GHL System Berhad Annual Report 2019

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 184 8. Effects of Proposed Shares Buy-Back (Cont’d) 8.1 Share Capital (Cont’d) The effect of the Proposed Shares Buy-Back on the issued and paid up share capital of GHL are illustrated below: No of Shares RM Issued and paid up share capital as at 31 December 2019 749,209,139 330,199,925 Issued and paid up share capital as at 29 May 2020 749,209,139 330,199,925 After share purchase and cancellation 674,288,225 # 297,179,933 Notes: # Assuming up to 10% of the issued and paid up capital of GHL or 74,920,914 GHL Shares are purchased and cancelled. 8.2 Net Assets The Proposed Share Buy-Back, if implemented, may increase or decrease the net assets and net assets per Share depending on the purchase prices of GHL Shares pursuant to the Proposed Share Buy-Back. The consolidated net assets per Share will increase if the purchase price is less than the audited consolidated net assets per share and conversely, the consolidated net assets per share will decrease if the purchase price exceeds the consolidated net assets per Share at the time when the GHL Shares are purchased. In the event the purchased GHL Shares which are retained as treasury shares are resold, the consolidated Net Assets per Share of GHL will increase or decrease depending on whether a gain or a loss is realised upon the resale. The quantum of the increase or decrease in net assets will depend on the actual selling price and the number of the treasury shares resold to the market. 8.3 Working Capital The Proposed Share Buy-Back, as and when implemented, will reduce the working capital of the GHL Group, the quantum of which will depend on the actual purchase price and number of purchased GHL Shares as well as any associated costs incurred in relation to the share buy-back pursuant to the Proposed Share Buy-Back. However, it is not expected to have a material adverse effect on the working capital of the Company. The working capital and the cash flow of the Company will also increase accordingly when the Proposed Share Buy-Back are retained as treasury shares are resold. The quantum of the increase in working capital and cash flow will depend on the actual selling price and the number of the treasury shares resold to the market. 8.4 Earnings The effect of the Proposed Share Buy-Back on the EPS of GHL will depend on, inter-alia, the actual number of purchased GHL Shares and the effective cost of funding to the GHL Group, or any loss in interest income to GHL or opportunity cost in relation to other investment opportunity. However, the Proposed Share Buy-Back, if exercised, is not expected to have any material effect on the EPS of GHL for the financial year ending 31 December 2019. 8.5 Dividends The above Proposed Share Buy-Back is not expected to have any impact on the dividend payment as the Board will take into considerations the Company’s profit, cash flow, and the capital commitments before proposing any dividend payment. STATEMENT TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES CONT’D