THIS STATEMENT/CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Transcription

1 THIS STATEMENT/CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO THE COURSE OF ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER IMMEDIATELY. Bursa Malaysia Securities Berhad ( Bursa Securities ) has not perused the contents of this Statement/Circular prior to its issuance as it is an exempt document pursuant to Paragraph 2.1 of Practice Note 18 of the Listing Requirements for the Main Market of Bursa Securities. Bursa Securities takes no responsibility for the contents of this Statement/Circular and 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 Statement/Circular. (Company No.: 7878-V) (Incorporated in Malaysia) PART A STATEMENT TO SHAREHOLDERS IN RELATION TO: PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES PART B CIRCULAR TO SHAREHOLDERS IN RELATION TO: PROPOSED ADOPTION OF NEW CONSTITUTION OF THE COMPANY Notice of the Company s Forty-Sixth Annual General Meeting ( AGM ) to be held at Dewan Perdana, Level 2, Convention Centre, Grand BlueWave Hotel Shah Alam, Persiaran Perbandaran, Seksyen 14, Shah Alam, Selangor Darul Ehsan on Thursday, 21 June 2018 at 2.00 p.m. together with a Form of Proxy are enclosed together with the Annual Report 2017 of the Company. If you are unable to attend and vote at the meeting, please complete and return the Form of Proxy in accordance with the instructions therein as soon as possible so as to arrive at the Company s Share Registrar office at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur or alternatively, Tricor s Customer Service Centre, Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur not less than 48 hours before the time set for holding the AGM or any adjournment thereof. The lodging of the Proxy Form will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last date and time for lodging the Form of Proxy: Tuesday, 19 June 2018 at 2.00 p.m. Date and Time of the AGM: Thursday, 21 June 2018 at 2.00 p.m. This Statement/Circular is dated 30 April 2018.

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Statement/Circular. ACT : Companies Act 2016, as amended from time to time including any reenactment thereof AGM : Annual General Meeting Board : Board of Directors of MASTEEL Bursa Securities : Bursa Malaysia Securities Berhad (Company No W) Statement/Circular : This Statement/Circular to the Shareholders of MASTEEL dated 30 April 2018 Company or MASTEEL : Malaysia Steel Works (KL) Bhd (Company No.: 7878-V) CMSA : Capital Markets and Services Act, 2007, as amended from time to time Constitution Group Listing Requirements LPD : : : : Constitution of MASTEEL, as amended from time to time MASTEEL or its subsidiaries Main Market Listing Requirements of Bursa Securities including any amendments thereto that may be made from time to time 2 April 2018, being the latest practicable date prior to the printing and dispatch of this Statement/Circular Minister : The Minister charged with the responsibility for companies Proposals Proposed New Constitution : : Collectively, the Proposed Share Buy-Back and Proposed New Constitution Proposed Adoption of New Constitution of MASTEEL Proposed Share Buy-Back : Proposed purchase by MASTEEL of its own Shares on Bursa Securities of not more than ten percent (10%) of the total number of issued shares of MASTEEL RM : Ringgit Malaysia Rules : Rules on Take-Overs, Mergers and Compulsory Acquisitions Shares : Ordinary shares of MASTEEL NA : Net assets attributable to ordinary equity holders of the Company Words incorporate the singular shall, where applicable, include the plural and vice versa and words incorporate the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include a corporation, unless otherwise specified. Any reference in this Statement/Circular to any enactment is a reference to that enactment as for the time being amend or re-enacted. Any reference to a time of a day in this Statement/Circular shall be a reference to Malaysian time, unless otherwise stated. i

3 TABLE OF CONTENTS PART A - STATEMENT TO SHAREHOLDERS IN RELATION TO: PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES Page 1. INTRODUCTION 2 2. DETAILS OF THE PROPOSED SHARE BUY-BACK 2.1 General Actual Share Buy-Back Maximum Amount of Funds to be Allocated and the Source of Funds Treatment of the Shares Purchased Purchase Price Resale Price Historical Share Price 4 3. RATIONALE AND POTENTIAL ADVANTAGES OF THE PROPOSED SHARE BUY-BACK 5 4. POTENTIAL DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK 5 5. FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK 5.1 Share Capital Working Capital Earnings NA per Share Dividends 6 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS 6 7. PURCHASE, RESALE AND CANCELLATION OF MASTEEL SHARES MADE IN THE PREVIOUS 12 MONTHS 7 8. PUBLIC SHAREHOLDING SPREAD 7 9. RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITIONS DIRECTORS RECOMMENDATION FURTHER INFORMATION 8 ii

4 TABLE OF CONTENTS PART B CIRCULAR TO SHAREHOLDERS IN RELATION TO: PROPOSED ADOPTION OF NEW CONSTITUTION OF THE COMPANY Page 1. INTRODUCTION DETAILS AND RATIONALE FOR THE PROPOSED NEW CONSTITUTION EFFECTS OF THE PROPOSED NEW CONSTITUTION DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS DIRECTORS RECOMMENDATION APPROVAL REQUIRED AGM FURTHER INFORMATION 11 APPENDIX I 1. DIRECTORS SHAREHOLDINGS AS AT THE LPD SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS AS AT THE LPD 13 APPENDIX II- FURTHER INFORMATION 14 APPENDIX III - PROPOSED ADOPTION OF NEW CONSTITUTION iii

5 PART A PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES 1

6 (Company No.: 7878-V) (Incorporated in Malaysia) SHARE BUY-BACK STATEMENT 1. INTRODUCTION The shareholders of MASTEEL had at the 45 th AGM of the Company held on 15 June 2017, granted approval for the Directors to purchase its own shares of up to 10% of the total number of issued shares of the Company. The said mandate shall in accordance with the Listing Requirements of Bursa Securities, lapse at the conclusion of the forthcoming AGM unless a fresh mandate is obtained from shareholders. The Board had on 4 April 2018 made the announcement to Bursa Securities that the Company proposes to seek its shareholders approval for the proposed renewal of authority to the Company for the Proposed Share Buy- Back. The aforesaid proposal if approved by the shareholders would become valid immediately upon the passing of the ordinary resolution at the forthcoming AGM and will expire at the conclusion of the next AGM of the Company unless the authority is further renewed by ordinary resolution passed at a general meeting (either unconditionally or subject to conditions) or upon the expiration of the period within which the next AGM is required by law to be held, or if earlier revoked or varied by ordinary resolution of the shareholders of the company in a general meeting, whichever occurs first. 2. DETAILS OF THE PROPOSED SHARE BUY-BACK 2.1 General The Board proposes to seek the authority of the shareholders of the Company to purchase its own shares of up to 10% of the total number of issued shares of the Company, through its appointed stockbroker on the market of Bursa Securities. As at LPD, the total number of issued shares of the Company stood at 427,239,831. Hence, the maximum number of Shares which may be purchased and/or held as treasury shares by the Company is 42,723,983 Shares. In accordance with Paragraph of the Listing Requirements, the Company may also purchase its own shares in odd lots i.e. any number of its own shares which is less than the number of shares prescribed by Bursa Securities as a board lot through a Direct Business Transaction or in any other manner as may be approved by Bursa Securities in accordance with such requirements as may be prescribed or imposed by Bursa Securities. The Proposed Share Buy-Back, once approved by the shareholders, will be effective immediately upon the passing of the ordinary resolution and shall be effective until: i. the conclusion of the next AGM of the Company (at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions); ii. iii. upon the expiration of the period within which the next AGM is required by law to be held, or unless revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting; whichever occurs first. 2

7 2.2 Actual Share Buy-Back The actual number of Shares that may be purchased, the total amount of funds to be utilised and the timing of the proposed transactions for the Company to purchase its own shares will depend on the availability of financial resources, relevant cost factors, market conditions and sentiments. In accordance with Paragraph of the Listing Requirements, MASTEEL will not purchase its own shares or hold any of its own shares as treasury shares if this results in the aggregate shares purchased or held to exceed 10% of the total number of issued shares of the Company. 2.3 Maximum Amount of Funds to be Allocated and the Source of Funds Pursuant to the Listing Requirements, the Proposed Share Buy-Back must be made wholly out of the retained profits of the Company. Therefore the maximum amount of funds to be utilized for the Proposed Share Buy-Back shall not exceed the retained profits account of the Company. As at 31 December 2017, the audited balances of retained profits of the Company stood at RM427.7 million. As at the LPD, the unaudited retained profits of the Company as at 31 March 2018 has not been announced. The Proposed Share Buy-Back will be funded by internally generated funds and/or external borrowings. The amount of internally generated funds and/or external borrowings to be utilised will only be determined later depending on, amongst others, the availability of internally generated funds, actual number of Shares to be purchased and other relevant cost factors. The actual number of Shares to be purchased and/or held, and the timing of such purchases will depend on, amongst others, the market conditions and sentiments of the stock market as well as the retained profits and financial resources available to the Company. In the event that the Company purchases and holds its own Shares using external borrowings, the Board will ensure that the Company has sufficient funds to repay the external borrowings and that the repayment will not have any material effect on the cash flow of the Group. The Company will not buy-back its own Shares unless it has recorded retained profits at the Company level. 2.4 Treatment of the Shares Purchased In accordance with Section 127(4) of the ACT, the Company may at its discretion, deal with the purchased Shares in the following manner:- i. cancel the Shares so purchased; ii. iii. retain the Shares so purchased as treasury shares; or retain part of the Shares so purchased as treasury shares and cancel the remainder Shares. Upon each transaction to purchase its own Shares, an immediate announcement will be made to Bursa Securities and whether to cancel the Shares, retain them as treasury shares or proceed in a combination of both. An immediate announcement will also be made to Bursa Securities of any resale or cancellation of the purchased Shares. Where the purchased Shares were held as treasury shares, the Board may:- (a) distribute the shares as dividends to shareholders, such dividends to be known as share dividends ; (b) resell the shares or any of the shares in accordance with the relevant rules of the Bursa Securities; (c) transfer the shares, or any of the shares for the purposes of or under an employees share scheme; (d) transfer the shares, or any of the shares as purchase consideration; (e) cancel the shares or any of the shares; or (f) sell, transfer or otherwise use the shares for such other purposes as the Minister may by order prescribe. The decision whether to retain the purchased Shares as treasury shares or to cancel the purchased Shares or a combination of both, will be made by the Board at the appropriate time. The Board will be mindful of the interests of the Company and its shareholders in exercising the authority granted by the shareholders in deciding the final number of Shares to be purchased and thereafter cancelled and/or retained as treasury shares. 3

8 2.5 Purchase Price In compliance with the Listing Requirements, the Company may only purchase the Shares at a price which is not more than fifteen per centum (15%) above the weighted average market price for the Shares for the five (5) market days immediately before the purchase. 2.6 Resale Price In the case of resale or transfer of treasury shares (if any), the Company may only resell the same on Bursa Securities or transfer treasury shares pursuant to Section 127(17) of the ACT at: i. a price which is not less than the weighted average market price for the Shares for the five (5) market days immediately before the resale or transfer; or ii. a discounted price of not more than 5% to the weighted average market price for the Shares for the five (5) market days immediately before the resale or transfer provided that:- (a) the resale or transfer takes place no earlier than 30 days from the date of purchase; and (b) the resale or transfer price is not less than the cost of purchase of the Shares being resold or transferred. 2.7 Historical Share Price The monthly highest and lowest prices of the Shares as traded on Bursa Securities for the preceding twelve (12) months from April 2017 to March 2018 are as follows:- Month High (RM) Shares Low (RM) 2017 April May June July August September October November December January February March (Source: Bloomberg) The last transacted price of the Shares on 2 April 2018, being LPD prior to the printing of this Statement/Circular is RM

9 3. RATIONALE AND POTENTIAL ADVANTAGES OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back, if implemented, is expected to benefit the Company and its shareholders as follows: i. to provide flexibility to the Company to utilise available financial resources to purchase its own shares; ii. to allow improvements to the earnings per share with the cancellation of the purchased Shares or treasury shares from the exercise; iii. to allow the Company to realise potential capital gains if the purchased Shares which are kept as treasury shares are subsequently resold at prices higher than their purchase prices; iv. to allow the distribution of treasury shares as share dividends to its shareholders which serves as a reward to its shareholders; and/or v. to reduce volatility of the share prices. 4. POTENTIAL DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK The potential disadvantages of the Proposed Share Buy-Back to the Company and its shareholders is that the Proposed Share Buy-Back will require utilisation of financial resources which may result in the Company foregoing other investment opportunities and/or foregoing income that may be derived from the deposit of such funds in interest bearing instruments and may also reduce cash dividend distributions to its shareholders. However, only after the Board has given due consideration to the potential impact on the Group s earnings and financial position and only if the Directors are of the opinion that it would be in the best interest of the Group s earnings and financial position, would the Board exercise the authority granted by the shareholders for the share buy-back. 5. FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK In the event that the Proposed Share Buy-Back is carried out, the financial effect on the existing issued shares capital, NA per share, working capital, earnings, dividends and shareholdings of existing Directors and substantial/major shareholders of the Company are as set out below. In the event that the Company intends to purchase its own shares using external borrowings, the Board shall ensure that the Company shall have sufficient funds to repay the external borrowings and that the repayment would have no material effect on the cash flow of the Company. 5.1 Share Capital (a) If all treasury shares are cancelled / reduced In the event the Proposed Share Buy-Back is carried out in full and the Shares so purchased are cancelled, the Proposed Share Buy-Back will result in the issued share capital of the Company being reduced as follows: No. of Shares Existing share capital as at 2 April ,239,831 Less: Maximum number of Shares that may be purchased (42,723,983) Resultant issued share capital 384,515,848 (b) If held as treasury shares The Proposed Share Buy-Back will have no effect on the total number of issued shares of the Company if the purchased Shares are held as treasury shares and are not cancelled. If the Shares so purchased are treated as treasury shares, the rights attached to them as to voting, dividends and participation in other distribution are suspended and the treasury shares shall not be taken into account in calculating the number of percentage of shares or of a class of shares in the Company for any purpose including 5

10 without limiting the generality of the provision, the provision of any law or requirements of the Articles or the Listing Requirements on substantial shareholding, takeovers, notices, requisitions of meetings, quorum for meetings and the result of votes on resolution at a meeting of shareholders. 5.2 Working Capital The Proposed Share Buy-Back if exercised is likely to reduce the working capital and cash flow of the Company, the quantum of which depends on, amongst others, the purchase price and the actual number of Shares purchased. Notwithstanding, it is not expected to have a material effect on the working capital and cash flow of the Company. However, the Shares so purchased and maintained as treasury shares may increase the working capital of the Company, if the treasury shares are subsequently resold at a higher price than the initial purchase price (subject to the extent of the number of treasury shares resold and the prevalent selling price). 5.3 Earnings The effect of the Proposed Share Buy-Back if carried out, may give rise to an increased earnings per share of the Company (subject to the purchase price, the actual number of shares bought back and the opportunity cost of the funds utilised for the Proposed Share Buy-Back). If the treasury shares are subsequently sold on Bursa Securities, there will be no impact on the earnings as the gain or loss is taken directly to the equity. 5.4 NA per Share The Proposed Share Buy-Back will reduce the NA per share if the purchase price exceeds the NA per share and conversely, will increase the NA per share if the purchase price is less than the NA per share. Should the Company chooses to retain any purchased Shares as treasury shares and subsequently resell the treasury shares on Bursa Securities and, depending on the price at which the said treasury shares are resold, the Proposed Share Buy-Back may have a positive effect on the NA per share, if a gain is achieved on resale (but subject to the selling price and number of treasury shares resold). 5.5 Dividends The Proposed Share Buy-Back may reduce the amount of retained profits available for payment of cash dividends to its shareholders. Nevertheless, if the Shares so purchased are retained as treasury shares, the said treasury shares may be distributed as dividends to its shareholders, if the Company so decides. Accordingly, the Directors will fully consider the interest of the Company and its shareholders in implementing the Proposed Share Buy-Back. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS Save for the incidental increase in the percentage of shareholdings of the Directors, major shareholders and persons connected to them as a result of the effective decrease in the total number of voting shares of the Company upon the Proposed Share Buy-Back, none of the Directors or major shareholders or persons connected to them has any interest in the Proposed Share Buy-Back or resale of the treasury shares. The shareholdings of the Directors and substantial shareholders are as stated in Appendix 1. 6

11 7. PURCHASE, RESALE AND CANCELLATION OF MASTEEL SHARES MADE IN THE PREVIOUS 12 MONTHS During the previous 12 months up to 31 March 2018, the Company had purchased 1,031,000 Shares and retained as treasury shares. Details of the share buy-back were as follows:- Month No. of Shares repurchased (units) Lowest Price paid (RM) Highest Price paid (RM) Average Price paid (RM) Total Consideration paid* (RM) March ,031, ,003, * Inclusive transaction cost During the previous 12 months up to 31 March 2018, the Company had resale 1,213,800 treasury shares. Details of the resale of shares were as follows:- Month No. of Treasury Shares sold (units) Lowest Price received (RM) Highest Price received (RM) Average Price received (RM) Total Consideration received * (RM) September 320, , October , ,600 November 390, , January , , Total 1,213,800 1,894, * Inclusive transaction cost As at 2 April 2018 (being the LPD), a total of 1,031,000 Shares were held as treasury shares. There was no cancellation of treasury shares in the preceding twelve (12) months. 8. PUBLIC SHAREHOLDING SPREAD As at the LPD, the public shareholding spread of the Company was 66.29%. Assuming that the Company purchases up to the maximum number of Shares as allowed under the Proposed Share Buy-Back, the public shareholding spread is expected to reduce to 62.64%. The Company shall not buy-back any Shares if it results in the Company being in breach of the minimum public shareholding spread requirement of the Listing Requirements. 9. RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITIONS As at the LPD, TYY Resources Sdn Bhd, Kemajuan Rekacekap Sdn Bhd, Tai May Chean and Tai Chet Siang & Sons Sendirian Bhd collectively hold 33.71% of the total number of issued shares of MASTEEL. Assuming that the Proposed Share Buy-Back is implemented in full and the Company purchases its own Shares from its shareholders other than from the aforementioned parties (it is also assumed that the total number of Shares held by the aforementioned parties remains unchanged), the collective shareholdings of the aforementioned parties will increase to 37.36% of the total number of issued shares of MASTEEL. Pursuant to Note 9 Paragraph 4.01 of the Rules, a person and any parties acting in concert with him will be required to make a mandatory offer for the remaining Shares of the Company not already owned by him/her/them if his/her/their stake in the Company is increased to beyond 33% or if his/her/their shareholding is between 33% and 50% and increases by another 2% in any six (6) months period. However, an exemption from mandatory offer obligation may be granted by the Securities Commission under Paragraph 4.15 of the Rules subject to the parties acting in concert complying with the conditions stipulated in the Paragraph 4.15 of the Rules. 7

12 The Company intends to implement the Proposed Share Buy-Back in the manner that will not result in any of the shareholders having to undertake a mandatory offer pursuant to the Rules. In this respect, the Board will be mindful of the requirements of the Rules when implementing the Proposed Share Buy-Back. In the event that MASTEEL decides to purchase its own shares which will result in the increase of the abovementioned parties shareholdings in MASTEEL to more than 2% in any six (6) month period, the abovementioned parties will seek a waiver from the Securities Commission under Paragraph 4.15 of the Rules before the Company purchases such Shares. 10. DIRECTORS RECOMMENDATION The Board having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the Proposed Share Buy-Back is in the best interest of the Company, and accordingly recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Share Buy-Back to be tabled at the forthcoming AGM. 11. FURTHER INFORMATION Shareholders are requested to refer to the enclosed Appendix I and II for further information. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 8

13 PART B PROPOSED ADOPTION OF NEW CONSTITUTION OF THE COMPANY 9

14 (Company No.: 7878-V) (Incorporated in Malaysia) Registered Office: Unit B-05-3A, 5 th Floor Block B (West Wing), PJ8 Office Suite No. 23, Jalan Barat, Seksyen Petaling Jaya Selangor Darul Ehsan 30 April 2018 Board of Directors:- Dato Ikhwan Salim bin Dato Haji Sujak Dato Sri Tai Hean Tek Hean Leng Lau Yoke Leong Ong Teng Chun Ng Siew Peng Ng Wah Lok Roy Thean Chong Yew Muhammad Hanizam bin Hj. Borhan (Chairman - Independent Non-Executive) (Managing Director / Chief Executive Officer) (Executive Director / Chief Financial Officer) (Executive Director) (Executive Director) (Senior Independent Non-Executive Director) (Independent Non-Executive Director) (Independent Non-Executive Director) To: The shareholders of Malaysia Steel Works (KL) Bhd Dear Sir/Madam, PROPOSED ADOPTION OF NEW CONSTITUTION OF THE COMPANY 1. INTRODUCTION On 4 April 2018, the Board announced that the Company proposed to seek the shareholders approval for the Proposed New Constitution. The purpose of this Circular is to provide you with the relevant information on the Proposed New Constitution, and to seek your approval for the special resolution to be tabled at the forthcoming AGM of the Company to be held at Dewan Perdana, Level 2, Convention Centre, Grand BlueWave Hotel Shah Alam, Persiaran Perbandaran, Seksyen 14, Shah Alam, Selangor Darul Ehsan on Thursday, 21 June 2018 at 2.00 p.m. The Notice of AGM together with the Form of Proxy are enclosed in the 2017 Annual Report. 2. DETAILS AND RATIONALE FOR THE PROPOSED NEW CONSTITUTION The Board proposes to adopt a new Constitution taking into account the changes to the Companies Act 2016 which came into force on 31 January 2017 and in line with the Listing Requirements. The details of the Proposed New Constitution are set out in Appendix III of this Statement/Circular. The Proposed New Constitution is primarily for the purpose of streamlining the Constitution to be in line with the Companies Act 2016, the Listing Requirements, the prevailing statutory and regulatory requirements as well as to update the existing Memorandum and Articles of Association of the Company, where relevant, to render consistency throughout in order to facilitate and further enhance administrative efficiency. 10

15 3. EFFECTS OF THE PROPOSED NEW CONSTITUTION The Proposed New Constitution will not have any effect on the share capital of the Company and shall not have any material effect on the substantial shareholdings, net assets, gearing and earnings per share of the Group. 4. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS None of the Directors and substantial shareholders or persons connected with them has any interest, direct or indirect, in the Proposed New Constitution. 5. DIRECTORS RECOMMENDATION The Board, after having considered all aspects of the Proposed New Constitution, is of the opinion that the Proposed New Constitution is in the best interest of the Company, and accordingly recommends that you vote in favour of the special resolution pertaining to the Proposed New Constitution to be tabled at the forthcoming AGM. 6. APPROVAL REQUIRED The Proposed New Constitution is subject to the approval being obtained from the shareholders of the Company at the forthcoming AGM. 7. AGM The AGM, the notice of which is enclosed in the Annual Report of the Company for financial year ended 31 December 2017 will be held at Dewan Perdana, Level 2, Convention Centre, Grand BlueWave Hotel Shah Alam, Persiaran Perbandaran Seksyen 14, Shah Alam, Selangor Darul Ehsan on Thursday, 21 June 2018 at 2.00 p.m., for the purpose of considering and, if thought fit, passing, inter alia, the special resolution set out in the Notice of AGM, to give effect to the Proposed New Constitution. If you are unable to attend or vote in person at the AGM, you will find attached to the Annual Report of the Company for the financial year ended 31 December 2017, a Form of Proxy, which you are required to complete, sign and return in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive at the Company s Share Registrar office at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur or alternatively, Tricor s Customer Service Centre, Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur, not less than forty-eight (48) hours before the date and time set for holding the AGM or any adjournment thereof. The lodging of the Form of Proxy will not, however, preclude you from attending and voting in person at the AGM should you subsequently wish to do. 8. FURTHER INFORMATION Shareholders are requested to refer to the enclosed Appendix II and III for further information. Yours faithfully, For and on behalf of the Board of MALAYSIA STEEL WORKS (KL) BHD DATO SRI TAI HEAN TEK HEAN LENG Managing Director / Chief Executive Officer 11

16 1. Directors Shareholdings as at the LPD Before the Proposed Share Buy-Back After the Proposed Share Buy-Back Direct Indirect Direct Indirect No. of Shares % (1) No. of Shares % (1) No. of Shares % (2) No. of Shares % (2) Dato Ikhwan Salim bin Dato Haji Sujak Dato Sri Tai Hean Tek Hean Leng ,892,616 (3) ,892,616 (3) Lau Yoke Leong Ong Teng Chun Ng Siew Peng Ng Wah Lok Roy Thean Chong Yew Muhammad Hanizam bin Hj. Borhan Notes: (1) Based on the total number of issued shares of MASTEEL of 427,239,831 Shares less 1,031,000 Shares held as treasury shares. (2) Based on the total number of issued shares of MASTEEL of 427,239,831 Shares less 42,723,983 Shares held as treasury shares. (3) Deemed interested pursuant to Section 8(4) of the ACT by virtue of his interests in TYY Resources Sdn Bhd. 12 APPENDIX I

17 APPENDIX I 2. Substantial Shareholders Shareholdings as at the LPD No. of Shares Before the Proposed Share Buy-Back After the Proposed Share Buy-Back Direct Indirect Direct Indirect % (1) No. of Shares % (1) No. of Shares % (2) No. of Shares % (2) TYY Resources Sdn Bhd 130,892, ,892, Dato Sri Tai Hean Tek Hean Leng ,892,616 (3) Datin Ng Pik Lian ,388,081 (4) Estate of Tai Chet Siang, Deceased ,892,616 (3) ,892,616 (3) ,388,081 (4) ,892,616 (3) Notes: (1) Based on the total number of issued shares of MASTEEL of 427,239,831 Shares less 1,031,000 Shares held as treasury shares. (2) Based on the total number of issued shares of MASTEEL of 427,239,831 Shares less 42,723,983 Shares held as treasury shares (3) Deemed interested pursuant to Section 8(4) of the ACT by virtue of their interests in TYY Resources Sdn Bhd. (4) Deemed interested pursuant to Section 8(4) of the ACT by virtue of her interest in TYY Resources Sdn Bhd and Kemajuan Rekacekap Sdn Bhd. 13

18 FURTHER INFORMATION APPENDIX II 1. DIRECTORS RESPONSIBILITY STATEMENT This Statement/Circular has been seen and approved by our Board they collectively and individually accept full responsibility for the accuracy of the information given 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 Statement/Circular misleading. 2. MATERIAL CONTRACTS As at the date of this Statement/Circular, neither Masteel nor Masteel s subsidiaries have entered into any contracts which are or may be material (not being contracts entered into in the ordinary course of business of Masteel and/or any of its subsidiaries) within the past two (2) years immediately preceding the date of this Statement/Circular. 3. MATERIAL LITIGATION, CLAIM AND ARBITRATION As at the date of this Statement/Circular, neither Masteel nor Masteel s subsidiaries are engaged in any material litigation, claim or arbitration, either as plaintiff or defendant, which may have a material effect on our Company s financial position, and our Directors are not aware of any proceedings, pending or threatened against our Group or of any facts likely to give rise to any proceedings which may materially and adversely affect our financial position or business. 4. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection during normal office hours (except for public holidays) from the date of this Statement/Circular up to and including the date of the forthcoming AGM, at our Registered Office: (i) Memorandum and Articles of Association of Masteel; and (ii) The latest audited consolidated financial statements of Masteel for the financial years ended 31 December 2016 and 31 December

19 APPENDIX III THE COMPANIES ACT 2016 MALAYSIA PUBLIC COMPANY LIMITED BY SHARES CONSTITUTION OF MALAYSIA STEEL WORKS (KL) BHD (Company No V) Incorporated on 25 th day of March,

20 THE COMPANIES ACT 2016 MALAYSIA A PUBLIC COMPANY LIMITED BY SHARES CONSTITUTION OF MALAYSIA STEEL WORKS (KL) BHD 1. The name of the Company is MALAYSIA STEEL WORKS (KL) BHD. 2. The registered office of the Company will be situated in Malaysia. 3. The objects for which the Company is established are: - (1) To carry on the business of an investment holding company, and in particular to invest the monies of the Company in or otherwise to acquire any such shares, stocks, debenture stocks, bonds obligations or securities by original subscription, tender purchase transfer, exchange or otherwise or to acquire the Company s own shares and stocks in such manner and to such extent as may from time to time be prescribed and allowed by law and the applicable rules, regulations, orders, guidelines or requirements issued by any relevant authorities from time to time and generally to enforce and exercise all rights and powers conferred by or incident to the ownership thereof and in particular to sell, transfer, exchange or otherwise dispose of the same and to hold shares or invest in, and to acquire, lease, promote or sell any undertakings of the Company or property of every description, and to manage, conduct or undertake the business of management or otherwise howsoever direct the operations of any business, company, corporation, firm of any other whatsoever enterprise, undertaking or venture, and generally to undertake any of the business of a holding or management company. (2) To carry on the business as manufacturers and suppliers of and dealers in steel and steel related products and other uses and do all things necessary or useful for carrying on any of the above businesses. (3) To produce, manufacture, smelt, refine, prepare, purchase, import, export, sell and generally to deal in all steel and steel related products and in connection therewith to acquire, erect, construct, establish, operate and maintain factories, workshops and other works in a suitable place or places in Malaysia or elsewhere and to exercise all or any of the powers contained in the Companies Act And it is hereby declared that the word Company in this clause except where used in reference to this Company, shall be deemed to include any partnership or other body of person whether incorporated or unincorporated, and whether domiciled in Malaysia or elsewhere, and further that the objects specified in each paragraph of this clause shall be regarded as independent objects and accordingly shall, except where otherwise expressed in any paragraph, be in no way limited or restricted by reference to, or inference from the terms of any other paragraph or the name of the Company but may be carried out in as full and ample a manner and construed just as wide a sense as if the said paragraph defined the objects of a separate distinct and independent company. 4. The Company shall has the full rights, powers and privileges for the purpose of carrying out the objects as mentioned above. 5. The liability of the Members of the Company is limited. 6. The provisions set out in the Companies Act 2016 which may be modified or substituted by the provisions of these clauses shall not apply to the Company, except in so far as the same are repeated or contained in this Constitution. 16

21 INTERPRETATION 7. In this Constitution, if not inconsistent with the subject or context, the words standing in the first column of the table next hereinafter contained shall bear the meanings set opposite to them respectively in the second column thereof:- WORDS Act Beneficial Owner Board Bursa Depository Central Depositories Act Clause CMSA Constitution Company Deposited Security Depositor Directors Documents electronic address electronic communication MEANINGS The Companies Act 2016 and any statutory modification, amendment or re-enactment thereof and every other legislation for the time being in force made thereunder and any written law for the time being in force concerning companies and affecting the Company. The ultimate owner of the Deposited Securities who is the person who is entitled to all rights, benefits, powers and privileges and is subject to all liabilities, duties and obligations in respect of, or arising from, the Deposited Securities and does not include a nominee of any description. The board of directors for the time being of the Company. Bursa Malaysia Depository Sdn. Bhd. (Company No W) including any further change of name. Securities Industry (Central Depositories) Act 1991, and every statutory amendment, modification, or re-enactment thereof for the time being in force. Clauses of this Constitution as originally framed or altered from time to time by Special Resolution. Capital Markets and Services Act 2007, and any statutory modification, amendment or re-enactment thereof for the time being in force. This Constitution as originally framed or as altered from time to time by Special Resolution. MALAYSIA STEEL WORKS (KL) BHD (Company No V). A security in the Company standing to the credit of a Securities Account and includes securities in the Securities Account that is in suspense subject to the provisions of the Central Depositories Act and the Rules. A holder of a Securities Account as defined in Section 2 of the Central Depositories Act. The directors for the time being of the Company as defined in Section 2(1) of the CMSA. Any document required to be sent under the Listing Requirements to the securities holder. Any address or number used for the purpose of sending or receiving Documents or information by electronic means. A document or information is sent or supplied by electronic communication if it is sent initially, and received at its destination by means of electronic equipment for the processing (which expression includes digital compression) or storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means. 17

22 electronic form Exchange Exempt Authorised Nominee Listing Requirements Market Day member Office Record of Depositors Register Registrar Rules Seal Secretary securities Securities Account share Document or information sent or supplied in electronic form are those sent by electronic communication or by any other means while in an electronic form whereby a recipient of such Documents or information would be able to retain a copy. Bursa Malaysia Securities Berhad (Company No W) and / or any other Exchange on which the Company is listed. An authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act. Bursa Malaysia Securities Berhad Main Market Listing Requirements including any amendments thereto that may be made from time to time. A day on which the stock market of the Exchange is open for trading in securities. Unless otherwise expressed to the contrary, any person(s) for the time being holding one or more shares in the Company and whose name(s) appears in the Register of Members and includes a Depositor who shall be treated as if he were a member pursuant to Section 35 of the Central Depositories Act but excludes the Bursa Depository in its capacity as a bare trustee member. The registered office for the time being of the Company. A record provided by the Bursa Depository to the Company or its registrar(s) under Chapter 24.0 of the Rules. The register of members to be kept pursuant to the Act, and unless otherwise expressed to the contrary, includes the Record of Depositors. Such person, firm or company which for the time being maintains in Malaysia, the register of securities holders. The Rules of the Bursa Depository and any appendices thereto, as amended, modified and supplemented from time to time. The Common Seal of the Company or in appropriate case the official seal. Any person or persons appointed to perform the duties of the secretary of the Company and shall include a joint, temporary assistant or deputy secretary. As defined in Section 2(1) of the CMSA. An account established by the Bursa Depository for a Depositor for the recording of deposit or withdrawal of Securities and for dealing in such Securities by the Depositor as permitted under the Central Depositories Act and / or the Rules. Issued share capital of a corporation and includes stock except where a distinction between stock and shares is expressed or implied. Writing shall include printing and lithography and any other mode or modes of representing or reproducing words, symbols or other information which may be displayed in a visible form, whether in a physical document or in an electronic communication or form or otherwise howsoever. Words denoting the singular number only shall include the plural number and vice versa and the masculine shall include the feminine and neuter genders and vice versa. 18

23 Words importing persons shall include corporations and companies. Subject as aforesaid, words or expressions contained in these Clauses shall be interpreted in accordance with the provisions of the Interpretation Acts, 1948 and 1967 of Malaysia, as amended from time to time and any re-enactment thereof. EFFECT OF THE LISTING REQUIREMENTS 8. (a) Notwithstanding anything contained in this Constitution, if the Listing Requirements prohibit an act being done, the act shall not be done. (b) (c) (d) (e) (f) (g) (h) Nothing contained in this Constitution prevents an act being done that the Listing Requirements require to be done. If the Listing Requirements require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the Listing Requirements require this Constitution to contain a provision and it does not contain such a provision, this Constitution is deemed to contain that provision. If the Listing Requirements require this Constitution not to contain a provision and it contains such a provision, this Constitution is deemed not to contain that provision. If any provision of this Constitution is or becomes inconsistent with the Listing Requirements, this Constitution is deemed not to contain that provision to the extent of the inconsistency. Notwithstanding anything contained in this Constitution, nothing herein contained shall prevent the Directors from applying to the Exchange for a waiver from compliance or observance of any of the Listing Requirements. In the event the compliance or observance of such Listing Requirements are waived by the Exchange, the Company shall not be required to comply with any of the Clauses relating to those Listing Requirements in respect of which compliance or observance has been waived by the Exchange. The provisions of this Clause 8 shall only apply so long as any of the securities of the Company are listed on the Exchange. SHARE CAPITAL AND VARIATION OF RIGHTS 9. Subject to the Act and this Constitution, shares in the Company may be issued by the Directors and any such shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Directors, subject to any special resolution of the Company, may determine. 10. Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares and subject to the provisions of this Constitution, the Act and the provisions of any resolution of the Company, shares in the Company may be issued by the Directors, who may allot, or otherwise dispose of such shares to such persons, on such terms and conditions, with such preferred, deferred or other special rights, and subject to such restrictions and at such times as the Directors may determine but the Directors in making any issue of shares shall comply with the following conditions:- (a) (b) in the case of shares of a class, other than ordinary shares, no special rights shall be attached until the same have been expressed in this Constitution and in the resolution creating the same; every issue of shares or options to employees and/or Directors shall be approved by members in general meeting and in respect of issuance of shares or options to Directors such approval shall specifically detail the amount of shares or options to be issued to such Directors; 19

24 (c) except in the case of an issue of securities on a pro rata basis to shareholders or pursuant to a back-to-back placement undertaken in compliance with the Listing Requirements, a Director, major shareholders, Chief Executive or person connected to any Director, major shareholder or Chief Executive of the Company shall not participate, directly or indirectly, in an issue of ordinary shares or other securities with rights of conversion to ordinary shares unless the shareholders of the Company in general meeting have approved the specific allotment to be made to the Director, major shareholders, Chief Executive or person connected to any Director, major shareholder or Chief Executive and the Director, major shareholders, Chief Executive or person connected to any Director, major shareholder or Chief Executive has abstained from voting on the relevant resolution; In this Clause, Major Shareholder, Chief Executive and Person connected to any Director, major shareholder or Chief Executive shall have the same meaning described thereto in the Listing Requirements. (d) (e) without limiting the generality of Sections 75 and 76 of the Act, the Company must not issue any ordinary shares or other securities with rights of conversion to ordinary shares if those shares or securities, when aggregated with any such shares or securities which the Company has issued during the preceding twelve (12) months, exceeds ten percent (10%) of the total number of issued shares (excluding treasury shares) of the Company, except where the shares or securities are issued with the prior shareholders approval in a general meeting of the precise terms and conditions of the issue; and in working out the number of shares or securities that may be issued by the Company, if the security is a convertible security, each such security is counted as the maximum number of shares into which it can be converted or exercised. 11. Subject to the Act, any preference shares may with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed. The Company shall have the power to issue preference capital ranking equally with, or in priority to, preference shares already issued. Preference shareholders shall have the same rights as ordinary shareholders as regards to receiving notices, reports and audited financial statements and attending meetings of the Company. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the share capital or winding up or during the winding up of the Company, or on a proposal for the disposal of the whole of the Company s property, business and undertaking, or where any resolution to be submitted to the meeting directly affects their rights and / or privileges attached to the shares, or when the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months. 12. Notwithstanding Clause 11, the repayment of preference share capital other than redeemable preference capital or any other alteration of preference shareholder's rights, may only be made pursuant to a special resolution of the preference shareholders concerned PROVIDED ALWAYS that where the necessary majority for such a special resolution is not obtained at the meeting, consent in writing, if obtained from not less than 75% of the total voting rights of the preference shareholders within two (2) months of the meeting, shall be as valid and effectual as a special resolution carried at the meeting. 13. Subject to the provisions of Sections 71 and 91 of the Act, if at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound up, be varied with the sanction of a special resolution passed at a separate meeting of the shareholders of that class. Where necessary majority of such a special resolution is not obtained at the meeting, consent in writing if obtained from the holders of not less than 75% of the total voting rights of the shareholders of that class within two (2) months of the meeting, shall be as valid and effectual as a special resolution carried at the meeting. To every such separate general meeting, the provisions of this Constitution relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be at least two (2) persons who are shareholders present in person or represented by proxy holding at least one-third (1/3) of the number of issued shares of the class, excluding any shares of that class held as treasury shares and that any holder of shares of the class present in person or by proxy may demand a poll. For adjourned meeting, quorum is one 20