution was passed, at which time it shall lapse, unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or ii) the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting; whichever occurs first AND THAT the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things deemed fit and expedient in the interest of the Company to give full effect to the Proposed SBB Renewal contemplated and/or authorised by this resolution. 13