MATRIX CONCEPTS HOLDINGS BERHAD (414615-U) (Incorporated in Malaysi JOINT VENTURE CUM SHAREHOLDERS AGREEMENT AND SUBSCRIPTION AGREEMENT BETWEEN MATRIX CONCEPTS HOLDINGS BERHAD, NISSIN EX.CO 1. INTRODUCTION Matrix Concepts Holdings Berhad ( ) has on 13 April 2017 entered into a Joint Venture Agreement cum Shareholders Agreement ( JVSA ) and Subscription Agreement ( SA ) with Nissin Ex. Co, Ltd ( ) and Nihon House Corporation ( ) to jointly venture into the manufacturing of prefabricated building materials using the technology of Industrialized Building Systems ( IBS ) to be undertaken by the joint venture company, Matrix IBS Sdn Bhd ( MIBS ). 2. INFOATION ON AND is a Japanese multi-trading company, specializing in selling flooring, paneling and decking products for use in residential and commercial projects whereas is also a Japanese company with its principal business in providing pre-cast concrete materials as well as marketing, selling and installing prefabricated houses under the brand name of NC House. 3 INFOATION ON MIBS MIBS is a company incorporated in Malaysia and a wholly-owned subsidiary of with an existing issued share capital of two(2) ordinary shares equivalent to 2/-. Its intended business is the manufacturing, marketing and sale of prefabricated concrete materials using the IBS technologies. 4 GENERAL DETAILS OF JVSA AND SA The salient details pertaining to the JVSA and SA, which are inter-related, are as follows:- Shareholding Structure Proposed shareholding structure of MIBS with an investment ratio of (80%), (12%) and (8%) ( collectively referred to as the Shareholders ) pursuant to the SA are as appended below :- Proposed Capital outlay at issue price of 1/- per share Current share capital of MIBS Initial share capital of MIBS Additional share capital of MIBS Total proposed share capital of MIBS (80%) (12%) (8%) TOTAL 2 - - 2 1,791,998 268,800 179,200 2,239,998 2,208,000 331,200 220,800 2,760,000 4,000,000 600,000 400,000 5,000,000 Upon the issuance and allotment of the shares under the Initial Share Capital as described above, the enforcement of JVSA shall take effect ( Effective Date ).
b) Shareholders Advance The Shareholders shall provide cash advances to MIBS ( Advance ) to assist in its start-up operations as follows:- SHAREHOLDERS (80%) (12%) (8%) TOTAL JVSA Advance to MIBS 18,000,000 2,700,000 1,800,000 22,500,000 MIBS shall pay interest of 4% p.a ( 4% Interest ) in respect of the above Advance to the Shareholders and the Advance is repayable in the manner as described in paragraph (c) below c) Repayment of Advance and dividend policy i) The distribution of profits of MIBS to the Shareholders out of the Proft After Tax (PAT ) shall be in the following manner:- Financial period of MIBS Distribution percentage of the PAT 1 st to 3 rd financial year 40% of PAT 4 th to 6 th financial year 60% of PAT From 7 th financial year onwards 80% of PAT ii) iii) The Board of Directors of MIBS in making any recommendations shall take into considerations the financial requirements and the cash flow position of MIBS without adversely affect its business and any restrictions imposed by any relevant legislations. Subject to paragraph (ii) above, the priority of distribution of profits to the Shareholders shall be as follows:- 1.1 Firstly, to settle the 4% Interest of the Advance made by each of the Shareholders for that financial year; 1.2 The balance of monies after settlement of the above 4% Interest, shall be used to repay the principal of Advance made by each of the Shareholders for that financial year based on the following formula- C=B- (4% Interest x A) Where :- A - means the Advance made by the particular shareholder for that financial year; B - means the respective distribution percentage of the PAT for the respective financial period of the Company in accordance with paragraph (i) above C - means the repayment of principal of Advance for that financial year. 1.3 The final balance of monies after full settlement of payment under Paragraph 1.1 and 1.2 above, shall be distributed as payment of dividends to the Shareholders. For the avoidance of doubt, MIBS shall not declare any payment of dividends prior to the full settlement of the Advance and the 4% Interest. 2
d) Moratorium period Subject to the terms and conditions more particularly described in the JVSA, no shareholder of MIBS shall be entitled during the first five(5) years from the Effective Date ( Moratorium Period ) to sell, transfer, assign, charge, mortgage, encumber, grant options over or otherwise dispose of or encumber any of their shares. After the Moratorium Period, the Shareholders shall be entitle to sell, transfer, assign, charge, mortgage, encumber, grant options over or otherwise dispose of or encumber any of their shares subject to the terms and conditions more particularly described in the JVSA. e) Composition of Board of Directors in MIBS The Board s composition for MIBS shall be a total of five(5) members comprising three(3) representative directors from and one(1) representative director each from and. 5. OBLIGATIONS AND RESPONSIBILITY OF THE SHAREHOLDERS Primary obligations and responsibilities of each shareholder are as described below:- b) c) To provide guaranteed sales ( in terms of the volume of orders), subject always to the capability and availability of production and delivery by MIBS for the first three(3) years from the Effective Date and for the subsequent years, MIBS shall be given the priority to participate in the projects undertaken by and its subsidiary companies. To act as coordinator for the business especially between the countries of Japan and Malaysia due to the different business culture and technical skill and knowledge of each country To provide and share its know-how of all related technical skills and knowledge for the development of the IBS in connection with the conduct of the business. 6 RATIONALE ON THE JVSA The purpose of the JVSA to establish IBS in Malaysia based on an agreed business plan which shall include the local production of prefabricated building materials and to construct buildings from these materials which are suitable for the housing industry and market these materials in Malaysia by utilizing s technical skills and knowledge. The JVSA is established based on the following principles and rationale :- The venture into IBS manufacturing is a natural progression for the Group to see an upgrade in the Group s construction processes in line with the latest technology in housing construction for better quality control as well as to bring greater value to the customers; 3
The implementation of IBS is in line with Malaysia s Construction Industry Transformation Plan 2016-2020 which propagate the acceleration of the adoption of IBS mechanization and modern practices. It had been highlighted by Construction Industry Development Board ( CIDB ) that they have intention to enforce all new development in Klang Valley to achieve 50% IBS score for private sector and 70% IBS score for public sector by 2018. By 2020, CIDB target to expand this enforcement to the whole of west Malaysia. Housing contractor which achieve 50 IBS score as prescribed in Malaysian Budget 2016 is entitled with the exemption of 0.125% construction levy; The integration of the new construction methodologies with s in-house construction arm using IBS technologies will shorten the construction duration of the properties by up to 30% with better worksite efficiency. The implementation of IBS is expected to reduce materials wastage and produce higher quality products; and It has always been s intention to inculcate sustainability in its development of properties within its group as such IBS techniques shall be localized and assist to promote local employment. In addition, the use of IBS system reduce dependency on foreign workers which address the issue of labour shortage in the construction sector. 7. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the Directors or major shareholders or persons connected to them has any interest, whether direct or indirect in the JVSA and SA 8. b) c) FINANCIAL EFFECTS OF JVSA AND SA Share capital Except for the increase in the share capital of MIBS, the JVSA and SA will not have any effect on the issued and paid up capital of. Net Assets (NA) and Earning per share The JVSA and SA will not have any material effect on the NA and Earnings per share of Group for the financial year ended 31 March 2017. Gearing The Transactions has no effect on the gearing of Group for the financial year ended 31 March 2017. 9. DIRECTORS STATEMENT The Board, having considered all aspects of the JVSA and SA, is of the view that the JVSA and SA are in the best interest of. 10. APPROVAL The JVSA and SA do not require the approval of shareholders of or any relevant authorities. 4
11. DOCUMENTS FOR INSPECTION A copy of the JVSA and SA are available for inspection at the Registered Office of located at Wisma Matrix, No.57, Jalan Tun Dr Ismail, 70200 Seremban, Negeri Sembilan during normal business hours on Mondays to Fridays for a period of 3 months from the date of this announcement. This announcement is dated 13 April 2017.. 5