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THIS CIRCULAR TO SHAREHOLDERS OF KEJURUTERAAN ASASTERA BERHAD (“KAB” OR THE “COMPANY”) 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 advisers immediately. This Circular has been reviewed and approved by Mercury Securities Sdn Bhd, being the Principal Adviser to the Company for the Proposals (as defined herein). Bursa Malaysia Securities Berhad 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.

KEJURUTERAAN ASASTERA BERHAD

[Company No. 199701005009 (420505-H)] (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS IN RELATION TO:-

(I) PROPOSED SHARE SPLIT INVOLVING THE SUBDIVISION OF EVERY 10 EXISTING ORDINARY SHARES IN THE COMPANY ("KAB SHARES" OR "SHARES") HELD ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER INTO 18 SHARES ("PROPOSED SHARE SPLIT"); AND

(II) PROPOSED BONUS ISSUE OF UP TO 881,927,638 FREE WARRANTS IN THE COMPANY ("WARRANTS") ON THE BASIS OF 1 WARRANT FOR EVERY 2 SHARES HELD ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER ("PROPOSED BONUS ISSUE OF WARRANTS")

(COLLECTIVELY REFERRED TO AS THE “PROPOSALS”)

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal Adviser

MERCURY SECURITIES SDN BHD Registration No. 198401000672 (113193-W)

(A Participating Organisation of Bursa Malaysia Securities Berhad)

The resolutions in respect of the above Proposals will be tabled at the Extraordinary General Meeting of the Company (“EGM”). In view of the COVID-19 outbreak and as part of the safety measures undertaken by the Company, the EGM will be conducted entirely through live streaming from the broadcast venue at KAB’s headoffice at No. 18, Jalan Radin Bagus 9, Bandar Baru Seri Petaling, 57000 Kuala Lumpur, Malaysia (“Broadcast Venue”) on Thursday, 25 March 2021 at 9.30 a.m. using the Remote Participation and Voting facilities (“RPV”) provided by Tricor Investor & Issuing House Services Sdn. Bhd. via its TIIH Online website at https://tiih.online. Shareholders will not be allowed to attend the EGM in person at the Broadcast Venue on the day of the meeting. The Notice of Extraordinary General Meeting of the Company (“EGM”) together with the Proxy Form are enclosed in this Circular. If you decide to appoint a proxy or proxies for the EGM, you must complete, sign and return the Proxy Form and deposit it at the office of the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur on or before the date and time indicated below or at any adjournment thereof. You can also have the option to lodge the proxy appointment electronically via TIIH Online at https://tiih.online before the proxy form lodgement cut-off time as mentioned below. For further information on the electronic lodgement of proxy form, kindly refer to the Administrative Notes. The lodging of the Proxy Form will not preclude you from attending and voting in person at the EGM should you subsequently decide to do so. Last day, date and time for lodging the Proxy Form : Tuesday, 23 March 2021 at 9.30 a.m. Day, date and time of the EGM : Thursday, 25 March 2021 at 9.30 a.m.

This Circular is dated 8 March 2021

DEFINITIONS

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Except where the context otherwise requires, the following definitions shall apply throughout this Circular:- Act - Companies Act 2016 of Malaysia, as amended from time to time and

any re-enactment thereof BNM - Bank Negara Malaysia Board - Board of Directors of the Company Bonus Warrants Entitlement Date

- A date to be determined and announced later by the Board, on which the names of Shareholders must appear in the Record of Depositors of the Company at 5.00 p.m. on that date in order to be entitled to the Warrants in connection with the Proposed Bonus Issue of Warrants

Bursa Depository - Bursa Malaysia Depository Sdn Bhd Bursa Securities - Bursa Malaysia Securities Berhad CAGR - Compound annual growth rate Circular - This circular to Shareholders in relation to the Proposals COVID-19 - Coronavirus disease 2019 Deed Poll - Deed poll constituting the Warrants to be executed by the Company Directors - Directors of the Company for the time being and shall have the

meaning ascribed to it in Section 2(1) of the Act and Section 2(1) of the Capital Markets And Services Act 2007 and Director shall be construed accordingly

EGM - Extraordinary general meeting of the Company Entitled Shareholders - Shareholders whose names appear in the Record of Depositors of

the Company at 5.00 p.m. on the Bonus Warrants Entitlement Date EPS - Earnings per Share EPSB - Everest Pavilion Sdn Bhd, a substantial Shareholder as referred to in

Section 6.3 of this Circular ESOS - Employees’ share option scheme of the Company which took effect

on 1 June 2018 for a period of 5 years ESOS Options - Options granted under the ESOS pursuant to the by-laws governing

the ESOS, where each option holder can subscribe for 1 new Share for every 1 ESOS Option held

FPE - Financial period ended FYE - Financial years ended / ending, as the case may be GDP - Gross domestic product Government - Malaysian Government IMR Report - The independent market research report dated 1 March 2021

prepared by SMITH ZANDER

DEFINITIONS (CONT’D)

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KAB or the Company - Kejuruteraan Asastera Berhad KAB Group or the Group - Collectively, KAB and its subsidiaries KAB Shares or Shares - Ordinary shares in the Company Listing Requirements - Main Market Listing Requirements of Bursa Securities, as amended

from time to time LPD - 10 February 2021, being the latest practicable date prior to the

printing of this Circular Market Day - Any day on which Bursa Securities is open for trading in securities Maximum Scenario - Assuming that prior to the Split Shares Entitlement Date and Bonus

Warrants Entitlement Date:- (i) all 39,977,900 new Shares available to be issued as at the

LPD under the Private Placement are issued; and (ii) all 49,388 Shares held as treasury shares as at the LPD are

resold in the open market MCO - Movement control order issued by the Government under the

Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967

Mercury Securities or the Principal Adviser

- Mercury Securities Sdn Bhd

Minimum Scenario - Assuming that prior to the Split Shares Entitlement Date and Bonus

Warrants Entitlement Date for the Proposed Bonus Issue of Warrants:- (i) none of the 39,977,900 new Shares available to be issued as

at the LPD under the Private Placement is issued; and (ii) none of the 49,388 Shares held as treasury shares as at the

LPD is resold in the open market NA - Net assets Official List - Official list of the Main Market of Bursa Securities PAT - Profit after taxation Placement Shares - Up to 39,977,900 new Shares to be issued pursuant to the Private

Placement as at the LPD Private Placement - Private placement of up to 70,574,600 new Shares, which was

announced by the Company on 10 October 2019 and is currently ongoing. As at the LPD, the Company has up to 39,977,900 Placement Shares to be issued. Further details please refer to Section 9 of this Circular

Proposals - Collectively, the Proposed Share Split and Proposed Bonus Issue of

Warrants Proposed Bonus Issue of Warrants

- Proposed bonus issue of up to 881,927,638 Warrants on the basis of 1 Warrant for every 2 Shares held on the Bonus Warrants Entitlement Date

DEFINITIONS (CONT’D)

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Proposed Share Split - Proposed share split involving the subdivision of every 10 existing Shares held on the Split Shares Entitlement Date into 18 Split Shares

Record of Depositors - A record of securities holders established by Bursa Depository under

the Rules of Bursa Depository RM and sen - Ringgit Malaysia and sen respectively Rules of Bursa Depository

- Rules of Bursa Depository as issued pursuant to the Securities Industry (Central Depositories) Act, 1991, as amended from time to time and any re-enactment thereof

Shareholders - Registered holders of the Shares SMITH ZANDER or the IMR

- Smith Zander International Sdn Bhd, an independent market researcher

SOP - Standard operating procedures Split Shares - Shares after the Proposed Share Split Split Shares Entitlement Date

- A date to be determined and announced later by the Board, on which the names of Shareholders must appear in the Record of Depositors of the Company at 5.00 p.m. on that date in order to be entitled to the Split Shares in connection with the Proposed Share Split

TEAP - Theoretical ex-all price THB - Thai baht, the official currency of Thailand VWAP - Volume-weighted average market price Warrants - Up to 881,927,638 free warrants in the Company to be issued

pursuant to the Proposed Bonus Issue of Warrants All references to “you” in this Circular are to the Shareholders. In this Circular, words referring to the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References 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 Malaysia time, unless otherwise stated. Any discrepancies in the tables included in this Circular between the amounts stated, actual figures and the totals thereof are due to rounding. Certain statements in this Circular may be forward-looking in nature, which are subject to uncertainties and contingencies. Forward-looking statements may contain estimates and assumptions made by the Board after due enquiry, which are nevertheless subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in such forward-looking statements. In light of these and other uncertainties, the inclusion of a forward-looking statement in this Circular should not be regarded as a representation or warranty that the Company’s plans and objectives will be achieved.

[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

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LETTER TO SHAREHOLDERS IN RELATION TO THE PROPOSALS CONTAINING:- SECTION PAGE EXECUTIVE SUMMARY v 1. INTRODUCTION 1 2. PROPOSED SHARE SPLIT 2 3. PROPOSED BONUS ISSUE OF WARRANTS 4 4. RATIONALE FOR THE PROPOSALS 9 5. INDUSTRY OVERVIEW AND PROSPECTS 11 6. EFFECTS OF THE PROPOSALS 17 7. TENTATIVE TIMELINE 24 8. APPROVALS REQUIRED AND CONDITIONALITY 24 9. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION 25 10. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS, CHIEF EXECUTIVE

AND/OR PERSONS CONNECTED TO THEM 26

11. BOARD’S RECOMMENDATION 26 12. EGM 26 13. FURTHER INFORMATION 27 APPENDIX I FURTHER INFORMATION 28 NOTICE OF EGM ENCLOSED PROXY FORM FOR THE EGM ENCLOSED ADMINISTRATIVE NOTES ENCLOSED


EXECUTIVE SUMMARY

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This Executive Summary highlights only the salient information of the Proposals. The Shareholders are advised to read the Circular in its entirety for further details and not to rely solely on this Executive Summary in forming a decision on the Proposals before voting at the EGM.

Key information Description Reference to Circular

Summary of the Proposals

Proposed Share Split The Proposed Share Split entails the subdivision of every 10 existing Shares held on the Split Shares Entitlement Date into 18 Split Shares. The Split Shares Entitlement Date will be determined by the Board and announced at a later date upon receipt of all relevant approvals for the Proposed Share Split. Proposed Bonus Issue of Warrants The Proposed Bonus Issue of Warrants entails the issuance of up to 881,927,638 Warrants on the basis of 1 Warrant for every 2 Shares held by the Entitled Shareholders on the Bonus Warrants Entitlement Date. The Bonus Warrants Entitlement Date will be determined by the Board and announced at a later date upon receipt of all relevant approvals for the Proposed Bonus Issue of Warrants. The exercise price of the Warrants will be determined and announced by the Board at a later date after taking into consideration, amongst others, the TEAP of the Shares based on the 5-day VWAP of the Shares up to and including the last trading day prior to the price-fixing date of the Warrants. It is the intention of the Company to implement the Proposed Bonus Issue of Warrants after the implementation of the Proposed Share Split.

Section 2

Section 3

Rationale for the Proposals

Proposed Share Split The rationale for the Proposed Share Split is as follows:- (i) the adjustment in the market price of the Shares

as a result of the Proposed Share Split is expected to result in the Split Shares being more affordable in order to appeal to a wider group of public shareholders and investors; and

(ii) it may improve the trading liquidity of the Shares

by increasing the number of shares in issue. Proposed Bonus Issue of Warrants The rationale for the Proposed Bonus Issue of Warrants is as follows:- (i) to reward Shareholders for their continuous

support by enabling them to participate in convertible securities of the Company, which are tradable on the Main Market of Bursa Securities, without incurring any cost;

Section 4.1

Section 4.2

EXECUTIVE SUMMARY (CONT’D)

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(ii) to provide Shareholders with an opportunity to increase their equity participation in the Company at a pre-determined exercise price over the exercise period of the Warrants, and to allow Shareholders to further participate in the future growth and any potential capital appreciation arising therefrom of the Company when the Warrants are exercised;

(iii) to provide the Group with additional working capital when the Warrants are exercised in the future. The exercise of the Warrants will allow the Group to obtain proceeds without incurring interest expenses as compared to bank borrowings. In addition, the exercise of the Warrants will increase the Company’s shareholders’ funds which will consequently improve its gearing levels;

(iv) to provide the Shareholders with a separate avenue to monetise the Warrants as the Warrants will be traded separately from the existing Shares. The issuance and exercise of the Warrants will further strengthen the capital base of the Group by increasing the size of its shareholders' funds pursuant to the exercise of the Warrants and provide the Company with greater flexibility in terms of the options available to meet its future funding requirements; and

(v) it will not result in an immediate dilution of the

EPS of the Company until such exercise of the Warrants.

Approvals required and conditionality

The Proposals are subject to the following approvals being obtained:- (i) Bursa Securities, the approval of which was

obtained on 25 February 2021 for the Proposed Share Split, admission of Warrants to the Official List as well as listing and quotation of the Warrants to be issued pursuant to the Proposed Bonus Issue of Warrants and new Shares to be issued arising from the exercise of the Warrants;

(ii) Shareholders at the forthcoming EGM for the

Proposals; and

(iii) any other relevant authorities and/or parties, if required.

The Proposed Bonus Issue of Warrants is not conditional upon the Proposed Share Split and vice versa. In addition, the Proposals are not conditional upon any other corporate exercise / scheme being or proposed to be undertaken by the Company.

Section 8

EXECUTIVE SUMMARY (CONT’D)

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Interested parties and any conflict of interest

None of the Directors, major Shareholders, chief executive of the Company and/or persons connected to them have any interest, direct or indirect, in the Proposals apart from their respective entitlements as Shareholders under the Proposed Share Split and Proposed Bonus Issue of Warrants, to which all other entitled Shareholders are similarly entitled to.

Section 10

Board’s recommendation

The Board recommends that you vote in favour of the resolutions pertaining to the Proposals to be tabled at the forthcoming EGM.

Section 11


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Registered Office Unit 30-01, Level 30, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah Persekutuan Malaysia 8 March 2021

Board of Directors Yoong Kah Yin (Independent Non-Executive Chairman) Dato’ Lai Keng Onn (Managing Director) Choong Gaik Seng (Executive Director) Datin Chan Pey Kheng (Executive Director) Goh Kok Boon (Executive Director) Lu Chee Leong (Independent Non-Executive Director) Tong Siut Moi (Independent Non-Executive Director) Dato’ Chan Chee Hong (Non-Independent Non-Executive Director) To: The Shareholders Dear Sir / Madam, (I) PROPOSED SHARE SPLIT (II) PROPOSED BONUS ISSUE OF WARRANTS (COLLECTIVELY REFERRED TO AS THE “PROPOSALS”) 1. INTRODUCTION

On 10 February 2021, Mercury Securities had, on behalf of the Board, announced that the Company proposes to undertake the Proposals. On 26 February 2021, Mercury Securities had, on behalf of the Board, announced that Bursa Securities had, vide its letter dated 25 February 2021, granted its approval for the following:- (i) Proposed Share Split;

(ii) admission to the Official List and the listing and quotation of up to 881,927,638

Warrants to be issued pursuant to the Proposed Bonus Issue of Warrants on the Main Market of Bursa Securities; and

(iii) listing and quotation of up to 881,927,638 new Shares to be issued arising from the exercise of the Warrants on the Main Market of Bursa Securities.

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The approval granted by Bursa Securities for the Proposals is subject to the conditions as set out in Section 8.1 of this Circular. THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH RELEVANT INFORMATION ON THE PROPOSALS AND TO SET OUT THE VIEWS AND RECOMMENDATION OF THE BOARD AS WELL AS TO SEEK YOUR APPROVAL FOR THE RESOLUTIONS PERTAINING TO THE PROPOSALS WHICH WILL BE TABLED AT THE FORTHCOMING EGM. THE NOTICE OF EGM AND THE PROXY FORM ARE ENCLOSED IN THIS CIRCULAR. YOU ARE ADVISED TO READ AND CAREFULLY CONSIDER THE CONTENTS OF THIS CIRCULAR TOGETHER WITH ITS APPENDIX BEFORE VOTING ON THE RESOLUTIONS TO GIVE EFFECT TO THE PROPOSALS TO BE TABLED AT THE FORTHCOMING EGM.

2. PROPOSED SHARE SPLIT

2.1 Details of the Proposed Share Split

The Proposed Share Split entails the subdivision of every 10 existing Shares held on the Split Shares Entitlement Date into 18 Split Shares. The Split Shares Entitlement Date will be determined by the Board and announced at a later date upon receipt of all relevant approvals for the Proposed Share Split. The Board confirms that the Proposed Share Split is allowed by way of passing an ordinary resolution in accordance with the Constitution of the Company.

It is the intention of the Company to implement the Proposed Share Split prior to the implementation of the Proposed Bonus Issue of Warrants. The actual number of Split Shares will depend on the total number of Shares in issue on the Split Shares Entitlement Date. As at the LPD, the issued share capital of the Company is RM60,799,253.32 comprising 939,941,698 Shares (including 49,388 Shares held as treasury shares). As at the LPD, the Company has:- (i) no outstanding ESOS Options which have been granted and not exercised. In

conjunction with the Proposals, the Company has undertaken not to grant any further ESOS Options until the completion of the Proposals; and

(ii) yet to issue up to 39,977,900 Placement Shares pursuant to the Private

Placement. For illustration purposes:- (i) under the Minimum Scenario, the total number of 939,941,698 issued Shares

(including 49,388 Shares held as treasury shares) as at the LPD will be subdivided into 1,691,895,056 Split Shares (including 88,898 Shares held as treasury shares); and

(ii) under the Maximum Scenario, the enlarged total number of 979,919,598

issued Shares after the Private Placement and resale of treasury shares in the open market will be subdivided into 1,763,855,276 Split Shares.

For the avoidance of doubt, the Proposed Share Split will increase the total number of Shares in issue but will not increase the value of the issued share capital of the Company.

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The Proposed Share Split will result in an adjustment to the reference share price of the Shares listed and quoted on the Main Market of Bursa Securities. For illustration purposes, based on the last transacted market price of the Shares on the LPD of RM1.02, the theoretical adjusted reference price of the Shares upon completion of the Proposed Share Split based on 1,000 Shares is set out below:-

Assumed no. of

Shares Market / Theoretical adjusted

reference price per Share

(1)Total value

RM RM As at the LPD 1,000 1.0200

(Last transacted market price on the LPD)

1,020

After the Proposed Share Split

1,800 (2)0.5667 (Theoretical adjusted reference

price after adjustment)

1,020

Notes:- (1) The total value was arrived at by multiplying the number of Shares held with the market

/ theoretical adjusted reference price per Share. (2) The theoretical adjusted reference price per Share is arrived at based on the following

formula:-

Theoretical adjusted

reference price per Share

= Market price per

Share on the LPD

x Assumed number of Shares held on

the LPD Assumed number of Split Shares

= RM1.0200 x 1,000

1,800 = RM0.5667

Based on the illustration above, the Proposed Share Split will decrease the reference price of the Shares but it will not have any impact on the total market value of these securities held by the Shareholders. Fractional entitlements for the Split Shares, if any, shall be disregarded and/or dealt with by the Board in such manner as the Board in its absolute discretion deems fit and expedient in the best interests of the Company. The Board confirms that the Proposed Share Split is in compliance with Paragraph 6.30(1A) of the Listing Requirements, as the adjusted price of a Share was not less than RM0.50 based on the daily VWAP of the Shares during the 3-month period up to and including 9 February 2021, being the date immediately before the submission of the application to Bursa Securities on 10 February 2021 in relation to the Proposed Share Split. For illustration purposes, based on the lowest daily VWAP of the Shares during the 3-month period before 10 February 2021 of RM0.9249 (on 9 November 2020), being the date of the submission of the application to Bursa Securities in relation to the Proposed Share Split, the theoretical adjusted reference price of the Shares upon completion of the Proposed Share Split based on 1,000 Shares is set out below:-

Assumed no.

of Shares Daily VWAP / Theoretical adjusted price per Share

Total value

RM RM As at 9 November 2020 1,000 0.9249 924.9 After the Proposed Share Split 1,800 0.5138

(Theoretical adjusted reference price after adjustment)

924.9

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2.2 Ranking

The Split Shares shall rank equally in all respects with one another. 2.3 Listing and quotation of the Split Shares

The approval from Bursa Securities for the listing and quotation of the Split Shares on the Main Market of Bursa Securities has been obtained via its letter dated 25 February 2021. No suspension will be imposed on the trading of the Shares on the Main Market of Bursa Securities for the purpose of implementing the Proposed Share Split.

The Split Shares will be listed and quoted on the Main Market of Bursa Securities on the next Market Day after the Split Shares Entitlement Date.

3. PROPOSED BONUS ISSUE OF WARRANTS

3.1 Basis and number of Warrants to be issued

The Proposed Bonus Issue of Warrants entails the issuance of up to 881,927,638 Warrants on the basis of 1 Warrant for every 2 Shares held by the Entitled Shareholders on the Bonus Warrants Entitlement Date. The Bonus Warrants Entitlement Date will be determined by the Board and announced at a later date upon receipt of all relevant approvals for the Proposed Bonus Issue of Warrants. It is the intention of the Company to implement the Proposed Bonus Issue of Warrants after the implementation of the Proposed Share Split. The actual number of Warrants to be issued will depend on the total number of Shares in issue on the Bonus Warrants Entitlement Date after taking into consideration any new Shares that may be issued pursuant to the Private Placement and any treasury shares that may be resold in the open market. For illustration purposes, as set out in Section 2.1 of this Circular:- (i) under the Minimum Scenario, the issued Shares of the Company will be

subdivided into 1,691,895,056 Split Shares (including 88,898 Shares held as treasury shares) upon completion of the Proposed Share Split. Based on the total number of 1,691,806,158 Split Shares (excluding treasury shares), the Proposed Bonus Issue of Warrants will entail the issuance of 845,903,079 Warrants; and

(ii) under the Maximum Scenario, the issued Shares of the Company will be

subdivided into 1,763,855,276 Split Shares upon completion of the Proposed Share Split. Based on the total number of 1,763,855,276 Split Shares, the Proposed Bonus Issue of Warrants will entail the issuance of 881,927,638 Warrants.

Fractional entitlements for the Warrants arising from the Proposed Bonus Issue of Warrants, if any, shall be disregarded and/or dealt with by the Board in such manner as the Board in its absolute discretion deems fit and expedient in the best interests of the Company. The Proposed Bonus Issue of Warrants is not intended to be implemented in stages over a period of time.

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3.2 Indicative salient terms of the Warrants Issuer : KAB Issue size : Up to 881,927,638 Warrants Form : The Warrants will be issued in registered form and constituted by

the Deed Poll. Board lot : For purpose of trading on Bursa Securities, a board lot of

Warrants shall be 100 units of Warrants carrying the right to subscribe for 100 new Shares during the Exercise Period, unless otherwise revised by the relevant authorities (“Board Lot”).

Tenure : 3 years commencing from and including the date of issuance of

the Warrants. Exercise period : The Warrants may be exercised at any time within the tenure of

the Warrants, commencing from and including the date of issuance of the Warrants to the close of business at 5.00 p.m. in Malaysia on the Market Day immediately preceding the 3rd anniversary of the date of issue of the Warrants (“Exercise Period”). Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid for any purpose.

Exercise price : The exercise price of the Warrants (“Exercise Price”) will be

determined by the Board and announced at a later date after obtaining all the relevant approvals but prior to the announcement of the Bonus Warrants Entitlement Date. The Exercise Price of the Warrants in issue during the Exercise Period shall however be subject to adjustments under circumstances prescribed in accordance with the terms and conditions of the Deed Poll.

Subscription rights

: Each Warrant entitles its holder to subscribe for 1 new Share at any time during the Exercise Period at the Exercise Price, subject to adjustments under circumstances prescribed in accordance with the terms and conditions of the Deed Poll.

Mode of exercise

: The Warrants holders must complete and sign the exercise form (which shall be irrevocable) and deliver the duly completed and executed exercise form to the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. The Warrants holders shall pay the aggregate of the Exercise Price payable when exercising their Warrants to subscribe for new Shares in the Company via:- (i) online payment into a bank account of the Company

maintained with a bank operating in Malaysia and provide the payment advice; or

(ii) banker’s draft or cashier’s order drawn on a bank operating in Malaysia or a money order or postal order issued by a post office in Malaysia.

The payment of such fee must be made in RM.

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Adjustments to the Exercise Price and/or the number of Warrants

: Subject to the provisions of the Deed Poll, the Exercise Price and/or the number of unexercised Warrants in issue may be adjusted by the Board in consultation with an approved adviser or auditors appointed by the Company or the auditors in the event of any alteration in the share capital of the Company at any time during the tenure of the Warrants, whether by way of, amongst others, rights issue, bonus issue, consolidation of shares, subdivision, conversion of shares or reduction of capital, in accordance with the terms and conditions of the Deed Poll. Any adjustment to the Exercise Price will be rounded up to the nearest 1 sen and in no event (otherwise than upon the consolidation of Shares) shall any adjustment involve an increase in the Exercise Price. No adjustment shall be made to the Exercise Price in any case in which the amount by which the same would be reduced in accordance with the terms and conditions of the Deed Poll would be less than 1 sen and any adjustment that would otherwise be required then to be made will not be carried forward.

Rights of the Warrant holders

: The Warrants do not confer on their holders any voting rights or any right to participate in any form of distribution and/or offer of further securities in the Company until and unless such holders of Warrants exercise their Warrants for new Shares in accordance with the provisions of the Deed Poll and such new Shares have been allotted and issued to such holders. Each holder of Warrants shall be deemed to remain the registered holder of the Warrants credited in his / its securities account until the name of the transferee is entered in the Record of Depositors.

Ranking of the new Shares to be issued pursuant to the exercise of the Warrants

: The new Shares to be issued pursuant to the exercise of the Warrants in accordance with the provisions of the Deed Poll shall, upon allotment, issuance and full payment of the Exercise Price, rank equally in all respects with the then existing issued Shares, save and except that the holders of such new Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to the Shareholders, the entitlement date (namely, the date as at the close of business on which Shareholders must be entered in the Record of Depositors with Bursa Depository in order to participate in any dividends, rights, allotments or other distributions) of which is prior to the date of allotment and issuance of such new Shares arising from the exercise of the Warrants.

Rights of the Warrant holders in the event of winding up, liquidation, compromise and/or arrangement

: Where a resolution has been passed for a members’ voluntary winding-up of the Company, or where there is a compromise or arrangement, whether or not for the purpose of or in connection with a scheme for the reconstruction of the Company or the amalgamation of the Company with 1 or more companies, then:- (i) for the purposes of such winding-up, compromise or

arrangement (other than a consolidation, amalgamation or merger in which the Company is the continuing corporation) to which the holders of the Warrants (or some other persons designated by them for such purpose by special resolution) shall be a party, the terms of such winding-up, compromise or arrangement shall be binding on all the holders of the Warrants; and

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(ii) in the event a notice is given by the Company to its Shareholders to convene a general meeting for the purpose of considering, and if thought fit, approving a resolution to voluntarily wind up the Company, and in any other case and subject always to the provisions in the Deed Poll, every holder of the Warrants shall be entitled to exercise his Warrants at any time within 6 weeks after the passing of such resolution for a members’ voluntary winding up of the Company or within 6 weeks after the granting of the court order approving the winding-up, compromise or arrangement, whereupon the Company shall allot the relevant new Shares to the holders of the Warrants credited as fully paid subject to the prevailing laws, and such holder of Warrants shall entitled to receive out of the assets of the Company which would be available in liquidation if the holder of the Warrants would have become entitled pursuant to such exercise and the liquidator of the Company shall give effect to such election accordingly. Upon the expiry of the aforesaid 6 weeks, all subscription rights shall lapse and cease to be valid for any purpose.

Modification of rights of Warrant holders

: Save as otherwise provided in the Deed Poll, a special resolution of the Warrant holders is required to sanction any modification, alteration or abrogation in respect of the rights of the Warrant holders. Any such modification is, however, subject to the approval of any relevant authorities.

Modification of the Deed Poll

: Any modification to the terms and conditions of the Deed Poll may be effected only by a further deed poll, executed by the Company and expressed to be supplemental to the Deed Poll. Any of such modification shall however be subject to the approval of Bursa Securities and the Warrant holders by way of special resolution (if so required). No amendment or addition may be made to the provisions of the Deed Poll without the sanction of a special resolution unless the amendments or additions are required to correct any typographical errors or relate purely to administrative matters or are required to comply with any provisions of the prevailing laws or regulations of Malaysia or, in the opinion of the Company, will not be materially prejudicial to the interests of the Warrant holders.

Transferability : The Warrants shall be transferable in the manner provided under

the Deed Poll, the Securities Industry (Central Depositories) Act, 1991 and the Rules of Bursa Depository and traded on Bursa Securities and subject to the provisions thereof, the Warrants shall be transferable in a Board Lot or in multiples thereof unless otherwise revised by the relevant authorities. No person shall be recognised by the Company as having title to the Warrants entitling the holder of Warrant thereof to subscribe for a fractional part of a Share or otherwise than as the sole holder of the entirety of such Share and save as provided under the Deed Poll, the Warrants shall not be transferred prior to the listing and quotation of the Warrants on the Main Market of Bursa Securities.

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Listing status : The Warrants will be listed and quoted on the Main Market of Bursa Securities.

Governing law : The Warrants and the Deed Poll shall be governed by the laws

and regulations of Malaysia.

3.3 Basis and justification for the issue price and exercise price of the Warrants The Warrants will be issued at no cost to the Entitled Shareholders. The exercise price of the Warrants will be determined and announced by the Board at a later date after taking into consideration, amongst others, the prevailing market conditions, market price of the Shares and the future prospects of the Company as illustrated in Section 5.4 in this Circular. The price-fixing announcement will also include the basis and justification for the exercise price of the Warrants. The Board intends to fix the exercise price of the Warrants at a premium between 0% and 20% to the TEAP of the Shares, calculated based on the 5-day VWAP of the Shares up to and including the last trading day prior to the price-fixing date of the Warrants. For illustrative purposes, based on an illustrative exercise price of RM1.00 for each Warrant, this represents the following premiums:-

VWAP up to 1 March 2021 (RM)

(1)Adjusted VWAP up to 1 March 2021

(RM)

(2)Premium to the adjusted VWAP

(%)

5-day 1.6095 0.8942 11.8 1-month 1.4127 0.8489 17.8

Notes:- (1) Adjusted VWAP after adjusting for the effects of the Proposed Share Split. (2) As the illustrative exercise price of RM1.00 is out-of-the-money compared to the

adjusted VWAP, no calculation for TEAP of the Shares is provided.

3.4 Ranking of the Warrants and the new Shares to be issued arising from the exercise of the Warrants The Warrant holders are not recognised as Shareholders and are not entitled to any voting rights, dividends, rights, allotments and/or other distributions until and unless such Warrant holders exercise their Warrants into new Shares. The new Shares to be issued arising from the exercise of the Warrants shall, upon allotment, issuance and full payment of the Exercise Price, rank equally in all respects with the existing issued Shares except that they shall not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid to Shareholders in respect of which the entitlement date is prior to the date of allotment and issuance of the new Shares.

3.5 Listing and quotation of the Warrants and the new Shares to be issued arising from the exercise of the Warrants Bursa Securities had, vide its letter dated 25 February 2021, granted its approval for the admission of the Warrants to the Official List as well as the listing and quotation of the Warrants and the new Shares to be issued arising from the exercise of the Warrants on the Main Market of Bursa Securities, subject to the conditions as set out in Section 8.1 of this Circular.

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3.6 Utilisation of proceeds The Proposed Bonus Issue of Warrants will not raise any immediate funds as the Warrants will be issued at no cost to Entitled Shareholders. The exact quantum of proceeds that may be received by the Company upon the exercise of the Warrants would depend on the actual number of Warrants exercised during the Exercise Period of the Warrants and the Exercise Price. Strictly for illustrative purposes, assuming full exercise of 845,903,079 (under the Minimum Scenario) or 881,927,638 Warrants (under the Maximum Scenario) at an illustrative exercise price of RM1.00 per Warrant, the Company will raise gross proceeds of approximately RM845.9 million and RM881.9 million under the Minimum Scenario and Maximum Scenario respectively. Such proceeds will be used to supplement the Group’s working capital requirements including to finance the Group’s day-to-day operations which shall include operational and administrative expense such as procurement of contract materials used in the Group’s projects, supply of labour works, payment of salaries and wages, transportation costs, utilities and other miscellaneous items. The exact breakdown for utilisation of proceeds and the timeframe for full utilisation cannot be determined at this juncture, as it would depend on the timing of receipt of such proceeds as well as the actual requirements of the Group at the time of utilisation.

4. RATIONALE FOR THE PROPOSALS 4.1 Proposed Share Split

The adjustment in the market price of the Shares as a result of the Proposed Share Split is expected to result in the Split Shares being more affordable in order to appeal to a wider group of public shareholders and investors. The Proposed Share Split may also improve the trading liquidity of the Shares by increasing the number of shares in issue. Following the completion of the Proposed Share Split, the theoretical market price of each Share will decrease by 1.8 times and the total number of Shares in issue will increase by the corresponding ratio. Notwithstanding this, Shareholders should note that the Proposed Share Split is not expected to alter the total value of the Split Shares held by them before and after the completion of the Proposed Share Split.

4.2 Proposed Bonus Issue of Warrants The rationale for the Proposed Bonus Issue of Warrants is as follows:- (i) to reward Shareholders for their continuous support by enabling them to

participate in convertible securities of the Company, which are tradable on the Main Market of Bursa Securities, without incurring any cost;

(ii) to provide Shareholders with an opportunity to increase their equity

participation in the Company at a pre-determined exercise price over the Exercise Period of the Warrants, and to allow Shareholders to further participate in the future growth and any potential capital appreciation arising therefrom of the Company when the Warrants are exercised;

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(iii) to provide the Group with additional working capital when the Warrants are exercised in the future. The exercise of the Warrants will allow the Group to obtain proceeds without incurring interest expenses as compared to bank borrowings. In addition, the exercise of the Warrants will increase the Company’s shareholders’ funds which will consequently improve its gearing levels;

(iv) to provide the Shareholders with a separate avenue to monetise the Warrants

as the Warrants will be traded separately from the existing Shares. The issuance and exercise of the Warrants will further strengthen the capital base of the Group by increasing the size of its shareholders' funds pursuant to the exercise of the Warrants and provide the Company with greater flexibility in terms of the options available to meet its future funding requirements; and

(v) it will not result in an immediate dilution of the EPS of the Company until such

exercise of the Warrants.

4.3 Details of fund-raising exercises undertaken by the Company in the past 12 months Save for the Private Placement, the Company has not undertaken any other fund-raising exercises in the past 12 months. As at the LPD, the Company has issued a total of 30,596,700 Placement Shares and raised total proceeds of RM22.0 million. The Private Placement is pending completion. Further details on the status of the Private Placement is set out in Section 9(i) of this Circular. For information, the details of the proposed utilisation of proceeds from the Private Placement based on the Company’s circular to the Shareholders dated 24 October 2019 is set out as follows:-

Utilisation of proceeds

Intended timeframe for utilisation from completion of

the Private Placement

(1)Proposed utilisation (RM’000)

(i) Expansion of customised energy

efficiency solutions business Within 24 months 17,000

(ii) Project costs and expenses Within 24 months 4,500 (iii) Acquisition and/or investment in

other complementary businesses and/or assets

Within 24 months 4,694

(iv) Estimated expenses for the

Private Placement Immediate 900

Total 27,094

Note:- (1) Based on the illustrative issue price of RM0.3839 per Placement Share in the

Company’s circular to the Shareholders dated 24 October 2019 in relation to the Private Placement.


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5. INDUSTRY OVERVIEW AND PROSPECTS 5.1 Malaysian economy

The Malaysian economy recorded a negative growth of 3.4% in the fourth quarter (third quarter (“3Q”) 2020: -2.6%), largely attributable to the imposition of the conditional MCO on a number of states since mid-October. The restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity. Nevertheless, the continued improvement in external demand provided support to growth. Consequently, except for manufacturing, all economic sectors continued to record negative growth.

For 2021, while near-term growth will be affected by the re-introduction of stricter containment measures, the impact, however, will be less severe than that experienced in 2020. The growth trajectory is projected to improve from the second quarter onwards. The improvement will be driven by the recovery in global demand, turnaround in public and private sector expenditure amid continued support from policy measures including PENJANA, KITA PRIHATIN, 2021 Budget and PERMAI, and higher production from existing and new facilities in the manufacturing and mining sectors. The vaccine rollout from February onwards is also expected to lift sentiments. (Source: Economic and Financial Developments in the Malaysia in the Fourth Quarter of 2020, BNM)

The Malaysian economy contracted 8.3% in the first half of 2020, with a decline of 17.1% in the second quarter. The economy is expected to contract at a slower pace in the second half of the year, aided by the speedy implementation of various stimulus packages to support people and revitalise the economy. In 2020, the economy is expected to contract by 4.5%. The impact of the packages is anticipated to have a spill- over effects and provide an additional boost to the economy in 2021. With the anticipated improvement in global growth and international trade, the Malaysian economy is projected to rebound between 6.5% and 7.5% in 2021. Growth will continue to be supported by strong economic fundamentals and a well-diversified economy. However, the favourable outlook hinges on two major factors – the successful containment of the COVID-19 pandemic and sustained recovery in external demand. (Source: Economic Outlook 2021, Ministry of Finance Malaysia)

5.2 Mechanical and electrical engineering services industry in Malaysia Engineering is the field or discipline, practice, profession and art that relates to the development, acquisition and application of technical, scientific and mathematical knowledge about the understanding, design, development, invention, innovation and use of materials, machines, structures, systems and processes for specific purposes.

In the construction sector, electrical engineering services involve electrical wiring and fitting for electricity transmission and distribution, communication and information technology networks and extra low voltage systems. Electrical engineering services may be employed in the installation of new electrical components and systems, or the maintenance and repair of existing electrical systems. Meanwhile, mechanical engineering services involve the deployment of heating, ventilation and air conditioning systems, water supply and sanitation systems, fire protection systems as well as escalators and lifts. Mechanical engineering services may be employed in the installation of new mechanical components and systems or the maintenance and repair of existing mechanical systems.


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Mechanical and electrical engineering services providers are responsible for the implementation of systems that make properties function. This includes the implementation of mechanical systems such as heating, ventilation and air conditioning systems; water supply and sanitation; fire protection systems; and escalators and lifts, as well as electrical systems such as electricity transmission and distribution systems; communications and information technology networks; lighting systems; and security and alarm systems. Mechanical and electrical engineering services in Malaysia, measured in terms of total value of construction work done for mechanical and electrical engineering services, increased from RM3.07 billion in 2017 to RM4.36 billion in 2020 at a CAGR of 12.40%. The total value of construction work done comprises the installation value of electrical, plumbing, heat and air-conditioning and other construction work done related to mechanical and electrical engineering services. SMITH ZANDER forecasts the mechanical and electrical engineering services industry to further grow from RM4.36 billion in 2020 to RM5.14 billion in 2022, based on the total value of construction work done for mechanical and electrical engineering services, at a CAGR of 8.58%, at a lower growth rate in view of the relatively slower economic activities resulting from the COVID-19 pandemic. The mechanical and electrical engineering services industry is driven by:- (i) Refurbishment of properties creates demand for mechanical and

electrical engineering services

Growth opportunities for refurbishment and maintenance projects are present in Malaysia’s property and construction sector as existing buildings are getting old, and require refurbishment and maintenance to prolong the life of the property. Among the factors that influence growth in property refurbishment are the increasing number of ageing buildings, limited vacant land for new development and technological changes, especially the use of information communication technology. Collectively, these factors create demand for mechanical and electrical engineering services for refurbishment and maintenance projects.

The prospects for property refurbishment and maintenance are positive, supported by the demand for secondhand residential and commercial properties, and the need to upgrade electrical and mechanical systems during the lifespan of buildings. The growth prospects for property refurbishment and maintenance are anticipated to create demand for mechanical and electrical engineering services. Nevertheless, in view of the prolonged outbreak of COVID-19 pandemic in Malaysia, businesses and consumers are more cautious in their spending including spending on property refurbishment and maintenance. This may temporary slowdown the growth prospect of property refurbishment and maintenance services until the impact of the outbreak of the COVID-19 pandemic fully subsides.

(ii) Demand for residential, commercial and industrial properties creates

demand for mechanical and electrical engineering services

The demand for mechanical and electrical engineering services, particularly that in new development projects, is dependent on construction activities undertaken to erect residential, commercial and industrial properties. Construction activities are largely economic-driven, whereby economic growth has the potential to contribute to increased disposable incomes among the population arising from higher employment and increased earnings for businesses and companies due to greater operating scale and wider market reach.

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Consequently, this leads to increased demand for residential, commercial and industrial properties, which in turn leads to higher demand for mechanical and electrical engineering services.

However, any sudden crisis, such as the outbreak of the COVID-19 pandemic since early 2020, will dampen economic growth. Any prolonged dampening in economic growth, even after the movement restrictions imposed by the Government (i.e. MCO, conditional MCO and recovery MCO) are lifted, and until the impact of the outbreak of the COVID-19 pandemic fully subsides, may lead to loss of businesses and jobs, pay cuts or lower salary growth and increase in unemployment rate. All of these may subsequently reduce consumer purchasing power, including the purchase of properties and affect the demand for properties. Nevertheless, in view of the COVID-19 pandemic, BNM has revised the forecast of GDP growth in 2020 to the range of -3.50% to -5.50%, indicating potential adverse economic conditions for the year which may negatively impact the demand for properties. To mitigate the economic impact of the COVID-19 pandemic, BNM announced a reduction of overnight policy rate by a total of 100 basis points to 1.75 percent between 3 March 2020 and 7 July 2020, as well as a deferment of all loan/financing repayments for a period of 6 months, with effect from 1 April 2020 to ease the cash flow of individuals and small and medium-sized enterprises as part of an economic stimulus package known as package PRIHATIN.

Further, under a short-term economic recovery plan known as PENJANA, the National Home Ownership Campaign (“HOC”) has been reintroduced for residential properties purchased between 1 June 2020 and 31 May 2021, and the 70% margin of financing limit applicable for a home-buyer’s third housing loan onwards for properties priced RM600,000 and above will be uplifted during the HOC period. Additionally, as announced under Budget 2021, full stamp duty exemptions will be provided to first-time Malaysian home-buyers who purchase residential properties priced RM500,000 and below between 1 January 2021 and 31 December 2025. All of these are expected to support the demand for properties in Malaysia.

(Source: IMR Report)

5.3 Energy efficiency industry in Malaysia

Energy management comprises the tracking, monitoring and planning of energy usage to control and optimise energy consumption in a building, to achieve energy efficiency. Energy conservation involves the behaviour or act of conserving energy usage that can produce positive outcome in reducing energy consumption. The growth of the energy efficiency industry is built on the growth of electricity consumption as energy efficiency solutions function to reduce energy consumption to perform the same task by encouraging efficient energy use. As such, when the consumption of electricity increases, it will create a larger potential market for the energy efficiency industry. The total volume of electricity consumption in Malaysia grew from 155,641 Gigawatt hours (“GWh”) in 2018 to an estimated 165,184 GWh in 2020, at a CAGR of 3.02%. SMITH ZANDER forecasts the volume of electricity consumption to grow by 2.66% from an estimated 165,184 GWh in 2020 to 169,578 GWh in 2021.


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The potential size of the energy efficiency industry is estimated by measuring the potential cost savings that can be achieved from the forecast electricity consumption in value terms in 2021. The cost savings that can be achieved from the implementation of energy efficiency solutions is estimated to be at 3.90% in 2021, which translates to an estimated potential electricity cost savings of RM2.20 billion.

The energy efficiency industry is driven by:- (i) Increasing consumption and rising prices of electricity to drive the

demand for energy efficiency solutions from the commercial and industrial sectors

The demand for energy efficiency solutions is largely contributed by the commercial and industrial sectors as these sectors comprise revenue generating businesses in which cost is as an important factor in determining a business’s profit. For the commercial sector, a large share of electricity is used in buildings for cooling, ventilation, lighting and appliances, amongst others; while for the industrial sector, electricity is often used for machine operations as well as for cooling, ventilation and lighting. Growth in electricity consumption, coupled with rising prices per unit of electricity is expected to drive the demand for energy efficiency solutions from the commercial and industrial sectors.

(ii) Government initiatives to drive the energy efficiency industry

The Government has undertaken and implemented various measures and initiatives to promote efficient energy use and this includes the implementation of energy efficiency initiatives including the National Energy Efficiency Action Plan (NEEAP) with a 10-year implementation period from 2016-2025. The implementation of energy efficiency initiatives is expected to positively impact the energy efficiency industry as individuals and companies seek to achieve efficient energy use. The electricity savings will eventually lead to a reduction in peak demand and the need to build new power plants in the future.

In addition, the draft Energy Efficiency and Conservation Act (“EECA”) has been presented and approved by the Cabinet, and is expected to be presented to parliament and be tabled in 2021. EECA is expected to focus on reducing energy use and lower the electricity bills of consumers. Further, the 12th Malaysia plan which is to be tabled at the parliament in the first quarter of 2021 includes environmental sustainability dimension, among others the blue economy, green technology, renewable energy as well as energy efficiency.

As such, these Government initiatives to promote efficient energy use will drive demand for energy efficiency solutions.

(Source: IMR Report)


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5.4 Prospects and future plans of the Group The Group is principally involved in the provision of electrical and mechanical engineering services in Malaysia. The nature of the Group’s business is project-based and its customers are primarily main contractors, project owners and property developers in Malaysia’s construction industry.

In light of the unprecedented COVID-19 pandemic globally, the Government effected containment measures since mid-March 2020 through the implementation of the MCO (including subsequent phases of MCO) including, amongst others, travel bans and measures to promote social distancing. The Group’s business, which is primarily in the construction industry, have been affected in the short run mainly due to temporary suspension of project operations and supply chain disruptions. Nevertheless, the Group has resumed its operations for some of its projects since 4 May 2020 and resumed full operations for all its projects from 1 June 2020. Upon resumption of business operations, the Group incurred higher labour cost to meet the delayed project timeline. As a result, the Group’s unaudited revenue and PAT for FYE 31 December 2020 declined by 5.5% and 48.7% respectively as compared to the previous financial year. Following the resumption of business operations and recovery of the Group’s financial performance, the Group has continued to secure several new projects during the calendar year 2020 as well as a new project in early February 2021. As at the LPD, the Group’s order book, contracts secured and tenders are as follows:- (i) order book balance is approximately RM370.0 million; and (ii) approximately RM214.0 million worth of tenders still pending. The Malaysian Government, however, imposed MCO with renewed restrictions in most states across Malaysia commencing from 13 January 2021 (“MCO 2.0”) to curb the sharp spike in COVID-19. Under the MCO 2.0, activities under the construction industry were allowed to operate with strict adherence to the relevant SOPs. In view that the Group was mainly able to carry out its business and operations through complying with the relevant SOPs, the Group does not foresee any material disruptions to its projects’ timelines and its business operations. Moving forward, the Group plans to continue to strengthen its market position in Malaysia’s electrical and mechanical engineering services industry by tendering for more projects. In addition to the Klang Valley area, the Group also intends to expand its business to cover the rest of Malaysia. Historically, the Group had focused on securing projects in the Central region of Malaysia, mainly in Kuala Lumpur and Selangor. Expansion of its business beyond the Klang Valley area is expected to bode well for the Group’s long-term business growth, thereby allowing them to realise sustainable growth and generate greater revenue. Apart from its core business in the provision of electrical and mechanical engineering services, the Group also intends to grow its revenue from other complementary services such as the provision of energy efficient solutions, clean energy generation, renewable energy solutions and building management solutions. At this juncture, the Group has allocated total capital and investment outlay of approximately RM100 million per annum for these complementary services, which includes its ongoing new ventures, new contracts to be secured with new customers for amongst others, construction of energy plant as well as through acquisition of companies in these divisions as further explained below.


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The Group had in end-2019 begun to offer comprehensive end-to-end customised energy efficiency solutions, which utilises software and hardware to optimise energy consumption of an electrical system. As at the LPD, the Group currently has 13 performance contracts (2 in Malaysia, 11 in Thailand). Moving forward, the Group plans to further venture to neighbouring ASEAN countries (e.g. Thailand and Vietnam) to enhance its market presence for its customised energy efficiency solutions business.

In late-2020, the Group had completed the acquisition of Kiev CRG Sdn Bhd (“Kiev CRG”), marking the Group’s foray into the clean energy generation business. Kiev CRG has a contract to build, own and operate a captive combined heat and power (also known as cogeneration) plant with a capacity of 1.5 megawatt (“MW”) in Seremban. The generated electricity and heat will be sold to a third party for a period of 8 years under an energy purchase agreement. As at the LPD, the cogeneration plant is under construction and the operation is expected to commence in the third quarter of 2021. This is expected to provide additional income sources to the Group upon commencement of the cogeneration plant. The Group is also exploring other new ventures in the clean energy generation business, such as the proposed acquisition of Konpro Industries Sdn Bhd (“Konpro Industries”) and Meru One Sdn Bhd (“Meru One”). Konpro Industries is the owner of a 2.2 MW waste heat recovery facility located in Negeri Sembilan, while Meru One owns a 2 MW cogeneration facility located in Klang, Selangor. As at the LPD, the parties are still in the midst of negotiating and finalising the definitive agreements which are subject to, amongst others, the satisfactory outcome of the legal, financial and technical due diligence conducted. Further, the Company had on 16 February 2021 announced that KAB Smart Solar Energy Sdn Bhd (“KSSE”) a wholly-owned subsidiary of the Company, had entered into a binding term sheet in respect of a proposed subscription by KSSE of 80% of the total proposed enlarged share capital in Mayang Hijau Sdn Bhd (“MHSB”), a company principally engaged in generation of renewable energy, environmental and green technology engineering consultancy. The proposed subscription marks the Group’s foray into the renewable energy segment and upon its successful completion, MHSB will become an indirect subsidiary of the Company. These new ventures are expected to contribute positively to the Group’s financial performance moving forward. Premised on the above, the Board is cautiously optimistic of the prospects of the Group moving forward. The Group will continue to review and monitor the COVID-19 pandemic and the economic situation in countries in which the Group operates in, while exercising prudence in spending in light of the market challenges and conditions brought about by the COVID-19 pandemic.


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6. EFFECTS OF THE PROPOSALS

6.1 Share capital

The pro forma effects of the Proposals on the issued share capital of the Company are as follows:-

Minimum Scenario Maximum Scenario No. of Shares

(excluding treasury shares)

No. of treasury shares

Total issued Shares

Issued share capital

(RM)

No. of Shares (excluding treasury shares)

No. of treasury shares

Total issued Shares

Issued share capital

(RM) Issued share capital as at the LPD 939,892,310 49,388 939,941,698 60,799,253 939,892,310 49,388 939,941,698 60,799,253 New Shares to be issued pursuant to the Private Placement

- - - - 39,977,900 -

39,977,900 (1)36,076,057

Resale of treasury shares in the open market

- - - - 49,388 (49,388) - -

939,892,310 49,388 939,941,698 60,799,253 979,919,598 - 979,919,598 96,875,310

Issued share capital after the Proposed Share Split

1,691,806,158 88,898 1,691,895,056 60,799,253 1,763,855,276 - 1,763,855,276 96,875,310

New Shares to be issued assuming full exercise of the Warrants

845,903,079 - 845,903,079 (2)845,903,079 881,927,638 - 881,927,638 (2)881,927,638

Enlarged issued share capital after the Proposals

2,537,709,237 88,898 2,537,798,135 906,702,332 2,645,782,914 - 2,645,782,914 978,802,948

Notes:- (1) Assuming all 39,977,900 new Shares available to be issued as at the LPD under the Private Placement were issued at an illustrative issue price of

RM0.9024 per Share (based on 10% discount to the 5-day VWAP up to the LPD of RM1.0026). (2) Based on an illustrative exercise price of RM1.00 per Warrant.

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6.2 NA and gearing The pro forma effects of the Proposals on the NA and gearing of the Group are as follows:- Minimum Scenario

Group level

Audited as at 31 December

2019

(I) (II) (III) (IV)

After subsequent events(1)

After (I) and the Proposed Share

Split(2)

After (II) and the Proposed Bonus Issue of Warrants

After (III) and assuming full

exercise of the Warrants(3)

(RM’000) (RM’000) (RM’000) (RM’000) (RM’000) Share capital 48,299 60,799 60,799 60,799 906,702 Foreign currency translation reserve (4)- (4)- (4)- (4)- (4)- Treasury shares (241) (4) (4) (4) (4) Retained profits 23,335 21,525 21,225 21,225 21,225 Shareholders’ equity / NA 71,393 82,320 82,020 82,020 927,923 Non-controlling interest (36) (66) (66) (66) (66) Total equity 71,357 82,254 81,954 81,954 927,857 No. of Shares in issue, excluding treasury shares (‘000)

369,103 939,892 1,691,806 1,691,806 2,537,709

NA per Share (RM) 0.19 0.09 0.05 0.05 0.37 Total borrowings (RM‘000) 12,596 13,058 13,058 13,058 13,058 Gearing ratio (times) 0.18 0.16 0.16 0.16 0.01

Notes:- (1) After taking into account the following subsequent events up to the LPD:-

(i) the subdivision of every 2 Shares into 5 Shares which was completed on 27 February 2020; (ii) acquisition of an indirect 49.997%-owned subsidiary, Energy Optimization (Thailand) Co., Ltd. for a cash consideration of THB4.6 million

(equivalent to approximately RM0.6 million based on BNM’s exchange rate of THB1:RM0.1368 on 31 December 2019) which was completed on 26 March 2020;

(iii) interim dividend via a share dividend distribution of 2,767,862 treasury shares on the basis of 3 treasury shares for every 1,000 existing Shares held by the Shareholders, which was distributed to the entitled Shareholders on 14 April 2020;

(iv) distribution of cash dividend of RM0.0025 per Share amounting to RM2.3 million to the Shareholders during the second quarter ended 30 June 2020;

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(v) acquisition by KAB Energy Power Sdn Bhd (a 90% subsidiary of the Company at the material time) of 7 ordinary shares in Kiev CRG Sdn Bhd, representing 70% of the total issued share capital in Kiev CRG Sdn Bhd, for a cash consideration of RM175,000, which was completed on 23 July 2020. KAB had subsequently increased its shareholding in KAB Energy Power Sdn Bhd from 90% to 100% on 3 September 2020. Thereafter, KAB Energy Power Sdn Bhd acquired the remaining 3 ordinary shares in Kiev CRG Sdn Bhd, representing 30% of the total issued share capital in Kiev CRG Sdn Bhd, for a cash consideration of RM75,000, which has been completed as at the LPD. Following that, as at LPD, Kiev CRG Sdn Bhd is a wholly-owned subsidiary of KAB Energy Power Sdn Bhd;

(vi) issuance of 6,033,600 new Shares on 13 November 2020 at the issue price of RM0.8287 each arising from the issuance of second tranche of Placement Shares under the Private Placement; and

(vii) issuance of 8,333,100 new Shares on 9 February 2021 at the issue price of RM0.90 each arising from the issuance of third tranche of Placement Shares under the Private Placement.

(2) After deducting estimated expenses to be incurred in relation to the Proposals of approximately RM0.3 million. (3) Based on the issuance of 845,903,079 new Shares arising from the full exercise of the Warrants at the illustrative exercise price of RM1.00 per

Warrant. (4) Less than RM1,000. Maximum Scenario

Group level

Audited as at 31 December

2019

(I) (II) (III) (IV) (V)

After subsequent

events(1)

After (I), the Private Placement

and resale of treasury shares in the open market(2)

After (II) and the Proposed Share Split(3)

After (III) and the Proposed

Bonus Issue of Warrants

After (IV) and assuming full

exercise of the Warrants(4)

(RM’000) (RM’000) (RM’000) (RM’000) (RM’000) (RM’000) Share capital 48,299 60,799 96,875 96,875 96,875 978,803 Foreign currency translation reserve (5)- (5)- (5)- (5)- (5)- (5)- Treasury shares (241) (4) - - - - Retained profits 23,335 21,525 20,674 20,374 20,374 20,374 Shareholders’ equity / NA 71,393 82,320 117,549 117,249 117,249 999,177 Non-controlling interest (36) (66) (66) (66) (66) (66) Total equity 71,357 82,254 117,483 117,183 117,183 999,111 No. of Shares in issue, excluding treasury shares (‘000)

369,103 939,892 979,920 1,763,855 1,763,855 2,645,783

NA per Share (RM) 0.19 0.09 0.12 0.07 0.07 0.38 Total borrowings (RM‘000) 12,596 13,058 13,058 13,058 13,058 13,058 Gearing ratio (times) 0.18 0.16 0.11 0.11 0.11 0.01

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Notes:- (1) After taking into account the following subsequent events up to the LPD:-

(i) the subdivision of every 2 Shares into 5 Shares which was completed on 27 February 2020; (ii) acquisition of an indirect 49.997%-owned subsidiary, Energy Optimization (Thailand) Co., Ltd. for a cash consideration of THB4.6 million

(equivalent to approximately RM0.6 million based on BNM’s exchange rate of THB1:RM0.1368 on 31 December 2019) which was completed on 26 March 2020;

(iii) interim dividend via a share dividend distribution of 2,767,862 treasury shares on the basis of 3 treasury shares for every 1,000 existing Shares held by the Shareholders, which was distributed to the entitled Shareholders on 14 April 2020;

(iv) distribution of cash dividend of RM0.0025 per Share amounting to RM2.3 million to the Shareholders during the second quarter ended 30 June 2020;

(v) acquisition by KAB Energy Power Sdn Bhd (a 90% subsidiary of the Company at the material time) of 7 ordinary shares in Kiev CRG Sdn Bhd, representing 70% of the total issued share capital in Kiev CRG Sdn Bhd, for a cash consideration of RM175,000, which was completed on 23 July 2020. KAB had subsequently increased its shareholding in KAB Energy Power Sdn Bhd from 90% to 100% on 3 September 2020. Thereafter, KAB Energy Power Sdn Bhd acquired the remaining 3 ordinary shares in Kiev CRG Sdn Bhd, representing 30% of the total issued share capital in Kiev CRG Sdn Bhd, for a cash consideration of RM75,000, which has been completed as at the LPD. Following that, as at LPD, Kiev CRG Sdn Bhd is a wholly-owned subsidiary of KAB Energy Power Sdn Bhd;

(vi) issuance of 6,033,600 new Shares on 13 November 2020 at the issue price of RM0.8287 each arising from the issuance of second tranche of Placement Shares under the Private Placement; and

(vii) issuance of 8,333,100 new Shares on 9 February 2021 at the issue price of RM0.90 each arising from the issuance of third tranche of Placement Shares under the Private Placement.

(2) Assuming that prior to the Split Shares Entitlement Date and Bonus Warrants Entitlement Date:- (i) all 39,977,900 Placement Shares are issued at an illustrative issue price of RM0.9024 per Share and after deducting estimated expenses to

be incurred in relation to the Private Placement of approximately RM0.9 million; and (ii) all 49,388 Shares held as treasury shares as at the LPD are resold in the open market at the 5-day VWAP of the Shares up to and including

the LPD of RM1.0026. (3) After deducting estimated expenses to be incurred in relation to the Proposals of approximately RM0.3 million. (4) Based on the issuance of 881,927,638 new Shares arising from the full exercise of the Warrants at the illustrative exercise price of RM1.00 per

Warrant. (5) Less than RM1,000.


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6.3 Substantial Shareholders’ shareholdings The pro forma effects of the Proposals on the substantial Shareholders’ shareholdings based on the register of substantial Shareholders of the Company as at the LPD are as follows:- Minimum Scenario

Substantial Shareholders

As at the LPD (I)

After the Proposed Share Split Direct Indirect Direct Indirect

No. of Shares (1)% No. of Shares (1)% No. of Shares (2)% No. of Shares (2)% Dato' Lai Keng Onn 351,580,000 37.41 (4)13,000,000 1.38 632,844,000 37.41 (4)23,400,000 1.38 GAT Success (M) Sdn Bhd 100,300,000 10.67 - - 180,540,000 10.67 - - Everest Pavilion Sdn Bhd - - (5)100,300,000 10.67 - - (5)180,540,000 10.67 Cherry Anne Tong Chun Ling - - (6)100,300,000 10.67 - - (6)180,540,000 10.67 Faith Chow Poh Ten 91,486,645 9.73 (7)4,458,335 0.47 164,675,961 9.73 (7)8,025,003 0.47 Kington Tong Kum Loong 71,931,214 7.65 (7)4,458,335 0.47 129,476,185 7.65 (7)8,025,003 0.47


(II) After (I) and upon full exercise of the Warrants

Direct Indirect No. of Shares (3)% No. of Shares (3)%

Dato' Lai Keng Onn 949,266,000 37.41 (4)35,100,000 1.38 GAT Success (M) Sdn Bhd 270,810,000 10.67 - - Everest Pavilion Sdn Bhd - - (5)270,810,000 10.67 Cherry Anne Tong Chun Ling - - (6)270,810,000 10.67 Faith Chow Poh Ten 247,013,941 9.73 (7)12,037,504 0.47 Kington Tong Kum Loong 194,214,277 7.65 (7)12,037,504 0.47

Notes:- (1) Based on 939,892,310 Shares (excluding 49,388 treasury shares) as at the LPD. (2) Based on 1,691,806,158 Shares (excluding 88,898 treasury shares) following the completion of the Proposed Share Split. (3) Based on 2,537,709,237 Shares (excluding 88,898 treasury shares) assuming full exercise of the Warrants. (4) Deemed interest in the Shares held by Fastrans Ventures Sdn Bhd pursuant to Section 8 of the Act. (5) Deemed interest in the Shares held by GAT Success (M) Sdn Bhd pursuant to Section 8 of the Act. (6) Deemed interest by virtue of her interest in EPSB pursuant to Section 8 of the Act. EPSB is deemed interested in the Shares held by GAT Success

(M) Sdn Bhd pursuant to Section 8 of the Act.

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(7) Deemed interest in the Shares held by Regalis Investment Ltd pursuant to Section 8 of the Act. Maximum Scenario


As at the LPD

(I) After the Private Placement and resale of

treasury shares in the open market Direct Indirect Direct Indirect

No. of Shares (1)% No. of Shares (1)% No. of Shares (2)% No. of Shares (2)% Dato' Lai Keng Onn 351,580,000 37.41 (5)13,000,000 1.38 351,580,000 35.88 (5)13,000,000 1.33 GAT Success (M) Sdn Bhd 100,300,000 10.67 - - 100,300,000 10.24 - - Everest Pavilion Sdn Bhd - - (6)100,300,000 10.67 - - (6)100,300,000 10.24 Cherry Anne Tong Chun Ling - - (7)100,300,000 10.67 - - (7)100,300,000 10.24 Faith Chow Poh Ten 91,486,645 9.73 (8)4,458,335 0.47 91,486,645 9.34 (8)4,458,335 0.45 Kington Tong Kum Loong 71,931,214 7.65 (8)4,458,335 0.47 71,931,214 7.34 (8)4,458,335 0.45


(II) After (I) and the Proposed Share Split

(III) After (II) and upon full exercise of the Warrants

Direct Indirect Direct Indirect No. of Shares (3)% No. of Shares (3)% No. of Shares (4)% No. of Shares (4)%

Dato' Lai Keng Onn 632,844,000 35.88 (5)23,400,000 1.33 949,266,000 35.88 (5)35,100,000 1.33 GAT Success (M) Sdn Bhd 180,540,000 10.24 - - 270,810,000 10.24 - - Everest Pavilion Sdn Bhd - - (6)180,540,000 10.24 - - (6)270,810,000 10.24 Cherry Anne Tong Chun Ling - - (7)180,540,000 10.24 - - (7)270,810,000 10.24 Faith Chow Poh Ten 164,675,961 9.34 (8)8,025,003 0.45 247,013,941 9.34 (8)12,037,504 0.45 Kington Tong Kum Loong 129,476,185 7.34 (8)8,025,003 0.45 194,214,277 7.34 (8)12,037,504 0.45

Notes:- (1) Based on 939,892,310 Shares (excluding 49,388 treasury shares) as at the LPD. (2) Based on 979,919,598 Shares following the completion of the Private Placement and resale of treasury shares in the open market. (3) Based on 1,763,855,276 Shares following the completion of the Proposed Share Split. (4) Based on the enlarged issued share capital of 2,645,782,914 Shares. (5) Deemed interest in the Shares held by Fastrans Ventures Sdn Bhd pursuant to Section 8 of the Act. (6) Deemed interest in the Shares held by GAT Success (M) Sdn Bhd pursuant to Section 8 of the Act. (7) Deemed interest by virtue of her interest in EPSB pursuant to Section 8 of the Act. EPSB is deemed interested in the Shares held by GAT Success

(M) Sdn Bhd pursuant to Section 8 of the Act. (8) Deemed interest in the Shares held by Regalis Investment Ltd pursuant to Section 8 of the Act.

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6.4 Earnings and EPS The Proposals are not expected to have any material effect on the earnings of the Group for the FYE 31 December 2021. The potential effects of the exercise of the Warrants on the future earnings of the Group and EPS of the Company will depend upon, amongst others, the number of Warrants exercised at any point in time and the returns generated by the Group from the use of proceeds raised from the exercise of the Warrants. Assuming that the earnings of the Group remain unchanged, the EPS of the Company will be proportionately diluted as a result of the increase in the number of Shares in issue pursuant to the Proposed Share Split and as and when the Warrants are exercised into new Shares. For illustration purposes, assuming that the Proposals had been completed and the Warrants had been fully exercised at the beginning of the FYE 31 December 2019 and the earnings of the Group remain unchanged, the pro forma effects of the Proposals on the consolidated earnings and EPS of the Group are as follows:-

Minimum Scenario Maximum Scenario

PAT attributable to owners of the

Company (RM)

Weighted average number of Shares

in issue (excluding

treasury shares) (units)

EPS (sen)

PAT attributable to owners of the

Company (RM)

Weighted average number of Shares

in issue (excluding

treasury shares) (units)

EPS (sen)

Audited FYE 31 December 2019 10,436,914 341,141,182 3.06 10,436,914 341,141,182 3.06 (I) After the Private Placement and resale of

treasury shares in the open market(1) 10,436,914 341,141,182 3.06

9,586,426 381,119,082 2.52

(II) After (I) and the Proposed Share Split (2)10,136,914 614,054,127 1.65 (2)9,286,426 686,014,346 1.35 (III) After (II) and the Proposed Bonus Issue of

Warrants 10,136,914 614,054,127

1.65 9,286,426 686,014,346 1.35

(IV) After (III) and assuming full exercise of the

Warrants 10,136,914 921,081,189

1.10 9,286,426 1,029,021,519 0.90

Notes:- (1) For the Maximum Scenario, assuming that prior to the Split Shares Entitlement Date and Bonus Warrants Entitlement Date:-

(i) all 39,977,900 new Shares pursuant to the Private Placement have been issued and after deducting estimated expenses to be incurred in relation to the Private Placement of approximately RM0.9 million (Minimum Scenario: nil); and

(ii) all 49,388 Shares held as treasury shares as at the LPD are resold in the open market at the 5-day VWAP of the Shares up to and including the LPD of RM1.0026 (Minimum Scenario: nil).

(2) After deducting estimated expenses to be incurred in relation to the Proposals of approximately RM0.3 million.

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6.5 Convertible securities As at the LPD, the Company does not have any other convertible securities and there are no outstanding ESOS Options which have been granted and not exercised. In conjunction with the Proposals, the Company has undertaken not to grant any further ESOS Options until the completion of the Proposals.

7. TENTATIVE TIMELINE

The tentative timeline of events leading to the completion of the Proposals is as follows:-

Date Events 25 March 2021 EGM for the Proposals March / April 2021 Announcement of the Split Shares Entitlement Date Split Shares Entitlement Date Listing and quotation of the Split Shares on the Main Market of Bursa

Securities Completion of the Proposed Share Split April / May 2021 Announcement of the Bonus Warrants Entitlement Date Listing and quotation of the Warrants on the Main Market of Bursa Securities Completion of the Proposed Bonus Issue of Warrants

8. APPROVALS REQUIRED AND CONDITIONALITY 8.1 Approvals required

The Proposals are subject to approvals being obtained from the following:- (i) Bursa Securities for the following:-

(a) Proposed Share Split;

(b) admission to the Official List and the listing and quotation of up to

881,927,638 Warrants to be issued pursuant to the Proposed Bonus Issue of Warrants on the Main Market of Bursa Securities; and

(c) listing and quotation of up to 881,927,638 new Shares to be issued arising from the exercise of the Warrants on the Main Market of Bursa Securities.

The approval of Bursa Securities was obtained on 25 February 2021, subject to the following conditions:-

Conditions Status of

compliance (i) KAB and Mercury Securities must fully comply with the

relevant provisions under the Listing Requirements at all times pertaining to the implementation of the Proposals;

To be complied

(ii) KAB and Mercury Securities are required to inform

Bursa Securities upon the completion of the Proposals; To be complied

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Conditions Status of

compliance (iii) KAB and Mercury Securities are required to furnish

Bursa Securities with a written confirmation of its compliance with the terms and conditions of Bursa Securities’ approval once the Proposals are completed;

To be complied

(iv) KAB or Mercury Securities are required to make the

relevant announcements pursuant to Paragraphs 6.35(2)(a) and (b) and 6.35(4) of the Listing Requirements in relation to the Proposed Share Split;

To be complied

(v) KAB is required to furnish Bursa Securities with a

certified true copy of the resolution passed by shareholders at EGM for the Proposed Share Split prior to the listing and quotation of the Split Shares; and

To be complied

(vi) KAB is required to furnish Bursa Securities on a

quarterly basis a summary of the total number of Shares listed pursuant to the exercise of Warrants as at the end of each quarter together with a detailed computation of listing fees payable.

To be complied

(ii) Shareholders at the forthcoming EGM for the Proposals; and

(iii) any other relevant parties / authorities, if required.

8.2 Conditionality The Proposed Bonus Issue of Warrants is not conditional upon the Proposed Share Split and vice versa. In addition, the Proposals are not conditional upon any other corporate exercise / scheme being or proposed to be undertaken by the Company.

9. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION Save for the Proposals and the following, there are no other corporate exercises which have been announced by the Company but are pending completion before the date of this Circular:- (i) Mercury Securities had on behalf of the Board, announced the Private Placement on

10 October 2019. The Private Placement has been approved by Bursa Securities on 17 October 2019 and approved by the Shareholders on 8 November 2019. On 26 March 2020, the Company obtained approval from Bursa Securities for its application for an extension of time of 6 months from 16 April 2020 to 16 October 2020 for the Company to complete the implementation of the Private Placement. The Company further received approval from Bursa Securities on 13 October 2020 for a further extension of time to complete the Private Placement by 16 April 2021. The Company had on 29 November 2019 and 13 November 2020 and 10 February 2021 issued a total of 30,596,700 Placement Shares to the identified investors. As at the LPD, the Company has up to 39,977,900 Placement Shares to be issued pursuant to the Private Placement.


26

(ii) On 25 March 2020, the Company announced the proposed acquisition by KAB Energy Power Sdn Bhd, a wholly-owned subsidiary of the Company of 2,000,000 ordinary shares in Konpro Industries Sdn Bhd and 600,000 ordinary shares in Meru One Sdn Bhd, both representing 80% each of the total paid up share capital in Konpro Industries Sdn Bhd and Meru One Sdn Bhd respectively, from Invest Energy Sdn Bhd for a total cash consideration of RM7,260,000.00 and the assumption of liabilities totalling RM4,240,000.00. As at the LPD, the parties are still in the midst of negotiating and finalising the definitive agreements which are subject to, amongst others, the satisfactory outcome of the legal, financial and technical due diligence conducted.

(iii) On 16 February 2021, the Company announced that KAB Smart Solar Energy Sdn Bhd

(“KSSE”), a wholly-owned subsidiary of the Company had entered into a binding term sheet with Mayang Hijau Sdn Bhd (“MHSB”), Evergreen Thumbsup Sdn Bhd (“ETSB”) and Mr Heng Boon Liang for the proposed subscription of 800,000 ordinary shares in MHSB, representing 80% of the total enlarged paid up share capital in MHSB for a total cash consideration of RM800,000.00 (“Proposed Subscription”). The Proposed Subscription also contemplates the issuance of 199,999 ordinary shares in MHSB to ETSB. As at 16 February 2021, the Proposed Subscription is subject to the fulfilment of the conditions precedent to the Proposed Subscription. Upon completion of the Proposed Subscription, MHSB shall be held by KSSE as to 800,000 ordinary shares (80%) and by ETSB as to 200,000 ordinary shares (20%).

10. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS, CHIEF EXECUTIVE AND/OR PERSONS CONNECTED WITH THEM None of the Directors, major Shareholders, chief executive of the Company and/or persons connected to them have any interest, direct or indirect, in the Proposals apart from their respective entitlements as Shareholders under the Proposed Share Split and Proposed Bonus Issue of Warrants, to which all other entitled Shareholders are similarly entitled to.

11. BOARD’S RECOMMENDATION The Board, having considered all aspects of the Proposals, including but not limited to the rationale and effects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company. Accordingly, the Board recommends that Shareholders vote in favour of the resolutions pertaining to the Proposals to be tabled at the forthcoming EGM.

12. EGM

The EGM, the notice of which is enclosed in this Circular, will be conducted entirely through live streaming from the Broadcast Venue at KAB’s headoffice at No. 18, Jalan Radin Bagus 9, Bandar Baru Seri Petaling, 57000 Kuala Lumpur on the date and time indicated below or at any adjournment thereof for the purpose of considering and, if thought fit, passing the resolution, with or without modifications, to give effect to the Proposals.

Date and time of the EGM : Thursday, 25 March 2021 at 9.30 a.m.


27

If you are unable to attend and vote in person at the EGM, you may appoint a proxy or proxies to attend and vote on your behalf by completing, signing and returning the enclosed Proxy Form in accordance with the instructions contained therein as soon as possible, so as to arrive at the office of the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur not less than 48 hours before the date and time for the EGM as indicated above or at any adjournment thereof. You can also have the option to lodge the proxy appointment electronically via TIIH Online at https://tiih.online before the proxy form lodgement cut-off time as mentioned above. For further information on the electronic lodgement of proxy form, please refer to the Administrative Notes for further information on submission via TIIH Online. The lodging of the Proxy Form will not preclude you from attending and voting in person at the EGM should you subsequently decide to do so. Shareholders WILL NOT BE ALLOWED to attend this EGM in person at the Broadcast Venue on the day of EGM. Therefore, shareholders are strongly advised to participate and vote remotely at the EGM through live streaming and online remote voting using the Remote Participation and Voting Facilities provided by the Company’s Share Registrar. Please read the Notes carefully and follow the Procedures in the Administration Notes for the EGM in order to participate remotely.

13. FURTHER INFORMATION You are requested to refer to the enclosed appendix for further information.

Yours faithfully, For and on behalf of the Board of KEJURUTERAAN ASASTERA BERHAD DATO’ LAI KENG ONN Managing Director

APPENDIX I – FURTHER INFORMATION

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1. RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and the Directors of the Company collectively and individually accept full responsibility for the completeness and accuracy of the information given in this Circular 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 in this Circular false or misleading.

2. CONSENTS AND CONFLICT OF INTEREST 2.1 Mercury Securities

The written consent of Mercury Securities, being the Principal Adviser for the Proposals, for the inclusion of its name and all references thereto in the form and context in which it appears in this Circular has been given and has not been subsequently withdrawn before the issuance of this Circular. Mercury Securities is not aware of any conflict of interest which exists or is likely to exist in relation to its role as the Principal Adviser for the Proposals.

2.2 SMITH ZANDER The written consent of SMITH ZANDER, being the independent market researcher, for the inclusion of its name and extracts of its IMR Report referred to in Section 5 of this Circular in the form and context in which it appears in this Circular has been given and has not been subsequently withdrawn before the issuance of this Circular. SMITH ZANDER is not aware of any conflict of interest which exists or is likely to exist in relation to its role as the independent market researcher for the Proposals.

3. MATERIAL COMMITMENTS AND CONTINGENT LIABILITIES Material commitments Save as disclosed below, as at the LPD, the Board confirmed that there are no other material commitments incurred or known to be incurred by the Group:-

Material commitments RM’000 Capital commitment in respect of property, plant and equipment - approved and contracted but not provided for 1,907

Contingent liabilities Save as disclosed below, as at the LPD, the Board confirmed that there are no other contingent liabilities incurred or known to be incurred by the Group which, upon becoming due or enforceable, may have a material impact on the financial results or position of the Group:-

Contingent liabilities RM’000 Guarantees given to third parties in respect of performance bonds for the Group’s projects 22,764


APPENDIX I – FURTHER INFORMATION (CONT’D)

29

4. MATERIAL LITIGATION Save as disclosed below, as at the LPD, the Board confirmed that neither the Company nor its subsidiaries are engaged in any material litigation, claim or arbitration, either as plaintiff or defendant, which has or may have a material and adverse effect on the financial position or business of the Group and the Board confirmed that there are no proceedings pending or threatened against the Company and/or any of its subsidiaries or any facts likely to give rise to any proceedings which might materially and adversely affect the financial position or business of the Group.

(i) On 13 July 2020, KAB announced that KAB Technologies Sdn. Bhd., its wholly-owned

subsidiary (“KABT”) had on 26 June 2020 commenced a Writ action against ICEE International Sdn Bhd (“ICEE”) and ICEE Energy Services Sdn Bhd (“ICEE Energy”) (collectively, the “Defendants”) before the High Court of Malaya at Kuala Lumpur under Civil Suit No.: WA-22NCVC-330-06/2020 (“Breach of Contract Suit”).

The claim against ICEE Energy is premised on a Work Order dated 1 April 2019 (“Work Order”) entered between KABT on the one part and ICEE Energy on the other part wherein ICEE Energy is required by contract to ensure that KABT receives its annual guaranteed savings of 8% which corresponds with an amount of monetary return of RM8,329.72 per month for a period of five (5) years, i.e. 60 months in respect of the Pullman Hotel, Kuching project (“Pullman Project”). KABT alleges that ICEE Energy has breached the material terms of the Work Order causing KABT to have suffered and continues to suffer loss and damage in so far as the Pullman Project is concerned. KABT’s claim against ICEE Energy is for amongst others a declaration that ICEE Energy has breached the express and/or implied terms of the Work Order, a declaration that the notice of termination issued by KABT in respect of the Work Order is valid, the outstanding shortfalls under the Work Order in the sum of RM12,418.20, general damages, special damages in the sum of RM813,709.19, interest and costs. The claim against ICEE is premised on an agreement dated 7 August 2019 (“2019 Agreement”) entered between KABT on the one part and ICEE on the other part wherein ICEE is required by contract to ensure that KABT receives its guaranteed savings of 10% which corresponds with a monetary return of RM6,680.40 and RM6,958.75 for a period of forty-eight (48) months, respectively for the projects at Robinson Rama 9 and Robinson Prachinburi in Thailand (“Robinson Projects”). KABT alleges that ICEE has breached the material terms of the 2019 Agreement causing KABT to have suffered and continues to suffer loss and damage. KABT’s claim against ICEE is for, amongst others, a declaration that ICEE has breached the express and/or implied terms of the 2019 Agreement, a declaration that the notice of termination issued by KABT in respect of the 2019 Agreement is valid, the outstanding shortfalls under the 2019 Agreement totaling a sum of RM15,132.98, general damages, special damages totaling a sum of RM1,431,099.49, interest and costs. On 14 August 2020, the Defendants filed a counterclaim (“Counterclaim”) seeking, amongst others, declarations that the Work Order and 2019 Agreement were wrongfully and/or unlawfully terminated, declarations that the Defendants are entitled to the profit sharing of the respective Pullman Project and Robinson Projects, rectification of the Work Order, damages to the sum of RM265,776.81 being the total outstanding balance under the Work Order and 2019 Agreement, interest and costs. On 16 October 2020, KABT filed its reply and defence to the Counterclaim.


30

The solicitors acting for KABT in this Breach of Contract Suit are of the opinion that although there appears to be cogent documentary evidence to demonstrate that the Defendants have in fact breached the terms of the Work Order and 2019 Agreement and there is reasonable prospect of success insofar as the present claims are concerned, the total quantum of damages that KABT is entitled to is indeterminate at this juncture and the precise quantum to be awarded should KABT succeed on question of liability will have to be proven at trial. Further, the solicitors are of the view that the outcome of the present proceedings is not expected to have any material impact on the holding company, namely, KAB as KAB is not a party to the proceedings and none of the directors or substantial shareholders of KAB have been named as a party to the present proceedings as at the LPD. On 1 March 2021, the Company announced that a settlement agreement had been entered into on 26 February 2021 (“Settlement Agreement”) between (i) KAB, KABT, Dato’ Lai (as defined herein) and Jonathan Wu Jo-Han on the one part, and (ii) Prabodh (as defined herein), Ranjit Singh A/L Harbinder Singh, ICEE and ICEE Energy on the second part (collectively, the “Parties”) to resolve their disputes amicably and the Settlement Agreement records the terms of the global settlement as full and final settlement in relation to, among others, the Breach of Contract Suit and Passing Off Suit (as defined herein) filed by the Parties. In respect of the Breach of Contract Suit, the terms of the Settlement Agreement provide, among others, that KABT shall effect payment of a total sum of RM120,000.00 in spite of ICEE’s claims totaling RM265,776.81. This will be the full and final settlement of any sums due from KABT to ICEE in respect of the Pullman Project and Robinson Projects. The Parties to the Breach of Contract Suit shall have no further claim whatsoever and shall not institute any fresh legal proceedings against each other arising from above mentioned projects. The Parties to the Breach of Contract Suit are to enter into a consent judgement to record the terms of the Settlement Agreement and a case management was fixed before the High Court on 2 March 2021 for the Parties to the Breach of Contract Suit to record the terms of the consent judgment.

(ii) On 13 July 2020, KAB announced that it had, on 10 July 2020, been served with a copy of the amended defences by ICEE, Prabodh Kumar A/L Kantilal (“Prabodh”) and ICEE Energy (collectively, the “Defendants”) and counterclaim filed by ICEE and ICEE Energy (“Counterclaim”) in the matter of Civil Suit No. WA-22NCVC-255 05/2020 (“Main Claim”) before the High Court of Malaya at Kuala Lumpur (“Passing Off Suit”).

The Main Claim and Counterclaim are premised on the following:- (a) On 28 May 2020, KAB’s wholly-owned subsidiary, KABT and KAB’s managing

director, Dato’ Lai Keng Onn (“Dato’ Lai”) (collectively, the “Plaintiffs”) filed the Main Claim against the Defendants for declarations that they are not liable for using ICEE’s business information on KABT’s website for a limited period of time, because the Defendants had consented to the use of ICEE’s business information.

(b) KABT commenced the Main Claim in the abundance of caution and to

safeguard KABT’s rights. Hence the declaratory judgment was sought in the Main Claim. KAB is not a party to the main action in the Main Claim. KAB has since been named as a party to the Main Claim by the Defendants, through their Counterclaim.

(c) The Defendants’ Counterclaim appears to be premised on a claim for passing

off, breach of confidential information, breach of fiduciary duty, the abuse of process and conspiracy to injure. The Defendants are asking for monetary damages totaling RM17,827,777.01.

On 21 August 2020, the Plaintiffs had filed their reply and defence to the Counterclaim.


31

In addition, the Plaintiffs had filed an interlocutory application for security for costs against ICEE and ICEE Energy for the sum of RM300,000.00 (RM150,000.00 each) of which the hearing was fixed for 13 January 2021 but was subsequently vacated and rescheduled to 22 April 2021 (“Interlocutory Application”). The solicitors acting for the Plaintiffs in this Passing Off Suit are of the opinion that it is more likely than not that the Plaintiffs will succeed in the Main Claim, and ICEE and ICEE Energy will not succeed in the Counterclaim. On 1 March 2021, the Company announced that a Settlement Agreement had been entered into on 26 February 2021 between the Parties to resolve their disputes amicably and the Settlement Agreement records the terms of the global settlement as full and final settlement in relation to, among others, the Breach of Contract Suit and Passing Off Suit filed by the Parties. In respect of the Passing Off Suit, the terms of the Settlement Agreement provide, among others, two agreed courses of action with regard to the Main Claim and the Counterclaim, respectively. With regards to the Main Claim, the Parties are to enter into a consent judgment on substantially the same terms as set out in the statement of claim filed by KABT and Dato’ Lai. As for the Counterclaim, ICEE and ICEE Energy are to withdraw the Counterclaim with no liberty to file afresh and with no order as to costs. The Interlocutory Application filed by the defendants to the Counterclaim (i.e. KAB, KABT, Dato’ Lai and Jonathan Wu Jo-Han) shall also be discontinued without liberty to file afresh and with no order as to costs. A date has been fixed before the High Court on 19 March 2021 for the Parties to the Passing Off Suit to record the terms of the consent judgment.

5. HISTORICAL SHARE PRICES The monthly highest and lowest market prices of the Shares as transacted on Bursa Securities for the past 12 months preceding the date of this Circular are as follows:-

High Low RM RM

2020 March 1.013 0.522 April 0.895 0.745 May 0.830 0.765 June 1.000 0.750 July 1.220 0.830 August 1.190 0.950 September 1.190 0.900 October 0.955 0.905 November 1.130 0.905 December 1.100 0.960 2021 January 1.050 0.955 February 1.870 0.975 Last transacted market price on 9 February 2021, being the last Market Day immediately prior to the first announcement of the Proposals

1.030

Last transacted market price on the LPD 1.020

(Source: Bloomberg)


32

6. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia during normal business hours from Monday to Friday (except public holidays) following the date of this Circular up to and including the date of the EGM:- (i) Constitution of the Company;

(ii) audited consolidated financial statements of the Company for the FYE 31 December

2018 and FYE 31 December 2019 as well as the unaudited consolidated financial statements of the Company for the FYE 31 December 2020;

(iii) the IMR Report referred to in Section 5 of this Circular;

(iv) relevant cause papers in respect of the material litigation referred to in Section 4 of this Appendix I;

(v) letters of consent referred to in Section 2 of this Appendix I; and

(vi) draft Deed Poll.




NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Kejuruteraan Asastera Berhad (“KAB” or the “Company”) will be conducted entirely through live streaming from the broadcast venue at KAB’s headoffice at No. 18, Jalan Radin Bagus 9, Bandar Baru Seri Petaling, 57000 Kuala Lumpur on Thursday, 25 March 2021 at 9.30 a.m. or at any adjournment thereof for the purpose of considering and, if thought fit, passing the following resolutions with or without modifications:- ORDINARY RESOLUTION 1 PROPOSED SHARE SPLIT INVOLVING THE SUBDIVISION OF EVERY 10 EXISTING ORDINARY SHARES IN THE COMPANY (“KAB SHARES” OR “SHARES”) HELD ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER INTO 18 SHARES (“SPLIT SHARES”) (“PROPOSED SHARE SPLIT”) “THAT subject to all approvals being obtained from the relevant authorities and parties (if required), approval be and is hereby given to the Board of Directors of the Company (“Board”) to subdivide every 10 existing ordinary shares in the Company held by all entitled shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined and announced later by the Board (“Split Shares Entitlement Date”), into 18 Split Shares; THAT the fractional entitlements arising from the Proposed Share Split, if any, shall be disregarded and/or dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company; THAT the Split Shares shall rank equally in all respects with one another, save and except that the holders of such Split Shares will not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid to the shareholders of the Company prior to the Split Shares Entitlement Date; AND THAT the Board be and is hereby authorised with full power to do all such acts, deeds and things and to execute and deliver on behalf of the Company all such documents and/or agreements as the Board may deem fit, necessary or expedient or appropriate in the best interest of the Company, in order to finalise, implement and/or give effect to the Proposed Share Split with full power to assent to any terms, conditions, modifications, variations and/or amendments as may be imposed or required by the relevant authorities or deemed necessary or desirable by the Board.” ORDINARY RESOLUTION 2 PROPOSED BONUS ISSUE OF FREE WARRANTS IN THE COMPANY (“WARRANTS”) ON THE BASIS OF 1 WARRANT FOR EVERY 2 SHARES HELD ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER (“PROPOSED BONUS ISSUE OF WARRANTS”)

"THAT subject to the approval of all relevant authorities or parties having been obtained, where required, the Board be and is hereby authorised to issue and allot up to 881,927,638 free Warrants in registered form and constituted by a deed poll to be executed by the Company constituting the Warrants (“Deed Poll”) by way of a bonus issue to all entitled shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined and announced later by the Board ("Bonus Warrants Entitlement Date"), on the basis of 1 free Warrant for every 2 Shares held on the Bonus Warrants Entitlement Date; THAT the Board be and is hereby authorised to fix the exercise price of the Warrants at a later date and that the Board be and is hereby authorised to issue and allot the new Shares arising from the exercise of the Warrants by the holders of the Warrants in accordance with the Deed Poll; THAT the new Shares to be issued arising from the exercise of the Warrants shall, upon allotment, issuance and full payment of the exercise price, rank equally in all respects with the existing issued Shares, save and except that the holders of such new Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to the Shareholders, the entitlement date of which is prior to the date of allotment and issuance of such new Shares; THAT the Board be and is hereby authorised to disregard and/or deal with any fractional entitlements for the Warrants that may arise from the Proposed Bonus Issue of Warrants, if any, in such manner as the Board shall in its absolute discretion deems fit and expedient and in the best interests of the Company; THAT the proceeds arising from the exercise of the Warrants, if any, be utilised for the purposes set out in the circular to the shareholders of the Company dated 8 March 2021 in relation to the Proposals, and the Board be authorised with full power to vary the manner and/or purpose of utilisation of such proceeds in such manner as the Board may deem fit, necessary and/or expedient, subject to the approval of the relevant authorities, where required; THAT the Board be and is hereby authorised to enter into and execute the Deed Poll with full powers to assent to any conditions, variations, modifications and/or amendments in any manner as may be required or imposed by the relevant authorities or deemed necessary by the Board, and subject to all provisions and adjustments contained in the Deed Poll, to assent to any modifications and/or amendments to the exercise price, exercise period and/or number of Warrants as may be required or permitted to be revised as consequences of any adjustments under the provisions of the Deed Poll with full power to implement and give effects to the terms and conditions of the Deed Poll, and to take all steps as the Board deems fit or expedient in order to implement, finalise and give full effect to the Deed Poll; AND THAT the Board be and is hereby authorised to sign and execute all documents, do all acts, deeds and things as may be required to give effect to and to complete the Proposed Bonus Issue of Warrants with full power to assent to any conditions, variations, modifications and/or amendments in any manner as may be required or permitted by any relevant authorities and to deal with all matters relating thereto and to take all such steps and do all acts, deeds and things for and on behalf of the Company in any manner as they may deem fit or necessary or expedient to implement, finalise and give full effect to the Proposed Bonus Issue of Warrants." By Order of the Board KEJURUTERAAN ASASTERA BERHAD JOANNE TOH JOO ANN SSM PC NO. 202008001119 (LS 0008574) SIA EE CHIN SSM PC NO. 202008001676 (MAICSA 7062413) Company Secretaries Kuala Lumpur 8 March 2021

Notes:- 1. IMPORTANT NOTICE

The broadcast venue is strictly for the purpose of complying with Section 327(2) of the Companies Act 2016, which requires the Chairperson of the EGM to be present at the main venue of the meeting.

Shareholders WILL NOT BE ALLOWED to attend this EGM in person at the broadcast venue on the day of the Company's EGM. Therefore, shareholders are strongly advised to participate and vote remotely at the EGM through live streaming and online remote voting using the Remote Participation and Voting facilities provided by the Company's Share Registrar, namely Tricor Investor & Issuing House Services Sdn Bhd.

Please read these Notes carefully and follow the Procedures in the Administrative Notes for the EGM in order to participate remotely.

2. For the purpose of determining who shall be entitled to attend this General Meeting, the Company shall be requesting

Bursa Malaysia Depository Sdn Bhd to make available to the Company, a Record of Depositors as at 18 March 2021. Only a member whose name appears on this Record of Depositors shall be entitled to attend this General Meeting or appoint a proxy to attend, speak and vote on his/her/its behalf.

3. A member entitled to attend and vote at this General Meeting is entitled to appoint a proxy or attorney or in the case of a corporation, to appoint a duly authorised representative to attend, participate, speak and vote in his place. A proxy may but need not be a member of the Company.

4. A member of the Company who is entitled to attend and vote at a General Meeting of the Company may appoint not more than two (2) proxies to attend, participate, speak and vote instead of the member at the General Meeting.

5. Where a member of the Company is an authorised nominee as defined in the Central Depositories Act, it may appoint not more than two (2) proxies in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

6. 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“Central Depositories Act”) which is exempted from compliance with the provisions of Section 25A(1) of the Central Depositories Act.

7. Where a member appoints more than one (1) proxy, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

8. The appointment of a proxy may be made in a hard copy form and submit to the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. In the case of an appointment made via TIIH Online, the proxy form must be deposited at https://tiih.online. Please refer to the Administrative Notes for further information on submission via TIIH Online. All proxy form submitted must be received by the Company not less than forty-eight (48) hours before the time appointed for holding the General Meeting or adjourned General Meeting at which the person named in the appointment proposes to vote.

9. Any authority pursuant to which such an appointment is made by a power of attorney must be deposited at the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the General Meeting or adjourned General Meeting at which the person named in the appointment proposes to vote. A copy of the power of attorney may be accepted provided that it is certified notarially and/or in accordance with the applicable legal requirements in the relevant jurisdiction in which it is executed.

10. Please ensure ALL the particulars as required in the proxy form are completed, signed and dated accordingly. 11. Last date and time for lodging the proxy form is Tuesday, 23 March 2021 at 9.30 a.m.



PROXY FORM

I/We, ………………………………………………………………………………..……Tel. No.: ……………………………………………

(Full name in block and NRIC No. / Company No.) of …………………………………………………………………………………………………………………………………………………

(Address) being a member of Kejuruteraan Asastera Berhad, hereby appoint(s):-

Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings No. of Shares % Address

and Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings No. of Shares % Address

or failing him, the Chairperson of the meeting as my/our proxy to vote for me/us on my/our behalf at the Extraordinary General Meeting of the Company to be conducted entirely through live streaming from the broadcast venue at KAB’s headoffice at No. 18, Jalan Radin Bagus 9, Bandar Baru Seri Petaling, 57000 Kuala Lumpur, Malaysia Thursday, 25 March 2021 at 9.30 a.m. or any adjournment thereof, and to vote as indicated below:-

Item Agenda Resolution FOR AGAINST

1. Proposed Share Split Ordinary Resolution 1

2. Proposed Bonus Issue of Warrants Ordinary Resolution 2

Please indicate with an ‘X’ in the space provided whether you wish your votes to be cast for or against the resolution. In the absence of specific direction, your proxy may vote or abstain as he thinks fit. Signed this………………………………………………………

Signature* Member

* Manner of execution: (a). If you are an individual member, please sign where indicated. (b) If you are a corporate member which has a common seal, this proxy form should be executed under seal in accordance with the

constitution of your corporation. (c) If you are a corporate member which does not have a common seal, this proxy form should be affixed with the rubber stamp of your

company (if any) and executed by: (i) at least two (2) authorised officers, of whom one shall be a director; or (ii) any director and/or authorised officers in accordance with the laws of the country under which your corporation is

incorporated. Notes:- 1. For the purpose of determining who shall be entitled to attend this General Meeting, the Company shall be requesting Bursa Malaysia

Depository Sdn Bhd to make available to the Company, a Record of Depositors as at 18 March 2021. Only a member whose name appears on this Record of Depositors shall be entitled to attend this General Meeting or appoint a proxy to attend, speak and vote on his/her/its behalf.

CDS Account No.

No. of Shares held

2. A member entitled to attend and vote at this General Meeting is entitled to appoint a proxy or attorney or in the case of a corporation, to appoint a duly authorised representative to attend, participate, speak and vote in his place. A proxy may but need not be a member of the Company.

3. A member of the Company who is entitled to attend and vote at a General Meeting of the Company may appoint not more than two (2) proxies to attend, participate, speak and vote instead of the member at the General Meeting.

4. Where a member of the Company is an authorised nominee as defined in the Central Depositories Act, it may appoint not more than two (2) proxies in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

5. 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“Central Depositories Act”) which is exempted from compliance with the provisions of Section 25A(1) of the Central Depositories Act.

6. Where a member appoints more than one (1) proxy, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

7. The appointment of a proxy may be made in a hard copy form and submit to the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. In the case of an appointment made via TIIH Online, this proxy form must be deposited at https://tiih.online. Please refer to the Administrative Notes for further information on submission via TIIH Online. All proxy form submitted must be received by the Company not less than forty-eight (48) hours before the time appointed for holding the General Meeting or adjourned General Meeting at which the person named in the appointment proposes to vote.

8. Any authority pursuant to which such an appointment is made by a power of attorney must be deposited at the Company’s Share Registrar at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the General Meeting or adjourned General Meeting at which the person named in the appointment proposes to vote. A copy of the power of attorney may be accepted provided that it is certified notarially and/or in accordance with the applicable legal requirements in the relevant jurisdiction in which it is executed.

9. Please ensure ALL the particulars as required in the proxy form are completed, signed and dated accordingly. 10. Last date and time for lodging the proxy form is Tuesday, 23 March 2021 at 9.30 a.m.

KEJURUTERAAN ASASTERA BERHAD [Company No. 199701005009 (420505-H)] ADMINISTRATIVE NOTES FOR EXTRAORDINARY GENERAL MEETING ("EGM") Date : Thursday, 25 March 2021 Time : 9.30 a.m. Broadcast Venue : KAB’s headoffice

No. 18, Jalan Radin Bagus 9, Bandar Baru Seri Petaling 57000 Kuala Lumpur, Malaysia

Precautionary Measures Against the Coronavirus Disease (“COVID-19”) In view of the COVID-19 outbreak and as part of the safety measures, the Company will conduct

the EGM on a virtual basis through live streaming and online remote voting via Remote Participation and Voting (“RPV”) facilities which are available on Tricor Investor & Issuing House Services Sdn Bhd's (“Tricor”) TIIH Online website at https://tiih.online.

The venue of the EGM is strictly for the purpose of complying with Section 327(2) of the Companies Act 2016 which requires the Chairman of the Meeting to be at the main venue of the meeting. No shareholders/proxy(ies) from the public will be physically present at the meeting venue.

We strongly encourage you to attend the EGM via the RPV facilities. You may also consider appointing the Chairman of the Meeting as your proxy to attend and vote on your behalf at the EGM.

Due to the constant evolving COVID-19 situation in Malaysia, we may be required to change the

arrangements of our EGM at short notice. Kindly check the Company’s website or announcements for the latest updates on the status of the EGM.

The Company will continue to observe the guidelines issued by the Ministry of Health and will take all relevant precautionary measures as advised.

Remote Participation and Voting The RPV facilities are available on Tricor’s TIIH Online website at https://tiih.online.

Shareholders are to attend, speak (in the form of real time submission of typed texts) and vote

(collectively, “participate”) remotely at the EGM using RPV facilities from Tricor.

Kindly refer to Procedures for RPV as set out below for the requirements and procedures. Procedures to Remote Participation and Voting via RPV Facilities Please read and follow the procedures below to engage in remote participation through live streaming and online remote voting at the EGM using the RPV facilities:

Before the EGM Day

Procedure Action

i. Register as a user with TIIH Online

Using your computer, access to website at https://tiih.online. Register as a user under the “e-Services” select “Create Account by Individual Holder”. Refer to the tutorial guide posted on the homepage for assistance.

Registration as a user will be approved within one (1) working day and you will be notified via e-mail.

If you are already a user with TIIH Online, you are not required to register again. You will receive an e-mail to notify you that the remote participation is available for registration at TIIH Online.

ii. Submit your request to attend EGM remotely

Registration is open from 10.00 a.m. Monday, 8 March 2021 until the day of EGM on Thursday, 25 March 2021. Shareholder(s) or proxy(ies) or corporate representative(s) or attorney(s) are required to pre-register their attendance for the EGM to ascertain their eligibility to participate the EGM using the RPV. Login with your user ID (i.e. e-mail address) and password and select the corporate event: (Registration) Kejuruteraan Asastera Berhad EGM

Read and agree to the Terms & Conditions and confirm the Declaration. Select “Register for Remote Participation and Voting”. Review your registration and proceed to register. System will send an e-mail to notify that your registration for remote

participation is received and will be verified. After verification of your registration against the Record of Depositors as

at 18 March 2021, the system will send you an e-mail after 23 March 2021 to approve or reject your registration for remote participation. (Note: Please allow sufficient time for approval of new user of TIIH Online and registration for the RPV).

On the EGM Day Procedure Action

i.Login to TIIH Online

Login with your user ID and password for remote participation at the EGM at any time from 9.00 a.m. i.e. 30 minutes before the commencement of meeting at 9.30 a.m. on Thursday, 25 March 2021

ii.Participate through Live Streaming

Select the corporate event: (Live Stream Meeting) Kejuruteraan Asastera Berhad EGM to engage in the proceedings of the EGM remotely.

If you have any question for the Chairman/Board, you may use the query box to transmit your question. The Chairman/Board will try to respond to questions submitted by remote participants during the EGM. If there is time constraint, the responses will be e-mailed to you at the earliest possible, after the meeting.

iii.Online remote voting

Voting session commences from 9.30 a.m. on Thursday, 25 March 2021 until a time when the Chairman announces the end of the session.

Select the corporate event: (Remote Voting) Kejuruteraan Asastera Berhad EGM or if you are on the live stream meeting page, you can select “GO TO REMOTE VOTING PAGE” button below the Query Box.

Read and agree to the Terms & Conditions and confirm the Declaration. Select the CDS account that represents your shareholdings. Indicate your votes for the resolutions that are tabled for voting. Confirm and submit your votes.

iv. End of remote participation

Upon the announcement by the Chairman on the conclusion of the EGM, the Live Streaming will end.

Note to users of the RPV facilities: 1. Should your registration for RPV be approved, we will make available to you the rights to join

the live stream meeting and to vote remotely. Your login to TIIH Online on the day of meeting will indicate your presence at the virtual meeting.

2. The quality of your connection to the live broadcast is dependent on the bandwidth and stability of the internet at your location and the device you use.

3. In the event you encounter any issues with logging-in, connection to the live stream meeting or online voting on the meeting day, kindly call Tricor Help Line at 011-40805616 / 011-40803168 / 011-40803169 / 011-40803170 for assistance or e-mail to [email protected] for assistance.

Entitlement to Participate and Appointment of Proxy Only members whose names appear on the Record of Depositors as at 18 March 2021 shall be

eligible to attend, speak and vote at the EGM or appoint a proxy(ies) and/or the Chairman of the Meeting to attend and vote on his/her behalf.

In view that the EGM will be conducted on a virtual basis, a member can appoint the Chairman of the Meeting as his/her proxy and indicate the voting instruction in the Form of Proxy.

If you wish to participate in the EGM yourself, please do not submit any Form of Proxy for the EGM. You will not be allowed to participate in the EGM together with a proxy appointed by you.

Accordingly, proxy forms and/or documents relating to the appointment of proxy/corporate

representative/attorney for the EGM whether in hard copy or by electronic means shall be deposited or submitted in the following manner not later than Tuesday, 23 March 2021 at 9.30 a.m:

(i) In Hard copy:

a) By hand or post to the office of the Share Registrar, Tricor Investor & Issuing House

Services Sdn Bhd at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or its Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur;

b) By fax at 03-2783 9222 or e-mail to [email protected]

(ii) By Electronic form: All shareholders can have the option to submit proxy forms electronically via TIIH Online and the steps to submit are summarised below:

Procedure Action

i. Steps for Individual Shareholders

Register as a User with TIIH Online

• Using your computer, please access the website at https://tiih.online. Register as a user under the “e-Services”. Please refer to the tutorial guide posted on the homepage for assistance.

• If you are already a user with TIIH Online, you are not required to register again.

Proceed with submission of form of proxy

• After the release of the Notice of Meeting by the Company, login with your user name (i.e. email address) and password.

• Select the corporate event: Kejuruteraan Asastera Berhad EGM - “Submission of Proxy Form”.

• Read and agree to the Terms and Conditions and confirm the Declaration.

• Insert your CDS account number and indicate the number of shares for your proxy(s) to vote on your behalf.

• Indicate your voting instructions – FOR or AGAINST, otherwise your proxy will decide on your votes.

• Review and confirm your proxy(s) appointment. • Print the form of proxy for your record.

ii. Steps for corporation or institutional shareholders

Register as a User with TIIH Online

Access TIIH Online at https://tiih.online Under e-Services, the authorised or nominated representative of the

corporation or institutional shareholder selects “Create Account by Representative of Corporate Holder”.

Complete the registration form and upload the required documents. Registration will be verified, and you will be notified by email within

one (1) to two (2) working days. Proceed to activate your account with the temporary password given

in the email and re-set your own password.

Note: The representative of a corporation or institutional shareholder must register as a user in accordance with the above steps before he/she can subscribe to this corporate holder electronic proxy submission. Please contact our Share Registrar if you need clarifications on the user registration.

Proceed with submission of form of proxy

Login to TIIH Online at https://tiih.online Select the corporate exercise name: “Kejuruteraan Asastera

Berhad EGM: Submission of Proxy Form” Agree to the Terms & Conditions and Declaration. Proceed to download the file format for “Submission of Proxy Form”

in accordance with the Guidance Note set therein. Prepare the file for the appointment of proxies by inserting the

required data. Submit the proxy appointment file. Login to TIIH Online, select corporate exercise name:

“Kejuruteraan Asastera Berhad EGM: Submission of Proxy Form”. Proceed to upload the duly completed proxy appointment file. Select “Submit” to complete your submission. Print the confirmation report of your submission for your record.

Voting at Meeting The voting at the EGM will be conducted on a poll pursuant to Paragraph 8.29A of the Main

Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). The Company has appointed Tricor to conduct the poll voting electronically (“e-voting”) via Tricor e-Vote application (“Tricor e-Vote App”).

No Breakfast / Lunch Pack, Door Gift or Food Voucher There will be no distribution of breakfast / lunch packs, door gifts or food vouchers during the

EGM since the meeting is being conducted on a virtual basis. Pre-Meeting Submission of Questions to the Board of Directors The Board recognises that the EGM is a valuable opportunity for the Board to engage with

shareholders. In order to enhance the efficiency of the proceedings of the EGM, shareholders may in advance, before the EGM, submit questions to the Board of Directors via Tricor’s TIIH Online website at https://tiih.online, by selecting “e-Services” to login, post your questions and submit it electronically no later than Tuesday, 23 March 2021. The Board of Directors will endeavor to address the questions received at the EGM.

Enquiry If you have any enquiry prior to the meeting, please call our Share Registrar, Tricor at +603-

2783 9299 during office hours i.e. from 8.30 a.m. to 5.30 p.m. (Monday to Friday).

Fold this flap for sealing Then fold here

KEJURUTERAAN ASASTERA BERHAD [Company No. 199701005009 (420505-H)] c/o Tricor Investor & Issuing House Services Sdn Bhd Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah Persekutuan Malaysia

1st fold here

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kab circular - proposed share split & bonus issue (210308)-full · 2021. 3. 9. ·...

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