AEON CREDIT SERVICE (M) BERHAD ( ACSM OR COMPANY )

AEON CREDIT SERVICE (M) BERHAD ( ACSM OR COMPANY ) (I) PROPOSED BONUS ISSUE OF 72,000,000 NEW ORDINARY SHARES IN ACSM ( BONUS SHARES ) AT AN ISSUE PRICE OF RM0.50 EACH TO BE CAPITALISED FROM THE COMPANY S RETAINED EARNINGS ON THE BASIS OF 1 BONUS SHARE FOR EVERY 2 EXISTING ACSM ORDINARY SHARES ( ACSM SHARES ) HELD ( PROPOSED BONUS ISSUE ); AND (II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF 3-YEAR MINIMUM 3.5% IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS ( ICULS ) ON THE BASIS OF 2 ICULS FOR EVERY 1 EXISTING ACSM SHARE HELD TO RAISE RM432,000,000 IN CASH ( PROPOSED RIGHTS ISSUE ) (COLLECTIVELY REFERRED TO AS THE PROPOSALS ) 1. INTRODUCTION On behalf of the Board of Directors of ACSM ( Board ), CIMB Investment Bank Berhad ( CIMB ) wishes to announce that the Company proposes to undertake the Proposals. 2. DETAILS OF THE PROPOSALS 2.1 Proposed Bonus Issue 2.1.1 Details The Proposed Bonus Issue will involve the issuance of 72,000,000 Bonus Shares at an issue price of RM0.50 each on the basis of 1 Bonus Share for every 2 existing ACSM Shares held by the Company s shareholders whose names appear in the ACSM s Record of Depositors ( ROD ) as at the close of business on an entitlement date to be determined by the Board and announced later ( Bonus Issue Entitlement Date ). As at the date of this announcement, the share capital of the Company is RM72,000,000 1 represented by 144,000,000 ACSM Shares. Upon completion of the Proposed Bonus Issue, the share capital of the Company will be increased to RM108,000,000 represented by 216,000,000 ACSM Shares. Fractional entitlements arising from the Proposed Bonus Issue, if any, shall be disregarded and shall be dealt with in the Board s absolute discretion in such manner as it deems fit and in the best interests of ACSM. The Bonus Issue Entitlement Date will be determined and announced at a later date upon receipt of all relevant approvals for the Proposed Bonus Issue. The Proposed Bonus Issue will be completed in a single issuance and will not be implemented in stages. 1 Pursuant to the transitional provisions under the Companies Act 2016 ( Act ), the sum of RM44,012,000 standing to the credit of ACSM s share premium account may, within 24 months from 31 January 2017, be utilised by ACSM in the manner as allowed for under the Act, and any remaining amount standing to the credit of ACSM s share premium account shall be reclassified and become part of ACSM s share capital. 1

For avoidance of doubt, the Proposed Bonus Issue is not conditional upon the Proposed Rights Issue, and the Proposed Rights Issue is not conditional upon the Proposed Bonus Issue. Hence, subject to obtaining all relevant approvals, the Proposed Bonus Issue will be implemented regardless of the Proposed Rights Issue. 2.1.2 Capitalisation of reserves The Proposed Bonus Issue will be implemented by capitalising RM36,000,000 from the Company s retained earnings. Based on ACSM s latest audited financial statements for the financial year ended ( FYE ) 29 February 2016 and latest available unaudited financial statements for the financial period ended ( FPE ) 30 November 2016, the illustrative effects of the Proposed Bonus Issue on the retained earnings of the Company are as follows: Audited As at 29 February 2016 (RM 000) Unaudited As at 30 November 2016 (RM 000) Retained earnings 668,806 766,605 Less: Amount to be capitalised for the Proposed Bonus Issue (36,000) (36,000) Balance after the Proposed Bonus Issue 632,806 730,605 The Board confirms that based on the latest audited financial statements for the FYE 29 February 2016 and the latest available unaudited financial statements for the FPE 30 November 2016 of the Company, the available reserves of the Company are adequate for the capitalisation under the Proposed Bonus Issue. Furthermore, the Board also confirms that the reserves required for capitalisation of the Proposed Bonus Issue are unimpaired by losses on a consolidated basis in accordance with Paragraph 6.30(1) of the Main Market Listing Requirements ( Listing Requirements ) of Bursa Malaysia Securities Berhad ( Bursa Securities ). 2.1.3 Ranking of the Bonus Shares The Bonus Shares shall, upon allotment and issuance, rank equally in all respects with the existing ACSM Shares, save and except that the Bonus Shares will not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid where the entitlement date is before the allotment date of the Bonus Shares. 2.1.4 Listing and quotation for the Bonus Shares An application will be made to Bursa Securities for the listing of and quotation for the Bonus Shares on the Main Market of Bursa Securities. The Bonus Shares will be listed on the Main Market of Bursa Securities on the next market day after the Bonus Issue Entitlement Date. 2

2.2 Proposed Rights Issue 2.2.1 Details The Proposed Rights Issue will be undertaken after the completion of the Proposed Bonus Issue. As mentioned in Section 2.1.1 of this announcement, the Proposed Rights Issue is not conditional upon the Proposed Bonus Issue, and in the event that the Proposed Bonus Issue is not completed for whatsoever reason, subject to obtaining all relevant approvals, the Proposed Rights Issue will be implemented. The Proposed Rights Issue, to be undertaken on a renounceable basis, involves the issuance of 432,000,000 ICULS at 100% of its nominal value of RM1.00 each in cash on the basis of 2 ICULS for every 1 existing ACSM Share held by the Company s shareholders ( Entitled Shareholders ) whose names appear in ACSM s ROD as at the close of business on an entitlement date to be determined by the Board and announced later ( ICULS Entitlement Date ) after the completion of the Proposed Bonus Issue. In the event that the Proposed Bonus Issue is not completed for whatsoever reason, the Proposed Rights Issue shall be undertaken on the basis of 3 ICULS for every 1 existing ACSM Share held. The Proposed Rights Issue will raise RM432,000,000 for the Company from the issuance of a total of 432,000,000 ICULS under the Proposed Rights Issue. The Proposed Rights Issue is renounceable in full or in part. This means that the Entitled Shareholders can subscribe for or renounce their entitlements to the ICULS in full or in part. Any ICULS not subscribed or not validly subscribed for shall be made available for excess applications by the Entitled Shareholders or their renouncee(s)/transferee(s).the Board intends to allocate such excess ICULS in a fair and equitable manner on a basis to be determined later by the Board. The ICULS will be provisionally allotted to the Entitled Shareholders on the ICULS Entitlement Date. Any fractional entitlements of ICULS under the Proposed Rights Issue will be disregarded and shall be dealt with in the Board s absolute discretion in such manner as it deem fits and in the best interests of ACSM. The coupon rate for the ICULS will be a minimum of 3.5% per annum, payable on an annual basis ( ICULS Coupon Rate ). The final ICULS Coupon Rate shall be reflected in the circular to the Company s shareholders seeking their approval for the Proposed Rights Issue at an extraordinary general meeting to be convened ( EGM ). The ICULS will be constituted by a trust deed to be executed between ACSM and an appointed trustee for the benefit of the ICULS holders. The indicative principal terms and conditions of the ICULS are set out in Appendix I of this announcement. 2.2.2 Basis of determining and justification for the ICULS issue price and ICULS conversion price The ICULS will be issued at its nominal value of RM1.00 each. The nominal value was fixed after taking into account the aggregate proceeds of RM432,000,000 to be raised from the Proposed Rights Issue, represented by the 432,000,000 ICULS to be issued. 3

Due to the timeframe to implement the Proposed Rights Issue and the potential share price movement of the ACSM Shares during this period, the conversion price for the ICULS has not been fixed. The ICULS conversion price will be determined on the price-fixing date to be announced at a later date ( Price Fixing Date ) after receipt of all relevant approvals but prior to the ICULS Entitlement Date. The Board shall determine the ICULS conversion price, taking into consideration the following: (i) (ii) (iii) the theoretical ex-all price ( TEAP ) per ACSM Share taking into account the Proposals, calculated based on the 5-market day volume weighted average market price ( VWAMP ) up to the date immediately preceding the Price Fixing Date; the then prevailing market conditions; and the final ICULS Coupon Rate and pricing for rights issue exercises. In any event, the ICULS conversion price shall be determined at a minimum of 15.0% discount to the TEAP as calculated in (i) above. For illustration purposes only and taking into account the 5-market day VWAMP per ACSM Share up to 22 March 2017, being the market day immediately preceding the date of this announcement of RM16.24 resulting in a TEAP of RM10.48 and assuming a discount to TEAP of 15.0%, the illustrative conversion price of the ICULS is RM8.91 per new ACSM Share after taking into account the completion of the Proposed Bonus Issue ( Illustrative ICULS Conversion Price ). Using the Illustrative ICULS Conversion Price and for illustration purposes only, a total of 48,484,848 new ACSM Shares will be issued upon full conversion of the ICULS. This represents 18.3% of the Company s enlarged share capital after the completion of the Proposals. 2.2.3 Ranking of the new ACSM Shares arising from the conversion of ICULS The new ACSM Shares to be issued arising from the conversion of the ICULS shall, upon allotment and issuance, rank equally in all respects with the existing ACSM Shares, save and except that they will not be entitled to any dividends, rights, allotments and/or any other distributions that may be declared, made or paid where the entitlement date is before the allotment date of the new ACSM Shares. Based on the terms of the ICULS, the ICULS holders can convert their ICULS held into new ACSM Shares anytime from and including the date of issuance of the ICULS ( Issue Date ) up to its maturity date, which is the third (3 rd ) anniversary of the Issue Date ( Maturity Date ). Any ICULS which are not converted would be mandatorily converted into new ACSM Shares on the Maturity Date. 2.2.4 Status of ICULS The ICULS shall constitute direct, unconditional, unsecured and unsubordinated obligations of ACSM and subject to the provisions contained in the trust deed, at all times rank equally, without discrimination, preference or priority between themselves and all present and future direct, unconditional, unsecured and unsubordinated debts and obligations of ACSM except those which are preferred by law. 4

2.2.5 Listing on the Main Market of Bursa Securities An application will be made to Bursa Securities for: (i) (ii) the admission of the ICULS on the Official List of Bursa Securities; and the listing of and quotation for the ICULS and the new ACSM Shares to be issued arising from the conversion of the ICULS on the Main Market of Bursa Securities. The admission, listing of and quotation for the ICULS on the Main Market of Bursa Securities is subject to compliance with the public spread requirements of the Listing Requirements where there must be at least 100 ICULS holders holding not less than 1 board lot each. 2.2.6 Subscription basis, undertakings and underwriting The Proposed Rights Issue is intended to be undertaken on a full subscription basis and not on a minimum subscription basis. The Company intends to procure irrevocable undertakings from its major shareholder to subscribe, either on its own or via its renouncee(s), for its entitlement under the Proposed Rights Issue. In respect of those remaining ICULS for which no undertakings have been procured, the Company intends to secure underwriting for such portion of the Proposed Rights Issue. Such underwriting arrangement(s) will be in place prior to the ICULS Entitlement Date. 3. RATIONALE FOR THE PROPOSALS 3.1 Rationale for the Proposed Bonus Issue The Proposed Bonus Issue aims to: (i) (ii) (iii) reward the Company s shareholders for their loyalty and continuous support by enabling them to have greater participation in the equity of the Company in terms of holding additional number of ACSM Shares while maintaining their percentage of equity interest in the Company; to increase the Company s share capital to a level which will better reflect the current scale of operations of ACSM and facilitate possible equity-linked fundraising exercises in the future through this larger share capital base; and improve the trading liquidity and marketability of the Company s ordinary shares by way of a larger number of ordinary shares in issue and affordability from the price adjustment from the Proposed Bonus Issue. 3.2 Rationale for the Proposed Rights Issue After due consideration of the various funding options available, the Board is of the view that the Proposed Rights Issue is the most optimal avenue for raising funds for the Company taking into account the Company s objectives and capital management strategy. 5

The Proposed Rights Issue: (i) (ii) (iii) (iv) provides an avenue to raise funds that will allow the Company to improve its capital adequacy ratio ( CAR ) and with the strengthening of its CAR, this will facilitate the build-up of an adequate level of capital buffer in anticipation of meeting sufficient capital requirements for the Company s business activities and to support continuous business growth; improves the Company s liquidity and financial flexibility by strengthening its financial position to meet requirements as described in Section 5 of this announcement; provides the Company s shareholders with an opportunity to participate in an equity offering on equal basis based on their proportionate shareholdings and serves to reward shareholders for their continued support and loyalty to ACSM without diluting their interests upon conversion of the ICULS, assuming all Entitled Shareholders fully subscribe for their respective entitlements; and results in the issue of the ICULS: (a) (b) (c) (d) that minimizes the immediate dilution effect on the basic earnings per share ( EPS ) of the Company, which would otherwise have an immediate upfront effect if the fund raising exercise was an issuance of ordinary shares. This is due to the ICULS expecting to be converted over a period of time and fully converted only on the Maturity Date; where the ICULS Coupon Rate will be determined upfront and offer certainty to the Company s coupon commitments for the funds raised as compared to variable rates which is subject to fluctuation; that provides the ability to convert into new ACSM Shares. Entitled Shareholders who subscribe for their entitlements may benefit from any upside from potential future capital appreciation of ACSM Shares when converted since the ICULS conversion price will be fixed at a discount; and Entitled Shareholders who subscribe for their entitlements will be given the opportunity to trade the ICULS, hence may also benefit from any upside from potential capital appreciation as the ICULS are also proposed to be listed and quoted on the Main Market of Bursa Securities. [The rest of this page has been intentionally left blank] 6

4. EFFECTS OF THE PROPOSALS 4.1 Share capital The issuance of the ICULS due to the Proposed Rights Issue will not have any effect on the Company s share capital unless converted. The pro forma effects of the Proposals on the share capital of ACSM are as follows: No. of ACSM Amount Shares (RM) ( 000) (RM 000) As at the date of this announcement 144,000 72,000 To be issued pursuant to the Proposed Bonus Issue 72,000 36,000 Enlarged issued share capital after Proposed Bonus Issue 216,000 108,000 Share premium reclassification pursuant to the Act (1) - 44,012 To be issued pursuant to the full conversion of ICULS (2)(3) 48,485 432,000 Enlarged share capital after conversion of ICULS 264,485 584,012 Notes: (1) Pursuant to the transitional provisions under the Act, the sum of RM44,012,000 standing to the credit of ACSM s share premium account may, within 24 months from 31 January 2017, be utilised by ACSM in the manner as allowed for under the Act, and any remaining amount standing to the credit of ACSM s share premium account shall be reclassified and become part of ACSM s share capital. (2) Based on the Illustrative ICULS Conversion Price of RM8.91 after taking into account the completion of the Proposed Bonus Issue, for illustration purposes only. (3) In the event the Proposed Bonus Issue is not completed for whatsoever reason, the Proposed Rights Issue shall be undertaken on the basis of 3 ICULS for every 1 existing ACSM Share held. Accordingly, the illustrative ICULS conversion price shall be RM13.36 based on a 15.0% discount to TEAP of RM16.24. For illustration purposes only, a total of 32,335,329 new ACSM Shares will be issued based on this ICULS conversion price, resulting in a corresponding increase of RM432,000,000 to the Company s share capital upon full conversion and an enlarged number of 176,335,329 ACSM Shares in issue. [The rest of this page has been intentionally left blank] 7

4.2 Net assets ( NA ), NA per share and gearing Based on the Company s latest audited statement of financial position as at 29 February 2016, the pro forma effects of the Proposals on the Company s NA, NA per share, gearing and CAR are as follows: Pro forma Audited (I) (II) (III) (IV) (V) As at 29 February 2016 After the Proposed Bonus Issue After (I) and the Proposed Rights Issue (1) After (II) and the proposed utilisation (2) After (III) and share premium reclassification (3) After (IV) and full conversion of ICULS (4)(5) (RM 000) (RM 000) (RM 000) (RM 000) (RM 000) (RM 000) Share capital 72,000 108,000 108,000 108,000 152,012 584,012 Share premium 44,012 44,012 44,012 44,012 - - Other reserves 668,806 632,806 628,196 628,196 628,196 628,196 ICULS reserves - - 393,413 393,413 393,413 - Equity attributable to ordinary holders Perpetual notes and sukuk 784,818 784,818 1,173,621 1,173,621 1,173,621 1,212,208 276,000 276,000 276,000 276,000 276,000 276,000 Shareholders' funds 1,060,818 1,060,818 1,449,621 1,449,621 1,449,621 1,488,208 No. of ACSM Shares (000) 144,000 216,000 216,000 216,000 216,000 264,485 NA per share (RM) 7.37 4.91 6.71 6.71 6.71 5.63 CAR (6) 20.2% 20.2% 27.4% 27.4% 27.4% 28.1% Total borrowings 4,908,177 4,908,177 4,948,075 4,793,075 4,793,075 4,753,177 Total cash and cash equivalents 67,250 67,250 499,250 339,640 339,640 339,640 Gearing (7) (times) 4.63 4.63 3.41 3.31 3.31 3.19 Net gearing (7) (times) 4.56 4.56 3.07 3.07 3.07 2.97 Notes: (1) After deducting retained earnings with the estimated expenses of approximately RM4.6 million in relation to the Proposals. On the issuance of the ICULS, the fair value of the ICULS is determined and allocated into its liability and equity components, as the ICULS are accounted for as a compound instrument. The equity component of the ICULS of RM392.10 million represents the difference between the fair value of the ICULS as a whole and the fair value of the liability component of ICULS. Deferred tax asset on the compound financial instrument of RM1.31 million is also added directly to the carrying amount of the equity component. The liability component is initially determined at the fair value of RM39.90 million, which is derived from the present value of all the ICULS coupon obligations throughout its tenure based on the discount rate of 6.7%. (2) Details of the proposed utilisation of the Proposed Rights Issue proceeds are described in Section 5 of this announcement. (3) As a result of the reclassification of RM44,012,000 standing to the credit in ACSM s share premium account which will become part of ACSM s share capital within 24 months from 31 January 2017 by virtue of the transitional provisions under the Act. 8

(4) Based on the Illustrative ICULS Conversion Price of RM8.91 resulting in the issuance of 48,484,848 new ACSM Shares upon full conversion, for illustrative purposes only. (5) In the event the Proposed Bonus Issue is not completed for whatsoever reason, the Proposed Rights Issue shall be undertaken on the basis of 3 ICULS for every 1 existing ACSM Share held. Accordingly, the illustrative ICULS conversion price shall be RM13.36 based on a 15.0% discount to TEAP of RM15.72. For illustration purposes only, a total of 32,335,329 new ACSM Shares will be issued based on this ICULS conversion, the effects of which are reflected in the table below: Pro forma (A) (B) (C) (D) After the After (A) and the After (B) and the After (C) and Proposed Rights Issue proposed utilisation share premium reclassification full conversion of ICULS (RM 000) (RM 000) (RM 000) (RM 000) Share capital 72,000 72,000 116,012 548,012 Share premium 44,012 44,012 - - Other reserves 664,196 664,196 664,196 664,196 ICULS reserves 393,413 393,413 393,413 - Equity attributable to ordinary holders Perpetual notes and sukuk 1,173,621 1,173,621 1,173,621 1,212,208 276,000 276,000 276,000 276,000 Shareholders' funds 1,449,621 1,449,621 1,449,621 1,488,208 No. of ACSM Shares (000) 144,000 144,000 144,000 176,335 NA per share (RM) 10.07 10.07 10.07 8.44 (6) Computed based on the Company s net assets excluding hedging reserves divided by the total value of receivables. (7) Gearing was computed by dividing the total borrowings with shareholders funds. Net gearing was computed by dividing the total borrowings less total cash and cash equivalents with shareholders funds. 4.3 Earnings and EPS The Proposals are not expected to have any material effect on the earnings and EPS of ACSM for the FYE 28 February 2018. The EPS of the Company is expected to reduce proportionately as a result of the Bonus Shares issued pursuant to the Proposed Bonus Issue. Further, the EPS in future financial years may be affected by the conversion of the ICULS subject to the level of returns to be generated from the utilisation of the proceeds raised from the Proposed Rights Issue. However, the extent of dilution to the EPS is dependent on, amongst others, the actual number of ICULS converted and the future earnings of ACSM after incorporating coupon payments for the ICULS during its tenure. Barring unforeseen circumstances, the proposed utilisation of proceeds arising from the Proposed Rights Issue is expected to contribute positively to the future earnings of the Company. 9

4.4 Substantial shareholders shareholding The issuance of the ICULS pursuant to the Proposed Rights Issue will not have any effect on the ordinary shareholdings of the Company s substantial shareholders. Their shareholdings will only be affected based on the levels of ICULS conversion during its tenure. Assuming all Entitled Shareholders fully subscribe for their respective entitlements, there will be no dilutive impact on the Company s substantial shareholders shareholding on the Maturity Date when all the ICULS are mandatorily converted into new ACSM Shares. Assuming the full subscription of ICULS by all the Entitled Shareholders, the pro forma effects of the Proposals on the substantial shareholders shareholdings in the Company based on Register of Substantial Shareholders as at 1 March 2017 (being the latest available information in respect of shareholdings) are as follows: Name As at 1 March 2017 (I) After the Proposed Bonus Issue (II) After (I) and the full conversion of ICULS (2) Direct Indirect Direct Indirect Direct Indirect No. of ACSM Shares % No. of ACSM Shares % No. of ACSM Shares % No. of ACSM Shares % No. of ACSM Shares % ( 000) ( 000) ( 000) ( 000) ( 000) ( 000) No. of ACSM Shares % AEON Financial Service Co., Ltd 85,968 59.70 - - 128,952 59.70 - - 157,897 (2) 59.70 AEON Co., Ltd - - 89,064 (1) 61.85 - - 133,596 (1) 61.85 163,584 (1)(2) 61.85 Notes: (1) Deemed interested in the ACSM Shares held by AEON Financial Service Co., Ltd and AEON Co. (M) Bhd. by virtue of Section 8 of the Act. (2) In the event that the Proposed Bonus Issue is not completed, the number of ACSM Shares held directly by AEON Financial Service Co., Ltd and indirectly by AEON Co., Ltd shall be 105.27 million and 109.63 million respectively with no change to the shareholdings. 4.5 Existing convertible securities As at the date of this announcement, the Company does not have any convertible securities in issue. 10

5. UTILISATION OF PROCEEDS The Proposed Rights Issue is expected to raise gross proceeds of RM432,000,000. The Company intends to utilise the proceeds arising from the Proposed Rights Issue in the following manner: Description Amount (RM Million) Estimated timeframe for the utilisation of the proceeds from the date of receipt Repayment of bank borrowings (i) 155.0 within 6 months Working capital (ii) 272.4 within 6 months Estimated expenses for the Proposals (iii) 4.6 within 1 month Total 432.0 (i) Repayment of bank borrowings As at 28 February 2017 (being the latest available unaudited information in respect of borrowings), the total bank borrowings of ACSM amount to RM5.26 billion. ACSM intends to utilise part of the proceeds raised from the Proposed Rights Issue to repay its existing long-term bank borrowings which are expected to be due for repayment within 6 months from the date of receipt of the proceeds. The partial repayment of ACSM s long-term bank borrowings is expected to result in an annual net interest savings of approximately RM590,000 to ACSM, based on the average interest rate of approximately 3.88% per annum of these existing long-term borrowings and after taking into account the ICULS coupon payments on an equivalent amount of the repayment of bank borrowings. These existing long-term borrowings were utilised for the Company s working capital. (ii) Working capital Part of the proceeds raised from the Proposed Rights Issue are expected to be utilised by ACSM for its working capital which consists primarily of the provision of financing to its customers incurred in the ordinary course of ACSM s day-to-day business operations. (iii) Defrayment of estimated expenses in connection with the Proposals The estimated expenses relating to the Proposals of approximately RM4.6 million comprises, amongst others, professional fees, fees payable to the relevant authorities and costs related to convening the EGM in connection with the Proposals. Any surplus or shortfall of funds for the payment of expenses for the Proposals will be utilised for working capital or be funded from working capital respectively. Pending the utilisation of proceeds by ACSM, the proceeds will be placed in interest-bearing deposit accounts with licensed financial institutions or as investment in money markets as the Board may deem fit. 11

6. APPROVALS REQUIRED AND INTER-CONDITIONALITY The Proposals are subject to, amongst others, the following approvals being obtained: (i) (ii) the Securities Commission Malaysia ( SC ) for the issuance of the ICULS under the SC s Guidelines on Issuance of Private Debt Securities and Sukuk to Retail Investors; Bursa Securities for: (a) (b) (c) the listing of and quotation for the Bonus Shares to be issued pursuant to the Proposed Bonus Issue on the Main Market of Bursa Securities; the admission of the ICULS on the Official List of Bursa Securities and the listing of and quotation for the ICULS on the Main Market of Bursa Securities; and the listing of and quotation for the new ACSM Shares to be issued upon conversion of ICULS on the Main Market of Bursa Securities; (iii) (iv) shareholders of the Company for the Proposals at an EGM to be convened; and any other relevant authorities and/or parties, if required. The Proposed Rights Issue is not conditional upon the completion of the Proposed Bonus Issue, and vice versa. The Proposals are not conditional upon any other proposal undertaken or to be undertaken by the Company. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and/or major shareholders of the Company and/or persons connected to them, as defined in the Listing Requirements of Bursa Securities, have any interest, whether direct or indirect, in the Proposals beyond their respective entitlements as shareholders of the Company, for which all the existing shareholders of the Company are also entitled to. 8. ADVISER CIMB has been appointed by the Company as the Principal Adviser and Lead Arranger for the Proposals. 9. DIRECTORS STATEMENT The Board having considered, among other things, the rationale and objectives for the Proposals, utilisation of the proceeds raised from the Proposed Rights Issue and the pro forma effects of the Proposals, are of the opinion that the Proposals are in the best interest of the Company. 10. TIMING OF SUBMISSION TO THE AUTHORITIES The relevant applications are proposed to be submitted to the relevant authorities within 2 months from the date of this announcement. 12

11. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances, the Proposals are expected to be completed during the third quarter of 2017. This announcement is dated 23 March 2017. 13

Issuer : ACSM Type of Offering : ICULS Appendix I Indicative Principal Terms and Conditions of ICULS Issue Price : 100% of the nominal value of RM1.00 each. Issue Date : The issue date of the ICULS shall be a market day and shall take place within the period commencing from the date of fulfilment of the conditions precedent for issuance of the ICULS and ending no later than one (1) year from the date of approval by the SC. Tenure / Maturity : Three (3) years / third (3rd) anniversary from the ICULS issue date ( Maturity ). Form and Constitution : The ICULS will be issued in registered form and constituted by a trust deed, and represented by a global certificate. Coupon : Minimum 3.5% per annum on the nominal value of the ICULS payable on an annual basis. Conversion Price : Discount to TEAP of a minimum of 15.0%, subject to finalisation. Conversion Period : The ICULS may be converted at any time within a period of three (3) years commencing from and including the ICULS issue date and expiring on Maturity. Status and ranking of the ICULS Mandatory conversion : The ICULS shall constitute direct, unconditional, unsecured and unsubordinated obligations of the Company and subject to the provisions contained in the trust deed, at all times rank equally, without discrimination, preference or priority between themselves and all present and future direct, unconditional, unsecured and unsubordinated debts and obligations of the Company except those which are preferred by law. : Unless the ICULS are converted prior to Maturity, the ICULS will be mandatorily converted into new ACSM Shares at the conversion price upon Maturity. Mode of conversion : The conversion of the ICULS will not require any cash payment by the ICULS holders. The ICULS Conversion Price shall be satisfied by surrendering the ICULS with an aggregate nominal value equivalent to the ICULS Conversion Price for cancellation by the Issuer. Any fractional new ordinary shares arising from the conversion of the ICULS shall be disregarded. Rights of ICULS : The ICULS holders are not entitled to any voting rights and shall not have any participating rights in any distribution and/or offer of securities in the Company until and unless such ICULS holders convert their ICULS into new ACSM Shares. Board lot : For purposes of trading on Bursa Securities, a board lot of ICULS shall be 100 units of ICULS, unless otherwise revised by the relevant authorities. 14

Appendix I Indicative Principal Terms and Conditions of ICULS Ranking of new ACSM Shares to be issued pursuant to the conversion of ICULS Adjustments in the ICULS Conversion Price and nominal value Amendment to the ICULS holders rights Participation in any distribution and/or offer of further securities : The new ACSM Shares to be issued pursuant to the conversion of ICULS shall, upon issue and allotment rank equally in all respects with the then existing ACSM Shares, except that they shall not be entitled to any dividends, rights, allotments and/or any other distributions that may be declared, made or paid where the entitlement date is before the date of allotment of the new ACSM Shares. : Necessary adjustments to the ICULS Conversion Price and/or the nominal value shall be made in the event of any alteration in the Company s share capital on or before the Maturity, whether by way of rights issue, bonus issue, consolidation of shares, subdivision of shares or reduction of capital howsoever being effected, in accordance with the provisions of the trust deed. : Save as otherwise provided in the trust deed and consented to in writing by ACSM, approval of the ICULS holders by way of special resolution is required to sanction any modification, variation or arrangement requested by ACSM in respect of the rights of the ICULS holders. : The ICULS holders are not entitled to any dividends, rights, allotments, distribution and/or offer of securities in the Company until and unless such ICULS holders have validly converted the ICULS into new ACSM Shares, and such ACSM Shares are allotted prior to the entitlement date of such dividend, right, allotment, distribution and/or offer of securities. Governing laws : Laws of Malaysia and the exclusive jurisdiction of the Courts of Malaysia. Redemption : The ICULS will not be redeemable. Rating : The ICULS will not be rated. Listing : ICULS will be listed on Main Market of the Bursa Securities. 15