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Proposed Acquisition and Notice Of 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 (“Bursa Securities”) takes no responsibility for the contents of this circular to shareholders (“Circular”), valuation certificate and report, 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. Shareholders should rely on their own evaluation to assess the merits and risks of the Proposed Acquisition. (Registration No.: 199601027090 (399442-A)) CIRCULAR TO SHAREHOLDERS IN RELATION TO PART A PROPOSED ACQUISITION BY CHIP NGAI ENGINEERING WORKS SDN BHD (REGISTRATION NO.: 197001000934 (10217-A)), A WHOLLY-OWNED SUBSIDIARY OF CN ASIA, OF A PARCEL OF VACANT LAND HELD UNDER H.S.(M) 23504, LOT 5856, LOCALITY OF SUNGAI LABU, MUKIM OF TANJUNG DUA BELAS, DISTRICT OF KUALA LANGAT, STATE OF SELANGOR DARUL EHSAN FROM TWINSTAR ACRES SDN BHD (REGISTRATION NO.: 201701027868 (1242034-D)) (“TASB”), A COMPANY WHOLLY-OWNED BY A RELATED PARTY FOR A CASH CONSIDERATION OF RM4,000,000 (“PROPOSED ACQUISITION”) PART B INDEPENDENT ADVICE LETTER (“IAL”) TO THE NON-INTERESTED SHAREHOLDERS OF CN ASIA IN RELATION TO THE PROPOSED ACQUISITION AND NOTICE OF EXTRAORDINARY GENERAL MEETING Independent Adviser for Part B (License Number: CMSL/A0330/2015) Licensed to provide advisory in corporate finance and investment advice ASIA EQUITY RESEARCH SDN BHD (Registration No.: 201401027762 (1103848-M)) The Notice convening the Extraordinary General Meeting (“EGM”) of CN Asia Corporation Bhd (“CN Asia” or “Company”) in respect of the Proposed Acquisition together with the Form of Proxy are enclosed in this Circular. The EGM will be held as follows:- Date and time of the EGM : Tuesday, 7 July 2020 immediately after the Twenty-Fourth (24th) Annual General Meeting of which scheduled to be held at 10.00 a.m. on the same morning or 11.00 a.m., whichever is earlier or at any adjournment thereof Venue of the EGM : Ground Floor Office Building, Lot 7907, Batu 11, Jalan Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia Last date and time for lodging the Proxy Form : Monday, 6 July 2020 at 11.00 a.m. The Form of Proxy must be completed and deposited at the office of the Share Registrar of the Company, Tricor Investor & Issuing House Services Sdn. Bhd. (Registration No. 197101000970 (11324-H)), at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or its Customer Service Counter, Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposed to vote or, in the case of a poll, not less than twenty-four (24) hours before the time for the taking of the poll or any adjournment thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. This Circular is dated 23 April 2020 DEFINITIONS (CONT’D) Except where the context otherwise requires, the following definitions shall apply throughout this Circular: Act : Companies Act 2016, as amended from time to time including any re- enactment thereof Board : Board of Directors of CN Asia Bursa Securities : Bursa Malaysia Securities Berhad (Registration No.: 200301033577 (635998-W)) Circular : This circular to the shareholders of CN Asia dated 23 April 2020 in relation to the Proposed Acquisition CN Asia Group or Group : CN Asia and its subsidiaries, collectively CN Asia or Company : CN Asia Corporation Bhd (Registration No.: 199601027090 (399442-A)) CN Asia Share(s) : Ordinary share(s) in CN Asia CNEW or Purchaser : Chip Ngai Engineering Works Sdn Bhd (Registration No.: 197001000934 (10217-A)), a wholly-owned subsidiary of CN Asia EGM : Extraordinary general meeting EPS : Earnings per share FYE : the Financial year ended/ending 31 December, as the case may be LAT : Loss after taxation LPD : 1 April 2020, being the latest practicable date prior to the date of this Circular LPS : Loss per share Main Market : Main Market of Bursa Securities MMLR : Main Market Listing Requirements of Bursa Securities, an amended from time to time including any re-enactment thereto NA : Net assets PAT : Profit after taxation PBT : Profit before taxation Property : A parcel of vacant land measuring approximately 11,407 sqm (122,784 sq ft) held under H.S.(M) 23504, Lot 5856, Locality of Sungai Labu, Mukim of Tanjung Dua Belas, District of Kuala Langat, State of Selangor Darul Ehsan Proposed Acquisition : Proposed acquisition by CNEW from TASB of the Property for the Purchase Consideration ii ii DEFINITIONS (CONT’D) DEFINITIONS (CONT’D) Except where the context otherwise requires, the following definitions shall apply throughout this Purchase Consideration : A cash consideration of RM4,000,000 for the purchase of the Property Circular: Raine & Horne or Valuer : Raine & Horne International Zaki + Partners Sdn Bhd Act : Companies Act 2016, as amended from time to time including any re- enactment thereof RM and sen : Ringgit Malaysia and sen, respectively Board : Board of Directors of CN Asia RPGT : Real Property Gains Tax Bursa Securities : Bursa Malaysia Securities Berhad (Registration No.: 200301033577 Sq ft : Square feet (635998-W)) Sqm(s) : Square metres Circular : This circular to the shareholders of CN Asia dated 23 April 2020 in relation to the Proposed Acquisition SPA : Sale and purchase agreement dated 20 January 2020 between CNEW and TASB for the Proposed Acquisition at the Purchase Consideration CN Asia Group or Group : CN Asia and its subsidiaries, collectively TASB or Vendor : Twinstar Acres Sdn Bhd (Registration No.: 201701027868 (1242034-D)) CN Asia or Company : CN Asia Corporation Bhd (Registration No.: 199601027090 (399442-A)) Valuation Certificate : Certificate of valuation dated 6 February 2020 issued in conjunction with CN Asia Share(s) : Ordinary share(s) in CN Asia the Valuation Report CNEW or Purchaser : Chip Ngai Engineering Works Sdn Bhd (Registration No.: 197001000934 Valuation Report : Valuation report dated 11 November 2019 in relation to the Property (10217-A)), a wholly-owned subsidiary of CN Asia prepared by Raine & Horne EGM : Extraordinary general meeting For the purpose of this Circular, all references to a time of day shall be a reference to Malaysian time, unless otherwise specified. EPS : Earnings per share In this Circular, words incorporating the singular shall, where applicable, include the plural and vice FYE : the Financial year ended/ending 31 December, as the case may be 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 LAT : Loss after taxation specified. LPD : 1 April 2020, being the latest practicable date prior to the date of this Any reference in this Circular to any enactment is a reference to that enactment as for the time being Circular amended and re-enacted. LPS : Loss per share Certain figures included in this Circular have been subject to rounding adjustments. Main Market : Main Market of Bursa Securities MMLR : Main Market Listing Requirements of Bursa Securities, an amended from time to time including any re-enactment thereto NA : Net assets The rest of this page is intentionally left blank PAT : Profit after taxation PBT : Profit before taxation Property : A parcel of vacant land measuring approximately 11,407 sqm (122,784 sq ft) held under H.S.(M) 23504, Lot 5856, Locality of Sungai Labu, Mukim of Tanjung Dua Belas, District of Kuala Langat, State of Selangor Darul Ehsan Proposed Acquisition : Proposed acquisition by CNEW from TASB of the Property for the Purchase Consideration ii iii iii TABLE OF CONTENTS PART A LETTER TO THE SHAREHOLDERS OF CN ASIA IN RELATION TO THE PROPOSED ACQUISITION: NO. DETAILS PAGE 1. INTRODUCTION 2 2. DETAILS OF THE PROPOSED ACQUISITION 3 3. RATIONALE AND BENEFITS OF THE PROPOSED ACQUISITION 9 4. RISK FACTORS IN RELATION TO THE PROPOSED ACQUISITION 10 5. EFFECTS OF THE PROPOSED ACQUISITION 11 6. HIGHEST PERCENTAGE RATIO APPLICABLE 12 7. APPROVALS REQUIRED 13 8. DIRECTORS’, MAJOR SHAREHOLDERS’ AND PERSONS’ CONNECTED INTERESTS 13 9. OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION 14 10. TRANSACTIONS WITH TASB FOR THE PRECEDING TWELVE (12) MONTHS 14 11. RELATED PARTY TRANSACTIONS AND INDEPENDENT ADVISER 14 12. STATEMENT AND RECOMMENDATION BY THE BOARD 15 13. AUDIT COMMITTEE’S STATEMENT 15 14. ESTIMATED TIMEFRAME FOR COMPLETION 15 15. EGM 16 16. FURTHER INFORMATION 16 PART B INDEPENDENT ADVICE LETTER FROM AER TO THE NON-INTERESTED 17 SHAREHOLDERS OF CN ASIA IN RELATION TO THE PROPOSED ACQUISITION APPENDICES I VALUATION CERTIFICATE BY RAINE & HORNE 41 II FURTHER INFORMATION 45 NOTICE OF EGM ENCLOSED PROXY FORM ENCLOSED ANNEXURE TO PROXY FORM ENCLOSED iv iv TABLE OF CONTENTS PART A LETTER TO THE SHAREHOLDERS OF CN ASIA IN RELATION TO THE PROPOSED ACQUISITION: NO. DETAILS PAGE 1. INTRODUCTION 2 2. DETAILS OF THE PROPOSED ACQUISITION 3 3. RATIONALE AND BENEFITS OF THE PROPOSED ACQUISITION 9 4. RISK FACTORS IN RELATION TO THE PROPOSED ACQUISITION 10 5. EFFECTS OF THE PROPOSED ACQUISITION 11 6. HIGHEST PERCENTAGE RATIO APPLICABLE 12 7. APPROVALS REQUIRED 13 PART A 8. DIRECTORS’, MAJOR SHAREHOLDERS’ AND PERSONS’ CONNECTED INTERESTS 13 9. OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION 14 LETTER TO THE SHAREHOLDERS OF CN ASIA IN RELATION TO THE PROPOSED ACQUISITION 10. TRANSACTIONS WITH TASB FOR THE PRECEDING TWELVE (12) MONTHS 14 11.
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