a shareholders agreement with Lum Jiann Wei ( LJW ) and Koo Kim Guan ( KKG ) ( Shareholders Agreement ); a call option agreement with LJW; and

Transcription

1 PARLO BERHAD (FORMERLY KNOWN AS CYBERTOWERS BERHAD) ( PARLO OR COMPANY ) PROPOSED SUBSCRIPTION OF 350,000 NEW ORDINARY SHARES IN TRAVEL IDEAS ONLINE SDN BHD WHICH WOULD RESULT IN TRAVEL IDEAS ONLINE SDN BHD BECOMING A 70%-OWNED SUBSIDIARY OF PARLO VIA PIONEER STREAMS CONSOLIDATED SDN BHD ( PROPOSED SUBSCRIPTION ) 1. INTRODUCTION 1.1 Background information On 4 October 2016, Nautical Angle Sdn Bhd ( Nautical Angle ), a wholly-owned subsidiary of the Company entered into a Memorandum of Understanding ( MOU ) with Travel Ideas Online Sdn Bhd ( Travel Ideas ) to subscribe for 225,000 new ordinary shares in Travel Ideas ( Travel Ideas Shares ) upon the terms and conditions to be agreed between Nautical Angle and Travel Ideas. Subsequently, Nautical Angle and Travel Ideas had on 17 March 2017 mutually agreed to extend the period for them to enter into a concluded contract to 30 September 2017 ( Completion Date of the MOU ). On 29 September 2017, Nautical Angle and Travel Ideas mutually agreed to further extend the Completion Date of the MOU to 28 February Proposed Subscription Following from the above, the of Board of Directors of Parlo ( Board ) wishes to announce that instead of Nautical Angle, Pioneer Streams Consolidated Sdn Bhd, which is also a wholly-owned subsidiary of the Company ( Pioneer Streams ) had on 28 February 2018 entered into a share subscription agreement with Travel Ideas to subscribe for 350,000 Travel Ideas Shares ( Subscription Shares ) for a total subscription price of RM700,000 in cash ( Subscription Price ) ( Subscription Agreement ). Pioneer Streams had also on the same date entered into the following agreements in relation to the Subscription Agreement: (i) (ii) (iii) a shareholders agreement with Lum Jiann Wei ( LJW ) and Koo Kim Guan ( KKG ) ( Shareholders Agreement ); a call option agreement with LJW; and a call option agreement with KKG. 2. INFORMATION ON TRAVEL IDEAS Travel Ideas was incorporated on 3 August 2016 under the Companies Act, 1965 as a vehicle to undertake the business of providing online travel bookings including all related activities thereto. Travel Ideas commenced its business operations on 1 September

2 As at 27 February 2018, being the latest practicable date of this announcement ( LPD ), Travel Ideas was in the midst of developing an online travel booking software ( Software ). As at the LPD, the software platform with content and user access is ready. Nevertheless, the booking engine and back-end management system (i.e., payment gateway and accounts) are still under development. Based on the latest management accounts of Travel Ideas for the 16-month period ended 31 December 2017, Travel Ideas had net liabilities of RM0.52 million and a loss after tax ( LAT ) of RM0.67 million. Nevertheless, the development cost for the Software capitalised in the said management accounts was RM0.98 million and the said development cost was approximately 87.60% of the total assets value of Travel Ideas as at 31 December 2017 of RM1.12 million. The financial results of Travel Ideas have not been audited as Travel Idea s 1 st financial statements will be for the period from 3 August 2016 until 31 December As at the LPD, the issued share capital of Travel Ideas was RM150,000 comprising 150,000 Travel Ideas Shares. Travel Ideas does not have any subsidiary or associated company. The directors and shareholders of Travel Ideas as at the LPD are as below: Name No. of Travel Ideas Shares held Percentage (%) LJW 75, KKG 75, Total 150, The profiles of the directors and shareholders of Travel Ideas are as follows: 2.1 LJW 2.2 KKG LJW, age 32, obtained his Advanced Diploma in Computer Science from NIIT College in He started his career in 2007 as a freelance software engineer, developing websites and web systems using Adobe Flash. He was also designing websites for numerous companies and courses for masters students at private universities. LJW was part of the pioneer team which started LifeStyle2U in 2010, an online shopping directory in Malaysia which advertises local businesses online by publishing their locations and coupon vouchers. In 2012, LJW joined Big One Solutions, a startup web programming house in Malaysia which works with new startups to introduce electronic commerce to local businesses as its Chief Technical Officer. Subsequently in 2014, he successfully designed and developed two (2) systems for Singapore Polytechnic and a real estate company in Singapore. In 2016, LJW left Big One Solutions and founded Travel Ideas together with KKG to undertake the business of providing online travel bookings including all related activities thereto. KKG, age 31, obtained a First (1 st ) Class Honors Degree from Lancaster University in BSc (Hons) Information System in

3 In 2007, KKG began his career as a part-time systems engineer for VLAN Technology Sdn Bhd ( VLAN ) prior to his graduation where he was maintaining and supporting more than 100 desktop users in five (5) countries. His responsibilities included supporting Windows servers, basic enterprise firewall design and configuration for end-users, basic enterprise Windows / Linux server setup, simple network design and configuration for small medium enterprise (SME) and providing on-site support and consultation. In 2009, KKG joined Big One Solutions as a non-executive / external consultant and was responsible for web consultation and business development. Subsequently in 2011, he was promoted to senior technical support leader and was responsible for its operations which included end-to-end system support, customers relationship building and technical studies. KKG was also heading VLAN s online sales department and was actively involved and advising on its online value added services for its existing client base. He left VLAN in In 2016, KKG left Big One Solutions and founded Travel Ideas together with LJW to undertake the business of providing online travel bookings including all related activities thereto. 3. DETAILS OF THE PROPOSED SUBSCRIPTION Pioneer Streams will be subscribing for 350,000 Subscription Shares for the Subscription Price at a subscription price of RM2.00 per Travel Ideas Share representing 70% of the total issued share capital of Travel Ideas upon completion of the Proposed Subscription. Thus, Travel Ideas would be a 70%-owned subsidiary of Pioneer Streams and in turn, a 70%-owned subsidiary of Parlo. The shareholdings in Travel Ideas will be as follows: Name No. of Travel Ideas Shares held Percentage (%) Pioneer Streams 350, LJW 75, KKG 75, Total 500, The Subscription Shares shall be free from all liens, charges, equities, pledges and any encumbrances whatsoever and is not a subject matter of any options, first right of refusal, security or any contractual commitments to any third parties. 3.1 Basis in arriving at the Subscription Price The Subscription Price was arrived at by mutual agreement between Pioneer Streams and Travel Ideas after taking into consideration the development cost of the Software (of RM0.98 million) capitalised in the management accounts of Travel Ideas as at 31 December The development cost of the Software was approximately 87.60% of the total assets value of Travel Ideas as at 31 December 2017 of RM1.12 million. The Board is of the view that the Subscription Price which approximates 70% of the said development cost (i.e., 70% of RM0.98 million is equivalent to RM0.69 million) is reasonable. 3

4 4. RATIONALE FOR THE PROPOSED SUBSCRIPTION Parlo had on 18 January 2018 completed its regularisation plan and its previous Guidance Note 3 ( GN 3 ) status has been uplifted. Parlo and its subsidiaries ( Parlo Group or Group ) new business is in the provision of travel, travel related and ancillary products and services as well as Meetings, Incentives, Conferences and Events ( MICE ). Pioneer Streams had on 28 February 2018 entered into the Subscription Agreement as it is the intention of the Parlo Group to venture into the business of providing online travel bookings as this would complement and is also an extension of the business of the Parlo Group. The Parlo Group intends to build market share in the online travel bookings business by targeting millennials who are more accustomed to making their travel holiday purchases via the online sphere. Travel Ideas is in the midst of developing the Software and requires funding for the continued development of the Software and repayment to its creditors. Thus, the Parlo Group (via Pioneer Streams) will also be providing an unsecured advance of RM938,000 (upon completion of the Proposed Subscription) which shall be repayable on demand to Pioneer Streams ( Advance ). The Advance shall bear interest at 3.50% per annum commencing from the Completion Date of the Subscription Agreement (as defined in Section 6.1(vi) of this announcement). The Proposed Subscription will enable the Parlo Group to have access to the Software without commissioning a third party to develop a customised software. Based on the Group s internal research and findings, the Proposed Subscription is a cheaper and more feasible alternative compared to a customised software which would require on-going software support and maintenance. The Proposed Subscription will also enable the current shareholders of Travel Ideas to retain part of their equity interests of Travel Ideas and have access to funding for the Software s continued development (via the Group). It is envisaged that the technical, network and information technology ( IT ) experience of Travel Ideas existing directors combined with the Parlo Group s experience and network in the travel industry will enable the Parlo Group to attain market share in the online travel bookings business as well as support for the continued maintenance, development and further enhancement of the Software. 5. SOURCE OF FUNDING The Subscription Price and the Advance are from the internally generated funds of the Parlo Group. 6. SALIENT TERMS OF THE AGREEMENTS 6.1 Subscription Agreement (i) (ii) Pioneer Streams and Travel Ideas had on 28 February 2018 entered into the Subscription Agreement to subscribe for the Subscription Shares for the Subscription Price based upon the terms and conditions of the said agreement; The Subscription Shares shall be free from all liens, charges, equities, pledges and any encumbrances whatsoever and is not a subject matter of any options, first right of refusal, security or any contractual commitments to any third parties; 4

5 (iii) (iv) The Subscription Shares represents 70.0% of the total issued share capital of Travel Ideas as at the Completion Date (as defined in Section 6.1(vi) of this announcement); The Subscription Agreement is subject to and conditional upon the compliance or fulfillment of the following condition precedents ( Conditions Precedent ): (c) (d) (e) (f) the Subscription Agreement being duly executed and stamped and the issuance of the Subscription Shares to Pioneer Streams being authorised vide resolutions duly passed by the board of directors and shareholders of Travel Ideas respectively; the execution of the Shareholders Agreement; the execution of the call option agreements between Pioneer Streams with LJW and KKG, respectively; the passing of resolutions by the board of directors and shareholders of Travel Ideas respectively to authorise such amendments to the Memorandum and Articles of Association of Travel Ideas as are necessary to reflect in full the terms of the Subscription Agreement and the Shareholders Agreement; the approval of the board of directors of Travel Ideas for the execution by Travel Ideas of the Subscription Agreement and the Shareholders Agreement; and the due diligence conducted on Travel Ideas is satisfactory and acceptable to Pioneer Streams, (v) (vi) (vii) The Conditions Precedents shall be fulfilled on or before 60 days from the date of the Subscription Agreement ( Expiry Date ) provided always that any extension of the Expiry Date beyond the said 60 days period ( Extended Expiry Date ) shall require the mutual consent in writing of Pioneer Streams, LJW and KKG. In the event the Conditions Precedent are not fulfilled and or obtained by the Expiry Date or the Extended Expiry Date as the case may be through no default, breach or omission of LJW, KKG and/or Pioneer Streams, then the terms of the Subscription Agreement may be varied by mutual agreement in writing by LJW, KKG and/or Pioneer Streams. Failing which, the Subscription Agreement shall thereafter lapse and have no further effect whatsoever and LJW, KKG and/or Pioneer Streams shall not have any further claim(s) of whatsoever nature in respect thereof; The Subscription Agreement shall be completed within 10 working days from the date on which the last of the Conditions Precedents is fulfilled and or obtained ( Completion Date ); On the Completion Date, the following shall take place: Pioneer Streams shall pay the sum of RM700,000, being the Subscription Price to Travel Ideas; Travel Ideas shall allot, issue and deliver the original share certificates in respect of Subscription Shares to Pioneer Streams; and 5

6 (c) LJW and KKG shall cause a meeting of the board of directors of Travel Ideas to be convened to approve the appointment of 2 directors nominated by Pioneer Streams to the board of directors of Travel Ideas, the resignation of 1 of the existing directors nominated by LJW and KKG and to approve the change of bank signatories whereby 1 of the directors nominated by Pioneer Streams shall be a duly authorised bank signatory; and (viii) Upon Pioneer Streams being registered as the shareholder of the Subscription Shares, Pioneer Steams shall provide the Advance to Travel Ideas for the continued development of the online travel booking software and repayment to its creditors. The Advance shall be repayable on demand and bears interest at 3.50% per annum commencing from the Completion Date. 6.2 Salient terms of the Shareholders Agreement (i) (ii) Upon completion of the Subscription Agreement, Pioneer Streams shall become a 70% shareholder of Travel Ideas. Accordingly, Pioneer Streams, LJW and KKG had on 28 February 2018 entered into the Shareholders Agreement to regulate their rights as shareholders of Travel Ideas upon the terms and conditions of the Shareholders Agreement; The effective date of the Shareholders Agreement shall be the Completion Date of the Subscription Agreement ( Effective Date ) and shall continue in full force and effect until: (c) (d) Travel Ideas is wound up in accordance with the provisions of the Companies Act 2016 ( Act ) or otherwise cease to exist as a separate corporate entity unless terminated earlier pursuant to Sections 6.2(viii) and (ix) of this announcement; or the sale of the entire issued share capital of Travel Ideas or the entire undertaking of Travel Ideas to a third party subject to the prior approval of Pioneer Streams ( Trade Sale ); or terminated by written agreement of Pioneer Streams, LJW and KKG; or Pioneer Streams ceases to hold any shares in Travel Ideas, (iii) (iv) Pioneer Streams, LJW and KKG agreed that save as for the Advance to Travel Ideas as set out in the Subscription Agreement, Pioneer Streams shall not be obliged to lend any money to Travel Ideas nor give any guarantee or indemnity in connection with any indebtedness of Travel Ideas; Unless Pioneer Streams, LJW and KKG agree in writing, the board of directors of Travel Ideas shall upon the Effective Date comprise of 3 directors nominated by the following parties: LJW and KKG shall be represented by 1 director; and Pioneer Streams shall be entitled to nominate 2 Directors and each nominated Director is referred to as an Investor-Director. 6

7 Pioneer Streams shall be entitled to nominate up to 2 observers to the board of directors of Travel Ideas as well as to attend management meetings and other meetings of Travel Ideas whether or not Pioneer Streams shall decide to appoint any director to the board of directors of Travel Ideas. Any observer from Pioneer Streams shall be entitled to receive notice of and attend any board of directors meetings of Travel Ideas, management meetings and or any other meetings, duly convened or adjourned as the case may be. (v) (vi) (vii) LJW and KKG further undertake and procure to each other and to Pioneer Streams that they shall not while they are shareholders of Travel Ideas and for 3 years after ceasing to be shareholders of Travel Ideas, compete, solicit away any employee of Travel Ideas or use any information obtained while in Travel Ideas, in the manner set out in the Shareholders Agreement; The day-to-day management of Travel Ideas shall be the responsibility of LJW and KKG on such terms and conditions set forth in their service / employment agreement, and with such restrictions, as the board of directors of Travel Ideas may think fit; The restrictions on the transfer of Travel Ideas shares are as follows: LJW and/or KKG shall not sell, assign, transfer or dispose of any shares in Travel Ideas except: i. with the consent of Pioneer Streams; ii. iii. (at the sole discretion of Pioneer Streams) together with such number of Pioneer Streams shares in Travel Ideas, as determined by Pioneer Streams, upon the same terms and conditions of sale, assignment, transfer or disposal of either LJW s and/or KKG s shares in Travel Ideas; and in accordance with Section 6.2(vii) of this announcement, (c) Subject to Section 6.2(vii) of this announcement, no shareholders (i.e., LJW, KKG or Pioneer Streams) shall sell, transfer or otherwise dispose of its shares in Travel Ideas without making an offer in writing to sell the same to the other shareholders (i.e., LJW, KKG and/or Pioneer Streams) ( Offerees ) in proportion to the Offerees respective shareholdings in Travel Ideas as at the date of the offer and according to the terms and conditions of the Shareholders Agreement; In the event Pioneer Streams identifies a third party who is desirous of acquiring such number of shares which is more than the shares owned by Pioneer Streams, Pioneer Streams may exercise its dragalong rights according to the terms and conditions in the Shareholders Agreement to cause LJW and KKG to sell such number of shares owned by LJW and KKG to such third party on same terms and condition; and 7

8 (d) In the event of a proposed sale to a third party purchaser by LJW and/or KKG pursuant to Section 6.2(vii) of this announcement, and Pioneer Streams wishes to sell shares owned by Pioneer Streams in Travel Ideas to such third party purchaser, Pioneer Streams may require LJW and/or KKG to procure that such third party purchaser offers to buy from Pioneer Streams all or part of Pioneer Streams shares in Travel Ideas on the same terms (including the price per each share being offered for sale) as shall apply to the purchase of the shares being offered for sale, (viii) If any shareholder defaults in the manner set out in the Shareholders Agreement ( Defaulting Shareholder ), then the non-defaulting shareholders, subject to the agreement of the majority of the non-defaulting shareholders shall have the right to do any of the following: (c) require the Defaulting Shareholder, to sell to it or its nominee(s) all of the Defaulting Shareholder s shares in Travel Ideas at the price fixed at 80% of the value of the Defaulting Shareholder s shares based on the valuation of Travel Ideas as shall be determined by an independent valuer appointed by the board of directors of Travel Ideas; or terminate the Shareholders Agreement in its entirety by notice in writing to the Defaulting Shareholder without prejudice to such other rights and remedies as they may have against the Defaulting Shareholder and thereupon wind up Travel Ideas under the provisions of the Act; or continue with the Shareholders Agreement with such revisions as may be agreed without prejudice to such other rights and remedies as they may have against the Defaulting Shareholder; and (ix) Without prejudice to Section 6.2(viii) of this announcement, the Shareholders Agreement is deemed terminated upon occurrence of the following events: (c) (d) (e) Travel Ideas shall be wound up in accordance with the provisions of the Act or otherwise cease to exist as a separate corporate entity; or Travel Ideas ceases or proposes to cease to carry on business or changes a substantial portion of the nature and direction of its business which materially changes the nature of the agreed business, save and except for changes approved by the board of directors of Travel Ideas; or a Trade Sale; or terminated by written agreement of all the parties to the Shareholders Agreement; or Pioneer Streams ceases to hold any shares in Travel Ideas. 8

9 6.3 Salient terms of the Call Option Agreement Pioneer Streams and LJW (i) (ii) Pioneer Streams and LJW had on 28 February 2018 entered into the Call Option Agreement Pioneer Streams and LJW, whereby Pioneer Streams shall have the right to acquire LWJ s entire shareholdings in Travel Ideas based upon the terms and conditions of the said agreement; Upon execution of the Subscription Agreement and the Shareholders Agreement and in consideration of the mutual covenants contained in the Call Option Agreement Pioneer Streams and LJW, and in further consideration of Pioneer Streams paying RM10 to LJW, LJW hereby grants to Pioneer Streams the irrevocable call option (the LJW Call Option ) to require LJW to dispose and sell all of the shares then held by LJW in Travel Ideas (the LJW Option Shares ) to Pioneer Streams upon or after the occurrence of any of the following call option events at the price fixed at 80% of the value of the option shares based on the valuation of Travel Ideas as shall be determined by an independent valuer appointed by the board of directors of Travel Ideas (the Option Price ): upon the exercise of Pioneer Streams of its rights to require LJW under the Shareholders Agreement to sell to it or its nominee(s) all of the LJW Option Shares in Travel Ideas at the Option Price; or upon the termination of the Shareholders Agreement; and (iii) Upon exercise of the LJW Call Option by Pioneer Streams, LJW shall be required to sell to Pioneer Streams or its nominee the entire LJW Option Shares then held by LJW. 6.4 Salient terms of Call Option Agreement Pioneer Streams and KKG (i) (ii) Pioneer Streams and KKG have on 28 February 2018 entered into the Call Option Agreement Pioneer Streams and KKG, whereby Pioneer Streams shall have the right to acquire KKG s entire shareholdings in Travel Ideas based upon the terms and conditions of the said agreement; Upon execution of the Subscription Agreement and the Shareholders Agreement and in consideration of the mutual covenants contained in the Call Option Agreement Pioneer Streams and KKG, and in further consideration of Pioneer Streams paying RM10 to KKG, KKG hereby grants to Pioneer Streams the irrevocable call option (the KKG Call Option ) to require KKG to dispose and sell all of the shares then held by KKG in Travel Ideas (the KKG Option Shares ) to Pioneer Streams upon or after the occurrence of any of the following call option events at the price fixed at the Option Price: upon the exercise of Pioneer Streams of its rights to require KKG under the Shareholders Agreement to sell to it or its nominee(s) all of the KKG Option Shares in Travel Ideas at the Option Price; or upon the termination of the Shareholders Agreement; and 9

10 (iii) Upon exercise of the KKG Call Option by Pioneer Streams, KKG shall be required to sell to Pioneer Streams or its nominee the entire KKG Option Shares then held by KKG. 7. LIABILITES TO BE ASSUMED There are no liabilities, including contingent liabilities and/or guarantees to be assumed by the Parlo Group pursuant to the Proposed Subscription. 8. ADDITIONAL FINANCIAL COMMITMENT REQUIRED Save for the Advances, there is no other financial commitment required by the Company arising for the Proposed Subscription in putting the asset (i.e., Travel Ideas) on stream. 9. RISK FACTORS The risk factors (which may not be exhaustive) pertaining to the Proposed Subscription include but are not limited to the following: 9.1 Non-completion of the Subscription Agreement In the event any of the Conditions Precedent is not fulfilled or waived (as the case may be), the Proposed Subscription may be delayed or terminated, and the potential benefits arising therefrom may not materialise. In this respect, the Board seeks to limit such risk and will take all reasonable steps to comply with the relevant Conditions Precedent so as to be able to complete the Proposed Subscription. 9.2 Business risks The Board does not foresee any new material risks pursuant to the Proposed Subscription in view that the Parlo Group remains focussed on its travel and tours as well as MICE business. The Proposed Subscription would provide an additional avenue (i.e., online travel bookings via Travel Ideas) for the Group to grow and expand its business. The Parlo Group is already subject to risks inherent to the travel and tourism industry which include, inter-alia, competition, foreign exchange risks, renewal of licenses, changes in economic and business conditions as well as political, regulatory and economic risks. Furthermore, the current shareholders and directors of Travel Ideas will continue to hold 30% equity interest in Travel Ideas to provide ongoing maintenance, continued development and further enhancement of the Software. Although enlarged Parlo Group (including Travel Ideas) seeks to limit these risks through, inter-alia, practising prudent management policies and constantly keeping abreast with the latest developments in the travel and tourism industry, no assurance can be given that any changes to these factors will not have a material adverse effect on enlarged Parlo Group s business. 9.3 Dependency on key personnel The Board believes that the sustainability of Travel Ideas business will depend substantially upon the abilities and continued efforts of Travel Ideas existing directors. 10

11 Presently, Travel Ideas is managed by LJW and KKG, whom are also the shareholders and directors of Travel Ideas, with extensive technical, network and IT knowledge as well as experience in developing business strategies and managing the business operations of Travel Ideas. The sudden departure or loss of any of them may result in Travel Ideas business being disrupted and its financial condition and results of operations being materially and adversely affected. However, Parlo does not expect there would be any disruptions to the business operations of Travel Ideas upon completion of the Proposed Subscription as LJW and KKG will continue to be shareholders (i.e., holding collectively 30% equity interest in Travel Ideas) and remain as part of the key management of Travel Ideas. As such, it would be in their interests to ensure the continuity and sustainability of the business and operations of Travel Ideas. 10. ESTIMATED TIME FRAME FOR THE COMPLETION OF THE PROPOSED SUBSCRIPTION The Proposed Subscription is expected to be completed by the 2 nd quarter of FINANCIAL EFFECTS 11.1 Share capital and substantial shareholders shareholdings The Proposed Subscription will not have any effect on the issued share capital of Parlo and the number of ordinary shares in issue of Parlo ( Parlo Shares ) as well as the shareholdings of its substantial shareholders as it does not involve any issuance of new Parlo Shares Earnings, earnings per share ( EPS ) and net assets ( NA ) Barring any unforeseen circumstances, the Proposed Subscription is expected to contribute positively to the earnings, EPS and NA of the Parlo Group for the financial year ending 31 December 2018 as the Proposed Subscription would support the extension to the Group s business into online travel bookings Gearing The Proposed Subscription is not expected to have any material impact on the gearing of the Parlo Group for the financial year ending 31 December Convertible securities As at the LPD, the Company does not have any convertible securities. 12. APPROVALS REQUIRED The Proposed Subscription is not subject to the approval of the shareholders of Parlo or any other relevant authorities. 11

12 13. PERCENTAGE RATIOS The highest percentage ratio applicable to the Proposed Subscription pursuant to Rule 10.02(g) of the ACE Market Listing Requirements of Bursa Securities is approximately 3.11%, computed based on the aggregate value of consideration given in relation to the transaction, compare with the pro forma net assets ( NA ) of the Parlo Group as at 31 December 2016*. Note: * The pro forma NA of the Parlo Group is based on the latest audited consolidated financial statements of Parlo for the financial year ended 31 December 2016 after adjustments for subsequent events (i.e., the completion of the regularisation plan and upliftment of its GN 3 status on 18 January 2018). 14. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND / OR PERSONS CONNECTED WITH THEM None of the Directors, major shareholders and /or persons connected with them has any interests, direct or indirect, in the Proposed Subscription. 15. STATEMENT BY THE BOARD The Board, having considered all aspects of the Proposed Subscription, is of the opinion that the Proposed Subscription is in the best interest of Parlo. 16. DOCUMENTS AVAILABLE FOR INSPECTION The following agreements are available for inspection at the registered office of Parlo at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Wilayah Persekutuan during office hours from Mondays to Fridays for a period of there (3) months from the date of this announcement: (i) (ii) (iii) (iv) Subscription Agreement; Shareholders Agreement; Call Option Agreement Pioneer Streams and LJW; and Call Option Agreement Pioneer Streams and KGG. This announcement is dated 28 February