KEY ASIC BERHAD CIRCULAR TO SHAREHOLDERS IN …ir.chartnexus.com/keyasic/website_HTML/attachments/...Benny T.Hu @ Ting Wu Hu (Independent Non-Executive Director) N.Chanthiran a/l Nagappan

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KEY ASIC BERHAD

(Company No. 707082-M)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE

PROPOSED REDUCTION OF THE ISSUED SHARE CAPITAL OF KEY ASIC

BERHAD (“KEY ASIC”) PURSUANT TO SECTION 116 OF THE COMPANIES

ACT, 2016

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Adviser

TA SECURITIES HOLDINGS BERHAD (14948-M)

(A Participating Organisation of Bursa Malaysia Securities Berhad)

The Notice of Extraordinary General Meeting (“EGM”) of Key ASIC and the Proxy Form are set out in this Circular. Key

ASIC’s EGM will be held as follows:

Venue of EGM : Greens 1, Golf Wing, Tropicana Golf & Country Resort, Jalan

Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan

Date and time of the EGM : Friday, 23 November 2018 at 2.00 p.m., or immediately following

the conclusion or adjournment of the 13th Annual General Meeting

of Key ASIC which scheduled to be held at the same venue and on

the same date at 1.00 p.m., whichever is later

Last date and time for lodging the Proxy Form : Wednesday, 21 November 2018 at 2.00 p.m.

You are entitled to attend and vote at our EGM or to appoint a proxy or proxies (where applicable) to attend and vote on your

behalf. In such event, the completed Proxy Form should be lodged at our Share Registrar Office 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 48 hours before the time set for holding the EGM or any adjournment thereof. The Proxy

Form once deposited will not preclude you from attending and voting in person at the EGM should you subsequently wish to do so.

This Circular is dated 12 October 2018

THIS CIRCULAR 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.

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.

DEFINITIONS

i

Except where the context otherwise requires, the following definitions shall apply throughout this Circular and

the accompanying appendices:

“Act” : Companies Act 2016

“Announcement” : The announcement of the Proposed Share Capital Reduction dated 2

October 2018

“Board” : Board of Directors of our Company

“Bursa Securities” : Bursa Malaysia Securities Berhad

“Circular” : This circular to shareholders dated 12 October 2018 in relation to the

Proposed Share Capital Reduction

“Court” : High Court of Malaya

“Director” : A natural person who holds a directorship in our Company, whether

in an executive or non-executive capacity, and shall have the meaning

given in Section 2(1) of the Act and Section 2(1) of the Capital

Markets and Services Act 2007

“EGM” : Extraordinary general meeting of our Company

“EPS” : Earnings per Key ASIC Share

“ESOS” : Employee share option scheme of our Company

“ESOS Options” : Options granted to the eligible persons pursuant to the ESOS

“FPE” : 17-month financial period ended

“FYE” : Financial year ended/ending, as the case may be

“IP” : Intellectual property

“Key ASIC” or “Company” : Key ASIC Berhad

“Key ASIC Group” or “Group” : Key ASIC and our subsidiaries, collectively

“Key ASIC Shares” or “Shares” : Ordinary shares in our Company

“LAT” : Loss after taxation

“Listing Requirements” : Main Market Listing Requirements of Bursa Securities

“LPD” : 24 September 2018, being the latest practicable date prior to the

printing of this Circular

“LPS” : Loss per Key ASIC Share

“Maximum Scenario” : Assuming all of the Outstanding ESOS Options are exercised into

new Key ASIC Shares and the Proposed Share Capital Reduction is

completed after the issuance of the Private Placement Shares

“Minimum Scenario” : Assuming none of the Outstanding ESOS Option is exercise into new

Key ASIC Share and the Proposed Share Capital Reduction is

completed prior to the issuance of the Private Placement Share

“NA” : Net assets attributable to ordinary equity holders of the respective

company

“Outstanding ESOS Options” : 406,000 ESOS Options granted which are currently outstanding as at

the LPD and are exercisable into 406,000 new Key ASIC Shares

“PAT” : Profit after taxation

DEFINITIONS (Cont’d)

ii

“Previous Private Placement” : The listing of 38,938,000 Key ASIC Shares at an issue price of

RM0.12 each on 16 June 2017 pursuant to a private placement

exercise representing approximately 10% of the share capital of our

Company which was completed on 16 June 2017

“Private Placement” : The private placement of up to 222,743,750 Key ASIC Shares which

was approved by Bursa Securities and our shareholders on 26 January

2018 and 27 February 2018 respectively

“Private Placement Shares” : 182,743,750 Key ASIC Shares pursuant to the Private Placement

“Proposed Share Capital Reduction” : Proposed reduction of the issued share capital of Key ASIC pursuant

to Section 116 of the Act

“RM” and “sen” : Ringgit Malaysia and sen, respectively

“TA Securities” : TA Securities Holdings Berhad (14948-M)

All references to “our Company” in this Circular are to Key ASIC, references to “our Group” are to our

Company and our subsidiaries. All references to “we”, “us”, “our” and “ourselves” are to our Company, or

where the context requires, our Group. All references to “you” in this Circular are references to the

shareholders of our Company.

Words incorporating the singular shall, where applicable, include the plural and vice versa and words

incorporating 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 Circular to

any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a

time of day in this Circular shall be a reference to Malaysian time, unless otherwise specified.

[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

iii

PAGE

LETTER TO OUR SHAREHOLDERS CONTAINING:

1. INTRODUCTION ..................................................................................................................................... 1 2. DETAILS OF THE PROPOSED SHARE CAPITAL REDUCTION .................................................. 1 3. RATIONALE FOR THE PROPOSED SHARE CAPITAL REDUCTION ......................................... 2 4. EFFECTS OF THE PROPOSED SHARE CAPITAL REDUCTION .................................................. 2 5. HISTORICAL SHARE PRICES ............................................................................................................. 6 6. INTERCONDITIONALITY OF THE PROPOSED SHARE CAPITAL REDUCTION ................... 6 7. APPROVALS REQUIRED ...................................................................................................................... 6 8. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION ................................ 7 9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS

CONNECTED WITH THEM .................................................................................................................. 7 10. DIRECTORS’ STATEMENT AND RECOMMENDATION ............................................................... 7 11. ESTIMATED TIME FRAME FOR COMPLETION ............................................................................ 7 12. EGM ........................................................................................................................................................... 7 13. FURTHER INFORMATION ................................................................................................................... 8

APPENDICES

I HISTORICAL FINANCIAL INFORMATION OF OUR GROUP 9

II FURTHER INFORMATION 11

NOTICE OF EGM ENCLOSED

PROXY FORM ENCLOSED

1

KEY ASIC BERHAD



Registered Office:

Unit 30-01, Level 30, Tower A, Vertical Business Suite

Avenue 3, Bangsar South, No. 8, Jalan Kerinchi

59200 Kuala Lumpur

12 October 2018

Board of Directors

Eg Kah Yee (Executive Chairman, Chief Executive Officer)

Benny T.Hu @ Ting Wu Hu (Independent Non-Executive Director)

N.Chanthiran a/l Nagappan (Independent Non-Executive Director)

Chen, Chia-Yin (Independent Non-Executive Director)

Prof Low Teck Seng (Independent Non-Executive Director)

To: Our Shareholders

Dear Sir/Madam,

PROPOSED SHARE CAPITAL REDUCTION

1. INTRODUCTION

On 2 October 2018, TA Securities announced on behalf of our Board that we propose to undertake the

Proposed Share Capital Reduction pursuant to Section 116 of the Act.

Further details of the Proposed Capital Reduction are set out in Section 2 below.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE RELEVANT

INFORMATION OF THE PROPOSED SHARE CAPITAL REDUCTION, TO SET OUT OUR

BOARD’S RECOMMENDATION ON THE PROPOSED SHARE CAPITAL REDUCTION AND

TO SEEK YOUR APPROVAL FOR THE RESOLUTION PERTAINING TO THE PROPOSED

SHARE CAPITAL REDUCTION TO BE TABLED AT OUR FORTHCOMING EGM. THE

NOTICE OF EGM TOGETHER WITH THE PROXY FORM ARE ENCLOSED IN THIS

CIRCULAR.

YOU ARE ADVISED TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR

TOGETHER WITH THE APPENDICES CONTAINED HEREIN CAREFULLY BEFORE

VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED SHARE CAPITAL

REDUCTION TO BE TABLED AT OUR FORTHCOMING EGM.

2. DETAILS OF THE PROPOSED SHARE CAPITAL REDUCTION

The Proposed Share Capital Reduction entails the reduction of RM46,000,000 of the issued share capital

of Key ASIC pursuant to Section 116 of the Act. The corresponding credit of RM46,000,000 arising from

such cancellation will be utilised to eliminate the accumulated losses of our Company and balance will be

credited to the retained earnings account of our Company which may be utilised in such manner as our

Board deems fit and as permitted by the relevant and applicable laws and our Company’s Constitution.

2

As at the LPD, the issued share capital of Key ASIC was RM73,741,642 comprising 930,569,000 Key

ASIC Shares. In addition, as at the LPD, our Company has 406,000 Outstanding ESOS Options, which

can be exercised into 406,000 new Key ASIC Shares at the exercise price of RM0.145 each. Our

Company does not have any treasury share as at the LPD.

Our Company had on 26 January 2018 and 27 February 2018 obtained approval from Bursa Securities

and our shareholders, respectively for the Private Placement. As at the LPD, 40,000,000 Key ASIC

Shares had been issued pursuant to the Private Placement.

For illustration purpose, the Proposed Share Capital Reduction will have the following effects:

(Audited)

As at 31 May 2018

Company level Group level

RM RM

Accumulated losses (45,711,881) (42,216,524)

Add: Credit arising from the Proposed Share Capital

Reduction

46,000,000 46,000,000

Less: Estimated expenses for the Proposed Share Capital

Reduction

(120,000) (120,000)

Resultant retained earnings 168,119 3,663,476

The summary and commentaries of the financial information of our Group for the past 3 financial years

are set out in Appendix I of this Circular.

An order by the Court will be sought to confirm the Proposed Share Capital Reduction pursuant to

Section 116 of the Act after receipt of approvals from our shareholders at our forthcoming EGM.

The effective date of the Proposed Share Capital Reduction will be the date of the lodgement of a sealed

copy of the order of the Court with the Companies Commission of Malaysia confirming the cancellation

of the share capital of our Company.

The Proposed Share Capital Reduction will not result in any adjustment to the market price and

the number of Key ASIC Shares held by our Company shareholders.

3. RATIONALE FOR THE PROPOSED SHARE CAPITAL REDUCTION

The Proposed Share Capital Reduction will enable our Company to rationalise its statement of financial

position by eliminating its accumulated losses. The elimination of accumulated losses in the statements

of financial position of our Company may enhance our Company’s credibility with customers, suppliers

and investors.

4. EFFECTS OF THE PROPOSED SHARE CAPITAL REDUCTION

4.1. EPS

The Proposed Share Capital Reduction will not have any material effect on the earnings and

EPS of our Group for the FYE 31 May 2019.

3

4.2. Share Capital

The pro forma effects of the Proposed Share Capital Reduction on our Company’s share capital

is as follows:

Minimum Scenario Maximum Scenario

No. of Key

ASIC Shares RM

No. of Key

ASIC Shares RM

Issued share capital as

at the LPD

930,569,000 73,741,642(1) 930,569,000 73,741,642(1)

Assuming full exercise

of the Outstanding

ESOS Options

- - 406,000 97,339(2)

Assuming full issuance

of the Private

Placement Shares

- - 182,743,750 38,376,188(3)

930,569,000 73,741,642 1,113,718,750 112,215,169

Reduction of issued

share capital pursuant

to the Proposed Share

Capital Reduction

- (46,000,000) - (46,000,000)

After the Proposed

Share Capital

Reduction

930,569,000 27,741,642 1,113,718,750 66,215,169

Notes:

(1) The Act, which came into operation on 31 January 2017, abolished the concept of

authorised share capital and par value of share capital. Consequently, the amounts

standing to the credit of the share premium account of RM20,170,383 become part of

the Company’s share capital pursuant to the transitional provisions set out in Section

618(2) of the Act and after taking into consideration of:

(a) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at

an issue price of RM0.1371 each on 6 June 2018; and

(b) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at

an issue price of RM0.1764 each on 31 July 2018.

(2) Assuming 406,000 ESOS Options were exercised at RM0.145.

(3) Assuming 182,743,750 Private Placement Shares were placed at the issue price of

RM0.21 per Share (being the illustrative issue price in the circular to shareholders

dated 12 February 2018 to the Private Placement).


4

4.3. NA and gearing

The pro forma effects of the Proposed Share Capital Reduction on the NA and gearing of our

Group are illustrated below:

Minimum Scenario

(Audited)

(I)

After

subsequent

(II)

After (I)

the Proposed

Share Capital

Reduction

As at 31

May 2018

events up to

LPD

RM RM RM

Share capital 67,471,642(1) 73,741,642(2) 27,741,642

Share option reserve 38,469 38,469 38,469

Foreign currency translation

reserve

(645,007)

(645,007) (645,007)

(Accumulated losses) / Retained

earning (42,216,524) (42,216,524) 3,663,476(3)

Shareholders’ funds / NA 24,648,580 30,918,580 30,798,580

No. of Shares in issue 890,569,000 930,569,000 930,569,000

NA per Shares (RM) 0.03 0.03 0.03

Total borrowings (RM) - - -

Gearing (times) - - -

Notes:

(1) The Act, which came into operation on 31 January 2017, abolished the concept of

authorised share capital and par value of share capital. Consequently, the amounts

standing to the credit of the share premium account of RM20,170,383 become part of

the Company’s share capital pursuant to the transitional provisions set out in Section

618(2) of the Act.

(2) After taking into consideration of:

(a) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at

an issue price of RM0.1371 each on 6 June 2018; and

(b) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at

an issue price of RM0.1764 each on 31 July 2018.

(3) After deducting the estimated expenses of RM120,000 for the Proposed Share Capital

Reduction.

5

Maximum Scenario

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

After (III) and the

Proposed Share

Capital

Reduction

As at 31

May 2018

After

subsequent

events up to the

LPD

After (1) and assuming full

exercise of the

Outstanding ESOS

Options

After (II) and

assuming full

issuance of Private

Placement Shares

RM RM RM RM RM

Share capital 67,471,642(1) 73,741,642 (2) 73,838,981(3) 112,215,169(4) 66,215,169

Share option reserve 38,469 38,469 - - -

Foreign currency translation

reserve (645,007)

(645,007)

(645,007)

(645,007) (645,007)

(Accumulated losses) / Retained

earning (42,216,524) (42,216,524) (42,216,524) (42,216,524) 3,663,476(5)

Shareholders’ funds / NA 24,648,580 30,918,580 30,977,450 69,353,638 69,233,638

No. of Shares in issue 890,569,000 930,569,000 930,975,000 1,113,718,750 1,113,718,250

NA per Shares (RM) 0.03 0.03 0.03 0.06 0.06

Total borrowings (RM) - - - - -

Gearing (times) - - - - -

Notes:

(1) The Act, which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital.

Consequently, the amounts standing to the credit of the share premium account of RM20,170,383 become part of the Company’s share capital

pursuant to the transitional provisions set out in Section 618(2) of the Act.

(2) After taking into consideration of:

(a) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at an issue price of RM0.1371 each on 6 June 2018; and

(b) the listing of 20,000,000 Key ASIC Shares pursuant to the Private Placement at an issue price of RM0.1764 each on 31 July 2018.

(3) Assuming 406,000 ESOS Options were exercised at RM0.145.

(4) Assuming 182,743,750 Private Placement Shares were placed out at the issue price of RM0.21 per Share (being the illustrative issue price in the

circular to shareholders dated 12 February 2018 pursuant to the Private Placement).

(5) After deducting the estimated expenses of RM120,000 for the Proposed Share Capital Reduction.

6

4.4. Substantial shareholders’ shareholdings

The Proposed Share Capital Reduction will not have any effect on the shareholding of our

substantial shareholders.

4.5. Convertible securities

Save for the 406,000 Outstanding ESOS Options, which can be exercised into 406,000 new

Key ASIC Shares at the exercise price of RM0.145 each, our Company does not have any other

existing convertible securities as at the LPD.

The Proposed Share Capital Reduction will not result in any adjustment to the exercise price

and number of the Outstanding ESOS Options.

5. HISTORICAL SHARE PRICES

The monthly highest and lowest transacted prices of Key ASIC Shares for the past 12 months are as

follows:

Highest

(RM)

Lowest

(RM)

2017

October 0.340 0.135

November 0.280 0.180

December 0.270 0.170

2018

January 0.260 0.190

February 0.210 0.165

March 0.180 0.120

April 0.185 0.125

May 0.160 0.130

June 0.200 0.135

July 0.225 0.150

August 0.245 0.190

September 0.220 0.190

Last transacted market price on 1 October 2018 (being the last trading date prior to the Announcement)

was RM0.205 per Key ASIC Share.

Last transacted market price on 24 September 2018 (being the LPD) was RM0.205 per Key ASIC Share.

(Source: Bloomberg)

6. INTERCONDITIONALITY OF THE PROPOSED SHARE CAPITAL REDUCTION

The Proposed Share Capital Reduction is not conditional upon any other corporate proposals undertaken

or to be undertaken by our Company.

7. APPROVALS REQUIRED

The Proposed Share Capital Reduction is subject to and conditional upon the following approvals being

obtained:

(i) our shareholders at the forthcoming EGM for the Proposed Share Capital Reduction; and

(ii) order of the Court pursuant to Section 116 of the Act for the Proposed Share Capital Reduction.

7

8. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION

Save for the Proposed Share Capital Reduction and Private Placement, our Board is not aware of any

corporate exercise which we have announced but not yet completed prior to the printing of this Circular.

9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED

WITH THEM

None of our Directors and/or major shareholders and/or persons connected with them has any interest,

direct and indirect, in the Proposed Share Capital Reduction.

10. DIRECTORS’ STATEMENT AND RECOMMENDATION

Our Board, after having considered all aspects of the Proposed Share Capital Reduction including but not

limited to the rationale and effects of the Proposed Share Capital Reduction, is of the opinion that the

Proposed Share Capital Reduction is in the best interest of our Company and accordingly recommend

you to vote IN FAVOUR of the resolution in respect of the Proposed Share Capital Reduction to be

tabled at our forthcoming EGM.

11. ESTIMATED TIME FRAME FOR COMPLETION

Barring any unforeseen circumstances and subject to receipt of all relevant approvals, our Board expects

the Proposed Share Capital Reduction to be completed in the 1st quarter of 2019.

The indicative timetable of events in relation to the Proposed Share Capital Reduction are set out below:

Tentative dates Events

23 November 2018

End November 2018

EGM

Submission of documents to the Court for the Proposed Share Capital

Reduction

Early 2019 Order by the Court for the Proposed Share Capital Reduction

Completion of the Proposed Share Capital Reduction

12. EGM

Our EGM, the notice of which is set out in this Circular, will be held at Greens 1, Golf Wing, Tropicana

Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Friday, 23

November 2018 at 2.00 p.m., or immediately following the conclusion or adjournment of the 13th

Annual General Meeting of Key ASIC scheduled to be held at the same venue and on the same date at

1.00 p.m., whichever is later, for the purpose of considering and if thought fit, passing with or without

modifications, the resolution to give effect to the Proposed Share Capital Reduction.

If you are unable to attend and vote in person at our EGM, you should complete, sign and return the

enclosed Proxy Form in accordance with the instructions provided thereon so as to arrive at our Share

Registrar Office 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 48 hours before the time set for holding our EGM or any adjournment thereof.

The lodging of the Proxy Form will not, however, preclude you from attending our EGM and voting in

person should you subsequently wish to do so.

8

13. FURTHER INFORMATION

You are advised to refer to the Appendices set out in this Circular for further information.

Yours faithfully,

For and on behalf of our Board

KEY ASIC BERHAD

EG KAH YEE

Executive Chairman, Chief Executive Officer

APPENDIX I

HISTORICAL FINANCIAL INFORMATION OF OUR GROUP

9

The summary of the financial information of our Group for the past 3 years audited FYEs are as follows:

(Audited)

FYE 31 December

2015

FPE 31 May

2017

FYE 31 May

2018

(RM’000) (RM’000) (RM’000)

Revenue 19,253 24,817 29,417

Profit/Losses after taxation attributable to the

owners of our Company

(13,928) (9,993) 3,715

Shareholders’ funds / NA 23,087 16,393 24,649

Share capital 41,423 62,739 67,472

Weighted average number of Key ASIC

Shares in issue (‘000)

802,848 838,443 870,921

No. of Key ASIC Shares in issue (‘000) 828,455 851,381 890,569

NA per Key ASIC Share (RM) 0.03 0.02 0.03

Basic Earnings/losses per Key ASIC Share

(sen) (1)

(1.73) (1.19) 0.43

Diluted EPS/LPS (sen)(1) N/A(2) N/A(2) 0.43

Notes:

(1) Based on the weighted average number of Key ASIC Shares.

(2) There is no diluted loss per share as our Group and Company does not have any dilutive potential

ordinary shares during the financial period.

(i) FYE 31 December 2015 vs FYE 31 December 2014

Our Group’s revenue for the FYE 31 December 2015 increased by 12.90% to approximately RM19.25

million (FYE 31 December 2014: approximately RM17.05 million). The increase in revenue was

mainly due to our Group’s additional revenue of RM4.73 million incurred, due to licensing an IP to one

of its existing customers, a company that provides a full range of services such as development,

prototype production and serial product supply.

In line with the increase in revenue, and coupled with the increase in gross profit margins of 23,25% to

41.90% in FYE 31 December 2015 (FYE 31 December 2014: approximately 18.65%) due mainly to

licensing of IP to its customers which have higher gross profit margins and decrease in impairment loss

on intangible assets of 76.67% to RM3.88 million (FYE 31 December 2014: approximately RM16.63

million) and the decrease in the amortisation of intangible assets of 75.88% to RM0.48 million in FYE

31 December 2015 (FYE 31 December 2014: approximately RM1.99 million), our Group recorded a

decrease in LAT of 59.33% to RM13.93 million in FYE 31 December 2015 (FYE 31 December 2014:

approximately RM34.25 million).

Our Group recorded a decline in NA of approximately 30.39% to RM23.09 as at 31 December 2015 (as

at 31 December 2014: approximately RM33.17 million) due mainly to the LAT incurred by our Group

of RM13.93 million in the FYE 31 December 2015.

APPENDIX I

HISTORICAL FINANCIAL INFORMATION OF OUR GROUP (Cont’d)

10

(ii) Annualised FPE 31 May 2017 vs FYE 31 December 2015

Our Group’s revenue for the annualised FPE 31 May 2017 decrease by 8.99% to approximately

RM17.52 million (FYE 31 December 2015: approximately RM19.25 million). The decrease in revenue

for the FYE 31 December 2017 was mainly due to the cease of the recognition of the revenue in

licensing an Intellectual Property (“IP”) to the customer as mentioned above as the said customer stop

licensing the said IP from our Group.

Notwithstanding the decrease in revenue, our Group recorded a decrease in LAT of 49.39% to RM7.05

million in the annualised FPE 31 May 2017 (FYE 31 December 2015: approximately RM13.93

million) due mainly to the absence of the impairment loss on intangible assets in the FPE 31 May 2017

and decrease in the electronic design automation tool charges of 57.78% to RM2.82 million in the

annualised FPE 31 May 2017 (FYE 31 December 2015: approximately RM6.68 million) due mainly to

cost cutting measures implemented by our Company by reducing the number of copies of the licenses.

Our Group recorded a decline in NA of 29.02% to approximately RM16.39 million as at 31 May 2017

(as at 31 December 2015: approximately RM23.09 million) due to the LAT incurred by our Group of

RM9.99 million in the FPE 31 May 2017.

(iii) FYE 31 May 2018 vs annualised FPE 31 May 2017

Our Group’s revenue for the FYE 31 May 2018 increased by 67.92% to approximately RM29.42

million (annualised FPE 31 May 2017: RM17.52 million) mainly due to new purchase orders from

Russian customers.

In line with the increase in revenue, and coupled with the increase in gross profit margins of 16.44% to

49.67% in FYE 31 May 2018 (annualised FPE 31 May 2017: 33.23%) mainly due to non-recurring

engineering revenue which have higher gross profit margin, decrease in depreciation and amortisation

of intangible assets of 8.33% to RM0.99 million in FYE 31 May 2018 (annualised FPE 31 May 2017:

RM1.08 million) and absence of adjustment on exceptional items made to impairment of trade

receivables in FYE 31 May 2018 (annualised FPE 31 May 2017: RM1.20 million), our Group recorded

PAT of approximately RM3.72 million for the FYE 31 May 2018 (annualised FPE 31 May 2017: LAT

of RM7.05 million).

Our Group recorded an increase in NA of 50.40% to approximately RM24.65 million as at 31 May

2018 (as at 31 May 2017: approximately RM16.39 million) due to the listing of 38,393,000 Key ASIC

Shares at an issue price of RM0.12 each pursuant to the Previous Private Placement, and the listing of

250,000 Key ASIC Shares at an issue price of RM0.145 each on 15 November 2017 pursuant to the

exercise of ESOS Options.


APPENDIX II

FURTHER INFORMATION

11

1. DIRECTORS’ RESPONSIBILITY STATEMENT

This Circular has been seen and approved by our Board and they collectively and individually accept full

responsibility for the accuracy of the information given and confirm that, after having made all

reasonable enquiries and to the best of their knowledge and belief, there are no false or misleading

statements or information contained in this Circular, or other facts and information, the omission of

which would make any statement in this Circular false or misleading.

2. CONSENTS

TA Securities, being the adviser for the Proposed Share Capital Reduction, has given and has not

subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references

thereto in the form and context in which they appear in this Circular.

3. CONFLICT OF INTERESTS

TA Securities has confirmed that it is not aware of any conflict of interest which exists or is likely to

exist in its capacity as the adviser for the Proposed Share Capital Reduction.

4. MATERIAL CONTRACTS

As at the LPD, neither our Company nor our subsidiary companies have entered into any material

contracts (not being contracts entered into in the ordinary course of business) during the 2 years

immediately preceding the date of this Circular

5. MATERIAL LITIGATION, CLAIMS AND ARBITRATION

As at the LPD, neither our Company nor our subsidiary companies engaged in any material litigation,

claims or arbitration either as plaintiff or defendant, which has a material effect on the financial position

of our Company and our Group and our Board is not aware of any proceedings pending or threatened, or

of any facts likely to give rise to any proceedings, which might materially and adversely affect the

business or financial position of our Group.

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the registered office of Key ASIC at

Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No.8, Jalan Kerinchi,

59200 Kuala Lumpur during normal business hours from 8.30 a.m. to 5.30 p.m. from Monday to Friday

(excluding public holidays) for the period commencing from the date of this Circular up to and including

the date of our forthcoming EGM:

(i) the Constitution of our Company;

(ii) our Group’s audited financial statements for the FPE 31 May 2017 and FYE 31 May 2018; and

(iii) the letter of consent and conflict of interest as referred to in Sections 2 and 3 above;

KEY ASIC BERHAD



NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Key ASIC Berhad (“Key ASIC” or

“Company”) will be held at Greens 1, Golf Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410

Petaling Jaya, Selangor Darul Ehsan on Friday, 23 November 2018 at 2.00 p.m., or immediately following the conclusion

or adjournment of the 13th Annual General Meeting of Key ASIC scheduled to be held at the same venue and on the same

date at 1.00 p.m., whichever is later for the purpose of considering and if thought fit, passing with or without

modifications, the following resolution:

SPECIAL RESOLUTION

PROPOSED REDUCTION OF THE ISSUED SHARE CAPITAL OF KEY ASIC PURSUANT TO SECTION 116

OF THE COMPANIES ACT, 2016 (“ACT”) (“PROPOSED SHARE CAPITAL REDUCTION”)

“THAT subject to and conditional upon the confirmation by the High Court of Malaya pursuant to Section 116 of the Act,

the Board of Directors of Key ASIC (“Board”) be and is hereby given the authority and approval to reduce the share

capital of the Company via the cancellation of the issued share capital of RM46,000,000 and that the credit arising from

such share capital reduction to be utilised to eliminate the accumulated losses of Key ASIC;

THAT the surplus after the elimination of the Company’s accumulated losses pursuant to the Proposed Share Capital

Reduction shall be credited to the retained earnings account of the Company which may be ultilised in such manner as the

Board deems fit and as permitted by the relevant and applicable laws and the Company’s Constitution;

AND THAT the Board be and is hereby authorised to approve, sign and execute all documents, do all things and acts as

the Board may consider necessary or expedient to implement, finalise and give full effect to the Proposed Share Capital

Reduction in the best interest of the Company with full power to assent to any conditions, variations, modifications and/or

amendments in any manner as may be required by any relevant authorities, the relevant and applicable laws or deemed

necessary or desirable by the Board.”

By Order of the Board

Wong Wai Foong (MAICSA 7001358)

Joanne Toh Joo Ann (LS 0008574)

Company Secretaries

Kuala Lumpur

Date: 12 October 2018

Notes:

1. A proxy may but need not be a member of the Company.

2. A member may appoint up to two (2) proxies to attend on the same occasion.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least

one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities

account.

4. Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 which holds ordinary shares in the Company for multiple beneficial owners in one (1) 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.

5. A member who appoints more than one proxy shall specify the proportion of his shareholdings to be represented by each proxy.

6. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of its attorney duly authorised.

7. The Form of Proxy must be deposited at the office of the Company’s Share Registrar situated 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 meeting.

8. Only members whose names appear in the Record of Depositors as at 14 November 2018 will be entitled to attend, speak and vote at the meeting or appoint proxy(ies) to attend, speak and/or vote on their behalf.

KEY ASIC BERHAD (707082-M)


FORM OF PROXY (Before completing the form please refer to notes below)

I/We, _____________________________________________________ NRIC/Company No._____________________________

(PLEASE USE BLOCK CAPITAL)

of ______________________________________________________________________________________________________ (FULL ADDRESS)

being member(s) of Key ASIC BERHAD, hereby appoint________________________________________________________

NRIC No._____________________________of________________________________________________________________

and/or failing whom, ____________________________________________________NRIC No.__________________________

of____________________________________________________________or failing him, the Chairman of the Meeting as

my/our proxy to vote for me/us and on my/our behalf, at the Extraordinary General Meeting of the Company to be held at Green

1, Golf Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Friday,

23 November 2018 at 2.00 p.m., or immediately following the conclusion or adjournment of the 13th Annual General Meeting of

Key ASIC scheduled to be held at the same venue and on the same date at 1.00 p.m., whichever is later and at any adjournment

thereof, on the following resolutions referred to in the Notice of Extraordinary General Meeting.

No. Agenda Resolution FOR AGAINST

1. Proposed Share Capital Reduction Special Resolution

(Please indicate with an “X” in the space provided below on how you wish your vote to be cast. If no instruction as to voting is

given, the proxy will vote or abstain from voting at his/her discretion.)

Dated this ______________ day of _________________ 2018.

Notes:

1. A proxy may but need not be a member of the Company.

2. A member may appoint up to two (2) proxies to attend on the same occasion.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least

one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities

account.

4. Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 which holds ordinary shares in the Company for multiple beneficial owners in one (1) 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.

5. A member who appoints more than one proxy shall specify the proportion of his shareholdings to be represented by each proxy.

6. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of its attorney duly authorised.

7. The Form of Proxy must be deposited at the office of the Company’s Share Registrar situated 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 meeting.

8. Only members whose names appear in the Record of Depositors as at 14 November 2018 will be entitled to attend, speak and vote at the

meeting or appoint proxy(ies) to attend, speak and/or vote on their behalf.

No. of shares held

If more than 1 proxy, please specify number of

shares represented by each proxy

Name of Proxy 1:

Name of Proxy 2:

Signature of Shareholder or Common Seal

Contact No:

Fold this flap for sealing

Then fold here

AFFIX

STAMP

Company Secretary

Key ASIC BERHAD (Company No. 707082-M)

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

1st fold here

KEY ASIC BERHAD CIRCULAR TO SHAREHOLDERS IN …ir.chartnexus.com/keyasic/website_HTML/attachments/...Benny T.Hu @ Ting Wu Hu (Independent Non-Executive Director) N.Chanthiran a/l Nagappan

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