KUMPULAN PERANGSANG SELANGOR BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to take, you should consult your stockbroker, solicitor, accountant, banker or other professional adviser 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. KUMPULAN PERANGSANG SELANGOR BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE The resolution in respect of the above proposal will be tabled at the Fortieth Annual General Meeting ( AGM ) of the Company. Notice of the Fortieth AGM of the Company, which will be held at Shah Alam 1, SACC Convec, No. 4, Jalan Perbadanan 14/9, Shah Alam, Selangor Darul Ehsan, on Thursday, 25 May 2017 at a.m. together with the Form of Proxy are set out in the Annual Report 2016 of the Company despatched together with this Circular. The Form of Proxy must be lodged at the office of Symphony Share Registrars Sdn. Bhd. at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, Petaling Jaya, Selangor Darul Ehsan not later than 48 hours before the time set for holding the meeting. The lodging of the Form of Proxy 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 Form of Proxy : 23 May 2017 at a.m. Date and time of AGM : 25 May 2017 at a.m. This Circular is dated 28 April 2017

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular: ABASS : Konsortium ABASS Sdn. Bhd., an indirect subsidiary of KDEB via its subsidiary, Air Selangor Act : Companies Act, 2016 AGM : Annual General Meeting Air Selangor : Pengurusan Air Selangor Sdn. Bhd., a wholly-owned subsidiary of KDEB Aqua-Flo : Aqua-Flo Sdn. Bhd., a subsidiary of Perangsang Selangor BASB : Bold Approach Sdn. Bhd., a wholly-owned subsidiary of Perangsang Selangor Board or Board of Directors : The Board of Directors of Perangsang Selangor Bursa Securities : Bursa Malaysia Securities Berhad Cash Band CBB : : Cash Band (M) Berhad, a wholly-owned subsidiary of Perangsang Selangor Century Bond Bhd., a subsidiary of PPSB Circular : Circular to Shareholders dated 28 April 2017 in relation to the Proposed Mandate Director(s) : 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 6 months of the date on which the terms of the transaction were agreed upon, a director or chief executive of Perangsang Selangor Group or its holding company Interested Directors Interested Major Shareholders Interested Persons Connected : Directors who are deemed to be Related Parties and are interested in the Proposed Mandate : Major Shareholders who are deemed to be Related Parties and are interested in the Proposed Mandate : Persons connected to the Directors and/or Major Shareholders, who fall under any one of the following categories:- (i) (ii) (iii) (iv) (v) (vi) a family member of the Director or Major Shareholder; 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, 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; 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; i

3 DEFINITIONS (Cont d) (vii) 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; (viii) 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 (ix) a body corporate which is a related corporation. Kaiserkorp : Kaiserkorp Corporation Sdn. Bhd., an indirect subsidiary of Perangsang Selangor via its wholly-owned subsidiary, BASB KASB : Konsortium Air Selangor Sdn. Bhd., an indirect subsidiary of KDEB via its subsidiary, Air Selangor KDEB : Kumpulan Darul Ehsan Berhad, a Major Shareholder of Perangsang Selangor and a wholly-owned subsidiary of MBI Kyco : Kyco Industries, Inc., an indirect subsidiary of Perangsang Selangor via its subsidiary Kaiserkorp, incorporated in United States of America Listing Requirements : Bursa Securities Main Market Listing Requirements, including any amendments that may be made from time to time LPD : 31 March 2017, being the latest practicable date prior to the printing of this Circular Major Shareholder(s) : A person who has an interest or interests in one or more voting shares in a company and the number of voting shares, or the aggregate of the number of those shares, is:- a) 10% or more of the aggregate of the number of all the voting shares in the company; or b) 5% or more of the aggregate of the number of all the voting shares in the company where such person is the largest shareholder of the company. For the purposes of Proposed Mandate, interest in shares shall have the same meaning in Section 8 of the Act. It also includes any person who is or was within the preceding 6 months of the date on which the terms of the transactions were agreed upon, a major shareholder of Perangsang Selangor Group or its holding company. MBI : Menteri Besar Selangor (Incorporated) 1994, a holding company of KDEB NBSB : Nadi Biru Sdn. Bhd., a wholly-owned subsidiary of Perangsang Selangor Perangsang Selangor or the Company Perangsang Selangor Group or the Group : Kumpulan Perangsang Selangor Berhad : Perangsang Selangor and its subsidiary companies PKNS : Perbadanan Kemajuan Negeri Selangor, a substantial shareholder of Perangsang Selangor and a person connected to KDEB ii

4 DEFINITIONS (Cont d) PNSB : PNSB Water Sdn. Bhd., an indirect subsidiary of KDEB via its subsidiary, Air Selangor PPSB : Perangsang Packaging Sdn. Bhd., a wholly-owned subsidiary of Perangsang Selangor Prismachem : Prismachem Sdn. Bhd., a Major Shareholder of Aqua-Flo Proposed Mandate : Proposed shareholders mandate for RRPTs to be entered into by Perangsang Selangor Group from the date of forthcoming Fortieth AGM to the next AGM Related Party(ies) : A director, major shareholder or person connected with such director or major shareholder as defined under Chapters 1 and 10 of the Listing Requirements RM and sen : Ringgit Malaysia and sen respectively RRPT : Related party transactions which are recurrent of a revenue or trading nature and which are necessary for the day-to-day operations and are entered/ to be entered into by Perangsang Selangor Group with the Related Parties in the ordinary course of business which involves the interest, direct or indirect, of Related Parties Share(s) : Number of ordinary share(s) issued by Perangsang Selangor Sg. Harmoni : Sungai Harmoni Sdn. Bhd., a wholly-owned subsidiary of Taliworks TWNS : Tabung Warisan Negeri Selangor, a shareholder of Perangsang Selangor and a person connected to KDEB Taliworks : Taliworks Corporation Berhad, a Major Shareholder of Aqua-Flo Taliworks Group : Sg. Harmoni and Taliworks (Langkawi) Taliworks (Langkawi) : Taliworks (Langkawi) Sdn. Bhd., a wholly-owned subsidiary of Taliworks All references to our Company in this Circular are to Perangsang Selangor. References to our Group are to our Company and our subsidiaries. References to we, us, our and ourselves are to our Company and where the context requires, shall include our subsidiaries. All references to you in this Circular are to our shareholders. Words denoting the singular shall, where applicable, include the plural and vice versa and words indicating the masculine gender shall, where applicable, include the feminine and/or neuter genders and vice versa. Reference to persons shall include a corporation, unless otherwise specified. 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 a day in this Circular shall be a reference to Malaysian time, unless otherwise stated. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK iii

5 CONTENTS LETTER TO THE SHAREHOLDERS OF PERANGSANG SELANGOR: Page 1. INTRODUCTION 1 2. INFORMATION ON THE PROPOSED MANDATE Provisions under the Listing Requirements Principal Activities of Perangsang Selangor Group Information on Related Parties and Nature of Transactions Amount due and owing to Perangsang Selangor Group by Related Parties Review Procedures for the RRPT Threshold for Authority Statement by the Audit Committee Rationale and Benefit for the Proposed Mandate Financial Effects of the Proposed Mandate Interests of Directors, Major Shareholders and/or Persons Connected to them DIRECTORS RECOMMENDATION APPROVAL REQUIRED FORTIETH AGM FURTHER INFORMATION 11 APPENDIX I : FURTHER INFORMATION 12 iv

6 LETTER TO THE SHAREHOLDERS OF KUMPULAN PERANGSANG SELANGOR BERHAD

7 KUMPULAN PERANGSANG SELANGOR BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office: 16 th Floor, Plaza Perangsang Persiaran Perbandanan Shah Alam Selangor Darul Ehsan Board of Directors 28 April 2017 YM Raja Dato Haji Idris Raja Kamarudin (Chairman, Non-Independent Non-Executive Director) Encik Mustaffa Kamil bin Ayub (Senior Independent Director) Encik Suhaimi bin Kamaralzaman (Non-Independent Non-Executive Director) YB Dato Kamarul Baharin bin Abbas (Independent Director) YB Sivarasa a/l Rasiah (Independent Director) YBhg Dato Dr. Mohamed Ariffin bin Aton (Independent Director) Encik Mohamed Ross bin Mohd Din (Independent Director) YBhg Dato Idris bin Md Tahir (Independent Director) YM Raja Shahreen bin Raja Othman (Non-Independent Non-Executive Director) To: The Shareholders of Perangsang Selangor Dear Sir/Madam PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION On 29 March 2017, the Board announced that the Company proposed to seek the approval of its shareholders for the Proposed Mandate at the forthcoming Fortieth AGM of the Company. The purpose of this Circular is to provide you with relevant details of the Proposed Mandate and to seek your approval for the ordinary resolution relating to Proposed Mandate under the agenda of Special Business as set out in the Notice of the Fortieth AGM of the Company, which will be held at Shah Alam 1, SACC Convec, No. 4, Jalan Perbadanan 14/9, Shah Alam, Selangor Darul Ehsan, on Thursday, 25 May 2017 at a.m., enclosed in the Annual Report 2016 of the Company. SHAREHOLDERS ARE ADVISED TO READ THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTION TO GIVE EFFECT TO THE PROPOSED MANDATE 1

8 2. INFORMATION ON THE PROPOSED MANDATE 2.1 Provisions under the Listing Requirements Pursuant to Paragraph 10.09(2) and Practice Note 12 of the Listing Requirements, a listed company may seek a shareholders mandate in respect of related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations subject to the following:- i) 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; ii) iii) iv) 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 prescribed threshold under Paragraph 10.09(1) of the Listing Requirements; 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 the shareholders mandate, the Interested Directors, Interested Major Shareholders and where it involves the interest of an Interested Person Connected, such Director or Major Shareholder, must not vote on the resolution to approve the transactions. An Interested Director or Interested Major Shareholder must also ensure that persons connected with him abstain from voting on the resolution approving the transactions; and v) the listed issuer immediately announces to Bursa Securities when the actual value of a RRPT entered into by the listed issuer or its subsidiaries, exceeds the estimated value of the RRPT disclosed in the circular by 10% or more and must include the information as may be prescribed by Bursa Securities in its announcement. Transactions entered into between a listed issuer (or any of its wholly-owned subsidiaries) and its wholly-owned subsidiary are excluded from complying with the requirements under Chapter 10 of the Listing Requirements. Where a shareholders mandate pursuant to Paragraph of the Listing Requirements has been procured, the provisions of Paragraph of the Listing Requirements shall not apply. The Proposed Mandate, if approved by the shareholders at the Fortieth AGM, shall continue to be in force until:- a) the conclusion of the next AGM of the Company at which time it will lapse unless authority is renewed by a resolution passed at the next AGM; b) the expiration of the period within which the next AGM is to be held pursuant to Section 340(2) of the Act (but must not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or c) revoked or varied by resolution passed by shareholders in a general meeting before the next AGM, whichever is earlier. Perangsang Selangor is proposing to seek its shareholders approval for the Proposed Mandate pursuant to Paragraph and Practice Note 12 of the Listing Requirements. 2

9 2.2 Principal Activities of Perangsang Selangor Group The principal activities of Perangsang Selangor are investment holding and provision of management services. The details of Perangsang Selangor s subsidiary companies are set out in table below:- Name of company Held by the Company Principal activities Proportion of Equity interest (%) BASB Investment holding NBSB Investment holding Perangsang Oil & Gas Sdn. Bhd. Investment holding Perangsang Telco Sdn. Bhd. Investment holding PPSB Investment holding Viable Chip (M) Sdn. Bhd. Investment holding Cash Band Investment holding Aqua-Flo Trading in chemical products 51 Held by BASB Kaiserkorp Investment holding 60 Held by Kaiserkorp Kyco Investment holding Kingkoil International Pte. Ltd. Investment holding Held by Kyco King Koil Licensing Company, Inc. King Koil Sales, Inc Licensing of patents and know-how for manufacture and sale of beds, mattresses and box springs, along with trademarks for such products Sales and marketing of beds, mattresses and other related products 3

10 Name of company Held by NBSB Smartpipe Technology Sdn Bhd Held by PPSB CBB Held by CBB Principal activities An engineering company offering integrated solutions to water and other utility companies for the maintenance of their pipeline assets for the reduction of nonrevenue water Investment holding and provision of management services Proportion of Equity interest (%) Eversynergy Sdn Bhd Property holding Multiview Enterprise Sdn Bhd Prestige Packages Sdn Bhd Cenbond Packages Sdn Bhd Sales and marketing of industrial packaging tapes, material and machinery and household care products Manufacture and sale of multi-wall paper bags woven laminated bags and pulp moulded products Manufacturing and sale of plastic moulded products, packaging products and paper products CB Bags Sdn Bhd Investment holding Polyplus Packages Sdn Bhd Manufacturing and sales of corrugated carton boxes Polyplus Packages (JB) Sdn Bhd Held by Prestige Packages Sdn Bhd Manufacturing and sales of corrugated carton boxes Brandpak Industries Sdn Bhd Manufacture and marketing of stretch films, plastic bags and liners PT. Prestige Packages Indonesia Cengreen Global Sdn Bhd Manufacture and sale of cement paper bags Distribution of beauty and health products Esteem Packaging Pte. Ltd Trading in paper and plastic packaging products 80 4

11 Name of company Held by Multiview Enterprise Sdn Bhd Principal activities Proportion of Equity interest (%) Multiview Packaging Sdn Bhd Manufacture and trading in industrial packaging tapes and related products Multiview (S) Ltd Ltd Sales and marketing of household care products and packaging materials Macro Chemicals Sdn Bhd Contract manufacturing of adhesive and household care products Held by CB Bags Sdn Bhd Prestige Packaging (Perlis) Sdn Bhd Manufacture and sale of cement paper bags Held by Cash Band Perangsang Hotel & Properties Sdn. Bhd. Property leasing management Note:- The above table did not include the subsidiaries of Perangsang Selangor which is/has been in liquidation, receivership, under official assignee, dormant and/or ceased operation. For further details, you may refer to Note 16 of the Company s Audited Financial Statements for the year ended 31 December

12 2.3 Information on Related Parties and Nature of Transactions The class and nature of transactions of the RRPT of Perangsang Selangor Group are as follows:- No. Company within Perangsang Selangor Group Transacting Related Parties (a) ABASS, KASB and PNSB ( Air Selangor Group ) Nature of Transactions Sales of chemical products, laboratory & monitoring equipment and disinfection system by Aqua-Flo to Air Selangor Group Estimated value for Proposed Mandate (from Fortieth AGM to the next AGM) # (RM 000) 54,500 Interested Major Shareholders MBI KDEB Interested Related Parties Name Nature of relationship KDEB is a major shareholder of Perangsang Selangor with direct shareholding of 57.88%. MBI is a holding company of KDEB. Interested Persons Connected Air Selangor PNSB, ABASS and KASB are subsidiaries of Air Selangor which in turn is a wholly-owned subsidiary of KDEB. PKNS PKNS is a substantial shareholder of Perangsang Selangor with direct shareholding of 5.52% and a person connected to KDEB TWNS TWNS is a shareholder of Perangsang Selangor with direct shareholding of 1.00% and a person connected to KDEB Interested Directors YM Raja Dato Idris Raja Kamarudin YM Raja Shahreen bin Raja Othman YM Raja Dato Idris Raja Kamarudin sits on the board of KDEB. He is the Chairman, a Non- Independent Non-Executive Director of Perangsang Selangor with direct shareholding of 0.042% and also holds directorship in Air Selangor. YM Raja Shahreen bin Raja Othman sits on the board of KDEB. He is a Non-Independent Non-Executive Director of Perangsang Selangor. 6

13 No. Company within Perangsang Selangor Group Transacting Related Parties Nature of Transactions Estimated value for Proposed Mandate (from Fortieth AGM to the next AGM) # (RM 000) Interested Related Parties Name Nature of relationship Encik Suhaimi bin Kamaralzaman Encik Suhaimi bin Kamaralzaman is the President of KDEB. He is also the Chief Executive Officer and Director of Air Selangor and a Non-Independent Non-Executive Director of Perangsang Selangor with direct shareholding of 0.002%. He also holds directorships in ABASS, KASB and PNSB. (b) Sg. Harmoni and Taliworks (Langkawi) ( Taliworks Group ) Sales of chemical products, laboratory & monitoring equipment and disinfection system by Aqua-Flo to Taliworks Group 24,500 Interested Major Shareholder Taliworks Taliworks is a major shareholder of Aqua-Flo with direct shareholding of 24%. Sg. Harmoni and Taliworks Langkawi are the wholly-owned subsidiaries of Taliworks. Notes: # The estimated value for the Proposed Mandate is based on Management s best estimate on assumption that the current operations will continue and all external factors remain constant. The estimated value may differ from actual results and is subject to Aqua-Flo is a 51% subsidiary of Perangsang Selangor. The balance of 25% and 24% equity interests in Aqua-Flo is owned by Prismachem and Taliworks respectively. Neither Prismachem and Taliworks nor their directors and shareholders hold any shares in Perangsang Selangor. The Company did not seek shareholders mandate on the RRPT at the last AGM held on 27 May Therefore, the information on the actual value transacted of each RRPT, the estimated value of each RRPT for the preceding year and deviation thereof are not available. 7

14 The above transactions are necessary for Perangsang Selangor Group s day-to-day operations, in the ordinary course of business and on transaction prices and terms not more favourable to the Related Parties than those generally available to the public as well as not to the detriment of the minority shareholders of Perangsang Selangor Group. The basis of arriving at the estimated value as indicated above is based on value transacted during the financial year ended 31 December 2016 as well as latest available information relating to these transactions. The value of these transactions may be subject to changes in the financial year ending 31 December Amount due and owing to Perangsang Selangor Group by Related Parties As at LPD, breakdown of the outstanding amount due and owing by the Related Parties to Perangsang Selangor Group under the RRPT which exceeded the credit term given arising from the RRPT as per Section 2.3 of this Circular are as follows: Outstanding amount due under RRPT which exceeded the credit term for the following periods as at LPD No Related Party 1 year or less (RM 000) More than 1 to 3 years (RM 000) 1 PNSB 3, Sungai Harmoni 3,979 3 ABASS KASB 1, Taliworks (Langkawi) 173 More than 3 to 5 years (RM 000) More than 5 years (RM 000) Note :The above outstanding amount was RRPT mainly transacted during the last financial year where no shareholders mandate was obtained in view that the transaction value was below the threshold to warrant shareholders mandate pursuant to Paragraph 10.09(2) and Practice Note 12 of the Listing Requirements, No late payment charges was imposed on the outstanding amounts due and owing by Air Selangor Group and Taliworks Group as our Board has reviewed the outstanding amounts, and is of the opinion that the outstanding amounts were part of normal business operations of the Group and are recoverable. In addition, the Company is of the view that the Related Parties are long term business partners and have sound credit standing. The management of the Company and Aqua-Flo are currently taking various actions to recover the above outstanding amount due, including continuous discussions with the Related Parties for early settlement of the outstanding amounts due. 2.5 Review Procedures for the RRPT The Group has established the following procedures and guidelines to ensure that the RRPT are undertaken on transaction prices on arm s length basis and on normal commercial terms that are not more favourable to the Related Parties than those normally available to the public and are not to the detriment of the minority shareholders: (a) A list of the Related Parties is established and circulated as and when its available to the finance division within the Group, who shall monitor and ensure that all RRPT to be entered into by the Group are reported to the Audit Committee for their recommendation to the Board. Prior to reporting to the Audit Committee, the Internal Audit Department will perform a review to ensure that all RRPT are to be undertaken on an arm s length basis, on terms which are not more favourable to the Related Parties other than those 8

15 generally available to the public as well as not to the detriment of the minority shareholders of the Group. (b) At least 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 products/services and/or quantities. In the event that quotation and comparative pricing from unrelated parties cannot be obtained, the transaction price will be determined by the Group based on the usual, business practices and policies to ensure that the RRPT is not detrimental to the Group. (c) The RRPT is monitored every month by the finance division and is reported to the Audit Committee on quarterly basis. However, if at any point in time during the period finance division discovered that the RRPT threshold (per the Listing Requirements) has been exceeded, finance division will, as soon as practicable report to the Audit Committee. Prior to reporting to the Audit Committee, the Internal Audit Department will perform a review to ensure that the RRPTs complies the Listing Requirement. All RRPT shall be reviewed by the Audit Committee on a quarterly basis. In the review of such transactions, the Audit Committee may, as it deems fit, request for additional information from independent sources. (d) (e) (f) (g) (h) The annual internal audit plan shall incorporate a review of all RRPT entered into pursuant to the shareholders mandate to ensure that the relevant approvals have been obtained and the procedures in respect of such transactions are adhered to before entering into such RRPT. The Audit Committee and the Board of Directors shall review the internal audit reports to ascertain that the guidelines and procedures established (as set out in paragraphs (a) to (d) above) to monitor RRPT have been complied with. The review shall be done on a quarterly basis. Where any member of Audit Committee and Board ( Person(s) ) has an interest (direct or indirect) in the RRPT to be reviewed, such Person(s) must declare his/her interest in the RRPT and abstain from deliberation and voting on the matter at the respective meeting in respect of such transactions. Disclosure will be made in the Annual Report of the Company of the actual breakdown of the aggregate value of transactions conducted based on the type of RRPT and the names of the Related Parties involved in each type of RRPT made and their relationship with the Company as required under Paragraph of the Practice Note 12 of the Listing Requirements pursuant to the shareholders mandate during the financial year. Disclosure will also be made in the Annual Reports for subsequent financial years during which the shareholders mandate remains in force. If the actual value of the RRPT entered into by the Group exceeds the estimated value of the RRPT disclosed in the circular to shareholders on the Proposed Mandate by 10% or more, the Company will make an immediate announcement to Bursa Securities. 2.6 Threshold for Authority There are no specific thresholds for approval of RRPT within the Group. However, all RRPT are subject to review by Audit Committee and approval by the Board. Upon the recommendation from the senior management on any RRPT, the Audit Committee will review the RRPT prior to recommending to the Board of Directors for approval. Where any Director has an interest (direct or indirect) in any RRPT, such Director must declare his/her interest and abstain from deliberation and voting on the matter. 9

16 2.7 Statement by the Audit Committee The Audit Committee of the Company has reviewed the procedures set out in Section 2.5 above and is of the view that the said procedures are sufficient to ensure that all RRPT are conducted on arm s length basis, on transaction prices and 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. Any member of the Audit Committee who is interested in any RRPT shall not be involved in the review of the RRPT. The Audit Committee is also of the view that Perangsang Selangor Group had put in place adequate procedures and processes to monitor, track and identify RRPT in a timely and orderly manner. The Audit Committee will review the procedures and processes annually or whenever the need arises. 2.8 Rationale and Benefit for the Proposed Mandate The RRPT envisaged under the Proposed Mandate are in the ordinary course of business of Perangsang Selangor Group. They are recurring transactions of revenue or trading nature which are likely to occur with some degree of frequency and arise at any time and from time to time. The transactions may be constrained by the time-sensitive nature and confidentiality of such transactions, and it may be impractical to seek shareholders approval on a case by case basis before entering into such RRPT. As such, the Board is seeking a shareholders mandate pursuant to Paragraph of the Listing Requirements for the RRPT described herein to allow the Group to enter into such recurrent transactions where the transaction prices are made on an arm s length basis and on normal commercial terms not favourable to the Related Parties than those generally available to the public and are not prejudicial to the interests of the minority shareholders. By obtaining the Proposed Mandate and renewal of the same on an annual basis, the necessity to convene separate general meetings from time to time to seek shareholders approval as and when such RRPT occur would not arise. This would reduce substantial administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The Related Parties which are involved in the RRPT have long-standing relationship with Perangsang Selangor Group and where applicable have proven their reliability. The RRPT entered into by Perangsang Selangor Group as detailed in Section 2.3 will meet Perangsang Selangor Group s business needs at the best possible terms and is in the best interest of Perangsang Selangor Group. 2.9 Financial Effects of the Proposed Mandate The Proposed Mandate will have no effect on the total number of issued share capital and substantial shareholders shareholdings of Perangsang Selangor. It is also not expected to have any material effect on the net assets per share and earnings per share of the Perangsang Selangor Group Interests of Directors, Major Shareholders and/or Person Connected to them As at the LPD, the details of the direct and indirect shareholdings of the Interested Directors and Major Shareholders and persons connected with them are set out in the Section 2.3 of this Circular and the table below. 10

17 Interested Directors YM Raja Dato Idris Raja Kamarudin Direct Indirect No. of Shares % (1) No. of Shares % (1) 209, YM Raja Shahreen bin Raja Othman Encik Suhaimi bin Kamaralzaman 10, Major Shareholder MBI ,807, KDEB 288,807,494 (2) Interested Person Connected Air Selangor PKNS 27,555, TWNS 5,000, Notes: (1) Based on number of issued Shares as at LPD of 499,004,119. (2) MBI is deemed interested by virtue of its interest in KDEB pursuant to Section 8 of the Act. Save as disclosed above, none of the Directors, Major Shareholders and/or persons connected to them has any interest, direct or indirect, in the Proposed Mandate. The Interested Directors namely YM Raja Dato Idris Raja Kamarudin, YM Raja Shahreen bin Raja Othman and Encik Suhaimi bin Kamaralzaman have abstained and will continue to abstain from board deliberation and voting in respect of the relevant RRPT under the Proposed Mandate at Board meetings and Audit Committee meetings, where applicable. The Interested Directors, Interested Major Shareholders namely MBI and KDEB and/or Interested Persons Connected will abstain from voting in respect of their direct and indirect shareholdings on the Proposed Mandate at the forthcoming Fortieth AGM. The Interested Director and Interested Major Shareholders have also undertaken to ensure that Interested Person Connected to them will abstain from voting in respect of their direct and indirect shareholdings on the Proposed Mandate at the forthcoming Fortieth AGM. 3. DIRECTORS RECOMMENDATION The Directors (save for the Interested Directors), having considered the Proposed Mandate including the rationale and benefit for the Proposed Mandate, is of the opinion that the Proposed Mandate is in the best interest of the Company and recommends that you vote in favour of the resolution pertaining to the Proposed Mandate to be tabled at the forthcoming Fortieth AGM. 4. APPROVAL REQUIRED The Proposed Mandate is subject to approval being obtained from our shareholders at the forthcoming Fortieth AGM. 5. FORTIETH AGM The Fortieth AGM of Perangsang Selangor, the Notice of which is set out in the Annual Report 2016 of Perangsang Selangor accompanying this Circular, will be held at Shah Alam 1, SACC Convec, No. 4, Jalan Perbadanan 14/9, Shah Alam, Selangor Darul Ehsan, 11

18 on Thursday, 25 May 2017 at a.m. for the purpose of considering and, if thought fit, passing resolution pertaining to the Proposed Mandate as described herein. If you are unable to attend and vote in person at the Fortieth AGM, you are requested to complete and return the Form of Proxy enclosed in the Annual Report 2016 in accordance with the instructions therein as soon as possible and in any event so as to arrive at the office of Symphony Share Registrars Sdn. Bhd. at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time fixed for the Fortieth AGM. The completion and returning of the Form of Proxy does not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. 6. FURTHER INFORMATION You are advised to refer to the attached Appendix I for further information. Yours faithfully For and on behalf of the Board of KUMPULAN PERANGSANG SELANGOR BERHAD MUSTAFFA KAMIL BIN AYUB Senior Independent Director 12

19 APPENDIX I FURTHER INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Directors of Perangsang Selangor who, individually and collectively, accept full responsibility for the accuracy of the information contained in this Circular and confirm that, after making 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 herein misleading. 2. MATERIAL LITIGATION Neither Perangsang Selangor nor its subsidiaries are involved or engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Directors of Perangsang Selangor do not have any knowledge of any proceedings, pending or threatened against Perangsang Selangor and/or any of its subsidiary companies or of any fact likely to give rise to any proceedings which may materially and adversely affect the financial position or business of Perangsang Selangor and/or its subsidiary companies. 3. MATERIAL CONTRACTS Save as disclosed below, there are no other material contracts, not being contracts entered into in the ordinary course of business, have been entered into by Perangsang Selangor and/ or its subsidiaries within the two (2) years immediately preceding the date of this Circular, being the LPD prior to printing of this Circular:- a. Development Agreement between Cash Band and Rockbay Stream Sdn Bhd On 6 February 2013, Cash Band, a subsidiary of the Company had entered into a Development Agreement ( the Agreement ) with Setia Eco Templer Sdn Bhd. ( SET ) (formerly known as Rockbay Streams Sdn.Bhd.), a wholly-owned subsidiary of S P Setia Berhad for the proposed joint venture involving a mixed development project comprising residential and commercial properties ( the Project ). Cash Band is the registered and beneficial owner of the following lands ( said Lands ): (i) (ii) (iii) The land held under PN for Lot 614, Pekan Templer, District of Gombak, measuring in area approximately hectares being leasehold land for ninety-nine (99) years expiring on 26 March 2094; The Land held under PN for Lot 11, Pekan Templer, District of Gombak, measuring in area approximately 183,000 square meters being leasehold land for ninety-nine (99) years expiring on 26 March 2094; and The land held under HSM 6815 for Lot PT Templer Park Resort, Mukim Rawang, District of Gombak, measuring in area approximately hectares being leasehold land for ninety-nine (99) years expiring on 29 September In consideration for Cash Band entering into the Agreement and the approval granted by the relevant authorities is subject to low-cost requirements, SET shall pay to Cash Band a sum representing thirteen per cent (13%) of the Gross Sales Value of the Project subject to a minimum payment of RM140,000,

20 The said Lands were formerly used as a golf club with commercial facilities located in Templer Park ( Perangsang Templer Golf Club ). Perangsang Templer Golf Club had ceased its operations with effect from 1 January 2015 to facilitate the Project. Cash Band and SET have mutually agreed to declare the Agreement unconditional on 4 December 2015 ( Unconditional Date ) and have further agreed to finalise and execute a Supplemental Agreement to vary the Agreement within a period of twentyone (21) business days commencing from 6 December On 8 January 2016, Cash Band and SET have mutually agreed to extend the period for the finalisation and signing of the Supplemental Agreement from 8 January 2016 to 15 February Subsequently, on 15 February 2016, Cash Band and SET have further agreed to extend the period for the finalisation and signing of the supplemental agreement from 15 February 2016 to 30 April On 4 March 2016, Cash Band and SET entered into a Supplemental Agreement to amend and vary the Agreement. The salient amendments to the Agreement are, inter alia, as follows: (i) (ii) the delivery by SET to Cash Band of a bank guarantee for an amount equal to RM,000,000 or, in the case where the Agreed Value is reduced, an amount of RM40,000,000, has been amended from within three (3) months to within five (5) months from the Unconditional Date; and the delivery of vacant possession of the said Lands by Cash Band to SET has been amended from within ten (10) business days from the period of three (3) months from Unconditional Date to within ten (10) business dates from the date when SET pays the Second Payment to Cash Band. b. Subscription of rights issue in Ceres Telecom Sdn. Bhd. ( Ceres Telecom ) On 1 June 2015, Perangsang Telco Sdn. Bhd. ( Perangsang Telco ) a wholly owned subsidiary of the Company had subscribed for an additional 3.6 million new issued shares in Ceres Telecom ( Rights Shares ) for a total consideration of RM3.6 million on cash basis as part of the 12 million rights issues by Ceres Telecom. Subsequently, on 24 June 2015, Perangsang Telco had subscribed for an additional 1.8 million Rights Shares for a total consideration of RM1.8 million which was not subscribed by the other shareholders of Ceres Telecom. Consequently, the equity stake of Perangsang Telco in Ceres Telecom has increased from 30% to 34.35%. c. Shareholders Agreement between Nadi Biru Sdn. Bhd. ( NBSB ), Smartpipe Holdings Sdn. Bhd. ( SHSB ) and Smartpipe Technology Sdn Bhd. ( SPT ) ( Shareholders Agreement ) On 21 March 2016, NBSB, a wholly-owned subsidiary of the Company had entered into a Shareholders Agreement with SHSB and SPT in relation to, amongst others, the proposed subscription by NBSB of new ordinary shares in SPT to own 51% equity stake of the enlarged issued share capital of SPT for a total investment cost of RM5,, in cash to carry out SPT s business which principally includes the following activities: (i) (ii) The marketing, selling and installing of pipes and other products, knowhow and technology granted under the License Agreement (as defined in Section 2.1 of the Company s announcement dated 21 March 2016) primarily for the rehabilitation of water mains, drains and sewers; and Such other business as NBSB and SHSB may agree in writing from time to time. SPT became a 51% owned subsidiary of NBSB on 16 May

21 d. Share Sale Agreement Between Yeoh Jin Hoe and Kumpulan Perangsang Selangor Berhad ( SSA ) On 13 May 2016, the Company had entered into Share Sale Agreement with Mr. Yeoh Jin Hoe, in relation to the acquisition of 60% equity stake in the King Koil mattress brand licensing business via Kaiserkorp for a total purchase consideration of USD28,800, (equivalent to approximately RM115,934,400.00) only to be satisfied entirely via cash upon the terms and conditions of the SSA ( the Acquisition ). On the even date, the Company also entered into a Shareholders Agreement ( SHA ) in escrow with Mr. Yeoh Jin Hoe and Kaiserkorp to regulate the relationship between the Company or its nominated wholly-owned special purpose subsidiary, Mr. Yeoh Jin Hoe and Kaiserkorp in respect of their respective rights and obligations as shareholders of Kaiserkorp. The SHA shall only take effect upon completion of the SSA. The Acquisition has been completed on 23 May 2016 in accordance with the terms of the SSA. Following the completion of the Acquisition, Kaiserkorp has became an indirect subsidiary of Perangsang Selangor via its wholly-owned subsidiary, BASB. e. Acquisition of additional 15% equity interest in Aqua-Flo On 25 May 2016: (i) (iii) (iv) (v) the Company had entered into Sales and Purchase of Shares Agreement with Hydrovest Sdn Bhd ( Hydrovest ) ( SPA1 ), a 60% subsidiary of the Company for the acquisition of 36% of the total number of issued shares of Aqua-Flo comprising 180,000 ordinary shares of RM1.00 each for a cash consideration of RM1,884,600.00; Hydrovest had entered into a Sale and Purchase of Shares Agreement with Taliworks ( SPA2 ), Hydrovest's 40% shareholder for the disposal of Hydrovest's 24% equity interest in Aqua-Flo comprising 120,000 ordinary shares of RM1.00 each to Taliworks at a cash consideration of RM1,256,400.00; the Company had entered into a Sale and Purchase of Shares Agreement with Prismachem ( SPA3 ) for the acquisition of 15% equity interest in Aqua-Flo comprising 75,000 ordinary shares of RM1.00 each from Prismachem at a cash consideration of RM4,900,000.00; and the Company had entered into a Shareholders Agreement with Prismachem, Taliworks and Aqua-Flo to regulate the relationship between the Company, Prismachem, Taliworks and Aqua-Flo in respect of their respective rights and obligations as shareholders of Aqua-Flo. The above acquisitions and disposal have been completed on 30 June 2016 in accordance with the terms of the SPA1, SPA2 and SPA3. Following the completion, Aqua-Flo has became a 51% subsidiary of Perangsang Selangor. f. Acquisition of 98.98% equity interest in CBB by PPSB On 11 August 2016, the Company and its wholly-owned subsidiary company, PPSB had entered into a conditional Share Sale Agreement with C B Equities Sdn Bhd and Vendors whereby PPSB agreed to acquire a total of 85,729,266 ordinary shares in CBB ( CBB Share(s) ), representing approximately 71.44% equity interest in CBB, for a total cash consideration of RM150,026, or RM1.75 per CBB Share ( Acquisition ). 15

22 The Proposed Acquisition and Proposed Mandatory General Offer were approved by the shareholders of the Company at an Extraordinary General Meeting on 31 October On 8 November 2016, PPSB completed the acquisition of 71.44% equity interest in CBB a listed entity. Through its subsidiaries, CBB is principally involved in the manufacturing of cement bags and currently the leading player with a significant market share in Peninsular Malaysia with presence in Indonesia, Singapore and Thailand. While the paper bag products lead its revenue contribution, Century Bond aspires to be a one-stop packaging solution provider. The flexible plastic packaging products and corrugated carton boxes produced in-house provides synergistic solutions to other divisions within the CBB s Group and have been regularly generating external sales. The CBB s Group is also involved in the production of a wide range of household care products under its house brand and as the contract manufacturer for leading retailers. As CBB is a listed entity in Bursa Malaysia, pursuant to Section 218(2) of the Capital Markets & Services Act, 2007 ( CMSA ) and Section 9(1), Part III of the Malaysian Code on Take-Overs and Mergers, 2010 ("Code ), the PPSB is obliged to extend a Mandatory General Offer ( MGO ) for all remaining CBB Shares not already owned by PPSB representing approximately 34,270, or 28.56% of the issued and paid-up share capital of CBB, for a cash consideration of RM1.75 per CBB Share. On 8 November 2016, PPSB issued a Notice of Extended Closing Date for the acceptance of the MGO to 13 November 2016 and thereafter was extended to 27 December 2016 ( Closing Date ). On 6 December 2016, PPSB holds 108,732,266 or 90.61% of CBB Shares. Paragraph 8.02(1) of the Listing Requirements provides that a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are in the hands of public shareholders. In view of that the Company does not intend to maintain the listing status of CBB, an application to withdraw the listing status was made to Bursa Securities and CBB Shares was suspended from trading on 5 January 2017 upon expiry of the 5 market days from the Closing Date. Based on the level of acceptances and the number of voting shares of CBB on the Closing Date, PPSB was not eligible to invoke the provisions of Section 222 of the CMSA to compulsorily acquire the remaining CBB Shares. In this regard, the PPSB has exercised its rights in accordance with Subsection 223(1) of the CMSA after the Closing Date, served the notice to acquire the remaining of CBB Shares, whereby such acquisition shall be done on the same terms and conditions as set out in the intial Offer including at the same offer price of RM1.75 per CBB Share as set out in the Offer document. All acceptance form must reach the PPSB not later than 28 March At 31 December 2016 and 28 March 2017, PPSB holds 93.26% and 98.98% of CBB shares respectively. 4. DOCUMENTS FOR INSPECTION Copies of the following documents will be available for inspection at the registered office of Perangsang Selangor at 16 th Floor, Plaza Perangsang, Persiaran Perbadanan, Shah Alam, Selangor Darul Ehsan, during normal business hours from the date of this Circular to the date of the Fortieth AGM:- (a) Constitution of the Company; (b) Audited consolidated financial statements of Perangsang Selangor for the past (2) financial years ended 31 December 2015 and 31 December 2016; and (c) Material contracts referred to in Section 3 above. 16