BIO OSMO BERHAD (Company No.: A) (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 BE TAKEN, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT ADVISER IMMEDIATELY. Bursa Malaysia Securities Berhad 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. BIO OSMO BERHAD (Company No.: A) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED SHAREHOLDERS RATIFICATION FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND EXTRACT OF THE NOTICE OF THE TENTH ANNUAL GENERAL MEETING The Notice of the Tenth Annual General Meeting ( 10 th AGM ) together with the Form of Proxy are set out in the 2017 Annual Report of Bio Osmo Berhad (the Company ) despatched together with this Circular. Date and time of the 10 th AGM : 22 November 2017 (Wednesday) at a.m. Venue of the 10 th AGM : Pinetree Hotel, 36 Jalan Mengkudu, Off Jalan Bukit Pasir Batu Pahat, Johor Darul Ta zim Last date and time for lodging the Form of Proxy : 20 November 2017 (Monday) at a.m. As a shareholder, you can appoint a proxy or proxies to attend and vote on your behalf. You must complete and deposit the Form of Proxy at the Company s registered office at No. 5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur, not less than forty-eight (48) hours before the time appointed for holding the 10 th AGM or at any adjournment thereof. The lodging of the Form of Proxy for the 10 th AGM will not preclude you from attending and voting in person at the meeting should you subsequently decide to do so. This Circular is dated 31 October 2017

2 DEFINITIONS Unless otherwise stated, the following definitions shall have the following meanings: Act : Companies Act 2016, as amended from time to time AGM : Annual General Meeting Bio Osmo or the Company Bio Osmo Group or the Group : Bio Osmo Berhad ( A) : Bio Osmo and its subsidiaries, collectively Board : Board of Directors of Bio Osmo Bursa Securities : Bursa Malaysia Securities Berhad ( W) Circular : This circular to shareholders of Bio Osmo dated 31 October 2017 Director(s) : Director(s) of Bio Osmo FYE : Financial year ended/ending ICSB : Impiana Cherating Sdn Bhd ( H) IHISB : Impiana Hotel Ipoh Sdn Bhd ( U) Impiana : Impiana Sdn Bhd ( V) IMSB : Intra Magnum Sdn Bhd ( P), a subsidiary of Bio Osmo ITSB : Impiana Tioman Sdn Bhd ( V) IUL Impiana Ubud (Labuan) Co. Ltd (LL12209) Listing Requirements : Main Market Listing Requirements of Bursa Securities LPD : 13 October 2017, being the latest practicable date prior to the despatch of this Circular, which shall not be more than 1 month prior to the date of this Circular Major Shareholder(s) : Any person who has an interest or interests in one or more voting shares in the Company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is: (a) (b) 10% or more of the aggregate of the nominal amounts of all the voting shares in the Company; or 5% or more 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. This includes any person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, a major shareholder of Bio Osmo as defined above or any other company which is a subsidiary or holding company of Bio Osmo. For the purpose of this definition, interest in shares shall have the meaning given in Section 8 of the Act Mandate Period : The period during which the Recurrent Related Party Transactions are to be entered into for which the Proposed Shareholders Mandate is being sought. This period shall commence immediately upon the passing of the ordinary resolution for the Proposed Shareholders Mandate during the forthcoming AGM until: (a) (b) the conclusion of the next AGM, unless the authority is renewed by a resolution passed at the next AGM; the expiration of the period within which the next AGM is required to be held pursuant to Section 340(2) of the Act (but will not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or ii

3 DEFINITIONS (c) revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier Persons Connected : In relation to a Director or a Major Shareholder, means such person who falls under any one of the following categories: Proposed Shareholders Ratification Proposed Shareholders Mandate (a) (b) (c) (d) (e) (f) (g) (h) (i) A family member of the Director or Major Shareholder, which family shall have the meaning given in Section 197 of the Act; A trustee of a trust (other than a trustee for a share scheme for employees or pension scheme) under which the Director, Major Shareholder or a family member of the Director or Major Shareholder is the sole beneficiary; A partner of the Director, Major Shareholder or a partner of a Person Connected with that Director or Major Shareholder; A person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; A person in accordance with whose directions, instructions or wishes the Director or Major Shareholder is accustomed or is under an obligation, whether formal or informal, to act; A body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; A body corporate or its Directors whose directions, instructions or wishes the Director or Major Shareholder is accustomed or under an obligation, whether formal or informal, to act; A body corporate in which the Director, Major Shareholder or person connected with him are entitled to exercise, or control the exercise of, not less than 20% of the votes attached to voting shares in the body corporate; or A body corporate which is a related corporation : Proposed shareholders ratification from the shareholders of the Company for the period commencing from 4 April 2017 to the date of the 10 th AGM between IMSB and various subsidiaries of Impiana : Proposed shareholders mandate for Bio Osmo Group to enter into Recurrent Related Party Transactions during the Mandate Period Proposals : Collectively, the Proposed Shareholders Ratification and Proposed Shareholders Mandate Ratification Period : Period during which the Recurrent Related Party Transactions were entered into for which the Proposed Shareholders Ratification is sought. This period shall commence from 4 April 2017 to the date of the 10 th AGM Recurrent Related Party Transaction(s) or RRPT : Related party transaction(s) which is/are recurrent, of a revenue or trading nature and which is/are necessary for the day-to-day operations of the Bio Osmo Group Related Party(ies) : Director(s), Major Shareholder(s) and/or person(s) connected with such Director(s) or Major Shareholder(s) Substantial Shareholder(s) : Shall have the meaning given in Section 136 of the Act iii

4 DEFINITIONS Words denoting the singular shall, where applicable, include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders, and vice versa. References to persons shall include corporations, unless otherwise specified. Any reference to any enactment in this Circular 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 is a reference to Malaysian time, unless otherwise stated. Any discrepancy in the tables between the amounts listed and the totals in this Circular are due to rounding. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK iv

5 TABLE OF CONTENTS PAGE LETTER TO THE SHAREHOLDERS CONTAINING: 1. INTRODUCTION 1 2. BACKGROUND OF THE RRPT 2 3. DETAILS OF THE PROPOSALS 3 4. RATIONALE FOR AND BENEFITS OF THE PROPOSALS 9 5. EFFECTS OF THE PROPOSALS 9 6. CONDITION OF THE PROPOSALS 9 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM DIRECTORS RECOMMENDATION AGM FURTHER INFORMATION 11 APPENDIX I II III IV ADDITIONAL INFORMATION 12 INFORMATION ON IMSB INFORMATION ON IMPIANA AND ITS SUBSIDIARIES INFORMATION ON ITSB EXTRACT OF THE NOTICE OF THE 10 TH AGM 17 v

6 BIO OSMO BERHAD (Company No.: A) (Incorporated in Malaysia) Registered office: No. 5-9A, The Boulevard Offices Mid Valley City Lingkaran Syed Putra Kuala Lumpur Malaysia 31 October 2017 Board of Directors: Shahrizal Hisham bin Dato Setia Abdul Halim (Executive Director) Azrin Mirzhan bin Kamaluddin (Executive Director) Wong Kok Seong (Independent Non-Executive Director) Prof. Dr. Mohd Amy Azhar bin Haji Mohd Harif (Independent Non-Executive Director) Datuk Haji Mohammad Kamal bin Yan Yahaya (Non-Independent Non-Executive Director) Dato Yahya bin A. Jalil (Non-Independent Non-Executive Director) Dato Latt Shariman bin Abdullah (Non-Independent Non-Executive Director) To: The shareholders of Bio Osmo Dear Sir/Madam, PROPOSED SHAREHOLDERS RATIFICATION FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION 1.0 On 30 August 2017, the Company announced to Bursa Securities that IMSB had entered into RRPT with various subsidiaries of Impiana. 1.1 The Company had on 14 September 2017 submitted an application to Bursa Securities for, amongst others, an extension of time to comply with paragraph of the Listing Requirements. Bursa Securities has via its letter dated 25 September 2017 granted Bio Osmo an extension of time from 4 April 2017 until the forthcoming AGM to obtain shareholders ratification and mandate for all RRPT entered into by IMSB and various subsidiaries of Impiana from 4 April 2017 to the date of the forthcoming AGM ( Bursa Approval ). 1

7 2. BACKGROUND OF THE RRPT 2.1 IMSB is a 75% subsidiary of Bio Osmo and the remaining 25% equity in IMSB is held by Impiana since 27 October Prior to 27 October 2016, IMSB had entered into hotel management agreement and letters of award ( the Agreements ) with the following companies: I. Hospitality Management Agreements with IHISB dated 11 September 2015 whereby IMSB had been appointed as the manager to manage and operate Impiana Hotel Ipoh and receiving management fee; II. Letter of Award as Development Consultant from ICSB dated 11 September 2015 and 1 September 2016 whereby IMSB had been appointed as the development consultant for the proposed development of Phases 1A, 1B and 2 of Impiana Resort & Residences Cherating and receiving technical fee; III. Letter of Award as Development Consultant from ITSB dated 11 September 2015 whereby IMSB had been appointed as the project management consultant for the proposed development of Impiana Tioman Hotel & Resort and receiving project management consultancy fee; and IV. Project Management Consultant Services Agreement with IUL dated 1 September 2016 whereby IMSB had been appointed as the project management consultant for the proposed development of Impiana Private Villas & Resorts Ubud, Bali and receiving technical fee. (hereinafter referred to as the Transactions ) IHISB and IUL are wholly-owned subsidiary companies of Impiana. ICSB is a 94.2% subsidiary of Impiana whilst ITSB is a company which is 50% owned by Dato Seri Farouk bin Abdullah ( DS Farouk ). The details of the shareholdings of IHISB, ICSB, IUL and ITSB are disclosed in Appendix III and IV respectively. 2.3 DS Farouk emerged as a Substantial Shareholder of Bio Osmo on 4 April He is also a Director and Substantial Shareholder of Impiana. As at LPD, DS Farouk holds a total of 37,812,488 shares representing 73.7% in Impiana. DS Farouk is now regarded as a Related Party by virtue of his direct and indirect shareholdings in Bio Osmo and ITSB and Impiana which in turn, owns IHISB, ICSB and IUL. Details of the Directors and Substantial Shareholders of IMSB, ITSB, Impiana and its subsidiaries are disclosed in Appendix II, III and IV respectively. 2.4 Pursuant to the Agreements, IMSB received a total of RM2.647 million as hotel management fees and technical fees from IHISB, ICSB and IUL for the period of three months ended 30 June Pursuant to Paragraph 10.08(2) of the Main Market Listing Requirements ( MMLR ) of Bursa Securities, Bio Osmo had triggered the percentage ratio of 5% in June 2017 as tabulated below: Revenue (RM) Cumulative (RM) % ratio* April , , % May , , % June ,877,889 2,647, % * Pursuant to Paragraph 10.02(g) of the MMLR and based on Bio Osmo s latest audited accounts as at 30 June

8 THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE RELEVANT INFORMATION ON THE PROPOSALS AND TO SEEK YOUR APPROVAL FOR THE ORDINARY RESOLUTION PERTAINING TO THE PROPOSALS TO BE TABLED AT THE FORTHCOMING AGM OF THE COMPANY. THE NOTICE OF THE AGM TOGETHER WITH THE FORM OF PROXY ARE ENCLOSED IN THE 2017 ANNUAL REPORT. 3. DETAILS OF THE PROPOSALS 3.1 Provisions under the Listing Requirements Under Paragraph of the Listing Requirements, the Company may seek a shareholders mandate for recurrent related party transactions subject to the following: i. the transactions are in the ordinary course of business and are on terms not more favourable to the Related Parties than those generally available to the public; ii. the shareholders mandate is subject to annual renewal and disclosure is made in the Company s annual report on the breakdown of the aggregate value of the transactions conducted under such mandate during the financial year where: a. the consideration, value of the assets, capital outlay or costs of the aggregated transactions is RM1 million or more; or b. the percentage ratio of such aggregated transactions is 1% or more, whichever is the lower; iii. iv. a circular to the shareholders for the mandate includes the information as may be prescribed by Bursa Securities; in a meeting to obtain shareholders mandate, 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 must not vote on the resolution to approve the transactions. An interested director or interested major shareholder must ensure that persons connected with him abstain from voting on the resolution approving the transactions; and v. immediately announce to Bursa Securities when the actual value of the RRPT entered into exceeds the estimated value of the transactions disclosed in the circular by 10% or more. 3.2 IMSB has, in the ordinary course of its business, entered into certain RRPT and it is anticipated that the company would, in the ordinary course of business, continue to enter into such transactions with the Related Parties, details of which are set out in Section 3.7. The transactions were also carried in the ordinary course of the Group s business. IMSB is also expected and intends to fulfil the ongoing contractual arrangements in relation to the hotel management and consultancy agreements entered with IHISB, ICSB and IUL. It is likely that such transactions will occur with some degree of frequency and could arise at any time. 3.3 Accordingly, the Board proposes to seek the Proposed Shareholders Ratification on those RRPT entered into by IMSB during the Ratification Period and the Proposed Shareholders Mandate for future RRPT to be entered into during the Mandate Period. These RRPT which are necessary for the day-to-day operations of the Group, have been/will be based on normal commercial terms, at arms length, and have been/will be transacted on terms that are not more favourable to the Related Parties than those generally available to the public. 3

9 3.4 Validity Period of the Proposed Shareholders Mandate The Proposed Shareholders Mandate, if approved by the shareholders of the Company at the forthcoming AGM, will take effect from the date of the passing of the ordinary resolution at the forthcoming AGM and shall continue to be in force until: (a) (b) (c) the conclusion of the next AGM, unless the authority is renewed by a resolution passed at the next AGM; the expiration of the period within which the next AGM is required to be held pursuant to Section 340(2) of the Act (but will not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier. Thereafter, the approval of the shareholders of the Company will be sought for the renewal of the shareholders mandate at each subsequent AGM of the Company. 3.5 Principal activities of the Group Bio Osmo is principally an investment holding company. The principal activities of its subsidiaries are as follows: Name of Company Country of Incorporation Equity Interest (%) Principal Activity Direct subsidiaries: Amshore Holdings Sdn Bhd Malaysia 100 Processing, manufacturing and selling of drinking water Morning Valley Sdn Bhd Malaysia 100 Inactive Amshore Vista Sdn Bhd Malaysia 100 Dormant Al Maurid Oil & Gas Sdn Bhd Malaysia 100 Dormant Intra Magnum Sdn Bhd Malaysia 75 Investment holding, management and operation of hotels and resorts, property investment and hotel development Indirect subsidiary: Amshore KL Sdn Bhd Malaysia 66 Inactive 4

10 3.6 Classes of Related Parties The RRPT involves the following Related Parties: Transacting Parties Country of Incorporation Interested Major Shareholder IHISB Malaysia Dato Seri Farouk bin Abdullah ( DS Farouk ) Related Parties Shareholdings of Related Parties in Transacting Parties Interested Director Direct % Indirect % Azrin Mirzhan bin (1) Kamaluddin (2) ICSB Malaysia DS Farouk Azrin Mirzhan bin Kamaluddin (2) (1) Dato Yahya bin A. Jalil IUL Labuan DS Farouk Azrin Mirzhan bin Kamaluddin (2) (1) Nature of relationship DS Farouk is a director of IHISB and substantial shareholder of Bio Osmo. IHISB is a wholly-owned subsidiary of Impiana and is controlled by DS Farouk and his family by virtue of their substantial interests in Impiana. DS Farouk is a substantial shareholder of Bio Osmo. ICSB is a subsidiary of Impiana and is controlled by DS Farouk and his family by virtue of their substantial interests in Impiana. Dato Yahya bin A. Jalil is a substantial shareholder of ICSB and Director of Bio Osmo. DS Farouk is a director of IUL and substantial shareholder of Bio Osmo. IUL is a wholly-owned subsidiary of Impiana and is controlled by DS Farouk and his family by virtue of their substantial interests in Impiana. ITSB Malaysia DS Farouk Azrin Mirzhan bin 50 - DS Farouk is a substantial shareholder of Kamaluddin (2) ITSB and Bio Osmo. Note: (1) Deemed interested by virtue of his interests in Impiana Sdn Bhd pursuant to Section 8(4) of the Act. (2) Interested Director by virtue of being person connected to Major Shareholder. 5

11 3.7 Details of the RRPT under the Proposals The details of the RRPT entered and/or to be entered into by the Group with the Related Parties under the Proposals are as follows: Transacting Related Parties Recipient Provider Nature of transactions Estimated value from 4 April 2017 up to the forthcoming AGM (RM) Proposed Shareholders Ratification Actual value during the period from 4 April 2017 up to the LPD (RM) Estimated value of the transaction from 14 October 2017 up to the forthcoming AGM (RM) Proposed Shareholders Mandate Estimated value to the transacted from the forthcoming AGM to the next AGM (4) IHISB IMSB To manage and operate Impiana Hotel Ipoh 219, ,727 59, ,304 ICSB IUL ITSB Note: IMSB IMSB IMSB To provide consultancy services on the development of Phases 1A, 1B and 2 of 2,359,188 2,359, ,068,000 Impiana Resort & Residences Cherating (1) To provide consultancy services on the development of Impiana Private Villas & 270, , ,763 Resorts Ubud, Bali (2) To provide consultancy services on the development of Impiana Tioman Hotel & Resort (3) N/A (5) (1) Site work is targeted to commence before January However, pre-development consultancy work has commenced since August (RM) N/A (5) N/A (5) 270,000 (2) Site work has begun in April 2017 with expected completion in November However, pre-development consultancy work has commenced since November (3) Target site work commencement in Quarter 4 year (4) The estimated value will vary and subject to changes. The estimated value was determined by the estimated % of progress claim for development consultants and technical fees, whereas for management of IHISB is on estimated gross operating revenue. (5) Shareholders Ratification is not being sought for the transactions entered between ITSB and IMSB. 6

12 3.8 Amount due from and owing by Related Parties pursuant to the RRPT ( Outstanding RRPT Receivables ) As at FYE 30 June 2017, the breakdown of the principal sum and interest for the total outstanding amount due under the RRPT which exceeded the credit terms are as follows: Company in Bio Osmo Group Transacting Party Nature of transactions IMSB ICSB To provide consultancy services on the development of Phases 1A, 1B and 2 of Impiana Resort & Residences Cherating Outstanding RRPT Receivables as at 30 June 2017 RM Outstanding RRPT Receivables as at 30 June 2017 which exceed normal credit period of 1 year or less RM Principal Interest More than 1 to 3 years RM More than 3 to 5 years RM More than 5 years RM 3,243,235 3,243, Total Amount Collected as at LPD 755,896 IMSB IUL To provide consultancy services on the development of Impiana Private Villas & Resorts Ubud, Bali Total Amount Collected as at LPD 0 968, , IMSB monitors the outstanding amount due on a regular basis and follow up on the status of the cases and takes appropriate action to recover the outstanding amount with reminder letters and phone calls The Board is of the opinion that the outstanding amount exceeding the credit period do occur in the normal course of business and the outstanding amount are collectible due to the relationship with Impiana and no event of default has occurred. 7

13 3.11 Review and disclosure procedures for RRPT The Company has implemented the following review and disclosure procedures to ensure that the RRPT are conducted on arm s length basis and are based on normal commercial terms that 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: i. The definition of related party, list of related parties and the review procedure will be circulated and/or updated within the Group. ii. Any tender, quotation or contract received from or proposed to be entered with a related party shall be reviewed by the Executive Director/ Chief Operating Officer, who will ascertain if it is an approved RRPT. Such tender, quotation or contract will not be approved unless the terms offered to the Group are comparable with those offered by other unrelated parties for the same or substantially similar type of transactions. Transactions with related party will only be entered into after taking into account the pricing, quality, level of services and expertise and other related factors. The negotiated transaction prices will be determined by market forces and similar to those transactions prices with unrelated third parties. iii. Wherever possible, the Management will endeavour that at least 2 other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities are used for comparison to determine whether the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products/services and/or quantities. Where quotation or comparative pricing from unrelated third parties cannot be obtained, the Management may rely on their knowledge in the prevailing industry norms bearing in mind the urgency and efficiency of services to be provided/received to ensure the RRPT are not detrimental to the Company. iv. All records of RPRT will be properly captured, kept and maintained to ensure accurate disclosure. v. RRPT will be reviewed by the Audit Committee quarterly to ensure that such transactions are undertaken at arm s length basis, on normal commercial terms and on terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders. In its review of such transactions, the Audit Committee may, as it deems fit, request for additional information pertaining to the transactions from independent sources of advisers or professionals. vi. vii. Where any of the Company s Director or member of the Audit Committee has a direct or indirect interest in the RRPT, he shall abstain from all deliberations and voting in respect of the said transaction. There is no threshold for approval for RRPT as all RRPT will be reviewed by the Audit Committee and approved by the Board of Directors. Disclosure will be made in the Company s annual report on the breakdown of the aggregate value of the RRPT made during the financial year, amongst others, based on the following information: i. the type of RRPT made; and ii. the names of the Related Parties involved in each type of the RRPT and their relationship with the Group. 8

14 3.12 Statement by the Audit Committee The Company s Audit Committee has seen and reviewed the procedures mentioned in Section 3.11 above and is satisfied that the Group has in place adequate procedures and processes to monitor, track and identify RRPT in a timely and orderly manner as well as to ensure that the RRPT will be undertaken: (a) (b) (c) (d) on arm s length basis; under normal commercial terms consistent with the Group s business practices and policies; on terms no more favourable to the Related Parties than those generally available to the public; and not to the detriment of the minority shareholders of the Company. The Audit Committee reviews the procedures in Section 3.11 periodically, at every quarter. The Audit Committee is also of the view that the above procedures in Section 3.11 are sufficient to ensure that the RRPT 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 of the Company. 4. RATIONALE FOR AND BENEFITS OF THE PROPOSALS The RRPTs entered into by IMSB with various subsidiaries of Impiana are in the ordinary course of business. The RRPT are recurring transactions of a revenue or trading nature which are will occur with some degree of frequency and could arise at any time and from time to time. These transactions may be constrained by the time-sensitive nature and confidentiality of such transactions, and it may be impractical to seek shareholders approval on a case-to-case basis before entering into such RRPT. By obtaining the Proposed Shareholders Mandate on an annual basis, the necessity to make regular announcements to Bursa Securities and to convene separate general meetings to seek shareholders approval from time to time is eliminated. This would substantially reduce administrative time, inconvenience and expenses associated with the making of announcements and convening of such meetings, without compromising the corporate objectives or adversely affecting the business opportunities available to the Bio Osmo Group. 5. EFFECTS OF THE PROPOSALS The Proposals will not have any effect on the share capital, shareholdings structure, net assets and gearing of Bio Osmo for the FYE 30 June However, the RRPT is expected to contribute positively to the consolidated earnings and EPS of Bio Osmo in the future through its shareholdings in IMSB. 6. CONDITION OF THE PROPOSALS The Proposals are subject to the approval being obtained from the shareholders of the Company at the forthcoming AGM. 9

15 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM Major Shareholder in Bio Osmo Dato Seri Farouk bin Abdullah Direct Indirect No. of Shares % No. of Shares % 155,985, Interested Directors in Bio Osmo Direct Indirect No. of Shares % No. of Shares % Azrin Mirzhan bin Kamaluddin Dato Yahya bin A. Jalil The interested Major Shareholder of the Company will abstain from voting in respect of his direct shareholding in the Company, on the resolutions approving the Proposals at the forthcoming AGM. In addition, the aforementioned interested Major Shareholder of the Company has also undertaken to ensure that the persons connected to them (if any) will abstain from voting in respect of their direct and/or indirect shareholdings on the resolution approving the Proposals at the forthcoming AGM. En Azrin Mirzhan bin Kamaluddin is an Interested Director by virtue of him being a Person Connected to the interested Major Shareholder and will abstain and will continue to abstain from all Board deliberations and voting in the Board resolutions pertaining to the Proposals. Dato Yahya bin A. Jalil is an Interested Director in so far only in respect of his direct shareholdings in ICSB and will abstain and will continue to abstain from all Board deliberations and voting in the Board resolutions pertaining to the Proposals. En Azrin Mirzhan bin Kamaluddin and Dato Yahya bin A. Jalil have also undertaken to ensure that the persons connected to them (if any) will abstain from voting in respect of their direct and/or indirect shareholdings on the resolution approving the Proposals at the forthcoming AGM. Save as disclosed above, none of the other Directors, other Major Shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposals. 8. DIRECTORS RECOMMENDATION The Board, save for En Azrin Mirzhan bin Kamaluddin and Dato Yahya bin A. Jalil, being Interested Directors, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company and accordingly, the Board recommends that you vote in favour of the ordinary resolution on Proposals to be tabled at the forthcoming AGM. 10

16 9. AGM The AGM, the notice of which is enclosed in the Annual Report of the Company for FYE 30 June 2017 will be held at Pinetree Hotel, 36 Jalan Mengkudu, Off Jalan Bukit Pasir, Batu Pahat, Johor Darul Ta zim on Wednesday, 22 November 2017 at a.m., for the purpose of considering and, if thought fit, passing, inter alia, the ordinary resolution set out in the Notice of AGM, to give effect to the Proposals. If you are unable to attend or vote in person at the AGM, you will find attached to the Annual Report of the Company for the FYE 30 June 2017, a Form of Proxy, which you are required to complete, sign and return in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive at the Company s registered office at No. 5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur, not less than 48 hours before the time appointed for the taking of the poll for the AGM or any adjournment thereof. The lodging of the Form of Proxy will not, however, preclude you from attending and voting in person at the AGM should you subsequently wish to do so. 10. FURTHER INFORMATION You are advised to refer to the attached appendices of this Circular for further information. Yours faithfully, for and on behalf of the Board of BIO OSMO BERHAD SHAHRIZAL HISHAM BIN DATO SETIA ABDUL HALIM EXECUTIVE DIRECTOR 11

17 APPENDIX I ADDITIONAL INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and its members who collectively and individually accept full responsibility for the accuracy of the information given and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement in this Circular misleading. 2. MATERIAL CONTRACTS Neither the Company nor any of its subsidiaries have entered into any material contracts, not being contracts entered into in the ordinary course of business, within 2 years immediately preceding the date of this Circular. 3. MATERIAL LITIGATION, CLAIMS AND ARBITRATION As at the date of this Circular, Bio Osmo Group is not engaged in any material litigation, claims or arbitration either as plaintiff or defendant and the Board does not have any knowledge of any proceedings, pending or threatened, against the Group or any facts likely to give rise to any proceedings which may materially or adversely affect the financial position of the Group. 4. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Company s registered office located at No. 5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur during office hours from Monday to Friday (except on public holidays) from the date of this Circular up to and including the date of the AGM: i. Constitution of the Company; and ii. Audited financial statements of the Company for the FYEs 30 June 2016 and THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 12

18 APPENDIX II INFORMATION ON IMSB 1. INFORMATION ON IMSB IMSB was incorporated as a private limited company in Malaysia on 27 January As at the LPD, the Directors and Substantial Shareholders of IMSB are as follows: Directors Nationality Designation Datin Afrizah binti Abu Bakar Malaysian Director Yap Weng Khoon Malaysian Director Prof. Dr Mohd Amy Azhar bin Mohd Harif Malaysian Director Chang How Weng Malaysian Director Wong Kok Seong Malaysian Director Substantial Shareholders Nationality/ Country of Incorporation Direct Indirect No of shares % No of shares % Bio Osmo Berhad Malaysia 18,750, Impiana Sdn Bhd Malaysia 6,250, Dato Seri Farouk bin Abdullah Malaysian - - (1) 6,250, Note: Deemed interested by virtue of his interests in Impiana Sdn Bhd pursuant to the provisions of the Companies Act THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 13

19 APPENDIX III INFORMATION ON IMPIANA AND ITS SUBSIDIARIES 1. INFORMATION ON IMPIANA Impiana was incorporated as a private limited company in Malaysia on 15 June The principal activity of Impiana is investment holding. The principal activities of Impiana Group of Companies include, amongst others, property development, project management consultancy services, operation of resort and hotel business, provision of management services as well as hotel and travel services. As at the LPD, the Directors and Substantial Shareholders of Impiana are as follows: Directors Nationality Designation Dato Seri Farouk bin Abdullah Malaysian Director Raja Dato Seri Eleena binti Sultan Azlan Shah Malaysian Director Mej Jen (B) Dato Mohd Ariff bin Ali Malaysian Director Substantial Shareholders Nationality/ Country of Incorporation Direct Indirect No of shares % No of shares % Dato Seri Farouk bin Abdullah Malaysian 37,812, Aneka Mutiara (M) Sdn Bhd Malaysia 6,503, Anjuran Hikmat Sdn Bhd Malaysia 3,859, Nina Kamaria Farouk Malaysian - - (1) 6,503, Raja Dato Seri Eleena binti Sultan Azlan Shah Malaysian - - (2) 3,859, Notes: (1) Deemed interested by virtue of her interests in Aneka Mutiara (M) Sdn Bhd pursuant to the provisions of the Companies Act (2) Deemed interested by virtue of her interests in Anjuran Hikmat Sdn Bhd pursuant to the provisions of the Companies Act INFORMATION ON IHISB IHISB was incorporated as a private limited company in Malaysia on 23 September The principal activity of IHISB is operation of resort, hotel and related services. As at the LPD, the Directors and Substantial Shareholders of IHISB are as follows: Directors Nationality Designation Dato Seri Farouk bin Abdullah Malaysian Director Datin Afrizah binti Abu Bakar Malaysian Director Substantial Shareholders Nationality/ Country of Incorporation Direct Indirect No of shares % No of shares % Impiana Sdn Bhd Malaysia 10,000, Dato Seri Farouk bin Abdullah Malaysian - - (1) 10,000, Note: (1) Deemed interested by virtue of his interests in Impiana Sdn Bhd pursuant to the provisions of the Companies Act

20 APPENDIX III INFORMATION ON IMPIANA AND ITS SUBSIDIARIES 3. INFORMATION ON ICSB ICSB was incorporated as a private limited company in Malaysia on 7 October The principal activity of ICSB is operation of resort, hotel and related services. As at the LPD, the Directors and Substantial Shareholders of ICSB are as follows: Directors Nationality Designation Datin Afrizah binti Abu Bakar Malaysian Director Azrin Mirzhan bin Kamaluddin Malaysian Director Mej Jen (B) Dato Mohd Ariff bin Ali Malaysian Director Substantial Shareholders Nationality/ Country of Incorporation Direct Indirect No of shares % No of shares % Impiana Sdn Bhd Malaysia 8,100, Y. Bhg. Dato Yahya bin A Jalil Malaysian 500, Dato Seri Farouk bin Abdullah Malaysian - - Note: (1) 8,100, (1) Deemed interested by virtue of his interests in Impiana Sdn Bhd pursuant to the provisions of the Companies Act INFORMATION ON IUL IUL was incorporated as a private limited company in Labuan on 28 August The principal activity of IUL is investment holding. As at the LPD, the Directors and Substantial Shareholders of IUL are as follows: Directors Nationality Designation Dato Seri Farouk bin Abdullah Malaysian Director Azrin Mirzhan bin Kamaluddin Malaysian Director Substantial Shareholders Nationality/ Country of Incorporation Direct Indirect No of shares % No of shares % Impiana Sdn Bhd Malaysia 10,000, Dato Seri Farouk bin Abdullah Malaysian - - (1) 10,000, Note: (1) Deemed interested by virtue of his interests in Impiana Sdn Bhd pursuant to the provisions of the Companies Act THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 15

21 APPENDIX IV INFORMATION ON ITSB 1. INFORMATION ON ITSB ITSB was incorporated as a private limited company in Malaysia on 11 March The principal activity of ITSB is principally engage in all aspects of the hotel business and the provision of related services. As at the LPD, the Directors and Substantial Shareholders of ITSB are as follows: Directors Nationality Designation Datin Afrizah binti Abu Bakar Malaysian Director Mohd Shukri bin Haji Mohd Jai Malaysian Director Substantial Shareholders Dato Seri Farouk bin Abdullah Datin Afrizah binti Abu Bakar Nationality Direct Indirect No of shares % No of shares % Malaysia Malaysian THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 16

22 EXTRACT OF THE NOTICE OF THE 10 TH ANNUAL GENERAL MEETING ORDINARY RESOLUTION 11 Proposed Shareholders Ratification and Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature THAT approval be and is hereby given to the Company and its subsidiaries ( Group ) to enter into and give effect to the recurrent related party transactions of a revenue or trading nature particulars which are set out in Section 3.7 and with the specified classes of related parties as specified in Section 3.6 of the Circular to Shareholders dated 31 October 2017, provided that: (a) (b) (c) (d) such arrangements and/or transactions are necessary for the Group s day-to-day operations; such arrangements and/or transactions undertaken are in the ordinary course of business, at arm s length basis and on normal commercial terms which are not more favourable to the related parties than those generally available to third party; such arrangements and/or transactions are not detrimental to the minority shareholders of the Company; and the disclosure is made in the annual report on the aggregate value of transactions conducted pursuant to the shareholders mandate during the financial year in relation to: (i) (ii) the related transacting parties and their respective relationship with the Company; and the nature of the recurrent transactions. THAT such authority shall continue to be in force until: (a) (b) (c) the conclusion of the next Annual General Meeting ( AGM ), unless the authority is renewed by a resolution passed at the next AGM; or the expiration of the period within which the next AGM is required to be held pursuant to Section 340(2) of the Companies Act 2016 (but will not extend to such extension as may be allowed pursuant to Section 340(4) of the Companies Act 2016); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier. AND THAT all Recurrent Related Party Transactions entered into by Intra Magnum Sdn Bhd, a subsidiary of the Company, from 4 April 2017 up to the date of this Ordinary Resolution, particulars which are set out in Section 3.7 be and are hereby approved, confirmed and ratified; AND THAT the Directors be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution. 17