Cahya Mata Sarawak : CMSB Statements accompanying AGM Notice

1. The profiles of the Directors who are standing for re-election as per Agenda 3 of the Notice of 48th AGM are stated on pages 41 and 42 of the Company's Annual Report 2022.
2. The profiles of the Directors are stated on pages 38 to 44 of the Company's Annual Report 2022. Their shareholdings in the Company are set out on page 242 of the Company's Annual Report 2022.
3. Details on the authority to allot and issue shares in the Company pursuant to Sections 75 and 76 of the Companies Act 2016 are set out in Note 6 of the Notice of 48th AGM.

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Cahya Mata Sarawak Berhad | Annual Report 2022

STATEMENT ACCOMPANYING

NOTICE OF 48TH ANNUAL

GENERAL MEETING

(Pursuant to Paragraph 12.06(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

SHARE BUY-BACK STATEMENT

1. IMPORTANCE
   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 Adviser immediately.
   Bursa Malaysia Securities Berhad ("Bursa Securities") has not perused this Share Buy-Back Statement ("Statement") prior to its issuance as it is an exempt Statement. Bursa Securities takes no responsibility for the contents of this Statement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss 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.
2. DETAILS OF THE PROPOSED SHAREHOLDERS' MANDATE FOR SHARE BUY-BACK
   2.1 Introduction
   At the 47th Annual General Meeting ("AGM") held on 27 May 2022, Cahya Mata Sarawak Berhad ("Cahya Mata" or "the Company") obtained shareholders' approval for the purchase of up to a maximum of ten percent (10%) of the total number of issued shares of the Company on Bursa Securities.
   This authority conferred by the shareholders will expire at the conclusion of the forthcoming 48th AGM of the Company.
   On 11 April 2023, the Board of Directors of Cahya Mata ("Board") announced to Bursa Securities that Cahya Mata proposed to seek shareholders' approval for the renewal of the Shareholders' Mandate at the forthcoming 48th AGM to allow the Directors to exercise the power of the Company to purchase its own Shares (referred to the Ordinary Shares of Cahya Mata "Share(s)" or "Cahya Mata Shares") of up to a maximum of ten percent (10%) of the total number of issued shares of Cahya Mata at any point of time through Bursa Securities ("Proposed Shareholders' Mandate for Share Buy-Back" or "Proposed Share Buy-Back").
   The purpose of this statement is to provide you with information on the Proposed Share Buy-Back, and to seek your approval for the ordinary resolution to be tabled under special businesses at the forthcoming 48th AGM of the Company.
   The Proposed Shareholders' Mandate for Share Buy-Back will take effect immediately after the passing of the ordinary resolution at the forthcoming 48th AGM and will continue in force until:
3. 1. the conclusion of the next AGM of the Company;
   2. the expiration of the period within the next AGM of the Company subsequent to the date it is required to be held pursuant to Section 340(2) of the Malaysian Companies Act 2016 ("the Act") but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act; or
   3. revoked or varied by a resolution passed by the shareholders in general meeting,

whichever occurs first.

The Shareholders' Mandate for Share Buy-Back, if obtained, would give authority to the Directors to exercise the power of the Company to purchase its own Shares in circumstances which the Directors consider would be in the interest of the Company.

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1. The maximum number or percentage of share to be acquired
   The Board proposes to seek a mandate from the shareholders of Cahya Mata to purchase and/or hold in aggregate up to ten percent (10%) of the total number of issued shares of the Company at any point of time through Bursa Securities.
2. Funding
   The Board proposes to allocate a maximum amount not exceeding the audited retained profits of Cahya Mata for the purchase of its own Shares. As at 31 December 2022, the audited retained profits of the Company amounted to RM686,422,000. As at 28 February 2023, the unaudited retained profits of the Company amounted to RM682,210,000.
   The funding of the Proposed Share Buy-Back will be sourced from internally generated funds and/or bank borrowings, the proportion of which will depend on the quantum of purchase consideration as well as the availability of internally generated funds and borrowings and repayment capabilities of the Company at the time of purchase. In the event that the Proposed Share Buy-Back is to be partly financed by bank borrowings, the Board will ensure that the Company will have sufficient funds to repay such borrowing and that the repayment would not have any material effect on the cash flow of Cahya Mata and its subsidiaries companies, collectively ("Cahya Mata Group" or "the Group").

3. POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK

1. Potential Advantages
   The Proposed Share Buy-Back will enable the Company to utilise its surplus financial resources not immediately required for use, to purchase its own Shares. The Proposed Share Buy-Back may enhance the Earning Per Share and reduce the liquidity level of the Shares of the Company in Bursa Securities, which generally shall have a positive impact on the market price of the Shares of the Company. Other potential advantages of the Proposed Share Buy-Back to the Company and its shareholders are as follows:
2. 1. to allow the Company to take preventive measures against speculation particularly when its Share are undervalued which would in turn stabilize the market price of the Shares and hence, enhance investors' confidence;
   2. when the Shares bought back by the Company are cancelled, shareholders of the Company are likely to enjoy an increase in the value of their investment in the Company as the net Earning Per Share of the Company and the Group will increase proportionately; and
   3. the Purchased Shares may be held as Treasury Shares and distributed to shareholders as dividends and/or resold in the open market with the intention of realising a potential capital gain in the Purchased Shares are resold at price(s) higher than their purchase price(s).

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Cahya Mata Sarawak Berhad | Annual Report 2022

STATEMENT ACCOMPANYING NOTICE OF 48TH ANNUAL GENERAL MEETING

(Pursuant to Paragraph 12.06(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

3.2 Potential Disadvantages

The potential disadvantages of the Proposed Share Buy-Back to the Company and its shareholders are as follows:

1. the Proposed Share Buy-Back will reduce the immediate financial resources of the Group;
2. the Proposed Share Buy-Back will reduce the amount of financial resources available for distribution to shareholders of the Company in the form of cash dividends;
3. Cahya Mata Group foregoing other better investment opportunities which may emerge in the future and/ or any income that may be derived from other alternatives uses of such funds as deposit in interest bearing instruments; and
4. The cash flow of the Company may be affected if the Company decides to utilise bank borrowing to finance the Proposed Share Buy Back.

Nevertheless, the Board is of the view that the Proposed Share Buy-Back is not expected to have any potential material disadvantages to the shareholders of the Company as well as the Group as it will be implemented only after careful consideration of the financial resources of the Group and the resultant impact on the shareholders of the Company.

4. FINANCIAL EFFECTS

The financial effects of the Proposed Share Buy-Back shown below are based on two (2) scenarios:

The proforma effects of the Proposed Share Buy-Back (assuming no resale, cancellation or distribution of Treasury Shares and Cahya Mata purchased up to ten percent (10%) of the total number of its issued shares) are set out below.

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1. Share capital
   Assuming the Proposed Shareholders' Mandate for Share Buy-Back is implemented in full and all the purchased Cahya Mata Shares are cancelled, the effect of the minimum and maximum number of Cahya Mata Shares to be bought back as permitted under the Proposed Share Buy-Back on the issued share capital of the Company are illustrated below.

The actual quantum of Shares purchased under the Proposed Share Buy-Back is limited to the availability of the retained earnings of Cahya Mata.

1. Dividends
   Assuming the Proposed Shareholders' Mandate for Share Buy-Back is implemented in full and the dividend quantum is maintained at historical levels, the Proposed Share Buy-Back will have the effect of increasing the dividend rate of Cahya Mata as a result of the reduction in the issued and paid-up share capital of Cahya Mata as described under Section 4 (a) above.
2. Net Assets ("NA") Per Share and Earning Per Share ("EPS")
   The NA per share of the Company may be increased or decreased, depending on the purchase prices of the Shares to be bought back by the Company. Should the purchase prices exceed the existing NA per share, the NA of the remaining Shares should decrease accordingly. And conversely, should the purchase price be lower than the existing NA per share unit, the resultant NA per share should increase accordingly. The effective reduction in the issued and paid-up share capital of the Company pursuant to the Proposed Share Buy-Back would generally, all else being equal, increase the consolidated EPS of the Company. However, the Proposed Share Buy-Back, if exercised, is not expected to have any material effect on the NA per share and EPS of the Company for the financial year ending 31 December 2023.
3. Working Capital
   The Proposed Share Buy-Back, as and when implemented will reduce the working capital and cash flow of the Group, the quantum being dependent on the number of Purchased Shares, the purchase price of Cahya Mata Ordinary Shares and the amount of financial resources to be utilized for the purchase of Cahya Mata Ordinary Shares. However, it is not expected to have a material effect on the working capital and cash flow of the Group.
   For Purchased Shares which are retained as treasury shares or transfer, upon its resale or transfer, the working capital and cash flow of the Company will increase. Again, the quantum of the increase in the working capital and cash flow will depend on the actual selling price of the Treasury Shares and the number of Treasury Shares resold or transferred.

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