Scanwolf : Minutes of 17th AGM

SCANWOLF CORPORATION BERHAD

Company Registration No. 200601021156 (740909-T)

(Incorporated in Malaysia)

MINUTES OF THE SEVENTEENTH ANNUAL GENERAL MEETING ("17TH AGM") OF THE COMPANY HELD AT AGATE ROOM (LEVEL G), AVANTE HOTEL, NO. 1, PERSIARAN BANDAR UTAMA, BANDAR UTAMA, 47800 PETALING JAYA, SELANGOR, MALAYSIA ON THURSDAY, 30 NOVEMBER 2023 AT 10.30 A.M.

Present	: Directors
	Tan Sri Dato' Sri Haji Syed Zainal	Chairman of Meeting/ Independent Non-
	Abidin Bin Syed Mohamed Tahir	Executive Chairman
	Dato' Dr. Chew Chen Yee	Non-IndependentNon-Executive Deputy
		Chairman
	Dato' Tan Sin Keat	Executive Director
	Mr. Ng Chee Wai	Executive Director
	Dato' Cheong Chen Khan	Non-IndependentNon-Executive Director
	Mr. Khoo Kien Hoe	Independent Non- Executive Director
	Mr. Lim Kian Huat	Independent Non- Executive Director
	Ms. Lee Pei Fen	Independent Non- Executive Director

Members, Corporate Representatives and Proxies

as per the Summary of Attendance List attached

By Invitation	: Mr. Teoh Teik Kean	Adviser
	Mr. Cheah Weng Fai	Representative from PKF PLT, External
		Auditors
	Ms. Puvaneswary Naidu Nyahnan	Representative from PKF PLT, External
		Auditors
In Attendance	: Mr. Tee Thiam Chai	Company Secretary
	Miss Nurliyana Nadhirah	Representative of Company Secretary
	Ms. Low Wei Mun	Representative of Company Secretary

CHAIRMAN

The Chairman welcomed the members and attendees to the Company's 17th AGM and introduced members of the Board of Directors, Company Secretary and Representatives from PKF PLT, External Auditors, to the shareholders.

NOTICE

The Notice of the 17th AGM, having been circulated earlier to all members of the Company and advertised in a local vernacular, New Straits Times within the prescribed period, was taken as read.

SCANWOLF CORPORATION BERHAD

COMPANY REGISTRATION NO. 200601021156 (740909-T)

MINUTES OF THE 17TH ANNUAL GENERAL MEETING HELD ON 30 NOVEMBER 2023

QUORUM

Upon confirming the presence of the requisite quorum pursuant to Clause 71 of the Constitution of the Company, the Chairman called the meeting to order at 10.30 a.m.

ADMINISTRATIVE MATTERS

The Chairman informed that pursuant to Paragraph 8.29A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in the notice of a general meeting must be voted by poll. The Chairman demanded for a poll to be carried out on all the resolutions as stated in the Notice of 17th AGM pursuant to the Constitution of the Company and informed that the poll would be conducted after all items on the agenda were dealt with.

The Chairman further informed that the Company had appointed Tricor Investor & Issuing House Sdn Bhd ("TIIH") as the poll administrator to conduct the polling process and Asia Securities Sdn. Bhd. as the Independent Scrutineers to validate the poll results.

1. AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
   TOGETHER WITH THE DIRECTORS' AND AUDITORS' REPORTS THEREON ("AFS
   2023")
   The Chairman informed that the AFS 2023 was meant for discussion only as the Companies Act 2016 did not require a formal approval of the shareholders for the AFS 2023. Therefore, the item was not put forward for voting.
   The Chairman also informed that the Company had on 22 November 2023 received a letter from the Minority Shareholders Watch Group ("MSWG") raising a few questions pertaining to the Company's Operational, Financial and Corporate Governance Matters.
   The Company's responses, which were presented on the screen at the 17th AGM and read out by Management, is attached hereto as "Appendix A".
   As there was no question raised from the floor, the Chairman declared that the AFS 2023 be received.
2. ORDINARY RESOLUTION 1
   RE-ELECTION OF TAN SRI DATO' SRI HAJI SYED ZAINAL ABIDIN BIN SYED
   MOHAMED TAHIR WHO RETIRES BY ROTATION PURSUANT TO CLAUSE 95 OF THE
   COMPANY'S CONSTITUTION
   As Ordinary Resolution 1 is concerning the Chairman and for corporate governance best practice, the Chairman passed the 17th AGM chair to Dato' Cheong Chen Khan, the Executive
   Director, to take the meeting through the resolution.
   Dato' Cheong Chen Khan put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT Tan Sri Dato' Sri Haji Syed Zainal Abidin Bin Syed Mohamed Tahir who is retiring pursuant to Clause 95 of the Constitution of the Company, be re-elected as Director of the
   Company."

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SCANWOLF CORPORATION BERHAD

COMPANY REGISTRATION NO. 200601021156 (740909-T)

MINUTES OF THE 17TH ANNUAL GENERAL MEETING HELD ON 30 NOVEMBER 2023

There being no question from the shareholders, Dato' Cheong Chen Khan passed the chair back to the Chairman.

1. ORDINARY RESOLUTION 2
   RE-ELECTION OF DATO' TAN SIN KEAT WHO RETIRES BY ROTATION PURSUANT TO
   CLAUSE 95 OF THE COMPANY'S CONSTITUTION
   The Chairman proceeded to the next agenda item which was on the re-election of Dato' Tan Sin Keat.
   The Chairman put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT Dato' Tan Sin Keat who is retiring pursuant to Clause 95 of the Constitution of the Company, be re-elected as Director of the Company."
   There being no question from the shareholders, the Chairman moved to the next agenda.
2. ORDINARY RESOLUTION 3
   RE-ELECTION OF MS. LEE PEI FEN WHO RETIRES BY ROTATION PURSUANT TO
   CLAUSE 102 OF THE COMPANY'S CONSTITUTION
   The next agenda item was on the re-election of Ms. Lee Pei Fen.
   The Chairman put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT Ms. Lee Pei Fen who is retiring pursuant to Clause 102 of the Constitution of the Company, be re-elected as Director of the Company."
   As there were no question from the shareholders, the Chairman moved to the next agenda.
3. ORDINARY RESOLUTION 4
   PAYMENT OF DIRECTORS' FEES AND BENEFITS AMOUNTING TO RM384,000.00 FOR THE FINANCIAL YEAR ENDING 30 JUNE 2024
   The next agenda item was on the payment of Directors' fees and benefits for the financial year ending 30 June 2024.
   The Chairman put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT the payment of Directors' fees and benefits amounting to RM384,000.00 for the financial year ending 30 June 2024 be approved."
   The Chairman moved on to the next agenda as there were no question raised from the shareholders.

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SCANWOLF CORPORATION BERHAD

COMPANY REGISTRATION NO. 200601021156 (740909-T)

MINUTES OF THE 17TH ANNUAL GENERAL MEETING HELD ON 30 NOVEMBER 2023

1. ORDINARY RESOLUTION 5
   RE-APPOINTMENT OF MESSRS. PKF PLT AS AUDITORS OF THE COMPANY
   Ordinary Resolution 5 was on the re-appointment of Messrs. PKF PLT as Auditors of the Company.
   The Chairman put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT Messrs. PKF PLT be hereby re-appointed as Auditors of the Company at a fee to be agreed upon with the Directors and to hold office until the conclusion of the next Annual
   General Meeting."
   There being no question from the shareholders, the Chairman moved to the next agenda.
2. ORDINARY RESOLUTION 6
   AUTHORITY TO ISSUE AND ALLOT SHARES OF THE COMPANY PURSUANT TO SECTIONS 75 & 76 OF THE COMPANIES ACT 2016
   The Chairman informed that Ordinary Resolution 6 was on the authority for Directors to issue and allot shares pursuant to Sections 75 and 76 of the Companies Act 2016.
   The Chairman put the following motion to the meeting for consideration and informed that the poll would be conducted later:
   "THAT pursuant to Sections 75 and 76 of the Companies Act 2016, Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities") ("Listing Requirements") and the approval of the relevant regulatory authorities, where such approval is required, the Directors of the Company be and are hereby authorised to issue and allot shares in the capital of the Company, grant rights to subscribe for shares in the Company, convert any securities into shares in the Company, or allot shares under an agreement or option of offer ("New Shares") from time to time, at such price, to such persons and for such purposes and upon such terms and conditions as the Directors may in their absolute deem fit, provided that the aggregate number of such New Shares to be issued, to be subscribed under any rights granted, to be issued from conversion of any security, or to be issued and allotted under an agreement or option or offer, pursuant to this resolution, when aggregated with the total number of any such New Shares issued during the preceding 12 months does not exceed 10% of the total number of issued shares (excluding any treasury shares) of the
   Company for the time being ("Proposed General Mandate").
   THAT such approval on the Proposed General Mandate shall continue to be in force until:
3. 1. the conclusion of the next Annual General Meeting of the Company held after the approval was given;
   2. the expiration of the period within which the next Annual General Meeting of the Company is required to be held after the approval was given; or
   3. revoked or varied by resolution passed by the shareholders of the Company in a general meeting,

whichever is the earlier.

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SCANWOLF CORPORATION BERHAD

COMPANY REGISTRATION NO. 200601021156 (740909-T)

MINUTES OF THE 17TH ANNUAL GENERAL MEETING HELD ON 30 NOVEMBER 2023

THAT pursuant to Section 85 of the Companies Act, read together Clause 57 of the Constitution of the Company, approval be and is given to waive the statutory pre-emptive rights of the shareholders of the Company to be offered new shares ranking equally to the existing issued shares of the Company arising from issuance of New Shares pursuant to the Proposed General Mandate.

THAT the Directors of the Company be and are hereby also empowered to obtain the approval from Bursa Securities for the listing of and quotation for such New Shares on the Main Market of Bursa Securities.

THAT authority be and is hereby given to the Directors of the Company, to give effect to the Proposed General Mandate with full powers to assent to any conditions, modifications, variations and/or amendments as they may deem fit in the best interest of the Company and/or as may be imposed by the relevant authorities.

AND FURTHER THAT the Directors of the Company, be and are hereby authorised to implement, finalise, complete and take all necessary steps and do all acts (including execute such documents as may be required), deeds and things in relation to the Proposed General Mandate."

Ms. Lim Cian Yai, representative of MSWG, raised a question on the sustainability of the Company's liquidity including the proceeds from selling land and banking facilities and whether it would be able to sustain the Company's working capital, as well as whether the Company would exercise the authority to allot shares under Sections 75 and 76 of the Companies Act 2016 ("the Act") if passed by the shareholders at this 17th AGM to raise funds.

Mr. Ng Chee Wai responded that the Group had secured RM9.20 million new banking facilities and received the proceed of RM7.70 million from the disposal of land as highlighted in the Company's responses to MSWG's earlier enquiries to address repayment of loans and working capital. As such, the Group is unlikely to exercise the authority to allot shares under Ordinary Resolution 6 above if passed by the shareholders at this 17th AGM in the near future unless additional funds are required to fund any new business projects or joint ventures.

To Ms. Lim Chai Yai's enquiry on whether the Company has the intention to seek exemption on Section 85 of the Act in relation to the shareholders' pre-emptive rights, Mr. Ng Chee Wai replied that the exemption was included in the mandate under Ordinary Resolution 6 for shareholders' approval.

8. ANY OTHER BUSINESS

The Chairman informed that no notice for other business pursuant to the Companies Act 2016 and the Constitution of the Company had been received.

CONDUCT OF POLL

Having dealt with all the items on the agenda, the Chairman invited the representative of the Poll Administrator to brief the floor on the polling procedures. The meeting then proceeded to conduct the poll on Ordinary Resolutions 1 to 6. The Chairman adjourned the meeting at 11.00 a.m. for the polling and counting of votes.

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SCANWOLF CORPORATION BERHAD

COMPANY REGISTRATION NO. 200601021156 (740909-T)

MINUTES OF THE 17TH ANNUAL GENERAL MEETING HELD ON 30 NOVEMBER 2023

ANNOUNCEMENT OF POLL RESULTS

Upon completion of the counting of votes by the Poll Administrator and verification of the results by the Scrutineer, the Chairman resumed the meeting at 11.20 a.m. for the declaration of the results of the poll.

Based on the poll results, attached hereto as "Appendix B" which was displayed on the screen, the Chairman declared ALL Ordinary Resolutions 1 to 6 carried.

CLOSURE

The Chairman thanked those present for their attendance and closed the meeting at 11.30 a.m.

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APPENDIX A

SCANWOLF CORPORATION BERHAD

Company Registration No. 200601021156 (740909-T)

(Incorporated in Malaysia)

SEVENTEENTH ANNUAL GENERAL MEETING

QUESTIONS FROM MINORITY SHAREHOLDERS WATCH GROUP

Operational & Financial Matters

Q1: For FY2023, Scanwolf remained in losses with a net loss of RM10.4 million (FY2022: - RM17.07 million), primarily due to lower sales recorded in the Manufacturing division. This was the third consecutive year Scanwolf ended a fiscal year in red.

The losses resulted in higher accumulated losses of RM23.7 million (FY2022: RM13.48 million), further lowering Scanwolf's total equity to RM57.4 million from RM67.32 million a year ago. Meanwhile, its total share capital amounted to RM82.02 million.

These numbers raised concerns that Scanwolf might slip into Practice Note 17 status, should the loss-making condition persist. The situation is exacerbated by Scanwolf's persistently loss-making Property Development and Manufacturing division.

Furthermore, external auditor Messrs PKF PLT also raised the issue of going concern of the Group and Company, in light of the net losses recorded by the Group and the Company.

1. Given the net losses position, rising accumulated losses, depleting shareholders' equity, and low cash level, what are the viable strategies to ensure the long-term business continuity and sustainability of Scanwolf?

1. The Group is pursuing various business strategies to increase its revenue and performance:-
   Manufacturing Division:
2. 1. Expansion of new products to secure more orders and contracts.
   2. Focusing on higher margin products.
   3. Increase export customers base by participation in international trade fairs.
   4. Continue strengthen our brand "Scanwolf Flooring".
   5. Continue to emphasize on cost management and efficiency improvement across on operations.

Property Division:

1. Increase aggressive marketing efforts to help clear the inventory holdings.
2. Special bulk purchase rebate offered to buyers.
3. Renting out some unsold units to generate consistent income.

1. What are the prospects of Scanwolf in the near term? When is the Group expected to become profitable? How is the core business of vinyl tiles flooring manufacturing expected to perform in FY2024?

1. The prospects in the near term are expected to slow down, remaining weaker than usual

due to efforts to control inflation impacting the overall market. However, the Group is confident that it will grow next year.

The core business of the Group remains on plastic extrusion, supplying to local and international furniture manufacturers. The plastic extrusion experience slow-down in current financial year due to our customer's largest export destination, the US, continues to experience housing issues. In the event the US starts cutting rates in 2024, the Group expects demand to recover.

The business on vinyl flooring segment is expected to growth in 2024 and expected private consumption to pick up strongly based on the current trend. Furthermore, the Group is actively building our brand name "Scanwolf Flooring" to build the presence in international market.

1. What was the outcome of the 'various business strategies to increase revenue' that were actively pursued by the Board and management?

1. (a) Please refer to above (a).

1. 1. We had disclosed our strategize in the first question.
2. Scanwolf has RM15.33 million of financial liabilities that will be due within the next 12 months from 30 June 2023 onwards (pages 56 and 107 of AR2023). In view of the low cash level of RM200,004, how does the Management plan to cope with the short- term liquidity risk and the cash requirements of the Group?

1. The RM15.33 million financial liabilities consist of RM0.21 million (Term Loan), RM3.02 million (Bridging Loans), RM6.87 million (Bankers' acceptances) and RM5.23 million (Bank Overdrafts).
   A subsidiary of the Group has on 29 May 2023 entered into a Sale and Purchase Agreement to dispose a piece of vacant land known as PT 53480, Kampar Putra, 31900 Kampar, Perak Darul Ridzuan, for a total cash consideration of RM7.70 million and completed on 11 October 2023.
   The proceeds of RM7.70 million is used to fully settle the RM3.02 million (Bridging Loans) on 11 October 2023. The remaining balance of RM4.68 million is for working capital.

Moreover, the Group has accepted RM9.20 million new banking facilities from a local bank in November 2023.

Q2: Despite the best effort to monetise existing inventories, Scanwolf's properties held for sale (primarily located in Kampar) remain sizeable at RM34.38 million as of 30 June 2023 (FY2022: RM37.94 million, Note 14 - Inventories, page 99 of AR2023).

1. What is the current supply and demand dynamics for the involved properties in Kampar?

1. Currently, there isn't any new launch of similar project in Kampar. The demand is a bit slow due to current higher interest rates and often buyers fail to meet certain eligibility requirements to obtain a property loan. However, with the strategies mention in 1(a) above, the Group is optimistic on the sales.

1. When are the inventories expected to be cleared from Scanwolf's book?

1. The Company does not have a definite answer on when the inventories expected to be cleared from the book. However, it is the Company priority to clear it as soon as possible.

Q3: In a reply to MSWG dated 30 November 2022, Scanwolf said it noted the importance of the five-year financial highlights and other indicators and will put them in the next annual report.

However, the Company did not disclose such information in AR2023.

Please provide this information in future annual reports, as it would be more meaningful to shareholders and enable them to compare the past financial performance and trends.

1. The Company will seriously take note of the five-year financial highlights and other indicators in next annual report.

Corporate Governance Matters

Q1: Paragraph 15.08 (2), Chapter 15 Corporate Governance of Bursa Securities Listing Requirements requires directors of listed issuers to undertake continuous training to enable them to discharge their duties effectively.

The board of directors must disclose in annual reports a brief description of the type of training that the directors have attended for the financial year and valid justifications for the non-attendance if the director has yet to attend any training during the financial year.

Based on disclosure in Scanwolf's annual reports (page 22 of AR2023), three out of the eight directors, namely Mr Ng Chee Wai, Mr Khoo Kien Hoe and Ms Lee Pei Fen, have attended training in FY2023.

Please provide the details of the training attended by the other four directors. If they did not attend any training, please state the reasons for the non-attendance.

1. Dato' Dr. Chew Chen Yee attended Mergers and Acquisition Course (兼并 & 收购) on 21
   July 2022 while Dato' Cheong Chen Khan attended Entrepreneur Course (校长 EMBA) on 30 June 2023. The other 2 directors have not attended any training in FY2023. The Board will ensure that all directors will attend at least one course in the next financial year. The company's HR department will be tasked to monitor and ensure that this good corporate governance practice be fulfilled every financial year.