DOLOMITE CORPORATION BERHAD (Company No.: W) (Incorporated in Malaysia under the then Companies Act, 1965)

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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 advisers immediately. Bursa Malaysia Securities Berhad ( Bursa Securities ) takes no responsibility for the contents of this circular to shareholders and RCPS holders (defined herein) of DCB ( 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. Shareholders and RCPS holders should rely on their own evaluation to assess the merits and risks of the Proposed Capital Reduction. DOLOMITE CORPORATION BERHAD (Company No.: W) (Incorporated in Malaysia under the then Companies Act, 1965) CIRCULAR TO SHAREHOLDERS AND RCPS HOLDERS IN RELATION TO THE PROPOSED CAPITAL REDUCTION PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016 TO REDUCE THE SHARE CAPITAL OF DOLOMITE CORPORATION BERHAD ( DCB OR COMPANY ) OF UP TO RM124,538, BY THE CANCELLATION OF THE SHARE CAPITAL OF THE COMPANY THAT HAS BEEN LOST OR IS UNREPRESENTED BY AVAILABLE ASSETS ( PROPOSED CAPITAL REDUCTION ) AND NOTICE OF EXTRAORDINARY GENERAL MEETINGS Adviser M& A M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) The notices convening the Extraordinary General Meetings ( EGMs ) for shareholders and RCPS holders of Dolomite Corporation Berhad ( DCB or Company ) in respect of the Proposed Capital Reduction to be held at Maple Room, Level C, One World Hotel, First Avenue, Bandar Utama City Centre, Petaling Jaya, Selangor Darul Ehsan, Malaysia on Monday, 7 August 2017 at 3.00 p.m. and 3.30 p.m. or immediately following the conclusion or adjournment (as the case may be) of the EGM for shareholders of DCB, respectively together with the Proxy Form are enclosed in this Circular. The Form of Proxy must be completed and deposited at the office of the Company s registered office at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for the EGMs or any adjournment thereof. The lodging of the Forms of Proxy will not preclude you from attending and voting in person at the meetings should you subsequently wish to do so. Last date and time for lodging the Proxy Form : Saturday, 5 August 2017 at 3.00 p.m. (for shareholders of DCB) Saturday, 5 August 2017 at 3.30 p.m. (for RCPS holders of DCB) Date and time of EGMs : Monday, 7 August 2017 at 3.00 p.m. (for shareholders of DCB) Monday, 7 August 2017 at 3.30 p.m. or immediately following the conclusion or adjournment (as the case may be) of the EGM for shareholders of DCB, to be held at the same venue and on the same date at 3.00 p.m., whichever is later (for RCPS holders of DCB) This Circular is dated 13 July 2017

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular: Act : Companies Act 2016, as amended from time to time including any reenactment thereof Board Bursa Securities : Board of Directors of DCB : Bursa Malaysia Securities Berhad ( W) Circular : This circular to the shareholders and RCPS holders of DCB dated 13 July 2017 in relation to the Proposed Capital Reduction Court DCB or Company DCB Group or Group DCB Share(s) EGM(s) EPS FPE FYE LPD M&A Securities or Adviser Main Market NA Proposed Capital Reduction RCPS RM and sen RMB : High Court of Malaya : Dolomite Corporation Berhad ( W) : DCB and its subsidiaries, collectively : Ordinary share(s) in DCB : Extraordinary general meeting(s) for shareholders and RCPS holders of DCB : Earnings per share : Financial period ended/ending, as the case may be : Financial year ended/ending 31 December, as the case may be : 3 July 2017, being the latest practicable date prior to the printing of this document : M&A Securities Sdn Bhd (15017-H), the Adviser to DCB for the Proposed Capital Reduction : Main Market of Bursa Securities : Net assets : Proposed capital reduction exercise to be carried out by the Company pursuant to Section 116 of the Act to reduce the share capital of the Company of up to RM124,538, by the cancellation of the share capital of the Company that has been lost or is unrepresented by available assets : Redeemable convertible preference shares in DCB : Ringgit Malaysia and sen, respectively : Ren Min Bi, the official currency of People s Republic of China For the purpose of this Circular, all references to a time of day shall be a reference to Malaysian time unless otherwise stated. In this Circular, 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 vice versa. References to persons shall, where applicable, include corporations. Certain figures included in this Circular have been subject to rounding adjustments. i

3 TABLE OF CONTENTS LETTER FROM THE BOARD IN RELATION TO THE PROPOSED CAPITAL REDUCTION: PAGE 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED CAPITAL REDUCTION 1 3. RATIONALE FOR THE PROPOSED CAPITAL REDUCTION 5 4. EFFECTS OF THE PROPOSED CAPITAL REDUCTION 5 5. SHARE PRICE PERFORMANCE 7 6. APPROVALS REQUIRED 8 7. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS 8 8. OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION 8 9. DIRECTORS OPINION AND RECOMMENDATION ESTIMATED TIME FRAME FOR COMPLETION MEETINGS FURTHER INFORMATION 9 APPENDICES I PRO FORMA CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF THE DCB GROUP AS AT 31 DECEMBER 2016 TOGETHER WITH THE REPORTING ACCOUNTANTS LETTER THEREON 10 II FURTHER INFORMATION 19 FOR SHAREHOLDERS OF DCB NOTICE OF EGM PROXY FORM FOR RCPS HOLDERS OF DCB NOTICE OF EGM PROXY FORM ENCLOSED ENCLOSED ENCLOSED ENCLOSED ii

4 DOLOMITE CORPORATION BERHAD (Company No.: W) (Incorporated in Malaysia under the then Companies Act, 1965) Registered Office: Lot 6.05, Level 6 KPMG Tower 8 First Avenue Bandar Utama Petaling Jaya Selangor Darul Ehsan 13 July 2017 Directors: Tan Sri Dato Seri Mohd Jamil bin Johari (Chairman and Independent Non-Executive Director) Lew Choong Keong (Managing Director) Lim Beng Keat (Non-Independent Non-Executive Director) Huang Jen Soong (Non-Independent Non-Executive Director) Dominic Aw Kian-Wee (Independent Non-Executive Director) Seow Yoo Lin (Independent Non-Executive Director) To: The shareholders and RCPS holders of Dolomite Corporation Berhad Dear Sir / Madam, PROPOSED CAPITAL REDUCTION 1. INTRODUCTION On 31 May 2017, M&A Securities had on behalf of the Board, announced that the Company proposes to undertake the Proposed Capital Reduction. Further details of the Proposed Capital Reduction are set out in Section 2 below. The purpose of this Circular is to provide you with details of the Proposed Capital Reduction and to seek your approval for the resolution pertaining to the Proposed Capital Reduction to be tabled at the forthcoming EGMs. The Notice of the EGMs and the Proxy Form are enclosed with this Circular. YOU 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 CAPITAL REDUCTION TO BE TABLED AT THE FORTHCOMING EGMS FOR SHAREHOLDERS AND RCPS HOLDERS. 2. DETAILS OF THE PROPOSED CAPITAL REDUCTION The Proposed Capital Reduction entails a reduction of the share capital of DCB to offset the credit arising against the entire accumulated losses of DCB via a special resolution and confirmation from the Court in accordance with Section 116 of the Act. 1

5 As at the LPD, the existing share capital of DCB is RM136,456, comprising 272,578,457 DCB Shares. The accumulated losses at company level as at 31 March 2017 amounts to RM124,538, As such, the share capital of DCB will be reduced and cancelled to the extent of and up to RM124,538,229.28, which is equivalent to the unaudited accumulated losses of DCB as at 31 March 2017 at the company level. Nevertheless, the actual amount of share capital that will be reduced will be determined based on the accumulated losses position at company level immediately prior to the effective date of the Proposed Capital Reduction. For illustration purposes, if share capital of DCB is reduced and cancelled by RM124,538,229.28, the Company will have a share capital of RM11,918, comprising 272,578,457 DCB Shares upon completion of the Proposed Capital Reduction. Based on the above, the Proposed Capital Reduction will have the following effect on the accumulated losses of the Group and DCB: Based on the audited financial statement for the FYE 2016 Audited FYE 2016 Group Level Company Level RM 000 RM 000 Accumulated losses (40,825) (7,856) Add: Credit arising from the Proposed Capital Reduction 124, ,538 Less: Estimated expenses incurred for the (200) (200) Proposed Capital Reduction Resultant retained earnings 83, ,482 Based on the unaudited financial statement for the FPE 31 March 2017 Unaudited as at 31 March 2017 Group Level Company Level RM 000 RM 000 Accumulated losses (44,343) (124,538)* Add: Credit arising from the Proposed Capital Reduction 124, ,538 Less: Estimated expenses incurred for the (200) (200) Proposed Capital Reduction Resultant retained earnings / (Accumulated losses) 79,995 (200) Note: * The accumulated losses at Company level as at 31 March 2017 amounts to RM million arising mainly from an inter-company waiver of debts granted by DCB to its wholly-owned subsidiary, Dolomite Technology (HK) Limited amounting to RM114,834,

6 The Proposed Capital Reduction does not entail any outflow of cash or change in the NA (save for estimated expenses to be incurred in relation to the Proposed Capital Reduction of RM200,000) of the Company. There will be no change in the total number of issued Shares in the Company held by the shareholders immediately after the Proposed Capital Reduction, nor will the Proposed Capital Reduction involve the payment to any shareholders of any share capital of the Company. The Proposed Capital Reduction will not result in any adjustment to the share price of the Company. 2.1 Financial position of the Group FYE FYE FYE 2014* 2015 # 2016 RM 000 RM 000 RM 000 Revenue 86,421 93, ,774 Cost of sales (63,394) (74,673) (71,814) Gross profit 23,027 19,106 33,960 Other income 21,515 17,413 12,989 Marketing and distribution expenses (2,039) (4,542) (3,869) Administration expenses (11,072) (16,528) (9,829) Other expenses (11,418) (3,175) (14,868) Profit from operations 20,013 12,274 18,383 Finance costs (6,544) (7,382) (6,620) Profit before taxation ( PBT ) 13,469 4,892 11,763 Taxation (7,473) (5,415) (6,613) Profit /(Loss) after taxation ( PAT/(LAT) ) 5,996 (523) 5,150 Exchange differences on translation of foreign operations (1,336) (1,321) (6,059) Total comprehensive profit / (loss) for the year 4,660 (1,844) (909) Share Capital 131, , ,289 Share premium (Accumulated losses) (46,680) (45,975) (40,825) Reserves 73,406 72,052 65,871 Total equity attributable to: Owners of the Company 158, , ,503 Non-controlling interest (5,614) (6,842) - Total equity 152, , ,503 Notes: * Restated due to the reclassification of royalty expense amounting to RM4.40 million to cost of sales. # Restated due to reclassification of exchange difference on translation of foreign operations amounting to RM0.30 million under other comprehensive income to other income. 3

7 FYE 2014 The Group recorded a revenue of RM86.42 million in the FYE 2014, a decrease from RM98.86 million recorded in the FYE The decrease in revenue was mainly due to lower revenue derived from the property development segment as a result of delay in the commencement of the Group s Dolomite Templer phase 3 property development project. The Group recorded a PBT and PAT of RM13.47 million and RM6.00 million respectively in the FYE 2014, a decrease from RM16.14 million and RM10.81 million respectively recorded in the FYE In the FYE 2013, the Group recorded a gain of RM11.48 million for the gains on foreign exchange and fair value adjustment on other payables under the thermal power generation segment. In the FYE 2014, the manufacturing segment for the Group had contributed to PBT of RM4.68 million in the FYE 2014 as compared to a loss before taxation of RM6.08 million in the FYE 2013 due to higher demand in the FYE Resulting from the above, the accumulated losses of the Group as at 31 December 2014 was RM46.68 million, a decrease of 13.4% from RM53.88 million recorded in the FYE FYE 2015 The Group recorded a revenue of RM93.78 million in the FYE 2015, an increase from RM86.42 million recorded in the FYE The increase in revenue was mainly due to higher revenue contribution from construction segment of the Group where construction works for both the internal and external property development projects registered an increase of 11.86% in revenue. The Group recorded a PBT of RM4.89 million in the FYE 2015, a decrease from RM13.47 million in the FYE The lower PBT was mainly due to lower profit margin in the property development segment in tandem with the soft consumer sentiment caused by the implementation of goods and services tax and continued weakening of crude oil and commodity prices. Although the Group achieved PBT, the higher effective taxation had resulted in a LAT of RM0.52 million during the FYE Notwithstanding the LAT recorded, the accumulated losses of the Group as at 31 December 2015 was RM45.98 million, a decrease from RM46.68 million recorded in the FYE The decrease in accumulated losses was due to, amongst others, reclassification of exchange gain on translation of foreign operations amounting to RM0.30 million under other comprehensive income to other income. FYE 2016 The Group recorded a revenue of RM million in the FYE 2016, an increase from RM93.78 million recorded in the FYE The increase in revenue was mainly due to higher revenue contribution from the property development segment of the Group from the sale of plots of subdivided vacant industrial land at Taman Sri Batu Caves, Selangor and sale of developed properties at Dolomite Templer, Selangor. In line with the increase in revenue, the Group recorded a PBT of RM11.76 million in the FYE 2016, an increase from RM4.89 million in the previous corresponding financial year. The higher PBT was mainly due to higher profit margin derived from the Group s property development segment. During the FYE 2016, the Company recorded a PAT of RM5.15 million. The accumulated losses of the Group as at 31 December 2016 was RM40.83 million, a decrease from RM45.98 million in the FYE 2015, after recording a PAT of RM5.15 million in the FYE

8 3. RATIONALE FOR THE PROPOSED CAPITAL REDUCTION The purpose of the Proposed Capital Reduction is to eliminate the Company s accumulated losses with a view to restructuring the finances of the Company. This serves to rationalise the financial position of the Company to reflect more accurately the value of its underlying assets, and thus the financial position of the Company. In addition, the Proposed Capital Reduction will facilitate future equity-related fund raising exercises to recapitalise and strengthen the financial position of the Company. The Company would also be in a better position to retain profits and enhance its ability to pay dividends in the future, as and when appropriate, if the accumulated losses are written off. The Directors will take into consideration the present and future funding needs of the Company and Group before declaring any dividends. 4. EFFECTS OF THE PROPOSED CAPITAL REDUCTION 4.1 Share capital The pro forma effects of the Proposed Capital Reduction on the Company s share capital are as follows: No. of shares Share capital 000 RM 000 As at the LPD 272, ,457 (1) After the Proposed Capital Reduction - (124,538) Total share capital 272,578 11,919 Note: (1) Pursuant to Section 618 of the Act and upon the commencement of Section 74 of the Act, any amount standing to the credit of a company s share premium account and capital redemption reserve shall become part of the company s share capital. The share premium standing upon commencement of Section 74 amounted to RM0.168 million and as such, has become part of the Company s share capital. The rest of this page is intentionally left blank 5

9 4.2 NA and gearing The pro forma effects of the Proposed Capital Reduction on the NA, NA per share and gearing position of the Company, based on its audited consolidated financial position as at 31 December 2016 and assuming that the Proposed Capital Reduction had been effected as at 31 December 2016 are as follows: Audited as at 31 December 2016 After subsequent events (i) After the Proposed Capital Reduction (iii) RM 000 RM 000 RM 000 Share capital/contributed share 136, ,457 11,919 capital Share premium (Accumulated losses) / (40,825) (40,825) 83,513 Retained earnings Reserves 65,871 65,871 65,871 Shareholders funds / NA 161, , ,303 No. of DCB Shares ( 000) (ii) 272, , ,578 NA per DCB Share (RM) Interest bearing borrowings 293, , ,767 Gearing (times) Notes: (i) Pursuant to Section 618 of the Act and upon the commencement of Section 74 of the Act, any amount standing to the credit of a company s share premium account and capital redemption reserve shall become part of the company s share capital. The share premium standing upon commencement of Section 74 amounted to RM0.168 million and as such, has become part of the Company s share capital. (ii) (iii) Pursuant to Section 74 of the Act, all shares issued before or upon the commencement of this Act shall have no par or nominal value. After reducing the share capital by RM million and after deducting the estimated expenses of RM200,000 for the Proposed Capital Reduction. 4.3 Substantial shareholders shareholding The Proposed Capital Reduction will not have any effect on the shareholdings of the substantial shareholders of DCB. 4.4 Earnings and EPS Save for the estimated expenses to be incurred in relation to the Proposed Capital Reduction of RM200,000, the Proposed Capital Reduction will not have any effect on the earnings or EPS of DCB. 6

10 4.5 Convertible securities Save for the following, the Company does not have any other existing convertible securities as at the LPD: (i) 2,547,175 outstanding warrants 2012/2017 ( Warrants ) which are expiring on 8 August 2017; and (ii) 12,374,428 RCPS which are maturing on 8 August The Proposed Capital Reduction will not give rise to any adjustment to the exercise rights or exercise price of the Warrants and/or to the conversion ratio or conversion rights of the RCPS. 4.6 Dividends The Proposed Capital Reduction is not expected to affect the dividend policy of DCB as future dividend payable would be dependent on inter-alia, the future profitability and cash flow position of the Group. 5. SHARE PRICE PERFORMANCE The monthly highest and lowest prices of DCB shares as traded on Bursa Securities for the past twelve (12) calendar months preceding the LPD are as follows: High Low RM RM 2016 July August September October November December January February March April May June The last transacted price of DCB shares on 30 May 2017, being the last market day prior to the date of the announcement of the Proposed Capital Reduction on 31 May 2017 was RM The last transacted price of DCB shares as at the LPD was RM (Source: M&A Securities) 7

11 6. APPROVALS REQUIRED The Proposed Capital Reduction is conditional upon the following being obtained: (i) approvals of the shareholders and RCPS holders of DCB at the forthcoming EGMs to be convened respectively; and (ii) confirmation of the Court for the Proposed Capital Reduction pursuant to Section 116 of the Act. The Proposed Capital Reduction is not conditional upon any other corporate proposals to be implemented by the Company, if any. 7. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors and/or major shareholders and/or persons connected with them have any interest, whether direct or indirect, in the Proposed Capital Reduction. 8. OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION Save for the Proposed Capital Reduction which is the subject matter of this Circular, the Board confirms that there is no other outstanding corporate proposal announced by the Company to Bursa Securities, the implementation of which is still pending. 9. DIRECTORS OPINION AND RECOMMENDATION The Board having considered all aspects of the Proposed Capital Reduction including the rationale for and effects of the Proposed Capital Reduction, is of the opinion that the Proposed Capital Reduction is in the best interest of the Group. As such, the Board recommends that you vote in favour of the resolution pertaining to the Proposed Capital Reduction to be tabled at the forthcoming EGMs for shareholders and RCPS holders to give effect to the Proposed Capital Reduction. 10. ESTIMATED TIME FRAME FOR COMPLETION The tentative timetable in relation to the Proposed Capital Reduction is as follows: Date Events 7 August 2017 EGMs for shareholders and RCPS holders for the Proposed Capital Reduction End September 2017 Completion of Proposed Capital Reduction Barring any unforeseen circumstances and subject to receipt of all approvals, the Proposed Capital Reduction is expected to be completed in the third quarter of

12 11. MEETINGS The EGMs for shareholders and RCPS holders, the notices of which are enclosed with this Circular, will be held at Maple Room, Level C, One World Hotel, First Avenue, Bandar Utama City Centre, Petaling Jaya, Selangor Darul Ehsan, Malaysia on Monday, 7 August 2017 at 3.00 p.m. and 3.30 p.m. or immediately following the conclusion or adjournment (as the case may be) of the EGM for shareholders of DCB, respectively for the purpose of considering the Proposed Capital Reduction contained herein and if thought fit, passing the resolution so as to give effect to the Proposed Capital Reduction. If you are unable to attend and vote in person at the EGMs for shareholders and RCPS holders, you may complete and return the enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at its Registered Office not less than forty-eight (48) hours before the time stipulated for the EGMs for shareholders and RCPS holders or any adjournment thereof. The lodging of the Proxy Form does not preclude you from attending and voting in person should you subsequently decide to do so. 12. FURTHER INFORMATION You are requested to refer to the attached appendices for further information. Yours faithfully, For and on behalf of the Board of DOLOMITE CORPORATION BERHAD LEW CHOONG KEONG Managing Director 9

13 APPENDIX I PRO FORMA CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF THE DCB GROUP AS AT 31 DECEMBER 2016 TOGETHER WITH THE REPORTING ACCOUNTANTS LETTER THEREON 10

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22 FURTHER INFORMATION APPENDIX II 1. RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and they collectively and individually accept full responsibility for the accuracy, completeness and correctness 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 facts the omission of which would make any statement herein misleading. 2. MATERIAL LITIGATION Save as disclosed below, as at the LPD, neither the Company nor any of its subsidiaries are engaged in any material litigations, claims or arbitrations, either as plaintiff or defendant, which may have a material effect on its financial position and the Board does not have any knowledge of any other proceeding, pending or threatened, against DCB and/or its subsidiaries or any facts which is likely to give rise to any proceedings which might materially and adversely affect the financial position or business of the Company and/or its subsidiaries as at the LPD: (i) Claims for liquidated ascertained damages ( LAD ) for alleged late delivery of vacant possession of the shop-office units purchased by the respective purchasers under the Dolomite Park Avenue development project at Batu Caves ( Project ) together with Certificate of Completion and Compliance ( CCC ). (a) Shah Alam High Court Appeal No. BA-12BNCVC-35-09/2016 Dolomite Properties Sdn Bhd ( DPSB ) versus Ang Chai Kian and 4 others ( Claimants 1 ) This is the first of the 3 appeals filed by DPSB against the decision of the Shah Alam Sessions Court in allowing the Claimants 1s claims for LAD for the alleged late delivery of vacant possession of the shop-office units purchased by the Claimants 1 under the Project together with CCC. The Shah Alam Sessions Court had on 26 August 2016 granted judgment in favour of the Claimants 1 for an aggregate sum of RM828, only. DPSB has filed in an application for the 3 appeals (i.e. this case and the cases listed under paragraphs (b) and (c) below) to be heard together. The matter is now fixed for case management on 13 July DPSB has sought to name Majlis Perbandaran Selayang ( MPS ) and Leong Chuk Wah ( Leong ), the architect for the Project, as third parties to the suit because of their failure to issue the relevant clearance for issuance of the CCC for the Project and failure to issue the CCC in a timely manner, respectively. However, the third party proceedings were dismissed by the Court. According to the lawyers acting for DPSB in this matter, DPSB has a good chance of succeeding in its appeal. 19

23 (b) Shah Alam High Court Appeal No. BA-12BNCVC-37-09/2016 Dolomite Industries Company Sdn Bhd ( DICSB ) and DPSB versus Balan a/l Perappa Koundan and another ( Claimants 2 ) This is the second of the 3 appeals filed by DICSB and DPSB against the decision of the Shah Alam Sessions Court in allowing the Claimants 2s claim for alleged breach of the terms of the Sale and Purchase Agreement ( SPA ) for failing to issue or obtain CCC for the property purchased by them and prayed for an order for specific performance of the SPA by obtaining CCC within 14 days from the date of the order, general and specific damages. The Shah Alam Sessions Court had on 26 August 2016 granted judgment in favour of the Claimants 2 for an aggregate sum of RM67, only. DICSB and DPSB have filed in an application for the 3 appeals (i.e. suits (a), (b) and (c)) to be heard together. The matter is now fixed for case management on 13 July As in suit no. (a) above, DICSB and DPSB have sought to name MPS and Leong as third parties to the suit because of their failure to issue the relevant clearance for issuance of the CCC for the Project and failure to issue the CCC in a timely manner, respectively. However, the third party proceedings were dismissed by the Court. According to the lawyers acting for DICSB and DPSB in this matter, DICSB and DPSB have a good chance of succeeding in their appeal. (c) Shah Alam High Court Appeal No. BA-12B /2016 DICSB and DPSB versus Lim Ah Hwa and 6 others ( Claimants 3 ) This is the third of the 3 appeals filed by DICSB and DPSB against the decisions of the Shah Alam Sessions Court in allowing the Claimants 3s claims for alleged breach of the terms of the Sale and Purchase Agreements ( SPA ) for failing to issue or obtain CCC for the properties purchased by them and prayed for an Order for specific performance of the SPA by obtaining CCC within 14 days from the date of Order, general and specific damages. The Shah Alam Sessions Court had on 26 August 2016 granted judgment in favour of the Claimants 3 for an aggregate sum of RM376, only. DICSB and DPSB have filed in an application for the 3 appeals (i.e. suits (a), (b) and (c)) to be heard together. The matter is now fixed for case management on 13 July As in suit no. (a) above, DICSB and DPSB have sought to name MPS and Leong as third parties to the suits because of their failure to issue the relevant clearance for issuance of the CCC for the Project and failure to issue the CCC in a timely manner, respectively. However, the third party proceedings were dismissed by the Court. According to the lawyers acting for DICSB and DPSB in this matter, DICSB and DPSB have a good chance of succeeding in their appeal. 20

24 (d) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Lim Ah Hwa versus DPSB On 27 October 2016, DPSB was served with a Writ of Summons and Statement of Claim dated 17 October 2016 by the Plaintiff (who is one of the Claimants 3 under suit (c) above) for LAD amounting to RM311, calculated from 12 March 2013 to 16 January 2015 together with interest at 5% per annum from the date of filing of the Writ until date of full realisation. DPSB has succeeded in striking-out the suit on the ground that the Plaintiff s case has already been heard under suit (c) above. The Plaintiff has appealed against the Court s decision to strike out the Plaintiff s claim. DPSB has filed in an application to strike out the Plaintiff s appeal on the ground that the Plaintiff s appeal has been filed out of time. The said applications are fixed for case management on 19 July The management of DPSB is of the opinion that DPSB has a good chance of succeeding in its striking out application. (e) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Bizbuilt Sdn Bhd versus DPSB On 27 October 2016, DPSB was served with a Writ of Summons and Statement of Claim dated 17 October 2016 by the Plaintiff (who is one of the Claimants 3 under suit (c) above) for LAD amounting to RM309, calculated from 16 March 2013 to 16 January 2015 together with interest at 5% per annum from the date of filing of the Writ until date of full realisation. DPSB has succeeded in striking-out the suit on the ground that the Plaintiff s case has already been heard under suit (c) above. The Plaintiff has filed an appeal against the Court s decision to strike out the Plaintiff s claim. The appeal is fixed for case management on 8 August 2017 and written submissions are to be filed prior to that date. The management of DPSB is of the opinion that DPSB has a good chance of success in this suit because the same matter cannot be tried twice. (f) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Chan Yin Wei and 2 others versus DPSB DPSB was served with a Writ of Summons dated 1 December 2016 and Statement of Claim dated 30 November 2016 by the Plaintiffs for LAD of the amount of RM303, together with interest at 5% per annum from the date of filing of the writ until date of full realisation for alleged late delivery of vacant possession of the shop-office units purchased by the Plaintiffs under the Project together with CCC. Suits no. (f), (g) and (h) have been consolidated. The consolidated suit is fixed for case management on 16 August Based on the opinion of the lawyers acting for DPSB, DPSB has a good chance of success in this suit. 21

25 (g) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Gentle Strategies Sdn Bhd versus DPSB DPSB was served with a Writ of Summons dated 1 December 2016 and Statement of Claim dated 30 November 2016 by the Plaintiff for LAD of the amount of RM412, together with interest at 5% per annum from the date of filing of the writ until date of full realisation, for alleged late delivery of vacant possession of the shop-office units purchased by the Plaintiff under the Project together with CCC. Suits no. (f), (g) and (h) have been consolidated. The consolidated suit is fixed for case management on 16 August Based on the opinion of the lawyers acting for DPSB, DPSB has a good chance of success in this suit. (h) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Woo Kok Wai and Another versus DPSB DPSB was served with a Writ of Summons dated 1 December 2016 and Statement of Claim dated 30 November 2016 by the Plaintiffs for LAD of the amount of RM341, together with interest at 5% per annum from the date of filing of the writ until date of full realisation, for alleged late delivery of vacant possession of the shop-office units purchased by the Plaintiffs under the Project together with CCC. Suits no. (f), (g) and (h) have been consolidated. The consolidated suit is fixed for case management on 16 August Based on the opinion of the lawyers acting for DPSB, DPSB has a good chance of success in this suit. (i) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 Tomac Corporation Sdn Bhd versus DPSB DPSB was served with a Writ of Summons dated 1 December 2016 and Statement of Claim dated 30 November 2016 by the Plaintiff for LAD of the amount of RM676, together with interest at 5% per annum from the date of filing of the writ until date of full realisation, for alleged late delivery of vacant possession of the shop-office units purchased by the Plaintiff under the Project together with CCC. This suit has been consolidated with suits no. (f), (g) and (h) above. The consolidated suit is fixed for case management on 16 August Based on the opinion of the lawyers acting for DPSB, DPSB has a good chance of success in this suit. (j) Shah Alam Sessions Court Suit No. BA-B52NCVC /2016 See Mong Ang and Another versus DPSB DPSB was served with a Writ of Summons dated 1 December 2016 and Statement of Claim dated 30 November 2016 by the Plaintiffs for LAD of the amount of RM338, together with interest at 5% per annum from the date of filing of the writ until date of full realisation, for alleged late delivery of vacant possession of the shop-office units purchased by the Plaintiff under the Project together with CCC. This suit has been consolidated with suits no. (f), (g) and (h) above. The consolidated suit is fixed for case management on 16 August Based on the opinion of the lawyers acting for DPSB, DPSB has a good chance of success in this suit. 22

26 (ii) Kuala Lumpur High Court Originating Summons No. WA-24NC(ARB)-2-01/2017 Dolomite Engineering Sdn Bhd ( DESB ) versus Pilihan Jadi Sdn Bhd ( PJSB ) This is an application by DESB to enforce the arbitration award granted to DESB against PJSB for damages for unlawful termination of contract in the amount of RM2,537, together with interest thereon at 4% per annum from 15 September 2013 until the date of payment, general damages in the amount of RM531, together with interest thereon at 4% per annum from 1 October 2016 until the date of payment and arbitration costs of RM82, only. PJSB has also filed an application to set aside the arbitration award. DESB has succeeded in its application to register the award and will enforce the order to recover the awarded sum. (iii) Arbitration No. SD (RCG/LKS) In the Matter of an Arbitration between DESB and Desaminium Jaya Sdn Bhd ( DJSB ) DESB commenced arbitration proceedings against DJSB for monies owing in a project to carry on road and drain works at Seri Kembangan. The amount claimed is RM525, for certified sums and RM876, for uncertified sums. DJSB alleged that the works were defective and counter-claimed for RM379, DJSB also alleged delay in completion and counter-claimed RM5, per day for liquidated damages. The arbitration is fixed for continued hearing on 17 July 2017 and 18 July According to the lawyers acting for DESB in this matter, DESB has a reasonable chance of success in its claim, depending on the result of investigations and testimony of witnesses. (iv) Shandong Dolomite Thermal Power Co Ltd s ( SDTP ) main contractor has commenced arbitration proceedings against SDTP to recover the outstanding progress claims of RMB108,673,296 (RM70,148,004) of which RMB50,304,477 (RM32,471,258) has been recorded in the financial statements of SDTP. In the same matter, SDTP has filed a counter claim against the main contractor for delay in completing the construction of infrastructure assets in Shandong Province of China amounting to RMB35,607,650 (RM22,984,539), costs incurred by SDTP to complete the balance of works amounting to RMB26,640,817 (RM17,196,498) and legal fee of RMB980,000 (RM632,585). The case is currently under arbitration. Based on the opinion of the lawyers acting for SDTP in China, the directors of SDTP are optimistic with the outcome of the case. 3. MATERIAL CONTRACTS As at the LPD, neither DCB nor its subsidiaries has entered into any contracts which are or may be material, other than contracts entered into in the ordinary course of business, within the 2 years preceding the date of this Circular. 23

27 4. MATERIAL COMMITMENT AND CONTINGENT LIABILITIES 4.1 Material commitment As at the LPD, the Board is not aware of any material commitment, incurred or known to be incurred, which may have a material impact on the results or financial position of the Group. 4.2 Contingent liabilities Save as disclosed below, as at the LPD, the Board is not aware of any contingent liabilities, incurred or known to be incurred, which upon becoming enforceable, may have a substantial impact on the ability of the Group to meet its obligations as and when they fall due: (i) DESB (a wholly-owned subsidiary of the Company) commenced arbitration proceedings against its customer for monies owing in a project to carry out road and drain works. The amount claimed is RM525,889 for certified sums and RM876,818 for uncertified sums. The customer alleged that the works were defective and counterclaimed for RM379,003. The customer further alleged delay in completion and counterclaimed RM5,000 per day for liquidated damages. Based on the legal counsel advice, the amount of contingent liabilities will depend on the issue of delay and defective works, which will have to be investigated during the hearing through the testimony of witnesses of fact and expert witnesses. (ii) SDTP s main contractor has filed action against SDTP to recover the outstanding progress claims of RMB108,673,296 (RM70,148,004) of which RMB50,304,477 (RM32,471,258) has been recognised in the book of SDTP. In the same matter, SDTP has filed a counter claim against the main contractor for delaying in completing the construction of infrastructure assets in Shandong Province of China amounting to RMB35,607,650 (RM22,984,539), costs incurred by SDTP to complete the balance of works amounting to RMB26,640,817 (RM17,196,498) and legal fee of RMB980,000 (RM632,585). The case is currently under arbitration. Based on the opinion of the lawyers acting for SDTP in China, the directors of SDTP are optimistic with the outcome of the case. 5. LETTERS OF CONSENT M&A Securities, being our Adviser has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references thereon in the form and context in which they appear. ECOVIS AHL PLT, being our Reporting Accountants has given and has not subsequently withdrawn its written consent to the inclusion of its name and letter on the proforma consolidated statement of financial position of the Group as at 31 December 2016 and the Reporting Accountant s letter as well as all references thereto, in the form and context in which they are contained in this Circular. 24

28 6. DECLARATION OF CONFLICT OF INTERESTS M&A Securities and ECOVIS AHL PLT have given their confirmations that no conflict of interest exist or is likely to exist in relation to their role as the Adviser and Reporting Accountants respectively. 7. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Registered Office of the Company during normal office hours from Mondays to Fridays (except for public holidays) for the period commencing from the date of this Circular up to the date of the EGMs for shareholders and RCPS holders: (a) (b) (c) (d) (e) Memorandum and Articles of Association of the Company; Audited financial statements of DCB for the 2 FYEs 31 December 2015 and 2016 and unaudited financial statements of DCB for the 3 months FPE 31 March 2017; Letters of consent referred to in Section 5 above; Pro forma consolidated statement of financial position of DCB as at 31 December 2016 together with the Reporting Accountants letter thereon; and The cause papers in respect of the material litigation referred to in Section 2 above. The rest of this page is intentionally left blank 25

29 DOLOMITE CORPORATION BERHAD (Company No.: W) (Incorporated in Malaysia under the then Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING FOR SHAREHOLDERS NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting ( EGM ) for shareholders of Dolomite Corporation Berhad ( DCB or the Company ) will be held at Maple Room, Level C, One World Hotel, First Avenue, Bandar Utama City Centre, Petaling Jaya, Selangor Darul Ehsan, Malaysia on Monday, 7 August 2017 at 3.00 p.m. or any adjournment thereof for the purpose of considering and, if thought fit, passing the following resolution: SPECIAL RESOLUTION PROPOSED REDUCTION OF THE EXISTING SHARE CAPITAL OF DOLOMITE CORPORATION BERHAD ( DCB ) OF UP TO RM124,538, PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016 BY THE CANCELLATION OF THE SHARE CAPITAL OF THE COMPANY THAT HAS BEEN LOST OR IS UNREPRESENTED BY AVAILABLE ASSETS ( PROPOSED CAPITAL REDUCTION ) THAT subject to the confirmation of the High Court of Malaya and the approvals from the relevant authorities being obtained, where necessary, approval be and is hereby given for the implementation of the Proposed Capital Reduction pursuant to Section 116 of the Companies Act 2016; THAT the share capital of the Company be reduced and cancelled to the extent of and up to RM124,538, and that such reduction be effected and satisfied by the cancellation of the share capital of the Company that has been lost or is unrepresented by available assets; AND THAT the Board be and is hereby authorised with full power to make any modifications, variations and / or amendments in any manner as may be in the best interest of the Company or as may be required by the relevant authority / authorities to give effect to the Proposed Capital Reduction, and to take all such steps as they may deem necessary or expedient in the best interests of the Company to implement, finalise and give full effect to the Proposed Capital Reduction. BY ORDER OF THE BOARD OF DOLOMITE CORPORATION BERHAD Tai Yit Chan (MAICSA ) Chan Su San (MAICSA ) Lo Sze Min (MIA 3439) Company Secretaries Selangor Darul Ehsan 13 July 2017 Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend at the same meeting. Where a member appoints two (2) or more proxies, the member shall specify in each proxy form the proportion of the member s shareholdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company. 3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

30 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or authority, if any, under which it is signed or notarially certified copy of that power or authority shall be deposited at the registered office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting. 6. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad the resolution set out in the notice of the meeting will be put to vote by way of poll. 7. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available a Record of Depositors as at 31 July 2017 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting and entitled to appoint proxy or proxies.

31 DOLOMITE CORPORATION BERHAD (Company No.: W) (Incorporated in Malaysia under the then Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING FOR REDEEMABLE CONVERTIBLE PREFERENCE SHARE ( RCPS ) HOLDERS NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting ( EGM ) for RCPS holders of Dolomite Corporation Berhad ( DCB or the Company ) will be held at Maple Room, Level C, One World Hotel, First Avenue, Bandar Utama City Centre, Petaling Jaya, Selangor Darul Ehsan, Malaysia on Monday, 7 August 2017 at 3.30 p.m. or immediately following the conclusion or adjournment (as the case may be) of the EGM for shareholders of DCB, to be held at the same venue and on the same date at 3.00 p.m., whichever is later for the purpose of considering and, if thought fit, passing the following resolution: SPECIAL RESOLUTION PROPOSED REDUCTION OF THE EXISTING SHARE CAPITAL OF DOLOMITE CORPORATION BERHAD ( DCB ) OF UP TO RM124,538, PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016 BY THE CANCELLATION OF THE SHARE CAPITAL OF THE COMPANY THAT HAS BEEN LOST OR IS UNREPRESENTED BY AVAILABLE ASSETS ( PROPOSED CAPITAL REDUCTION ) THAT subject to the confirmation of the High Court of Malaya and the approvals from the relevant authorities being obtained, where necessary, approval be and is hereby given for the implementation of the Proposed Capital Reduction pursuant to Section 116 of the Companies Act 2016; THAT the share capital of the Company be reduced and cancelled to the extent of and up to RM124,538, and that such reduction be effected and satisfied by the cancellation of the share capital of the Company that has been lost or is unrepresented by available assets; AND THAT the Board be and is hereby authorised with full power to make any modifications, variations and / or amendments in any manner as may be in the best interest of the Company or as may be required by the relevant authority / authorities to give effect to the Proposed Capital Reduction, and to take all such steps as they may deem necessary or expedient in the best interests of the Company to implement, finalise and give full effect to the Proposed Capital Reduction. BY ORDER OF THE BOARD OF DOLOMITE CORPORATION BERHAD Tai Yit Chan (MAICSA ) Chan Su San (MAICSA ) Lo Sze Min (MIA 3439) Company Secretaries Selangor Darul Ehsan 13 July 2017 Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend at the same meeting. Where a member appoints two (2) or more proxies, the member shall specify in each proxy form the proportion of the member s RCPS holdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company. 3. Where a member of the Company is an exempt authorised nominee which holds RCPS in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

32 An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or authority, if any, under which it is signed or notarially certified copy of that power or authority shall be deposited at the registered office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting. 6. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad the resolution set out in the notice of the meeting will be put to vote by way of poll. 7. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available a Record of Depositors as at 31 July 2017 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting and entitled to appoint proxy or proxies.

33 PROXY FORM FOR EGM FOR SHAREHOLDERS (To be completed in block letters) DOLOMITE CORPORATION BERHAD (Company No.: W) No. of Shares held CDS Account No. *I/We I/C or Passport or Company No. of... being a *member/members of the abovenamed Company, hereby appoint : Full name (in Block Letters) I/C/Passport No. Proportion of shareholdings No. of Shares % Address Full name (in Block Letters) I/C/Passport No. Proportion of shareholdings No. of Shares % Address or failing him/her, THE CHAIRMAN OF THE MEETING as *my/our proxy to attend and vote for *me/us on *my/our behalf at the Extraordinary General Meeting for shareholders of the Company to be held at Maple Room, Level C, One World Hotel, First Avenue, Bandar Utama City Centre, Petaling Jaya, Selangor Darul Ehsan, Malaysia on Monday, 7 August 2017 at 3.00 p.m. or any adjournment thereof, in respect of *my/our shareholding in the manner indicated below: SPECIAL RESOLUTION For Against 1 PROPOSED CAPITAL REDUCTION Please indicate with an X in the space above on how you wish to cast your vote. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fit. Dated this...day of Tel No. (during office hours) SHAREHOLDER (If shareholder is a corporation, this form should be executed under common seal) Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend at the same meeting. Where a member appoints two (2) or more proxies, the member shall specify in each proxy form the proportion of the member s shareholdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company. 3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or authority, if any, under which it is signed or notarially certified copy of that power or authority shall be deposited at the registered office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting. 6. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad the resolution set out in the notice of the meeting will be put to vote by way of poll. 7. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available a Record of Depositors as at 31 July 2017 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting and entitled to appoint proxy or proxies.