THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR...

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, solicitor, accountant, bank manager or other professional adviser 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.

CCM DUOPHARMA BIOTECH BERHAD(Company No.: 524271-W) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE:-

PART A

PROPOSED ACQUISITION OF 806,450 COMMON SHARES IN PANGEN BIOTECH INC. (“PANGEN”) REPRESENTING APPROXIMATELY 8.39% EQUITY INTEREST IN PANGEN BY CCM DUOPHARMA BIOTECH BERHAD (“CCMD”) FROM CHEMICAL COMPANY OF MALAYSIA BERHAD FOR A TOTAL PURCHASE CONSIDERATION OF RM59.16 MILLION (EQUIVALENT TOKRW16.35 BILLION) TO BE SATISFIED ENTIRELY IN CASH (“PROPOSED ACQUISITION”)

PART B

INDEPENDENT ADVICE LETTER FROM KENANGA INVESTMENT BANK BERHAD TO THE NON-INTERESTED SHAREHOLDERS OF CCMD IN RELATION TO THE PROPOSED ACQUISITION

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Adviser for Part A

UOB Kay Hian Securities (M) Sdn Bhd(Company No. 194990-K)

(A Participating Organisation of Bursa Malaysia Securities Berhad)

Independent Adviser for Part B

Kenanga Investment Bank Berhad(Company No. 15678-H)


The Notice of the Extraordinary General Meeting (“EGM”) of CCM Duopharma Biotech Berhad (“CCMD” or the “Company”) for the Proposed Acquisition which is scheduled to be held at Ballroom 1 & 2, Setia City Convention Centre,No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 31 May 2018 at 10.30 a.m. or immediately following the conclusion or adjournment of the EGM for the Proposed Bonus Issue and Proposed DRP (as defined in the “Definitions” section of this Circular), scheduled to be held at the same venue and on the same date at 10.00 a.m., whichever is later, or at any adjournment thereof, together with the Form of Proxy are enclosed herein.

A member entitled to attend and vote at the EGM is entitled to appoint not more than 2 proxies to attend and vote instead of him. In such event, the completed and signed Form of Proxy must be deposited at the Company’s Share Registrar, 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, not less than 24 hours before the time appointed for taking of the poll as per Section 334(3) of the Companies Act 2016. The lodging of the Form of Proxy shall not preclude you from attending and voting in person at the EGM should you subsequently wish to do so.

Date and time of the EGM ………....... : Thursday, 31 May 2018 at 10.30 a.m. or immediately following the conclusion or adjournment of the EGM for the Proposed Bonus Issue and Proposed DRP scheduled to be held at the same venue and on the same date at 10.00 a.m., whichever is later.

This Circular is dated 16 May 2018






PART A


PART B


AND


Adviser for Part A















PART A


PART B


AND


Adviser for Part A






The Notice of the Extraordinary General Meeting (“EGM”) of CCM Duopharma Biotech Berhad (“CCMD” or the “Company”) for the Proposed Acquisition which is scheduled to be held at Ballroom 1 & 2, Setia City Convention Centre,No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 31 May 2018 at 10.30 a.m. or immediately following the conclusion or adjournment of the EGM for the Proposed Bonus Issue and Proposed DRP (as defined in the “Definition” section of this Circular), scheduled to be held at the same venue and on the same date at 10.00 a.m., whichever is later, or at any adjournment thereof, together with theForm of Proxy are enclosed herein.









PART A


PART B


AND


Adviser for Part A















PART A


PART B


AND


Adviser for Part A






The Notice of the Extraordinary General Meeting (“EGM”) of CCM Duopharma Biotech Berhad (“CCMD” or the “Company”) for the Proposed Acquisition which is scheduled to be held at Ballroom 1 & 2, Setia City Convention Centre,No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 31 May 2018 at 10.30 a.m. or immediately following the conclusion or adjournment of the EGM for the Proposed Bonus Issue and Proposed DRP (as defined in the “Definition” section of this Circular), scheduled to be held at the same venue and on the same date at 10.00 a.m., whichever is later, or at any adjournment thereof, together with theForm of Proxy are enclosed herein.









PART A


PART B


AND


Adviser for Part A















PART A


PART B


AND


Adviser for Part A















PART A


PART B


AND


Adviser for Part A















PART A


PART B


AND


Adviser for Part A










DEFINITIONS

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

Act : The Companies Act, 2016

AGM : Annual General Meeting

ASEAN : Association of South East Asian

Board : The Board of Directors of CCMD

Bonus Share(s) : New CCMD Share(s) to be issued pursuant to the proposed bonus issue exercise, which is the subject matter of the circular to shareholders of CCMD dated 30 April 2018

Bursa Depository : Bursa Malaysia Depository Sdn Bhd

Bursa Securities : Bursa Malaysia Securities Berhad

CCMB or the Vendor : Chemical Company of Malaysia Berhad

CCMB Distribution : The capital distribution exercise undertaken by CCMB whereby CCMB distributed all the CCMD Shares held by CCMB to the shareholders of CCMB which was completed on 28 December 2017

CCMB Group : CCMB and its subsidiary companies, collectively

CCMD or the Company : CCM Duopharma Biotech Berhad

CCMD Group or the Group

: CCMD and its subsidiary companies, collectively

CCMD Share(s) or Share(s)

: Ordinary share(s) in CCMD

CMSA : Capital Markets and Services Act, 2007

Deeds of Novation : Deeds to be entered into by CCMD as set out in Section 3.6 of Part A of this Circular

Director(s) : A natural person who holds directorship in the Company and shall have the meaning given in Section 2(1) of the CMSA and includes:-

(i) in the case of an issuer of structured warrants, a director of the issuer of the structured warrants; or

(ii) in the case of an applicant or listed issuer which is a collective investment scheme, a director of a management company or a director of the trustee-manager, as the case may be

DMSB : Duopharma (M) Sdn Bhd, a wholly-owned subsidiary of CCMD

EGM : Extraordinary General Meeting

EPS : Earnings per share

EPO : Erythropoietin, please refer to Section 2.1 of Part A of this Circular for further details.

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DEFINITIONS (CONT'D)

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Factor VIII : Blood coagulation Factor VIII, please refer to Section 2.1 of Part A of this Circular for further details

FSH : Follicle Stimulating Hormone, please refer to Section 2.1 of Part A of this Circular for further details

FYE : Financial year ended/ ending

G-CSF : Granulocyte colony stimulating factor, please refer to Section 2.1 of Part A of this Circular for further details

GDP : Gross domestic product

INF-β : Interferon beta, please refer to Section 2.1 of Part A of this Circular for further details

Interested Directors : Tan Sri Datin Paduka Siti Sa’diah binti Sh. Bakir, Leonard Ariff bin Abdul Shatar, Datuk Nik Moustpha bin Haji Nik Hassan and Datuk Mohd Radzif bin Mohd Yunus, collectively

Interested Persons : Jaeseung Yoon, Youngboo Kim, Kwanghee Baek and Taeho Byun,collectively

IT : Information technology

Kenanga IB or the Independent Adviser

: Kenanga Investment Bank Berhad, the independent adviser for the Proposed Acquisition

Korea : South Korea

KOSDAQ : Korean Securities Dealers Automated Quotations

KRW and jeon : Korean won and jeon, respectively

KRX : Korean Exchange

Listing Requirements : Main Market Listing Requirements of Bursa Securities

LPD : 8 May 2018, being the latest practicable date prior to the printing and despatch of this Circular

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

MCA : Marketing & Commercialisation Agreement entered into on 26 December 2013 between CCMB and PanGen

NA : Net assets

PanGen : PanGen Biotech Inc.

PanGen Shares : Common shares in PanGen

PB Multiple : Price-to-book multiple

PNB : Permodalan Nasional Berhad

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DEFINITIONS (CONT'D)

iii

Proposed Acquisition : Proposed acquisition of 806,450 PanGen Shares representing approximately 8.39% equity interest in PanGen by CCMD from CCMB for a total purchase consideration of RM59.16 million (equivalent to KRW16.35 billion) to be satisfied entirely in cash

Proposed Bonus Issue and Proposed DRP

: Proposed bonus issue of up to 371,945,333 Bonus Shares to be credited as fully paid-up on the basis of 4 Bonus Shares for every 3 existing CCMD shares held on an entitlement date to be determined and announced later; and proposed establishment of a dividend reinvestment plan which will provide the shareholders of CCMD with an option to elect to reinvest their cash dividend in the CCMD shares,which are the subject matter of the circular to shareholders of CCMD dated 30 April 2018.

Purchase Consideration

: Purchase consideration of RM59.16 million (equivalent to KRW16.35 billion) for the Proposed Acquisition to be satisfied entirely in cash

RM and sen : Ringgit Malaysia and sen, respectively

Rules : Rules on Take-Overs, Mergers and Compulsory Acquisitions issued by the Securities Commission Malaysia

Sale Shares : 806,450 PanGen Shares, representing approximately 8.39% equity interest in PanGen

Share Subscription Agreement

: Share subscription agreement entered into on 26 December 2013 by CCMB with PanGen and the Interested Persons

SSA : Conditional share sale agreement entered into on 13 April 2018 between CCMD and CCMB in respect of the Proposed Acquisition

UOBKH or the Adviser : UOB Kay Hian Securities (M) Sdn Bhd

VWAMP : Volume weighted average market price

Words incorporating the singular shall, where applicable, include the plural and vice versa. Words incorporating the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Any 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.

Unless otherwise specified, where applicable throughout this Circular, the exchange rate used shall be RM0.3619: KRW100, based on the middle rate at 5.00 p.m. published by Bank Negara Malaysia on 12 April 2018, being the last trading day prior to the signing of the SSA.

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TABLE OF CONTENTS

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PAGEPART A LETTER TO THE SHAREHOLDERS OF CCMD IN RELATION TO THE PROPOSED ACQUISITION CONTAINING:- 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED ACQUISITION 2 3. SALIENT TERMS OF THE SSA 12 4. RATIONALE AND JUSTIFICATION FOR THE PROPOSED ACQUISITION 15 5. INDUSTRY OUTLOOK AND FUTURE PROSPECTS 16 6. RISK FACTORS IN RELATION TO THE PROPOSED ACQUISITION 18 7. EFFECTS OF THE PROPOSED ACQUISITION 19 8. APPROVALS REQUIRED/ OBTAINED 20 9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR

PERSONS CONNECTED TO THEM 20

10. TRANSACTIONS WITH CCMB FOR THE PRECEDING 12 MONTHS 22 11. DIRECTORS’ STATEMENT AND RECOMMENDATION 22 12. AUDIT COMMITTEE’S STATEMENT 22 13. ESTIMATED TIMEFRAME FOR COMPLETION 23 14. PROPOSALS ANNOUNCED BUT PENDING COMPLETION 23 15. INDEPENDENT ADVISER 24 16. EGM 24 17. FURTHER INFORMATION 24 PART B INDEPENDENT ADVICE LETTER FROM KENANGA IB TO THE NON-INTERESTED SHAREHOLDERS OF CCMD IN RELATION TO THE PROPOSED ACQUISITION

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APPENDICES I INFORMATION ON PANGEN 49 II FINANCIAL STATEMENTS OF PANGEN FOR THE FYE 31 DECEMBER

2017 54

III FURTHER INFORMATION 115 NOTICE OF EGM ENCLOSED FORM OF PROXY ENCLOSED

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PART A

LETTER TO THE SHAREHOLDERS OF CCMD IN RELATION TO THE PROPOSED ACQUISITION

1

CCM DUOPHARMA BIOTECH BERHAD(Company No.: 524271-W)(Incorporated in Malaysia)

Registered Office

13th Floor, Menara PNB 201-A, Jalan Tun Razak

50400 Kuala Lumpur Malaysia

16 May 2018Board of Directors

Tan Sri Datin Paduka Siti Sa’diah binti Sh Bakir (Non-Independent Non-Executive Chairman) Leonard Ariff bin Abdul Shatar (Group Managing Director) Dato’ Mohamad Kamarudin bin Hassan (Senior Independent Non-Executive Director) Razalee bin Amin (Independent Non-Executive Director) Puan Sri Datuk Seri Rohani Parkash binti Abdullah (Independent Non-Executive Director) Zaiton binti Jamaluddin (Independent Non-Executive Director) Dato’ Eisah binti A. Rahman (Independent Non-Executive Director) Datuk Nik Moustpha bin Haji Nik Hassan (Independent Non-Executive Director)Datuk Mohd Radzif bin Mohd Yunus (Non-Independent Non-Executive Director)Dato’ Hajah Normala binti Abdul Samad (Non-Independent Non-Executive Chairman) (resigned with

effect from 28 December 2017)Dato’ Azmi bin Mohd Ali (Non-Independent Non-Executive Director) (resigned with effect from 28

December 2017)

To: The Shareholders Dear Sir/Madam,

PROPOSED ACQUISITION OF 806,450 PANGEN SHARES REPRESENTING APPROXIMATELY 8.39% EQUITY INTEREST IN PANGEN BY CCMD FROM CCMB FOR A TOTAL PURCHASE CONSIDERATION OF RM59.16 MILLION (EQUIVALENT TO KRW16.35 BILLION) TO BE SATISFIED ENTIRELY IN CASH

1. INTRODUCTION

On 13 April 2018, UOBKH on behalf of the Board, announced that the Company had on the same date entered into a conditional share sale agreement with CCMB for the acquisition of the Sale Shares representing approximately 8.39% equity interest in PanGen for a total purchase consideration of RM59.16 million (equivalent to KRW16.35 billion) to be satisfied entirely in cash.

In view of the interests of PNB who is a common major shareholder of CCMD and CCMB, the Proposed Acquisition is deemed a related party transaction pursuant to Paragraph 10.08 of the Listing Requirements.

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In this respect, the Board has appointed Kenanga IB to act as the independent adviser to advise the non-interested directors and non-interested shareholders of CCMD as to whether the Proposed Acquisition is fair and reasonable so far as the non-interested directors and non-interested shareholders of CCMD are concerned, and whether the Proposed Acquisition is to the detriment of the non-interested shareholders of CCMD.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE THE SHAREHOLDERS WITH THE RELEVANT INFORMATION ON THE PROPOSED ACQUISITION AS WELL AS TO SEEK THE APPROVAL FROM THE SHAREHOLDERS FOR THE ORDINARY RESOLUTION PERTAINING TO THE PROPOSED ACQUISITION TO BE TABLED AT THE FORTHCOMING EGM. THE NOTICE OF THE FORTHCOMING EGM AND THE FORM OF PROXY ARE ENCLOSED TOGETHER WITH THIS CIRCULAR.

SHAREHOLDERS ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR AND THE INDEPENDENT ADVICE LETTER FROM KENANGA IB TO THE NON-INTERESTED SHAREHOLDERS OF CCMD IN RELATION TO THE PROPOSED ACQUISITION, AS SET OUT IN PART A AND PART B OF THIS CIRCULAR, TOGETHER WITH THE APPENDICES CONTAINED HEREIN BEFORE VOTING ON THE ORDINARY RESOLUTION PERTAINING TO THE PROPOSED ACQUISITION TO BE TABLED AT THE FORTHCOMING EGM.

2. DETAILS OF THE PROPOSED ACQUISITION

On 13 April 2018, CCMD had entered into the SSA with CCMB for the proposed acquisition of the Sale Shares, representing approximately 8.39% equity interest in PanGen for a total purchase consideration of RM59.16 million (equivalent to KRW16.35 billion) to be satisfied entirely in cash.

On 28 December 2017, CCMB completed the CCMB Distribution as part of a group-wide restructuring of the CCMB Group to streamline the business of the CCMB Group and the CCMD Group whereby the CCMB Group would focus on the polymer and chemical businesses whereas the CCMD Group would focus on the pharmaceutical business. The Proposed Acquisition together with the Deeds of Novation would transfer approximately 8.39% equity interest in PanGen, the remaining pharmaceutical business within the CCMB Group to CCMD.

Upon completion of the Proposed Acquisition, CCMD will hold approximately 8.39% equity interest in PanGen and will assume CCMB’s place in the Share Subscription Agreement and the MCA. The illustration of the Proposed Acquisition is set out below:-

PNB

CCMB CCMD

PanGen


MCA

Bene

fits

and

oblig

atio

ns

46.87%56.32%

8.39%

PNB

CCMB CCMD

PanGen


MCA

Benefits and obligations

46.87%56.32%

8.39%SSA

Deeds of novation(Executed in conjunction

with the SSA)

CURRENT AFTER COMPLETIONCommon shareholder of

CCMB and CCMD(Related party)

(Subject matter of this Circular)

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2.1 Information on PanGen

PanGen was incorporated on 29 January 2010 in Korea under the Commercial Act of South Korea as a stock company under its present name. PanGen was listed on 11 March 2016 on the KOSDAQ, a trading board of the KRX in Korea under the category of New Growth Engine Companies.

As at the LPD, the share capital of PanGen is KRW4,807,890,500 (equivalent to RM17,414,179) comprising of 9,615,781 PanGen Shares.

As at the LPD, PanGen has 5-year convertible bonds issued at the nominal value of KRW18.00 billion to be converted at the conversion price of KRW17,295. The 5-year convertible bonds expire on 21 February 2023.

The substantial shareholders of PanGen and their respective shareholding in PanGen as at the LPD are as follows:-

NameNationality/ Country of

incorporationNo. of PanGen

Shares held %Youngboo Kim South Korean 1,244,480 12.94

Jaeseung Yoon South Korean 906,360 9.43

CCMB Malaysia 806,450 8.39

Kwanghee Baek South Korean 501,440 5.21

The Directors of PanGen and their respective shareholding in PanGen as at the LPD are as follows:-

Name Designation Nationality

No. of PanGen

Shares held %Youngboo Kim Co-Chief Executive

Officer South Korean 1,244,480 12.94

Jaeseung Yoon Co-Chief Executive Officer

South Korean 906,360 9.43

Kwanghee Baek Non-Executive Director


Jaehong Jang Chief Financial Officer


Leonard Ariff Bin Abdul Shatar

Non-Executive Director

Malaysian - -

The principal place of business of PanGen is at its factory located at 4F Innoplex 2-dong, 306 Sinwon-ro, Yeongtong-gu, Suwon, Geonggi-do, Korea with a built-up area of 4,406.85 square metres. PanGen provides services to customers in Korea, Malaysia, Japan, Middle East, Turkey, People’s Republic of China, Mexico, India and Venezuela.

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PanGen is involved in the development of biosimilar products, development of producer cell line (which is used to produce the proteins necessary for the manufacturing of biosimilar products) using PanGen’s patented technology, design and develop small scale manufacturing process, manufacturing of materials used for pre-clinical and clinical trials, development of research cell lines (which is used to produce the proteins necessary on a small scale basis for research purpose), and manufacturing of protein reagents and assay kits/system.

For information, biosimilar is a biologic medical product approved by authorities which is almost an identical copy of an original product that is manufactured by a different corporation.

As at the LPD, details of the biosimilar products of PanGen which are under development, their indicative use and development stages are set out below:-

Products under development Indicative use Development stage*1EPO Treatment for anaemia (a

condition whereby the amount of red blood cells in the body is low)

Clinical trials phase ended in September 2017, and PanGen together with DMSB, have applied for registration with the Malaysian authorities in March 2017

Factor VIII Treatment for haemophilia (a genetic disease which impair the body’s ability to make blood clots, which is necessary to stop bleeding)

Pre-clinical study completed

G-CSF Treatment for neutropenia (a condition whereby the amount of neutrophil, a type of white blood cells, is low)

Pre-clinical study completed and is in the process of preparing to undergo clinical trials

FSH Treatment for infertility Research and development stage, to undergo pre-clinical study after completion

INF-β Treatment of multiple sclerosis (disease in which the insulating covers of nerve cells in the brain and spinal cord are damaged)

Research and development stage, to undergo pre-clinical study after completion

Note:-

*1 The different stages of the development of biosimilar products are set out below:

Stage Development stage Description1 Producer cell line

developmentDevelopment of the new cell lines necessary to produce the proteins for the manufacturing of the intended biosimilar products

2 Manufacturing process development

Development of the basic manufacturing process for producing the producer cell line in bulk

3 Scaling of manufacturing process

Further development of the manufacturing process to scale up the amount of producer cell lines produced

4 Pre-clinical studies Testing of the biosimilar products to determine the toxicity of the products to determine the suitability on testing of the products on humans

5 Building up the Chemistry Manufacturing &Control (CMC)

Compilation of all the required documentation and reports by the various authorities prior to the starting of the clinical trials

6 Clinical trials Testing of the biosimilar products on humans

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Please refer to Appendix I of this Circular for further details of PanGen.

2.2 Background information on the Share Subscription Agreement and MCA

On 28 December 2017, CCMB completed the CCMB Distribution as a group-wide restructuring of the CCMB Group to streamline the business of the CCMB Group and the CCMD Group whereby the CCMB Group would focus on the polymer and chemical businesses whereas the CCMD Group would focus on the pharmaceutical business.

The diagram below illustrates the business structure of the CCMD Group and CCMB Group before and after the CCMB Distribution:-

PNB

CCMB CCMD

PNB

CCMB

Other subsidiaries

of CCMB

PanGen73.37% 8.39%

PRIOR TO THE CCMB DISTRIBUTION

AFTER THE CCMB DISTRIBUTION

CCMD

Pharmaceutical Division Polymer and Chemical Division

PanGen

8.39%

56.32% 46.87%


MCA


MCA

Other subsidiaries

of CCMB

Benefits and obligations

The rights are shared within the pharmaceutical division

56.32%Benefits and obligations

Pharmaceutical BusinessChemical and Polymer Businesses

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With the completion of the CCMB Distribution, PNB holds direct equity interest in CCMB and CCMD. However, the 8.39% equity interest in PanGen, which is part of the pharmaceutical business is still held by CCMB together with the legal rights under the Share Subscription Agreement and the MCA.

The Proposed Acquisition is in line with the group-wide restructuring of the CCMB Group to streamline the business of the CCMB Group and the CCMD Group.

For information purpose, the Share Subscription Agreement was entered into together with the MCA which, inter alia, granted CCMB (and such of affiliates as nominated by CCMB) the exclusive marketing and commercialisation rights in the territories of Malaysia, Brunei and Singapore and the first right of refusal to extend it to other ASEAN countries for all the biosimilar products developed by PanGen upon terms and conditions contained therein.

The Proposed Acquisition would be undertaken together with the Deeds of Novation which would give CCMD the legal rights to market biosimilar products developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal to extend it to other ASEAN countries.

2.3 Basis and justification of arriving at the Purchase Consideration

Basis

The Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Share was arrived at, on a willing-buyer willing-seller basis, after taking into consideration of the following:-

(i) the 5-day VWAMP of PanGen Shares up to the day prior to the signing of the SSA of KRW20,683 (equivalent to RM74.85) per PanGen Share. The Purchase Consideration of KRW20,269 (equivalent to RM73.35) per PanGen Share represents a 2% discount to the 5-day VWAMP of PanGen Shares;

(ii) the benefits arising from the Deeds of Novation, including the legal rights to market biosimilar products developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal for an exclusive and perpetual royalty-free license and right to package, fill and finish, store, promote, market, commercialise, sell, import, export and distribute PanGen’s products in other ASEAN countries granted under the MCA subject to the terms and conditions contained therein; and

(iii) the future prospects of PanGen as set out in Section 5.3 of Part A of this Circular.

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Further, the Board (save for the Interested Directors) has taken into consideration the historical trading share price of PanGen in arriving at the Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Share. The last transacted price, 5-day, 1-month, 3-month, 6-month and 1-year VWAMP of PanGen Shares up to 12 April 2018, being the day prior to the signing of the SSA (“LTD”) are set out below:-

Share price Premium/ (discount)KRW KRW %

Last transacted price of PanGen Shares as at the LTD 20,100 169 0.84

5-day volume VWAMP of PanGen Shares up to and including the LTD

20,683 (414) (2.00)

1-month VWAMP of PanGen Shares up to and including the LTD

19,491 778 3.99


18,627 1,642 8.82


17,430 2,839 16.29


16,692 3,577 21.43

(Source: Bloomberg)

Based on the above, the Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Share represents a discount of 2% to the 5-day VWAMP of PanGen Shares and a premium of between 0.84% to 21.44% over the last transacted price of PanGen Shares as at the LTD, and also the 1-month, 3-month, 6-month and 12-month VWAMP of PanGen Shares up to and including the LTD.

The Board (save for the Interested Directors) is of the view that the Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Shares was arrived at based on, amongst others, the discount of 2% to the 5-day VWAMP of PanGen Shares up to and including the LTD and the implied premiums based on the 1-month, 3-month, 6-month and 12-month VWAMP of PanGen Shares up to and including the LTD does not form part of the basis for arriving at the Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Shares and is purely for illustrative purposes.

In addition, as the Proposed Acquisition includes the novation of the Share Subscription Agreement and the MCA pursuant to the Deeds of Novation, CCMD would be able to benefit from the marketing and commercialisation rights of PanGen’s new products in Malaysia, Brunei and Singapore and the first right of refusal to extend it to other ASEAN countries.

For the purpose of further justifying the Purchase Consideration, the Board has considered the PB Multiple of comparable companies to evaluate the Purchase Consideration. The PB Multiple is a measure of the market price of a company’s shares relative to its net assets of the company.

The computation of PB Multiple is as follows:

Price marketNA

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However, there is no public listed company which is identical to PanGen in respect of, amongst others, the composition of business activities, geographical markets, scale of business operations and financial positions. For the purpose of evaluating the Purchase Consideration, the comparable companies were selected mainly with reference to the substantial similarity of their business of PanGen, which is involved in the development of biosimilar products, development of producer cell line, design and develop small scale manufacturing process, manufacturing of materials used for pre-clinical and clinical trials, development of research cell lines, and manufacturing of protein reagents and assay kits/system, and are currently listed in the stock exchanges in Japan, Korea and Taiwan to provide a meaningful relative valuation statistics. Nevertheless, it should be noted that this comparable valuation statistic is carried out purely to provide an indicative benchmark valuation of the Purchase Consideration.

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2.4 Mode of settlement

Pursuant to the SSA, the Purchase Consideration will be settled entirely in cash upon the completion of the SSA.

2.5 Source of funding

The Purchase Consideration is expected to be satisfied entirely through bank borrowings.

2.6 Liabilities to be assumed by CCMD

Save for the obligations and liabilities in and arising from, pursuant to or in connection with the SSA, the Share Subscription Agreement and the MCA, there are no other liabilities including contingent liabilities and/or guarantees to be assumed by CCMD arising from the Proposed Acquisition.

2.7 Additional financial commitment required

Upon the completion of the Proposed Acquisition, there are no additional financial commitment required by the CCMD Group to put the business of PanGen on-stream as PanGen is an on-going business entity.

2.8 Information on the Vendor

CCMB was incorporated in Malaysia on 7 August 1963, and is listed on the Main Market of Bursa Securities. As at 30 April 2018, the issued share capital of CCMB is RM81,920,000 comprising 167,695,988 ordinary shares.

CCMB is an investment holding and management company with its subsidiaries engaged in the manufacturing and marketing of chemicals, polymers and pharmaceuticals products and services.

As at 30 April 2018, the substantial shareholders and their interests in CCMB are set out below:-

Name No. of shares % No. of shares %

PNB 94,449,487 56.32 - -Yayasan Pelaburan Bumiputra - - 94,449,487*1 56.32

Note:-

*1 Deemed interested by virtue of its shares in PNB pursuant to Section 8 of the Act.

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As at 30 April 2018, the Directors and their interests in CCMB are set out below:-

Name No. of shares % No. of shares %

Dato’ Hajah Normala binti Abdul Samad

- - - -

Nik Fazila binti Nik Mohamed Shihabuddin

- - - -

Khalid bin Sufat - - - -Dato’ Azmi bin Mohd Ali - - - -Dato Wan Mohd Fadzmi bin Che Wan Othman Fadzilah

- - - -

Dr. Leong Chik Weng - - - -Dato’ Seri Ir. Dr. Zaini bin Ujang - - - -Datin Paduka Kartini binti Hj. Abdul Manaf

- - - -

Leonard Ariff bin Abdul Shatar (resigned with effect from 28 December 2017)

- - - -

Tan Sri Datin Paduka Siti Sa’diah binti Sh. Bakir (resigned with effect from 28 December 2017)

- - - -

Datuk Nik Moustpha bin Haji Nik Hassan (resigned with effect from 28 December 2017)

- - - -

The original cost of investment and the date of investment in the Sale Shares by CCMB are as follows:

Amount AmountDate of investment Type of subscription (KRW’000) (RM’000)(1)

8 January 2014 PanGen Shares 2,999,994 9,4448 January 2014 Redeemable cumulative

convertible preferred shares (“RCCPS”)*2

1,999,996 6,296

Total 4,999,990 15,740

Notes:-

*1 Converted based on the exchange rate of RM0.3148: KRW100 applied on 8 January 2014.*2 The RCCPS was subsequently converted into PanGen Shares on 7 April 2016.

For information purposes, the movement in the number of PanGen Shares held by CCMB are as follows: Year Event Additional

PanGen Shares Cumulative no. of

PanGen Shares held by CCMB

2014 Acquisition of PanGen Share vide the Share Subscription Agreement

241,935 241,935

2015 Bonus Issue by PanGen on the basis of one new PanGen Share for every existing PanGen Share held

241,935 483,870

2016 Conversion of all the RCCPS held by CCMB into PanGen Shares

322,580 806,450

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3. SALIENT TERMS OF THE SSA

The salient terms and conditions of the SSA are set out as follows:-

3.1 Sale and purchase

Subject to the terms and conditions of the SSA, the Vendor agrees to sell and CCMD as purchaser, agrees to purchase the Sale Shares on a willing-buyer willing-seller basis, free from all encumbrances and with all rights, benefits and entitlements together with all dividends and distributions attaching thereto as from the Completion Date (as defined in Section 3.4 of Part A of this Circular) for the Purchase Consideration.

The parties agree to effect the sale, purchase and transfer of the Sale Shares outside the KOSDAQ market pursuant to the terms of the SSA and in compliance with the Financial Investment Services and Capital Markets Act of Korea and the enforcement decrees and rules promulgated thereunder as well as other relevant laws and rules of Korea.

The sale, purchase and transfer of the Sale Shares shall include the novation and assignment of the rights, benefits, title, interests, obligations and liabilities of the Vendor, as at the Completion Date, under the following agreements, to CCMD:-

(i) Share Subscription Agreement; and

(ii) MCA.

3.2 Purchase Consideration

The total purchase consideration of the Sale Shares shall be the aggregate sum of RM59.16 million (equivalent to KRW16.35 billion) which shall be paid in RM and is arrived on a willing-buyer willing-seller basis after taking into consideration a discount of 2% of the market price based on the 5-day VWAMP of the PanGen Shares up to and including the last business day prior to the date of the SSA of KRW20,683(equivalent to RM74.85) per PanGen Share.

3.3 Conditions Precedent

The SSA and its Completion (as defined in Section 3.4 of Part A of this Circular) are conditional upon the following conditions being fulfilled on or before 2 months from the date of the SSA, unless otherwise extended by mutual agreement between CCMD and CCMB in writing (“Cut-Off Date”):-

(i) the approval of the shareholders of CCMB in relation to the disposal and transfer of the Sale Shares to CCMD;

(ii) the approval of the shareholders of CCMD in relation to the purchase and transfer of the Sale Shares from CCMB;

(iii) the report by CCMD in relation to the purchase of the Sale Shares and becoming a holder of the PanGen Shares in bulk with the Financial Services Commission and the KRX, which report shall be made within 5 business days from the date of execution of the SSA. The report was made by CCMD on 19 April 2018 to the Financial Services Commission and the KRX;

(iv) the execution of the Deeds of Novation;

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(v) the filing to be made by Interested Persons in relation to the notification of a change in the earlier notification for the guarantee by the Interested Persons under the Share Subscription Agreement in relation to the deed of novation of the Share Subscription Agreement, with the Bank of Korea (if applicable);

(vi) the filing to be made by PanGen in relation to the notification of a change in the earlier notification for the put option vested to the Vendor by the Interested Persons under the Share Subscription Agreement in relation to the deed of novation of the Share Subscription Agreement, with the Bank of Korea (if applicable);

(vii) the rectification by PanGen in relation to the Foreign Invested Enterprise Registration Certificate; and

(viii) the registration of foreign investment by CCMD with the governor of the Financial Supervisory Service, which was registered by CCMD on 11 April 2018.

The SSA shall become unconditional on the date that all Conditions Precedent have been fulfilled or otherwise waived by the parties in writing on or before the Cut-Off Date (“Unconditional Date”).

3.4 Completion and payment of Purchase Consideration

The completion of the sale, purchase and transfer of the Sale Shares (“Completion”) of the Proposed Acquisition is subject to:-

(i) pre-completion covenants pursuant to the SSA; and

(ii) the SSA becoming unconditional.

The Completion Date shall fall 5 business days after the Unconditional Date or such other date as may be mutually agreed between CCMD and CCMB in writing, on which date the Completion shall take place (“Completion Date”).

On the Completion Date, the following shall occur:

(a) Completion shall be by way of an off-market transaction conducted outside of the KOSDAQ market, whereby the Vendor shall issue a written instruction to the Vendor’s securities company to execute the transfer of the Sale Shares from the Vendor’s securities account in which the Sale Shares are being held to CCMD’s securities account by way of book-keeping entry and the Vendor shall furnish the book-keeping entry to CCMD on the Completion Date;

(b) Vendor shall procure the transfer of the share certificates to CCMD/CCMD’s securities company; and

(c) concurrently, upon confirmation from CCMD’s securities company that the Sale Shares have been transferred to CCMD’s securities account, CCMDshall pay the Purchase Consideration to the Vendor in the form of a banker’s draft.

3.5 Events of default and termination

(i) An event of default shall be deemed upon the occurrence of any of the following events:-

(a) any party is or becomes, or is adjudicated or found to be, bankrupt or insolvent or wound up;

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(b) a judicial manager or receiver or receiver and manager or a similar officer is appointed over, or distress, attachment or execution is levied or enforced upon, any material part of the assets or undertaking of any party; or

(c) the default, breach or non-compliance by any party of any agreement, covenant, warranty and obligation under the SSA.

(ii) CCMD’s remedy

If prior to the Completion, the Vendor commits an event of default as referred to in Section 3.5(i) of Part A of this Circular which is not capable of being remedied or which is capable of remedy but not remedied by the Vendor within 21 days from the date of receipt of notice from CCMD detailing such event of default, CCMD shall be entitled to:-

(a) the right of specific performance against the Vendor and all such reliefs flowing therefrom. Such remedy shall be in addition to and not in lieu of, limitation or diminution of other remedies provided to CCMD under the SSA or otherwise at law or in equity to claim damages which it has suffered or incurred as a result of such breach by the Vendor or such termination occurring including all fees costs and expenses arising therefrom or incidental thereto; or

(b) terminate the SSA by notice in writing to the Vendor without prejudice to all other rights and remedies available at any time to CCMD(including but not limited to monetary compensation for any loss suffered by CCMD, including costs incurred relating to or in connection with the preparation, negotiation, signing and implementation of the SSA) whereupon CCMD shall have no further obligation to buy and the Vendor shall not have any further obligation to sell the Sale Shares.

(iii) Vendor’s remedy

if prior to Completion, CCMD commits an event of default as referred to in Section 3.5(i) of Part A of this Circular which is not capable of being remedied or which is capable of remedy but not remedied by CCMD within 21 days from the date of receipt of the notice from the Vendor detailing such event of default, the Vendor shall be entitled to:-

(a) the right of specific performance against CCMD and all such reliefs flowing therefrom. Such remedy shall be in addition to and not in lieu of, limitation or diminution of other remedies provided to the Vendor under the SSA or otherwise at law or in equity to claim damages which it has suffered or incurred as a result of such breach by CCMD or such termination occurring including all fees costs and expenses arising therefrom or incidental thereto claim for specific performance, in which case it is agreed that an alternative remedy of monetary compensation shall not be regarded as compensation or sufficient compensation for such event of default; or

(b) terminate the SSA by notice in writing to CCMD without prejudice to all other rights and remedies available at any time to the Vendor (including but not limited to monetary compensation for any loss suffered by the Vendor, including costs incurred relating to or in connection with the preparation, negotiation, signing and implementation of the SSA) whereupon the Vendor shall not have any further obligation to sell and CCMD shall not have any further obligation to buy the Sale Shares.

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3.6 Novation of the Share Subscription Agreement and MCA

In conjunction with the Proposed Acquisition and as part of the condition precedents to the SSA, CCMD will enter into the following agreements pursuant to the terms and conditions of the SSA:-

(i) deed of novation between CCMD, CCMB and the Interested Persons, for the novation and assignment from CCMB of all rights, title, interests and benefits, obligations and liabilities of CCMB which are subsisting under the Share Subscription Agreement to CCMD as if CCMD was a party to the Share Subscription Agreement in place of CCMB. For information, the Share Subscription Agreement was completed on 8 January 2014; and

(ii) deed of novation between CCMD, CCMB and PanGen for the novation and assignment from CCMB of all rights, title, interest and benefits, obligations and liabilities of CCMB which are subsisting under the MCA to CCMD as if CCMD is a party to the MCA in place of CCMB.

4. RATIONALE AND JUSTIFICATION FOR THE PROPOSED ACQUISITION

The Proposed Acquisition involves the acquisition of an investment stake in PanGen, a company which is involved in the development of biosimilar products and services required to develop biosimilar products.

As set out in Section 3.6 of Part A of this Circular, the Proposed Acquisition would be undertaken together with the Deeds of Novation which would give CCMD the rights to market biosimilar products developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal to extend it to other ASEAN countries.

PanGen has experience in the development of biosimilar products whereby PanGen is currently undertaking the development of 5 biosimilar products. In addition, PanGen provides support for research in the form of development of research cell lines (which is used to produce the proteins necessary on a small scale basis for research purpose), and manufacturing of protein reagents and assay kits/system.

The Proposed Acquisition is undertaken in-line with CCMD’s long-term plan to source for new biosimilar products to grow its pharmaceutical business. As part of the long-term plan, DMSBhas been working with PanGen since 2012 to jointly develop the EPO biosimilar in Malaysia.

With the investment in PanGen, CCMD can potentially work together with PanGen to enter into the biotherapeutics medicines (medicines made from living organisms or modification of proteins to create therapies) market with a lower cost to entry by utilising the current products and technology of PanGen as compared to developing the products and technology internally.

With the novation of the MCA, CCMD would be able to manufacture and market the new biosimilars products developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal to extend it to other ASEAN countries.

CCMD would also be able to benefit from the transfer of technology and know-how by PanGen relating to bio-business undertaken or to be undertaken by CCMD. CCMD had sent a working team to PanGen’s facilities to be trained on conduct and management of clinical trial for the EPO biosimilar, and on good manufacturing practice requirement for clinicial trial. In addition, the employees of CCMD Group had also received intensive training from PanGen to transfer PanGen’s technology on the manufacturing process of the EPO biosimilars to CCMD.

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5. INDUSTRY OUTLOOK AND FUTURE PROSPECTS

5.1 Overview and outlook of the Korean economy

The rebound in international trade and greater fiscal support are projected to sustain the GDP at around 3% for 2018 and 2019, even though construction investment is projected to slow following tighter regulations on housing and mortgage lending. High household debt and weak employment growth continue to hold back private consumption. Inflation is projected to remain close to 2%, while the current account surplus will edge up to 6% of GDP.

The government's strategy of “income-led growth”, driven by public employment, a sharp rise in the minimum wage and increased social spending, needs to be supported by reforms to raise productivity. Fiscal policy, which is increasingly focused on income redistribution, also needs to place greater emphasis on productivity. Gradually reducing the degree of monetary accommodation by raising the policy interest rate from a record-low 1¼% would help keep inflation in check and contain household debt.

(Source: OECD Economic Outlook, Volume 2017 Issue 2)

5.2 Overview and outlook of the pharmaceutical industry in Korea

Korea is the 13th largest pharmaceutical market in the world and the 3rd largest in Asia. Sales are forecast to grow from USD15.1 billion in 2015 to USD18.3 billion by 2020, representing a strong annual growth rate of 3.9%. Current spending on healthcare reached USD101.0 billion, or around 7.4% of GDP, which is very low for a developed country. Still, Korea boasts a world-class health system in terms of access and quality and is one of the few Asian countries whose population is able to afford innovative treatments.

Like other developed countries with growing public healthcare burdens, budgetary constraints are leading to cost containment measures. In recent years, the Korean government has slowed pharmaceutical market growth through aggressive price cuts and tightening reimbursement criteria for both innovative and generic medicines. Reimbursement prices of generics are already approximately half the average for Organization for Economic Cooperation and Development (OECD) countries.

Due to a large domestic generics industry and government policies to encourage usage, generics make up a comparatively large portion of the total market at 47%. Further government price cuts, stricter regulations on sales and rebates and intensified competition, however, are creating a difficult environment for generics companies moving forward.

The patented drug sector has seen steady growth above the global average, growing at an average annual rate of 4.1% over the last five years. Innovative treatments are introduced swiftly following approval, and the United States-Korea Free Trade Agreement (KORUS) contains provisions that, if adhered to, will strengthen the intellectual property (“IP”) climate. Significant government subsidies and incentives are also being directed towards innovative companies investing in research and development (“R&D”). As with generics, however, government price cutting is dampening potential market growth.

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Korea’s domestic pharmaceutical industry is relatively advanced and dominated by large generics firms. In recent years, the government has used subsidies, tax breaks, reimbursement policies and IP laws to promote R&D investment by both domestic and multinational firms. The country now boasts a robust and growing R&D sector, particularly in biotech, with several locally-developed innovative drugs receiving approval in recent years. With the establishment of an approval pathway for biosimilars in 2009, Korea aims to become a global leader in biosimilar development and stem cell research. The country has a booming clinical trials industry, bolstered by a streamlined regulatory process and world-class medical facilities. Seoul is now one of the world's largest clinical research centres by trial numbers.

(Source: International Trade Administration 2016 Top Market Report Pharmaceutical Country Case Study)

5.3 Prospects of PanGen

Presently, the revenue of PanGen are generated from the development of producer cell line (which is used to produce the proteins necessary for the manufacturing of biosimilar products) using PanGen’s patented technology, manufacturing of materials used for pre-clinical and clinical trials, development of research cell lines (which is used to produce the proteins necessary on a small scale basis for research purpose), and manufacturing of protein reagents and assay kits/system.

As set out in Section 3.6 of Part A of this Circular, the Proposed Acquisition would be undertaken together with the Deeds of Novation which would give CCMD the rights to market biosimilar products developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal to extend it to other ASEAN countries.

Upon the completion of the Proposed Acquisition, and as and when the development of new biosimilar products of PanGen such as Factor VIII, G-CSF, FSH and INF-β is completed, CCMD would be able to market these new biosimilar products to ASEAN countries as provided for under the MCA. This will potentially increase the revenue generated by the CCMD Group.

PanGen is currently developing 5 biosimilar products as detailed in Section 2.1 of Part A of this Circular. The first biosimilar products that is expected to be launched by PanGen is the EPO biosimilars which is currently pending the registration with the authorities. Once the registration with the authorities is completed, the EPO biosimilars will be marketed by PanGen in Korea and CCMD in Malaysia which could potentially increase the revenue generated by PanGen.

After taking into consideration the long-term plan of CCMD to source for new biosimilar products and the strategic partnership to transfer know-how and technology by PanGen to CCMD, the Board sees the acquisition of PanGen as favourable to the CCMD Group as it will allow for the CCMD Group to benefit from the future development of the new biosimilar products whereby the CCMD Group would be able to manufacture and market such products in other ASEAN countries.

Premised on the above and the positive outlook of the Korean economy, the Board is optimistic of the future prospects of PanGen and the Proposed Acquisition is expected to contribute positively to the financial results of the CCMD Group.

(Source: Management of CCMD)

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6. RISK FACTORS IN RELATION TO THE PROPOSED ACQUISITION

The risk factors that may arise from the Proposed Acquisition, which may not be exhaustive, are set out below:-

6.1 Non-completion of the Proposed Acquisition

The completion of the Proposed Acquisition is subject to, amongst others, the fulfilment of the Conditions Precedent as disclosed in Section 3.3 of Part A of this Circular. In the event the Conditions Precedent are not fulfilled, the Proposed Acquisition may not be completed, which may result in the failure of the CCMD Group to achieve the objectives and benefits of the Proposed Acquisition. Notwithstanding that, the Board and management of CCMD shall use their best endeavours to ensure every effort is taken to procure all necessary approvals to satisfy the Conditions Precedent.

6.2 Acquisition risk

Although the Board believes that CCMD may derive benefits from the Proposed Acquisition, there is no assurance that such anticipated benefits will be realised or that PanGen will be able to generate sufficient returns, or that the Share Subscription Agreement and the MCA is able to benefit the CCMD Group in the future. There is also no assurance that CCMD will be able to develop, manufacture or market the products of PanGen in order to increase the profitability of the CCMD Group.

However, the CCMD Group believes it can mitigate such risks by conducting assessments and reviews, on the development of new products of PanGen for the ASEAN region and to monitor the financial performance of PanGen in order to make the necessary investment decision on the PanGen Shares.

6.3 Foreign currency risk

The PanGen Shares are traded in KRW, whilst the reporting currency of CCMD is in RM. For reporting purposes, any adverse changes in KRW may result in foreign currency translation differences as a result of our investment in PanGen Shares. No assurance can be given that any future significant exchange rate fluctuations or changes in foreign exchange control regulations will not have a material adverse impact on CCMD's operating results and financial conditions.

The management of CCMD will continue to monitor the CCMD Group's foreign currency exposures and will take the necessary steps to minimise exchange rate exposures whenever deemed appropriate.

6.4 Political, economic and regulatory risks

CCMD is susceptible to changes in the political, economic and regulatory conditions of the country where PanGen operate in, even more so in Korea where PanGen’s main operations and research facilities are located. Therefore, changes in the political, economic and regulatory conditions in Korea could adversely affect the financial performance or prospects of PanGen, which in turn will adversely affect the financial performance of CCMD by means of an impairment on the investment in PanGen. These include, but not limited to, risks of war, expropriation, nationalisation, changes in general economic, business or credit conditions, political or social development and changes in government policy such as changes in interest rates, inflation rate, taxation and currency exchange controls.

CCMD shall continuously monitors the changing environment so as to respond and adapt to any change in the political, economic and regulatory conditions accordingly, as and when they arise in the future.

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6.5 Risk of changes in Korea’s policies on foreign investments and repatriation of profits/ dividends

PanGen will be subject to the policies on foreign investment and repatriation of profits/ dividends under the laws of Korea. CCMD understands that, under the current laws of Korea, there is no restriction against foreign investment in the industries where PanGen operates in, and there are no restrictions imposed on the repatriation of profits, dividends and capital save for payment of applicable taxes.

Notwithstanding the above, there can be no assurance that any changes to the Korea’s policies on foreign investment and repatriation of profits/ dividends in the future will not have a material effect on the CCMD Group. In order to mitigate the abovementioned risk, the CCMD Group will adopt a proactive approach in keeping abreast of the relevant policies in Korea on foreign investment and repatriation of profits/ dividends in relation to PanGen.

7. EFFECTS OF THE PROPOSED ACQUISITION

The effects of the Proposed Acquisition on the issued share capital and substantial shareholders’ shareholding of the Company, NA, gearing level, earnings and EPS of the CCMD Group are set out below.

7.1 Issued share capital

The Proposed Acquisition will not have any effect on the issued share capital of CCMD as it will not result in any issuance of new CCMD Shares.

7.2 NA per Share and gearing

The Proposed Acquisition will not have any effect on the NA per Share of the CCMD Group save for the estimated expenses of RM650,000 to be incurred for the Proposed Acquisition.

Based on the financial statements for the FYE 31 December 2017 and assuming the entire Purchase Co

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