MBM RESOURCES BERHAD ( V) QUESTIONS RAISED BY SHAREHOLDERS DURING TWENTY-SECOND ANNUAL GENERAL MEETING HELD ON 19 MAY 2016

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1 No. of Ordinary Shares held : Mr Vinodth Ram A/L Ramasamy ( Mr Vinodth ) : Nil (Authorised Representative of MSWG) 1. Commended the Board for publishing the minutes of the Annual General Meeting and Extraordinary General Meeting of the Company in the Company s website as well as agreeing to upload the Company s Memorandum and Articles of Association on the Company s website. 2. Requested the Company to also upload the Letter from MSWG together with the Company s reply thereof in the Company s website and to provide seats outside the meeting room for elderly shareholders should the meeting room is only open to the shareholders half an hour before the meeting time. The Board noted the comments and requests and would look into the matter accordingly. No. of Ordinary Shares held : 20,000 : Mr Leong Wai Hong 1. On safety facilities, what is the existing capacity utilisation of the plant? Any need to expand to meet the requirement? What is the percentage of utilisation of the plant? 2. Noted the progress of Menara MBMR was very slow, especially the relocation of Volvo showroom. Does it affect the efficiency of the Company? What is the Company s plan on the completion of the relocation of showroom? 3. What is the value reflected on the last chart, is it revenue or profit? Is there a big jump on the profit from 2016 to 2017? Page 1

2 ANNEXURE II - QUESTIONS RAISED BY SHAREHOLDERS DURING TWENTIETH ANNUAL GENERAL MEETING HELD ON 16 JUNE There was no issue with capacity in Autoliv Hirotako Sdn Bhd ( AHSB ). This can be easily scaled up as and when orders are received from the customers. Currently, the utilisation of the plant was 60%. 2. The Volvo showroom had started its operations at Menara MBMR last week. Lead time was required to order and ship furniture from overseas according to Volvo Cars Malaysia s specifications. The official opening was planned in the next two months. 3. In compliance with Malaysian guidelines, the Company did not make profit forecasts and as such, no value was indicated in the presentation. About the breakeven point for OMI Alloy Sdn Bhd, most of the volume would come in the 2 nd half of As a result, the breakeven point might be achieved in the monthly figure but not for full year. The alloy wheels business was still making losses, but as volume ramps up as the year progresses, the losses would be narrowed. Going into 2017, and as the volume reaches the critical breakeven volume number, the Company would start seeing losses narrowing to the point of breakeven or making profit but it would be on a monthly basis and not necessarily for the full year. : Mr Lim Pin Yeong No. of Ordinary Shares held : 11, Since the Company had moved into its new corporate office in Menara MBMR, would the Board consider having its AGM nearer to its corporate office in Kuala Lumpur? 2. How does TPPA benefit the Company? 3. Since the Company s share price was very low, would the Board consider undertaking share buyback to help maintain the share price? It was noted that the Company s warrants with strike price above RM3.00 would be expiring in June Page 2

3 4. Please elaborate on the significant decline in Trade Payables from RM187 million to RM69 million? Please also elaborate on the increase in Trade Receivables from RM134 million to RM149 million. 5. On page 143, segmental reporting, how many years has Auto Parts Manufacturing suffered losses and going forward, how the Company addressing this issues? 1. The Company has been holding its AGMs for the past several years at this hotel where there was parking and less traffic congestion. Many years ago, the Company had its AGM in Kuala Lumpur and there were complaints about parking. Nevertheless, the Board may consider having the AGM near Mid Valley area in future when the traffic flows improve. 2. The Board is seeking the s mandate on the proposed Share Buy-Back under Special business at this AGM. The agenda of the proposal is set out in the Notice of today s AGM under Special Business. 3. Based on the government s report on TPPA, potential export opportunities open to the Malaysian companies were tremendous. However, many of the Company s products are not for the export market except alloy wheels. Furthermore, exports of our alloy wheels are mainly to Europe, which is not part of TPPA. Therefore, the impact on the Company is expected to be neutral. 4. The decline in trade payables was due to lower inventories level as at end 2015 in anticipation of the new variant of AXIA in January As such, Perodua as the Principal had held back the inventories given out to its dealers. Therefore, the inventories only came in January Trade receivables had increased due to delay in payments from Proton as the component manufacturing companies had significant sales to Proton. 5. Most of the losses from auto parts manufacturing segment were dragged down by OMI Alloy Sdn Bhd. Until the company achieves the economies of scale with the orders secured, of which deliveries are expected in 2 nd half of 2016, the losses would be narrowed eventually. Page 3

4 ANNEXURE II - QUESTIONS RAISED BY SHAREHOLDERS DURING TWENTIETH ANNUAL GENERAL MEETING HELD ON 16 JUNE 2015 No. of Ordinary Shares held : 3,200 : Mr Kok Yoon Wah (Proxy) 1. If the warrants expire and are not taken up, what will happen to the warrant reserve of RM44 million? (Deloitte) 1. Under the accounting treatment, after the warrants expire, the warrant reserve will be reversed as part of retained earnings under equity accounting. on Resolution 8 Proposed Share Buy-Back 1. : Lim Pin Yeong No. of Ordinary Shares held : 11,000 Noted that the Company had never purchased any shares. Given that the share price was depressed and if the resolution is passed, will the Company purchase its own shares as the Company had very strong operational cash flow? The Company had not purchased any of its own shares previously as this was the first time the Board was seeking a mandate from the shareholders for share buy-back. The proposed resolution would give the Board, the discretion to purchase up to 10% of the shares by taking into accounts factors such as current share price and the intrinsic value of the shares. Similar to the distribution of dividend, the Board would have to look into the financial resources and consider how a combination of dividend and share buy-back will return profit and capital to the shareholders. Page 4

5 2. : Mr Kok Yoon Wah (Proxy) No. of Ordinary Shares held : 3,200 on Resolution 8 Proposed Share Buy-Back Will the Company carry out a share buy-back in the next 6 months to sustain the share price? If the resolution is approved, the Board will consider the share buy-back and study on the timing before undertaking the share buy-back. Page 5