TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other adviser immediately. Bursa Malaysia Securities Berhad has not perused Item 2 of the Circular in relation to the Proposed Purchase of Shares by the Company and takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liabilities whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS in relation to the 1. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY The Notice of the 49 th Annual General Meeting that contains resolutions pertaining to the Proposed Shareholders Mandate on Recurrent Related Party Transactions of a Revenue or Trading Nature and Proposed Renewal of Authority for the Purchase of Own Shares by the Company to be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160, Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Tuesday, 27 April 2010 at a.m. is sent to you together with this Circular. Shareholders are advised to refer to the Notice of the 49 th Annual General Meeting and the Form of Proxy, which are included in the Annual Report The Form of Proxy must be lodged at the Registered Office of the Company, 6 th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Malaysia not later than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof. This Circular is dated 5 April 2010

2 DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular:- Act : Malaysian Companies Act, 1965 as amended from time to time and any re-enactment thereof AGM : Annual General Meeting Board : Board of Directors of TCB Code : The Malaysian Code on Take-overs and Mergers 1998 as amended from time to time and any re-enactment thereof Director : Shall have the meaning given in Section 2(1) of the Capital Markets and Services Act 2007 and includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a director of TCB, its subsidiary or holding company; or the chief executive of TCB, its subsidiary or holding company EPS : Earnings per Share Goods : Includes stocks-in-trade, parts, accessories, works-in-progress, finished goods, components and raw materials Bursa Securities or Exchange : Bursa Malaysia Securities Berhad Listing Requirements : The Main Market Listing Requirements of Bursa Securities Major Shareholder : A person who has an interest or interests in one or more voting shares in TCB and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is - (a) 10% or more of the aggregate of the nominal amounts of all the voting shares in TCB; or (b) 5% or more of the aggregate of the nominal amounts of all the voting shares in TCB where such person is the largest shareholder of TCB. For the purpose of this definition, interest in shares shall have the meaning given in section 6A of the Act. A major shareholder includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a major shareholder of TCB or any other company which is its subsidiary or holding company Ordinary Shares : Issued and paid-up ordinary shares of RM1.00 each in TCB Person Connected : In relation to a director or a major shareholder, means such person or persons who falls under any one of the following categories:- (a) a member of the director s or major shareholder s family; (b) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the director, major shareholder or a member of the director s or major shareholder s family is the sole beneficiary; (c) a partner of the director, major shareholder or a partner of a person connected with that director or major shareholder; (d) a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the i

3 directions, instructions or wishes of the director or major shareholder; (e) a person in accordance with whose directions, instructions or wishes the director or major shareholder is accustomed or is under an obligation, whether formal or informal, to act; (f) a body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director or major shareholder; (g) a body corporate or its directors whose directions, instructions or wishes the director or major shareholder is accustomed or under an obligation, whether formal or informal, to act; (h) a body corporate in which the director, major shareholder and/or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or (i) a body corporate which is a related corporation. Proposals : The Proposed Shareholders Mandate and Proposed Share Buy-back collectively Proposed Shareholders Mandate : Shareholders approval for renewal of and new general mandate in relation to recurrent related party transactions of a revenue or trading nature which are necessary for day-to-day operations Proposed Share Buy-back : Proposal to renew the authority for the purchase of own shares by TCB to enable TCB to purchase and/or hold up to ten per centum (10%) of its own Ordinary Shares Ringgit Malaysia or RM and sen : Lawful currency of Malaysia Shares : Issued and paid-up Ordinary Shares of RM1.00 each and 6% Cumulative Participating Preference Shares of RM1.00 each of TCB Recurrent RPT : Recurrent related party transactions or transaction of a revenue or trading nature, which are necessary for day-to-day operations Related Party or Related Parties : A director, major shareholder or person connected with such director or major shareholder (as defined in the Listing Requirements) Services : Includes secretarial, corporate, finance and treasury, nominee, share registration, ESOS administration, human resources management and development, quality improvement, technical advisory, stock broking, shares and securities services, investment and fund management, insurance and insurance broking, property, hotel, building and estate management, logistic, transportation and freight, marketing and distribution, rental and security services Substantial Shareholder or Substantial Shareholders : Shall have the meaning given in Section 69D of the Act TCB or Company : Tasek Corporation Berhad (4698-W) ii

4 TCB Group : Tasek Corporation Berhad and its subsidiaries Treasury Shares : The purchased Ordinary Shares which are bought and held by TCB as treasury shares and shall have the meaning given under Section 67A of the Act iii

5 CONTENTS LETTER TO SHAREHOLDERS Page 1. INTRODUCTION 1 2. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2.1 DETAILS CLASSES OF RELATED PARTIES NATURE OF RELATED PARTY TRANSACTIONS CONTEMPLATED REVIEW PROCEDURES FOR RECURRENT RPT STATEMENT BY BOARD AUDIT AND RISK MANAGEMENT COMMITTEE VALIDITY PERIOD OF THE PROPOSED SHAREHOLDERS MANDATE DISCLOSURE EXISTING MANDATE ON RECURRENT RPT (NOT SEEKING FOR RENEWAL) 2.2 RATIONALE FOR AND THE BENEFITS OF THE PROPOSED SHAREHOLDERS MANDATE 2.3 CONDITION OF THE PROPOSED SHAREHOLDERS MANDATE 3. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY 3.1 DETAILS OF THE PROPOSED SHARE BUY-BACK RATIONALE FOR THE PROPOSED SHARE BUY-BACK POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY- BACK 3.4 EFFECTS OF THE PROPOSED SHARE BUY-BACK ORDINARY SHARE CAPITAL NTA, WORKING CAPITAL AND CASH FLOW EARNINGS DIVIDENDS DIRECTORS & SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS PUBLIC SHAREHOLDING SPREAD PURCHASES OR RESALE OF TREASURY SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS IMPLICATION OF THE CODE SHARE PRICES DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS DIRECTORS RECOMMENDATION ANNUAL GENERAL MEETING FURTHER INFORMATION 12 APPENDICES APPENDIX I - MAJOR SHAREHOLDERS, PERSONS CONNECTED WITH DIRECTORS 13 APPENDIX II - DETAILS OF RECURRENT RPT 15 APPENDIX III - FURTHER INFORMATION 18 iv

6 TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia) Registered Office: 6 th Floor, Office Block, Grand Millennium Kuala Lumpur 160 Jalan Bukit Bintang Kuala Lumpur Directors: Kwek Leng Peck (Non-Executive Director) (Chairman) Dato Teo Tong Kooi (Executive Director / Vice Chairman) Ting Sii Yao Sik Tien (Non-Executive Director) Dato Khoo Peng Lai (Independent Non-Executive Director) 5 April 2010 Dato Chong Pah Aung (Independent Non-Executive Director) Wan Mohd Shukri bin Ariffin (Independent Non-Executive Director) Kwek Kon Chun (Non-Executive Director) To: The Shareholders of Tasek Corporation Berhad Dear Sir/Madam PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY 1. INTRODUCTION On 9 February 2010 the Company had announced that it proposes to seek shareholders approval for the Proposals. At the Company s 48 th AGM held on 28 April 2009, shareholders had approved the following ordinary resolutions in respect of the Proposals: i) Proposed Shareholders Mandate on Recurrent Related Party Transactions of a Revenue or Trading Nature; and ii) Proposed Renewal of Authority for the Purchase of Own Shares by the Company. The above said approvals will lapse at the conclusion of the forthcoming AGM unless renewed. The purpose of this Circular is to provide you with details of the Proposals and to seek your approval for the renewal of the ordinary resolutions to be tabled at the 49 th AGM to be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160, Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Tuesday, 27 April 2010 at 10:00 a.m. 2. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2.1 DETAILS The approval for renewal of and new general mandate will permit the TCB Group to enter into all recurrent related party transactions of a revenue or trading nature with the classes of Related Parties as listed in Appendix II which are necessary for day-to-day operations in the ordinary course of business and on terms not more favourable to the Related Parties than those generally available to the public Classes of Related Parties The TCB Group s day-to-day operations carried out between companies within the TCB Group and any of the following classes of Related Parties are: a) Major Shareholders of companies within the TCB Group, Hong Leong Investment Holdings 1

7 Pte. Ltd. ( HLIH ) and persons connected with HLIH ( HLIH Group ), as listed in Appendix I; and b) Directors of companies within the TCB Group and persons connected with such directors, as listed in Appendix I. The details of shareholdings of the aforesaid classes of Related Parties are set out in paragraph 3.5 below Nature of Related Party Transactions Contemplated The principal activities of TCB are the manufacture and sale of cement and related products and investment holding whereas the principal activity of the subsidiaries, namely Posek Pembangunan Sdn. Bhd. are property development; Tasek Property Holdings Sdn. Bhd., investment holding; Tasek Plantation Sdn. Bhd., land cultivation, plantation and estate management; Tasek Concrete Sdn. Bhd., manufacturing and supplying of ready-mixed concrete; Tasek Industries Sdn. Bhd., intention-investment holding, management administrative, supervisory business and investment services; and Tasek Holdings Pte Ltd, dormant. The Related Parties of the TCB Group are involved in a diverse range of industries, including inter alia, insurance and insurance broking, securities broking, fund management, hotel and property management, property development, distribution, marketing, trading and the provision of nominee, share registration, security, transport, logistic services and trading of ready mixed products. In view thereof, it is envisaged that in the normal course of business of TCB Group, transactions between companies in the TCB Group and its Related Parties will occur with some degree of frequency from time to time and may arise at any time. Accordingly, the Board considers it beneficial to have the flexibility to enter into such transactions, which are carried out at arms length and on normal commercial terms. The details of Recurrent RPT contemplated within the validity of the Proposed Shareholders Mandate would include those described in Appendix II Review Procedures for Recurrent RPT The TCB Group has in place the following review procedures for Recurrent RPT:- a) The Recurrent RPT are conducted at arm s length and based on normal commercial terms consistent with the TCB Group s usual business practices and policies and on terms not more favourable to the Related Party than those generally available to the public and are not to the detriment of the minority shareholders. b) A register is maintained to record Recurrent RPT, which are entered into pursuant to the Proposed Shareholders Mandate. c) Internal auditors will review the terms of the Recurrent RPT, which are entered into pursuant to the Proposed Shareholders Mandate. The following are commercial considerations which the TCB Group takes into account before entering into transactions for the sale/supply of goods and provision of services to a purchaser, in the ordinary course of business: - a) the ability and track record of the purchaser to pay for the goods supplied or services provided; and b) whether past experience and working relationship with the purchaser has been satisfactory. The following are commercial considerations which the TCB Group takes into account before entering into transactions for the receipt of goods or services from a vendor/service provider, in the ordinary course of business: - a) the competitiveness in pricing; b) the standard and quality of the goods/services and whether it meets the requirements of the TCB Group; 2

8 c) the responsiveness, level of service provided by the goods or services provider and whether past experience and working relationship has been satisfactory; and d) the track record, competence of the goods or service provider and whether the goods or services provider has sufficient resources to perform its obligations. The TCB Group would only enter into transactions with the relevant parties based on the above criteria, regardless of whether or not the party is a Related Party. The methods and procedures on which transaction prices will be determined will take into consideration the pricing and contract rate, terms and conditions, level of service or expertise required, quality, reliability and consistency of the products and services as compared with the prevailing market rates and prices and general practices by the service or products providers of similar capacity and capability generally available in the open market of unrelated third parties. The Board Audit and Risk Management Committee will undertake periodic review of the Recurrent RPT to ensure that such transactions are undertaken at arm s length, normal commercial terms, on terms not more favourable to the Related Party than those generally available to the public and not to the detriment of minority shareholders and in the best interest of the TCB Group. If any member of the Board Audit and Risk Management Committee is interested in the Recurrent RPT, he/she will abstain from reviewing that particular Recurrent RPT. In their review and approval of such transactions, the Board Audit and Risk Management Committee may, as they deem fit, request for additional information pertaining to the transactions from independent sources or advisers. At least two other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison, wherever possible, to determine whether the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products/services and/or quantities. Where quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be determined by TCB Group based on those offered by/to other unrelated parties for the same or substantially similar type of transaction to ensure that the Recurrent RPT is not detrimental to TCB Group. The guidelines for the relevant approving authority practiced by TCB Group in relation to Recurrent RPT are as follows:- a) Transactions below RM200,000 each in value, will be reviewed and approved by the Group Chief Operating Officer or Chief Financial Officer or such other senior executive(s) (not being a person connected to the Related Party) designated by the Board Audit Risk and Management Committee from time to time for such purpose, and tabled for review by the Board Audit Risk and Management Committee on a quarterly basis. b) Transactions equal to or exceeding RM200,000 each in value will be reviewed and approved by the Board Audit Risk and Management Committee. c) The Group Chief Operating Officer or Chief Financial Officer or other senior executive(s) designated by the Board Audit Risk and Management Committee from time to time for such purpose, and the Board Audit Risk and Management Committee, may, as he/it deems fit, request for additional information pertaining to the transaction under review from independent sources or advisers, including the obtaining of valuations from independent valuers Statement by Board Audit and Risk Management Committee The Board Audit and Risk Management Committee has reviewed the above procedures and the terms of the Proposed Shareholders Mandate, and is of the view that: a) it is satisfied that the review procedures for the Recurrent RPT as well as the periodic reviews to be made by the Board Audit and Risk Management Committee in relation thereto, are sufficient to ensure that the Recurrent RPT will be made at arm s length and in accordance with TCB Group s normal commercial terms and on terms not more favourable to the Related Party than those generally available to the public, and hence, not prejudicial to the shareholders and are not to the detriment of minority shareholders. b) TCB Group has in place adequate procedures and processes to monitor, track and identify Recurrent RPT in a timely and orderly manner, and such procedures and processes are reviewed on a yearly basis or whenever the need arises. 3

9 2.1.5 Validity Period of the Proposed Shareholders Mandate The Proposed Shareholders Mandate, if approved at the AGM, will take immediate effect and will (unless revoked or varied by the Company in general meeting) continue in force until the next AGM of the Company or the expiration of the period within which the next AGM is required to be held pursuant to section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act, whichever is the earlier). Approval from shareholders will thereafter be sought for the renewal of the Proposed Shareholders Mandate at each subsequent AGM, subject to satisfactory review by the Board Audit and Risk Management Committee of the Company of its continued application to Recurrent RPT Disclosure TCB has disclosed a breakdown of the aggregate value of the Recurrent RPT conducted during the financial year ended 31 December 2009 in its Annual Report based on the following: (i) type of recurrent RPT made; and (ii) names of Related Parties involved in each type of recurrent RPT and relationship with TCB. Disclosure will continue to be made in the Annual Reports for subsequent financial years that the Proposed Shareholders Mandate continues in force Existing Mandate On Recurrent RPT (Not seeking for renewal) Set out below is the actual value transacted of each Recurrent RPT, from the date on which the existing mandate was obtained on 28 April 2009 up to 15 March 2010 being, the latest practicable date before the printing of this Circular, together with its estimated value as disclosed in the Circular to Shareholders dated 6 April 2009: - TCB Group with the following Related Parties Nature of Transactions Estimated Aggregate Value as disclosed in the Circular to Shareholders dated 6 April 2009 ( Estimated Value ) Actual Value transacted from date of AGM on 28 April 2009 up to 15 March 2010 ( Actual Value ) Hong Leong Asia Ltd. Sale of cement by TCB 25,000,000 0 Island Concrete (Private) Sale of cement by TCB 50,000,000 0 Limited HL Building Materials Pte. Ltd. Sale of rebuilt mixer trucks to Tasek Concrete Sdn. 500,000 0 Hong Leong Asia Ltd. Hayford Holdings Sdn. Bhd. Bhd. Management fee paid by Tasek Industries Sdn. Bhd. Supply of aggregates to Tasek Concrete Sdn. Bhd. 500, ,200, RATIONALE FOR AND THE BENEFIT OF THE PROPOSED SHAREHOLDERS MANDATE The rationale for the Proposed Shareholders Mandate to the TCB Group are as follows:- a) The Proposed Shareholders Mandate will facilitate transactions with Related Parties, which are in the ordinary course of business of the TCB Group. The TCB Group has had a longstanding business relationship with many of the Related Parties ranging from 5 years to 45 years. The Related Parties are both good customers of the TCB Group as well as reliable suppliers of goods and services required by the TCB Group for its business. The goods and services provided by the Related Parties are priced competitively and all transactions between the TCB Group and the Related Parties are carried out at arm s length basis. Although, the TCB Group also sources similar goods or services from third parties, the TCB Group would like to seek approval from the shareholders as the close co-operation between the TCB Group and the Related Parties have been mutually beneficial and is expected to continue to be of benefit to the business of the TCB Group. 4

10 b) For certain transactions, where it is vital that confidentiality be maintained, it would not be viable to obtain prior shareholders approval, as releasing details of the transaction prematurely may adversely affect and prejudice the TCB Group s interests and place the TCB Group at a disadvantage as compared to its competitors who may not require shareholders approval to be obtained; and c) The Proposed Shareholders Mandate will substantially reduce the expenses associated with convening of general meetings on an ad hoc basis, improve administrative efficiency considerably and allow resources to be channelled towards attaining other corporate objectives. The benefit of the Proposed Shareholders Mandate is that it will enhance the TCB Group s ability to pursue business opportunities, which are time-sensitive in nature and will eliminate the need for the Company to convene separate general meetings to seek shareholders approval for each transaction. 2.3 CONDITION OF THE PROPOSED SHAREHOLDERS MANDATE The Proposed Shareholders Mandate is subject to the approval of the shareholders of TCB at the forthcoming AGM. 3. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY 3.1 DETAILS OF THE PROPOSED SHARE BUY-BACK Your Directors propose to seek shareholders approval for a renewal of the authority to undertake the Proposed Share Buy-back at the forthcoming 49 th AGM to be held on 27 April As at 15 March 2010, the Company had purchased 397,900 Ordinary Shares which are held as Treasury Shares. The current total issued and paid-up ordinary share capital of the Company, before adjusting for the Treasury Shares, is RM184,907,200 divided into 184,907,200 Ordinary Shares. Hence, the maximum number of Ordinary Shares which may be purchased and/or held as Treasury Shares by the Company is 18,490,720 Ordinary Shares which is ten per centum (10%) of the issued and paidup ordinary share capital of TCB. The maximum 18,490,720 Ordinary Shares which may be purchased by the Company would include the 397,900 Ordinary Shares already held as Treasury Shares. The funding for the Proposed Share Buy-back will be from internally generated funds and/or borrowings, the proportion of which will depend on the quantum of Ordinary Shares purchased, the purchase consideration as well as the availability of funds of the TCB Group at the time of purchase(s). The amount of bank borrowings if any, to be used for the Proposed Share Buy-back would depend on the repayment capabilities of the Company. In the event, the Company decides to utilise the bank borrowings, the Company will ensure that it has sufficient funds to repay the bank borrowings so that the repayment would have no material effect on the Company s cash flow. The maximum funds to be allocated by the Company for the Proposed Share Buy-back will be made wholly out of retained profits and/or the share premium account. As of 31 December 2009, the audited retained profits and share premium of the Company were RM million and RM million respectively. The Proposed Share Buy-back will be effective immediately upon the passing of the ordinary resolution up to the conclusion of the next AGM of TCB (unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting or the expiration of the period within which the next AGM after the date is required by law to be held, whichever occurs first). In accordance with the guidelines of Bursa Securities, TCB may only purchase the Ordinary Shares on the Exchange at a price which is not more than fifteen per centum (15%) above the weighted average market price for the past five (5) market days immediately preceding the date of the purchase(s) and the Company may only resell the Treasury Shares on the Exchange at a price which is not less than the weighted average market price for the shares for the past five (5) market days immediately prior to the resale or at a discounted price of not more than five per centum (5%) to the weighted average market price for the shares for the five (5) market days immediately prior to the resale provided that:- 5

11 (i) the resale takes place no earlier than 30 days from the date of purchase; and (ii) the resale price is not less than the cost of purchase of the shares being resold. The Proposed Share Buy-back will allow your Directors to exercise the power of the Company to purchase its own Ordinary Shares at any time within the abovementioned time period using the internal funds and/or borrowings of the Company. The actual number of Ordinary Shares to be purchased, the total amount of funds involved for each purchase, and the timing of the purchase will depend on the market conditions and sentiment of the stock market as well as the financial resources available to the Company. The Directors will deal with the Ordinary Shares so purchased in the following manner: i) cancel the Ordinary Shares so purchased; or ii) retain the Ordinary Shares so purchased as Treasury Shares; or iii) retain part of the Ordinary Shares so purchased as Treasury Shares and cancel the remainder. The Treasury Shares may be distributed as dividends to the shareholders and/or resold on Bursa Securities and/or subsequently cancelled. An announcement will be made to Bursa Securities in respect of the intention of the Directors whether to retain the Ordinary Shares so purchased as Treasury Shares or cancel them or both if the Proposed Share Buy-back is executed. The rationale for the Proposed Share Buy-back if exercised is expected to potentially benefit the Company and its shareholders as follows: The Company would expect to enhance the EPS of the Group (in the case where the Directors resolve to cancel the Ordinary Shares so purchased or retain the Ordinary Shares in Treasury Shares and are not subsequently resold) and thereby long term and genuine investors are expected to enjoy a corresponding increase in the value of their investments in the Company; If the Ordinary Shares bought back are kept as Treasury Shares, it will give the Directors an option to sell the Ordinary Shares so purchased at a higher price and therefore make an exceptional gain for the Company. Alternatively the Ordinary Shares so purchased can be distributed as share dividends to shareholders; and The Company may be able to stabilise the supply and demand of its Ordinary Shares in the open market and thereby supporting its fundamental values. The Listing Requirements state that a company intending to purchase its own ordinary shares and/or resell treasury shares on the Exchange may appoint up to two participating organisations (as defined in the Rules of Bursa Securities) for that purpose only. The Company and its Directors in exercising the power to purchase the Ordinary Shares and/or resell Treasury Shares, will be subject, at all times, to all such obligations imposed on the Company under the law, including without limitation, the provisions of the Capital Markets and Services Act In exercising its power to purchase the Ordinary Shares and/or resell Treasury Shares, the Company will not engage in speculative trading activities in relation thereto. 3.2 RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-back will enable TCB to utilise its financial resources not immediately required for use to purchase the Ordinary Shares. The Proposed Share Buy-back is expected to have the effect of stabilising the supply and demand as well as the price of the Ordinary Shares on Bursa Securities which may have a positive impact on the market price of the Ordinary Shares and may result in an increase in TCB s EPS with the cancellation of the Ordinary Shares bought back by the Company. 6

12 3.3 POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-back will allow the Company to utilise its financial resources with no immediate use to purchase the Ordinary Shares on the Exchange and as a result of which may help enhance the EPS of the Company. The maintenance of the share price is important, as it will reduce the effects of volatile fluctuation of the prices of the Ordinary Shares in the stock market as well as to protect investors confidence in TCB. Both are important in facilitating the Company s future fund raising exercises through the equity market. The Proposed Share Buy-back will, however, reduce the financial resources of TCB and may result in TCB having to forego any good investment opportunities, which may emerge in future. It may also result in a lower amount of cash dividends that can be declared to shareholders as funds are being diverted to purchase the Ordinary Shares. TCB may stand to realise a potential gain if the Ordinary Shares so purchased are kept as Treasury Shares and are subsequently resold at prices higher than the purchase prices. Nevertheless, the Directors will be mindful of the interests of TCB and its shareholders in implementing the same. 3.4 EFFECTS OF THE PROPOSED SHARE BUY-BACK The effects of the Proposed Share Buy-back on the ordinary share capital, NTA, working capital and earnings of TCB are set out below: Ordinary Share Capital On the assumption that the Proposed Share Buy-back is carried out in full and the Ordinary Shares so purchased including 397,900 Treasury Shares held, are fully cancelled, the Proposed Share Buy-back will result in the issued and paid-up ordinary share capital of TCB as at 15 March 2010 to be reduced from RM184,907,200 comprising 184,907,200 Ordinary Shares to RM166,416,480 comprising 166,416,480 Ordinary Shares. Existing issued and paid-up ordinary share capital as at 15 March 2010 (before adjusting for the Treasury Shares held) Number of Ordinary Shares reduced (Assuming the Ordinary Shares so purchased, including the Treasury Shares held, are fully cancelled) No. of Ordinary Shares RM 184,907, ,907,200 18,490,720 18,490,720 Upon completion of the Proposed Share Buy-back 166,416, ,416,480 Number of Ordinary Shares held as Treasury as at 15 March , ,900 Pursuant to the Act, if the Ordinary Shares so purchased are treated as Treasury Shares, the rights attached to them as to voting, dividends and participation in the other distribution and otherwise will be suspended and the Treasury Shares shall not be taken into account in calculating the number of shares or of a class of shares in the Company for any purposes including, without limiting the generality of this provision, the provisions of any law or requirement of the Articles of Association of the Company or the Listing Requirements on substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum and the result of a vote on a resolution at a meeting NTA, Working Capital and Cash Flow The Proposed Share Buy-back is likely to reduce the NTA of the TCB Group and will reduce the working capital of the TCB Group, the quantum of which depends on, among others, the number of Ordinary Shares eventually purchased and the purchase prices of the Ordinary Shares. For Ordinary Shares so purchased which are kept as Treasury 7

13 Shares, upon its resale, the NTA of the Group and the working capital of the Company will increase assuming that a gain has been realised. Again, the quantum of the increase in NTA will depend on the actual selling price of the Treasury Shares and the number of Treasury Shares resold. The impact on the cash flow of the TCB Group will be reduced depending on the number of Ordinary Shares eventually purchased and the purchase price(s) of the Ordinary Shares Earnings The effects of the Proposed Share Buy-back on the earnings of TCB Group would depend on the purchase price and number of Ordinary Shares purchased. The effective reduction in the number of Ordinary Shares applied in the computation of the consolidated EPS pursuant to the Proposed Share Buy-back may generally, all else being equal, have a positive impact on the consolidated EPS of the Company for the next financial year Dividends For the financial year ended 31 December 2009, TCB has proposed a final dividend of 10 sen per share less Malaysian income tax of 25% and a special dividend of 20 sen per share less Malaysian income tax of 25% subject to shareholders approval. Assuming the Proposed Share Buy-back is implemented in full, dividends will be paid on the remaining issued capital of TCB (excluding the Ordinary Shares already purchased). The Proposed Share Buy-back may have an impact on the Company s payment of dividend for the next financial year as it will reduce the cash available which may be used for such payment. Nonetheless, the Treasury Shares purchased may be distributed as share dividends to shareholders, if the Company so decides. 3.5 DIRECTORS & SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS The Directors shareholdings of TCB before and after the Proposed Share Buy-back are as follows: - --Before Proposed Share Buy-back -- No. of Ordinary Shares held based on the Register of Directors Shareholdings as at 15 March After Proposed Share Buy-back -- No. of Ordinary Shares held Kwek Leng Peck Dato Teo Tong Kooi Ting Sii Yao Sik Tien Dato Khoo Peng Lai Dato Chong Pah Aung Wan Mohd Shukri bin Ariffin Kwek Kon Chun Direct % Indirect % Direct % Indirect %

14 The Substantial Shareholders and their respective shareholdings before and after the Proposed Share Buy-back are as follows: --Before Proposed Share Buy-back -- No. of Ordinary Shares held based on the Register of Substantial Shareholders as at 15 March After Proposed Share Buy-back -- No. of Ordinary Shares held Lembaga Tabung Haji Amanahraya Trustees Berhad Skim Amanah Saham Bumiputera HL Cement (Malaysia) Sdn. Bhd. HL Cement (Labuan) Limited HL Cement (HK) Limited Hong Leong Asia Ltd. Hong Leong Corporation Holdings Pte Ltd Hong Leong Enterprises Pte. Ltd. Hong Leong Investment Holdings Pte. Ltd. Kwek Holdings Pte Ltd Kwek Leng Beng Davos Investment Holdings Private Limited Kwek Leng Kee Quek Leng Chye Tan Sri Quek Leng Chan Direct % Indirect % Direct % Indirect % 11,944, ,944, ,816, ,816, ,302, ,302, ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # ,302,811 # , ,302,811 # , ,302,811 # Notes: # Deemed interest through HL Cement (Malaysia) Sdn. Bhd. by virtue of Section 6(A) of the Act 9

15 3.6 PUBLIC SHAREHOLDING SPREAD As at 15 March 2010, the public shareholding spread of the Company was 27.02%. The public shareholding spread is expected to be reduced to 19.09% assuming the Proposed Share Buy-back is implemented in full with the purchase from the market and all the Ordinary Shares so purchased are cancelled. The Directors will endeavour to ensure that the Company complies with the public shareholding spread requirement in the event that the public shareholding spread requirement is not met as a result of the Proposed Share Buy-back. 3.7 PURCHASES OR RESALE OF TREASURY SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS TCB has not made any purchase of its Ordinary Shares or resale of its Treasury Shares in the financial year end 31 December From 1 January 2009 to 15 March 2010 (being the latest practicable date before printing of this Circular), the Company had purchased 397,900 Ordinary Shares of which the total purchase consideration was RM1,838, The details are shown as below: - Date of Purchase Total No. of Ordinary Shares Purchased Lowest Price Paid Highest Price Paid Average Price Paid Total Purchase Consideration* 8 May , , June , , June , , November , , February , , February , , February , , February , , February , , March , , March , , March , , ,900 1,838, * Total purchase consideration is inclusive of brokerage fees, clearing fees and stamp duty. The Ordinary Shares bought back by the Company during the preceding twelve (12) months up to 15 March 2010 have been retained as Treasury Shares. 3.8 IMPLICATION OF THE CODE Based on the Company s Register of Substantial Shareholders as at 15 March 2010, it is unlikely that the provisions on mandatory takeovers under the Code will be triggered by any shareholder of the Company solely by reason of the Proposed Share Buy-back being carried out in full. 3.9 SHARE PRICES The monthly highest and lowest prices of the Shares traded on the Exchange for the last twelve (12) months from March 2009 to February 2010 are as follows: March April May June July August Low RM High RM

16 September October November December 2010 January February Low RM High RM The last transacted price of the Ordinary Shares on 15 March 2010, being the last practicable date prior to the announcement and printing of this Circular, was RM5.03 per share. (Source:-Bloomberg) 4. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors and Substantial Shareholders or persons connected with the Directors and Substantial Shareholders has any interest, direct or indirect, in the Proposed Share Buy-back or resale of Treasury Shares. Save as disclosed herein below, none of its other Directors and major shareholders or persons connected with the Directors and major shareholders of TCB have any interest, direct or indirect in the Proposed Shareholders Mandate. Name of Major Shareholder and persons connected No of Ordinary Shares held in TCB as at 15 March 2010 Direct % Indirect % HL Cement (Malaysia) Sdn. Bhd. 134,302, HL Cement (Labuan) Limited ,302,811 # HL Cement (HK) Limited ,302,811 # Hong Leong Investment Holdings Pte. Ltd ,302,811 # Kwek Leng Beng ,302,811 # Tan Sri Quek Leng Chan 347, ,302,811 # Kwek Leng Kee ,302,811 # Quek Leng Chye ,302,811 # Kwek Holdings Pte Ltd ,302,811 # Davos Investment Holdings Private Limited ,302,811 # Hong Leong Enterprises Pte. Ltd. - - Hong Leong Corporation Holdings Pte Ltd ,302,811 # ,302,811 # Hong Leong Asia Ltd ,302,811 # # Deemed interest through HL Cement (Malaysia) Sdn. Bhd. by virtue of Section 6(A) of the Act Hong Leong Investment Holdings Pte. Ltd. is the ultimate holding company of all the above companies except for Kwek Holdings Pte Ltd and Davos Investment Holdings Private Limited. Kwek Leng Peck, Ting Sii Yao Sik Tien and Kwek Kon Chun (being representatives of the Major 11

17 Shareholders), and Dato Teo Tong Kooi (who is also a representative of the Major Shareholder in an executive capacity on the Board of Directors of TCB) (the Interested Directors ) have abstained and will continue to abstain from deliberating and voting on the Proposed Shareholders Mandate at the Board of Directors meetings and have ensured that persons connected to them will also abstain from voting on the resolution approving the Proposed Shareholders Mandate at the forthcoming AGM in respect of their direct and indirect shareholdings. Hong Leong Investment Holdings Pte. Ltd, Kwek Leng Beng, Tan Sri Quek Leng Chan, Kwek Leng Kee, Quek Leng Chye (brother of Tan Sri Quek Leng Chan), Kwek Holdings Pte Ltd, Davos Investment Holdings Private Limited, Hong Leong Enterprises Pte. Ltd., Hong Leong Corporation Holdings Pte Ltd, Hong Leong Asia Ltd., HL Cement (HK) Limited, HL Cement (Labuan) Limited and HL Cement (Malaysia) Sdn. Bhd., will abstain from voting in respect of their direct and/or indirect interests, on the resolution pertaining to the Proposed Shareholders Mandate at the forthcoming AGM. Furthermore, Hong Leong Investment Holdings Pte. Ltd., Kwek Leng Beng, Tan Sri Quek Leng Chan, Kwek Leng Kee, Quek Leng Chye, Kwek Holdings Pte Ltd, Davos Investment Holdings Private Limited, Hong Leong Enterprises Pte. Ltd., Hong Leong Corporation Holdings Pte Ltd, Hong Leong Asia Ltd., HL Cement (HK) Limited, HL Cement (Labuan) Limited and HL Cement (Malaysia) Sdn. Bhd. have ensured that the persons connected with them as mentioned above will abstain from voting in respect of their direct and/or indirect interests on the resolution approving the Proposed Shareholders Mandate at the AGM. 5. DIRECTORS' RECOMMENDATION The Board of Directors of TCB, having taken into consideration all aspects of the Proposed Share Buy-back is of the opinion that the Proposed Share Buy-back is in the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary Resolution for the Proposed Share Buy-back to be tabled at the forthcoming AGM. The Board of Directors of TCB (excluding the Interested Directors), having taken into consideration all aspects of the Proposed Shareholders Mandate, is of the opinion that the Proposed Shareholders Mandate is in the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary Resolution for the Proposed Shareholders Mandate to be tabled at the forthcoming AGM. 6. ANNUAL GENERAL MEETING The 49 th AGM of the Company, the Notice of Meeting of which is incorporated in the Annual Report 2009 accompanying this Circular, will be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160, Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Tuesday, 27 April 2010 at 10:00 a.m. for the purpose of considering and if though fit, passing the Ordinary Resolutions on the Proposals under the Agenda on Special Business as set out in the said Annual Report. If you are unable to attend the AGM in person, please complete the Form of Proxy enclosed in the Annual Report 2009 and forward the Form of Proxy to the Registered Office of TCB 6 th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur so as to arrive not later than fortyeight (48) hours before the time for convening the AGM. The completion and return of the Form of Proxy will not preclude you from attending and voting at the AGM in person should you wish to do so. The Form of Proxy should be completed strictly in accordance with the instructions contained therein. 7. FURTHER INFORMATION Shareholders are advised to refer to the attached Appendices for further information. Yours faithfully For and on behalf of the Board of TASEK CORPORATION BERHAD DATO KHOO PENG LAI Independent Non-Executive Director 12

18 APPENDIX I MAJOR SHAREHOLDER OF TCB HONG LEONG INVESTMENT HOLDINGS PTE. LTD. ( HLIH ) GROUP Name of Company HL-Manufacturing Industries Sdn. Bhd. Singapore Cement Manufacturing Company (Private) Limited ( SCMC ) Island Concrete (Private) Limited CDL Hotels (Malaysia) Sdn. Bhd. Relationship with TCB This company is a wholly-owned subsidiary of Hong Leong Asia Ltd. ( HLA ). Kwek Leng Peck and Dato Teo Tong Kooi are directors of this company. This company is 50% owned by HLA. Kwek Leng Beng and Kwek Leng Peck are directors of SCMC. Dato Teo Tong Kooi is an alternate director to Kwek Leng Beng on the Board of SCMC. This company is a wholly-owned subsidiary of HLA. Kwek Leng Peck and Dato Teo Tong Kooi are directors of this company. This company is an indirect wholly-owned subsidiary of Millennium & Copthorne Hotels plc, a subsidiary of City Developments Limited, which in turn is a subsidiary of HLIH. Kwek Leng Beng and Kwek Leng Peck are directors of this company. MAJOR SHAREHOLDER OF TCB TAN SRI QUEK LENG CHAN, KWEK LENG BENG, KWEK LENG KEE & QUEK LENG CHYE Name of Company Hong Leong Marketing Co Berhad Hong Leong Share Registration Services Sdn. Bhd. Hong Leong Investment Bank Berhad Kimsik Company Sdn. Bhd. PJ City Development Sdn. Bhd. Relationship with TCB This company is a wholly-owned subsidiary of Hong Leong Industries Berhad ( HLI ). Tan Sri Quek Leng Chan is a director of HLI and has a deemed interest of 67.80% in HLI. Kwek Leng Beng, Kwek Leng Kee and Quek Leng Chye have deemed interest of 66.88% in HLI. This company is an indirect wholly-owned subsidiary of Hong Leong Company (Malaysia) Berhad ( HLCM ). Tan Sri Quek Leng Chan and Kwek Leng Beng are directors and major shareholders of HLCM. Kwek Leng Kee and Quek Leng Chye are major shareholders of HLCM. Kwek Leng Peck is a director of HLCM. This company is a wholly-owned subsidiary of HLG Capital Berhad ( HLGC ). Tan Sri Quek Leng Chan is a director of HLGC. Tan Sri Quek Leng Chan, Kwek Leng Beng, Kwek Leng Kee and Quek Leng Chye have deemed interest of 75% in HLGC. Tan Sri Quek Leng Chan and Kwek Leng Beng have deemed interest of 8.75% and 10.45% respectively in this company. This company is an indirect wholly-owned subsidiary of HLCM. 13

19 DIRECTOR OF TCB DATO TEO TONG KOOI Name of Company Isyoda Marketing Sdn. Bhd. Relationship with TCB This company is a wholly-owned subsidiary of Isyoda (M) Sdn. Bhd., which in turn is a wholly-owned subsidiary of Isyoda Corporation Berhad ( ICB ). Dato Teo Tong Kooi is a director of ICB and has deemed interest of 3.88% in ICB. 14

20 APPENDIX II DETAILS OF RECURRENT RPT CONTEMPLATED Renewal of Existing Transactions for Shareholders Mandate Transaction Transacting Parties Related Parties Estimated Aggregate Value as disclosed in the Circular to Shareholders dated 6 April 2009 ( Estimated Value ) Actual Value transacted from date of AGM on 28 April 2009 up to 15 March 2010 ( Actual Value ) Estimated Aggregate Value * from date of the forthcoming AGM to the next AGM (a) Sale of cement by TCB to:- Hong Leong Marketing Co Berhad Hong Leong Investment Holdings Pte. Ltd. ( HLIH ) Tan Sri Quek Leng Chan Kwek Leng Beng Kwek Leng Kee Quek Leng Chye 60,000,000 30,103,691 41,000,000 Kimsik Company Sdn. Bhd. Tan Sri Quek Leng Chan Kwek Leng Beng 29,000,000 9,160,158 15,000,000 HL- Manufacturing Industries Sdn. Bhd. HLA HLIH Kwek Leng Beng Tan Sri Quek Leng Chan Kwek Leng Kee Quek Leng Chye Kwek Leng Peck Dato Teo Tong Kooi 5,000,000 1,760,350 5,000,000 Singapore Cement Manufacturing Company (Private) Limited HLA HLIH Kwek Leng Beng Tan Sri Quek Leng Chan Kwek Leng Kee Quek Leng Chye Kwek Leng Peck Dato Teo Tong Kooi 60,000,000 2,558,560 5,000,000 * Estimated value based on existing records with adjustments where necessary in accordance with budget figures and/or contracted amounts. The estimated values may vary and are subject to changes. 15