Star Media : Circular to Shareholders in relation to Proposed Variation

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant 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.

STAR MEDIA GROUP BERHAD

Registration No. 197101000523 (10894-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO:

PROPOSED VARIATION TO THE UTILISATION OF PROCEEDS RAISED FROM THE DISPOSAL OF CITYNEON HOLDINGS LIMITED, A FORMER INDIRECT SUBSIDIARY COMPANY OF STAR MEDIA GROUP BERHAD TO LUCRUM 1 INVESTMENT LIMITED WHICH WAS COMPLETED ON

12 JULY 2017 ("PROPOSED VARIATION")

The resolution in respect of the above proposal will be tabled as Special Business at the Fifty-Second ("52nd") Annual General Meeting ("AGM") of Star Media Group Berhad ("the Company") to be conducted entirely through live streaming at the broadcast venue, Cyberhub, Level 2, Menara Star, 15, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia ("the Broadcast Venue") and online voting using the Remote Participation and Voting facilities at https://tiih.online on Monday, 27 May 2024 at 10.00 a.m. or at any adjournment thereof, together with the Proxy Form are set out in the Company's Annual Report 2023. Please follow the procedures provided in the Administrative Guide for the AGM in order to register, participate and vote remotely via the Remote Participation and Voting platform.

If you decide to appoint a proxy(ies) to attend and vote on your behalf at the 52nd AGM, the Proxy Form must be deposited at Tricor Investor & Issuing House Services Sdn Bhd at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or submitted electronically via TIIH online website at https://tiih.online not less than forty-eight

1. hours before the time set for holding the AGM or at any adjournment thereof. The lodging of the Proxy Form will not preclude you from participating and voting remotely at the AGM should you subsequently wish to do so.

The last day and time for lodging the Proxy Form is Saturday, 25 May 2024 at 10.00 a.m.

This Circular is dated 26 April 2024

DEFINITIONS

For the purpose of this Circular, except where the context otherwise requires, the following terms and expressions shall have the following meanings:

"AGM"	:	Annual General Meeting
"Board"	: Board of Directors of Star Media
"Bursa Securities"	: Bursa Malaysia Securities Berhad [Registration No. 200301033577
		(635998-W)]
"Circular"	: This circular to shareholders dated 26 April 2024 in relation to the
		Proposed Variation
"Cityneon"	: Cityneon Holdings Limited (Company No. 199903628E), a company
		incorporated in the Republic of Singapore and a former subsidiary of
		Laviani which was disposed to Lucrum
"Disposal"	: The disposal by Laviani of its entire equity interest in Cityneon
		comprising 128,458,590 ordinary shares, representing approximately
		52.51% equity interest in Cityneon to Lucrum for the Disposal
		Consideration
"Disposal Circular"	: The circular to shareholders dated 22 June 2017 in respect of the
		Disposal
"Disposal Consideration"	: The total cash consideration of SGD115,612,731 for the Disposal (or
or "Disposal Proceeds"		equivalent to approximately RM360,179,902 based on the exchange
		rate of SGD1: RM3.1154, being the middle rate for SGD to RM quoted
		from Bank Negara Malaysia as at 27 April 2017)
"EPS"	:	Earnings per share
"EGM"	:	Extraordinary General Meeting
"FPE"	:	Financial Period Ended
"Laviani"	: Laviani Pte Ltd (Company No.: 200812800N) is a wholly-owned
		subsidiary of Star Media, which was incorporated on 1 July 2008 in the
		Republic of Singapore. Laviani, a dormant subsidiary which was
		inactive, has been dissolved on 24 August 2019 by way of a member's
		voluntary liquidation pursuant to Section 308(5) of the Companies Act,
		Cap. 50 (now known as the Companies Act 1967) which stated that on
		the expiration of three (3) months from lodgement of the final return with
		the registrar and with the official receiver in Singapore, the company is
		deemed dissolved
"Listing Requirements"	: Main Market Listing Requirements of Bursa Securities, as amended
		from time to time
"LPD"	: 29 March 2024, being the latest practicable date prior to the printing of
		this Circular
"Lucrum"	: Lucrum 1 Investment Limited (Company No. 1942309) which was
		incorporated in the British Virgin Islands, was the purchaser for the
		Disposal
"NA"	:	Net Assets

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DEFINITIONS

"Proposed Variation"	: Proposed variation to the utilisation of proceeds raised from the
	Disposal and an extension of timeframe for the full utilisation of the
	proceeds
"RM and sen"	: Ringgit Malaysia and sen respectively
"Star Media Group" or	: Star Media and its subsidiaries collectively
"Group"
"Star Media" or "Company"	: Star Media Group Berhad [Registration No. 197101000523 (10894-D)]

All references to "our Company" in this Circular are to Star Media and references to "our Group" are to our Company and our subsidiaries. References to "we", "us", "our" and "ourselves" are to our Company and where the context requires, shall include our subsidiaries. All references to "you" and "your" in this Circular are to our Shareholders.

Unless specifically referred to, words denoting the singular shall, where applicable, include the plural and vice versa and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders and vice versa. References to persons shall include corporations, unless otherwise specified.

Any reference in this Circular to any enactment, code, rules and regulations is a reference to that enactment, code, rules and regulations as for the time being amended or re-enacted.

Any reference to time of day and date of this Circular is a reference to Malaysian time and date.

Any discrepancies in the tables included in this Circular between the amounts listed, actual figures and the totals thereof are due to rounding.

Certain statements in this Circular may be forward-looking in nature, which are subject to uncertainties and contingencies. Forward-looking statements may contain estimates and assumptions made by our Board after due enquiry, which are nevertheless subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in such forward-looking statements. In light of these and other uncertainties, the inclusion of a forward-looking statement in this Circular should not be regarded as a representation or warranty that the plans and objectives of our Company will be achieved.

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TABLE OF CONTENTS

			Page
EXECUTIVE SUMMARY	iv
LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED VARIATION
1.	INTRODUCTION	1
2.	DETAILS OF THE PROPOSED VARIATION	1
3.	RATIONALE OF THE PROPOSED VARIATION	7
4.	EFFECTS OF THE PROPOSED VARIATION	7
5.	APPROVALS REQUIRED AND CONDITIONALITY	7
6.	INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS	7
	CONNECTED WITH THEM
7.	DIRECTORS' STATEMENT AND RECOMMENDATION	7
8.	ESTIMATED TIMEFRAME FOR UTILISATION	8
9.	CORPORATE EXERCISE ANNOUNCED BUT NOT YET COMPLETED	8
10.	AGM		8
11.	FURTHER INFORMATION	8
APPENDIX
FURTHER INFORMATION	9
NOTICE OF AGM	Enclosed in Annual Report 2023
PROXY FORM	Enclosed in Annual Report 2023

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EXECUTIVE SUMMARY

All definitions used in this Executive Summary shall have the same meaning as the words and expressions provided in the "Definition" section and context of this Circular.

This Executive Summary highlights only the pertinent information of the Proposed Variation. Shareholders are advised to read this Circular in its entirety for further details and not to rely solely on this Executive Summary in forming a decision on the Proposed Variation before voting at the forthcoming AGM of the Company.

Key information			Description
Summary	of	the	Proposed	The Company's wholly-owned subsidiary, Laviani had entered into a
Variation					conditional sale and purchase agreement on 12 May 2017 with Lucrum
					for the proposed disposal of its entire equity interest in Cityneon for a
					disposal consideration of SGD115,612,731 (equivalent to
					approximately RM360,179,902) to be satisfied entirely via cash.
					As of the LPD, RM293.68 million or 81% of the Disposal Proceeds had
					been utilised and the remaining 19% of the Disposal Proceeds,
					totalling RM66.50 million has not been utilised. Summary of the
					Disposal Proceeds utilised as at the LPD is set out in Section 2.4 in
					this Circular.
					Under the Proposed Variation, the Board proposes to reallocate the
					entire sum of RM66.50 million from future investments to general
					working capital. The targeted timeframe for completion of the
					Proposed Variation is by 30 June 2025.
					Please refer to Section 2 of this Circular for further details on the
					Proposed Variation.
Rationale	for	the	Proposed	The reallocation of RM66.50 million from future investments to working
Variation					capital will further benefit the Group as the additional funds available
					will provide flexibility to the Group to fund its business operations, as
					and when required. This includes the use of the funds for potential
					future investment requirements.
Effects of	the	Proposed	The Proposed Variation will not have any effect on the issued share
Variation					capital, substantial shareholders' shareholdings, net assets, and EPS
					of the Group.
Approvals		required	and	The Proposed Variation is subject to the approval of the shareholders
confidentiality				of the Company at the forthcoming AGM to be convened.
					The Proposed Variation is not conditional or inter-conditional upon any
					other corporate proposal undertaken or to be undertaken by the
					Company.
Directors'	Statement	and	The Board, after taking into consideration all aspects of the Proposed
Recommendation			Variation, including the rationale and effects of the Proposed Variation
					and after careful deliberation, is of the opinion that the Proposed
					Variation is in the best interest of the Company. Accordingly, the Board
					recommends that you VOTE IN FAVOUR of the resolution pertaining
					to the Proposed Variation to be tabled at the forthcoming 52nd AGM of
					the Company.

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STAR MEDIA GROUP BERHAD

[Registration No.: 197101000523 (10894-D)]

(Incorporated in Malaysia)

Registered Office

Level 15, Menara Star

15, Jalan 16/11

46350 Petaling Jaya

Selangor Darul Ehsan

Malaysia

26 April 2024

BOARD OF DIRECTORS:

Tan Sri Dato' Seri Chor Chee Heung (Chairman, Independent Non-Executive Director) Tan Sri Dato' Sri Kuan Peng Ching @ Kuan Peng Soon (Deputy Chairman, Non-IndependentNon-Executive Director)

Dato' Dr Mohd Aminuddin bin Mohd Rouse (Non-IndependentNon-Executive Director) Madam Wong You Fong (Non-IndependentNon-Executive Director)

Mr Loh Chee Can (Independent Non-Executive Director)

Ms Tee Chew Lay (Independent Non-Executive Director)

To: Our Shareholders

Dear Sir/Madam,

PROPOSED VARIATION

1. INTRODUCTION

On 15 March 2024, the Company announced the Proposed Variation. Further details of the Proposed Variation are set in the ensuing sections.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH DETAILS AND INFORMATION PERTAINING TO THE PROPOSED VARIATION AND TO SEEK YOUR APPROVAL FOR THE RESOLUTION TO BE TABLED AT THE FORTHCOMING AGM.

YOU ARE ADVISED TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED VARIATION AT THE FORTHCOMING 52ND AGM OF THE COMPANY. THE NOTICE OF THE 52ND AGM AND PROXY FORM ARE ENCLOSED IN THE ANNUAL REPORT 2023.

2. DETAILS OF THE PROPOSED VARIATION

2.1 Original Proposed Utilisation

On 12 May 2017, the Company had announced that its wholly-owned subsidiary, Laviani had entered into a conditional sale and purchase agreement with Lucrum for the Disposal.

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The circular in respect of the Disposal was subsequently despatched to shareholders on 22 June 2017 and the shareholders approved the Disposal at the EGM of the Company held on 7 July 2017. At the EGM, shareholders had approved the utilisation of the proceeds from the Disposal as set out in the table below (or you may refer to Section 4 of the Disposal Circular) for further information:

Purpose	Intended timeframe for utilisation	Expected	%
	from the Completion Date of the	utilisation as per
	Disposal 12 July 2017	the Disposal
		Circular
		(RM'000)
Future investments* 1	24 months i.e. by 11 July 2019	200,000	55
	(referred to as the "Initial
	Timeframe")
General working capital * 2	24 months	154,095	43
Expenses in relation to the	3 months	6,085	2
Disposal * 3
Total		360,180	100

Notes:

*1

*2

The Company intends to expand its primary business activities, amongst others, print and digital business segment, specifically in the new digital media products after witnessing the increase in the digital media consumption trend. In an effort to stay ahead of the digital media consumption trend, the Company will continue its expansion of its existing portfolio by exploring new media assets which will bring potential earnings to the Group and to grow its ePaper circulation.

Notwithstanding the above, Star Media Group's future plans also include, amongst others, further expansion of the other business segments so as to enhance their respective contributions to Star Media Group. These future plans may include, but are not limited to, providing new or alternative products to the current offerings and continuously seeking investment opportunities or collaborations which the Board deems appropriate and will be in the best interest of the Company to raise its integrated media solutions position in the media industry and to expand its footprint in the Association of Southeast Asian Nations (ASEAN) region.

As at the date of the circular dated 22 June 2017, the Management of Star Media Group has neither identified any suitable or viable investment opportunity for consideration nor entered into any agreement with any parties for potential collaboration. The Management of Star Media Group is still exploring its options to identify suitable investment(s) and/ or new product offerings and will continuously seek and identify suitable and viable investment opportunities and/ or product offerings to strengthen their earnings. In the event that the Board and the Management of Star Media could not identify any suitable or viable investment opportunity and/ or collaborations within 24 months from the Completion Date, the proceeds will continue to be placed in deposits with financial institutions or short-term money market instruments until such time when the Management of Star Media Group is able to identify investment opportunity and/ or new product offerings.

As and when the Board and the Management of Star Media identify any suitable investment(s) and/ or new product offerings, the Company will make the necessary announcements (in accordance with the Listing Requirements or any other relevant rules and regulations) and to seek the necessary approval(s) from the shareholders of Star Media and/ or relevant regulatory bodies should the nature of the transaction requires so.

The gross proceeds arising from the Disposal earmarked for the working capital requirements of the Company are intended to partially defray the expenses for its day-to-day operations which include, but are not limited to, financing the Company's daily operations and operating expenses which include general administration such as salaries, sales and marketing expenses and any other operating expenditures. The actual amount to be utilised for the working capital requirements may differ subject to the operating requirements at the time of utilisation.

*3	The gross proceeds arising from the Disposal earmarked for the estimated expenses of the Disposal are intended
	to be utilised to fund the estimated expenses of the Disposal.

The Disposal was subsequently completed on 12 July 2017 (referred to as the "Completion Date").

The Company provides the status update and progress of utilisation of the proceeds from the Disposal in its Quarterly Financial Reports which are announced to Bursa Securities on a quarterly basis. The disclosure is made under the "Status of corporate proposal announced" section in the Notes to these Reports.

As at the LPD, the Company has utilised 81% or RM293.68 million of the total Disposal Proceeds. The balance 19% of these proceeds which amounts to RM66.50 million previously earmarked for future investments has yet to be utilised (referred to as "the Remaining Balance").

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2.2 Details on the Utilised Disposal Proceeds

2.2.1 The breakdown and details on the utilised Disposal Proceeds together with the duration taken under each of the intended utilisation are provided in the table below:

Purposes	Detailed utilisation	Duration taken for	Total
					utilisation	(RM'000)
Future	Investment in the "Over-the-	Within 18 months from the	47,500
investments	top" (OTT) segment, including	Completion Date
	expansion	into	overseas
	markets	namely	Singapore
	and Brunei
General working	Daily operating expenses for	Within 15 months from the	154,095
capital	payments	to	employees, as	Completion Date
	well as suppliers and vendors
	for capital and	operational
	expenditures
Expenses in	Professional	fees, referral	Within 3 months from the	6,085
relation to the	fee, regulatory fee and other	Completion Date
Disposal1	incidental expenses
Total						207,680

2.2.2 Since the completion of the Disposal, the Board and Management have sought to identify suitable investments, in particular within the digital media space. This included expanding into new products, exploring joint ventures and partnerships with media and non-media industry players, which ultimately were not concluded. The proposals were not successful as the Board deemed that the potential investments were not in the best interest of the Company.

2.3. Details of the First Revision

2.3.1 On 1 August 2019, the Company had announced that it had only utilised 58% or RM207.68 million of the Disposal Proceeds as per the intended purpose as disclosed in the Disposal Circular.

The Board had on even date, varied the utilisation of the balance Disposal Proceeds of RM152.50 million (referred to as the "Balance Disposal Proceeds") which was intended for future investments to general working capital. From this amount, RM86.0 million was re-allocated for working capital and the Remaining Balance was set aside for future investments.

The Board had also extended the timeframe for utilisation from the Initial Timeframe to 31 July 2021 (referred to as the "First Revision").

1 The breakdown of the expenses in relation to the Disposal are related to the professional fees (RM0.435 million), regulatory fees (RM0.025 million), other incidental expenses (RM0.225 million) and referral fee* (RM5.4 million). The referral fee* represented 1.5% of the Disposal Consideration amounting to SGD1,734,191 (equivalent to approximately RM5,353,621 based on the exchange rate of SGD1:RM3.0871 as at 14 June 2017 (Source: Bank Negara Malaysia) which was paid by Laviani to Sino City Asia Limited ("Sino") for its role and efforts in introducing

Lucrum to Laviani.

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2.3.2 Details of the First Revision are set out in the table below:

Purposes	Original	Actual	Remaining	First Revision	Reallocation
	proposed	utilisation as	unutilised		amount after
	utilisation	at 30 June	balance as at		the First
		2019	30 June 2019		Revision
	(RM'000)	(RM'000)	(RM'000)	(RM'000)	(RM'000)
Future investments	200,000	(47,500)	152,500	(86,000)	66,500
General working	154,095	(154,095)	-	86,000	86,000
capital
Expenses in	6,085	(6,085)	-	-	-
relation to the
Disposal
Total	360,180	(207,680)	152,500	-	-

1. The First Revision was undertaken by the Board due to the following reasons:
2. 1. The Company's initial intention was to expand its primary business activities as well as further expansion into other business segments to enhance their respective contributions to Star Media Group. While the Company had utilised RM47.50 million in the OTT segment, the Company had not identified suitable investment(s) which would in the best interest of the Company. Accordingly, it was decided to re-allocate RM86.0 million out of the Balance Disposal Proceeds which was initially earmarked for future investments to general working capital for the purposes of repaying trade and other payables as well as staff salaries.
   2. The allocation of the proceeds for general working capital purposes is expected to further enhance the cash flow and financial position of the Company.
3. The First Revision had resulted in additional funds of RM86.0 million being available to be utilised for the Company's working capital purposes. In the absence of such funds being available, the
   Company might have required other sources of financing such as bank borrowings, which would have incurred interest charges. As a result of the First Revision, the Company did not incur such interest charges, resulting in enhanced cash flow, earnings and financial position of the Company.
4. The First Revision was not subjected to any regulatory authorities' or shareholders' approval on the basis that the variation was not considered material as the percentage of variation was approximately 24% of the total proceeds from the Disposal. The Company continued to provide the status update of the utilisation of the Disposal Proceeds in the relevant section entitled "Status of corporate proposal announced" in the Notes to the Quarterly Financial Reports on a quarterly basis.
5. The revised timeframe for the First Revision which was due in July 2021 was extended to July 2023 as the Group continued to identify and evaluate growth opportunities through potential mergers and acquisitions. The disclosure was provided in "Note B6 - Status of corporate proposal announced" in the Quarterly Results ("QR") of the Company for FPE 30 June 2021 which was announced to Bursa Securities on 26 August 2021.
6. Subsequently, the timeframe for utilisation of the Remaining Balance which was due in July 2023 was further extended to 31 December 2024 and the disclosure was provided in "Note B6 - Status of corporate proposal announced" in the QR of the Company for FPE 30 June 2023 which was announced to Bursa Securities on 22 August 2023.

2.4 Details of the Proposed Variation

In the Proposed Variation, the Board intends to re-allocate the entire Remaining Balance for future investments to working capital and to extend the timeframe for utilisation from 31 December 2024 to 30 June 2025.

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The working capital is intended to support the expenses for the Company's day-to-day operations which include, but are not limited to, financing its daily operations and operating expenses which include payment to employees, suppliers and vendors for capital and operational expenditures as well as any potential strategic investment opportunities and/or product offerings. The actual amount to be utilised for the working capital requirements may differ subject to the operating requirements at the time of utilisation.

2.4.1 For ease of information, the proposed or intended utilisation of the proceeds in respect of the Remaining Balance are set out in the table below:

Purposes	Total	%
	(RM'000)
Payments to employees	33,400	50.2
Payments to suppliers and vendors for capital and operational	33,100	49.8
expenditures
Potential strategic investment opportunities*1	-	0.0
Total	66,500	100.0

Notes:

*1) The Company has been constantly identifying future prospective businesses and/or investments to utilise the earmarked proceeds as stated in the First Revision. As at the LPD, the Board has not identified any viable potential investment opportunities which would require utilisation of proceeds in respect of the Remaining Balance. If and when suitable investment opportunities have been identified by the Company, the funds will be utilised from the available proceeds in respect of the Remaining Balance. However, if no such investment opportunities are identified by 30 June 2025, the Company intends for the proceeds in respect of the Remaining Balance to be utilised for working capital purposes, in the manner as set out in the table above.

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