THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to take, you should consult your stockbroker, solicitor, accountant, bank manager or other professional advisers immediately. Bursa Malaysia Securities Berhad has not perused this Circular prior to its issuance, and takes no responsibility for the contents of this 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 Circular. HUA YANG BERHAD (Company No. 44094-M) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED BONUS ISSUE OF 18,000,000 NEW ORDINARY SHARES OF RM1.00 EACH IN HUA YANG BERHAD ( HYB OR THE COMPANY ) ( HYB SHARE(S) OR SHARE(S) ) ( BONUS SHARE(S) ) ON THE BASIS OF ONE (1) BONUS SHARE FOR EVERY FIVE (5) EXISTING SHARES HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ( PROPOSED BONUS ISSUE ) AND NOTICE OF EXTRAORDINARY GENERAL MEETING Adviser The Notice of the Extraordinary General Meeting ( EGM ) of Hua Yang Berhad ( HYB or the Company ), which has been scheduled to be held at the Head Office of the Company at 4th Floor, C-21 Jalan Medan Selayang 1, Medan Selayang, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 19 August 2010 at 11.00 a.m., or immediately after the conclusion or any adjournment of the Thirty-First (31 st ) Annual General Meeting of the Company, whichever is the later, together with the Form of Proxy are enclosed herewith. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and to vote on his/her behalf. In such event, the Form of Proxy must be lodged at the registered office of HYB at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh, Perak Darul Ridzuan, not less than forty-eight (48) hours before the time stipulated for holding the EGM, as indicated below. The lodging of the Form of Proxy does not preclude you from attending and voting in person at the EGM, should you subsequently wish to do so. Last date and time for lodging the Form of Proxy.. : Tuesday, 17 August 2010 at 11.00 a.m. Date and time of the EGM... : Thursday, 19 August 2010 at 11.00 a.m. This Circular is dated 28 July 2010
DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular:- Act : Companies Act, 1965 Board : The Board of Directors of HYB Bonus Share(s) : The 18,000,000 new HYB Shares to be issued pursuant to the Proposed Bonus Issue Bursa Depository : Bursa Malaysia Depository Sdn Bhd (165570-W) Bursa Securities : Bursa Malaysia Securities Berhad (635998-W) Circular : This circular to the shareholders of HYB dated 28 July 2010 Director(s) : The directors for the time being of the Company within the context of Section 4 of the Act EGM : Extraordinary General Meeting Entitlement Date : The date as at the close of business (to be determined and announced later by the Board) on which shareholders of HYB must be registered as a member and whose names appear in the Record of Depositors in order to participate in the Proposed Bonus Issue EPS : Earnings per Share FPE : Financial period ended FYE : Financial year(s) ended / ending, as the case may be HYB or the Company : Hua Yang Berhad (44094-M) HYB Group or the Group : HYB and its subsidiaries, collectively HYB Share(s) or Share(s) : Ordinary share of RM1.00 each in HYB Listing Requirements : The Main Market Listing Requirements of Bursa Securities LPD : 16 July 2010, being the latest practicable date prior to the printing of this Circular NA : Net Assets OSK or the Adviser : OSK Investment Bank Berhad (14152-V) Proposed Bonus Issue : Proposed bonus issue of 18,000,000 Bonus Shares on the basis of one (1) Bonus Share for every five (5) existing HYB Shares held on the Entitlement Date Record of Depositors : A record of depositors established by Bursa Depository under the Rules of Depository, as amended from time to time i
DEFINITIONS (CONT D) RM and sen : Ringgit Malaysia and sen, respectively Words incorporating the singular shall, where applicable, include the plural and vice versa. Words incorporating the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Any reference to persons shall include corporations, unless otherwise specified. Any reference in this 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 Circular shall be a reference to Malaysian time, unless otherwise specified. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ii
TABLE OF CONTENTS PAGE LETTER TO THE SHAREHOLDERS OF HYB CONTAINING:- 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED BONUS ISSUE 2 3. RATIONALE AND JUSTIFICATIONS FOR THE PROPOSED BONUS ISSUE 3 4. EFFECTS OF THE PROPOSED BONUS ISSUE 3 5. HISTORICAL SHARE PRICES 5 6. APPROVALS REQUIRED / OBTAINED 5 7. INTER-CONDITIONALITY 5 8. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM 5 9. ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION 6 10. CORPORATE PROPOSALS ANNOUNCED BUT PENDING COMPLETION 6 11. BOARD S RECOMMENDATION 6 12. EGM 6 13. FURTHER INFORMATION 7 APPENDICES I. CONFIRMATION LETTER FROM MESSRS ERNST & YOUNG 8 II. ADDITIONAL INFORMATION 16 NOTICE OF EXTRAORDINARY GENERAL MEETING FORM OF PROXY ENCLOSED ENCLOSED iii
HUA YANG BERHAD (Company No. 44094-M) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office: 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh Perak Darul Ridzuan 28 July 2010 Board of Directors: Tan Sri Dato Seri Dr. Ting Chew Peh (Chairman / Independent Non-Executive Director) Ho Mook Leong (Chief Executive Officer / Executive Director) Ho Wen Yan (Chief Operating Officer / Executive Director) Dato Tan Bing Hua (Senior Independent Non-Executive Director) Tan Sri Dato Seri Prof. Dr. Yom Ahmad Bin Ngah Ahmad (Independent Non-Executive Director) Chew Po Sim (Non-Independent Non-Executive Director) Chew Hoe Soon (Non-Independent Non-Executive Director) To: The Shareholders of Hua Yang Berhad Dear Sirs/Madam, PROPOSED BONUS ISSUE OF 18,000,000 BONUS SHARES ON THE BASIS OF ONE (1) BONUS SHARE FOR EVERY FIVE (5) EXISTING HYB SHARES HELD ON THE ENTITLEMENT DATE 1. INTRODUCTION On 16 July 2010, OSK had, on behalf of the Board, announced that the Company proposes to undertake a bonus issue of up to 18,000,000 Bonus Shares on the basis of one (1) Bonus Share for every five (5) existing Shares held by the entitled shareholders of the Company on the Entitlement Date. On 20 July 2010, OSK had, on behalf of the Board made an application to Bursa Securities for the listing of and quotation for the Bonus Shares on the Main Market of Bursa Securities. Upon obtaining all approvals, the Bonus Shares will be listed and quoted on the Main Market of Bursa Securities on the next market day after the Entitlement Date. THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH DETAILS ON THE PROPOSED BONUS ISSUE AND TO SEEK YOUR APPROVAL FOR THE RESOLUTION PERTAINING TO THE PROPOSED BONUS ISSUE TO BE TABLED AT THE FORTHCOMING EGM TO BE CONVENED. THE NOTICE OF THE FORTHCOMING EGM AND THE FORM OF PROXY ARE ENCLOSED TOGETHER WITH THIS CIRCULAR. SHAREHOLDERS OF HYB ARE ADVISED TO READ AND CAREFULLY CONSIDER THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES CONTAINED HEREIN BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED BONUS ISSUE TO BE TABLED AT THE FORTHCOMING EGM. 1
2. DETAILS OF THE PROPOSED BONUS ISSUE 2.1 Basis and Number of Bonus Shares The Proposed Bonus Issue will entail an issuance of 18,000,000 Bonus Shares to be credited as fully paid-up, on the basis of one (1) Bonus Share for every five (5) existing Shares held by entitled shareholders of the Company as at the close of business on the Entitlement Date. Based on the issued and paid-up share capital of the Company of RM90,000,000 comprising 90,000,000 Shares, 18,000,000 Bonus Shares shall be issued pursuant to the Proposed Bonus Issue. Fractional entitlements arising from the Proposed Bonus Issue, if any, shall be dealt in such manner as the Board shall in their absolute discretion deems fit and expedient in the best interest of the Company. 2.2 Capitalisation of Reserves The Proposed Bonus Issue shall be wholly capitalised from the Company s share premium, capital redemption reserves and retained earnings accounts. Based on the Company s audited financial statements for the FYE 31 March 2010 and the latest unaudited results for the first quarter FPE 30 June 2010, the share premium, capital redemption reserve and retained earnings balances of the Company are as follows:- Share Premium Capital Redemption Reserves Retained Earnings Total Company Level RM 000 RM 000 RM 000 RM 000 Audited as at 31 March 2010 6,697 500 10,576 17,773 Final dividend (1) - - (2,025) (2,025) Interim dividend (2) - - 12,525 12,525 Amount to be capitalised for the Proposed Bonus Issue Estimated expenses for the Proposed Bonus Issue (6,697) (500) (10,803) (18,000) - - (90) (90) Balance after the Proposed Bonus Issue - - 10,183 10,183 Share Premium Capital Redemption Reserves Retained Earnings Total Company Level RM 000 RM 000 RM 000 RM 000 Unaudited as at 30 June 2010 6,697 500 23,682 30,879 Final dividend (1) - - (2,025) (2,025) Amount to be capitalised for the Proposed Bonus Issue Estimated expenses for the Proposed Bonus Issue (6,697) (500) (10,803) (18,000) - - (90) (90) Balance after the Proposed Bonus Issue - - 10,764 10,764 2
Notes:- (1) (2) Being the first and final net dividend of RM0.0225 per share proposed, in respect of FYE 31 March 2010. Being the net interim dividend received in respect of the FYE 31 March 2011 from the following subsidiary companies of HYB:- Subsidiary companies RM 000 Agro Mod Industries Sdn Bhd 6,000 Grandeur Park Sdn Bhd 5,625 Prisma Pelangi Sdn Bhd 900 Total 12,525 The Board confirms that the reserves of the Company (after adjusting for dividend payments from the subsidiaries of HYB) are adequate for the capitalisation of the Proposed Bonus Issue based on the latest audited financial statement as well as the latest quarterly report. The Reporting Accountants of the Company, Messrs Ernst & Young had vide its letter dated 16 July 2010, as enclosed in Appendix I of this Circular, confirmed that, based on the financial information extracted from the audited financial statements of the Company for the FYE 31 March 2010 and the unaudited results for the FPE 30 June 2010, the Company has sufficient reserves in its share premium, capital redemption reserves and retained earnings accounts for the capitalisation of the Proposed Bonus Issue. The reserves required for the capitalisation of the Proposed Bonus Issue are unimpaired by losses on a consolidated basis and the Proposed Bonus Issue will not be implemented in stages over a period of time. 2.3 Ranking of the Bonus Shares The Bonus Shares shall, upon allotment and issuance, rank pari passu in all respects with the existing HYB Shares, save and except the new HYB 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 precedes the date of allotment of such new Bonus Shares. 3. RATIONALE AND JUSTIFICATION FOR THE PROPOSED BONUS ISSUE The Proposed Bonus Issue aims to reward the existing shareholders of the Company for their loyalty and continuing support, by enabling them to have a greater participation in the equity of the Company in terms of number of shares held, whilst maintaining their percentage of equity interest. In addition, the Proposed Bonus Issue is expected to improve the trading liquidity of HYB Shares on Bursa Securities and increase the capital base of the Company. 4. EFFECTS OF THE PROPOSED BONUS ISSUE 4.1 Share Capital The proforma effects of the Proposed Bonus Issue on the issued and paid-up share capital of HYB are as follows:- Issued and paid-up share capital No. of Shares RM As at 30 June 2010 90,000,000 90,000,000 To be issued pursuant to the Proposed Bonus Issue 18,000,000 18,000,000 After the Proposed Bonus Issue 108,000,000 108,000,000 3
4.2 NA and Gearing Based on the audited consolidated balance sheets of HYB as at 31 March 2010, the proforma effects of the Proposed Bonus Issue on the NA and gearing of HYB are as follows:- Proforma I Audited as at After the 31 March 2010 Proposed Bonus Issue (RM 000) (RM 000) Share Capital 90,000 108,000 Share Premium 6,697 - Retained Earnings 98,627 ^ 85,709 Capital Redemption Reserves 500-195,824 193,709 Minority Interest 1,760 1,760 Shareholders Equity / NA 197,584 195,469 No. of Shares 90,000 108,000 NA per Share (RM) 2.20 1.81 Borrowings (RM) 56,801 56,801 Gearing (times) 0.29 0.29 Note:- ^ After netting off estimated expenses of approximately RM90,000 in relation to the Proposed Bonus Issue and the proposed first and final net dividend payable of approximately RM2.025 million. 4.3 Earnings The Proposed Bonus Issue is not expected to have any material effect on the earnings of the Group for the FYE 31 March 2011. However, there will be a corresponding dilution in the EPS of the Group as a result of the increase in the number of shares arising from the Proposed Bonus Issue. 4.4 Convertible Securities As at the LPD, there are no options, warrants or convertible securities issued by the Company. 4.5 Substantial Shareholders Shareholdings The Proposed Bonus Issue will not have any effect on the substantial shareholders percentage shareholdings in HYB, as the Bonus Shares will be allotted on a pro-rata basis to all the shareholders of the Company. The number of HYB Shares held by the substantial shareholders will increase proportionately pursuant to the Proposed Bonus Issue. 4
5. HISTORICAL SHARE PRICES High Low RM RM 2009 July 0.750 0.635 August 0.780 0.720 September 0.780 0.740 October 0.760 0.690 November 0.770 0.650 December 0.780 0.680 2010 January 0.900 0.750 February 0.935 0.860 March 0.920 0.860 April 0.950 0.835 May 0.935 0.780 June 0.900 0.790 The last transacted price of HYB Shares on 15 July 2010, being the last day on which HYB Shares were traded, prior to the date of announcement of the Proposed Bonus Issue, was RM0.90. The last transacted price of HYB Shares on 20 July 2010, was RM1.15. (being the latest practicable date prior to the printing of this Circular) (Source: Bloomberg) 6. APPROVALS REQUIRED / OBTAINED The Proposed Bonus Issue is subject to and conditional upon approvals being obtained from the following:- (i) (ii) (iii) Bursa Securities, for the listing of and quotation for the new Bonus Shares on the Main Market of Bursa Securities; the shareholders of the Company, for the Proposed Bonus Issue at the forthcoming EGM; and any other relevant authorities and/or parties, if required. 7. INTER-CONDITIONALITY The Proposed Bonus Issue is not conditional upon any other corporate exercise undertaken or to be undertaken by HYB. 8. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and major shareholders of the Company and/or persons connected to them has any interest, direct or indirect, in the Proposed Bonus Issue apart from their respective entitlement under the Proposed Bonus Issue, which are also available to all other shareholders of the Company. 5
9. ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION The tentative timetable for the implementation of the Proposed Bonus Issue is as follows:- Month Event 19 August 2010 EGM to vote on the Proposed Bonus Issue Mid September 2010 End of September 2010 Announcement of Entitlement Date for the Proposed Bonus Issue Completion of the Proposed Bonus Issue Barring any unforeseen circumstances, the Board expects the Proposed Bonus Issue to be completed in the third quarter of the year 2010. 10. CORPORATE PROPOSALS ANNOUNCED BUT PENDING COMPLETION Save for the Proposed Bonus Issue (which is the subject matter of this Circular), the Board confirms that there is no other outstanding corporate proposal announced by the Company, but not yet completed as at the date of this Circular. 11. BOARD S RECOMMENDATION The Board, having considered all aspects of the Proposed Bonus Issue, is of the opinion that the Proposed Bonus Issue is in the best interest of the Company. The Board, therefore, recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Bonus Issue to be tabled at the forthcoming EGM of the Company on the basis of the rationale set out in Section 3 of this Circular. 12. EGM The EGM, the Notice of which is set out in this Circular, will be held at the Head Office of the Company at 4th Floor, C-21 Jalan Medan Selayang 1, Medan Selayang, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 19 August 2010 at 11.00 a.m., or immediately after the conclusion or any adjournment of the Thirty-First (31 st ) Annual General Meeting of the Company, whichever is the later, for the purpose of considering and, if thought fit, passing with or without modification, the ordinary resolution to give effect to the Proposed Bonus Issue. If you are unable to attend and vote in person at the EGM, please complete, sign and return the enclosed Form of Proxy for the EGM to the Registered Office of the Company at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh, Perak Darul Ridzuan so as to arrive not later than forty-eight (48) hours before the time fixed for holding the EGM. The Form of Proxy should be completed strictly in accordance with the instruction contained therein. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the EGM should you subsequently wish to do so. 6
13. FURTHER INFORMATION Shareholders are advised to refer to the Appendices set out in this Circular for further information. Yours faithfully, For and on behalf of the Board of HUA YANG BERHAD TAN SRI DATO SERI DR. TING CHEW PEH Chairman/Independent Non-Executive Director 7
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APPENDIX II ADDITIONAL INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and they individually and collectively accept full responsibility for the accuracy of the information contained in this Circular and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there is no material fact the omission of which would make any statement herein false or misleading. 2. CONSENTS 2.1 Adviser The written consent of OSK to the inclusion of its name in this Circular, in the form and context in which they appear have been given and have not subsequently been withdrawn before the issue of this Circular. 2.2 Reporting Accountants The written consent of Messrs Ernst & Young, the reporting accountants, to the inclusion of its name in this Circular and the confirmation letter on the adequacy of the Company s reserves in relation to the Proposed Bonus Issue in the form and context in which they appear have been given and have not subsequently been withdrawn before the issue of this Circular. 3. DECLARATIONS OF CONFLICT OF INTEREST 3.1 Adviser OSK confirms that as at the date of this Circular, there is no equity, and/or financial relationship with HYB, that has resulted in or may result in a situation of conflict of interest in its role as adviser to the Company for the Proposed Bonus Issue. 3.2 Reporting Accountants Messrs Ernst & Young, the reporting accountants for the Proposed Bonus Issue, confirms that as at the date of this Circular, there is no equity and/or financial relationship with HYB that has resulted in or may result in a situation of conflict of interest in its role as the reporting accountants to the Company on the Proposed Bonus Issue. 4. MATERIAL LITIGATION, CLAIMS OR ARBITRATION Save as disclosed below, as at the LPD, neither HYB nor any of its subsidiaries is engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Directors of HYB have no knowledge of any proceedings pending or threatened against the Company and/or its subsidiaries or of any fact likely to give rise to any proceedings, which may materially or adversely affect the financial position or business of HYB Group:- 16
APPENDIX II ADDITIONAL INFORMATION (CONT D) Shah Alam High Court Civil Suit No.: MT3-22-622-2004 ( High Court Matter ) Hasnan Bin Ahmad Mokhtar ( Plaintiff ) v Bison Holdings Sdn Bhd ( BHSB ) and M/s CH Yeap & Maluda The abovesaid suit was brought by the Plaintiff, acting as the Administrator of the Estate of Ahmad Mokhtar Bin Shuib ( Deceased ) to seek, inter alia, a declaration to render a transfer of ownership of a piece of property held under Title No. HS(D) 15519, Lot No.: 4864 (PT 1877) Mukim Hulu Klang, Daerah Gombak, Selangor ( Property ) from the Deceased to BHSB, to be null and void. The Plaintiff had on 7 September 2004 served BHSB, a subsidiary of the Company, with a Writ of Summons and a Statement of Claim both dated 28 July 2004, The Plaintiff had on 9 November 2005 added Messrs C.H. Yeap & Maluda, who has acted as BHSB s solicitors in relation to the Sale and Purchase Agreement dated 31 October 1995 ( SPA ) between the Deceased and BHSB for the transfer of the Property, as the 2nd Defendant to the suit. BHSB had on 15 September 2004 entered an appearance and subsequently filed its Defence and Counterclaim dated 1 October 2004 on the basis that a SPA was valid and in existence and that the title to the Property had already been transferred to BHSB. BHSB had counterclaimed for, inter alia, the rental fees due from the Deceased to BHSB pursuant to the SPA and a tenancy agreement dated 14 December 2001 between the Deceased and BHSB. BHSB is also seeking for an order for the Plaintiff to return the Property with vacant possession to the Defendant; The Plaintiff filed its Reply to Defendant s Defence and Counterclaim on 14 October 2004. The case is scheduled for case management on 22 July 2010 pending finalisation of bundles of documents for trial purposes. Save and except for the usual claim for cost, there is no claim for liquidated damages against BHSB nor did the Plaintiff plead the existence of a fraud. The solicitor, acting on behalf of BHSB is of the view that BHSB stands a reasonable chance of success in the above matter. In a related suit, vide Bandar Baru Bangi Sessions Court Originating Application No. 54-9-04, Bison Holdings Sdn Bhd ( BHSB ) (as Applicant) vs. Hasnan Bin Ahmad Mokhtar ( First Respondent ) and Siti Hajar Binti Ibrahim ( Second Respondent ) (collectively, the Respondents ), BHSB commenced its application for recovery of specific immovable property against the Respondents in relation to the Property on 23 September 2004 vide an Originating Application. This matter was fixed for hearing on 9 December 2004. The Respondents applied to the court for stay of proceeding for this matter pending the disposal of the Shah Alam High Court Civil Suit No.: MT3-22-622-2004 ( High Court Matter ) that was initiated by the First Respondent, being the Administrator of the Estate of Ahmad Mokhtar Bin Shuib. On 10 June 2005, the Sessions Court granted the Respondents application for stay of proceedings pending disposal of the High Court Matter. At this juncture of time proceedings in regard to the aforesaid Originating Application is stayed until the disposal of the High Court Matter. The solicitor, acting on behalf of BHSB is of the view that BHSB stands a reasonable chance of success in the above matter. 17
APPENDIX II ADDITIONAL INFORMATION (CONT D) 5. MATERIAL COMMITMENTS AND CONTINGENT LIABILITIES Save as disclosed below, as at 30 June 2010, our Board is not aware of any material commitments and contingent liabilities incurred by our Group that has not been provided for, which upon becoming enforceable, may have a material impact on our financial results/position of our Group:- RM 000 Corporate guarantees given to financial institutions for banking facilities granted to the Company s subsidiaries 91,100 6. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar) 30250 Ipoh, Perak Darul Ridzuan, during normal business hours (except public holidays) from the date hereof up to the time fixed for the holding of the EGM:- (i) Memorandum and Articles of Association of HYB; (ii) Audited consolidated financial statement of HYB for the past two (2) FYE 31 March 2010 and 31 March 2009 and the latest unaudited quarterly results for the FPE 30 June 2010; (iii) The relevant cause papers in respect of the material litigation referred to in Section 4 above; (iv) (v) The confirmation letter from the reporting accountants on the adequacy of the Company s reserves in relation to the Proposed Bonus Issue; and Letter of consent referred to in Section 2 above. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 18
HUA YANG BERHAD (Company No. 44094-M) (Incorporated in Malaysia under the Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of the Company will be held at the Head Office of the Company at 4th Floor, C-21 Jalan Medan Selayang 1, Medan Selayang, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 19 August 2010 at 11.00 a.m., or immediately after the conclusion or any adjournment of the Thirty-First (31 st ) Annual General Meeting of the Company, whichever is the later, for the purpose of considering and if thought fit, passing with or without modification, the following ordinary resolution:- ORDINARY RESOLUTION PROPOSED BONUS ISSUE OF 18,000,000 NEW ORDINARY SHARES OF RM1.00 EACH IN HUA YANG BERHAD ( HYB OR THE COMPANY ) ("HYB SHARE(S)" OR SHARE(S) ) ("BONUS SHARE(S)") ON THE BASIS OF ONE (1) NEW ORDINARY SHARE FOR EVERY FIVE (5) EXISTING HYB SHARES HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ("PROPOSED BONUS ISSUE") "THAT, subject to the approvals of all relevant regulatory authorities, the Board of Directors of the Company ( Board ) be and is hereby authorised to capitalise an amount of RM18,000,000 out of the reserves of the Company, and to apply the same for the purposes of issuing 18,000,000 Bonus Shares of RM1.00 each in the share capital of the Company credited as fully paid-up to be issued on the basis of one (1) new Bonus Share for every five (5) existing HYB Shares held by the entitled shareholders whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later and announced later; AND THAT fractional entitlements, if any, shall be dealt in such manner as the Board shall in their absolute discretion deems fit and expedient in the best interest of the Company; AND THAT the new Bonus Shares will upon allotment and issuance, rank pari passu in all respects with the existing issued and paid-up HYB Shares, save and except that the new HYB Shares so issued will not be entitled to any dividends, rights, allotments and/or other distributions where the entitlement date precedes the date of allotment of such new HYB Shares; AND THAT the Board be and is hereby authorised to give effect to the Proposed Bonus Issue with full powers to assent to any conditions, modifications, variations and/or amendments in any manner as may be required by the relevant authorities and to deal with all matters relating thereto and to take all such steps and do all acts and things in any manner as they may deem necessary or expedient to implement, finalise and give full effect to the Proposed Bonus Issue." By Order of the Board HUA YANG BERHAD CHAN SEW MOH (MIA 12605) LEONG OI WAH (MAICSA 7023802) Company Secretaries Ipoh, Perak Darul Ridzuan 28 July 2010 19
Notes:- 1. A member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy / proxies who may but need not be a member/members of the Company to attend and vote in his/her stead and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. When a member appoints two (2) or more proxies, the appointments shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing or, if the appointor is a Corporation, either under the corporation s seal or under the hand of an officer or attorney duly authorised. 4. The instrument appointing a proxy must be deposited at the Registered Office at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh, Perak Darul Ridzuan at least forty-eight (48) hours before the time appointed for the Meeting or any adjournment thereof. 20
HUA YANG BERHAD (Company No. 44094-M) (Incorporated in Malaysia under the Companies Act, 1965) FORM OF PROXY I/We, (Full name and NRIC No./Company No. in block letters) of (Full address in block letters and telephone no.) being a member / members of Hua Yang Berhad (44094-M) ( Company ), hereby appoint (Name of proxy as per NRIC, in capital letters) NRIC No. (new) of (Full address in block letters) and / or failing him/her (Name of proxy as per NRIC, in capital letters) NRIC No. (new) of (Full address in block letters) or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Extraordinary General Meeting ( EGM ) of the Company to be held at the Head Office of the Company at 4th Floor, C-21 Jalan Medan Selayang 1, Medan Selayang, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 19 August 2010 at 11.00 a.m., or immediately after the conclusion or any adjournment of the Thirty-First (31 st ) Annual General Meeting of the Company, whichever is the later, or any adjournment thereof in respect of my/our holdings of shares in the manner indicated below:- ORDINARY RESOLUTION FOR AGAINST Proposed Bonus Issue (Please indicate with a cross ("X") in the space provided, how you wish your vote to be cast in respect of the above resolution. If you do not do so, the proxy will vote or abstain at his/her discretion.) Dated this day of 2010 Signature(s) / Common Seal of Shareholder Notes:- 1. A member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy / proxies who may but need not be a member/members of the Company to attend and vote in his/her stead and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. When a member appoints two (2) or more proxies, the appointments shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing or, if the appointor is a Corporation, either under the corporation s seal or under the hand of an officer or attorney duly authorised. 4. The instrument appointing a proxy must be deposited at the Registered Office at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh, Perak Darul Ridzuan at least forty-eight (48) hours before the time appointed for the Meeting or any adjournment thereof.
Please fold here Stamp HUA YANG BERHAD 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar) 30250 Ipoh Perak Darul Ridzuan Please fold here
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