PHARMANIAGA BERHAD

SUMMARY OF KEY MATTERS DISCUSSED AT THE

TWENTY-THIRD ANNUAL GENERAL MEETING (“23rd AGM”) OF PHARMANIAGA
BERHAD (“PHARMANIAGA” OR “THE COMPANY”) CONDUCTED ENTIRELY
THROUGH LIVE STREAMING VIA ONLINE MEETING PLATFORM OF TIIH ONLINE AT
HTTPS://TIIH.ONLINE ON WEDNESDAY, 16 JUNE 2021 AT 9.00 A.M.

PRESENT:

1. Shareholders - As per the Attendance List.

2. Proxy Holders - As per the Attendance List.

DIRECTORS PRESENT VIRTUALLY:

YBhg. Dato’ Sri Mohammed Shazalli - Chairman / Non-Independent Non-
1.
Ramly Executive Director

2. YBhg. Datuk Zulkarnain Md Eusope - Managing Director

3. YBhg. Dato’ Dr. Najmil Faiz Mohamed Aris - Independent Non-Executive Director

4. YBhg. Datuk Dr. Azhar Ahmad - Independent Non-Executive Director

5. YBrs. Encik Zulkifli Jafar - Independent Non-Executive Director

6. YBrs. Dr. Abdul Razak Ahmad - Independent Non-Executive Director

7. YBrs. Encik Izaddeen Daud - Non-Independent Non-Executive Director

8. YBrs. Encik Zainal Abidin Shariff - Independent Non-Executive Director

MANAGEMENT PRESENT VIRTUALLY

1. Encik Mohamed Iqbal Abdul Rahman - Deputy Managing Director

2. Puan Norai’ni Mohamed Ali - Chief Financial Officer

3. Encik Syaruzaimi Yusof - Company Secretary

IN ATTENDANCE (VIRTUAL):

1. Mr. Herbert Chua - Representing External Auditors,

PricewaterhouseCoopers PLT
(“PWC”)

2. Mr. Khen Koo - Representing External Auditors,

PwC

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

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1.0 FULLY VIRTUAL 23RD ANNUAL GENERAL MEETING PROCEEDINGS

The 23rd Annual General Meeting (“AGM”) was fully conducted virtually in accordance with the
provision of Section 327 of the Companies Act 2016 and pursuant to Clause 84 of the
Company’s Constitution.

The Company’s 23rd AGM proceeding was in accordance with the latest update by the
Securities Commission dated 1 June 2021 in relation to the Guidance Note and FAQs on the
Conduct of General Meetings for Listed Issuers (“SC’s Latest Update”) where, in line with the
Government’s implementation of a total lockdown from 1 June 14 June 2021, a listed issuer is
only allowed to conduct a fully virtual general meeting and all meeting participants including the
Chairperson of the meeting, board members, senior management and shareholders are to
participate in the meeting online. Physical gatherings no matter how small are prohibited.

According to the SC’s Latest Update, an online meeting platform can be recognized as the
meeting venue or place under Section 327(2) of the Companies Act 2016 provided that the
online platform is located in Malaysia.

2.0 OPENING ADDRESS BY CHAIRMAN

The Chairman welcomed all members to the 23rd Annual General Meeting of the Company.

The Chairman proceeded to remind all shareholders who joined the meeting remotely that all
discussions are deemed confidential and only for the knowledge of shareholders of the
Company and that any audio and visual recording are strictly prohibited unless with Company’s
written consent.

During his opening address, the Chairman highlighted to the Shareholders that 2020 was a
challenging year as a whole and Pharmaniaga has not been sparedthe impact of these adverse
business challenges. He added that nonetheless, the Company continued to march forward by
strengthening its foothold in the pharmaceutical industry, building on solid fundamentals and
honing in on new growth segments, which started with the appointment of new leadership.

The Chairman then stated that as the world was gripped by COVID-19 in 2020, the pandemic
underscored the importance for Pharmaniaga, as a most reliable leader in Malaysia’s
pharmaceutical technology and distribution sectors, to uphold its resolve to fulfil its fundamental
objectives. These can be distilled to three key commitments: supporting healthcare needs
through products and services; driving the sustainable growth of the Group; and enhancing
value for all our shareholders.

Despite the volatile environment, Pharmaniaga was able to weather through the uncertainties
and its course. This was achieved by strengthening capabilities to deliver relevant, accessible,
high-quality healthcare solutions for clientele in Malaysia and international markets.

According to the Chairman, this year, the Company has redoubled its efforts in supporting the
nation and safeguarding the Rakyat by focusing on its operational excellence in distribution of
medical supplies during this critical time, as well as through participation in the Government’s
COVID-19 vaccination programme.

The Group has taken a key role in the Government’s National COVID-19 Immunisation
Programme and entered into an agreement with the Government in March 2021 to supply 12
million doses of Sinovac COVID-19 vaccine to be filled and finished at the Company’s small
volume injectable plant in Puchong, Selangor.

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

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 Before concluding his opening address, the Chairman informed the shareholders that the filled
and finished activities to be done marks a milestone not only for Pharmaniaga, but for the nation,
as it is the first human vaccine to be filled and finished in Malaysia.

3.0 PRESENTATION BY THE MANAGING DIRECTOR (“MD”)

The MD briefed on the financial performance of Pharmaniaga and its subsidiaries (“the Group”)
for the financial year ended 31 December 2020.

Financial Highlights

For the financial year 2020, the Group recorded a solid revenue of RM2.7 billion and registered
a strong profit before zakat and taxation of RM36 million, a significant improvement from the
deficit of RM149.4 million in 2019 which was due to two items namely the full amortisation of the
Pharmacy Information System and Ranitidine product recall.

The Company has also strengthened its earnings growth in 2020, registering a higher profit after
taxation of RM26 million. This reflects a jump of 118% in Profit After Tax compared with the
deficit of RM149 million recorded in the previous year.

The presentation slides also covered explanation on the following areas:

- Continuity of the concession business

Due to the Company’s performance, achieving 99.6% compliance to its KPIs, the
Government has added 46 new products under the Approved Products Purchase List
(APPL) upon completion of tender exercises conducted in 2020.

Pharmaniaga is also appointed as the partner for delivery of three COVID-19 vaccines,
namely; 12 million doses of Sinovac COVID-19 vaccine, 1.38 million COVAX COVID-19
vaccine and 6.4 million AstraZeneca COVID-19 vaccines.

Considering the interim concession will expire at the end of 2021, Pharmaniaga has
submitted a request for extension and is currently further refining the proposal to continue
providing the best services to the Government.

- Focus on niche manufacturing

Besides the additional list of products, the Company plan to establish the first Halal vaccine
manufacturing facility in the world and expect that it will start operating by 2024.

The Company is also in the midst of conducting the fill and finish manufacturing of Sinovac
COVID-19 vaccine at its high-tech plant, Pharmaniaga LifeScience Sdn Bhd at maximum
capacity since obtaining approval for commercialization from the Drugs Control Authority on
23 April 2021.

- Expand digitalization

Efforts are currently being put in place to expand digitalization in the Company’s supply
chain. Apart from the Government hospitals and clinics, the Company plan to place the
Pharmacy Information System (PhIS) for private facilities as well to enable contactless
delivery.

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

Page 3 of 6
 - Bolster Indonesian Operations

Currently, PT Millennium Pharmacon International Tbk is supported by a Central Warehouse

and extensive network of 33 branches throughout the republic, on top of the Company’s
manufacturing arm, PT Errita Pharma in Bandung that produces 97 general pharma
products.

However, due to COVID-19, the overall healthcare industry in Indonesia has taken a hit
hence impacting the Company’s overall revenue and profitability.

- Growth in private sector

One of the key areas of growth during the pandemic was sales of supplements and over the
counter (OTC) products. With major marketing and advertising initiatives, Pharmaniaga will
be able to establish its presence in more retail outlets to further boost growth by end of the
year.

- Strengthen Human Capital

With over 300 technical experts comprising of pharmacists, chemists, regulatory and clinical
affairs specialists, Pharmaniaga take pride in being a technically viable company.

99.8% of Pharmaniaga’s employees are local and 58% of them are below 40 years old
hence, it assures the continuity of the Company’s business. In ensuring business
sustainability, a long-term programme and clear succession plans have been put in place.

4.0 MATTERS RAISED BY THE MINORITY SHAREHOLDER WATCHDOG GROUP (“MSWG”)

MSWG via a Letter dated 9 June 2021 raised several questions, which were replied by the
Company via a letter dated 14 June 2020 and shared with the members of the Company during
the AGM. A. A copy of the same is attached to these minutes as Appendix A.

5.0 SIGNIFICANT MATTERS RAISED BY SHAREHOLDERS

Shareholders/Proxies raised the following significant matters which were duly answered by the
Board and members of Senior Management. A copy of the question and answer discussed is
annexed hereto as Appendix B.

6.0 RESOLUTIONS PASSED

Based on the polling results, all resolutions were passed by shareholders as follows:

VOTE AGAINST VOTE AGAINST RESULTS

NO RESOLUTIONS
NO OF SHARES % NO OF SHARES %
1. Ordinary Resolution 1 Re- 173,479,896 99.937 109,216 0.063 Carried
election of Dato’ Sri
Mohammed Shazalli Ramly

2. Ordinary Resolution 2 Re- 173,530,656 99.965 61,154 0.035 Carried

election of Datuk Zulkarnain
Md Eusope

3. Ordinary Resolution 3 Re- 173,505,756 99.965 60,854 0.035 Carried

election of Dato’ Dr. Najmil Faiz
Mohamed Aris

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

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4. Ordinary Resolution 4 Re- 173,442,772 99.926 127,838 0.074 Carried
election of Datuk Dr. Azhar
Ahmad

5. Ordinary Resolution 5 Re- 173,601,780 99.965 61,154 0.035 Carried

election of Encik Zulkifli Jafar

6. Ordinary Resolution 6 Re- 173,529,256 99.962 65,854 0.038 Carried

election of Dr. Abdul Razak
Ahmad

7. Ordinary Resolution 7 Re- 173,483,856 99.936 111,054 0.064 Carried

election of Encik Izaddeen
Daud

8. Ordinary Resolution 8 Re- 173,533,756 99.965 61,154 0.035 Carried

election of Encik Zainal Abidin
Shariff

9. Ordinary Resolution 9 Payment 173,463,276 99.924 132,624 0.076 Carried

of Directors’ fees and meeting
allowances for Pharmaniaga
Berhad from 17 June 2021 until
the conclusion of the next AGM
of the Company

10. Ordinary Resolution 10 173,462,823 99.925 130,277 0.075 Carried

Payment of meeting
allowances to Directors for
directorship in Pharmaniaga
Berhad subsidiaries in
Malaysia from 17 June 2021
until the conclusion of the next
AGM of the Company

11. Ordinary Resolution 11 173,459,823 99.923 134,077 0.077 Carried

Payment of Directors’ fees and
meeting allowances to
Directors for directorship in
Pharmaniaga Berhad
subsidiaries in Indonesia from
17 June 2021 until the
conclusion of the next AGM of
the Company

12. Ordinary Resolution 12 173,405,815 99.912 152,106 0.088 Carried

Payment of benefits in kind
payable to the Chairman and
Directors from 17 June 2021
until the conclusion of the next
AGM of the Company

13. Ordinary Resolution 13 Re- 172,926,813 99.575 737,444 0.425 Carried

appointment of Messrs.
PricewaterhouseCoopers
PLT as Auditors
14. Ordinary Resolution 14 173,548,162 99.934 114,754 0.066 Carried
Approval for Directors to allot
and issue shares

15. Ordinary Resolution 15 2,617,983 95.903 111,845 4.097 Carried

Renewal of Shareholders’
Mandate for Recurrent Related
Party Transactions

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

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Based on the aforesaid results, the Chairman declared all the Ordinary Resolutions as set out
in the Notice of the 23rd AGM of the Company dated 24 May 2021 were duly passed by the
shareholders.

The Annual General Meeting concluded at 11.00 a.m.

Summary of Key Matters Discussed at Pharmaniaga Berhad 23rd AGM

Page 6 of 6
 Appendix A

9 June 2021

The Chairman and (FAX:03-2141750)

Board of Directors
PHARMANIAGA BERHAD
28th Floor, Menara Boustead,
No. 69 Jalan Raja Chulan,
50200 Kuala Lumpur

Attention: Wan Intan Idura Wan Ismail / Syaruzaimi Yusof

Company Secretaries

Re: 23rd Annual General Meeting (AGM) of Pharmaniaga Berhad (Pharma) to be

held on Wednesday, 16th June 2021

In the interest of minority shareholders and all other stakeholders of the Company, we
would like to raise the following issues: -

Operational & Financial Matters

1) The Company entered into an agreement with the Government of Malaysia in

March 2021 to supply 12 million doses of Sinovac Covid-19 vaccine to be filled
and finished at its small volume injectable plant in Puchong. (Page 51 of AR
2020)

a) What is the capital investment made by the Company to undertake this

project?

b) What is the expected contribution to the Company’s profitability in FYE

2021?

c) Is the Company in negotiations with the Government to increase the

supply of the Sinovac vaccine? If yes, what is the expected increase?

2) Pharma’s contract with the Malaysian Government for the provision of

medicines and medical supplies will expire in November 2024. The Company is
looking for new avenues of growth both in the domestic and international
markets. (Page 51 of AR 2020)

What are the Company’s plans in developing new growth areas both in the
domestic and international markets?
3) The Cormpany is a dominant player in the Halal pharmaceutical market which
offers great potential as Halal medicines gain in popularity in usage around the
world?

a) What is the Company’s market share of the Halal pharmaceuticals

market in terms of percentage and value in FYE 2020?

b) What are the Company’s strategies in developing its Halal

pharmaceutical product offerings?

4) Pharma’s Indonesian logistic and distribution arm, PT Millenium Pharmacon

International TBK (MPI) registered a 3% decline in sales in FYE 2020 despite
adding on 33 MPI branches during the year. (Page 54 of AR 2020)

a) What were the reasons for the decline in sales despite having the
additional branches?

b) The Indonesian market offers huge potential to the Company due to

its demography. What are the steps the Company plans to take to
increase its sales in this huge market?

5) The Company incurred Non-Audit Fee of RM1.3 million in FYE 2020

(FYE2019: Nil). (Page 168 of AR 2020)

What is the nature of this fee?

6) Impairment loss on receivables increased significantly from RM1.6 million in FYE

2019 to RM3.9 million in FYE 2020. (Page 168 of AR 2020)

a) What was the reason for the substantial increase in impairments?

b) How much of these impairments have been recovered to-date?
c) What percentage of these impairments are expected to be non-
recoverable?
d) Are impairments expected to increase, going forward?
We would appreciate if the Board could present the points raised here, and
their related answers, for the shareholders present at the forthcoming AGM. At
the same time, we await a written reply as soon as possible for our records.

Thank you.

Yours sincerely

DEVANESAN EVANSON
Chief Executive Officer
DE/RS/PHARMA/AGM2020
 Appendix B

23rd ANNUAL GENERAL MEETING OF PHARMANIAGA BERHAD

Questions submitted by shareholders prior to AGM
as of 15 June 2021

QUESTION 1
KOW LIH SHI
Appreciate Pharmaniaga’s contribution to the nation on vaccine delivery.
Proud to continue supporting the company! I’m a vaccinated shareholder
too!
Will Pharmaniaga have partnerships with international research
companies, focused on research of medicines and mutated virus and
germs in order to prepare for upcoming pandemics or diseases?

ANSWER
We are partnering with multiple research organisations in several countries to
meet emerging market demands.

This is part of our future pipeline.

QUESTION 2
KOW LIH SHI
Will Pharmaniaga wind up dormant companies within the Group?

ANSWER
We will not be winding up the dormant company Pharmaniaga Pegasus Sdn
Bhd as this is the investment company for the China project where a litigation
case is currently ongoing.

We are currently in the process of winding up PT Mega Pharmaniaga in Jakarta,

Indonesia.
QUESTION 3

KOW LIH SHI

Does the Malaysian Government contribute funding to support the
company?

ANSWER

The Malaysian Government does not provide funding to support the Company.
However, the Company has applied and received a grant from the Malaysian
Investment Development Authority (MIDA) in 2016 for a project which qualify
under their scheme; Pharmaniaga LifeScience’s Lyophilised machine.

QUESTION 4

KOW LIH SHI

Will Pharmaniaga be emerging stronger in subsequent quarters?

ANSWER

We remain confident that the subsequent quarters will contribute positive

results.

QUESTION 5

KOW LIH SHI

Does the Boustead Group contribute much to the operational income of

Pharmaniaga?

ANSWER

The Boustead Group does not contribute to the operational income of

Pharmaniaga.

Principally, as the main shareholder of the Company, Boustead Group does not
contribute to the operational income of Pharmaniaga. However, they provided
support by giving the opportunity to leverage on Group’s strengths from other
Divisions.
QUESTION 6

KOW LIH SHI

Any R&D growth for worldwide network in medicine in terms of non-

monetary reward for Pharmaniaga?

ANSWER

Pharmaniaga is involved in the R&D of an affordable treatment of Hepatitis C

through the collaboration with Pharco Pharmaceuticals (Pharco) and Drugs for
Neglected Diseases Initiative (DNDi).
Our contribution goes into the dossier development that is used in the
registration in Malaysia and will be used for registration in other countries in
ASEAN and Latin America.
We will continue to be in involved in projects that are in the great interest of the
nation, such as the Hepatitis C treatment project.

QUESTION 7

KOW LIH SHI

Can Pharmaniaga survive if you lose the contract with the Government?

ANSWER

Pharmaniaga core business is in three main segments; logistics and distribution

(which covers the concession), manufacturing, trading and consumer
healthcare.
All supply of the drugs to the Government are via the tender process. Only a
few key players have the capacity to manufacture the drugs due to the highly
regulated business. We have to ensure all of our manufacturing plants are as
per regulatory standards, to ensure that we always comply to the Government’s
requirements.
We have to ensure that our pricing remains competitive for the market, locally
and globally.
So far, we have secured several tenders issued by MOH. MOH is satisfied with
our products and services and we will continue to support and to supply to the
MOH.
We are also increasing our presence and market share in the private market,
locally and globally.
Our consumer healthcare is also gaining wider market share with our OTC
products such as Actimol, Citrex Vitamin C, Baraka and Perozin.

QUESTION 8

KOW LIH SHI

Could the company expand into export business for profit growth?

ANSWER

Venturing into the export market is one of our core strategies.

We have made inroads into Europe, Middle East and North Africa.

Efforts are being made to establish reliable partners to pursue business in the
respective continents mentions.

QUESTION 9

KOW LIH SHI

Will Pharmaniaga be venturing into new sectors?

ANSWER

Pharmaniaga is a pharmaceutical company and is involved in the manufacturing

and trading of pharmaceutical drugs and non-drugs.

We have moved into vaccine which is a new area within the drug industry.

Pharmaniaga will always in the lookout for new opportunities but it has to gel
well with the expertise and complement the subsectors we are in.

QUESTION 10

JOHANIFF SOFAZ B. ADNAN

It was in the news recently that Arab Saudi only recognises the Pfizer and
Astrazeneca vaccines for those performing the Haj and Umrah. Any action
from your side to make Arab Saudi and other countries recognise the
Sinovac vaccine as a worldwide digital vaccination certificate?

ANSWER

Arab Saudi recognises all the COVID-19 vaccines that have received WHO’s
emergency use license (EUL) such as Pfizer, AstraZeneca, Moderna, and
Johnson & Johnson previously. However, the list will be extended upon WHO’s
approval.

The Sinovac vaccine has received the EUL from The World Health Organization
(WHO) on 1 June 2021. We have been informed by Sinovac that it has
submitted a request to Saudi Food and Drug Authority (SFDA) for the approval
two months ago. It is expected that SFDA will approve it soon.

QUESTION 11

JOHANIFF SOFAZ B. ADNAN

The Edge CEO morning brief dated 28 May 2021 mentioned that Sinovac
confirms Pharmaniaga as its sole vaccine distributor in Malaysia. Is your
company planning to be the sole vaccine distributor for other vaccines
such as Sinopharm, Gamaleya (Sputnik V), Moderna, Novavax, Bharat
Biotech, Johnson & Johnson and the two brands of vaccines currently
under Malaysia’s National Immunisation Programme (PICK), which is
Pfizer and AstraZeneca?

ANSWER

Pharmaniaga is the exclusive distributor of the Sinovac COVID-19 vaccine in

Malaysia.

Pharmaniaga scopes covers fill and finish manufacturing and distribution of

Sinovac COVID-19 vaccine only.

If we were given the opportunity to work with other COVID-19 vaccine

manufacturers, we will be glad to do so. Currently, we are in the midst of
discussing with other related parties.

We have been appointed as the logistics partner for the distribution of

AstraZeneca vaccine, upon the completion of an open tender. We will continue
to participate and offer our services.
QUESTION 12

P’NG JIUNN YUAN

What is the gross profit margin for the Sinovac vaccine that Pharmaniaga
is selling to the Government?

ANSWER

As any other business dealings, we do not disclose the gross profit margin due
to confidentiality of the information.

QUESTION 13

P’NG JIUNN YUAN

Is there any agreement with the Government that Pharmaniaga will supply
the majority of the vaccine to Malaysia?

ANSWER

Pharmaniaga agreement is to supply 12 million doses of Sinovac COVID-19

vaccines to the MOH which covers only 18% of the population.

QUESTION 14

P’NG JIUNN YUAN

What is your view on Duopharma’s agreement with the Government to

supply another type of vaccine? Will it affect Pharmaniaga’s overall
business opportunity?

ANSWER

At the moment, it is the Government’s decision to appoint Duopharma as one

of the COVID-19 vaccine suppliers.

No, it will not affect Pharmaniaga’s business opportunity.

QUESTION 15

P’NG JIUNN YUAN

When will the new facility start operating?

ANSWER

We have embarked on the Halal vaccine project and the facility will start
operating by 2024.

QUESTION 16

P’NG JIUNN YUAN

Moving forward, will Pharmaniaga inject capex to manufacture your own

COVID-19 vaccine?

ANSWER

Yes, we will consider injecting CAPEX to manufacture our own COVID-19

vaccine if it is viable.

QUESTION 17

TEH NAM KHOON

Do you mind to provide your perspective in view of the major selling of

company stocks by key stakeholders of Boustead Holdings Berhad and
Lembaga Tabung Angkatan Tentera?

ANSWER

We are not in the position to comment on this matter.

QUESTION 18

TEH NAM KHOON

With the majority deployment of vaccines nationwide for 2021, how much
of the revenue growth can we expect for FY2021? How much of profit
margin per 1 dose of vaccine?
ANSWER

We would expect a double-digit growth in the revenue for FY2021.

We are unable to disclose the cost, due to confidentiality of the information.

QUESTION 19

MANOHAR A/L G N KARUNA

Ivermectin:
What will be the impact to Pharmaniaga if Ivermectin is approved for large
scale use in Malaysia?

ANSWER

The function of Ivermectin is different from that of the vaccine. It is to treat

patients, while the vaccine is to protect and prevent healthy people from the
virus.

We do not foresee any significant impact with the introduction of Ivermectin, in

view of differing functions between the two.

QUESTION 20

MANOHAR A/L G N KARUNA

Ivermectin:

Can Pharmaniaga get exclusive rights to procure and distribute

Ivermectin here?

ANSWER

We are exploring partnerships for the supply of this medicine.

QUESTION 21

MANOHAR A/L G N KARUNA

Sinovac:

Confusion on Pharmaniaga position on Sinovac. Is Pharmaniaga

manufacturing from production of the vaccine to completion and delivery
of Sinovac in Malaysia or are you just bottling them here?

ANSWER
Pharmaniaga is importing the bulk material from Sinovac and performs the fill
and finish process at the Pharmaniaga LifeScience plant. This also involves
transfer of technology and required testing.

QUESTION 22

LEONG TAK CHUAN

How much is the profit gained from supplying Sinovac to fulfill total
government commitment?

ANSWER

As in any other business dealings, we do not disclose the gross profit margin
due to confidentiality of the information.

QUESTIONS 23

LEONG TAK CHUAN

What is the outlook/forecast on Sinovac supply to private sectors, post

Government vaccination programme? How much profit is anticipated
from here?
ANSWER
There is a huge demand for the private sector vaccination.
However, for the profit, as in any other business dealings, we do not disclose
the gross profit margin due to confidentiality of the information.
QUESTION 24-26

KOW LIH SHI

NG GUEY SHYAN

TEH NAM KHOON

Will there be a dividend/ special dividend provided in the next quarter?

ANSWER

We are dedicated to delivering shareholder value through consistent dividend

payouts.

The Board of Directors reviews the dividend each quarter and the factors that
we consider includes underlying business performance, the financial outlook
and other factors which may vary quarter to quarter.

REQUEST FOR EVOUCHER

QUESTION 27

STEPHEN LYE TUCK MENG

Dear BOD, kindly give us some eVouchers or eWallet for being loyal
shareholders and attending this meeting. Times are bad now. Thank you.

ANSWER

This question will be answered by the Chairman at the end

of the meeting.

EVOUCHER

QUESTION 28-29

TEE BENG HEE

LIM BA TAI @ LIM ENG KIM

Since the Company is paying its BOD fees, remuneration, allowances

etc during this pandemic, we hope the Company will reconsider its
earlier decision of not giving any eVouchers/ eWallet to shareholders/
proxies attending this live streaming agm/egm and remote voting. Your
kind consideration and gesture is very much appreciated. Thank you.

ANSWER

This question will be answered by the Chairman at the end of the meeting.

E-WALLET

QUESTION 30

SEE YOOT WAH

Please reconsider e-wallet to tide over COVID-19 storm. Thank you.

ANSWER

At the moment, we will still maintain providing RoyalePharma e-voucher.

REGISTRATION AT TRICOR SYSTEM

QUESTION 31

SUA FOONG YUEN

I registered, but no confirmation?

ANSWER

Tricor has communicated with the respected shareholder to check the

application history in the system for confirmation of registration.
 23rd ANNUAL GENERAL MEETING OF PHARMANIAGA BERHAD
Live questions submitted by shareholders during AGM
on 16 June 2021

FINANCE & INDONESIA OPERATIONS

QUESTION 1

KOH CHOOI PENG

The Group reported negative cash flow from operations amounted to RM25.71
million in FY2020 (pages 139-140 of AR). This worsened to RM86.263 million as
disclosed in the 1st Quarter 2021 results.

What is/are the reason(s) for the persistent negative cash flow from operations
which are financed mostly by more bank borrowings? How will the Company
improve cash flows moving forward?

ANSWER

The negative cash flow from operation for FY2020 was due to the advance payment
made for personal protective equipment (PPE) made to the suppliers in overseas
during the COVID-19 crisis in FY2020.

The situation continues in Quarter 1 FY2021 as a result of advance payment made to

Sinovac Life Sciences Co. Ltd. for COVID-19 vaccine.

The operation cash flow will turn positive once we receive payment from the
Government.

QUESTION 2

KOH CHOOI PENG

The Gearing Ratio of Pharmaniaga had increased from only 1.2X in FY2016 to
2X in FY2020. The Group incurred further net drawdown of borrowing amounting
to RM120.687 million in the first quarter of FY2021 based on latest quarterly
results.

With budgeted capex of RM120.6 million (page 216 of AR), can the Board provide
further details on how the Group is going to manage the gearing going forward
from the current high levels?

ANSWER

The high gearing ratio is due to the advance payment made for personal protective
equipment (PPE) to the suppliers in overseas during the COVID-19 crisis in FY2020.
The situation continues in Quarter 1 FY2021 as a result of advance payment made to
Sinovac Life Sciences Co. Ltd. for COVID-19 vaccine.

The gearing will be pared down once we receive payment from the Government.

While for the budgeted CAPEX, we have received additional term loan (long term
financing).

QUESTION 3

CHUA SONG YUN

Pharmaniaga's borrowings under current liabilities are very high at RM669

million, which is about 1.9x of the equity. Considering that the company share
price are in multi-years high, why are we not raising fund via private placement
to lower the borrowings to a more comfortable level? Are we restricted by
controlling shareholder's dilution concerns?

ANSWER

Higher borrowings are due to advance payment made to overseas suppliers for the
purchase of personal protective equipment (PPE) during Covid-19 crisis and the
situation continues in 2021 as a result of advance payment made to purchase Covid-
19 vaccine from Sinovac Life Sciences Co. Ltd. Nevertheless, the borrowings will be
pared down once we received payment from the Government.

We have obtained the trust from financial institutions to fund these transactions via
short term facilities.

We do not intend to explore any private placement at this juncture. The borrowings will
be pared down once we received the collection from Government.

QUESTION 4

WEE TEE FATT

What is the percentage of profit contribution from the COVID-19 vaccine moving
forward?

In view that the Government has recently approved Johnson & Johnson and
CanSino vaccines for conditional use in Malaysia, will the said vaccines impact
the sale of the company's Sinovac vaccine?
ANSWER

It is too early to disclose the profit contribution of the vaccine at this juncture. It will be
announced during our financial quarterly results.

No, it will not affect our sale of the Sinovac COVID-19 vaccine.

QUESTION 5

NEO SAY YEOW

A report mentioned that profit from Sinovac COVID-19 vaccine is only RM1 per
dose. Why so low?

ANSWER

We have never shared any information related to the profitability of the Sinovac
COVID-19 vaccine to anyone. The RM 1 profit per dose report was the writer’s
assumption.

QUESTION 6

KOH CHOOI PENG

The Indonesian operations increased its Net Losses further to RM8.38 million in
FY2020. The losses continued at RM1.66 million as reported in the first Quarter
2021 results.

What are the actions taken to turn around the Indonesian operations? When will
Management expect it to be profitable?

ANSWER

With a population close to 300mil, Indonesia offers significant opportunities despite

the tough competition.
Performance was impacted in 2020 during the peak of COVID-19 pandemic.
Management has put in strategies and we foresee positive growth moving ahead.

MPI’s Strategies:
-Accelerate revenue growth
-Increase profitability by improving collection rate and inventory
management
-Reduce finance costs
-Adopt IT for operational efficiency
Errita’s Strategies:

-Accelerating product launches by focusing on our first to market strategy

-Continued partnership with MPI as distributor of our products in Java and
collaboration with local distributors to cover the areas of West, Central
and East Java; and
-Collaboration with multinational companies to undertake contract
manufacturing activities.

DIVIDEND & SHARE PRICE

QUESTION 7
YEOW SIEW CHONG

I am very disappointed with the dividend. Only 1 sen.

ANSWER

We are dedicated to delivering shareholder value through consistent dividend payouts.

The Board of Directors reviews the dividend each quarter and the factors that we
consider includes underlying business performance, the financial outlook and other
factors which may vary quarter to quarter.

QUESTION 8

LOO TUCK FATT

Can we expect higher and more frequency of dividends?

ANSWER

As a stable dividend yield stock, we are dedicated to delivering shareholder value

through consistent dividend payouts.

The Board of Directors reviews the dividend each quarter and the factors that we
consider includes underlying business performance, the financial outlook and other
factors which may vary quarter to quarter.
QUESTION 9

GOH CHIA HUI

Why the stock price stagnant at RM 5.1+? Thanks

ANSWER

The share price is determined by the open market forces and we have no influence on
the price movement.

R&D, MANUFACTURING, COVID-19 VACCINE & INTERNATIONAL BUSINESS

QUESTION 10

KOW LIH SHI

Does Pharmaniaga have the ability to produce new vaccine for COVID-19 and
other new virus?

ANSWER

Pharmaniaga is in talks with potential partners to collaborate on the development of

our own COVID-19 vaccine and also for other viral vaccines.

QUESTION 11
KOW LIH SHI

Why does the Government not appoint Pharmaniaga to produce Malaysian

made vaccine?

ANSWER

It is the Government’s prerogative to appoint a company to implement this initiative.

Meanwhile, our plan to establish the world’s first Halal vaccine facility is progressing
well. The facility is targeted for completion by 2022. With the establishment of this
facility, Pharmaniaga aspires to be the preferred partner to the Government in
producing Malaysian made vaccines.

QUESTION 12

KOW LIH SHI

How about the was earlier statement by ministry that Malaysia will be doing our
own vaccine by a local University. Was that for education contribution?
ANSWER

On 13 June, media reported Health Minister Datuk Seri Dr Adham Baba announced
that Institute for Medical Research Malaysia (IMR) is developing two types of COVID-
19 vaccines - a ribonucleic acid (RNA) vaccine or messenger RNA (mRNA) vaccine
and an inactivated vaccine. This is a project initiated by the Government and as a
GLC, we will support this effort.

QUESTION 13

KOW LIH SHI

The cost of Pharmaniaga to produce existing vaccine is lower than import?

ANSWER

Yes, the cost to fill and finish the Sinovac COVID-19 vaccine locally is lower as
compared to importing it.

QUESTION 14

KOW LIH SHI

Can Pharmaniaga as a medicine centre and local lab support the Government?

ANSWER

We make high quality and affordable medicines, and we are in the midst of expanding
our therapeutic segments to include biopharma and nutraceuticals. As we are
manufacturers of generic drugs, we are able to support the Government in reducing
its dependency on imported and expensive innovator drugs.

QUESTION 15

KOW LIH SHI

How is the Malaysian pharmaceutical industry? How is Pharmaniaga growing

and are you exploring new areas with profitable returns?

ANSWER

Pharmaniaga is a pharmaceutical company and is involved in the manufacturing and

trading of pharmaceutical drugs and non-drugs.

We have moved into vaccine which is a new area within the Malaysian pharma
industry, and this will also serve as a new revenue stream to the Group.
Pharmaniaga is always in the lookout for new opportunities, but it has to be aligned
with our aspirations and complement the subsectors we are currently operating in.

QUESTION 16

KOW LIH SHI

How is your oversea business expanding? Could partnerships or joint ventures

with well-known centres contribute to the growth of the health
industry/medicines?

ANSWER

Venturing into export market is one of our core strategies. We have received approval
for 13 new products, bringing our total number of approved export registrations to 190
products spanning 15 countries.

We have also secured a strategic partnership with an international research

organisation to produce various niche and complex products, allowing us to maintain
our competitive edge.

We continue to ensure that our products are efficacious and robust in terms of
consistency and reproducible product quality for local and international markets.

QUESTION 17

LEE HOE CHOON

We've an agreement to supply 12 million doses of F&F Sinovac COVID-19

vaccine and 200,000 of finished products, please update as at this week, how
many has been delivered?

If all above has been fulfilled, judging from Malaysia small population and
presence of other competitive vaccine, are there any plan to continue using the
F&F facilities?

ANSWER

As of 30 June 2021, we have a total of 11.8 million doses of fill and finish, as well as
finished Sinovac COVID-19 vaccines. Out of this number, 5.8 million doses are
pending Lot Release approval from the National Pharmaceutical Regulatory Agency
which will be obtained very soon.
To date, we have delivered 4 million doses to Vaccine Distribution Centres (PPV) and
Vaccine Storage Centres (PSV) nationwide as per instructions by Ministry of Health.
We are confident that we will be able to fulfil our contractual obligation to the
Government by end of July.
Pharmaniaga will continue to utilise the fill and finish facility to fulfill the increasing
demands for vaccines from both local and international markets.

QUESTION 18

CHEW CHUAN FATT

From what I know our company does not have the necessary facilities and
skilled resources to perform this function. To do this it will involve time and
training of staff and incurred capex in the expense of vaccinating our people in
the shortest time possible. If ALL vaccines are imported directly then all of these
will not be an issue.

May I know what are the cost and benefits of filled & finished of Sinovac COVID-
19 vaccine over the ready product imported direct from China?

ANSWER

Pharmaniaga LifeScience Sdn Bhd plant in Puchong is already equipped with the
required filling equipment, infrastructure (including cold chain warehouse and quality
control systems) and trained manpower for sterile injectable manufacturing. As such,
undertaking the COVID-19 vaccine fill-finish required minimal time and resources.

The two main benefits are; firstly, the cost of the fill and finish dose being lower than
the finished good dose; and secondly, due to constraints in the supply of finished
product by Sinovac, undertaking the fill-finish in Malaysia using Sinovac’s bulk allowed
earlier availability of the vaccine to the Government.

QUESTION 19

LIEW CHEE SENG

Can your Sinovac COVID-19 vaccine prevent individuals from the COVID-19
variants from India, Britain and South Africa?

ANSWER
It has been demonstrated that the Sinovac COVID-19 vaccine is effective against the
variants from Brazil, UK and South Africa. The Indian variant or known as Delta variant
study is ongoing.
We will announce any new developments from time to time.
QUESTION 20

FOO SAY TEE

With demand for COVID-19 vaccines outpacing the world’s supplies, how can
Pharmaniaga ensure Malaysian gets more?

ANSWER

Pharmaniaga is currently focused on meeting its obligation to deliver 12 million doses

of Sinovac COVID-19 vaccine to the Government, while an additional 12 million doses
of the vaccine have been ordered for Malaysia.

REQUEST FOR ANNUAL REPORT

QUESTION 21: KOH CHOOI PENG

QUESTION 22: TEH PENG TIN
QUESTION 23: CHUA CHIN LEONG
QUESTION 24: LOO YEO MING
QUESTION 25: CHEONG SIAN HOE

ANSWER

The requested Annual Report have been posted to shareholders by Pharmaniaga’s

Share Registrar; Tricor Investor & Issuing House Services Sdn Bhd on 22 June 2021.

REQUEST FOR E-VOUCHER

QUESTION 26: CHEAH YEW BOON

QUESTION 27: LEE SUAN BEE
QUESTION 28: STEPHEN LYE TUCK MENG
QUESTION 29: LEONG FOOK SEN @ FRANCIS LEONG
QUESTION 30: CHAN AH MOI
QUESTION 31: LAU ATI @ LAU CHUAN TENG
QUESTION 32: LAU TING EN
QUESTION 33: PORAVI A/L S P SITHAMBARAM PILLAY
QUESTION 34: TEH PENG TIN
QUESTION 35: CHIEW CHOY @ CHOW CHIN HOI
QUESTION 36: REEMARACHNA A/P PORAVI
QUESTION 37 MONO KARI A/P SOKKALINGAM
QUESTION 38: LEE CHONG SING
QUESTION 39: TAN KWAI YIN
QUESTION 40: CHAN NGUN FONG
QUESTION 41: MOHD TAHIR BIN MAULUT
QUESTION 42: HOW SAY KEONG
QUESTION 43: TEH SUE LENG
QUESTION 44: LEE AH CHAI @ LEE TIEN SING
QUESTION 45: TEE BENG NGO
QUESTION 46: JOHNNY LEE YUEN KUN
QUESTION 47: SHIRLEY TAN
QUESTION 48: THAVARAJAN A/L MUTHIAH PILLAI
QUESTION 49: TEH SUE WEI
QUESTION 50: GOH PEK HONG
QUESTION 51: LOO YEO MING
QUESTION 52: LUM PEK KAM
QUESTION 53: LOO YEO MING
QUESTION 54: KOK SAK LIN
QUESTION 55: TAN TENG CHEE
QUESTION 56: ONG SON YANG
QUESTION 57: SEE YOOT WAH
QUESTION 58: LUM MAY KWAN
QUESTION 59: LEE TUCK FEONG
QUESTION 60: LEE KWAI YOONG
QUESTION 61: LEE MIN SHIN
QUESTION 62: CHEONG SIAN HOE
QUESTION 63: REEVANASH A/L PORAVI
ANSWER

As a form of appreciation to shareholders and proxies who have logged-in during this
AGM, the Company will email a RM50 RoyalePharma e-voucher to the email address
registered with Tricor for purpose of this virtual AGM. Eligible shareholders will receive
the e-voucher with a unique code within 14 days after the completion of this AGM. The
e-voucher can be used at www.royalepharma.com, an online pharmacy operated by
the Company.

The terms and conditions of the use of the e-voucher will be stated in the email issued
to all eligible shareholders and proxies.

OTHER ENQUIRIES/ COMMENTS

QUESTION 64

LIM JIT CHEW

I noted on page 242 - Ordinary Resolution 12, that the Non-Executive Directors
are given Unlimited Coverage of Medical Benefits as one of the benefits in kind.
Is this particular benefit also extended to the staff of the company? If not why?

ANSWER

Employees’ Medical benefits are different from that of Directors as it also covers family
members. There are limits to the total amount and treatment for inpatient and
outpatient as per terms with Insurance provider, however the Company has never
denied treatment for Employees and dependants that have exceeded their limit.

QUESTION 65

TEH PENG TIN

How much does the company spend on this virtual AGM and EGM?

ANSWER

We have budgeted RM80,000 for this virtual AGM and EGM.

QUESTION 66

TAN KWAI YIN

What is cost for this Remote Participation & Voting (RPV) meeting?
ANSWER

We have budgeted RM80,000 for this virtual AGM and EGM.

QUESTION 67

TAN KIM WHATT

Live transmission interrupted

ANSWER

The live streaming of the AGM was conducted smoothly at our end without any
interruptions. However, we can’t be certain of the internet connection at your location,
as it was beyond our control.

QUESTION 68

LOO YEO MING

How do we know that you have address all our questions? and satisfactorily?

ANSWER

We have answered all questions provided through our share registrar, satisfactorily.

The questions and answers will be uploaded to the Company’s website in due time.

QUESTION 69, 70, 71 FROM STEPHEN LYE TUCK MENG

QUESTION 69

Dear BOD - There was a question earlier with my name on it - I did not ask that
question - I have checked with Samantha Goh (Tricor) - she said you people
screwed up on this. I believe an apology is in order.
The Question is: Question 1
Appreciate Pharmaniaga's contribution to the nation...

ANSWER
We deeply regret this mix up and will ensure that it will not happen again in the future.
However, for our shareholders’ information, our Dato’ Sri Chairman has addressed
this matter and issued an apology during the AGM.
QUESTION 70

Q27 - is the correct question I asked. Not Q1.

ANSWER

We deeply regret this mix up and will ensure that it will not happen again in the future.
However, for our shareholders’ information, our Dato’ Sri Chairman has addressed
this matter and issued an apology during the AGM.

QUESTION 71
I should be given double the vouchers for the screwup with the questions earlier
which I did not ask - Question 1.
ANSWER
We have addressed this issue accordingly. Thank you for your kind understanding.

QUESTION 72

SHIVANANDHA A/L CHELLAPPAH

There is a video clip in display with no sound. Is that intentional? Just

wondering if it’s my computer the problem.

ANSWER

The live streaming of the AGM and EGM were conducted smoothly at our end without
any interruptions, and all videos were played well with audio.

QUESTION 73

SHIRLEY TAN

Thank you Chairman & Pharmaniaga!

ANSWER

You are most welcome, Madam. Thank you for being our loyal shareholder throughout
the years.

QUESTION 74

TAN SAIK KUEN

Thank you.
ANSWER

You are most welcome. Thank you for being our loyal shareholder throughout the
years.

QUESTION 75

SHIVANANDHA A/L CHELLAPPAH

Can’t hear Chairman

ANSWER

We apologise for any interruptions experienced during the live streaming of the AGM.

QUESTION 76 & 77 FROM LIM JIT THIN

QUESTION 76

LIM JIT THIN

Last year door gift was not utilised due to the MCO lockdown cos my email was
not accessible as I was not able to go to the office. Will the company rectify this
by reissuing the eVoucher again as I had even email (dated 17 Nov 2020) to your
company (online@royalepharma.com) without a reply.

ANSWER
We are sorry to hear that you were unable to utilise last year’s e-voucher due to various
factors. However, we hope you will be able to utilise the e-voucher provided this year.
For our shareholder’s information, the e-voucher provided this year will expire on 30
September 2021. Thank you for your kind understanding.

QUESTION 77
Due to 2020 MCO/RMCO/CMCO, I had not been able to access my personal email
account due to the restrictions to go to the office and now the office dept has
been closed down. This makes it difficult and worse for me to access email. Had
to use my neighbour's PC to email to you then on 17 Nov 2020 @
online@royalepharma.com (w/o any reply) thus can't read your email on e-
voucher to utilise it in time. Kindly extend, thank you.

ANSWER
We are sorry to hear that you were unable to utilise last year’s e-voucher due to various
factors. However, we hope you will be able to utilise the e-voucher provided this year.
For our shareholder’s information, the e-voucher provided this year will expire on 30
September 2021. Thank you for your kind understanding.
QUESTION 78
SHIVANANDHA A/L CHELLAPPAH

Sorry, will the meeting resume?

ANSWER

The session for the AGM began at 9.00 am, while the session for EGM began at 11.00
am on 16 June 2021.

QUESTION 79

CHOW LEE MING

Please give your products.

ANSWER

This year, Pharmaniaga will continue providing our shareholders with our
RoyalePharma e-voucher.