Key highlights on corporate actions

◆ Corporate actions refer to events that bring change to securities of a company and the company itself. They are proposed by the company's board of directors and approved by the company's shareholders at general meetings

◆ Corporate actions are meant to restructure the business, influence the share price and to reward shareholders.

◆ There are three main types of corporate actions namely

• Mandatory - all existing shareholders are required to participate. Examples include bonus issue, share splits and share consolidation.

• Mandatory with an option - though compulsory, shareholders are given an opportunity to choose from available options, for example, either scrip dividend or cash dividend.

• Voluntary - shareholders have an option either to participate in the corporate action or not, for example rights issues and share buy backs.

◆ A bonus issue is an offer for free additional shares by a company as a reward to shareholders.

◆ A scrip dividend is an offer by a company to shareholders for an option to receive a dividend payment either in form of cash or additional shares.

◆ A share split involves a company dividing its existing shares into multiples thereby increasing the number of the outstanding shares while the underlying total market value of the company remains the same.

◆ Share consolidation is undertaken by a company to reduce total number of shares in issue while simultaneously increasing the nominal value of the shares.

◆ A takeover involves one company assuming control of another company by buying a controlling stake in the latter.

◆ A merger is a corporate strategy whereby two or more companies voluntarily combine to form one new entity.

◆ An employee share scheme is an arrangement whereby the employer rewards employees (or a selection of them) through shares or any other share derived benefits.

◆ Dividends are distributions of a portion of a company's earnings to shareholders as and when declared by the board of directors.