MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965)

Transcription

1 THIS EXPLANATORY STATEMENT/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 adviser immediately. The Notices of the Court Convened Meeting ( CCM ) and Extraordinary General Meeting ( EGM ) together with the respective Forms of Proxy are enclosed. Bursa Malaysia Securities Berhad ( Bursa Securities ) takes no responsibility for the contents of this Explanatory Statement/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 Explanatory Statement/Circular. MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) EXPLANATORY STATEMENT TO SHAREHOLDERS PURSUANT TO SECTION 177 OF THE COMPANIES ACT, 1965 AND CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED INTERNAL REORGANISATION BY WAY OF A MEMBERS SCHEME OF ARRANGEMENT UNDER SECTION 176 OF THE COMPANIES ACT, 1965 AND NOTICES OF CCM AND EGM Adviser AmInvestment Bank Berhad (Company No V) (A Participating Organisation of Bursa Malaysia Securities Berhad) You may appoint a proxy or proxies to attend and vote on your behalf. If you wish to do so, you must complete, sign and deposit the relevant enclosed Forms of Proxy for the CCM and EGM in accordance with the instructions contained therein, at the registered office of the Company at Suite 5.11 & 5.12, 5th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 24 hours before the time appointed for the taking of the poll for the CCM and not less than 48 hours for the EGM or at any adjournment thereof or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll. The lodging of the Forms of Proxy for the CCM and EGM will not preclude you from attending and voting in person at the CCM and/or EGM should you subsequently decide to do so. Date and time of CCM : Friday, 26 February 2016 at a.m. or at any adjournment thereof Date and time of EGM : Friday, 26 February 2016 at a.m. or immediately following the conclusion of the CCM, which will be held at the same venue and on the same day at a.m., whichever is later, or at any adjournment thereof Venue of CCM and EGM : Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim Last day and time for lodging of the : Thursday, 25 February 2016 at a.m. Form of Proxy for the CCM Last day and time for lodging of the Form of Proxy for the EGM : Wednesday, 24 February 2016 at a.m. This Explanatory Statement/Circular is dated 4 February 2016

2 DEFINITIONS For the purpose of this Explanatory Statement/Circular, except where the context otherwise requires, the following definitions shall apply:- Act : Companies Act, 1965 AmInvestment Bank : AmInvestment Bank Berhad (23742-V) Board : Board of directors of MCE Bursa Depository : Bursa Malaysia Depository Sdn Bhd ( W) Bursa Securities : Bursa Malaysia Securities Berhad ( W) CCM or Court Convened Meeting : Meeting of the shareholders of the Company which is convened pursuant to an order of the High Court under Section 176(1) of the Act, including any shareholders meeting which is held pursuant to an adjournment in accordance with Section 176(2) of the Act CDS Account : Securities account maintained through the central depository system operated by Bursa Depository Effective Date : The date on which an office copy of the order of the High Court approving the Scheme of Arrangement is lodged with the Registrar of Companies or such earlier date as the High Court may determine and as may be specified in the order, which shall be the same day as the Entitlement Date EGM : Extraordinary General Meeting Entitled Shareholders : The shareholders of the Company whose names appear in the Record of Depositors as at the Entitlement Date Entitlement Date : The date to be determined by the Board and announced later, on which the names of the Entitled Shareholders must be registered in MCE s Record of Depositors as at 5.00 p.m. in order to be entitled to the new Newco Shares pursuant to the Proposed Share Exchange EPS : Earnings per share Explanatory Statement / Circular : Explanatory Statement to the shareholders of MCE pursuant to Section 177 of the Act and Circular to shareholders of MCE dated 4 February 2016 in relation to the Proposed Scheme High Court : High Court of Malaya Listing Requirements : Main Market Listing Requirements of Bursa Securities LPD or Latest Practicable Date : 28 January 2016, being the latest practicable date prior to the printing of this Explanatory Statement/Circular MCE or Company : Multi-Code Electronics Industries (M) Berhad ( K) MCE Group : Collectively, MCE and its subsidiaries MCE Share(s) : Ordinary share(s) of RM1.00 each in MCE NA : Net assets i

3 DEFINITIONS (CONT D) Newco : MCE Holdings Berhad, a company which was newly incorporated to facilitate the implementation of the Proposed Internal Reorganisation Newco Group : Newco and its subsidiaries upon completion the Proposed Internal Reorganisation Newco Share(s) : Ordinary share(s) of RM1.00 each in Newco PN21 : Practice Note 21 Prescribed Securities : Securities which have been prescribed by Bursa Securities to be deposited with Bursa Depository under and in accordance with the Securities Industry (Central Depositories) Act, 1991 Proposed Internal Reorganisation or Proposed Scheme : Proposed internal reorganisation by way of a members scheme of arrangement under Section 176 of the Act comprising the following proposals:- (a) (b) Proposed Share Exchange; and Proposed Transfer of Listing Proposed Share Exchange Proposed Transfer of Listing : Proposed exchange of all the MCE Shares with Newco Shares on the basis of one (1) new Newco Share for every one (1) existing MCE Share held as at the Entitlement Date : Proposed assumption of the listing status of MCE by Newco and the admission of Newco to, and withdrawal of MCE from, the Official List of Bursa Securities with the listing of and quotation for the new Newco Shares on the Main Market of Bursa Securities RM : Ringgit Malaysia and sen, respectively SC : Securities Commission Malaysia Scheme Agreement : The scheme agreement dated 29 September 2015, entered into between MCE and Newco for the implementation of the Proposed Scheme Scheme of Arrangement : A scheme of arrangement between MCE and the shareholders of MCE under Section 176 of the Act to effect the Proposed Internal Reorganisation 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/or neuter genders and vice versa. Reference to persons shall include corporations, unless otherwise specified. Any reference in this Explanatory Statement/Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Explanatory Statement/Circular shall be a reference to Malaysian time, unless otherwise stated. References to we, us, our and ourselves are to the Company save where the context otherwise required, include our subsidiaries and references to you or your are to the shareholders of MCE. ii

4 TABLE OF CONTENTS LETTER TO THE SHAREHOLDERS OF MCE CONTAINING:- SECTION PAGE 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED INTERNAL REORGANISATION 2 3. SALIENT TERMS OF THE SCHEME AGREEMENT 3 4. RATIONALE FOR THE PROPOSED INTERNAL REORGANISATION 4 5. EFFECTS OF THE PROPOSED INTERNAL REORGANISATION 5 6. INFORMATION ON NEWCO 8 7. APPROVALS REQUIRED 8 8. TENTATIVE TIMELINE AND ESTIMATED TIME FRAME FOR COMPLETION INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM 10. DIRECTORS RECOMMENDATION CCM AND EGM ADDITIONAL INFORMATION APPENDICES APPENDIX I INFORMATION ON NEWCO 12 APPENDIX II THE SCHEME OF ARRANGEMENT 14 APPENDIX III FURTHER INFORMATION 21 NOTICE OF CCM NOTICE OF EGM FORM OF PROXY FOR THE CCM FORM OF PROXY FOR THE EGM Enclosed Enclosed Enclosed Enclosed iii

5 MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office: Suite 5.11 & th Floor, Menara TJB No.9, Jalan Syed Mohd. Mufti Johor Bahru Johor Darul Takzim 4 February 2016 Board of Directors Samad Bin Kassim (Chairman / Independent Non-Executive Director) Lim Ming Kee (Group Managing Director / Non-Independent Executive Director) Dr. Goh Kar Chun (Group Executive Director / Non-Independent Executive Director) Tai Lam Shin (Senior Independent Non-Executive Director) Loo Shen Chang (Independent Non-Executive Director) To: Shareholders of MCE Dear Sir/Madam, PROPOSED INTERNAL REORGANISATION 1. INTRODUCTION On 29 September 2015, AmInvestment Bank had, on behalf of the Board, announced that the Company intends to implement a proposed internal reorganisation by way of a members scheme of arrangement under Section 176 of the Act comprising the following proposals:- (a) proposed exchange of all the MCE Shares with Newco Shares on the basis of one (1) new Newco Share for every one (1) existing MCE Share held as at the Entitlement Date; and (b) proposed assumption of the listing status of MCE by Newco and the admission of Newco to, and withdrawal of MCE from, the Official List of Bursa Securities with the listing of and quotation for the new Newco Shares on the Main Market of Bursa Securities. It was also announced that the Company and Newco had on 29 September 2015 entered into the Scheme Agreement with Newco for the purpose of the Proposed Internal Reorganisation. 1

6 On 23 December 2015, AmInvestment Bank had, on behalf of the Board, announced that Bursa Securities had, vide its letter dated 22 December 2015, granted its approval for the Proposed Transfer of Listing and the listing of and quotation for the entire enlarged issued and paid-up share capital of Newco of RM44,404,702 comprising 44,404,702 Newco Shares on the Main Market of Bursa Securities. On 26 January 2016, AmInvestment Bank had, on behalf of the Board, announced that the High Court had granted an order for the convening of meeting of shareholders of MCE for the purpose of considering and, if thought fit, approving the Scheme of Arrangement, the terms of which are set out in Appendix II of this Explanatory Statement/Circular. The purpose of this Explanatory Statement/Circular is to provide you with the details of the Proposed Internal Reorganisation and to seek your approval for the resolutions to be tabled at the forthcoming CCM and EGM. We advise you to read and consider carefully the contents of this Explanatory Statement/Circular before voting on the resolutions pertaining to the Proposed Internal Reorganisation to be tabled at the forthcoming CCM and EGM. 2. DETAILS OF THE PROPOSED INTERNAL REORGANISATION 2.1 Proposed Share Exchange Newco was incorporated to facilitate the implementation of the Proposed Internal Reorganisation. Under the Proposed Share Exchange, the Entitled Shareholders will exchange their MCE Shares with new Newco Shares on the basis of one (1) new Newco Share for every one (1) existing MCE Share held. The issue price of the new Newco Shares will be determined based on the following methodology:- (a) (b) based on the prevailing five (5)-day volume weighted average market price of MCE Shares prior to the announcement of the Entitlement Date; or the par value of the Newco Shares of RM1.00; whichever is higher. As at the LPD, the Company has an issued and fully paid-up share capital of RM44,404,700 comprising 44,404,700 MCE Shares. Pursuant to the Proposed Share Exchange, the Entitled Shareholders will receive such number of new Newco Shares which is equivalent to their respective shareholdings in MCE as at the Entitlement Date, and MCE shall become a wholly-owned subsidiary of Newco. The new Newco Shares to be issued pursuant to the Proposed Share Exchange will rank pari passu in all respects with each other and with the two (2) existing issued and paid-up Newco Shares. The two (2) existing Newco Shares will continue to be held by the existing shareholders of Newco, namely Wong Hooi Lee and Muzafa Shah Bin Olan. As the Newco Shares to be issued pursuant to the Proposed Share Exchange will be Prescribed Securities, the new Newco Shares will be credited directly into the respective CDS Accounts of the Entitled Shareholders in substitution of the MCE Shares and no physical certificates will be issued. Notices of allotment will be despatched to the Entitled Shareholders within eight (8) market days from the Entitlement Date. 2

7 2.2 Proposed Transfer of Listing Upon completion of the Proposed Share Exchange, Newco will be the new holding company of the MCE Group and will assume the listing status of MCE. Accordingly, it is proposed that MCE be delisted from the Official List of Bursa Securities and Newco be admitted to the Official List of Bursa Securities in place of MCE, with the listing of and quotation for the entire enlarged issued and paid-up share capital of Newco of RM44,404,702 comprising 44,404,702 Newco Shares on the Main Market of Bursa Securities. The Proposed Share Exchange and Proposed Transfer of Listing will be implemented through the Proposed Scheme. 3. SALIENT TERMS OF THE SCHEME AGREEMENT The salient terms of the Scheme Agreement are as follows:- (a) (b) (c) (d) (e) in consideration of the transfer by the Entitled Shareholders of all of the issued and fully paid-up shares in MCE held by them to Newco, Newco agrees to issue and allot one (1) Newco Share in exchange for one (1) MCE Share to the Entitled Shareholders and to assume the listing status in place of MCE in accordance with the terms and conditions of the Scheme Agreement; the new Newco Shares to be issued shall, upon allotment and issue, rank pari passu in all respects with all the then existing Newco Shares; the Proposed Internal Reorganisation will be implemented through the Scheme and the obligations of MCE and Newco under the Scheme Agreement shall be conditional upon all requisite approvals, consents and/or sanctions being obtained on or before twelve (12) months from the date of the Scheme Agreement, including but not limited to the approvals of Bursa Securities and the shareholders of MCE at an EGM and the CCM as well as the sanction of the High Court of Malaya; the Proposed Scheme shall become effective on the Effective Date; and Newco agrees to adopt a new memorandum and articles of association on substantially the same terms as the form of memorandum and articles of association attached to the Scheme Agreement prior to the Effective Date. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 3

8 4. RATIONALE FOR THE PROPOSED INTERNAL REORGANISATION MCE, being the current listed vehicle, is also an operating company. It is principally engaged in investment holding, manufacture and supply of anti-theft and keyless entry systems, parking sensors, power window regulator systems, functional switches, motor driven actuators, ignition key set systems and automotive lightings for motor vehicles. The principal activities of MCE s subsidiaries include trading in auto accessories, manufacture and assembly of automotive lightings and the intention to provide healthcare services. The Proposed Internal Reorganisation will facilitate the establishment of a corporate structure where:- (a) (b) (c) it allows Newco as an investment holding company to directly own 100% of the issued and paid-up share capital of MCE, and assume the listing status in place of MCE; the existing shareholders of MCE will be migrated to be shareholders of Newco; and MCE ceases its function as the listed vehicle within the MCE Group and continues as an investment holding company as well as an operational company carrying out its existing businesses. The shareholding structure and corporate structure of the MCE Group before and after the Proposed Internal Reorganisation is depicted in Section 5.1 below. The Board is of the view that the Proposed Internal Reorganisation enables Newco Group to achieve ease and flexibility in the expansion to new business segments or streamlining of business segments as and when opportunities arise. The creation of a separate listed entity allows Newco to acquire or expand to new businesses or explore investment opportunities which can be held separately from MCE s operational activities. It also allows the Newco Group to streamline its business segments as and when the need arises. The Board and management of MCE Group is continuously exploring and evaluating new business opportunities as they arise. The Board will make the relevant announcements as and when the new business segments or expansions/acquisitions materialise. In addition, the Proposed Internal Reorganisation will be able to separate Newco (as the listed entity) from its operating entities and safeguard Newco from direct operating risks such as claims and litigation in connection with the Newco Group s operations and business activities. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 4

9 5. EFFECTS OF THE PROPOSED INTERNAL REORGANISATION 5.1 Group structure Upon completion of the Proposed Internal Reorganisation, MCE will become a wholly-owned subsidiary of Newco. Newco will be the new holding company of the MCE Group and will assume the listing status of MCE. The shareholding structure and corporate structure of the MCE Group as at the LPD and upon completion of the Proposed Internal Reorganisation are as follows:- Shareholding structure and corporate structure as at the LPD Note:- * Based on direct interest. Shareholding structure and corporate structure upon completion of the Proposed Internal Reorganisation Note:- * Based on direct interest. Save for the change in corporate structure as depicted in the chart above, there will be no change to the corporate or business structure under the Newco Group as the Newco Group will continue to own and operate the existing businesses currently being carried out by the MCE Group. 5

10 5.2 Issued and paid-up share capital The Proposed Internal Reorganisation will not have any effect on the issued and paid-up share capital of MCE. The proforma effects of the Proposed Internal Reorganisation on the issued and paid-up share capital of Newco are as follows:- No. of Share Capital Newco Shares RM Issued and paid-up share capital as at the LPD 2 2 New shares to be issued pursuant to the Proposed Share Exchange Enlarged issued and paid-up share capital of Newco 44,404,700 44,404,700 44,404,702 44,404, NA per share and gearing Upon completion of the Proposed Internal Reorganisation, the Newco Group s NA and gearing will not be significantly different from the MCE Group s NA and gearing prior to the implementation of the Proposed Internal Reorganisation. The proforma effects of the Proposed Internal Reorganisation on the NA per share and gearing of the enlarged Newco Group are as set out below. Before the Proposed Internal Reorganisation After the Proposed Internal Reorganisation (1) MCE Consolidated Group Newco MCE Group (2) Newco Newco RM RM RM RM RM Share Capital 44,404, ,404,700 44,404,702 44,404,702 Capital reserve Share premium - 654, ,456 47,198, ,456 Share buy-back reserve 352, , ,000 Foreign currency translation (19,964) - (19,964) - (19,964) Retained earnings 48,331,365 - (3) 47,801,365-47,801,365 NA attributable to owners of the Company Non-controlling interests 93,722,557 (86,657) 2-93,192,557 (86,657) 91,603,374-93,192,559 (86,657) Total NA/Shareholders fund 93,635, ,105,900 91,603,374 93,105,902 Total borrowings (RM) 9,169,119-9,169,119-9,169,119 Gearing (times) Number of ordinary shares 44,404, ,404,700 44,404,702 44,404,702 Par value for each ordinary share (RM) NA per ordinary share (RM) Notes:- (1) Based on the audited consolidated financial statement of MCE as at 31 July (2) For illustration purposes, in view that the prevailing market prices of MCE Shares are trading below the par value of Newco Shares of RM1.00, the new Newco Shares are assumed to be issued at RM1.00 per new Newco Share pursuant to the Proposed Share Exchange. (3) Being the estimated expenses of RM530,000 in relation to the Proposed Internal Reorganisation. 6

11 5.4 Proforma substantial shareholders shareholdings of Newco Upon completion of the Proposed Internal Reorganisation, MCE will become a wholly-owned subsidiary of Newco and the Entitled Shareholders (including MCE s substantial shareholders) will hold new Newco Shares in proportion to the number of shares held in the Company on the Entitlement Date. The proforma effects of the Proposed Internal Reorganisation on the substantial shareholders shareholdings in Newco are illustrated as follows:- Existing Shareholders of Newco As at the LPD After the Proposed Internal Reorganisation Direct Indirect Direct Indirect No. of Newco Shares % No. of Newco Shares % No. of Newco Shares % No. of Newco Shares % Wong Hooi Lee * - - Muzafa Shah Bin Olan * - - Substantial shareholders of MCE Dr. Goh Kar Chun ,611, Goh Chai Siong ,813, Note:- * Less than 0.01%. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 7

12 5.5 Earnings and EPS The Proposed Internal Reorganisation will not have any effect on the consolidated EPS of MCE vis-a-vis the consolidated EPS of Newco upon completion of the Proposed Internal Reorganisation in view that the Proposed Share Exchange will be implemented on the basis of one (1) new Newco Share for every one (1) existing MCE Share held. 6. INFORMATION ON NEWCO Newco was incorporated in Malaysia under the Act as a private limited company under the name of MCE Holdings Sdn Bhd on 9 September 2015, and was subsequently converted to a public limited company on 28 September As at the LPD, Newco has an authorised share capital of RM400,000 comprising 400,000 ordinary shares of RM1.00 each, of which two (2) ordinary shares of RM1.00 each have been issued and are fully paid-up. Newco will increase its authorised share capital prior to the implementation of the Proposed Share Exchange. The intended principal activity of Newco is investment holding and it is currently dormant. The directors of Newco as at the LPD are Wong Hooi Lee and Muzafa Shah Bin Olan and they hold one (1) Newco Share each. As part of the implementation of the Proposed Share Exchange, all the directors of MCE at that point in time will be appointed as the directors of Newco, and the current directors of Newco shall resign. Further information on Newco is set out in Appendix I of the Explanatory Statement/Circular. 7. APPROVALS REQUIRED The Proposed Internal Reorganisation is conditional upon the following approvals being obtained:- (a) the approval of Bursa Securities, which was obtained via its letter dated 22 December 2015, for the following:- (i) (ii) Proposed Transfer of Listing; and admission, listing of and quotation for the entire enlarged issued and paid-up share capital of Newco on the Official List of Bursa Securities; subject to the following conditions:- Condition Make the relevant announcements pursuant to paragraph 8.2 of PN21 of the Listing Requirements. Furnish Bursa Securities with a letter of undertaking in the form of Annexure PN21-B of the Listing Requirements duly executed by Newco together with a certified true copy of Newco s board of directors resolution authorising the signatory. Status of compliance To be complied with upon receipt of confirmation from Bursa Depository that Newco Shares are ready to be credited into the Entitled Shareholders securities account. To be complied with after the appointment of the directors of Newco. 8

13 Condition Furnish Bursa Securities with the confirmation letters duly signed by the directors to be appointed to Newco s board of directors (in the format prescribed in Annexures PN21-C and PN21-D of the Listing Requirements) immediately after their appointments and in any event, before making the relevant announcement pursuant to Paragraph 8.2 of PN21 of the Listing Requirements. Furnish Bursa Securities with a letter confirming that all approvals of the relevant authorities have been obtained together with a copy each of all the said letters. Furnish Bursa Securities with a confirmation that the requirements stipulated under Paragraph and of the Listing Requirements have been duly complied together with the relevant document supporting the same. Furnish Bursa Securities with a certified true copy of the resolution passed by the shareholders of MCE in general meeting approving the Proposed Internal Reorganisation. Furnish Bursa Securities with a copy of the certificate of lodgement of the court order sanctioning the scheme after it has been filed with the Companies Commission of Malaysia. Status of compliance To be complied with after the appointment of the directors of Newco. To be complied with after receipt of the order of the High Court sanctioning the Proposed Scheme. To be complied with after the appointment of the directors of Newco. To be complied with after receipt of the approval of the shareholders of MCE at the forthcoming EGM and CCM, if applicable. To be complied with after the order of the High Court sanctioning the Proposed Scheme has been filed with the Companies Commission of Malaysia. (b) (c) (d) (e) the approval of the shareholders of MCE at the forthcoming EGM and CCM; the order of the High Court sanctioning the Proposed Scheme; the approval of the financiers of MCE, if required; and the approval, consent and/or sanction of any other relevant authorities/parties, if required. The Proposed Share Exchange and Proposed Transfer of Listing are inter-conditional. The Proposed Internal Reorganisation is not conditional upon any corporate proposals of the Company. Save for the Proposed Internal Reorganisation, there are no other corporate exercises which have been announced that are still pending completion as at the LPD. 9

14 8. TENTATIVE TIMELINE AND ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances, the Proposed Internal Reorganisation is expected to be completed by the second quarter of calendar year The key milestones and tentative timing for the implementation of the Proposed Internal Reorganisation are set out below. Key milestones Tentative timing CCM/EGM 26 February 2016 Submission of application to the High Court for sanction of the Proposed Scheme Early March 2016 High Court sanction for the Proposed Scheme Early May 2016 Announcement of the Entitlement Date and despatch of notice of share exchange to the Entitled Shareholders Early May 2016 Entitlement Date Mid May 2016 Delisting of MCE Shares and listing of Newco Shares End May INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM None of the directors, major shareholders of MCE and/or persons connected with them have any interest, direct or indirect, in the Proposed Internal Reorganisation other than their respective entitlements, if any, under the Proposed Share Exchange as the Entitled Shareholders, which are also available to all the other Entitled Shareholders on a pro-rata basis. 10. DIRECTORS RECOMMENDATION The Board, having considered, amongst others, the rationale for the Proposed Internal Reorganisation as set out in Section 4 of this Explanatory Statement/Circular, is of the opinion that the Proposed Internal Reorganisation is in the best interest of MCE. Accordingly, the Board recommends that you vote in favour of the resolutions to be tabled at the forthcoming CCM and EGM to give effect to the Proposed Internal Reorganisation. 11. CCM AND EGM 11.1 CCM The CCM, the notice of which is enclosed with this Explanatory Statement/Circular, will be held with leave of the High Court at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m. or at any adjournment thereof, for the purpose of considering and if thought fit, approving the resolution set out in the notice of CCM. You may appoint a proxy to attend and vote on your behalf. If you wish to do so, you must complete, sign and lodge the enclosed Form of Proxy for the CCM in accordance with the instructions contained therein, at MCE s registered office at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 24 hours before the time appointed for the taking of the poll for the CCM or at any adjournment thereof. The lodging of the Form of Proxy for the CCM will not preclude you from attending and voting in person at the CCM should you subsequently decide to do so. 10

15 11.2 EGM The EGM, the notice of which is enclosed with this Explanatory Statement/Circular, will be held at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m. or immediately following the conclusion of the CCM, which will be held at the same venue and on the same day at a.m., whichever is later, or at any adjournment thereof, for the purpose of considering and if thought fit, approving the resolution set out in the notice of EGM. You may appoint a proxy to attend and vote on your behalf. If you wish to do so, you must complete, sign and lodge the enclosed Form of Proxy for the EGM in accordance with the instructions contained therein, at MCE s registered office at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 48 hours before the time set for the EGM or at any adjournment thereof or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll. The lodging of the Form of Proxy for the EGM will not preclude you from attending and voting in person at the EGM should you subsequently decide to do so. When the Proposed Share Exchange, as approved by the shareholders of MCE at the forthcoming CCM and EGM and sanctioned by the High Court becomes effective, it will be binding upon the Entitled Shareholders, whether or not the Entitled Shareholders were present at the CCM and/or EGM in person or by proxy or voted for or against the said resolution at the CCM and/or EGM or voted at all. For clarity, please note that the requisite majority for passing a resolution at the CCM is different from the requisite majority required for passing a special resolution at the EGM. In essence, the requisite majority for the CCM is a majority in number representing three-fourths in value of the members present and voting either in person or by proxy at the meeting, whereas the requisite majority for EGM is a majority of not less than three-fourths in number or in value, of the members present and voting either in person or by proxy at the meeting. 12. ADDITIONAL INFORMATION Shareholders are advised to refer to the enclosed appendices for additional information. Yours faithfully For and on behalf of the Board of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD SAMAD BIN KASSIM Chairman / Independent Non-Executive Director 11

16 APPENDIX I INFORMATION ON NEWCO 1. HISTORY AND BUSINESS Newco was incorporated in Malaysia under the Act as a private limited company under the name of MCE Holdings Sdn Bhd on 9 September 2015 and was subsequently converted to a public limited company under the name MCE Holdings Berhad on 28 September The intended principal activity of Newco is investment holding and it is currently dormant. 2. SHARE CAPITAL As at the LPD, the authorised and issued and paid-up share capital of Newco are as follows:- No. of shares Par value per share Total RM RM Authorised * 400, ,000 Issued and paid-up Note:- * Newco will increase its authorised share capital prior to the implementation of the Proposed Share Exchange. 3. SUBSTANTIAL SHAREHOLDERS The substantial shareholders of Newco and their respective shareholdings in Newco as at the LPD are as follows:- Direct Name Nationality No. of Newco Shares held Indirect % No. of Newco Shares held Wong Hooi Lee Malaysian Muzafa Shah Bin Olan Malaysian % 4. DIRECTORS AND PROPOSED DIRECTORS As at the LPD, the directors of Newco are Wong Hooi Lee and Muzafa Shah Bin Olan. As part of the implementation of the Proposed Share Exchange, all the directors of MCE at that point in time will be appointed as the directors of Newco, and the current directors of Newco shall resign. The particulars of the current and proposed directors of Newco and their respective proforma shareholdings in Newco after the implementation of the Proposed Internal Reorganisation (based on their shareholdings in MCE as at the LPD) are as follows:- Direct Name Nationality No. of Newco Shares held Existing directors of Newco Reorganisation) Indirect % No. of Newco Shares held (Prior to the implementation of the Proposed Internal Wong Hooi Lee Malaysian Muzafa Shah Bin Olan Malaysian %

17 APPENDIX I Direct Name Nationality No. of Newco Shares held Indirect % No. of Newco Shares held % Proposed directors of Newco (As part of Reorganisation) (1) Samad Bin Kassim the implementation of the Proposed Internal Malaysian 100, Lim Ming Kee Malaysian 778, Dr. Goh Kar Chun Malaysian 9,611, (2) 350, Tai Lam Shin Malaysian 20, Loo Shen Chang Malaysian Notes:- (1) For illustration purposes, the respective proposed directors shareholdings in Newco upon the implementation of the Proposed Share Exchange is based on their respective shareholdings in MCE as at the LPD after taking into consideration the Proposed Share Exchange. (2) Deemed interested by virtue of the Newco Shares held by his spouse. 5. SUBSIDIARY AND ASSOCIATED COMPANY Newco does not have any subsidiary or associated company as at the LPD. Upon completion of the Proposed Internal Reorganisation, MCE will be the direct wholly-owned subsidiary of Newco. For further details on the corporate structure of Newco upon completion of the Proposed Internal Reorganisation, kindly refer to Section 5.1 of this Explanatory Statement/Circular. 6. PROFIT AND DIVIDEND RECORD As at the LPD, Newco is a dormant company and was incorporated on 9 September 2015 to facilitate the implementation of the Proposed Internal Reorganisation. As at the LPD, Newco does not have any business operations, profit or dividend record. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 13

18 APPENDIX II THE SCHEME OF ARRANGEMENT TERMS OF THE SCHEME OF ARRANGEMENT PURSUANT TO SECTION 176 OF THE COMPANIES ACT, 1965 (1) MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (the Company or MCE ) AND (2) SHAREHOLDERS OF MCE 2. RECITALS Background Information 2.1 MCE was incorporated on 6 February 1990 in Malaysia under the Companies Act, 1965 (the Act ) as a private limited company under the name of Multi-Code Electronics Industries (M) Sdn Bhd. MCE was converted into a public company under the name of Multi-Code Electronics Industries (M) Berhad on 12 July MCE was listed on the Second Board of the Kuala Lumpur Stock Exchange (presently Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities )) on 28 July As at 28 January 2016, MCE has an authorised share capital of RM50,000, comprising 50,000,000 ordinary shares of RM1.00 each ( MCE Shares ) of which RM44,404, comprising 44,404,700 MCE Shares have been issued and fully paidup. 2.2 MCE, being the current listed vehicle, is also an operating company. It is principally engaged in investment holding, manufacture and supply of anti-theft and keyless entry systems, parking sensors, power window regulator systems, functional switches, motor driven actuators, ignition key set systems and automotive lightings for motor vehicles ( Existing Businesses ). 2.3 MCE Holdings Berhad ( Newco ) was incorporated on 9 September 2015 under the Act as a private limited company with an authorised share capital of RM400, comprising of 400,000 ordinary shares of RM1.00 each ( Newco Share ), of which RM2.00 comprising of 2 Newco Shares were issued and fully paid up. Newco was converted into a public company under the name of MCE Holdings Berhad on 28 September MCE proposes to implement an internal reorganisation exercise by way of a members scheme of arrangement under Section 176 of the Act the details of which are set out below in paragraph 7, 8 and 9 in order to facilitate the establishment of a corporate structure where:- (a) (b) (c) it allows Newco, an investment holding company to directly own 100% of the issued and paid-up share capital of MCE, and assume the listing status in place of MCE; the existing shareholders of MCE will be migrated to be shareholders of Newco; and MCE will cease its function as the listed vehicle within the MCE Group (as defined in clause 3) but continue as an investment holding company as well as an operational company carrying out its Existing Businesses. 14

19 APPENDIX II 3. DEFINITIONS In this Scheme, the following expressions shall, unless the context otherwise requires, have the meaning set opposite each of them:- Act Companies Act, 1965 Approvals Approving Authority Board Bursa Depository Bursa Securities CDS Account Central Depositories Act all the approvals and consents required to be obtained as part of the Conditions Precedent and "Approval" shall mean each or any of the Approvals the relevant authority, body or person whose Authority approval or consent is required for the fulfilment of a Condition Precedent board of directors Bursa Malaysia Depository Sdn Bhd (Company No W) or its successor-in-title, or any other company approved by the Minister of Finance under section 5 of the Central Depositories Act to be a central depository in lieu of the above named company Bursa Malaysia Securities Berhad (Company No W) or its successor-in-title a central depository system securities account established by Bursa Depository for a depositor pursuant to the Central Depositories Act and in accordance with the Rules of the Bursa Depository the Securities Industry (Central Depositories) Act 1991 and any statutory modification, amendment or re-enactment thereof and any and every other legislation for the time being in force made thereunder Conditions Precedent shall have the meaning ascribed to it in paragraph 6 Effective Date EGM Entitled Shareholders Entitlement Date Listing Requirements Market Day MCE Group MCE Shares Newco Group the date on which an office copy of the order of the High Court of Malaya sanctioning the Scheme shall have been lodged with the Registrar of Companies or such earlier date as the High Court of Malaya may determine and as may be specified in the order extraordinary general meeting holders of MCE Shares as at the Entitlement Date a date to be determined by the Board of MCE on which the Entitled Shareholders must be registered in MCE's Record of Depositors as at 5.00 pm to be entitled to the Newco Shares pursuant to the Proposed Share Exchange Main Market Listing Requirements of Bursa Securities a day on which the stock exchange operated by Bursa Securities is open for trading, and "Market Days" shall be construed accordingly MCE and its subsidiaries ordinary shares of RM1.00 each in MCE collectively, Newco as the listed entity and the MCE Group 15

20 APPENDIX II Newco Shares Proposed Internal Reorganisation ordinary shares of RM1.00 each in Newco The proposed internal reorganisation by way of a members scheme of arrangement under Section 176 of the Act comprising the following proposals: (a) (b) Proposed Share Exchange; and Proposed Transfer of Listing Proposed Share Exchange Proposed Transfer of Listing Record of Depositors Rules of the Bursa Depository Scheme Scheme Agreement Unconditional Date the proposed exchange of all the shares of MCE with Newco Share on the basis of one (1) new Newco Share for every one (1) MCE Share via a scheme of arrangement under section 176 of the Act between Newco and the Entitled Shareholders, which entails the exchange of shares in the manner set out in paragraph 7 the proposed assumption of the listing status of MCE by Newco and the admission of Newco to, and withdrawal of MCE from, the Official List of Bursa Securities with the listing of and quotation for the new Newco Shares on the Main Market of Bursa Securities, in the manner provided in paragraph 8 a record of shareholders provided by Bursa Depository pursuant to the rules of central depository as defined in the Central Depositories Act the rules of Bursa Depository as issued pursuant to the Central Depositories Act this scheme of arrangement pursuant to Section 176 of the Act between MCE and the shareholders of MCE to effect the Proposed Internal Reorganisation the agreement dated 29 September 2015 between MCE and Newco which sets out the terms with regards to the implementation of the Scheme twelve (12) months from the date of the Scheme Agreement, or such other date as may be mutually agreed between MCE and Newco 4. INTERPRETATION 4.1 The expressions MCE and Newco include the successors of MCE and Newco respectively. 4.2 Words importing one gender include all other genders and words importing the singular include the plural and vice versa. 4.3 The term month means calendar month. 4.4 Any reference to a specific written law or any general reference to written laws include any statutory extension, modification, amendment or re-enactment of it or them and any regulations, orders or other subsidiary legislation made under it or them. 16

21 APPENDIX II 5. THE SCHEME 5.1 Consideration In consideration of the transfer by the Entitled Shareholders of all of the issued and fully paidup shares in MCE held by them to Newco, Newco had via the Scheme Agreement agreed to issue and allot one (1) Newco Share in exchange for one (1) existing MCE Share held by the Entitled Shareholders and to assume the listing status in place of MCE in accordance with the terms and conditions of the Scheme Agreement. 5.2 Purpose The Board of MCE is of the view that the Proposed Internal Reorganisation will enable the Newco Group to achieve ease and flexibility in the expansion to new business segments or streamlining of business segments as and when opportunities arise. The creation of a separate listed entity allows Newco to acquire or expand to new businesses or explore investment opportunities which can be held separately from MCE s operational activities. It also allows the Newco Group to streamline its business segments as and when the need arises. In addition, the Proposed Internal Reorganisation will be able to separate Newco (as the listed entity) from its operating entities and safeguard Newco from direct operating risks such as claims and litigation in connection with the Newco Group s operations and business activities. 5.3 Details of the Proposed Internal Reorganisation (a) Proposed Share Exchange Newco was incorporated to facilitate the implementation of the Proposed Internal Reorganisation. Under the Proposed Share Exchange, the Entitled Shareholders will exchange their MCE Shares with new Newco Shares on the basis of one (1) new Newco Share for every one (1) existing MCE Share held. The issue price of the new Newco Shares will be determined based on the following methodology:- (a) (b) based on the prevailing five (5)-day volume weighted average market price of MCE Shares prior to the announcement of the Entitlement Date; or the par value of the Newco Shares of RM1.00; whichever is higher. Pursuant to the Proposed Share Exchange, the Entitled Shareholders will receive such number of new Newco Shares which is equivalent to their respective shareholdings in MCE as at the Entitlement Date, and MCE shall become a wholly-owned subsidiary of Newco. The new Newco Shares to be issued pursuant to the Proposed Share Exchange will rank pari passu in all respects with each other and with the two (2) existing issued and paid-up Newco Shares. The two (2) existing Newco Shares will continue to be held by the existing shareholders of Newco, namely Wong Hooi Lee and Muzafa Shah Bin Olan. As at 28 January 2016, the Company has an issued and fully paid-up share capital of RM44,404,700 comprising 44,404,700 ordinary shares of RM1.00 each. 17

22 APPENDIX II (b) Proposed Transfer of Listing Upon completion of the Proposed Share Exchange, Newco will be the new holding company of MCE Group. Subject to the approval of Bursa Securities, MCE will be delisted from the Official List of Bursa Securities and Newco will be admitted to the Official List of Bursa Securities in place of MCE with the listing of and quotation for the entire enlarged issued and paid-up share capital of RM44,404,702 comprising 44,404,702 Newco Shares on the Main Market of Bursa Securities. 5.4 Inter-conditionality The Proposed Share Exchange and Proposed Transfer of Listing are inter-conditional. 6. CONDITIONS PRECEDENT The Proposed Internal Reorganisation will be implemented through the Scheme and the obligations of MCE and Newco under the Scheme Agreement shall be conditional upon the following conditions precedent (collectively, "Conditions Precedent" and each a "Condition Precedent") fulfilled on or before the Unconditional Date: (a) obtaining the approval of Bursa Securities for the following:- (i) (ii) Proposed Transfer of Listing; and admission, listing of and quotation for the entire enlarged issued and paid-up share capital of Newco on the Official List of Bursa Securities; (b) (c) (d) (e) (f) obtaining the approval of the shareholders of MCE at an EGM and at a meeting to be convened by an order of the High Court of Malaya pursuant to Section 176 of the Act; obtaining the order of the High Court of Malaya sanctioning the Scheme; obtaining the approval of the financiers of MCE, if required; obtaining the approval, consent and/or sanction of any other relevant authorities or parties, if required; and the increase of Newco s authorised share capital to at least RM50,000, comprising 50,000,000 Newco Shares. This Scheme shall become unconditional on the date on which the last of the Conditions Precedent is fulfilled. 7. IMPLEMENTATION OF THE PROPOSED SHARE EXCHANGE 7.1 Subject to: (a) (b) the fulfilment of the Conditions Precedent as set out in paragraph 6; and the existing holders of Newco Shares approving the execution, delivery and performance of the Scheme Agreement, including but not limited to the issuance of the Newco Shares the Proposed Share Exchange shall take place on the Effective Date whereupon Newco Shares will be issued to the Entitled Shareholders in exchange for the MCE Shares held, on the basis of one (1) Newco Share for every one (1) MCE Share held. Notices of allotment will be despatched to the Entitled Shareholders within eight (8) market days from the Entitlement Date. 18

23 APPENDIX II 7.2 Once the Entitlement Date has been determined by the Board of MCE, the Board of MCE shall announce and send a notice which sets out the Entitlement Date, the details of the suspension and the implementation procedure to each of the Entitled Shareholders. 7.3 MCE and Newco shall jointly take steps to procure that the CDS Accounts of the Entitled Shareholders will be credited with the new Newco Shares in substitution for their MCE Shares as soon as practicable after the Effective Date, and Newco shall issue the requisite notices of allotment in respect of the new Newco Shares by post to the respective Entitled Shareholders in accordance with the provisions of the Listing Requirements. As the Newco Shares will be scripless securities, no physical certificates will be issued to the Entitled Shareholders. 7.4 MCE and Newco shall have the authority to take all necessary actions and execute any documents required to effect or assist in effecting the Proposed Share Exchange, including to appear by counsel at the hearing of any application/petition to the High Court of Malaya to seek its sanction for the Scheme. 7.5 The Proposed Share Exchange shall take place at 5.00 pm on the Effective Date. Upon completion of the Proposed Share Exchange, MCE will become a wholly-owned subsidiary of Newco. There will be no change to the issued and paid-up share capital of MCE. 7.6 The Proposed Share Exchange will increase the issued and paid-up capital of Newco from the present issued and paid-up share capital of RM2.00 comprising 2 Newco Shares to RM44,404,702 comprising 44,404,702 Newco Shares. When the Proposed Share Exchange takes place on the Effective Date, the then existing two (2) Newco Shares will continue to be held by the existing shareholders of Newco, namely Wong Hooi Lee and Muzafa Shah Bin Olan. The new Newco Shares to be issued pursuant to the Proposed Share Exchange shall, upon allotment and issue, rank pari passu in all respects with the then existing Newco Shares. 7.7 Newco shall, prior to the Effective Date, execute or cause the necessary documents/agreements to be executed and take such other necessary steps so that, when the Proposed Share Exchange takes place on the Effective Date adopts a new memorandum and articles of association on substantially the same terms as the form of memorandum and articles of association attached to the Scheme Agreement as Appendix A. 8. IMPLEMENTATION OF PROPOSED TRANSFER OF LISTING 8.1 Subject to the Proposed Share Exchange being undertaken in accordance with paragraph 7, MCE and Newco agree to jointly use reasonable endeavours to procure, as soon as reasonably practicable after the Effective Date:- (a) (b) (c) that Newco be admitted to the Official List of Bursa Securities in place of MCE; that MCE be removed from the Official List of Bursa Securities; and the listing of and quotation for the entire enlarged issued and paid-up Newco Shares on the Main Market of Bursa Securities. 9. IMPLEMENTATION OF THE SCHEME The Scheme shall become effective on the Effective Date. Unless the Scheme shall have become effective within twenty four (24) months from the date of the Scheme Agreement (which was dated 29 September 2015), or such other later date, if any, as MCE and Newco may mutually agree (under the Scheme Agreement) or as may be required by the High Court of Malaya, the Scheme shall lapse. 19

24 APPENDIX II 10. COSTS All the costs, charges, fees and expenses of and incidental to the preparation of the Scheme and the implementation thereof shall be borne by MCE. 11. FURTHER AMENDMENTS The Scheme is subject to any further amendments, variations or conditions as may be required by any relevant authority. Further, MCE may consent to any modification of or addition to the Scheme or any condition as the Board of MCE may, in the best interests of MCE deem fit, or to any condition which the High Court of Malaya may think fit to approve or impose. 12. GOVERNING LAW The construction, validity and performance of this Scheme of Arrangement shall be governed by the laws of Malaysia and the parties hereto submit to the non-exclusive jurisdiction of the High Court of Malaya. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 20

25 APPENDIX III FURTHER INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT The directors of MCE have seen and approved this Explanatory Statement/Circular and they 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 herein misleading. 2. CONSENT AND NON-CONFLICT OF INTERESTS (a) AmInvestment Bank AmInvestment Bank has given and has not subsequently withdrawn its written consent to the inclusion of its name and all references thereto in the form and context in which it appears in this Explanatory Statement/Circular. AmInvestment Bank is not aware of any existing conflict of interest nor of any circumstances which would or is likely to give rise to a possible conflict of interest by virtue of its appointment as the Adviser to MCE for the Proposed Internal Reorganisation. (b) Messrs. Wong Beh & Toh Messrs. Wong Beh & Toh has given and has not subsequently withdrawn its written consent to the inclusion of its name and all references thereto in the form and context in which it appears in this Explanatory Statement/Circular. Messrs. Wong Beh & Toh is not aware of any existing conflict of interest nor of any circumstances which would or is likely to give rise to a possible conflict of interest by virtue of its appointment as the Solicitors to MCE for the Proposed Internal Reorganisation. 3. MATERIAL CONTRACTS Save for the Scheme Agreement and as disclosed below, neither Newco, MCE nor any of the subsidiaries of MCE has entered into any material contracts, not being contracts entered into in the ordinary course of business, within the past two (2) years preceding the date of the Explanatory Statement/Circular:- (a) a sale and purchase agreement dated 13 March 2014 between MCE, Lo Ying-Jui, Feng Yan Ming and Ang Ah Lek for the disposal of entire 65% equity interest in Plasmet Industries (M) Sdn Bhd comprised of 1,599,000 ordinary shares of RM1.00 each for a consideration of RM1,933,000. The transaction has been completed. 21

26 APPENDIX III 4. MATERIAL LITIGATION, CLAIMS OR ARBITRATION As at the LPD, neither Newco, MCE nor any of the subsidiaries of MCE is involved in any material litigation, claim or arbitration, either as plaintiff or defendant, which has or would have a material and adverse effect on the financial position of the Newco or MCE Group and, to the best of the Board s knowledge and belief, the Board is not aware of any material proceedings pending or threatened or against Newco or the MCE Group. 5. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at MCE s registered office at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim during normal business hours from Mondays to Fridays (except for public holidays) from the date of this Explanatory Statement/Circular to the date of the forthcoming CCM and EGM:- (a) (b) (c) (d) (e) Memorandum and Articles of Association of MCE and Newco; audited financial statements of MCE for the two (2) financial years ended 31 July 2014 and 31 July 2015 and the quarterly report of MCE for the three (3)-month period ended 31 October 2015; letters of consent referred to in Section 2 above; the material contract referred to in Section 3 above; and the Scheme Agreement dated 29 September 2015 between MCE and Newco. 22

27 MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) NOTICE OF COURT CONVENED MEETING IN THE HIGH COURT OF MALAYA AT JOHOR ORIGINATING SUMMONS NO. 24NCVC /2015 In the matter of Multi-Code Electronics Industries (M) Berhad (Company No.: K) ( Applicant ) And In the matter of a Proposed Scheme of Arrangement between the Applicant and its members pursuant to Section 176 of the Companies Act, 1965 And In the matter of Order 88 of the Rules of Court, 2012 Multi-Code Electronics Industries (M) Berhad (Company No.: K)... Applicant NOTICE OF COURT CONVENED MEETING (For Shareholders of the Applicant) NOTICE IS HEREBY GIVEN that by an Order of the High Court of Malaya ( Court ) dated 26 January 2016 in respect of the above matter ( Order ), the High Court ordered a meeting to be convened for the shareholders of the abovenamed Applicant, Multi-Code Electronics Industries (M) Berhad ( MCE or Company ), for the purpose of considering and, if thought fit, approving a scheme of arrangement proposed to be made between MCE and its shareholders ( Court Convened Meeting ) pursuant to Section 176(1) of the Companies Act, 1965 ( Act ). The following resolution is proposed to be voted upon and approved in the Court Convened Meeting for MCE s shareholders: THAT subject to the sanction of the Court, the approval of MCE s shareholders and approval of all relevant regulatory authorities, if any, being obtained, approval be and is hereby given for the implementation of the internal reorganisation by way of a members scheme of arrangement under Section 176 of the Act between MCE with its shareholders ( Proposed Scheme of Arrangement ), details of which are set out in Section 2 of the Explanatory Statement/Circular to Shareholders dated 4 February 2016, which entails the following proposals:

28 (a) (b) proposed exchange of the entire issued and paid-up ordinary shares of RM1.00 each in MCE ( MCE Shares ) for ordinary shares of RM1.00 each in Newco ( Newco Shares ) on the basis of one (1) new Newco Share for every one (1) MCE Share held ( Proposed Share Exchange ); and proposed assumption of the listing status of MCE by Newco and the admission of Newco to, and withdrawal of MCE from, the Official List of Bursa Malaysia Securities Berhad ( Bursa Securities ) with the listing and quotation for the new Newco Shares on the Main Market of Bursa Securities ( Proposed Transfer of Listing ); (collectively referred to as the Proposed Internal Reorganisation ) AND THAT the board of directors of the Company be and is hereby authorised to complete and give effect to the Proposed Internal Reorganisation and to do all acts and things for and on behalf of the Company as the directors of the Company may consider necessary or expedient with full power to: (a) (b) execute any other agreements in relation to the Proposed Internal Reorganisation and such other agreements, deeds, instruments, undertakings, declarations and/or arrangements including any supplementary or variation agreements and documents in connection therewith and to give full effect to and complete the Proposed Internal Reorganisation; and assent to any condition, modification, variation and/or amendment as may be imposed or permitted by Bursa Securities and any other relevant authorities or as may be deemed necessary by the directors of the Company in the best interest of the Company and to take all steps and do all acts and things in any manner as they may deem necessary and/or expedient to finalise, implement, to give full effect to and complete the Proposed Internal Reorganisation, AND THAT all previous actions taken by the directors of the Company for the purpose of or in connection with the Proposed Internal Reorganisation and are hereby adopted, approved and ratified. The Court Convened Meeting for Shareholders will be held at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m. or at any adjournment thereof (as the case may be), at which place and time all the aforesaid shareholders are requested to attend. A copy of the Explanatory Statement/Circular detailing the Proposed Scheme of Arrangement and containing the Form of Proxy required to be furnished pursuant to Section 177 of the Act is enclosed herewith ( Document ). Additional copies of the Document can be obtained from the registered office of the Company at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim on any day from the date of the Document up to the date of the Court Convened Meeting for Shareholders, from 9.00 a.m. to 5.00 p.m. from Mondays to Fridays (except public holidays). The resolution to be voted upon and approved in the Court Convened Meeting shall be decided by way of poll. The Shareholders may vote in person at the Court Convened Meeting for Shareholders or they may appoint their proxy(ies) to attend and vote in their stead. A proxy may but need not be a member of the Company. A Form of Proxy for the Court Convened Meeting for Shareholders is enclosed in the Document. The Form of Proxy must be deposited at the registered office of the Company at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim no later than 24 hours before the time appointed for the taking of the poll for the Court Convened Meeting for Shareholders or any adjourned meeting thereof.

29 By the Order of the Court, the Court has appointed Lim Ming Kee (NRIC No.: ) being a director of MCE or failing him, Dr. Goh Kar Chun (NRIC No.: ), being a director of MCE, to act as the Chairman of the Court Convened Meeting and that the results of the Court Convened Meeting be reported to the Court after the Court Convened Meeting. The Proposed Scheme of Arrangement will be subject to the subsequent sanction of the High Court. Date: 4 February 2016 Messrs Wong Beh & Toh Peti #30 Level 19, West Block Wisma Selangor Dredging 142-C Jalan Ampang Kuala Lumpur Notes:- (1) A member entitled to attend and vote at the Court Convened Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Notwithstanding this, a member entitled to attend and vote at the Court Convened Meeting is entitled to appoint any person as his proxy to attend and vote instead of him at the Court Convened Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Court Convened Meeting shall have the same rights as the member to speak at the Court Convened Meeting. (2) Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. (3) Where a member is an authorised nominee as defined under The Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 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. (4) The instrument appointing a proxy shall be in writing under the hand of appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. (5) To be valid, the form of proxy must be deposited at the Registered Office of the Company at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 24 hours before the time appointed for the taking of the poll for the Court Convened Meeting or any adjournment thereof. (6) In respect of deposited securities, only members whose names appear on the Record of Depositors on 22 February 2016, shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

30 MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Multi-Code Electronics Industries (M) Berhad ( MCE or Company ) will be held at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m. or immediately following the conclusion of the Court Convened Meeting of the Company, whichever is later, or at any adjournment thereof, to consider and if thought fit, to pass the following special resolution: SPECIAL RESOLUTION PROPOSED INTERNAL REORGANISATION THAT subject to the sanction of the High Court of Malaya, the approval of Bursa Malaysia Securities Berhad ( Bursa Securities ) and approval of all other relevant authorities (if any) being obtained, approval be and is hereby given to the board of directors of the Company ( Board ) to implement the internal reorganisation by way of a members scheme of arrangement under Section 176 of the Act between MCE with its shareholders ( Proposed Scheme of Arrangement ), details of which are set out in Section 2 of the Explanatory Statement/Circular to Shareholders dated 4 February 2016, which entails the following proposals: (c) (d) proposed exchange of the entire issued and paid-up ordinary shares of RM1.00 each in MCE ( MCE Shares ) for ordinary shares of RM1.00 each in MCE Holdings Berhad ( Newco ) ( Newco Shares ) on the basis of one (1) new Newco Share for every one (1) MCE Share held ( Proposed Share Exchange ); and proposed assumption of the listing status of MCE by Newco and the admission of Newco to, and withdrawal of MCE from, the Official List of Bursa Securities with the listing and quotation for the new Newco Shares on the Main Market of Bursa Securities ( Proposed Transfer of Listing ). (collectively referred to as the Proposed Internal Reorganisation ) AND THAT the Board be and is hereby authorised to complete and give effect to the Proposed Internal Reorganisation and to do all acts and things for and on behalf of the Company as the directors of the Company may consider necessary or expedient with full power to:- (a) (b) execute any other agreements in relation to the Proposed Internal Reorganisation and such other agreements, deeds, instruments, undertakings, declarations and/or arrangements including any supplementary or variation agreements and documents in connection therewith and to give full effect to and complete the Proposed Internal Reorganisation; and assent to any condition, modification, variation and/or amendment as may be imposed or permitted by Bursa Securities and any other relevant authorities or as may be deemed necessary by the directors of the Company in the best interest of the Company and to take all steps and do all acts and things in any manner as they may deem necessary and/or expedient to finalise, implement, to give full effect to and complete the Proposed Internal Reorganisation AND THAT all previous actions taken by the directors of the Company for the purpose of or in connection with the Proposed Internal Reorganisation be and are hereby adopted, approved and ratified.

31 By Order of the Board MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD LEE WEE HEE (MAICSA ) POW JULIET (MAICSA ) Company Secretaries Johor Bahru, Johor Darul Takzim 4 February 2016 Notes:- (1) A member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Notwithstanding this, a member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint any person as his proxy to attend and vote instead of him at the Extraordinary General Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Extraordinary General Meeting shall have the same rights as the member to speak at the Extraordinary General Meeting. (2) Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. (3) Where a member is an authorised nominee as defined under The Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 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. (4) The instrument appointing a proxy shall be in writing under the hand of appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. (5) To be valid, the form of proxy must be deposited at the Registered Office of the Company at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 48 hours before the time for holding the Extraordinary General Meeting or any adjournment thereof or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll. (6) In respect of deposited securities, only members whose names appear on the Record of Depositors on 22 February 2016, shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

32 MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) FORM OF PROXY FOR COURT CONVENED MEETING IN THE HIGH COURT OF MALAYA AT JOHOR ORIGINATING SUMMONS NO. 24NCVC /2015 In the matter of Multi-Code Electronics Industries (M) Berhad (Company No.: K) ( Applicant ) And In the matter of a Proposed Scheme of Arrangement between the Applicant and its members pursuant to Section 176 of the Companies Act, 1965 And In the matter of Order 88 of the Rules of Court, 2012 Multi-Code Electronics Industries (M) Berhad (Company No.: K)... Applicant FORM OF PROXY I/We (Nric No. ) of (full address) a member / members of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD hereby appoint (full name) (Nric No. ) of (full address) or failing him, (Nric No. ) of (full address) as *my / our proxy to vote for *me / us on *my / our behalf at the Court Convened Meeting of the Company to be held at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m. or at any adjournment thereof, to vote as indicated below.

33 My/our proxy shall vote as follows:- RESOLUTION ^ FOR ^ AGAINST SCHEME OF ARRANGEMENT ^ Please indicate with an X how you wish your vote to be cast. If no specific direction as to voting is given, the proxy / proxies will vote or abstain at his / her discretion. ** The proportion of my/our shareholding to be represented by my/our proxies* are as follows: Proxy Name Address NRIC/ Passport No. (1) (2) Total shares held Proportion of Shareholdings ** To be completed in the event the shareholders wishes to appoint more than one (1) proxy (see note 2 below). Dated this day of 2016 No. of shares held: Signature of member/s Notes:- (1) A member entitled to attend and vote at the Court Convened Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Notwithstanding this, a member entitled to attend and vote at the Court Convened Meeting is entitled to appoint any person as his proxy to attend and vote instead of him at the Court Convened Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Court Convened Meeting shall have the same rights as the member to speak at the Court Convened Meeting. (2) Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. (3) Where a member is an authorised nominee as defined under The Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 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. (4) The instrument appointing a proxy shall be in writing under the hand of appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. (5) To be valid, the form of proxy must be deposited at the Registered Office of the Company at Suite 5.11 & 5.12, 5 th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, Johor Bahru, Johor Darul Takzim not less than 24 hours before the time appointed for the taking of the poll for the Court Convened Meeting or any adjournment thereof. (6) In respect of deposited securities, only members whose names appear on the Record of Depositors on 22 February 2016, shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

34 Fold this flap for sealing Then fold here AFFIX STAMP MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) Suite 5.11 & 5.12, 5 th Floor, Menara TJB No. 9, Jalan Syed Mohd. Mufti Johor Bahru Johor Darul Takzim 1st fold here

35 MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) FORM OF PROXY FOR THE EXTRAORDINARY GENERAL MEETING FORM OF PROXY I/We (Nric No. ) of (full address) a member / members of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD hereby appoint (full name) (Nric No. ) of (full address) or failing him, (Nric No. ) of (full address) as *my / our proxy to vote for *me / us on *my / our behalf at the Extraordinary General Meeting of the Company to be held at Hop Sing II Hall, Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, Johor Bahru, Johor Darul Takzim on Friday, 26 February 2016 at a.m., or immediately following the conclusion of the Court Convened Meeting, which will be held at the same venue and on the same day at a.m., whichever is later, or at any adjournment thereof, to vote as indicated below. My/our proxy shall vote as follows:- SPECIAL RESOLUTION ^ FOR ^ AGAINST PROPOSED INTERNAL REORGANISATION ^ Please indicate with an X how you wish your vote to be cast. If no specific direction as to voting is given, the proxy / proxies will vote or abstain at his / her discretion. ** The proportion of my/our shareholding to be represented by my/our proxies* are as follows: Proxy Name Address NRIC/ Passport No. (1) (2) Total shares held Proportion of Shareholdings ** To be completed in the event the shareholders wishes to appoint more than one (1) proxy (see note 2 below). No. of shares held: Dated this day of 2016 IMPORTANT: PLEASE READ NOTES OVERLEAF Signature of member/s