LFE CORPORATION BERHAD (Company No A) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO

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1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. LFE CORPORATION BERHAD (Company No A) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO PROPOSED NEW SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE Adviser midi INVESTMENT MIDF AMANAH INVESTMENT BANK BERHAD,.Q The notice of the Extraordinary General Meeting ("EGM") of LFE Corporation Berhad ("LFE" or the "Company") to be held at Boardroom, 1st Floor, Lot 43117, Off Jalan Balakong, Balakong, Seri Kembangan, Selangor Darul Ehsan, on Tuesday, 29 December 2015 at a.m. or immediately after the conclusion or any adjournment thereof of the Thirteenth (13th) Annual General Meeting, whichever is the later. The Proxy Form must be lodged at the Registered Office of the Company at Level 2, Tower 1, Avenue 5, Bangsar South City, Kuala Lumpur not later than forty-eight (48) hours before the time fixed for the EGM or any adjournment thereof. The lodgement of the Proxy Folin will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last date and time for lodging the Proxy Form : Sunday, 27 December 2015 at a.m. Date and time of the EGM : Tuesday, 29 December 2015 at a.m. This Circular is dated 14 December 2015

2 DEFINITIONS In this Circular and the accompanying appendices, the following abbreviations shall have the following meanings unless otherwise stated: "Act" Companies Act, 1965 "AED" "AGM" "Audit Committee" "Bilateral Lenders" "Board" or the "Directors" "Bursa Securities" "Circular" Emirati Dirham Annual General Meeting The Audit Committee of LFE OCBC Bank (M) Berhad ( W), Malayan Banking Berhad (3813-K), Hong Leong Bank Berhad (97141-X) and Hong Leong Islamic Bank Berhad ( W) Board of Directors of LFE Bursa Malaysia Securities Berhad ( W) This circular to shareholders in relation to the Proposed Shareholders' Mandate dated 14 December 2015 "CEL" Cranborne Enterprise Limited ( ) "Dato' Rosthman" "Dato' Shafiz" "Daisy Bliss" "Director" "DRA" "EGM" "FYE" "GBP" or "E" "IJM Construction" "IJM-LFE" "ISZL Consortium" "Kerisma" "LFE" or the "Company" "LFEE" YBhg. Dato' Rosthman Bin Ibrahim YBhg. Dato' Shafiz Bin Dato' Shahrani Daisy Bliss Sdn Bhd ( M) Shall have the same 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 or a chief executive of LFE or any other company which is a subsidiary of LFE or a holding of LFE Debt Restructuring Agreement dated 28 February 2013 as supplemented by the Supplemental DRA dated 17 June 2014 entered into between the Obligors and the Scheme Creditors Extraordinary General Meeting Financial year ended British Pound IJM Construction Sdn Bhd ( H) The joint venture between IJM Construction and LFEE, collectively A consortium consisting of IJM Constructions, Sunway Builders, Zelan and LFEE Kerisma Berhad ( V) LFE Corporation Berhad ( A) LFE Engineering Sdn Bhd (25875-K) i

3 DEFINITIONS (Cont'd) "LFE Group" or the "Group" "LFE Share(s)" or "Share(s)" "LPD" "LTLR" "Major Shareholder(s)" LFE and its subsidiaries, collectively Ordinary shares of RM0.30 each in LFE 26 November 2015, being the latest practicable date prior to the printing of this Circular Lim Thiam Leong Realty Sdn Bhd (11539-U) A person who has an interest or interests in one (I) or more voting shares in a corporation and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is: (a) (b) 10% or more of the aggregate of the nominal amounts of all the voting shares in the corporation; or 5% or more of the aggregate of the nominal amounts of all the voting shares in the corporation where such person is the largest shareholder of the corporation. For the purpose of this definition, "interest in shares" has the meaning given in Section 6A of the Act and for the purpose of the Proposed Shareholders' Mandate, a Major Shareholder includes any person who is or was within preceding six (6) months of the date on which the terms of the transaction were agreed upon, a Major Shareholder of LFE, or any other corporation which is its subsidiary or holding company, in accordance with the definition in Chapter 10 of the MMLR "MIDF Investment" "MMLR" "Morison Anuarul Azizan Chew" "Obligors" "Person(s) Connected" MIDF Amanah Investment Bank Berhad (23878-X) The Main Market Listing Requirements of Bursa Securities Messrs Morison Anuarul Azizan Chew (Firm No. AF ), external auditor of LFE Group LFE and LFEE, the wholly-owned subsidiaries of LFE In relation to a director or a major shareholder, means such person(s) who falls under any one of the following categories: (a) (b) (c) (d) (e) family member of the director or major shareholder, and shall include his spouse, parent, child (including adopted child and stepchild), brother, sister and the spouse of his child, brother or sister; a trustee of a trust (other than a trustee for a share scheme for employees or pension scheme) under which the director, major shareholder or a family member of the director or major shareholder is the sole beneficiary; a partner of the director, or the major shareholder or a partner of a person connected with that director or major shareholder; a person who is 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; 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; ii

4 DEFINITIONS (Cont'd) (f) (g) (h) 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; 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; a body corporate in which the director, major shareholder 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 a body corporate which is a related corporation. "Proposed Shareholders' Mandate" Proposed new shareholders' mandate in respect of the RRPT to be entered into by LFE Group from the date of the EGM up to the next AGM of the Company as set out in Section 2.5 of this Circular Ringgit Malaysia "Related Party(ies)" "RRPT" "SA 1" "SA 2" "SA 3" "Scheme Creditors" "Settlement Agreements" "Shapadu Capital" "Shapadu Corporation" "Shapadu Energy" "Shapadu Properties" "Sunway Builders" Director(s), Major Shareholder(s) or person(s) connected with such Director(s) or Major Shareholder(s) Related Party transaction(s) which are recurrent, of a revenue or trading in nature and which are necessary for day-to-day operations of the LFE Group Settlement Agreement dated 23 April 2014 between Tamouh, IJM Construction, Sunway Builders, Zelan and LFEE relating to the amount owing from Tamouh to ISZL Consortium for the construction of Zone C Towers amounting to AED million, equivalent to RM million (based on the exchange rate of AED1.149: RM1.00 as at 31 July 2014) Settlement Agreement dated 23 April 2014 between Tamouh, IJM Construction, Sunway Builders, Zelan and LFEE relating to the amount owing from Tamouh to ISZL Consortium for the construction of Zone El Mall amounting to AED62.14 million, or equivalent to RM54.08 million (based on the exchange rate of AED1.149:RM1.00 as at 31 July 2014) Settlement Agreement dated 23 April 2014 between Tamouh, IJM-LFE relating to the amount owing from Tamouh to IJM-LFE for the construction of Zone E2 Hotel and Apartment amounting to AED89.49 million, or equivalent to RM77.89 million (based on the exchange rate of AED1.149:RM1.00 as at 31 July 2014) Scheme creditors under the DRA namely Kerisma and the Bilateral Lenders SA 1, SA 2 and SA 3, collectively Shapadu Capital Sdn Bhd ( H) Shapadu Corporation Sdn Bhd ( M) Shapadu Energy and Engineering Sdn Bhd (42495-W) Shapadu Properties Sdn Bhd ( A) Sunway Builders Sdn Bhd ( T) iii

5 DEFINITIONS (Coned) "Supplemental DRA" "Tamouh" "TMSB" "Zelan" : Supplemental Debt Restructuring Agreement dated 17 June 2014 entered into between the Obligors and the Scheme Creditors : Al Tamouh Investment LLC Teratai Megah Sdn Bhd ( A) Zelan Holdings ( M ) Sdn Bhd ( D) All references to "we", "us", "our", "ourselves" or "LFE" in this Circular are to LFE. All references to "you" in this Circular are to the shareholders of the Company who are entitled to attend and vote at the EGM and whose names appear in the Record of Depositors at the time and on the date to be determined by the Board. Words denoting the singular shall, where applicable, include the plural and vice versa and words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this circular shall be a reference to Malaysian time, unless otherwise stated. [The rest of this page is intentionally left blank] iv

6 TABLE OF CONTENTS PAGE LETTER TO SHAREHOLDERS OF LFE 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED SHAREHOLDERS' MANDATE 2 3. RATIONALE AND BENEFIT FOR THE PROPOSED SHAREHOLDERS' MANDATE 9 4. EFFECTS OF THE PROPOSED SHAREHOLDERS' MANDATE 9 5. APPROVALS REQUIRED 9 6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSON(S) 10 CONNECTED 7. DIRECTORS' RECOMMENDATION EGM FURTHER INFORMATION 11 APPENDIX I FURTHER INFORMATION 12 NOTICE OF EGM FORM OF PROXY ENCLOSED ENCLOSED The rest of this page is intentionally left blank] v

7 LFE CORPORATION BERHAD (Company No A) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office: Level 2, Tower 1, Avenue 5 Bangsar South City Kuala Lumpur 14 December 2015 The Board of Directors Liew Kiam Woon (Managing Director) Juliana Quah Kooi Hong (Executive Director) Kok Tong Yong (Executive Director) YBhg. Dato' Shafiz Bin Dato' Shahrani (Executive Director) YBhg. Dato' Rosthman Bin Ibrahim (Executive Director) David Low Teck Wee (Senior Independent Non-Executive Director) YM Tunku Azlan bin Tunku Aziz (Independent Non-Executive Director) Loo Thin Tuck (Independent Non-Executive Director) Dear Shareholders, PROPOSED SHAREHOLDERS' MANDATE 1. INTRODUCTION On 27 November 2015, MIDF Investment, on behalf of the Board announced that the Company has proposed to seek its shareholders' approval for the new shareholders' mandate for RRPTs pursuant to Paragraph of the MMLR. The purpose of this Circular is to provide you with the relevant information of the Proposed Shareholders' Mandate and to seek your approval on the resolution pertaining to the Proposed Shareholders' Mandate to be tabled at the forthcoming EGM, which will be held at Boardroom, 1st Floor, Lot 43117, Off Jalan Balakong, Balakong, Seri Kembangan, Selangor Darul Ehsan on Tuesday, 29 December 2015 at a.m. or immediately after the conclusion or any adjournment thereof of the Thirteenth (13th) AGM, whichever is the later. YOU ARE ADVISED TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR INCLUDING THE APPENDIX CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED SHAREHOLDERS' MANDATE TO BE TABLED AT THE FORTHCOMING EGM. [The rest of this page is intentionally left blank] 1

8 2. DETAILS OF THE PROPOSED SHAREHOLDERS' MANDATE 2.1 MMLR Pursuant to Paragraph (2) and Practice Note 12 of the MMLR, a listed issuer may seek a mandate from its shareholders in respect of RRPTs subject to the following: (a) (b) the transactions are in the ordinary course of business and are on terms not more favourable to the Related Party than those generally available to the public; the shareholders' mandate is subject to annual renewal and disclosure is made in the Annual Report of the aggregate value of transactions conducted pursuant to the shareholders' mandate during the financial year where the aggregate value is equal to or more than the threshold below in relation to a listed issuer with an issued and paid-up capital of RM60.0 million and above: (i) (ii) the consideration, value of the assets, capital outlay or costs of the RRPT is RM1 million or more; or the percentage ratio of such RRPT is 1% or more, whichever is the higher; (c) (d) (e) the listed issuer's circular to shareholders for the shareholders' mandate includes the information as may be prescribed by Bursa Securities. The draft circular must be submitted to Bursa Securities together with a checklist showing compliance with such information; in a meeting to obtain shareholders' mandate, the interested Director, interested Major Shareholder or interested Person Connected with a Director or Major Shareholder, and where it involves the interest of an interested Person Connected with a Director or Major Shareholder, such Director or Major Shareholder, must not vote on the resolution to approve the transactions. An interested Director or interested Major Shareholder must ensure that persons connected with him abstain from voting on the resolution approving the transactions; and the listed issuer immediately announces to Bursa Securities when the actual value of a RRPT entered into by the listed issuer, exceeds the estimated value of the RRPT disclosed in the circular by ten percent (10%) or more and must include the information as may be prescribed by Bursa Securities in its announcement. Accordingly, the Board proposes to seek the shareholders' approval for the Proposed Shareholders' Mandate for LFE Group to enter into transactions in the normal course of business within the classes of Related Parties set out in Section 2.4 below, provided such transactions are entered into at arms' length and on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders. Such mandate will enable LFE Group to enter into the RRPTs without the necessity, in most instances, to make the otherwise announcement or to convene meetings in order to procure specific prior approval of its shareholders. The RRPTs will also be subject to the review procedures set out in Section 2.6 below. [The rest of this page is intentionally left blank] 2

9 2.2 Validity Period of the Proposed Shareholders' Mandate The Proposed Shareholders' Mandate, if approved by the shareholders, shall take effect from passing of the ordinary resolution proposed at the forthcoming EGM, and shall continue to be in force until: (i) (ii) (iii) the conclusion of the next AGM of the Company following this EGM, at which such Proposed Shareholders' Mandate was passed, at which time it will lapse, unless by a resolution passed at the general meeting, the mandate is renewed; the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 143(1) of the Act (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by resolution passed by shareholders in a general meeting, whichever is earlier. Thereafter, the approval from the shareholders will be sought for the renewal of the Proposed Shareholders' Mandate for the RRPT, as applicable, at each subsequent AGM. 2.3 Principal Activities of LFE Group The principal activity of LFE is investment holding. The principal activities of its subsidiaries as at LPD are as follows: Effective Equity Interest Name of Company (%) Direct holding: LFEE 100 LFE Builder Sdn Bhd 100 Lynex Construction Sdn Bhd 100 LFE International Limited 100 TMSB 100 LFE Technology Sdn Bhd 100 Principal Activities Provision of general and specialised electrical and mechanical engineering services and maintenance works Property investment General contractors Distribution of consumer electronics products Building and general contractors Provision of specialised engineering services for extra low voltage electrical systems and instrumental and control systems for intelligent transportation systems applications such as expressway traffic management systems, tunnel plant and traffic management systems and automatic cash transfer systems [The rest of this page is intentionally left blank] 3

10 Effective Equity Interest Name of Company (%) Indirect holding: Principal Activities Subsidiary companies of LFEE: LFE Engineering (JB) Sdn Bhd LFE Engineering (Vietnam) Company Limited') 100 Provision of general and specialised electrical and mechanical engineering services and maintenance works 100 Technical design and provision of consultancy services for design, implementation and contracting of mechanical and electrical engineering services Notes: (,) rol Companies not required to be audited in is country of incorporation. A non-statutory audit of financial statements was carried out by Morison Anuarul Azizan Chew for the purpose of consolidation. Companies not audited by Morison Anuarul Azizan Chew. 2.4 Classes and Nature of RRPT The types of RRPTs to be covered by the Proposed Shareholders' Mandate relate principally to the provision of mechanical and electrical engineering and plumbing services, rental of office and storage premises, and supply and purchase of materials and goods which are within the day to day operations and in ordinary course of LFE Group's businesses. (a) Provision of Mechanical and Electrical Engineering and Plumbing Services In the course of our Group's businesses, it is anticipated that our Group will provide mechanical and electrical engineering services and plumbing services to the Related Parties for contracts undertaken and to be undertaken by our Group as sub-contractors for the Related Parties. The provision of such services are on terms, which in the view of the Directors are reasonably market competitive and are not more favourable to the Related Parties than terms offered by our Group to other customers who are unrelated parties. Further, the provision of such services will derive revenue for the Group which otherwise would not have been generated by the Group. (b) Supply and Purchase of Materials and Goods In the course of our Group's businesses, it is anticipated that our Group will purchase materials which are necessary for and ancillary to our mechanical and electrical engineering and plumbing works from the Related Parties, and will supply electrical and computer goods to the Related Parties. The materials purchased from the Related Parties will be on terms, which in the view of the Directors are reasonably market-competitive and are not more favourable to the Related Parties than terms offered by other suppliers who are unrelated parties. Similarly, the goods supplied by our Group to the Related Parties will be on normal commercial terms that are consistent with our Group's usual business practices and policies, and which are not more favourable to the Related Parties than those offered to other customers who are unrelated parties. [The rest of this page is intentionally left blank] 4

11 (c) Supply of Manpower In the course of our Group's businesses, it is anticipated that our Group will procure the supply of manpower such as skilled and unskilled workers which are necessary for our construction activities from the Related Parties. The provision of such services are on teams, which in the view of the Directors are reasonably market-competitive and are not more favourable to the Related Parties than terms offered by any unrelated parties. (d) Provision of Design, Development and Construction Services In the course of our Group's businesses, it is anticipated that our Group will provide design development and construction services to the Related Parties for contracts undertaken and to be undertaken by our Group as subcontractors for the Related Parties. The provision of such services are on terms, which in the view of the Directors are reasonably market-competitive and are not more favourable to the Related Parties than terms offered by our Group to other customers who are unrelated parties. Further, the provision of such services will derive revenue for the Group which otherwise would not have been generated by the Group. (e) Provision of Project Management Consultancy and Feasibility Study Services In the course of our Group's businesses, it is anticipated that our Group will provide project management consultancy and feasibility study services to the Related Parties for contracts undertaken and to be undertaken by our Group for the Related Parties. The provision of such services are on terms, which in the view of the Directors are reasonably market-competitive and are not more favourable to the Related Parties than terms offered by our Group to other customers who are unrelated parties. Further, the provision of such services will derive revenue for the Group which otherwise would not have been generated by the Group. [The rest of this page is intentionally left blank] 5

12 Nature of RRPT The types of RRPT which are to be covered by the Proposed Shareholders' Mandate and the estimated value of the RRPT are disclosed in the following table: Estimated aggregate value of transactions from forthcoming EGM on 29 December 2015 to the next AGM* Nature of transaction Nature of relationship between LFE Group and the Related Party Related Party Transacting Company within the L FE Group (RM'000) 0 tri LTLR has awarded a contract to LFEE for the upgrading and refurbishment of the existing podium block of Campbell Complex at Lot 68, Section 40, Jalan Dang Wangi, Bandaraya Kuala Lumpur LTLR is a subsidiary of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE C:4 H [4 4. W 4. C> (5 CT M Shapadu Corporation has awarded a contract to LFEE for the construction of a mixed development of office building, serviced residences, hotels and retail outlets in Precint 2, Putrajaya, known as Project 2M9 Putrajaya Shapadu Corporation wholly owns Shapadu Capital, a substantial shareholder of LFE Shapadu Corporation W 4. W,-- ("-- N CV v-i CEL has signed an Article of Agreement with LFEE for providing project management consultancy services for the construction of a hotel and serviced residences project in London, United Kingdom CEL is a subsidiary of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE W C..) Gx4 C.. W ,400(2) CEL has issued a letter of Intent to TMSB for the construction of a hotel and serviced residence project in London, United Kingdom CEL is a subsidiary of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE W C.-) 4 H CT 0 CT' Shapadu Properties has awarded a contract for the construction of 92 units of terrace houses at Kerteh, Terengganu Shapadu Properties is a subsidiary of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE Shapadu Properties 4 H 6

13 Estimated aggregate value of transactions from forthcoming EGM on 29 December 2015 to the next AGM (RM'000) 0 O o ri 0.c:i 0 tn,-, Nature of transaction Shapadu Energy has issued a letter of intent to LFEE for the feasibility studies, site investigations, design and construction of onshore terminal Dato' Rosthman has awarded a contract to design and build a luxurious bungalow in Precint 2, Putrajaya Nature of relationship between LFE Group and the Related Party Related Party Transacting Company within the LFE Group Shapadu Energy is a subsidiary of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE Shapadu Energy Dato' Shafiz intends to award a contract to LFEE to design and build a luxurious bungalow in Precint 2, Putrajaya Dato' Shafiz intends to award a contract to LFEE to design and build a luxurious bungalow in Precint 2, Putrajaya Daisy Bliss has been contracted to supply manpower to TMSB for the construction of 92 units terrace houses in Kerteh, Terengganu W C-4 4. Dato' Rosthman is the Group Executive Director of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE Dato' Rosthman W Ca-, -. Dato' Shafiz is the Group Managing Director of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE Dato' Shafiz L4 W C2-.- Dato' Shafiz is the Group Managing Director of Shapadu Corporation which wholly owns Shapadu Capital, a substantial shareholder of LFE Dato' Shafiz L-T-) G4 ga. -.. Daisy Bliss is a substantial shareholder of LFE 1:1=1 H Daisy Bliss 2 The estimated values disclosed may vary subject to changes.40 as at 25 November ,000 at El = E 71 million at 1= Ril,16.40 as at 25 November

14 2.6 Review Methods or Procedures of RRPT LFE Group has established various methods and procedures to ensure the RRPTs are undertaken on transaction prices and arm's length basis and on normal commercial terms, which are consistent with LFE Group's usual business practices and policies, on terms which are not more favourable to the Related Parties than those extended to the public and are not detrimental to the minority shareholders: (a) (b) (c) All RRPT shall be treated and processed on normal commercial terms consistent with our Group's usual business practices and policies and will not be more favourable to the Related Parties than those extended to unrelated third parties and the public; The transaction prices, terms and conditions which are market driven are to be detein ined at arms' length on a customer/supplier relationship basis at mutually agreed rates after due consideration of benefits to be derived from the transaction, under similar commercial terms for transactions with unrelated third parties, which depend on demand and supply, quality, level of service and other related factors; At least two (2) 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 produces/services and/or quantities; In the event that quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction prices will be determined by the usual business practices of the Group to ensure the RRPTs are not detrimental to the Group; (d) (e) In the case of tenancy of properties including the renewal thereof, the rental rates shall be based on independent valuation conducted by independent valuers, the tenure including the renewal thereof shall not be for a period of more than three (3) years, and there shall not be any provision in the tenancy agreements for payment of rental on a lump sum basis except on equal pro-rata monthly instalments; Any member of the Audit Committee may, as he deems fit, request for additional information pertaining to the transactions including from independent sources or advisers; If a member of the Audit Committee has an interest, direct or indirect, in any particular transaction, he will have to abstain from deliberation and voting at the Audit Committee meeting where such transaction is tabled for consideration; (g) (h) (i) The Audit Committee will also review all RRPT on a quarterly basis to ascertain that the guidelines and procedures have been complied with, and will consider from time to time whether the guidelines have become inappropriate and/or unable to ensure that the transactions will be on normal commercial terms and/or will prejudice the interest of shareholders in general; Proper records shall be maintained to capture all RRPTs entered into pursuant to the Proposed Shareholders' Mandate to ensure accurate disclosure thereof; Disclosure will be made in the annual report of the breakdown of the aggregate value of the RRPT during the financial year, amongst others, based on the following information: (i) (ii) the type of RRPT made; and the names of the Related Parties involved in each type of the RRPTs made and their relationship with our Group; There are no specific thresholds for approval of RRPT within LFE Group. However, all RRPT are subject to the approval of two (2) Executive Directors, subject to the provisions of the MMLR and/or the Act, where necessary. 8

15 2.7 Amount due and owing from the Related Parties As at FYE 31 July 2015, there is no amount due and owing to the Company by its related parties arising from the RRPTs as set out in Section 2.5 of this Circular, which exceeded the credit term. 2.8 Statement by the Audit Committee The Audit Committee of the Company has seen and reviewed the procedures mentioned in Section 2.6 of this Circular and is of the view that the said procedures are sufficient and effective to ensure that the RRPTs are entered into on arm's length basis and on teims not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders of LFE. The Audit Committee of the Company further affirms that the Group has in place adequate procedures and processes to identify, monitor, track and disclose RRPTs accurately and completely, in a timely and orderly manner. The procedures and processes are reviewed by the Audit Committee on a quarterly basis, or whenever the need arises. 3. RATIONALE AND BENEFIT FOR THE PROPOSED SHAREHOLDERS' MANDATE The RRPT are carried out in the ordinary course of business and intended to meet the business needs of the Group on the best possible terms. They are recurring transactions of a revenue or a trading in nature which are likely to occur with some degree of frequency. These RRPT may be time sensitive in nature, making it impractical to seek shareholders' approval on a case by case basis before entering into such RRPT. As such, the Board is seeking for shareholders' approval for the Proposed Shareholders' Mandate under Paragraph and Practice Note 12 of the MMLR for these RRPT so as to facilitate the efficiency with which these transactions are carried out. By obtaining the Proposed Shareholders' Mandate on an annual basis, the necessity to announce and/or convene separate general meetings of LFE to seek shareholders' approval as and when such RRPT occur would not arise. This would substantially reduce administrative time and expenses associated with the convening of general meetings on an ad hoc basis, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available therein. In addition, the RRPTs are intended to meet the business needs of the Group on the best possible terms. By transacting with the Related Parties, the Group would have an advantage of familiarity with the background and management of the Related Parties, thus enabling more informed commercial decisions to be made. In most dealings with the Related Parties, the Group and the Related Parties have close cooperation and a good understanding of each other's business needs thus providing a platfoim where all parties can benefit from conducting the RRPTs. The RRPTs carried out within LFE's Group creates mutual benefits for the companies in the Group, such as expediency and increased efficiency necessary for day-to-day operations. The RRPT to be entered into by the Group as detailed in Section 2.5 of this Circular are anticipated to continue to generate revenue and/or to meet the Group's business needs. 4. EFFECTS OF THE PROPOSED SHAREHOLDERS' MANDATE The Proposed Shareholders' Mandate will not have any material effect on the share capital, net assets, earnings per share, gearing and substantial shareholders' shareholdings of the Group. 5. APPROVALS REQUIRED The Proposed Shareholders' Mandate is conditional upon the approval of the shareholders of the Company being obtained at the forthcoming EGM to be convened. 9

16 6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDER AND/OR PERSON(S) CONNECTED Save as disclosed below, as at the LPD, none of the Directors, Major Shareholders and/or Person(s) Connected to them has any interest, whether direct or indirect, in the Proposed Shareholders' Mandate: Direct Indirect Interested Related Parties No. of LFE Shares No. LFE Shares 'A) Interested Directors Dato' Shafiz 58,677,250 (1) 32.32% Dato' Rosthman Interested Major Shareholders Shapadu Capital 58,677, % Shapadu Corporation 58,677,250 (2) 32.32% Daisy Bliss 11,666, % Persons connected to Major Shareholders Dato' Shafiz 58,677,250 (I) 32.32% Notes: (I) Deemed interested by virtue of his shareholding in Shapadu Corporation pursuant to Section 6A of the Act. (2) Deemed interested by virtue of its shareholding in the wholly-owned subsidiary, Shapadu Capital pursuant to Section 6A of the Act. Accordingly, Dato' Shafiz and Dato' Rosthman ("Interested Directors") have abstained and will continue to abstain from all deliberations and voting on matters relating to the Proposed Shareholders' Mandate at Board meetings. Dato' Shafiz will abstain from voting in respect of his indirect shareholdings in LFE at the forthcoming EGM on the resolution pertaining to the Proposed Shareholders' Mandate. The Interested Major Shareholders, namely Shapadu Capital, Shapadu Corporation and Daisy Bliss ("Interested Major Shareholders") will abstain from voting in respect of their direct and/or indirect shareholdings in LFE at the forthcoming EGM on the resolution pertaining to the Proposed Shareholders' Mandate. The above Interested Directors and Interested Major Shareholders have undertaken that they shall ensure that persons connected to them will abstain from voting in respect of their direct and/or indirect shareholdings on the resolution, deliberating or approving the Proposed Shareholders' Mandate at the forthcoming EGM. 7. DIRECTORS' RECOMMENDATION The Board (save for Dato' Shafiz and Dato' Rosthman), who is deemed interested in the Proposed Shareholders' Mandate), after having considered all aspects of the Proposed Shareholders' Mandate including the rationale, is of the opinion that the Proposed Shareholders' Mandate is in the best interest of the Company. Accordingly, the Board (save for Dato' Shafiz and Dato' Rosthman) recommends that you vote in favour of the resolution in relation to the Proposed Shareholders' Mandate to be tabled at the forthcoming EGM. IThe rest of this page is intentionally left blank] 10

17 8. EGM The EGM, the notice of which is enclosed with this Circular, will be held at Boardroom, 1st Floor, Lot 43117, Off Jalan Balakong, Balakong, Seri Kembangan, Selangor Darul Ehsan on Tuesday, 29 December 2015 at a.m. or immediately after the conclusion or any adjournment thereof of the Thirteenth (13th) AGM, whichever is the later, for the purpose of, amongst others, consideration and if thought fit, passing the resolution pertaining to the Proposed Shareholders' Mandate. If you are unable to attend and vote in person at the EGM, you are requested to complete, sign and return the enclosed Proxy Form in accordance with the instructions printed therein as soon as possible, so as to arrive at the registered office of the Company not later than forty-eight (48) hours before the time set for the EGM. The lodgement of the Proxy Form will not preclude you from attending and voting in person at the EGM should you subsequently wish to do so. 9. FURTHER INFORMATION Shareholders are advised to refer to the enclosed Appendix I for further information. Yours faithfully For and on behalf of the Board of LFE CORPORATION BERHAD Liew Kiam Woon Managing Director 11

18 APPENDIX I FURTHER INFORMATION 1. Directors' Responsibility Statement This Circular has been seen and approved by the Board and they individually and collectively accept full responsibility for the accuracy of the information given in this Circular and confirm that after having made all reasonable enquiries and to the best of their knowledge and belief; there are no other facts the omission of which would make any statement in this Circular false or misleading. 2. Consents MIDF Investment, being the Adviser for the Proposed Shareholders' Mandate, has given and has not subsequently withdrawn its written consent to the inclusion in the Circular of its name and all references thereto in the form and context in which it appears in this Circular. 3. Material contracts Save as disclosed below, neither LFE nor its subsidiaries have entered into any other material contract (not being contracts entered into in the ordinary course of business of LFE Group) during the two (2) years immediately preceding the date of this Circular: (i) (ii) (iii) (iv) (v) On 23 April 2014, Tamouh and LFEE together with other members of ISZL Consortium entered into a Settlement Agreements to mutually cancel the letter of award dated 9 September 2006 and the formal agreement dated 10 October 2006, whereby subject to the terms of the Settlement Agreements, Tamouh had agreed to pay Consortium a sum of AED 148, by way of transfer of property and cash; On 23 April 2014, Tamouh and LFEE together with other members of ISZL Consortium entered into a Settlement Agreements to mutually cancel the letter of intent dated 2 September 2007, whereby subject to the terms of the Settlement Agreements, Tamouh had agreed to pay the sum of AED 62,142,090 to the Consortium by way of grant of rights over vacant plot of land number RT4-C1 1 b on Reem Island, Abu Dhabi, United Arab Emirates; On 23 April 2014, Tamouh and IJM-LFE entered into a Settlement Agreement to mutually cancel the letter of award dated 23 April 2008 and the letter of acceptance dated 16 June 2009, whereby subject to the terms of the settlement agreement, Tamouh had agreed to pay UM-LFE the total sum of AED 89,490, by way of grant of rights over vacant plot of land number RT4-C12 on Reem Island, Abu Dhabi, United Arab Emirates and cash of AED 2,000,000; On 17 June 2014, LFE and LFEE entered into a Supplemental DRA with its Scheme Creditors to amend the DRA dated 28 February The salient terms of the Supplemental DRA are that the proposed settlement date to Kerisma be amended to 31 December 2014, the submission date to Bursa Securities for approval shall be 30 June 2014 and LFE shall compensate Kerisma by paying a cash sum of RM500, in lieu of the warrants; Pursuant to the terms of Settlement Agreements executed on 23 April 2014 between Tamouh and UM-LFE, on 2 July 2015, IJM-LFE's nominee namely UM LFE Sdn Bhd had entered into a Musataha Contract for vacant land with Tamouh, ("Musataha Contract") whereby subject to the Willis of the Musataha Contract, UM LFE Sdn Bhd has been given the exclusive possession and development rights in respect of the land known as RT4-C12, Al Reem Island, Abu Dhabi, United Emirates; [The rest of this page is intentionally left blank] 12

19 (vi) (vii) Pursuant to the terms of Settlement Agreement executed on 23 April 2014 between Tamouh and ISZL Consortium, on 2 July 2015, ISZL Consortium's nominee namely IJM Sunway Sdn Bhd had entered into a Musataha Contract for vacant land with Tamouh, whereby subject to the terms of the Musataha Contract, IJM Sunway Sdn Bhd has been given the exclusive possession and development rights in respect of the land known as RT4-Cllb, Al Reem Island, Abu Dhabi, United Emirates; and On 29 January 2015, six (6) sale and purchase agreements have been entered between Tamouh and ISZL Consortium's nominees namely IJM Construction and Sunway Engineering Sdn Bhd to transfer the properties known as office floors 4 to 9 (inclusive) of building A2, Marina Square, Reem Island, Abu Dhabi United Emirates pursuant to the terms of the Settlement Agreement executed between Tamouh and ISZL Consortium dated 23 April Material litigation, claims or arbitration Save as disclosed below, neither LFE nor its subsidiaries are engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, which has a material effect on the financial position of the LFE Group and the Board is not aware of any proceedings, pending or threatened against LFE Group or of any facts likely to give rise to any proceedings which might materially and adversely affect the position and business of LFE or any of its subsidiaries during the two (2) years immediately preceding the date of this Circular: (i) (ii) LFE International Limited and LFE ("The Companies") ("The Plaintiffs") had obtained a final Arbitration Award at Kuala Lumpur Regional Arbitration Centre against its former Director Alan Rajendram a/i Jeya Rajendram ("The Defendant") on 29 September 2011 for the sum of RM26,356,698 together with interest at the rate of 8% on the award sum until full date. The Company further obtained an order dated 13 February 2012 to record the said Arbitration Award as Judgement of the High Court. The Companies has commenced execution proceedings against the Defendant by way of writ of seizure and sale at the Penang High Court (37WS-12-09/2013) and is currently pending the Court Bailiff's further action. In addition to the execution proceedings the Company has also commenced Bankruptcy Proceedings ( /2013) at the Penang High Court against the Defendant and the same is currently pending the hearing of the Creditors Petition at the Penang High Court. LFE has written off this amount due from the Defendant on 28 September As such there is no further exposure to LFE as a result of the execution proceeding and the bankruptcy proceeding instituted against the Defendant. LFEE had instituted a writ action against KUB Builders Sdn Bhd via suit No: 22C for non-payment of RM2,005, in respect of the works carried out by LFEE in Johor Bharu. The parties in the writ action subsequently entered into a consent judgement dated 3 January 2014 whereby KUB Builders Sdn Bhd had agreed to pay a sum of RM1,892, as full and final settlement of the action by seven (7) instalment payments commencing from 3 January 2014 until 30 June There is no further exposure to the Plaintiff as a result of this action as the Defendant has paid almost all the amount due pursuant to the Consent Judgment. [The rest of this page is intentionally left blank] 13

20 5. DOCUMENTS FOR INSPECTION The following documents are available for inspection during normal business hours at the Registered Office of LFE at Level 2, Tower 1, Avenue 5, Bangsar South City, Kuala Lumpur, during normal business hours from Mondays to Fridays (except on public holidays) from the date of this Circular up to and including the date of the EGM: the Memorandum and Articles of Association of LFE; (ii) the audited consolidated financial statements of LFE Group for the past two (2) FYE 31 July 2014 and FYE 31 July 2015; (iii) the letter of consent referred to in Section 2 of this Appendix I; (iv) (v) the material contracts referred to in Section 3 of this Appendix I; and the relevant cause papers in respect of the material litigation, claims or arbitration as referred to in Section 4 of this Appendix I. [The rest of this page is intentionally left blank] 14

21 LFE CORPORATION BERHAD (Company No A) (Incorporated in Malaysia under the Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting ("EGM") of LFE Corporation Berhad ("LFE" or "Company") will be held at Boardroom, 1st Floor, Lot 43117, Off Jalan Balakong, Balakong, Seri Kembangan, Selangor Darul Ehsan, on Tuesday, 29 December 2015 at a.m. or immediately after the conclusion or any adjournment thereof of the Thirteenth (13th) Annual General Meeting, whichever is the later. ORDINARY RESOLUTION PROPOSED NEW SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTION OF A REVENUE OR TRADING NATURE "THAT, subject always to the provisions of the Companies Act, 1965 ("the Act"), the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities") and the regulations, guidelines and guidance notes issued from time to time by Bursa Securities or any other regulatory authorities, approval be and is hereby given for the Company and its subsidiaries (collectively the "Group") to enter into the related party transactions of a revenue or trading nature with the related parties as specified in Section 2.5 (the "Proposed Shareholders' Mandate") of the Circular to Shareholders dated 14 December 2015 ("Circular") provided that such transactions and/or arrangements are in the ordinary course of business which are necessary for the day-to-day operations of the Group, on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders. THAT the authority conferred by this resolution shall take effect immediately upon the passing of this resolution and the Proposed Shareholders' Mandate shall continue to be in force until:- (a) (b) (c) the conclusion of the next annual general meeting ("AGM") of the Company following the AGM at which the Proposed Shareholders' Mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; the expiration of the period within which the next AGM after that date 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; or revoked or varied by resolution passed by the shareholders at a general meeting, whichever is the earlier. THAT authority be and is hereby given to the Directors of the Company and its subsidiaries to complete and do all such acts and things (including executing such documents as may be required) to give effect to the Proposed Shareholders' Mandate. AND THAT the estimates given in respect of the Recurrent Related Party Transactions specified in Section 2.5 of the Circular being provisional in nature, the Directors and/or any of them be and are hereby authorised to agree to the actual amounts(s) thereof provided that such amount or amounts comply with the procedures set out in Section 2.6 of the Circular." By Order of the Board WONG YOUN KIM (MAICSA ) Company Secretary Kuala Lumpur 14 December 2015

22 Notes: A member entitled to attend and vote at the EGM is entitled to appoint a proxy or proxies (but not more than two (2)) to attend and vote in his stead. A proxy may but need not be a member of the Company and Sections 149 (1) (b) of the Companies Act, 1965 shall not apply. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of shareholdings to be represented by each proxy. Each proxy appointed shall represent a minimum of 1,000 shares held by the member. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ("omnibus account'), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. This Form of Proxy must be deposited at the Company's Registered Office, Level 2, Tower 1, Avenue 5, Bangsar South City, Kuala Lumpur not less than forty-eight (48) hours before the time appointed for the holding of the EGM. Only depositors whose names appear in the Record of Depositors as at 22 December 2015 shall be entitled to attend the EGM. [The rest of this page is intentionally left blank]

23 PROXY FORM LFE CORPORATION BERHAD ( A) CDS Account No: No. of Shares Held *I/We of being a *member/members of the LFE CORPORATION BERHAD ("the Company"), hereby appoint of.or failing whom /the Chairman of the Meeting as my/our proxy to attend, speak and vote on my/our behalf at the EXTRAORDINARY GENERAL MEETING of the Company ("the Meeting") to be held at Boardroom, 1st Floor, Lot 43117, Off Jalan Balakong, Balakong, Seri Kembangan, Selangor Darul Ehsan, on Tuesday, 29 December 2015 at a.m. or immediately after the conclusion or any adjournment thereof of the Thirteenth (13th) Annual General Meeting, whichever is the later. I / We direct my / our proxy to vote for or against the resolutions to be proposed at the Meeting as indicated hereunder: RESOLUTION FOR AGAINST Ordinary Resolution Proposed Shareholders' Mandate Please indicate with an "X" how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion. Dated this day of, Signature(s)/Common Seal of member(s) Notes: 0.) A member entitled to attend and vote at the EGM is entitled to appoint a proxy or proxies (but not more than two (2)) to attend and vote in his stead. A proxy may but need not be a member of the Company and Sections 149 (1) (b) of the Companies Act, 1965 shall not apply. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of shareholdings to be represented by each proxy. Each proxy appointed shall represent a minimum of 1,000 shares held by the member. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ("omnibus account"), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. This Form of Proxy must be deposited at the Company's Registered Office, Level 2, Tower 1, Avenue 5, Bangsar South City, Kuala Lumpur not less than forty-eight (48) hours before the time appointed for the holding of the EGM. Only depositors whose names appear in the Record of Depositors as at 22 December 2015 shall be entitled to attend the EGM