THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

THIS
IF YOUCIRCULAR
ARE IN IS IMPORTANT
ANY DOUBT AS ANDTOREQUIRES
THE COURSE YOUROF IMMEDIATE
ACTION ATTENTION.
TO BE TAKEN, YOU SHOULD CONSULT YOUR
IF
THIS
THISYOU ARE IN IS
CIRCULAR
CIRCULAR ANY
IS DOUBT AS
IMPORTANT
IMPORTANT AND
AND TO THE COURSE
REQUIRES
REQUIRES YOUR
YOUR OF ACTION ATTENTION.
IMMEDIATE
IMMEDIATE TO BE TAKEN, YOU SHOULD CONSULT YOUR
ATTENTION.
STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS
STOCKBROKER, SOLICITOR, ACCOUNTANT,
IF YOU ARE IN ANY DOUBT AS TO THE COURSE OF ACTION TO BE BANK MANAGER OR TAKEN,
OTHERYOU PROFESSIONAL
SHOULD CONSULT ADVISERS
YOUR
IMMEDIATELY.
IMMEDIATELY.
IF
IF YOU
YOU AREARE IN
STOCKBROKER, IN ANY
ANY DOUBT
DOUBT AS
SOLICITOR, ASACCOUNTANT,
TO
TO THE
THE COURSE
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OF ACTION
ACTION
MANAGER TO
TO BEBEORTAKEN,
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OTHER YOU
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SHOULD CONSULT
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STOCKBROKER,
STOCKBROKER,
IMMEDIATELY. SOLICITOR,
SOLICITOR, ACCOUNTANT,
ACCOUNTANT, BANK BANK MANAGERMANAGER OR OR OTHER
OTHER PROFESSIONAL
PROFESSIONAL ADVISERSADVISERS
Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its
Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its
IMMEDIATELY.
IMMEDIATELY.
accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance
accuracy or completeness
Bursa Malaysia and expressly
Securities Berhad takes nodisclaims any liability
responsibility for thewhatsoever
contents offorthis
anyCircular,
loss howsoever arising
makes no from or in as
representation reliance
to its
upon the whole or any part of the contents of this Circular.
upon
Bursathe
Bursa
accuracy whole
Malaysia
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or completeness of theexpressly
Berhad
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takes
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contents of
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representation
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accuracy
upon or
or completeness
completeness
the whole or any part and
and
of theexpressly
expressly
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disclaims any
any liability
of this Circular.liability whatsoever
whatsoever for
for any
any loss
loss howsoever
howsoever arising
arising from
from or
or in
in reliance
reliance
This Circular has been reviewed by CIMB Investment Bank Berhad, the Principal Adviser of IRIS Corporation Berhad (“IRIS”) for
This
uponCircular
upon the has
the whole
whole orbeen
or any reviewed
any part
part of theby
of the CIMB Investment
contents
contents of
of this Bank Berhad, the Principal Adviser of IRIS Corporation Berhad (“IRIS”) for
this Circular.
Circular.
the Proposed Share Issuance (as defined herein).
the
ThisProposed Share
Circular has beenIssuance
reviewed(asbydefined
CIMB herein).
Investment Bank Berhad, the Principal Adviser of IRIS Corporation Berhad (“IRIS”) for
This
ThisProposed
the Circular
Circular has
has been
been
Share reviewed
reviewed
Issuance (asby
by CIMB
CIMB Investment
defined Investment Bank
herein). Bank Berhad,
Berhad, the
the Principal
Principal Adviser
Adviser of
of IRIS
IRIS Corporation
Corporation Berhad
Berhad (“IRIS”)
(“IRIS”) for
for
the
the Proposed
Proposed Share
Share Issuance
Issuance (as
(as defined
defined herein).
herein).

IRIS
IRIS CORPORATION
CORPORATION BERHAD BERHAD
(Company No. 302232-X)
(Company No. 302232-X)
IRIS CORPORATION BERHAD
(Incorporated in Malaysia)
(Incorporated
(Company No.in302232-X)
IRIS CORPORATION Malaysia)
BERHAD
(Incorporated
(Company No.in302232-X)
(Company No. Malaysia)
302232-X)
(Incorporated
(Incorporated in
in Malaysia)
Malaysia)

CIRCULAR
CIRCULAR TO TO SHAREHOLDERS
SHAREHOLDERS
CIRCULAR TO SHAREHOLDERS
CIRCULAR TO SHAREHOLDERS
IN
IN RELATION
RELATION TO TO THE
THE
IN RELATION TO THE
IN RELATION TO THE
PROPOSED
PROPOSED ISSUANCE
ISSUANCE AND
AND ALLOTMENT
ALLOTMENT OF OF 494,380,400
494,380,400 NEW
NEW ORDINARY
ORDINARY SHARES
SHARES IN
IN IRIS
IRIS
(“SUBSCRIPTION
(“SUBSCRIPTION SHARE(S)”)
SHARE(S)”)
PROPOSED ISSUANCE AT AN ISSUE
AT AN ISSUE
AND ALLOTMENT PRICE
OFPRICE OF RM0.12
OF RM0.12
494,380,400 PER
NEWPER SUBSCRIPTION
SUBSCRIPTION
ORDINARY SHARE
SHARESSHARE
IN IRIS
REPRESENTING
PROPOSED
REPRESENTING APPROXIMATELY
ISSUANCE
APPROXIMATELY
(“SUBSCRIPTION SHARE(S)”) AT 20%
AND ALLOTMENT OF
OF THE
20%ISSUE
AN OF
THE TOTAL
OF NUMBER
494,380,400
TOTAL
PRICE NEWPER
NUMBER
RM0.12 OF
OF ISSUED
ORDINARY SHARES
ISSUEDSHARES INOF IRIS
IRIS
SHARESSHARE
SUBSCRIPTION OF IRIS
REPRESENTING CORPORATION
(“SUBSCRIPTION
CORPORATION
APPROXIMATELY BERHAD
SHARE(S)”) AT AN
20%ISSUE
BERHAD (“PROPOSED
PRICE
OF(“PROPOSED
THE TOTAL SHARE
OF NUMBER
RM0.12 ISSUANCE”)
SHAREPEROF SUBSCRIPTION
ISSUANCE”)
ISSUED SHARESSHARE
OF IRIS
REPRESENTING APPROXIMATELY 20% OF(“PROPOSED
CORPORATION BERHAD THE TOTAL NUMBER OF ISSUED SHARES OF IRIS
SHARE ISSUANCE”)
AND
CORPORATION BERHAD (“PROPOSED
AND SHARE ISSUANCE”)
AND
NOTICE
NOTICE OF
OF EXTRAORDINARY
AND GENERAL
EXTRAORDINARY GENERAL MEETING
MEETING
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal
Principal Adviser
Adviser
Principal Adviser
Principal Adviser

CIMB
CIMB Investment
Investment Bank Bank Berhad
Berhad
(Company No. 18417-M)
CIMB (Company No. 18417-M)
Investment Bank Berhad
(A Participating Organisation of Bursa Malaysia Securities Berhad)
(A Participating Organisation
CIMB of No.
Investment
(Company Bursa Malaysia
Bank Securities Berhad)
Berhad
18417-M)
(A Participating Organisation
(Company
(Company of No.
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18417-M)
The Notice of the Extraordinary(A (AGeneral
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The Notice of the Extraordinary General Meeting (“EGM”) of IRIS which is to be held at The Auditorium, 1st Floor, Lot 8 & 9, IRIS
Smart Technology Complex, Technology Park Malaysia, Bukit Jalil, 57000 Kuala Lumpur on Wednesday, st12 September 2018 at
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should you at 11.00 a.m.
subsequently
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do so.
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Last date
Date and time
and time of thefor
EGMlodging the Form of Proxy :: Wednesday,
Monday, 10 September
12 September 2018 at 11.00
2018 a.m.a.m.
at 11.00
Date
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date time of the
and time
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for lodging
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the Form
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Proxy ::: Monday,
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10 September
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2018 2018
at at 11.00
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Date and time of the EGM : Wednesday, 12 September 2018 at 11.00 a.m.
Date
Date and
and time
time of of the
the EGM
EGM :: Wednesday,
Wednesday, 12 12 September
September 2018 2018 at at 11.00
11.00 a.m.
a.m.
This
This Circular
Circular is
is dated
dated 24
24 August
August 2018
2018
This Circular is dated 24 August 2018
This Circular is dated 24 August 2018
DEFINITIONS

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

2017 Placement : Private placement exercise undertaken by IRIS pursuant to Sections

75 and 76 of the Act which was completed on 7 July 2017

ACE Market : The ACE Market of Bursa Securities

Act : The Malaysian Companies Act, 2016, as amended from time to time
and any re-enactment thereof

Announcement : The announcement dated 14 June 2018 made by CIMB on behalf of

the Company on Bursa Securities for the Proposed Share Issuance

Board : The Board of Directors of the Company

Bursa Securities : Bursa Malaysia Securities Berhad

Caprice : Caprice Development Sdn Bhd

CIMB : CIMB Investment Bank Berhad

Circular : This circular dated 24 August 2018 to the shareholders of IRIS in

relation to the Proposed Share Issuance

Company or IRIS : IRIS Corporation Berhad

Conditions Precedent : The conditions precedent to be fulfilled within the CP Period prior to
the allotment and issuance of the Subscription Shares in favour of
the Subscribers as set out in Section 2.1.2 of this Circular

CP Period : A period of three (3) months from the date of the Subscription
Agreement or such extended period(s) as the Company and the
Subscribers may mutually agree in writing for the fulfilment of the
Conditions Precedent

DPYH : Dato’ Poh Yang Hong

DRAR : Dato’ Rozabil @ Rozamujib bin Abdul Rahman

DSRTYC : Dato’ Sri Robin Tan Yeong Ching

Director : The directors of IRIS and shall have the meaning given in Section
2(1) of the Act and Section 2(1) of the Capital Market Services Act
2007

EGM : Extraordinary general meeting

Encumbrance : Any mortgage, charge (whether fixed or floating), pledge, lien, option
or any other form of security interest or any obligation to create any
of the same created by the Company

EPS : Earnings per share

FYE : Financial year ended/ending, as the case maybe

ICT : Information and communication technology

IRIS Group or Group : IRIS and its subsidiaries, collectively

IRIS Share(s) or Share(s) : Ordinary share(s) in IRIS

ii
DEFINITIONS (cont’d)

Listing Requirements : ACE Market Listing Requirements of Bursa Securities

LPD : 25 July 2018, being the latest practicable date prior to the printing
and despatch of this Circular

Market Day A day on which the stock market of Bursa Securities is opened for
trading in securities

Mazer : Mazer Sdn Bhd

NA : Net assets

PAT : Profit after tax

PATAMI : Profit after tax and minority interest

Proposed Share Issuance : Proposed issuance of the Subscription Shares to the Subscribers

R Capital : R Capital Sdn Bhd

Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions

Share Issuance Price : RM0.12 per Subscription Share

Subscribers : Subscribers to the Subscription Shares, namely DPYH, DRAR and

DSRTYC

Subscription Agreement : The subscription agreement dated 14 June 2018 entered into
between the Company and the Subscribers setting out the terms
and conditions of the Proposed Share Issuance

Subscription Price : The total cash consideration of RM59,325,648.00 to be paid by the

Subscribers pursuant to the Subscription Agreement

Subscription Share(s) : 494,380,400 new ordinary shares representing approximately 20%

of the total issued shares of IRIS to be issued and allotted to the
Subscribers pursuant to the Proposed Share Issuance

Unconditional Date : The date on which the last of the Conditions Precedent has been
duly fulfilled

VWAMP Volume-weighted average market price

CURRENCY

RM and sen : Ringgit Malaysia and sen respectively

USD : United States Dollar

Unless otherwise stated, the information set out in this Circular in relation to the Major Shareholder(s),
Director(s) and person(s) connected with them is as at the LPD.

All references to the “Company” in this Circular are to IRIS and references to the “Group” and “IRIS
Group” are to the Company and its subsidiaries. All references to “you” in this Circular are to the
shareholders of the Company, unless the context otherwise requires.

Words denoting the singular shall 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.

iiii
DEFINITIONS (cont’d)

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 time of day in this Circular shall be a reference to Malaysian time, unless otherwise
stated.

Any discrepancy in the tables between the amounts listed and the totals in this Circular 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 the
Board after due inquiry, 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 Group’s plans and objectives will
be achieved.

(The rest of this page has been intentionally left blank)

iii
iii
TABLE OF CONTENTS

CIRCULAR TO THE SHAREHOLDERS IN RELATION TO THE PROPOSED SHARE ISSUANCE

CONTAINING:

PAGE

1. INTRODUCTION 1

2. DETAILS OF THE PROPOSED SHARE ISSUANCE 2

3 INFORMATION ON THE SUBSCRIBERS 8

4. RATIONALE 8

5. INDUSTRY OVERVIEW, OUTLOOK AND PROSPECTS 9

6. EFFECTS OF THE PROPOSED SHARE ISSUANCE 13

7. HISTORICAL SHARE PRICES 16

8. APPROVALS REQUIRED 17

9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS 17

CONNECTED WITH THEM

10. ESTIMATED TIMEFRAME FOR COMPLETION 18

11. PROPOSALS ANNOUNCED BUT PENDING COMPLETION 18

12. DIRECTORS’ RECOMMENDATION 19

13. EGM 19

14. FURTHER INFORMATION 19

APPENDICES

I. ADDITIONAL INFORMATION ON IRIS GROUP 20

II. FURTHER INFORMATION 24

NOTICE OF EGM ENCLOSED

FORM OF PROXY ENCLOSED

iv
iv
 IRIS CORPORATION BERHAD
(Company No. 30232-X)
(Incorporated in Malaysia)

Registered Office

Level 2, Tower 1, Avenue 5

Bangsar South City
59200 Kuala Lumpur.

24 August 2018

Board of Directors:

Datuk Nik Azman Bin Mohd Zain (Chairman and Non-Independent Non-Executive Director)
Dato’ Poh Yang Hong (President and Group Managing Director) (Non-Independent Executive Director)
Dato’ Rozabil @ Rozamujib Bin Abdul Rahman (Non-Independent Executive Director)
Dato’ Dr. Abu Talib Bin Bachik (Senior Independent Non-Executive Director)
Chan Feoi Chun (Independent Non-Executive Director)
Hussein Bin Ismail (Non-Independent Non-Executive Director)

To: The Shareholders of IRIS

Dear Sir/Madam

PROPOSED ISSUANCE AND ALLOTMENT OF 494,380,400 NEW ORDINARY SHARES IN IRIS AT

AN ISSUE PRICE OF RM0.12 PER SUBSCRIPTION SHARE (“PROPOSED SHARE ISSUANCE”)

1. INTRODUCTION

On 14 June 2018, CIMB had, on behalf of the Board, announced that IRIS had entered into a
Subscription Agreement with the Subscribers for the Proposed Share Issuance. Additionally on
20 June 2018, we had provided further information on the basis of determining and justification
for the issue price of the Subscription Shares via an announcement made by CIMB on behalf of
the Board.

On 21 August 2018, CIMB had, on behalf of the Board, announced that Bursa Securities, had
vide its letter dated 20 August 2018, resolved to approve the listing of and quotation for the
Subscription Shares on the ACE Market of the Bursa Securities, subject to the terms and
conditions as set out in Section 8 of this Circular.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE RELEVANT

INFORMATION ON THE PROPOSED SHARE ISSUANCE TOGETHER WITH THE
RECOMMENDATION FROM OUR BOARD TO SEEK YOUR APPROVAL ON THE ORDINARY
RESOLUTIONS TO BE TABLED BY WAY OF POLL AT OUR FORTHCOMING EGM. THE
NOTICE OF EGM AND THE FORM OF PROXY ARE ENCLOSED TOGETHER WITH THIS
CIRCULAR.

1
 YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS
CIRCULAR TOGETHER WITH THE APPENDICES CONTAINED HEREIN BEFORE VOTING
ON THE RESOLUTIONS PERTAINING TO THE PROPOSED SHARE ISSUANCE TO BE
TABLED AT THE FORTHCOMING EGM.

2. DETAILS OF THE PROPOSED SHARE ISSUANCE

2.1 Salient terms of the Subscription Agreement

2.1.1 Subscription

Subject to the terms and conditions of the Subscription Agreement, the Subscribers
irrevocably agree to subscribe for, and IRIS agrees to allot and issue to the Subscribers,
the Subscription Shares free from any Encumbrance at the Share Issuance Price for an
aggregate consideration of RM59,325,648.00 only, to be satisfied in full by way of cash,
in accordance with the terms and conditions of the Subscription Agreement, further
details of which are set out below:

Number of % of total issued Subscription

Subscribers Subscription Shares share capital Price (RM)
DSRTYC 247,190,200 10.00 29,662,824
DPYH 197,190,200 7.98 23,662,824
DRAR 50,000,000 2.02 6,000,000
Total 494,380,400 20.00 59,325,648

2.1.2 Conditions Precedent

2.1.2.1 The Proposed Share Issuance is subject to effective fulfilment of the following
Conditions Precedent within a period of 3 months from the date of the
Subscription Agreement or such extended period(s) as the Company and the
Subscribers may mutually agree in writing (“CP Period”):

(i) the approval from Bursa Securities for the listing of and quotation for the
Subscription Shares on the ACE Market of Bursa Securities;

(ii) the approval from the shareholders of the Company for the Proposed
Share Issuance; and

(iii) the approval and/or consent of any other relevant authorities/parties, if

required.

As soon as practicable after the date of the Subscription Agreement, the

Company shall take the necessary steps to obtain the approvals referred to in
clauses 2.1.2.1(i) and 2.1.2.1(ii) above.

2.1.2.2 Non-fulfilment of the Conditions Precedent

Subject to the terms and conditions of the Subscription Agreement, if all or any
of the Conditions Precedent is not fulfilled, the Subscription Agreement shall
cease and determine upon the expiry of the CP Period. Thereafter, neither party
shall have any claims against the other save for any antecedent breach.

2.1.2.3 The Unconditional Date

The Subscription Agreement shall become unconditional on the date of which

the last of the Conditions Precedent has been fulfilled.

2
2
2.1.3 Subscribers’ obligations are several

The obligations of the Subscribers to subscribe the Subscription Shares under this
Proposed Share Issuance are separate and several. Nothing shall create or constitute
any form of partnership, joint venture or similar business relationship between the
Subscribers. Each Subscriber shall not bind the other Subscribers in any way
whatsoever to anyone. Each Subscriber is not a legal representative of the other
Subscribers, and each Subscriber shall not assume or create any obligation,
representation, warranty or guarantee, express or implied, on behalf of the other
Subscribers for any purpose whatsoever.

2.1.4 No opt out

The Subscribers hereby, jointly and severally, expressly and unconditionally agree,
covenant and undertake with the Company that upon the Company making the
announcement on the Bursa Securities of the Proposed Share Issuance, the Subscribers
shall not be entitled to opt out their obligations to subscribe for the Subscription Shares
under and pursuant to Subscription Agreement for the period commencing from the
Announcement date to the completion notwithstanding the fall in price for the Company's
shares within such period.

2.1.5 Post completion moratorium / lock-in period

Subject to the completion of the Proposed Share Issuance provided herein, the
Subscribers hereto hereby expressly irrevocably agree and acknowledge that no
Subscriber shall directly or indirectly, offer, sell, pledge, contract to sell, grant any option
to purchase or otherwise dispose of the Subscription Shares or any part thereto for a
period of 3 months from the listing of the Subscription Shares on the ACE Market of
Bursa Securities.

2.1.6 Payment and delivery of Subscription Shares

2.1.6.1 The Company shall procure that the Subscription Shares are credited to the
respective omnibus accounts and/or the central depository system accounts of
the Subscribers or their nominees or custodians as specified by the placement
agent through the facilities of the Bursa Malaysia Depository Berhad, on the
allotment date and the names of the Subscriber or their nominees or custodians
as specified by the placement agent shall be entered into the records of
depositors of the Company.

2.1.6.2 The Subscribers shall procure that payment of the Subscription Price with
respect to the Subscription Shares being subscribed by the respective
Subscriber is paid to the placement agent within a period of 5 market days from
the price-fixing date. Upon the total Subscription Price being received by the
placement agent and the placement agent having given confirmation to the
Company’s share registrar that the subscription monies are in place, the
Company on the allotment date, procure the delivery and crediting of the
Subscription Shares in accordance with Section 2.1.6.1 above.

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 2.1.7 Termination of the Subscription Agreement

If any of the following take place, either the Subscribers or the Company may terminate
the Subscription Agreement at any time prior to the completion of the same:

(i) an order is made or an effective resolution is passed for the winding up of the
Company;

(ii) a receiver, receiver and manager, judicial manager, liquidator, administrator or

like official is appointed over the whole or substantial part of the undertaking or
property of the Company;

(iii) a holder of an Encumbrance takes possession of the whole or any substantial

part of the undertaking or property of the Company;

If the Subscription Agreement is terminated as stipulated above, each party shall retain
the rights it has against the other in respect of any breach of the Subscription Agreement
occurring before the termination, or the following may take place:

(i) to defer the completion of the Proposed Share Issuance to such date as may be
mutually agreed by the Parties in writing; or

(ii) to proceed with the completion of the Proposed Share Issuance (without
prejudice to the Parties’ rights under the Subscription Agreement).

2.1.8 Completion

The completion of the Proposed Share Issuance under the Subscription Agreement shall
take place on the date of listing of the Subscription Shares on the ACE Market of Bursa
Securities after the payment of the Subscription Price by the Subscribers under Clause
2.1.6 hereof.

The Subscribers have confirmed that they have sufficient financial resources to subscribe for the
Subscription Shares pursuant to the Subscription Agreement and CIMB has verified the
sufficiency of financial resources of the Subscribers for the subscription of the Subscription
Shares.

2.2 Basis and justification of determining the issue price of the Subscription Shares

The issue price of RM0.12 per Subscription Share was arrived at on a willing-buyer willing seller
basis after taking into consideration the following:

(i) the prevailing market conditions;

(ii) the 5-day VWAMP of IRIS Shares; and

(iii) the intended utilisation of the gross proceeds to be raised from the Proposed Share
Issuance, as set out in Section 2.6 of this Circular.

The Share Issuance Price represents a discount of approximately 11.0% to the 5-day VWAMP of
IRIS Shares up to and including 13 June 2018, being the last trading day prior to the date of the
Announcement of RM0.1349 (“LTD”).

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 In addition, the Share Issuance Price represents the following discounts against the historical
share price of IRIS:
Share price Discount
RM RM %

Last transacted price of IRIS Shares as at the LTD 0.1300 0.0100 7.7

5-day VWAMP of IRIS Shares up to and including the LTD 0.1349 0.0149 11.0

1-month VWAMP of IRIS Shares up to and including the LTD 0.1342 0.0142 10.6

6-month VWAMP of IRIS Shares up to and including the LTD 0.1853 0.0653 35.2

1-year VWAMP of IRIS Shares up to and including the LTD 0.1812 0.0612 33.8

The Company also disclosed in its interim financial report for the fourth quarter ended 31 March
2018 (“Interim Report”), the current business environment for financial year 2019 (“FY2019”) is
expected to remain challenging for IRIS Group. For the Proposed Share Issuance, the
Subscribers namely Dato’ Sri Robin Tan Yeong Ching, Dato’ Poh Yang Hong and Dato’ Rozabil
@ Rozamujib Bin Abdul Rahman had expressed their acceptance to participate in the Proposed
Share Issuance at the issue price of RM0.12 per IRIS Share. The Board recognises that the
Proposed Share Issuance will enable IRIS to raise funds to meet its working capital
requirements and to capitalise on future business projects/investments, as and when such
opportunity arises, without incurring additional interest costs as compared to bank borrowings.

After due consideration of IRIS Group’s financial position and the rationale for the Proposed
Share Issuance which is disclosed in Section 4 of this Circular, the Board decided to apply a
discount rate of approximately 11.0% to the 5-day VWAMP of IRIS Shares up to and the LTD of
RM0.1349 to derive the issue price of RM0.12 per Subscription Share as it was necessary to
secure the participation of the Subscribers in the Proposed Share Issuance.

2.3 Implication of the Rules

By virtue of their interests in Caprice, DPYH and DRAR are deemed to be persons acting in
concert with each other based on Section 216(2) of the Capital Market and Services Act, 2007.

According to Rule 4.01 of the Rules, where a group of persons acting in concert holds more than
33% of the voting shares or voting rights of a company, any member of the group will incur a
mandatory offer obligation if he acquires voting shares or voting rights resulting in him:

(a) Acquiring more than 33% of the voting shares or voting rights of the company; or

(b) Acquiring more than 2% of the voting shares or voting rights of the company in any 6
month period (when the person already holds more than 33% but not more than 50% of
the voting shares or voting rights of the company.

As at the LPD, DPYH(1) and DRAR(2) collectively holds 11.61% of voting shares in IRIS.
Accordingly, the subscription by DPYH and DRAR of 247,190,200 of Subscription Shares will not
give rise to any consequence of mandatory general offer obligation pursuant to the Rules as the
shareholdings of DPYH and DRAR after the Proposed Share Issuance will not result in them
having more than 33% of the voting shares in IRIS, collectively.

Notes:

(1) Pursuant to DPYH’s interest in Caprice.

(2) Pursuant to DRAR’s interest in Caprice, R Capital and Mazer.

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2.4 Ranking of Subscription Shares

The Subscription Shares shall, upon allotment and issuance, rank pari passu in all respects with
the existing IRIS Shares, save and except that the Subscriptions Shares will not be entitled to
any dividends, rights, allotments and/or any other distributions that may be declared, made or
paid for which the entitlement date precedes the date of allotment and issuance of the
Subscription Shares.

2.5 Listing of and quotation for the Subscription Shares

The approval has been obtained from the Bursa Securities vide its letter dated 20 August 2018
for the listing of and quotation for the Subscription Shares on the ACE Market of the Bursa
Securities.

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2.6 Utilisation of proceeds

Based on the Share Issuance Price and the issuance of 494,380,400 Subscription Shares
pursuant to the Proposed Share Issuance, IRIS is expected to raise gross proceeds of
approximately RM59.33 million. The gross proceeds raised from the Proposed Share Issuance
are proposed to be utilised by IRIS Group in the following manner:

Proposed utilisation of proceeds RM 000 Expected timeframe for utilisation

Working capital, future business 58,826 Within 12 months from the completion of
projects / investment(1) the Proposed Share Issuance

Estimated expenses(2) 500 Within 1 month

Total proceeds 59,326

Notes:

(1) The Company proposes to utilise up to RM58,826,000 of the proceeds to be raised from the
Proposed Share Issuance to meet its working capital requirements and/or for future business
projects/investments which is complementary to IRIS’s current business operations.

The future business projects/investments comprise bidding for various trusted identification
projects in Africa, Asia, Asia Pacific and North America regions whereby depending on the local
tendering requirements, IRIS may either be the main contractor/supplier or a supplier to a local
partner.The allocation of proceeds for these future business projects/investments is approximately
RM8.00 million. This will cover the expenses to be incurred for the projects which include but is
not limited to sales and marketing expenses and preliminary expenses for the future business
projects/investment such as professional fees and start-up costs. The Company shall make the
requisite announcement and seek shareholders’ approval, if required in accordance with the
Listing Requirements, as and when the future business projects/investments are confirmed.

The balance proceeds of approximately RM50.83 million shall be allocated for working capital
purposes as follows:

Working capital RM 000 %

Purchase of raw materials and payment of trade creditors (suppliers & 43,826 86.20%
contractors)
Staff salaries & allowances, wages and statutory payments 6,000 11.80%
General office expenses, mainly for utilities charges 500 1.00%
Other operating expenses, mainly for the upkeep and maintenance of 500 1.00%
existing office premises
Total 50,826 100.00%

The actual utilisation for working capital may differ subject to investment opportunities, timing and
operating cash flow requirements of IRIS Group.

(2) Including amongst others, professional fees, placement fee and fees to relevant authorities. If the
actual expenses related to the Proposed Share Issuance differ from the estimated amount above,
the excess/shortfall will be adjusted to working capital, future business projects/investment and
vice versa.

Pending the utilisation of proceeds from the Proposed Share Issuance for the above purposes,
the proceeds will be placed in deposits with financial institutions or short term money market
instruments.

We wish to highlight that prior to the Proposed Share Issuance, IRIS had undertaken a private
placement exercise pursuant to Sections 75 and 76 of the Act which was completed on 7 July
2017. Please refer to Section 2 of Appendix I of this Circular for further details on the utilisation
of proceeds raised from the 2017 Placement.

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3. INFORMATION ON THE SUBSCRIBERS

3.1 Information on DPYH

DPYH is the President and Group Managing Director of IRIS. He is also a Non-Independent
Executive Director of IRIS. DPYH is a major shareholder of IRIS via his direct interest of 0.69%
and indirect interest of 10.26% by virtue of his interest in Caprice pursuant to Section 8 of the Act.

Save for except as disclosed above, DPYH does not have any family relationship with any
director and/or major shareholder of IRIS and does not have any conflict of interest with IRIS.

3.2 Information on DRAR

DRAR is currently a Non-Independent Executive Director of IRIS and a major shareholder of IRIS
via his indirect interest of 10.92% by virtue of his interest in Caprice, R Capital and Mazer
pursuant to Section 8 of the Act.

Save as disclosed above, DRAR does not have any family relationship with any director and/or
major shareholder of IRIS and does not have any conflict of interest with IRIS.

3.3 Information on DSRTYC

DSRTYC is the Chief Executive Officer and Executive Director of Berjaya Corporation Berhad,
the Chairman and Non-Independent Non-Executive Director of Berjaya Media Berhad and the
Non-Independent Non-Executive Director of Atlan Holdings Berhad.

DSRTYC does not have any family relationship with any director and/or major shareholder of
IRIS, does not have any conflict of interest with IRIS and is not a person connected with any
director and/or major shareholder of IRIS.

4. RATIONALE

The Proposed Share Issuance will enable IRIS to raise funds to meet its working capital
requirements and/or to finance future business projects/investments, as and when such
opportunity arises, without incurring additional interest costs as compared to bank borrowings.

After due consideration of the various funding options available to the Company, the Board is of
the view that the Proposed Share Issuance is the most appropriate avenue for the Company to
raise funds as the Proposed Share Issuance will:

(i) enable the Company to raise funds expeditiously without relying entirely on equity
funding from the existing shareholders of the Company as compared to a proportionate
issuance of new Shares in a rights issue scenario, which would typically entail a longer
implementation time and may prove to be challenging in terms of securing underwriting
given current market conditions;

(ii) allow the Company to raise funds without incurring interest costs or service principal
repayments as compared to bank borrowings; and

(iii) strengthen the financial position of the Company by virtue of an increase in the capital
base of the Company.

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 In addition to the above, as you may be aware, IRIS’s financial position has been deteriorating
over the years as IRIS had been reporting losses for the past 3 financial years mainly due to the
poor performance of IRIS’s non-core businesses. This had resulted in the reduction of IRIS’s
shareholders’ equity from RM550 million in FYE 2016 to RM193 million in FYE 2018. The poor
financial performance had also impacted the current ratio of IRIS, which had been on a declining
trend since FYE 2016. Altogether, the current financial condition of IRIS has made it challenging
for IRIS to raise funds from the debt market. Accordingly, IRIS had to undertake the Proposed
Share Issuance instead.

How the Proposed Share Issuance will impact shareholders of the Company as well as create
value to the Company and its shareholders

As highlighted in Section 4(ii) above, the Proposed Share Issuance will allow the required funds
to be raised without incurring additional interest costs which will further impact the profitability
and cash flow of the Company. On top of interest savings, as discussed in Section 6.2 below,
the Proposed Share Issuance will also enlarge the share capital base of the Company and thus,
lower the Company’s gearing ratio and increase the NA per share of the Company. IRIS is also
hopeful that the successful implementation of the Proposed Share Issuance and the participation
of DPYH and DRAR, its existing substantial shareholders and DSRTYC will potentially restore
some of the confidence of its stakeholders.

Adequacy of the Proposed Share Issuance to address the financial concerns of IRIS Group and
the steps taken to address the financial concerns of IRIS Group

The Board wishes to highlight that the Proposed Share Issuance is only a short term measure in
addressing IRIS’s current financial condition. The Proposed Share Issuance is expected to
provide a better footing for IRIS to continue to focus on revitalising the trusted identification
business that IRIS has strength in and exit its non-core, loss-making businesses. In FYE 2018,
IRIS has disposed its loss making education division and has implemented a plan to manage the
completion of remaining loss-making sustainable development projects by phasing out the
business. IRIS has also completed the disposal of its entire equity interest in Regal Energy
Limited (which in turn holds 65% equity interest in Weinan IRIS Envirowerks Zhouji Renewable
Resources Co., Ltd.) on 26 July 2018. In the long run, the Board and the management of IRIS
are hopeful that these efforts shall improve IRIS’s financial performance and bring value to its
stakeholders.

5. INDUSTRY OVERVIEW, OUTLOOK AND PROSPECTS

5.1 Overview and outlook of the Malaysian economy

The Malaysian economy performed strongly in 2017, registering a growth of 5.9% (2016: 4.2%).
Growth was anchored by domestic demand, reflecting faster expansion in both private and public
sector spending. Similar to the region, Malaysia benefited from the broad-based global recovery,
with gross exports increasing at its fastest pace since 2004. The materialisation of positive
spillovers from the external sector further reinforced domestic demand.

In this positive environment, Malaysia is projected to remain firmly on a steady growth path to
grow by 5.5% – 6.0% (2017: 5.9%).

(Source: Extracted from Bank Negara Malaysia Annual Report 2017)

The Malaysian economy expanded by 5.4% in the first quarter of 2018 (4Q 2017: 5.9%), driven
by continued growth in private sector spending (5.2%; 4Q 2017: 7.4%) and strong growth in net
exports (62.4%; 4Q 2017: 2.3%). On a quarter-on-quarter seasonally-adjusted basis, the
economy grew by 1.4% (4Q 2017: 1.0%).

Domestic demand recorded a moderate growth of 4.1% (4Q 2017: 6.2%), due to lower growth of
private sector expenditure (5.2%; 4Q 2017: 7.4%) and a marginal decline in public sector
spending (-0.1%; 4Q 2017: +3.4%).

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 Private consumption registered a sustained growth of 6.9% (4Q 2017: 7.0%), supported by
continued strength in wage and employment growth. Growth of private investment moderated to
0.5% (4Q 2017: 9.2%). Private investment was weighed down by lower capital spending in
structures, particularly in residential and commercial properties, and machinery and equipment
during the quarter. On a sectoral basis, private investment was supported mainly by the services
sector, particularly the education and healthcare sub-sectors.

Public consumption growth was lower at 0.4% (4Q 2017: 6.8%) on account of lower expenditure
on supplies and services. Public investment continued to decline in the first quarter (-1.0%; 4Q
2017: -1.4%), attributed to the contraction in spending on fixed assets by public corporations.
The lower capital spending by public corporations was due mainly to the near completion of a
few large-scale projects. Gross fixed capital formation (GFCF) growth moderated to 0.1% (4Q
2017: 4.3%). By type of assets, capital spending on machinery and equipment registered a
contraction of 3.6% (4Q 2017: +8.3%). Investment in structures grew more moderately (2.8%; 4Q
2017: 3.3%) while investment in other types of assets recorded a smaller decline of 0.2% (4Q
2017: -6.8%).

In 2018, growth is projected to remain favourable, with domestic demand as the key driver of
growth. The positive growth prospects are supported by continued spill overs from the external
sector to domestic economic activity. Trade performance is expected to benefit from favourable
global demand, new export production capacity and exposure to the global technology cycle.

On the domestic front, leading indicators such as the Department of Statistics Malaysia’s
Composite Leading Index, MIER Business Conditions Index and MIER Consumer Sentiments
Index point toward continued expansion of the economy. Private consumption will be
underpinned by continued wage and employment growth, with support from Government
measures. Investment activity will be supported by capital spending for new and ongoing projects
amid positive business sentiments.

(Source: Economic and Financial Developments in the Malaysian Economy in the First Quarter
of 2018, Bank Negara Malaysia)

5.2 Overview and outlook of the ICT Industry

The government has invested aggressively in improving its international broadband bandwidth,
4G coverage, and cloud capabilities over the past three years. The federal government has also
worked closely with telecom service providers to improve network coverage and affordability.
Malaysia’s significant improvement can be attributed to increased use of ICT among citizens, as
well as an improvement in overall user experience.

Additionally, Malaysia has also prioritized initiatives to encourage the development of smart cities
that encompass a broad range of digital transformation activities, including government services,
education, and transportation. At the same time, policymakers have initiated a range of programs
that target local enterprises to promote the use of cloud computing. The overarching ICT strategy
that brings these activities together has enabled Malaysia to increase the contribution of its digital
economy to account for 17% of its overall national economy in 2016 – one of the highest
percentages in the world, according to the Department of Statistics of Malaysia.

The Department of Statistics of Malaysia (DOSM) reported that the digital economy now
accounts for 17% of its economy – which is extremely high, considering that most nations are at
a single-digit digital share. The ICT services sector, which includes Information Technology
Outsourcing, Business Process Outsourcing, and Knowledge Process Outsourcing, has grown to
account for 40% of the ICT sector, contributing more to the national economy than manufacturing.
Relative to overall Gross Domestic Product performance, ICT services have grown at a CAGR of
9%, contributing 4.8% in 2010 and 5.4% in 2015.

Policymakers in Malaysia have managed to help cultivate a substantial ICT sector by focusing on
digital infrastructure investment to transform the whole economy. As shown in the following figure,
Malaysia’s improvements in international bandwidth and download speeds are impressive, and
are the building blocks for its successful transformation to a digital economy.

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Beyond planning, the central government strongly emphasizes the provision of a sufficient ICT
budget. In the 2016 budget released by the Ministry of Finance, ICT infrastructure investment
was included as the top level, number-one priority for fueling further economic development. In
the 2017 budget, in addition to strengthening digital infrastructure, the government has also
emphasized the importance of enhancing broadband quality and affordability to stimulate digital
content development and build a robust industry ecosystem. At the national level, Malaysia has
implemented policies and regulations aimed at stimulating ICT demand, improving user
experience, and enhancing people's ability to use emerging digital technology. Furthermore, the
government leverages forward-thinking policy frameworks to facilitate Right of Way in the rollout
of network infrastructure, encouraging collaborative planning between municipal construction and
network construction projects.

(Source: GCI APEC 2017 Report – “Quantifying the Value of Digital Infrastructure Development”
published by Huawei Technologies Co., Ltd)

Digital identification (“ID”) cards in global circulation are expected to increase from 1.75 billion in
2013 to 3.3 billion in 2021. Of this, a total of 3.2 billion national ID smart cards will be issued by
103 countries. As of early 2017, 82% of all countries issuing official ID cards have implemented
programs that depend on smart cards or plastic cards and biometrics. Many countries are now
implementing cards with built-in biometric security for their respective national ID programs. The
government of Maldives has recently launched a biometric smart card based national ID called
“Passport Card” for its citizens in collaboration with Mastercard. Contactless smart cards are
increasingly being adopted by many national identity programs such as the German Identity card
and MyKad—the identity card issued by the Government of Malaysia to its citizens.

Experts expect to see as many as 600 million devices with biometric authentication by 2021. By
2020, 50 billion Internet of Things (IoT) devices are forecasted to be in use, and 500 million
biometric sensors will be deployed for IoT by 2018. Indeed, IoT will be a major enabler for
combining analytics and continuous assessment to generate an adequate level of assurance, in
real time, that an individual is who he or she claims to be.

(Source: World Bank. 2018. Technology Landscape for Digital Identification, Washington, DC)

The demand for digital certificates has been increasing, mainly due to growing awareness on
trust and security. As at end 2017, total number of digital certificates issued in Malaysia was
11.04 million (2016: 9.6 million). Public sector is the major contributor to the usage of digital
certificates with 97.1% of total certificates issued. In raising the level of consumer trust towards
digital certificate, several improvements have been made to this service including implementing
Digital Date Time Stamp Services (“DTS”). DTS is expected to promote the use of Public Key
Infrastructure to a higher level and become an important component of the digital ecosystem in
Malaysia.

(Source: Industry Performance Report 2017 by Malaysian Communications and Multimedia

Commission, 2018)

The information and communication sector recorded a strong growth of 8.3% (January – June
2016: 8.6%). The communication segment remained as the major contributor to growth,
sustaining its pace at 9.3% (January – June 2016: 9.8%) following the aggressive promotional
activities by telecommunication companies and introduction of new telephone models.
Meanwhile, information segment grew 5.7% (January – June 2016: 3.6%) and computer services
rose 6.4% (January – June: 7%). The subsector is expected to sustain its strong growth
momentum expanding 8.5% in 2017(2016: 8.1%) supported by launching of latest smartphone
models, price reductions on earlier premium models and an increase in subscriptions to value
added services offered by telecommunication companies.

(Source: 2018 Economic Report by Ministry of Finance Malaysia)

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5.3 Prospects of IRIS

The principal business activities of IRIS are technology consulting and the implementation of
trusted identification, payment, transportation and sustainable development. In terms of its
business operations, the management of IRIS is on track with the Group’s transition to refocus
on its core business and to divest its non-core businesses. With the disposal of IRIS’s education
division(1) and the rationalisation of non-core businesses in the future, the management of IRIS
will be able to focus its resources on its core trusted identification business and capturing new
growth opportunities. IRIS Group is expected to be well positioned to further strengthen its
trusted identification business and to expand its enterprise products and solutions offerings.

In terms of strengthening the trusted identification business, we are on a continuous effort to

enhance our current products and solutions, as well as develop new products and solutions to
ensure that our products and solutions are among the most secure in the world.

For our enterprise products and solutions offerings, we are working hard on developing and
deploying the new Facial Live Capture (“FLC”) KiPPas kiosks, currently utilised by the Malaysian
Immigration Department for automated renewals of Malaysian electronic passports
(“ePassport(s)”). The renewal kiosks complement the current FLC kiosks for new and renewal
passport applications made at immigration counters across the country. In addition, IRIS’s
solutions for ePassport and automated border control solutions have also been updated,
upgraded and are ready to be deployed once the highly anticipated new policy for Logical Data
Structure Version 2.0 is finalised and endorsed by the International Civil Aviation Organisation.

Our products and solutions are mainly developed internally by designated software development
team. In relation thereto, other than the staff costs incidental to the software development team,
other costs to be incurred in relation to new product development is expected to be very minimal.

IRIS Group is expected to continue to derive revenues from the on-going trusted identification
projects in Africa, Asia, Asia Pacific and North America regions. There are exciting opportunities
for growth in the market as highlighted in Section 5.2 of this Circular. In this regard, the
management is of the view that the Proposed Share Issuance is in the best interest of the Group
whereby it enables the Group to raise funds for its day to day operations and future business
opportunities to support the growth of the Group. This shall in turn is expected to contribute
positively to the financial performance of the Group.

In view of the above and barring any unforeseen circumstances which may have an adverse
impact on the business operations of the Group, the management of IRIS is positive about the
Group’s prospects and expects continued growth of IRIS business operations and financial
performance.

(Source: Management of IRIS)

Note:

(1) IRIS had entered into shares sale agreement on 3 May 2018 for the disposal of entire equity
interest in 4 subsidiaries namely Seri Stamford College Sdn Bhd, Stamford College (Malacca) Sdn
Bhd, Platinum Encoded Sdn Bhd and Formula IRIS Racing Sdn Bhd. In accordance with the
shares sale agreement, the effective disposal date is on 31 March 2018.

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6. EFFECTS OF THE PROPOSED SHARE ISSUANCE

6.1 Share capital

The pro forma effects of the Proposed Share Issuance on the issued share capital of IRIS are as
follows:
No. of IRIS Shares RM 000
Issued share capital as at the LPD 2,471,902,462 480,276

To be issued pursuant to the Proposed Share Issuance 494,380,400 59,326(1)

Enlarged issued share capital of IRIS 2,966,282,862 539,602

Note:

(1) Based on the Share Issuance Price.

6.2 NA, NA per IRIS Share and gearing

Based on the latest audited consolidated financial statements of IRIS as at 31 March 2018, the
pro forma effects of the Proposed Share Issuance on the NA, NA per IRIS Share and gearing of
IRIS Group are as follows:
After the
Audited as at Proposed Share
31 March 2018 Issuance
RM 000 RM 000

Share capital 480,276 539,602(1)

Other reserves 41,148 41,148

Accumulated losses (327,605) (328,105)(2)

Total equity attributable to owners of the 193,819 252,645

Company/NA

No. of IRIS Shares in issue 2,471,902,462 2,966,282,862(1)

NA per IRIS Share (RM) 0.08 0.09

Total borrowings (RM 000) 104,507 104,507

Gearing ratio (times) (3) 0.54 0.41

Notes:

(1) After the Proposed Share Issuance of 494,380,400 new IRIS Shares at the Share Issuance Price.

(2) After deducting estimated expenses of RM500,000 for the Proposed Share Issuance.

(3) Gearing ratio is calculated as total borrowings divided by the total equity attributable to owners of the
Company.

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6.3 Earnings and EPS

The Proposed Share Issuance is not expected to have a material impact on the earnings of IRIS
Group for the financial year ending 31 March 2019. However, the EPS of the Group is expected
to be diluted upon the completion of the Proposed Share Issuance as a result of the increase in
the number of IRIS Shares in issue arising from the Proposed Share Issuance.

The Proposed Share Issuance is expected to contribute positively to the future earnings of IRIS
Group arising from the proposed utilisation of proceeds as set out in Section 2.6 of this Circular.

6.4 Convertible securities

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

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6.5 Substantial shareholders’ shareholdings

As at the LPD and based on the Register of Substantial Shareholders of the Company, the pro forma effects of the Proposed Share Issuance on the
shareholdings of the substantial shareholders of IRIS are as follows:
As at the LPD After the Proposed Share Issuance

Direct Indirect Direct Indirect

Substantial Shareholder No. of shares %(1) No. of shares %(1) No. of shares %(2) No. of shares %(2)

Felda Investment Corporation Berhad (“FIC”) 375,806,481 15.20 - - 375,806,481 12.67 - -

Felda Land Development Authority (“FELDA”) - - 375,806,481(3) 15.20(3) - - 375,806,481(3) 12.67(3)

Caprice 253,718,405 10.26 - - 253,718,405 8.55 - -

DPYH 17,000,000 0.69 253,718,405(4) 10.26 214,190,200 7.22 253,718,405(4) 8.55

DRAR - - 270,031,405(5) 10.92 50,000,000 1.69 270,031,405(5) 9.10

DSRTYC - - - - 247,190,200 8.33 - -

Notes:

(1) Based on the issued share capital of 2,471,902,462 IRIS Shares as at the LPD.

(2) Based on the enlarged issue share capital of 2,966,282,862 IRIS Shares after the Proposed Share Issuance.

(3) Deemed interested by virtue of its interest in FIC pursuant to Section 8 of the Act.

(4) Deemed interested by virtue of his interest in Caprice pursuant to Section 8 of the Act.

(5) Deemed interested by virtue of his interest in Caprice, R Capital and Mazer pursuant to Section 8 of the Act.

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7. HISTORICAL SHARE PRICES

The monthly highest and lowest market prices of the IRIS Shares as traded in Bursa Securities
for the past 12 months from August 2017 to July 2018 are set out below:

High (RM) Low (RM)

2017
August 0.185 0.160
September 0.195 0.165
October 0.190 0.165
November 0.170 0.145
December 0.185 0.135

2018
January 0.245 0.175
February 0.220 0.170
March 0.200 0.165
April 0.190 0.160
May 0.165 0.115
June 0.170 0.115
July 0.155 0.135

Last transacted market price of IRIS Shares as at the LTD, being the latest RM0.135
date immediately prior to the Announcement

Last transacted market price as at the LPD prior to the printing of this Circular RM0.150

Last transacted market price as at 23 August 2018 prior to the despatch of this RM0.150
Circular

(Source: Bloomberg)

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8. APPROVALS REQUIRED

The Proposed Share Issuance is subject to the following approvals being obtained:

(i) Bursa Securities, for which the approval for the listing of and quotation for the
Subscription Shares on the ACE Market of the Bursa Securities, was obtained vide its
letter dated 20 August 2018, subject to the following conditions:

Conditions Status of compliance

(a) IRIS and CIMB must fully comply with the relevant Noted.
provisions under the ACE Market Listing Requirements
pertaining to the implementation of the Proposed Share
Issuance.
(b) IRIS and CIMB to inform Bursa Securities upon the To be complied.
completion of the Proposed Share Issuance.
(c) IRIS to furnish Bursa Securities with a written To be complied.
confirmation of its compliance with the terms and
conditions of Bursa Securities’ approval once the
Proposed Share Issuance is completed.
(d) Certified true copy of the resolution passed by the To be complied.
shareholders in general meeting approving the
Proposed Share Issuance.

(ii) The shareholders of IRIS, for the Proposed Share Issuance at an EGM of the Company
to be convened.

For clarification purposes, the Proposed Share Issuance to each respective Subscriber is not
inter-conditional with each other. The Proposed Share Issuance is not conditional upon any other
proposals undertaken or to be undertaken by the Company.

The voting on the resolution in relation to the Proposed Share Issuance will be taken by way of
poll. Independent scrutineers will be appointed to validate the votes cast at the EGM of the
Company or any adjournment thereof.

9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED

WITH THEM

Save as disclosed below, none of the Directors and/or major shareholders of IRIS and/or
persons connected with them have any interests, whether direct or indirect, in the Proposed
Share Issuance.

DPYH is currently the President and Group Managing Director of IRIS. He is also a Non-
Independent Executive Director of IRIS. DPYH is a major shareholder of IRIS via his direct
interest of 0.69% and indirect interest of 10.26% by virtue of his interest in Caprice pursuant to
Section 8 of the Act. DRAR is currently a Non-Independent Executive Director of IRIS and a
major shareholder of IRIS via his indirect interest of 10.92% by virtue of his interest in Caprice, R
Capital and Mazer pursuant to Section 8 of the Act.

DPYH and DRAR are deemed to be persons connected with each other by virtue of their
interests in Caprice. In accordance thereto, DPYH and DRAR are deemed interested in the
Proposed Share Issuance in respect of their respective subscriptions under the Proposed Share
Issuance (“Interested Directors”).

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 The Interested Directors have abstained and shall continue to abstain from deliberating and
voting on any resolutions pertaining to the respective proposed share issuance to them, as well
as the proposed share issuance to persons connected with them under the Proposed Share
Issuance at any meeting of the Board. The Interested Directors shall also abstain from voting in
respect of their direct or indirect shareholdings in IRIS on the resolutions concerning the
proposed share issuance to them, as well as the proposed share issuance to persons connected
with them under the Proposed Share Issuance to be tabled at the Company’s forthcoming EGM.

Further to the above, the Interested Directors also have undertaken to ensure that persons
connected with them shall abstain from voting in respect of their direct and/or indirect
shareholdings in IRIS (if any) on the resolutions regarding to the respective proposed share
issuance to them, as well as the proposed share issuance to persons connected with them under
the Proposed Share Issuance to be tabled at IRIS’s forthcoming EGM.

The directors’ shareholdings in IRIS based on the register of directors’ shareholdings of the
Company as at the LPD are as follows:

Shareholdings in IRIS
No. of IRIS Shares

Directors Direct %(1) Indirect %

DPYH 17,000,000 0.69 253,718,405(2) 10.26

DRAR - - 270,031,405(3) 10.92

Notes:

(1) Based on the issued share capital of 2,471,902,462 IRIS Shares as at the LPD.

(2) Deemed interested by virtue of his interest in Caprice pursuant to Section 8 of the Act.

(3) Deemed interested by virtue of his interest in Caprice, R Capital and Mazer pursuant to Section 8 of
the Act.

In addition, Caprice is also deemed interested in the Proposed Share Issuance by virtue of
DPYH and DRAR’s interests and directorships in Caprice. R Capital and Mazer are also deemed
interested in the Proposed Share Issuance by virtue of DRAR’s shareholdings and directorships
in R Capital and Mazer respectively (Caprice, R Capital and Mazer are collectively referred to as
the “Interested Shareholders”). The Interested Shareholders will abstain from voting in respect
of their direct and/or indirect shareholdings in IRIS on the resolutions in relation to the Proposed
Share Issuance to be tabled at the forthcoming EGM to be convened. The Interested
Shareholders have undertaken that they will also ensure that persons connected with them who
have interests in the shares of IRIS will abstain from voting in respect of their direct/indirect
shareholdings in IRIS on the resolutions in relation to the Proposed Share Issuance to be tabled
at the forthcoming EGM to be convened.

10. ESTIMATED TIMEFRAME FOR COMPLETION

Barring any unforeseen circumstances and subject to all required approvals being obtained, the
Proposed Share Issuance is expected to be completed by the fourth quarter of year 2018.

11. PROPOSALS ANNOUNCED BUT PENDING COMPLETION

Save for the Proposed Share Issuance, there are no outstanding corporate exercises/schemes
which have been announced but are pending completion by IRIS.

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12. DIRECTORS’ RECOMMENDATION

The Board (save for DPYH and DRAR, who have abstained from deliberating and voting on the
resolutions in relation to the Proposed Issuance due to their interest in the Proposed Share
Issuance), having considered all aspects of the Proposed Share Issuance (including the rationale
and the financial effects of the Proposed Share Issuance) is of the opinion that the Proposed
Share Issuance are in the best interests of IRIS.

Accordingly, the Board (save for the Interested Directors) recommends that you vote in favour of
the resolutions to give effect to the Proposed Share Issuance to be tabled at the forthcoming
EGM.

13. EGM

The EGM, the notice of which is enclosed herein, is scheduled to be held at The Auditorium, 1st
Floor, Lot 8 & 9, IRIS Smart Technology Complex, Technology Park Malaysia, Bukit Jalil, 57000
Kuala Lumpur on Wednesday, 12 September 2018 at 11.00 a.m. or at any adjournment thereof,
for the purpose of considering and if thought fit, passing with or without modification, the
resolution to give effect to the Proposed Share Issuance.

If you are unable to attend, participate, speak and vote in person at the EGM, you are requested
to complete and return the enclosed proxy form in accordance with the instruction provided
thereon so as to arrive at the Registered Office of IRIS at Level 2, Tower 1, Avenue 5, Bangsar
South City, 59200 Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time
stipulated for holding the EGM. The lodging of the proxy form does not preclude you from
attending, participating, speaking and voting in person at the EGM should you subsequently wish
to do so.

14. FURTHER INFORMATION

Shareholders of IRIS are advised to refer to the appendices enclosed herein for further
information.

Yours faithfully
For and on behalf of the Board of
IRIS CORPORATION BERHAD

Datuk Nik Azman Bin Mohd Zain

Chairman, Non-Independent Non-Executive Director

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 APPENDIX I

ADDITIONAL INFORMATION ON IRIS GROUP

1. SUMMARY OF FINANCIAL INFORMATION OF IRIS

1.1. Historical information of IRIS Group

Audited for the FYE 31 March

2016 2017 2018
RM 000 RM 000 RM 000
Revenue:
Continued operations 476,311 429,310 334,692
Discontinued operations 43,322 8,365 5,418
519,633 437,675 340,110
(Loss)/Profit before tax:
Continued operations (12,192) (299,795) (128,050)
Discontinued operations 30,010 (1)
(16,237) (14,166)
17,818 (316,032) (142,216)
PAT:
Continued operations (33,090) (307,408) (117,273)
Discontinued operations 30,003 (1)
(16,274) (14,197)
(3,087) (323,682) (131,470)

PATAMI:
Continued operations (23,951) (275,730) (110,427)
Discontinued operations 30,003 (16,410) (13,124)
6,052 (292,140) (123,551)

Shareholders’ funds (excluding minority 550,029 288,158 193,819

interests)/NA

Current assets 671,869 472,300 268,373

Current liabilities 383,902 406,550 336,778
Number of shares in issue (000) 2,077,074 2,247,184 2,471,902
Weighted average number of shares in issue 2,042,105 2,232,699 2,412,183
(000)

NA per IRIS Share(2) 0.26 0.13 0.08

Gross EPS/(loss per share) (sen)(3) (0.15) (14.50) (5.45)

Net EPS/(loss per share) (sen)(4) 0.30 (13.08) (5.12)

Borrowings 274,788 181,595 104,507

Current ratio(5) 1.75 1.16 0.80

Gearing (times)(6) 0.50 0.63 0.54

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 Notes:

(1) Inclusive of RM29,931,000 gain on disposal of entire 75% equity investment in PJT Technology Co.
Ltd on 30 December 2015.

(2) Computed based on shareholders’ funds (excluding minority interests)/NA over the number of
shares in issue.

(3) Computed based on PAT over weighted average number of shares in issue.

(4) Computed based on PATAMI over weighted average number of shares in issue.

(5) Computed based on current assets divided by current liabilities.

(6) Computed based on total borrowings over shareholders’ funds (excluding minority interests)/NA

1.2. Commentaries of financial performance for FYE 31 March 2016

The IRIS Group achieved revenue of RM519.6 million in FYE 31 March 2016, a decrease of
approximately 7.5% from RM562.0 million achieved over the previous financial year. The
decrease was mainly due to lower delivery of Malaysia ePassport project, slow demand for
Rimbunan Kaseh and Sentuhan Kasih projects, and government fiscal stress constraints amid
declining oil revenue.

Despite having a lower revenue, IRIS Group attained a profit before tax of RM17.8 million, a
substantial increase from loss of RM18.3 million for the previous financial year. This translated
into PATAMI of RM6.1 million for IRIS Group. The increase was mainly contributed by the gain
on disposal of RM29.9 million by IRIS Group of its entire 75% equity investment in PJT
Technology Co. Ltd. Furthermore, the Trusted Identification Division’s overseas projects namely
Nigeria ePassports, Senegal ePassports and Tanzania eID have provided better margins, in
addition to lower operating expenses.

IRIS Group’s balance sheet has strengthened further by reducing its debts from RM484.5 million
to RM274.8 million. The shareholders’ funds have also increased from RM546.9 million to
RM550.0 million. As a result, the gearing ratio has improved from 0.89 times to 0.50 times in the
end of FYE 31 March 2016.

Net EPS for FYE 31 March 2016 was at 0.30 sen, increased from net loss per share of 1.07 sen.

1.3. Commentaries of financial performance for FYE 31 March 2017

For FYE 31 March 2017, IRIS Group achieved revenue of RM437.7 million, a decrease of
approximately 15.8% from RM519.6 million recorded in FYE 31 March 2016. The decrease is
attributed to lower revenue from Sustainable Development projects due to substantial completion
of the Rimbunan Kaseh and Sentuhan Kasih projects for the state government and FELDA
respectively and the non-renewal of the Malaysia ePassport project at the Government of
Malaysia’s decision. The lower revenue was partially offset by higher revenue from the Trusted
Identification division especially from Senegal eID cards project and delivery of banking cards for
local financial institutions.

Due to the corporate restructuring plan of IRIS, IRIS Group made a one-time non-cash
impairment of RM247.1 million. The impairment consists of goodwill and assets of RM143.5
million from non-core Sustainable Development and Education divisions and RM103.6 million
from trade and other receivables for Trusted Identification. Due to these impairments, IRIS Group
recorded a significant loss before tax of RM316.0 million in FYE 31 March 2017 as compared to
profit before tax of RM17.8 million in FYE 31 March 2016.

If the financial statements are normalised to exclude one-off charges and only reflect on
operations, IRIS Group would have posted a loss before tax of RM68.9 million for FYE 31 March
2017. Taking into account taxation, IRIS reported a loss after tax of RM323.7 million in FYE 31
March 2017 compared to loss after tax of RM3.1 million in FYE 31 March 2016.

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 During the year, IRIS debt reduced to RM181.6 million from RM274.8 million. However, the
shareholders’ funds of IRIS Group have decreased from RM550.0 million to RM288.2 million due
to the loss after tax in FYE 31 March 2017. As a result, the gearing ratio has increased to 0.63
times in the end of FYE 31 March 2017 from 0.50 times.

Net loss per share for FYE 31 March 2017 was at 13.08 sen, reduced from net EPS of 0.30 sen
from the previous year.

Overall, by implementing the corporate restructuring plan which include initiating divestments of
loss making non-core Sustainable Development and Education Divisions to minimise further
losses from the Sustainable Development and Education divisions and to increase profit in
Trusted Identification division, IRIS is making ongoing improvements across all areas of the IRIS
Group to deliver sustainable growth. The Education Division was effectively disposed off as at
31 March 2018, and on 26 July 2018, IRIS completed the disposal of its entire equity interest in
Regal Energy Limited (which in turn holds 65% equity interest in Weinan IRIS Envirowerks Zhouji
Renewable Resources Co., Ltd.).

1.4. Commentaries of financial performance for FYE 31 March 2018

For FYE 31 March 2018, IRIS Group achieved revenue of RM340.1 million, a 22.3% attrition
from RM437.7 million recorded in FYE 31 March 2017. The decrease is attributed to lower
revenue from Trusted Identification of RM327.3 million from RM372.9 million recorded in FYE 31
March 2017 and Sustainable Development divisions of RM7.4 million from RM57.0 million.

The lower revenue from Trusted Identification division was mainly due to lower deliveries of
passports and identification cards and lower volume of bank cards personalised as most of the
bank cards have migrated from signature based to PIN-based cards. Sustainable Development
division recorded a lower revenue due to significant completion of its Rimbunan Kaseh and
Sentuhan Kasih projects.

IRIS Group recorded a lower loss after tax of RM117.3 million from continued operations in FYE
31 March 2018 as compared to RM307.4 million from continued operations in FYE 31 March
2017. The significant loss in FYE 31 March 2017 was mainly attributable to impairment losses
arising from previous investments in non-core business. For FYE 31 March 2018, the loss was
mainly due to recognition of projects related expenditure in relation to completed projects and
losses from foreign exchange due to the strengthening of the RM against the USD and the Euro.
The foreign exchange losses arose from the fact that most of the cash flows of the Company’s
current contracts are denominated in the USD and the Euro while IRIS Group’s reporting
currency is in RM. Consequently, IRIS’s revenue, costs, profits and asset values are affected by
fluctuations in the foreign currency exchange rates.

Trusted Identification division reported a loss before tax of RM41.0 million in FYE 31 March 2018
compared to a loss before tax of RM8.6 million in FYE 31 March 2017 mainly due to recognition
of project related expenditure in relation to completed projects and foreign exchange losses.
Sustainable Development divisions narrowed the loss before tax in FYE 31 March 2018 to
RM70.6 million compared to FYE 31 March 2017’s loss before tax of RM195.2 million. The
higher loss before tax in FYE 31 March 2017 was mainly due to impairment loss.

IRIS Group’s debts stood at RM104.5 million a reduction from the previous year’s of RM181.6
million. Due to the loss after tax amounting to RM142.2 million, the shareholders’ funds of IRIS
Group have decreased to RM193.8 million. Nonetheless, the gearing ratio has improved from
0.63 times to 0.54 times.

Net loss per share for FYE 31 March 2018 was at 5.12 sen, reduced from 13.08 sen.

Overall, IRIS has made significant ongoing improvements across all areas of the Group by
minimizing further losses from the Sustainable Development division through the phasing out of
the loss-making business, divesting the loss-making Education division and strengthening our
core business of Trusted Identification.

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2. Information on the 2017 Placement

Previously, IRIS had undertaken a private placement of up to 10% of the issued share capital of
IRIS in accordance to Sections 75 and 76 of the Act on 29 May 2017. Below are the details of
the 2017 Placement:

Completion date : 7 July 2017

Number of shares issued : 224,718,405
Issue Price for the Private : 0.14 per IRIS Share (represents discount of 5.2% to the five
Placement (5)-day VWAP of IRIS Shares up to and including 21 June
2017 of RM0.1477)
Total gross proceed raised : RM31,460,576.70
from Private Placement

The details of the utilisation of proceeds from the 2017 Placement up to 23 November 2017 (as
disclosed in our interim financial report for the quarter ended 30 September 2017) are as follows:

Proposed Actual Balance to Intended

utilisation utilisation be utilised timeframe for
Description RM 000 RM 000 RM 000 utilisation
Working capital of IRIS Group 31,332 (31,332) - Within 12 months

Estimated expenses in relation 129 (129) - Within 1 month

to the 2017 Placement
Total 31,461 (31,461) -

Note:

(1) The breakdown of the utilisation of proceeds for working capital of IRIS pursuant to the 2017
Placement is as follows:

Description RM 000 %
Purchase of raw materials and payment of trade creditors (suppliers & 21,147 67.49%
contractors)
Repayment of borrowings 3,750 11.97%
Staff salaries & allowances, wages and statutory payments 6,115 19.52%
General office expenses, mainly utilities charges 320 1.02%
Total 31,332 100.00%

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 APPENDIX II

FURTHER INFORMATION

1. DIRECTORS’ RESPONSIBILITY STATEMENT

This Circular has been seen and approved by the Board and they hereby collectively and
individually accept full responsibility for the accuracy of the information contained herein and
confirm that, after making all reasonable inquiries and to the best of their knowledge and belief,
there are no false or misleading statements or other facts, the omission of which would make any
statement herein false or misleading.

2. CONSENT AND CONFLICT OF INTERESTS

CIMB, being the Principal Adviser for the Proposed Share Issuance, has given and has not
subsequently withdrawn its written consent to the inclusion in this Circular of its name and all
references thereto in the form and context in which they appear in this Circular.

CIMB, its related and associated companies, as well as its holding company, CIMB Group
Holdings Berhad and the subsidiaries and associated companies of its holding company (the
“CIMB Group”) form a diversified financial group and are engaged in a wide range of investment
and commercial banking, brokerage, securities trading, asset and funds management and credit
transaction service businesses. The CIMB Group has engaged and may in the future, engage in
transactions with and perform services for the Group. In addition, in the ordinary course of
business, any member of the CIMB Group may at any time offer or provide its services to or
engage in any transactions (on its own account or otherwise) with our Company and/or any other
person(s), hold long or short positions in securities issued by us and/or our affiliates, make
investment recommendations and/or publish or express independent research views on such
securities, and may trade or otherwise effect transactions for its own account or the account of its
other customers in debt or equity securities or senior loans of our Company and/or our affiliates.
This is a result of the businesses of CIMB Group generally acting independently of each other
and accordingly, there may be situations where parts of the CIMB Group and/or its customers
now have or in the future, may have interest or take actions that may conflict with the interests of
the Group.

In view of the above, CIMB confirms that as at the LPD, it is not aware of any conflict of interest
situation that exist or likely to exist in its capacity as the Principal Adviser for the Proposed Share
Issuance.

3. MATERIAL COMMITMENTS

Save as disclosed below, as at 31 March 2018, the Group is unaware of any commitment
incurred or known to be incurred IRIS Group which upon becoming enforceable may have
material impact on the financial position of the Group:

Group
Capital Expenditure RM 000
Approved and contracted for: Plant and equipment 36

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4. CONTINGENT LIABILITIES

As at the LPD there are no contingent liabilities incurred or known to be incurred by the Company
and/or the Group as at 31 March 2018.

5. MATERIAL LITIGATION

Save as disclosed below, as at the LPD, the IRIS Group is not engaged in any material litigation,
claims or arbitration, either as plaintiff or defendant, and the Board is not aware and does not
have any knowledge of any proceedings pending or threatened against the Group, or of any
facts likely to give rise to any proceedings, which might materially or adversely affect the financial
position or business of the Group:

(i) IRIS vs The Government of the United States (“U.S.”) (“U.S. Government”)

The lawsuit commenced on 24 February 2015. The lawsuit is a claim for patent
infringement of IRIS’ U.S. Patent No. 6,111,506, “Method of Making an Improved
Security Identification Document Including Contactless Communication Insert Unit”
against the U.S Government. It is alleged that U.S. electronic passports manufactured
for the U.S. Government, as well as use of foreign and U.S. Passports by the U.S.
Government and by entities acting on behalf of the U.S. Government constitute
infringements of that aforementioned IRIS patent, for which infringements IRIS is
claiming just compensation.

In February 2016, the U.S. Government filed a petition with the United States Patent and
Appeals Board, (“PTAB”), to have the aforementioned IRIS patent declared invalid.
While the PTAB proceedings are pending, the litigation in the United States Court of
Federal Claims is put on hold. At the time the litigation was put on hold, the proceedings
was still in the discovery phase.

Appeal filed by Department of Justice (“DOJ”) on 17 August 2017 requesting for

rehearing to PTAB against the dismissal of their Petition earlier was dismissed by PTAB
on 22 January 2018. As such, the main proceeding which is the infringement
proceedings itself will commence soon.

However the U.S. Government had on 14 June 2018, filed another motion to dismiss
IRIS’s First Amended Complaint. IRIS then filed Plaintiff’s Opposition to Motion to
dismiss the U.S. Government motion on 3 July 2018. The U.S. Government to file its
reply on/or before 24 July 2018.

The solicitors are of the view that it is estimated that the litigation will last for another
twelve (12) to eighteen (18) months. A reasonable estimate as to the outcome of the
litigation must await completion of briefing and hearing on patent claim construction. The
solicitors are of the view that in the compensation phase, IRIS will be required to hire an
expert to testify on the value of the patent to the U.S. Government. However, the
solicitors are estimating that it is possible that fees and costs going forward could reach
or possibly exceeds USD1,000,000.

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(ii) IRIS Technologies (M) Sdn Bhd (“ITSB”) and Kunt Electronic Sanayii ve Ticaret
A.S (both parties are henceforth known as “JVCO”) vs Security General
Directorate of Ministry of Interior or Emniyet Genel Mudurlugu (Turkey) (“EGM”)

The JVCO’s claim for unlawful termination by EGM and payment for the balance amount
of (Turkish Lira) TL6,195,000 (equivalent to RM9,014,221.00) due to JVCO for works
completed was rejected. EGM’s claim for the refund of monies paid to the JVCO for the
completion of Phase 1 (delivery of hardware and equipment) of the project to the amount
of TL6,195,000 (equivalent to RM9,014,221.00) was allowed and declared that the JVCO
had to return the said amount to EGM with interest. The JVCO to pay TL5,053,84
(equivalent to RM7,354.00) as expenses arising from their performance of the contract
and loss suffered by EGM. EGM’s claim of TL49,761,53 (equivalent to RM72,407.00) as
expenses arising from their performance of the contract and loss due to the termination
was allowed and the JVCO was ordered to pay the said amount as compensation.

The Company was informed that a decision was declared on 16 September 2014 and
was duly served on the JVCO on 28 January 2015.

The Judgment were as follows:

1. The JVCO’s claim for unlawful termination by EGM and payment for the balance
amount of (Turkish Lira) TL6,195,000 (equivalent to RM9,014,221) due to the
JVCO for works completed was rejected;
2. EGM’s claim for the refund of monies paid to the JVCO for the completion of
Phase 1 (delivery of hardware and equipment) of the Project to the amount of
TL6,195,000 (equivalent to RM9,014,221) was allowed and declared that the
JVCO had to return the said amount to EGM with interest;
3. The JVCO to pay TL5,053,84 (equivalent to RM7,354) as compensation for loss
suffered by EGM; and
4. EGM’s claim of TL49,761,53 (equivalent to RM72,407) as expenses arising from
their performance of the contract and loss due to the termination was allowed
and the JVCO was ordered to pay the said amount as compensation.

The judgment is pending enforcement against the JVCO.

(iii) IRIS vs IQPR Sdn Bhd (High Court of Pulau Pinang A/E No: PA-38-275-06/2016)

IRIS had entered into an Equipment Lease Agreement (“Agreement”) with IQPR Sdn
Bhd on 3 May 2011 where a security was given by Mr Tan Chin Hwang ("the
Defendant") to IRIS in respect of this Agreement. The Security in question was a charge
registered on a piece of land held under title no. GRN 56247 Lot 3635, Bandar Tanjong
Bungah, Daerah Timur Laut, Negeri Pulau Pinang (“the Security”).

The Charge over the Security was registered on 10 June 2011 and no other charges
exist on the said Security. Due to IQPR Sdn Bhd committing several defaults in its
obligations under the Agreement, IRIS had sent out letters of demand and intent dated
13 December 2013 and 6 March 2014 stating its intent to enforce its rights over the
Security in view of the IQPR’s continued breaches. By the same letter IRIS terminated
the Agreement.

The 3rd Auction was fixed on 6 June 2018 at a reserve price of RM3,888,000.00 and the
auctioneer appointed was Eng Sitt Tatt of M/S Landmarks Auctioneers Sdn Bhd. The
Auction fixed on 6 June 2018 was aborted as there were no interested bidders. An
application to fix the 4th Auction date was filed in court on 26 July 2018, pending
extraction of the sealed copy of the application from court.

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(iv) Saudi Arabia Quad Communication & Security Solutions (“Plaintiff”) v IRIS

The Plaintiff filed its claim against IRIS for the alleged non-payment of goods and service
rendered arose from an agreement and contractual relationship to implement a project
with the Ministry of Interiors, Department of Passports and Immigration, People’s
Republic of Bangladesh for the Enrolment of Bangladeshi Citizens in Kingdom of Saudi
Arabia for Machine Readable Passports (MRP) (the “Project”) for the amount of
USD3,477,522.

On 29 December 2015, Quad via its solicitors issued a Notice of Demand (NOD) to IRIS
claiming they sum of USD3,477,522 allegedly payable to them under the Supply &
Services Agreement.

On 16 February 2016, IRIS disputed the claims and did not make any payments. Quad
via its solicitors filed a suit against IRIS in the Riyadh Court. IRIS has appointed Messrs
Adel Yousef Al-Atalah based in Riyadh to represent IRIS.

The Hearing on 7 May 2018 was adjourned by the court to 28 May 2018 pending
translation of documents. The Hearing on 28 May 2018 was adjourned by the Court to
27 August 2018 for primary judgment.

The solicitors are of the view that the outcome on the sum of USD3,477,522 is bleak.

(v) In the High Court of Malaya at Kuala Lumpur Suit No. WA-22NCVC-126-03/2017;
Roxwell Group Sdn Bhd (755819-U) (“Plaintiff”) against (1) IRIS, (2) Tan Say Jim
(“D2”), (3) Su Thai Ping (“D3”), (4) Hamdan Bin Mohd Hassan (“D4”) & (5) Sylla
Ibrahima Sory (“D5”)

The Plaintiff and D1 entered into a Cooperation Agreement (“Agreement”) on 17th

November 2011 and among the salient terms of the Agreement was for the Plaintiff to
identify for IRIS for potential projects in the Republic of Guinea and Guinea Bissau
(“Territory”) for a period of three (3) years from the date of the Agreement. In
consideration of any and all services in respect of the Agreement involving the sale of
plant, equipment, machinery or asset arranged by the Plaintiff, IRIS agreed to pay the
Plaintiff a commission of 15% on the value or price of the plant, equipment, machinery or
asset sold.

The Plaintiff is claiming for an alleged commission payment in the amount of

RM169,480,350.00 (together with interest deemed appropriate by the court) under the
Agreement calculated based on the formula of 15% on the reported value of the BOT
Passport Contract awarded by the Government of the Republic of Guinea to IRIS in 2013
(“Project”). The Plaintiff is also alleging that IRIS has colluded with D2, D3, D4 and D5 to
deprive of its contractual rights under the Agreement.

It is relevant to note that the Project does not involve the sale of plant and equipment
and no deposit was received from the Republic of Guinea. There was also no
commission payment agreed between the Plaintiff and IRIS as to the securement of the
Project. IRIS denies it has breached the Agreement and wishes to reiterate that the
Plaintiff had never in any way facilitated to secure any contract whatsoever in favour of
IRIS within the two years from the execution of the Agreement. By virtue of clause 7.1 of
the Agreement, the same in effect became redundant and was never pursued.

In addition to the above claims, the Plaintiff also alleges that IRIS interfered with the
contractual relations between the Plaintiff and it’s employee, Sylla (who is also the 5th
defendant) by recruiting Sylla to assist IRIS directly in dealing with the Government of
the Republic of Guinea. The Plaintiff does not make a specific claim for damages for this
allegation which arises out of the same facts as the Conspiracy Claim.

27

27
 The Plaintiff via its solicitors served IRIS a letter of demand in relation to the alleged
commission payable for the securement of the Project in 21st July 2014 which was
categorically denied and refuted by IRIS’s solicitors via letter dated 19th September 2014.
IRIS therefore deems the Plaintiff’s action as nothing but retaliatory in nature.

The parties have filed Bundle of Pleadings, Issues to be Tried, Plaintiff and Defendants’
Summary of Case, Common Bundle of Documents and List of Witnesses. The Court
fixed 27 September 2018 as final Case Management for parties to file Witness
Statement on/or before the case management date and full trial has been fixed on 16
October 2018 - 19 October 2018.

As of today, the Plaintiff has not been able to furnish sufficient particulars in relation to
the commissions and conspiracy claims. Therefore, the solicitors are of the view that the
Plaintiff is unable to show that it is entitled to its claim.

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the registered office of IRIS at
Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Malaysia, during normal
business hours (except public holidays in Wilayah Persekutuan Kuala Lumpur) from the date of
this Circular up to and including the date of the forthcoming EGM:

(i) The Subscription Agreement;

(ii) The Constitution of IRIS;

(iii) Audited consolidated financial statements of IRIS Group for the FYE 31 March 2017 and
FYE 31 March 2018;

(iv) The relevant cause papers for the material litigation as disclosed in Section 5 of this
Appendix; and

(v) CIMB’s letter of consent and CIMB’s declaration of non-conflict of interests as referred to
in Section 2 of this Appendix, respectively.

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28

28
 IRIS CORPORATION BERHAD
(Company No. 302232-X)
(Incorporated in Malaysia)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting (“EGM”) of IRIS Corporation
Berhad ("IRIS" or the "Company") will be held at The Auditorium, 1st Floor, Lot 8 & 9, IRIS Smart
Technology Complex, Technology Park Malaysia, Bukit Jalil, 57000 Kuala Lumpur on Wednesday, 12
September 2018 at 11.00 a.m. or any adjournment thereof, to consider and if thought fit, to approve the
following ordinary resolutions:

ORDINARY RESOLUTION 1

PROPOSED SHARE ISSUANCE OF 494,380,400 NEW ORDINARY SHARES IN IRIS AT AN ISSUE

PRICE OF RM0.12 PER SUBSCRIPTION SHARE (“PROPOSED SHARE ISSUANCE”)

“THAT, subject to the approvals of all relevant authorities being obtained, approval be and is hereby
given to the Board of Directors of IRIS (“Board”) to allot and issue 494,380,400 new ordinary shares of
IRIS (“Subscription Shares”) at an issue price of RM0.12 per Subscription Share, pursuant to the
subscription agreement dated 14 June 2018;

THAT the proceeds of the Proposed Share Issuance will be utilised for the purposes as set out in the
circular to shareholders of the Company dated 24 August 2018 (“Circular”), and the Board be authorised
with full powers to vary the manner and/or purpose of utilisation of such proceeds in such manner as the
Board may deem fit, necessary and/or expedient, subject to the approval of the relevant authorities,
where required;

THAT such Subscription Shares will, upon issuance and allotment, rank pari passu in all respects with
the existing IRIS shares, save and except that the Subscription Shares will not be entitled to any
dividends, rights, allotments and/or other forms of distribution that may be declared, made or paid for
which the entitlement date precedes the date of allotment and issuance of the said Subscription Shares;

AND THAT the Board be and is hereby authorised to give full effect to the Proposed Share Issuance with
full powers to assent to any terms, conditions, modifications, variations and/or amendments in any
manner as may be required by the relevant authorities or as the Board may deem necessary or
expedient in the best interests of the Company and to do all acts, deeds and things and to execute, sign
and deliver for and on behalf of the Company all such documents as may be necessary and/or expedient
in the best interests of the Company.”
ORDINARY RESOLUTION 2

PROPOSED SUBSCRIPTION OF 247,190,200 SUBSCRIPTION SHARES AT AN ISSUE PRICE OF

RM0.12 PER SUBSCRIPTION SHARE BY DATO’ SRI ROBIN TAN YEONG CHING (“PROPOSED
SUBSCRIPTION BY DSRTYC”)

“THAT, subject to the passing of Ordinary Resolution 1 above, and subject to the approval of and in
compliance with any conditions as may be imposed by the relevant authorities, approval be and is hereby
given for the Company to issue and allot 247,190,200 Subscription Shares at an issue price of RM0.12
per Subscription Share, to Dato’ Sri Robin Tan Yeong Ching (“DSRTYC”) pursuant to the Proposed
Share Issuance as set out in the Circular;

AND THAT, the Directors be and are hereby authorised to give full effect to the Proposed Subscription
by DSRTYC with full powers to assent to any conditions, variations, modifications and/or amendments in
any manner as may be required in the best interests of the Company, and to take all steps or do all acts
as they may deem necessary or expedient in order to implement, finalise and give full effect to the
Proposed Subscription by DSRTYC as part of the Proposed Share Issuance.”

ORDINARY RESOLUTION 3

PROPOSED SUBSCRIPTION OF 197,190,200 SUBSCRIPTION SHARES AT AN ISSUE PRICE OF

RM0.12 PER SUBSCRIPTION SHARE BY DATO’ POH YANG HONG (“PROPOSED SUBSCRIPTION
BY DPYH”)

“THAT, subject to the passing of Ordinary Resolution 1 above, and subject to the approval of and in
compliance with any conditions as may be imposed by the relevant authorities, approval be and is hereby
given for the Company to issue and allot 197,190,200 Subscription Shares at an issue price of RM0.12
per Subscription Share, to Dato’ Poh Yang Hong (“DPYH”) pursuant to the Proposed Share Issuance as
set out in the Circular;

AND THAT, the Directors be and are hereby authorised to give full effect to the Proposed Subscription
by DPYH with full powers to assent to any conditions, variations, modifications and/or amendments in
any manner as may be required in the best interests of the Company, and to take all steps or do all acts
as they may deem necessary or expedient in order to implement, finalise and give full effect to the
Proposed Subscription by DPYH as part of the Proposed Share Issuance.”

ORDINARY RESOLUTION 4

PROPOSED SUBSCRIPTION OF 50,000,000 SUBSCRIPTION SHARES AT AN ISSUE PRICE OF

RM0.12 PER SUBSCRIPTION SHARE BY DATO’ ROZABIL @ ROZAMUJIB BIN ABDUL RAHMAN
(“PROPOSED SUBSCRIPTION BY DRAR”)

“THAT, subject to the passing of Ordinary Resolution 1 above, and subject to the approval of and in
compliance with any conditions as may be imposed by the relevant authorities, approval be and is hereby
given for the Company to issue and allot 50,000,000 Subscription Shares at an issue price of RM0.12 per
Subscription Share, to Dato’ Rozabil @ Rozamujib bin Abdul Rahman (“DRAR”) pursuant to the
Proposed Share Issuance as set out in the Circular;

AND THAT, the Directors be and are hereby authorised to give full effect to the Proposed Subscription
by DRAR with full powers to assent to any conditions, variations, modifications and/or amendments in
any manner as may be required in the best interests of the Company, and to take all steps or do all acts
as they may deem necessary or expedient in order to implement, finalise and give full effect to the
Proposed Subscription by DRAR as part of the Proposed Share Issuance.”
BY ORDER OF THE BOARD

Wong Youn Kim (MAICSA 7018778)

Company Secretary

Kuala Lumpur
Dated: 24 August 2018

Notes:

1. A depositor shall not be regarded as a member entitled to attend the EGM, to speak and vote or appoint proxy(ies) to
attend, vote and speak on his/her behalf unless his/her name appears in the register of members and/or record of
depositors as at 4 September 2018.

2. To be valid, the form of proxy, duly completed must be deposited at the Registered Office of the Company at Level 2,
Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur not less than 48 hours before the time for holding the
meeting Provided That in the event the Member(s) duly executes the form of proxy but does not name any proxy, such
Member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, Provided Always that the
rest of the proxy form, other than the particulars of the proxy have been duly completed by the Member(s).

3. A Member entitled to attend and vote is entitled to appoint not more than two (2) proxies to attend and vote at the
meeting except where a Member is an authorised nominee as defined under the Securities Industry (Central Depositories)
Act 1991, in which event it may appoint not more than two (2) proxies respect to each Securities Account it holds in
ordinary shares of the Company standing to the credit of the said Securities Account.

4. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for
multiple beneficial owners in one (1) Securities Account (“omnibus account”), there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where a Member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints
two (2) or more proxies, the appointments shall be invalid unless the proportion of shareholdings to be represented by
each proxy is specified in the instrument appointing the proxies.

6. The instrument appointing a proxy shall be writing under the hand of the appointer or of his attorney duly authorised in
writing or, if the appointer is a corporation, either under the corporation’s common seal or under the hand of an officer or
attorney duly authorised.

7. A Member shall not be precluded from attending and voting in person at any general meeting after lodging the form of
proxy but however such attendance shall automatically revoke the authority granted to the proxy.

8. Pursuant to Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions
set out in this Notice will be put to vote by way of poll. Independent Scrutineers will be appointed to validate the votes
cast at the EGM or any adjournment thereof.

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 IRIS CORPORATION BERHAD
(Company No. 302232-X)
(Incorporated in Malaysia) No. of Shares CDS Account No.

PROXY FORM

I/We………………………………………………………… NRIC No./Company No ……………………………………...........

(FULL NAME IN BLOCK LETTERS)
of ………………………………………………………………………………………………………………………………...........
(FULL ADDRESS)
being a member/members of IRIS Corporation Berhad (the “Company”), do hereby appoint

.……….………...……………………………………………. NRIC No./Company No ………………………………………….

(FULL NAME OF PROXY IN BLOCK LETTERS)

of ……………………………………………………………………………………………………………………………...and/or
(FULL ADDRESS)

.……….………...……………………………………………. NRIC No./Company No ………………………………………….

(FULL NAME OF PROXY IN BLOCK LETTERS)

of ……………………………………………………………………………………………………………………………………...
(FULL ADDRESS)

or failing him/her, the CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the
extraordinary general meeting (“EGM”) of the Company to be held at The Auditorium, 1st Floor, Lot 8 & 9, IRIS
Smart Technology Complex, Technology Park Malaysia, Bukit Jalil, 57000 Kuala Lumpur on Wednesday, 12
September 2018 at 11.00 a.m. or any adjournment thereof, in the following manner:

RESOLUTIONS FOR AGAINST

ORDINARY RESOLUTION 1 – PROPOSED SHARE ISSUANCE
ORDINARY RESOLUTION 2 – PROPOSED SUBSCRIPTION BY DSRTYC
ORDINARY RESOLUTION 3 – PROPOSED SUBSCRIPTION BY DPYH
ORDINARY RESOLUTION 4 – PROPOSED SUBSCRIPTION BY DRAR
Please indicate with a check mark ("") in the appropriate box against resolutions how you wish your proxy to vote.
In the absence of specific instructions, the proxy will vote or abstain at his/her discretion.

Signed this _________ day of ________________, 2018 No. of Shares Percentage(%)

Proxy 1
Proxy 2
……………………………………………………… Total 100
Signature(s)/Common Seal of Shareholder(s)

Notes:
1. A depositor shall not be regarded as a member entitled to attend the EGM, to speak and vote or appoint proxy(ies) to attend, vote
and speak on his/her behalf unless his/her name appears in the register of members and/or record of depositors as at 4
September 2018.
2. To be valid, the form of proxy, duly completed must be deposited at the Registered Office of the Company at Level 2, Tower 1,
Avenue 5, Bangsar South City, 59200 Kuala Lumpur not less than 48 hours before the time for holding the meeting Provided That
in the event the Member(s) duly executes the form of proxy but does not name any proxy, such Member(s) shall be deemed to
have appointed the Chairman of the meeting as his/their proxy, Provided Always that the rest of the proxy form, other than the
particulars of the proxy have been duly completed by the Member(s).
3. A Member entitled to attend and vote is entitled to appoint not more than two (2) proxies to attend and vote at the meeting except
where a Member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, in which
event it may appoint not more than two (2) proxies respect to each Securities Account it holds in ordinary shares of the Company
standing to the credit of the said Securities Account.
4. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple
beneficial owners in one (1) Securities Account (“omnibus account”), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus account it holds.
5. Where a Member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2)
or more proxies, the appointments shall be invalid unless the proportion of shareholdings to be represented by each proxy is
specified in the instrument appointing the proxies.
6. The instrument appointing a proxy shall be writing under the hand of the appointer or of his attorney duly authorised in writing or,
if the appointer is a corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly
authorised.
7. A Member shall not be precluded from attending and voting in person at any general meeting after lodging the form of proxy but
however such attendance shall automatically revoke the authority granted to the proxy.
8. Pursuant to Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out
in this Notice will be put to vote by way of poll. Independent Scrutineers will be appointed to validate the votes cast at the EGM
✄

or any adjournment thereof.

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AFFIX
STAMP

THE COMPANY SECRETARY  

IRIS CORPORATION BERHAD  
Level 2, Tower 1, Avenue 5,  
Bangsar South City,  
59200 Kuala Lumpur  
 

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