| Query Letter Contents | We refer to your announcement dated 20 July 2012 in respect of the above matter.
In this connection, kindly furnish Bursa Malaysia Securities Berhad ("Bursa
Securities") with the following additional information for public release:-
The latest audited net profits and net assets of CM, CC and MS respectively.
Particulars of contingent liabilities and guarantees to be assumed by your
Company/MPath Sdn Bhd arising from the Proposed Acquisition.
The estimated time frame for submission of the application for the relevant
authorities' approval on the Proposed Acquisition.
Effect of the Proposed Acquisition on MGRC group's earnings per share for the
financial year ending 30 June 2013.
Effect of the Proposed Acquisition on the net assets per share and gearing of
the MGRC group, based on its latest audited accounts as at 30 June 2011.
To quantify the First Payment, Second Payment and Third Payment.
The source(s) of funding for MGRC's portion of the cash contribution to MPath
Sdn Bhd in order for MPath to finance the Proposed Acquisition.
Details of the profit incentive for the Clinipath group of up to RM2,200,000
for the relevant financial year.
Please furnish Bursa Securities with your reply within one (1) market day from
the date hereof.
Yours faithfully
TAN YEW ENG
Head, Issuers
Listing Division, Regulation
TYE/NMA
c.c:- Head, Market Surveillance Department, Market Supervision Division,
Securities Commission (via fax) |
Further to the Company's announcement on 20 July 2012 and the letter from Bursa Malaysia Securities Berhad dated 24 July 2012 (Reference no. NM-120723-43396), the Board of Directors of MGRC wish to provide the following additional information relating to the Proposed Acquisitions:-
1. Latest audited net profits and net assets of Clinipath (Malaysia) Sdn. Bhd. ( CM ), Clinipath Capital Sdn. Bhd. ( CC ), and Medical Scan Sdn. Bhd. ( MS ) respectively.
The latest audited net profits and assets of CM, CC, and MS respectively are as follows:
| Latest audited |  | |
| Financial year ended | 31/10/2010 | 31/3/2011 |
| (RM) | (RM) |
| CM | | |
|
| 20,043,764 | |
|
| 616,370 | |
|
| 4,689,819 | |
| | |
| CC | | |
|
| 348,000 | |
|
| (26,103) | |
|
| 149,474 | |
| | |
| MS | | |
|
| | 724,700 |
|
| | 59,617 |
|
| | 10,591 |
2. Particulars of contingent liabilities and guarantees to be assumed by the Company/MPath Sdn. Bhd. ("MPath") arising from the Proposed Acquisition.
There are no liabilities, including contingent liabilities and guarantee to be assumed by the Company/MPath pursuant to the Proposed Acquisitions.
3. The estimated time frame for submission of the application for the relevant authorities' approval on the Proposed Acquisition.
MGRC does not need to submit any application to seek the approval of any authority for the Proposed Acquisitions.
4. Effect of the Proposed Acquisitions on MGRC Group's earnings per share for the financial year ending 30 June 2013.
As the Proposed Acquisitions is expected to be completed in the first (1st) quarter of 2013, the Proposed Acquisitions is not expected to have a material effect on the MGRC Groups earnings and earnings per share for the financial year ending 30 June 2013. The Proposed Acquisitions is expected to contribute positively to the future earnings and earnings per share of the MGRC Group for the ensuing financial years.
5. Effect of the Proposed Acquisitions on the net assets per share and gearing of the MGRC group, based on its latest audited accounts as at 30 June 2011.
There is no material effect of the Proposed Acquisition on the net assets per share and gearing of the MGRC Group (based on its latest audited accounts as at 30 June 2011) with the assumption that the Proposed Acquisition will be funded without borrowings and adoption of the new Malaysian Financial Reporting Standards.
6. To quantify the First Payment, Second Payment and Third Payment.
The aggregate consideration payable to the Sellers/Vendors under the Shares SPA shall not exceed RM13,300,000 and shall comprise three separate payments in accordance with the following table:
| 1st Payment | 2nd Payment | 3rd Payment |
| CM Shares Consideration | RM3,422,600 | RM4,657,400 | RM5,060,000 |
| CC Shares Consideration | RM150,000 | nil | nil |
| MS Shares Consideration | RM10,000 | nil | nil |
| Sub-Total | RM3,582,600 | RM4,657,400 | RM5,060,000 |
7. The source(s) of funding for MGRC's portion of the cash contribution to MPath in order for MPath to finance the Proposed Acquisition.
MGRCs portion of the cash contributions to MPath will be sourced from retained earnings.
8. Details of the profit incentive for the Clinipath group of up to RM2,200,000 for the relevant financial year.
The amount payable as a profit incentive will be determined by Ernst & Young upon their confirmation of the Clinipath Groups audited financial results for the financial year ending 31 October 2012 based on the application of a multiple of 2.3 times to the consolidated profit before tax of up to RM2,200,000. The maximum profit incentive shall therefore not exceed the RM5,060,000 as earmarked for the Third Payment disclosed in Item 6 above.
For the avoidance of doubt, the profit before tax as determined by Ernst & Young shall not comprise amounts arising from any waiver of indebtedness of the Clinipath Group nor items that may be treated as revenue but are non-recurring in nature.
In addition, append hereunder are additional information/amendments to MGRC's announcement made on 20 July 2012:-
(i) Section 1, last paragraph on Proposed Acquisition of Property, we wish to clarify that an announcement will be made upon execution of the Property SPA at a later date.
(ii) Section 2.1.1 (b), is amended to read as "a Special Audit for financial year ending 31 October 2012" instead of "a Special Audit as at 31 October 2012".
(iii) Section 2.1.3 (a), second sentence of the last paragraph is amended to read as "is that the Original CM Sellers" instead of "is that the Original CM Settlers".
(iv) Section 2.5, third paragraph, we wish to clarify that, Frederick Chee How Chai and Lee Yung Kuong are sellers of all those shares in MS legally and beneficially owned by them.
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