168 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 8. Effects of Proposed Shares Buy-Back (Cont’d) 8.2 Net Assets The Proposed Shares Buy-Back, if implemented may increase or decrease the net assets and net assets per share depending on the purchase prices of GHL Shares pursuant to the Proposed Shares Buy-Back. The consolidated net assets per share will increase if the purchase price is less than the audited consolidated net assets per share and conversely, the consolidated net assets per share will decrease if the purchase price exceeds the consolidated net assets per share at the time when the GHL Shares are purchased. In the event the purchased GHL Shares which are retained as treasury shares are resold, the consolidated net assets per share of GHL will increase or decrease depending on whether a gain or a loss is realised upon the resale. The quantum of the increase or decrease in net assets will depend on the actual selling price and the number of the treasury shares resold to the market. 8.3 Working Capital The Proposed Shares Buy-Back, as and when implemented, will reduce the working capital of the GHL Group, the quantum of which will depend on the actual purchase price and number of purchased GHL Shares as well as any associated costs incurred in relation to the share buy-back pursuant to the Proposed Share Buy-Back. However, it is not expected to have a material adverse effect on the working capital of the Company. The working capital and the cash flow of the Company will also increase accordingly when the Proposed Share Buy-Back which are retained as treasury shares are resold. The quantum of the increase in working capital and cash flow will depend on the actual selling price and the number of the treasury shares resold to the market. 8.4 Earnings The effect of the Proposed Shares Buy-Back on the earning per share (“EPS”) of GHL will depend on, inter-alia, the actual number of purchased GHL Shares and the effective cost of funding to the GHL Group, or any loss in interest income to GHL or opportunity cost in relation to other investment opportunity. However, the Proposed Shares Buy-Back, if exercised, is not expected to have any material effect on the EPS of GHL for the financial year ended 31 December 2022. 8.5 Dividends The above Proposed Shares Buy-Back is not expected to have any impact on the dividend payment as the Board will take into considerations the Company’s profit, cash flow and the capital commitments before proposing any dividend payment. 9. Malaysian Code on Take-Overs and Mergers 2016 (CODE) The Proposed Shares Buy-Back, if carried out in full (whether shares are cancelled or treated as treasury shares) may result in a substantial shareholder and/or parties acting in concert with it incurring a mandatory general offer obligation. In this respect, the Board is mindful of the provisions under Rule 4 of the Rules on Take-Overs, Mergers and Compulsory Acquisitions. In the event that GHL decides to purchase its own Shares which will result in Loh Wee Hian and Actis Stark (Mauritius) Limited’s shareholdings in GHL increasing by more than 2% in any period of six (6) months. Loh Wee Hian and Actis Stark (Mauritius) Limited will seek a waiver from the Securities Commission Malaysia under Rule 4 of the Rules on Take-Overs, Mergers and Compulsory Acquisitions before the Company purchases its own Shares. STATEMENT TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES CONT’D
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