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Circular/Notice to ShareholdersDIVERSIFIED GATEWAY SOLUTIONS BERHAD

Subject CIRCULAR TO SHAREHOLDERS OF DIVERSIFIED GATEWAYSOLUTIONS BERHAD IN RELATION TO THE:- (I) PROPOSEDCAPITAL REDUCTION; AND (II) PROPOSED SHARECONSOLIDATION

Please refer attachment below.

Attachments

Announcement Info

Company Name DIVERSIFIED GATEWAY SOLUTIONS BERHAD

Stock Name DGSB

Date Announced 02 Nov 2018

Category Document Submission

Reference Number DCS-02112018-00003

http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=190215&name=EA_DS_ATTACHMENTS

DIVERSIFIED GATEWAY SOLUTIONS BERHAD(Company No.: 675362-P) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO THE

(I) PROPOSED REDUCTION OF THE ISSUED SHARE CAPITAL OF DIVERSIFIED GATEWAY SOLUTIONS BERHAD (“DGSB”) BY RM100,000,000 PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016; AND

(II) PROPOSED CONSOLIDATION OF EVERY 2 EXISTING ORDINARY SHARES IN DGSB (“DGSB SHARES” OR “SHARES”) INTO 1 NEW DGSB SHARE;

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal Adviser

M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)

(A Participating Organisation of Bursa Malaysia Securities Berhad)

Notice convening the Extraordinary General Meeting (“EGM”) of DGSB to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, 29 November 2018 at 11.00 a.m. or any adjournment thereof, together with the Form of Proxy are enclosed with this Circular.

You are entitled to attend and vote at the EGM or appoint a proxy or proxies to attend and vote on your behalf. If you wish to do so, you may deposit the Form of Proxy at DGSB’s registered office at No. 45-5, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur in not less than 48 hours before the time and date stipulated for the EGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the EGM should you subsequently wish to do so.

Last date and time for lodging the Form of Proxy

: Tuesday, 27 November 2018 at 11.00 a.m.

Date and time of EGM : Thursday, 29 November 2018 at 11.00 a.m.

This Circular is dated 2 November 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. Shareholders are advised to make their own evaluation to assess the merits and risks of the Proposals.

This Circular has been reviewed by M&A Securities Sdn Bhd as the Principal Adviser to Diversified Gateway Solutions Berhad for the Proposals (as defined herein).

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i

DEFINITIONS

i

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

ACE Market : ACE Market of Bursa Securities

Act : Companies Act 2016, as amended from time to time including any re-enactment thereof

Board : Board of Directors of DGSB

Bursa Depository : Bursa Malaysia Depository Sdn Bhd (165570-W)

Bursa Securities : Bursa Malaysia Securities Berhad (635998-W)

Circular : This circular to the shareholders of DGSB in relation to the Proposals dated 2 November 2018

Consolidated Shares : Ordinary shares in DGSB after the Proposed Share Consolidation

Court : High Court of Malaya

DGSB or Company : Diversified Gateway Solutions Berhad (675362-P)

DGSB Group or Group : DGSB and its subsidiaries, collectively

DGSB Shares or Shares : Ordinary shares in DGSB

EGM : Extraordinary general meeting

Entitlement Date : A date to be determined later by the Board in their absolute discretion as they deem fit and announced later, for the purpose of determining the entitlement of the shareholders of DGSB to the Proposed Share Consolidation

EPS : Earnings per Share

FPE : Financial period ended

FYE : Financial year ended 31 March

Listing Requirements : ACE Market Listing Requirements of Bursa Securities

LPD : 22 October 2018, being the latest practicable date prior to the printing of this Circular

M&A Securities or Principal Adviser

: M&A Securities Sdn Bhd (15017-H), the Principal Adviser to DGSB for the Proposals

Market Day : Any day between Monday and Friday (inclusive of both days) which is not a public holiday and on which Bursa Securities is open for the trading of securities

NA : Net assets

PAT : Profit after taxation

PBT : Profit before taxation

Proposals : Proposed Capital Reduction and Proposed Share Consolidation, collectively

ii

DEFINITIONS (CONT’D)

ii

Proposed Capital Reduction : Proposed reduction of the issued share capital of DGSB by RM100,000,000 pursuant to Section 116 of the Act

Proposed Share Consolidation

: Proposed share consolidation of every 2 existing Shares in DGSB into 1 Consolidated Share

Record of Depositors : A record consisting names of depositors established by Bursa Depository

RM and sen : Ringgit Malaysia and sen, respectively

All references to “you” in this Circular are references to shareholders of DGSB.

Words denoting the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders and vice versa. References to persons shall include corporations.

Any reference to any enactment in this Circular 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 is a reference to Malaysian time, unless otherwise specified.

iii

TABLE OF CONTENTS

iii

PAGE LETTER TO THE SHAREHOLDERS OF DGSB CONTAINING:

1. INTRODUCTION 1

2. DETAILS OF THE PROPOSALS 2

3. RATIONALE FOR THE PROPOSALS 4

4. EFFECTS OF THE PROPOSALS 4

5. HISTORICAL SHARE PRICES 6

6. APPROVALS REQUIRED 7

7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

7

8. DIRECTORS’ STATEMENT AND RECOMMENDATION 7

9. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION 7

10. ESTIMATED TIME FRAME FOR COMPLETION 7

11. EGM 8

12. FURTHER INFORMATION 8

APPENDICES

I HISTORICAL FINANCIAL INFORMATION 9

II FURTHER INFORMATION 11

NOTICE OF EGM ENCLOSED

FORM OF PROXY ENCLOSED

1

1


Registered Office:

No. 45-5, The Boulevard Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur

2 November 2018 Directors:Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Hajjah Aishah bte Sultan Haji Ahmad Shah, DK(II), SIMP (Independent Non-Executive Chairperson)Dato’ Dr Tan Seng Chuan (Executive Director)Monteiro Gerard Clair (Non-Independent Non-Executive Director)Chow Seck Kai (Independent Non-Executive Director)Dr Tang Pen San (Independent Non-Executive Director) Wan Mai Gan (Independent Non-Executive Director)

To: The shareholders of Diversified Gateway Solutions Berhad

Dear Sir / Madam,

(I) PROPOSED CAPITAL REDUCTION; AND

(II) PROPOSED SHARE CONSOLIDATION

1. INTRODUCTION

On 15 October 2018, M&A Securities had, on behalf of the Board, announced that the Company proposes to undertake the Proposals.

On 16 October 2018, M&A Securities had, on behalf of the Board, announced that the application in relation to the Proposed Share Consolidation has been submitted to Bursa Securities.

Bursa Securities had vide its letter dated 19 October 2018, approved the Proposed Share Consolidation.

Further details of the Proposals are set out in Section 2 below.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH DETAILS OF THE PROPOSALS AND TO SEEK YOUR APPROVAL FOR THE RESOLUTIONS PERTAINING TO THE PROPOSALS TO BE TABLED AT THE FORTHCOMING EGM. THE NOTICE OF EGM AND FORM OF PROXY ARE ENCLOSED WITH THIS CIRCULAR.

YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDIX BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS TO BE TABLED AT THE FORTHCOMING EGM.

2

2

2. DETAILS OF THE PROPOSALS

As at LPD, the share capital of the Company is RM160,053,793 represented by 1,491,464,790 DGSB Shares. As at LPD, the Company does not hold any treasury shares.

2.1 Proposed Capital Reduction

The Proposed Capital Reduction entails the reduction of DGSB’s share capital by RM100,000,000 pursuant to Section 116 of the Act.

The Proposed Capital Reduction will result in the reduction of the share capital of DGSB from RM160,053,793 to RM60,053,793. The Proposed Capital Reduction will give rise to a credit of RM100,000,000 which will be utilised to set off the accumulated losses of DGSB.

For illustration purposes, the effects of the Proposed Capital Reduction on the accumulated losses of the Company as well as DGSB Group are as follows:

Company Level Group Level Audited

31 March 2018

Unaudited30 June

2018

Audited31 March

2018

Unaudited30 June

2018RM’000 RM’000 RM’000 RM’000

Accumulated losses (102,609) (102,768) 23,028 23,229

Add: Credit arising from the Proposed Capital Reduction

100,000 100,000 100,000 100,000

Less: Estimated expenses incurred for the Proposals

(150) (150) (150) (150)

Resultant (accumulated losses) / retained earnings

(2,759) (2,918) 122,878 123,079

An order by the High Court of Malaya will be sought to sanction the Proposed Capital Reduction pursuant to Section 116 of the Act (“Order”) after receipt of approval from the shareholders of the Company at the forthcoming EGM. The effective date of the Proposed Capital Reduction will be the date of the lodgement of a sealed copy of the Order with the Registrar of Companies.

The Proposed Capital Reduction will not result in any adjustment to the share price of DGSB and the existing number of ordinary shares of DGSB in issue.

2.2 Proposed Share Consolidation

DGSB expects to implement the Proposed Share Consolidation upon receiving all relevant approvals, but before the completion of the Proposed Capital Reduction due to the time required to obtain the sanction of the High Court.

The Proposed Share Consolidation entails the consolidation of every 2 existing DGSB Shares held by DGSB’s shareholders, whose name appear in the Company’s Record of Depositors at the close of business on the Entitlement Date, into 1 Consolidated Share.

Any fractional entitlements arising from the Proposed Share Consolidation shall be disregarded and/or dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company.

3

3

2.2.1 Ranking of the Consolidated Shares

The Consolidated Shares will, upon allotment and issuance, rank equally in all respect with one another.

2.2.2 Theoretical adjusted reference price and number of the Consolidated Shares

The Proposed Share Consolidation will result in an adjustment to the reference price and number of DGSB Shares, as quoted on the ACE Market, but will not have any impact on the total market value of the Shares held by the Company’s shareholders.

For illustration purposes, based on the last transacted market price of DGSB Shares as at the LPD, the theoretical adjusted reference price and number of the Consolidated Shares upon completion of the Proposed Share Consolidation will be as follows:

No. of DGSB Shares

Closing market price/Theoretical

adjusted reference price (RM)

Total value (RM)

As at LPD 1,491,464,790 0.05 74,573,240

After the Proposed Share Consolidation

745,732,395 (i) 0.10 74,573,240

Note:

(i) The theoretical adjusted reference price is calculated as follows:

Theoretical adjusted

reference price

= Market price x Number of Shares before the Proposed Share Consolidation

Number of Consolidated Shares after the Proposed Share Consolidation

= RM0.05 x 1,491,464,790 745,732,395

= RM0.10

2.2.3 Listing of and quotation for the Consolidated Shares

As DGSB Shares are prescribed securities, the Consolidated Shares will be credited directly into the respective central depository system accounts of the entitled shareholders whose names appear in the Record of Depositors of the Company on the Entitlement Date and no physical certificate will be issued. In addition, no suspension will be imposed on the trading of DGSB Shares on the ACE Market for the purpose of implementing the Proposed Share Consolidation. The Consolidated Shares shall be listed and quoted on the ACE Market on the next Market Day following the Entitlement Date.

The notices of allotment of the Consolidated Shares will be issued and despatched to the entitled shareholders within 4 Market Days after the listing of and quotation for the Consolidated Shares on the ACE Market, or such other period as may be determined by Bursa Securities.

4

4

3. RATIONALE FOR THE PROPOSALS

3.1 Proposed Capital Reduction

The Proposed Capital Reduction will enable the Company to rationalise its statement of financial position by reducing the accumulated losses. The reduced issued share capital pursuant to the Proposed Capital Reduction will also reflect more accurately the value of the underlying assets and the financial position of the Company. Further, the elimination of the accumulated losses from the statement of financial position of the Company would ease the Company to declare dividends from its future available profits and provide a better financial platform for the Group’s future growth moving forward.

3.2 Proposed Share Consolidation

The Proposed Share Consolidation will improve the Company’s capital structure by consolidating the existing DGSB Shares which will reduce the number of DGSB Shares available in the market.

As the Company has a large share base and a relatively low trading price range, the Board noted that a small movement in the Share price may result in a high percentage of movement in the Share trading price. The Proposed Share Consolidation is expected to bring about a corresponding upward adjustment in the trading price of the Shares. This is expected to enhance DGSB’s corporate image and will encourage investors to view the consolidated Shares as a long term investment rather than a “penny stock” prone to speculative pressures.

Further, the Company shall benefit from easier management of a smaller share base at no expense to either the Company or its shareholders as the Proposed Share Consolidation will not have any impact on the total value of DGSB Shares held by its shareholders.

4. EFFECTS OF THE PROPOSALS

4.1 Share capital

The effects of the Proposals on the share capital of DGSB are as follows:

No. of shares Share capital (RM)Share capital as at LPD 1,491,464,790 160,053,793Proposed Capital Reduction - (100,000,000)

Proposed Share Consolidation (745,732,395) -After Proposals 745,732,395 60,053,793

The rest of this page is intentionally left blank

5

5

4.2 NA and gearing

For illustrative purposes, based on the audited consolidated statement of financial position of DGSB Group as at 31 March 2018 and on the assumption that the Proposals had been effected on that date, the pro forma effect of the Proposals on the NA per share and gearing of the Group are as follows:

(I) (II) (III)

Auditedas at 31

March 2018Subsequent

events(i)

After (I) and Proposed

CapitalReduction

After (II) and Proposed Share Consolidation(ii)

RM’000 RM’000 RM’000 RM’000Share capital 150,834 160,054 60,054 60,054Reverse acquisition

reserve(131,013) (131,013) (131,013) (131,013)

Exchange translation reserve

(498) (498) (498) (498)

Retained earnings 23,028 23,028 123,028 122,878Total equity

attributable to owners of the parent

42,351 51,571 51,571 51,421

Non-controlling interest 87 87 87 87Total equity 42,438 51,658 51,658 51,508

Number of DGSB Shares

1,355,877,090 1,491,464,790 1,491,464,790 745,732,395

NA per DGSB Share (RM)

0.03 0.03 0.03 0.07

Interest bearing borrowings

926 926 926 926

Gearing (times) 0.02 0.02 0.02 0.02

Notes:

(i) After adjusting for the private placement of 135,587,700 DGSB Shares at RM0.068 each undertaken by DGSB which was completed on 11 July 2018 (“Private Placement”)

(ii) After deducting the estimated expenses of RM150,000 for the Proposals

4.3 Substantial shareholders’ shareholding

The Proposals will not have any effect on the shareholdings of the substantial shareholders of DGSB.


6

6

4.4 Earnings and EPS

Save for estimated expenses to be incurred in relation to the Proposals of RM150,000, the Proposals will not have any impact on the earnings of the Group except for the proportionate increase in the Group’s EPS as a result of the reduction in the number of Shares in issue upon completion of the Proposed Share Consolidation. For illustration purposes, based on the audited consolidated financial statements for the FYE 31 March 2018 and on the assumption that the Private Placement and Proposals had been effected on the end of the financial year, their pro forma effect on the Group’s EPS are set out below:

Audited FYE 31 March 2018 After the Proposals

Loss for the year attributable to owners of the parent (RM)

2,248,029 2,248,029

No. of Shares as at the LPD 1,491,464,790 745,732,395

Loss per Share (sen) 0.15 0.30

4.5 Convertible securities

As at LPD, the Company does not have any outstanding convertible securities.

4.6 Dividends

The Proposals are not expected to affect the dividend policy of DGSB as future dividend payable would be dependent on inter-alia, the future profitability and cash flow position of the Group.

5. HISTORICAL SHARE PRICES

The monthly highest and lowest prices of DGSB shares as traded on Bursa Securities for the past 12 calendar months preceding LPD are as follows:

High Low RM RM

2017November 0.100 0.045 December 0.145 0.075

2018January 0.160 0.095 February 0.125 0.080 March 0.110 0.085 April 0.090 0.060 May 0.085 0.065 Jun 0.090 0.065 July 0.090 0.065 August 0.080 0.065 September 0.075 0.060 October 0.065 0.045

The last transacted price of DGSB Share on 12 October 2018, being the last Market Day prior to the date of the announcement of the Proposals on 15 October 2018 was RM0.055 per Share. The last transacted price of DGSB Shares as at LPD was RM0.050 per Share.

(Source: Bloomberg)

7

7

6. APPROVALS REQUIRED

The Proposals are subject to the following approvals being obtained:

(i) Bursa Securities for the Proposed Share Consolidation;

(ii) the shareholders of DGSB at the forthcoming EGM;

(iii) the Order from the High Court of Malaya sanctioning the Proposed Capital Reduction pursuant to Section 116 of the Act;

(iv) financier and/or creditors of DGSB, if required; and

(v) any other relevant authorities or parties, if required.

The Proposals are not inter-conditional and are not conditional upon any other corporate proposals to be implemented by the Company.

7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors, major shareholders of the Company and/or persons connected with them has any interest, direct or indirect, in the Proposals other than their existing shareholdings, to which all the shareholders of the Company are similarly entitled.

8. DIRECTORS’ STATEMENT AND RECOMMENDATION

The Board, after having considered all aspects of the Proposals including the rationale and financial effects, is of the opinion that the Proposals are in the best interest of the Group. As such, the Board recommends that you vote in favour of the resolutions pertaining to the Proposals to be tabled at the forthcoming EGM of the Company.

9. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION

Save for the Proposals, there are no other corporate exercises which have been announced by the Company but have yet to be completed as at LPD.

10. ESTIMATED TIME FRAME FOR COMPLETION

The tentative timetable in relation to the Proposals is as follows:

Date Events 29 November 2018 EGM

Mid December 2018 Entitlement Date Completion of the Proposed Share Consolidation

End January 2019 Order granted by the High Court of Malaya for the Proposed Capital Reduction

Beginning February 2019 Lodgement of a sealed copy of the Order with the Registrar of Companies Completion of the Proposed Capital Reduction

8

8

Barring any unforeseen circumstances and subject to all approvals being obtained, the Proposals are expected to be completed in the first quarter of 2019.

11. EGM

The forthcoming EGM, the notice of which is enclosed with this Circular, will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, 29 November 2018 at 11.00 a.m. and at any adjournment thereof for the purpose of considering and if thought fit, passing the resolutions to give effect to the Proposals.

If you are unable to attend and vote in person at the forthcoming EGM, you are requested to complete, sign and return the enclosed Form of Proxy in accordance with the instructions contained therein as soon as possible and in any event, so as to arrive at the registered office at No. 45-5, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time set for the EGM. The lodging of the Form of Proxy does not preclude you from attending and voting in person at the forthcoming EGM should you subsequently wish to do so.

12. FURTHER INFORMATION

You are requested to refer to the attached appendix for further information.

Yours faithfully, For and on behalf of the Board of DIVERSIFIED GATEWAY SOLUTIONS BERHAD

DATO’ DR TAN SENG CHUAN Executive Director

9

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liver

y of

SAP

clo

ud p

rodu

cts,

suc

h as

Arib

a, C

4C, H

ybris

and

SAP

by

Des

ign.

Fur

ther

, ISS

T co

ntin

ued

to e

xpan

d its

exi

stin

g SA

P ER

P pr

ojec

ts u

sing

new

bu

sine

ss s

uite

s, n

amel

y SA

P S/

4 H

ANA

and

SAP

Busi

ness

One

.

Prof

it be

fore

tax

incr

ease

d by

RM

1.5

mill

ion

or 7

5.9%

in li

ne w

ith in

crea

se o

f re

venu

e an

d al

so d

ecre

ase

in d

epre

ciat

ion

of p

rope

rty,

pla

nt a

nd e

quip

men

t as

m

ost

of o

ur p

rope

rty,

pla

nt a

nd e

quip

men

t ha

s be

en fu

lly d

epre

ciat

ed.

Prof

it fo

r th

e ye

ar d

ecre

ased

by

RM0.

9 m

illio

n or

69.

3% f

rom

RM

1.4

mill

ion

in F

YE 2

016

to R

M0.

4 m

illio

n in

FYE

201

7. T

he d

ecre

ase

was

mai

nly

due

to

reco

gniti

on o

f un

used

tax

loss

es in

ISS

Con

sulti

ng (

Mal

aysi

a) S

dn B

hd a

s de

ferr

ed t

ax a

sset

s in

FYE

201

6 am

ount

ed t

o ap

prox

imat

ely

RM3.

6 m

illio

n, w

hich

le

d to

a o

ne-o

ff t

ax in

com

e in

FYE

201

6.

Com

pari

son

betw

een

FYE

2017

and

FY

E 20

18

Reve

nue

incr

ease

d by

RM

9.7

mill

ion

or 1

3.2%

fro

m R

M74

.2 m

illio

n in

FYE

201

7 to

RM

83.9

mill

ion

in F

YE 2

018.

The

inc

reas

e w

as m

ainl

y du

e to

fur

ther

gr

owth

of o

ur B

usin

ess

Perf

orm

ance

Ser

vice

s se

gmen

t in

Tha

iland

with

incr

ease

d nu

mbe

r of

new

cus

tom

ers

secu

red,

nam

ely

Siam

Che

mic

al I

ndus

try

Co. L

td,

Gol

den

Priz

e Ca

nnin

g Co

. Ltd

, Luc

ky S

tar

Co. L

td, M

illco

n St

ell P

CL, P

rime

Stee

l Ind

ustr

y Co

. Ltd

, Tha

i Foo

d G

roup

PCL

and

Tha

ntaw

an I

ndus

try

PCL.

Prof

it fo

r th

e ye

ar d

ecre

ased

fro

m R

M0.

4 m

illio

n in

FYE

201

7 to

a l

oss

for

the

year

of

RM2.

3 m

illio

n in

FYE

201

8. T

he l

osse

s w

ere

due

to s

ever

al o

ne-o

ff ex

pens

es in

curr

ed b

y D

GSB

Gro

up s

uch

as im

pairm

ent

loss

on

trad

e re

ceiv

able

s fr

om o

ur n

on-p

erfo

rmin

g D

igita

l and

Inf

rast

ruct

ure

Segm

ent.

Fur

ther

, th

ere

wer

e al

so s

igni

fican

t se

rvic

e co

sts

amou

nted

to

appr

oxim

atel

y RM

3.0

mill

ion

char

ged

to p

ost-

empl

oym

ent

bene

fits,

whi

ch i

s a

prov

isio

n fo

r th

e G

roup

’s

retir

emen

t sc

hem

e be

nefit

s to

be

paid

in f

utur

e. T

his

prov

isio

n is

cal

cula

ted

by r

efer

ence

s to

, am

ong

othe

rs,

empl

oyee

s’ le

ngth

of

serv

ices

and

sal

ary

rate

s.

Its

incr

ease

was

due

to

a hi

gher

sal

ary

incr

ease

rat

e an

d an

nual

vol

unta

ry r

esig

natio

n ra

te u

sed

in t

he c

alcu

latio

n.

Com

pari

son

betw

een

3-m

onth

s FP

E 30

Jun

e 20

17 a

nd 3

0 Ju

ne 2

018

Reve

nue

incr

ease

d by

RM

2.3

mill

ion

or 1

5.2%

fro

m R

M15

.0 m

illio

n in

3-m

onth

FPE

30

June

201

7 to

RM

17.3

mill

ion

in 3

-mon

th F

PE 3

0 Ju

ne 2

018

due

to

DG

SB G

roup

con

tinue

s to

exp

and

its c

usto

mer

bas

e in

its

Busi

ness

Per

form

ance

Ser

vice

s se

gmen

t in

Tha

iland

. Th

e in

crea

se o

f re

venu

e le

d th

e G

roup

to

a tu

rnar

ound

fro

m lo

sses

to

prof

it m

akin

g in

FPE

30

June

201

8.

11

11

APPENDIX IIFURTHER INFORMATION

1. RESPONSIBILITY STATEMENT

This Circular has been seen and approved by the Board and they collectively and individually accept full responsibility for the accuracy, completeness and correctness of the information given herein 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 herein misleading.

2. MATERIAL COMMITMENT AND CONTINGENT LIABILITIES

As at LPD, the Board is not aware of any material commitment, incurred or known to be incurred, which may have a material impact on the results or financial position of the Group.

As at LPD, save for the bank guarantees given by financial institutions in respect of projects of the Group amounted to RM1.75 million, the Board is not aware of any contingent liabilities incurred or known to be incurred by the Group, which upon becoming enforceable may have a material impact on the financial results or position of the Group.

3. LETTERS OF CONSENT

M&A Securities, being DGSB’s Principal Adviser has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references thereon in the form and context in which they appear.

4. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection by the Company’s shareholders at its registered office at No.45-5, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur during normal office hours from Mondays to Fridays (except public holidays) from the date of this Circular up to the date of the EGM:

(i) DGSB’s Memorandum and Articles of Association;

(ii) Audited financial statements of the DGSB Group for FYE 31 March 2017 and FYE 31 March 2018 and latest unaudited results FPE 30 June 2018; and

(iii) Letter of consent referred to in Section 3.




NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Diversified Gateway Solutions Berhad (“DGSB” or the “Company”) will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, 29 November 2018 at 11.00 a.m. or any adjournment thereof for the purpose of considering and, if thought fit, passing the following resolutions:

SPECIAL RESOLUTION 1

PROPOSED REDUCTION OF THE ISSUED SHARE CAPITAL OF DGSB BY RM100,000,000 PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016 (“PROPOSED CAPITAL REDUCTION”)

“THAT subject to the confirmation of the High Court of Malaya and the approvals from the relevant authorities and parties being obtained, where necessary, approval be and is hereby given for the implementation of the Proposed Capital Reduction pursuant to Section 116 of the Companies Act 2016;

THAT the share capital of the Company be reduced and cancelled to the extent of and up to RM100,000,000 and that such reduction be effected and satisfied by the cancellation of the share capital of the Company that has been lost or is unrepresented by available assets;

AND THAT the Board of Directors of the Company (“Board”) be and is hereby authorised with full power to make any modifications, variations and / or amendments in any manner as may be in the best interest of the Company or as may be required by the relevant authority / authorities to give effect to the Proposed Capital Reduction, and to take all such steps as they may deem necessary or expedient in the best interests of the Company to implement, finalise and give full effect to the Proposed Capital Reduction.”

SPECIAL RESOLUTION 2

PROPOSED CONSOLIDATION OF EVERY 2 EXISTING ORDINARY SHARES IN DGSB (“DGSB SHARES” OR “SHARES”) INTO 1 NEW DGSB SHARE (“CONSOLIDATED SHARE”) (“PROPOSED SHARE CONSOLIDATION”)

“THAT, upon the approvals being obtained from the relevant authorities, approval be and is hereby given to the Company to give effect to the consolidation of every 2 existing DGSB Shares into 1 new Consolidated Share;

THAT the Consolidated Shares shall rank equally in all respects with one another;

THAT the fractional entitlements arising from the Proposed Share Consolidation shall be disregarded and/or dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company;

AND THAT the Board be and is hereby authorised to sign and execute all documents to give effect to the Proposed Share Consolidation with full power to assent to any condition, modification, variation and/or amendment in any manner as may be required or imposed by the relevant authorities and to

take all steps and do all acts and things in the manner as the Board may consider necessary or expedient in order to implement, finalise and give full effect to the Proposed Share Consolidation.”

BY ORDER OF THE BOARD OF DIVERSIFIED GATEWAY SOLUTIONS BERHAD

Chow Yuet Kuen (MAICSA 7010284) Lau Fong Siew (MAICSA 7045893) Company Secretaries

Kuala Lumpur 2 November 2018

Notes: (i) A member of the Company shall be entitled to appoint up to two (2) proxies to attend at the same meeting. Where a

member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

(ii) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or if the appointer is a corporation either under Seal or under the hand of an officer or attorney duly authorised. A proxy may but need not be a member of the Company. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

(iv) The instrument appointing a proxy and the power of attorney (if any) under which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the Company at No. 45-5, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting as the case may be at which the person named in the instrument proposes to vote.

(v) Only members whose names appear in the Record of Depositors on 21 November 2018 shall be entitled to attend, speak and vote at this meeting or appoint proxy/proxies to attend and/or vote on his/her behalf.

(vi) The resolutions set out in the Notice of Extraordinary General Meeting will be put to vote by poll pursuant to Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad.

FORM OF PROXY


DIVERSIFIED GATEWAY SOLUTIONS BERHAD

*I/We ………………………………………………………………………………………………………………………………………………………

I/C or Passport or Company No. …………………………………………… of ………………………………….……………………………

………………………………………………………………………………………………………………………………………………………………..

being a *member/members of DIVERSIFIED GATEWAY SOLUTIONS BERHAD, hereby appoint :

Full name (in Block Letters) I/C/Passport No. Proportion of shareholdings No. of Shares %

Address


Address

or failing him/her, THE CHAIRMAN OF THE MEETING as *my/our proxy to attend and vote for *me/us on *my/our behalf at the Extraordinary General Meeting of the Company to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, 29 November 2018 at 11.00 a.m. or any adjournment thereof, in respect of *my/our shareholding in the manner indicated below:

SPECIAL RESOLUTION For Against1 PROPOSED CAPITAL REDUCTION 2 PROPOSED SHARE CONSOLDIATION

Please indicate with an “X” in the space above on how you wish to cast your vote. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fit.

Signed this .................day of.................................2018

Signature of Shareholder (s) Number of Ordinary Shares Held Notes: (i) A member of the Company shall be entitled to appoint up to two (2) proxies to attend at the same meeting. Where a







FORM OF PROXY



*I/We ………………………………………………………………………………………………………………………………………………………


………………………………………………………………………………………………………………………………………………………………..



Address


Address












FORM OF PROXY



*I/We ………………………………………………………………………………………………………………………………………………………


………………………………………………………………………………………………………………………………………………………………..



Address


Address












AFFIXSTAMP

1st fold here

Fold this flap for sealing

Then fold here


AFFIXSTAMP HERE

To: The COMPANY SECRETARIES DIVERSIFIED GATEWAY SOLUTIONS BERHAD No. 45-5, The Boulevard Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur


diversified gateway solutions berhad...this circular has been reviewed by m&a securities sdn bhd...

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