V.S. INDUSTRY BERHAD ( VSIB OR COMPANY ) (I) (II) PROPOSED SHARE SPLIT; AND PROPOSED AMENDMENT 1. INTRODUCTION On behalf of the Board of Directors of VSIB ( Board ), Maybank Investment Bank Berhad ( Maybank IB ) wishes to announce that VSIB proposes to undertake the following Proposals: (i) (ii) proposed share split involving the subdivision of every one (1) existing ordinary share of RM1.00 each in VSIB ( VSIB Shares ) held on an entitlement date to be determined ( Entitlement Date ) into five (5) ordinary shares of RM0.20 each in VSIB ( Subdivided Shares ) ( Proposed Share Split ); and proposed amendment to the Memorandum of Association ( Memorandum ) of VSIB to facilitate the implementation of the Proposed Share Split ( Proposed Amendment ). (The Proposed Share Split and the Proposed Amendment are collectively referred to as the Proposals.) 2. DETAILS OF THE PROPOSALS 2.1 Proposed Share Split 2.1.1 Basis and number of the Subdivided Shares The Proposed Share Split entails the subdivision of every one (1) existing VSIB Share held by the entitled shareholders, whose names appear in the Record of Depositors of the Company as at the close of business on the Entitlement Date ( Entitled Shareholders ), into five (5) Subdivided Shares. As at 7 July 2015, being the latest practicable date ( LPD ) prior to this Announcement, the issued and paid-up share capital of the Company is RM229,859,506 comprising 229,859,506 VSIB Shares (including 1,149,336 treasury shares held by the Company). Upon completion of the Proposed Share Split, the issued and paid-up share capital of the Company shall be RM229,859,506 comprising 1,149,297,530 Subdivided Shares. No suspension will be imposed on the trading of VSIB Shares on Bursa Malaysia Securities Berhad ( Bursa Securities ) to implement the Proposed Share Split. 2.1.2 Ranking of the Subdivided Shares The Subdivided Shares shall, upon allotment and issuance, rank equally in all respects with each other. 2.1.3 Listing of and quotation for the Subdivided Shares An application will be made to Bursa Securities for the submission of and quotation for the VSIB Shares into Subdivided Shares pursuant to the Proposed Share Split. 1
The Subdivided Shares will be listed and quoted on the Main Market of Bursa Securities on the next market day following the Entitlement Date. The notice of allotment for the Subdivided Shares will be issued and despatched to the Entitled Shareholders within four (4) market days after the listing of and quotation for the Subdivided Shares on the Main Market of Bursa Securities, or such other period as may be prescribed by Bursa Securities. As the Subdivided Shares are prescribed securities under Section 14(5) of the Securities Industry (Central Depositories) Act, 1991 ( SICDA ), the Subdivided Shares will be subjected to the SICDA and the Rules of the Bursa Malaysia Depository Sdn Bhd. Accordingly, the Subdivided Shares will be credited into the respective Central Depository System accounts of the Entitled Shareholders and no physical share certificate(s) will be issued. 2.2 Proposed Amendment VSIB proposes to amend its Memorandum to facilitate the implementation of the Proposed Share Split. The necessary amendment to the Memorandum is as follows: First sentence of Clause 5 of the Memorandum Existing The capital of the Company is RM500,000,000.00 divided into 500,000,000 shares of RM1.00 each. Proposed Amendment The capital of the Company is RM500,000,000.00 divided into 2,500,000,000 shares of RM0.20 each. 3. RATIONALE OF THE PROPOSALS 3.1 Proposed Share Split The Proposed Share Split is expected to enhance the marketability and trading liquidity of the ordinary shares of VSIB on Bursa Securities as a result of the increase in the number of shares in issue. The Proposed Share Split will result in an adjustment to the market price of VSIB Shares, making the shares more affordable and appeal to a wider group of public shareholders and/or investors to participate in the growth of the Company. The Proposed Share Split will also enable the existing shareholders of the Company to have a larger number of ordinary shares in VSIB while maintaining their percentage of equity interest in VSIB. 3.2 Proposed Amendment The Proposed Amendment is to facilitate the implementation of the Proposed Share Split. 2
4. EFFECTS OF THE PROPOSALS The Proposed Amendment will not have any effect on the issued and paid-up share capital, substantial shareholders shareholding in the Company, consolidated net assets ( NA ) per share, gearing, consolidated earnings and earnings per share ( EPS ) and convertible securities of VSIB. 4.1 Issued and paid-up share capital The proforma effects of the Proposed Share Split on the issued and paid-up share capital of the Company are as follows: Issued and paid-up share capital as at the LPD Par value (RM) No. of VSIB Shares Amount (RM) 1.00 229,859,506 229,859,506 After the Proposed Share Split 0.20 1,149,297,530 229,859,506 4.2 Substantial shareholders shareholding The Proposed Share Split will not have any effect on the percentage of the substantial shareholders shareholding in VSIB. However, the number of shares held by the substantial shareholders in VSIB will increase proportionately as a result of the Proposed Share Split. 4.3 NA per share and gearing Based on the latest audited consolidated statement of financial position of the Company as at 31 July 2014 and on the assumption that the Proposed Share Split had been effected on that date, the proforma effects of the Proposed Share Split on the NA per share and gearing of VSIB and its subsidiaries ( VSIB Group ) are as follows: (I) (II) (III) Adjustments pursuant to the exercise of Audited as at 31 July 2014 employees share option scheme ( ESOS ) of VSIB (1) After (I) and placement (2) After (II) and the Proposed Share Split (RM 000) (RM 000) (RM 000) (RM 000) Share capital 186,355 209,280 229,860 229,860 Reserves 339,805 357,698 415,939 415,719 (3) Total equity attributable to 526,160 566,978 645,799 645,579 owners of the Company Non-controlling interests 114,829 114,829 114,829 114,829 Total equity 640,989 681,807 760,628 760,408 Number of shares in issue 185,225 208,131 228,711 1,143,551 ( 000) (4) NA per share (RM) (5) 2.8 2.7 2.8 0.6 Total borrowings 409,791 409,791 409,791 409,791 Gearing (times) (6) 0.8 0.7 0.6 0.6 3
Notes: (1) After taking into account 22,925,000 VSIB Shares issued pursuant to the exercise of the ESOS options from 1 August 2014 up to the LPD. Out of the 22,925,000 VSIB Shares issued, 20,667,000 VSIB Shares were issued pursuant to the previous ESOS which have been terminated on 8 May 2015 and the remaining 2,258,000 VSIB Shares were issued pursuant to the ESOS which became effective from 12 May 2015 ( New ESOS Options ). (2) After taking into account 20,580,000 VSIB Shares issued pursuant to the placement exercise which was completed on 19 June 2015. (3) After deducting the estimated expenses in relation to the Proposals of approximately RM0.22 million. (4) After excluding treasury shares held by the Company. (5) Total equity attributable to owners of the Company divided by number of shares in issue. (6) Total borrowings divided by total equity attributable to owners of the Company. 4.4 Earnings and EPS The Proposed Share Split is not expected to have any material effect on the consolidated earnings of VSIB for the financial year ending 31 July 2015. However, there will be a corresponding dilution in the EPS of the VSIB Group as a result of the increase in the number of ordinary shares of VSIB pursuant to the Proposed Share Split. 4.5 Convertible securities As at the LPD, save for the New ESOS Options, the Company does not have any other convertible securities. The Proposed Share Split will give rise to adjustments to the option price and/or the number of VSIB Shares comprised in the New ESOS Options which are yet to be exercised or vested. Such adjustments arising from the Proposed Share Split will only be finalised by the Board on the Entitlement Date. The holders of the unexercised New ESOS Options will be notified of such adjustment within fourteen (14) calendar days from the adjustment. 5. APPROVALS REQUIRED The Proposals are subject to the following approvals being obtained: (i) (ii) (iii) Bursa Securities; shareholders of VSIB at an extraordinary general meeting to be convened; and any other relevant authorities, if required. The Proposed Share Split and the Proposed Amendment are inter-conditional upon each other. The Proposals are not conditional upon any other corporate exercise/scheme of the Company. 4
6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and major shareholders of the Company as well as persons connected to them have any interest, direct and/or indirect, in the Proposals, save for their respective entitlements under the Proposed Share Split, which are also available to all other shareholders of the Company. 7. DIRECTORS STATEMENT After having considered the rationale and effects of the Proposals, the Board is of the opinion that the Proposals are in the best interest of the Company. 8. ADVISER Maybank IB has been appointed as the Principal Adviser to the Company for the Proposals. 9. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances, the Proposals are expected to be completed by third (3 rd ) quarter of 2015. 10. APPLICATION TO THE RELEVANT AUTHORITY Barring any unforeseen circumstances, the application to the relevant authority for the Proposed Share Split is expected to be made within one (1) month from the date of this Announcement. This Announcement is dated 14 July 2015. 5