TUNE PROTECT GROUP BERHAD CIRCULAR TO SHAREHOLDERS. in relation to the

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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 you should take, you should consult your stockbroker, bank manager, solicitor, accountant 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. TUNE PROTECT GROUP BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS in relation to the PROPOSED RENEWAL OF EXISTING AND NEW SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE ( PROPOSED RENEWAL OF RRPT MANDATE ) The ordinary resolution in respect of the above proposal will be tabled as Special Business at our Annual General Meeting ("AGM") to be held at Golden Screen Cinemas ( GSC ), 4 th Floor, 1 Utama Shopping Centre, 1, Lebuh Bandar Utama, Bandar Utama City Centre, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan on Monday, 22 May 2017 at a.m. The Notice of the AGM together with the Form of Proxy are despatched together with this Circular. You are entitled to attend and vote at our AGM or appoint a proxy or proxies to attend and vote on your behalf. If you wish to do so, you must deposit the Form of Proxy at the office of our Registered Office at B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the date and time fixed for our AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at our AGM should you subsequently wish to do so. Last day and time for lodging the Form of Proxy Date and time of our AGM : : Saturday, 20 May 2017 at a.m. Monday, 22 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: Act : Companies Act, 2016, as amended from time to time and any re-enactment thereof AGM : Annual general meeting AirAsia : and its affiliates, namely PT Indonesia AirAsia and Thai AirAsia Co. Ltd, collectively or individually as the context requires AirAsia X # : AirAsia X Berhad Audit and Risk Committee : Our audit and risk committee, presently comprising Ng Soon Ng Siek Chuan, Datuk Kamarudin Bin Meranun and Tan Ming-Li Audit Committee Board : Board of Directors of TPG : Our audit committee, presently comprising Ng Soon Ng Siek Chuan, Datuk Kamarudin Bin Meranun and Tan Ming-Li Bursa Securities : Bursa Malaysia Securities Berhad ( W) CMSA : Capital Markets and Services Act 2007, as amended from time to time and any re-enactment thereof Director(s) : Shall have the same meaning given in Section 2(1) of the CMSA and for the purpose of the Proposed Renewal of RRPT Mandate, includes any person who is or was within the preceding six months of the date on which the terms of the transaction were agreed upon, a director or a chief executive of our Company, our subsidiary or holding company, in accordance with the definition in Chapter 10 of the Listing Requirements EGM : Extraordinary general meeting Listing Requirements : Main Market Listing Requirements of Bursa Securities, as amended or expanded from time to time LPD : 23 March 2017, being the latest practicable date prior to the issuance of this Circular Major Shareholder(s) : A person who has an interest or interests in one or more voting shares in our Company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is: NA : Not applicable (a) 10% or more of the aggregate of the nominal amounts of all the voting shares in our Company; or (b) 5% or more of the aggregate of the nominal amounts of all the voting shares in our Company where such person is the largest shareholder of our Company. For the purpose of this definition, interests in shares has the meaning given in Section 8 of the Act. For the purpose of the Proposed Shareholders Mandate, Major Shareholder (as defined above) includes any person who is or was within the preceding six months of the date on which the terms of the transaction were agreed upon, a Major Shareholder of our Company or any other corporation which is our Company's subsidiary or holding company Person(s) Connected : Shall have the same meaning given in Paragraph 1.01 of the Listing Requirements Proposed Renewal of RRPT Mandate : Proposed renewal of existing shareholders mandate and new shareholders mandate for the RRPTs set out in Section 2.4 of this Circular entered or to be entered by our Company and/or subsidiaries in the ordinary course of business Related Party(ies) : Our Directors, Major Shareholders and/or Persons Connected to any of our Directors and/or Major Shareholders # On 16 March 2017, the Board has approved the splitting of the Audit and Risk Committee into two (2) separate committees, namely Audit Committee and Risk Management Committee i

3 DEFINITIONS (Cont d) RM and sen : Ringgit Malaysia and sen, the lawful currency of Malaysia RRPT(s) : Transactions entered into or proposed to be entered into by our Company and/or subsidiaries which involve the interest, direct or indirect, of the Related Parties and which are recurrent, of a revenue or trading nature and which are necessary for the day-to-day operations of our Company or subsidiaries TPG or Company : Tune Protect Group Berhad ( K) Group : TPG and its subsidiaries, associate and joint venture partner TPG Share(s) or Share(s) : Ordinary shares in our Company TIL : Tune Insurance (Labuan) Ltd (LL06997), our 80.0%-owned subsidiary TPM : Tune Insurance Malaysia Berhad (30686-K), our 83.26%-owned subsidiary TIPCC : Tune Insurance PCC Ltd (PCC11332), a wholly-owned subsidiary of TPR TDL : Tune Direct Ltd (LL09836), our wholly-owned subsidiary TDM : Tune Direct (M) Sdn Bhd ( U), a wholly-owned subsidiary of TDL TPR : Tune Protect Re Ltd (LL08072), our wholly-owned subsidiary Travel Protection Plan : The travel insurance product currently branded as Tune Protect Travel Insurance by AirAsia which is offered to the customers of AirAsia and underwritten by our local insurance partners, and in Malaysia by TPM Tune Air : Tune Air Sdn Bhd ( V) Tune Live : Tune Live Sdn Bhd ( U) Tune Group : Tune Group Sdn Bhd ( P) All references to "our Company" in this Circular means Tune Protect Group Berhad and references to "our Group" mean our Company and our subsidiaries, associate and joint venture partner. References to "we", "us", "our" and "ourselves" mean our Company, or where the context otherwise requires, our Group. All references to "you" in this Circular mean the shareholders of our Company, unless the context otherwise requires. Words denoting the singular shall include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders, and vice versa. References to persons shall include corporations and vice versa. Any reference to any enactment in this Circular is a reference to that enactment as for the time being amended or re-enacted. Any reference to time of day in this Circular is a reference to Malaysian time, unless otherwise stated. ii

4 TABLE OF CONTENTS Page LETTER TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF RRPT MANDATE CONTAINING: 1. INTRODUCTION PROPOSED RENEWAL OF RRPT MANDATE RATIONALE AND BENEFITS OF THE PROPOSED RENEWAL OF RRPT MANDATE EFFECTS OF THE PROPOSED RENEWAL OF RRPT MANDATE APPROVAL REQUIRED INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS.. 14 CONNECTED TO THEM 7. DIRECTORS RECOMMENDATION AGM FURTHER INFORMATION 15 APPENDIX FURTHER INFORMATION 16 iii

5 TUNE PROTECT GROUP BERHAD (Company No K) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, Petaling Jaya Selangor Darul Ehsan 28 April 2017 Board of Directors: Ng Soon Ng Siek Chuan (Acting Chairman and Senior Independent Non-Executive Director) Tan Sri (Dr.) Anthony Francis Fernandes ( Tan Sri (Dr.) ) (Non-Independent Non- Executive Director) Datuk Kamarudin bin Meranun ( Datuk Kamarudin ) (Non-Independent Non-Executive Director) Tan Ming-Li (Independent Non-Executive Director) To: Our shareholders Dear Sir/Madam, PROPOSED RENEWAL OF EXISTING SHAREHOLDERS MANDATE AND NEW SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION At the Fifth AGM held on 3 June 2016, our Company had obtained a general mandate from our shareholders for our Company and/or subsidiaries to enter into the RRPTs as set out in the Circular to Shareholders dated 4 May The said general mandate obtained from our shareholders shall in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming Sixth AGM unless authority for its renewal is obtained from our shareholders at the said AGM. Our Board had on 16 March 2017 announced our intention to seek your approval at our forthcoming Sixth AGM for the Proposed Renewal of RRPT Mandate. The purpose of this Circular is to provide you with details of the Proposed Renewal of RRPT Mandate together with our Board s recommendation and to seek your approval for the resolution pertaining to the Proposed Renewal of RRPT Mandate to be tabled at our forthcoming AGM, the notice of which is set out in our Annual Report for the financial year ended 31 December 2016 (which is despatched together with this Circular). 1

6 YOU ARE ADVISED TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTION RELATING TO THE PROPOSED RENEWAL OF RRPT MANDATE TO BE TABLED AT OUR FORTHCOMING AGM. 2. PROPOSED RENEWAL OF RRPT MANDATE 2.1 Details of the Proposed Renewal of RRPT Mandate Under Paragraph of the Listing Requirements, we may seek shareholders mandate for related party transactions which are recurrent, of revenue or trading nature and which are necessary for our Company and subsidiaries day-to-day operations, subject to the following: (i) (ii) the transactions are in the ordinary course of business and are on terms not more favourable to the Related Party(ies) than those generally available to the public; your mandate is subject to annual renewal and disclosure being made in our Annual Report on the of transactions conducted under such mandate during the financial year where the is equal or more than the following threshold: (a) (b) the consideration, value of the assets, capital outlay or costs of the transactions is equal to or exceeds RM1 million; or any one of the percentage ratios of such transactions is equal to or exceeds 1%, whichever is the higher; (iii) (iv) (v) a circular to shareholders for the shareholders mandate includes the information as may be prescribed by Bursa Securities; in a meeting to obtain your mandate, the Related Party(ies) with any interest, direct or indirect must not vote on the resolution(s) in respect of the transaction. An interested Director or interested Major Shareholder must ensure that Persons Connected with them abstain from voting on the resolution(s) to approve the transaction; and immediate announcement to Bursa Securities when the actual value of a related party transaction entered into by our Company and/or subsidiaries exceeds the estimated value of the related party transaction disclosed in the circular by 10% or more. Where your mandate has been procured pursuant to the above, the provisions of Paragraph of the Listing Requirements will not apply. In the ordinary course of our business, we have entered into certain RRPTs and it is anticipated that we would, in the ordinary course of our business, continue to enter into such RRPTs with the Related Parties, the details of which are set out in Section 2.4 below. In this regard, our Board proposes to seek your approval for the renewal of the shareholders mandate for the RRPTs entered and/or to be entered into by our Company and/or subsidiaries, which are necessary for the day-to-day operations of our Company or subsidiaries and are based on terms on arm s length basis which are not more favourable to the Related Parties than those generally available to the public and are not detrimental to our minority shareholders. 2

7 2.2 Validity Period for the Proposed Renewal of RRPT Mandate The Proposed Renewal of RRPT Mandate, if approved at our forthcoming AGM, will take effect from the date of the passing of the ordinary resolution in relation to the Proposed Renewal of RRPT Mandate and will be subject to annual renewal. In this respect, the authority conferred by our shareholders for the Proposed Renewal of RRPT Mandate shall continue to be in force until: (i) (ii) (iii) the conclusion of our next AGM following our forthcoming AGM, at which time it will lapse, unless renewed by a resolution passed at our next AGM; or the expiration of the period within which our next AGM is required to be held under Section 340(2) and 340(3) of the Act (but shall not extend to such extension as may be allowed under Section 340(4) of the Act); or the Proposed Renewal of RRPT Mandate is revoked or varied by ordinary resolution passed by you in a general meeting, whichever is the earlier. Thereafter, your approval will be sought for the renewal of the Proposed Renewal of RRPT Mandate at each subsequent AGM, subject to a satisfactory review by our Audit Committee. 2.3 Principal Activities of our Company and subsidiaries Our subsidiaries are insurance providers or underwriters, directly and via reinsurance, of general and life insurance products across the Asia-Pacific region. Our subsidiaries act as insurance product managers for our online partners (currently AirAsia, AirAsia X and Tune Hotels Regional Services Sdn Bhd) where we, amongst others, design and manage insurance products that will be sold to the customers of our online insurance partners. Our Company is principally an investment holding company whilst the principal activities of our subsidiaries are as follows: Company Effective Equity Interest % Principal Activities TPR Licensed to carry on general reinsurance business in, from or through Labuan TPM Underwriting of all classes of general insurance in Malaysia TDL Investment holding and manager of the online distribution platform # TIL * Licensed to operate as an offshore captive insurer in Labuan Subsidiary of TDL TDM Insurance intermediary business for life, general and Takaful business Subsidiary of TPR # TIPCC Captive insurance business 3

8 # Licences for TIL and TIPCC were surrendered to Labuan Financial Services Authority on 23 September 2015 & 3 October 2016 respectively. * Mr. Yap Wai Bing of Messrs TMF Trust Labuan Limited, Brumby Centre, Lot 42, Jalan Muhibbah, L Federal Territory of Labuan had been appointed as liquidator of TIL on 27 December RRPTs under the Proposed Renewal of RRPT Mandate Principal Activities of the Related Parties The principal activities of the Related Parties are as follows: Company Principal Activities AirAsia X Berhad PT Indonesia AirAsia Tune Group.com Limited Tune Group SP&G Insurance Brokers Thai AirAsia Co. Ltd Air transportation services while the principal activities of its subsidiaries include amongst others, the provision of insurance services, financing and leasing arrangement, inflight meals, tour operating business and media owner with publishing division Provision of low-cost, long-haul air transportation services Commercial air transport services Licensing of brand names to various ventures Investment holding Insurance broking and consultancy services Commercial air transport services (The rest of this page is intentionally left blank) 4

9 2.4.2 Details of the RRPTs under the Proposed Renewal of RRPT Mandate The details of the RRPTs transacted from which the existing shareholders ratification and mandate was obtained at the last AGM held on 3 June 2016 and the details of the RRPTs entered or to be entered into by our Company and/or subsidiaries with the Related Parties under the Proposed Renewal of RRPT Mandate are as follows: Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM AirAsia Berhad is our Major Shareholder. is 15.45% Air, which in turn is 48.8% owned by Tan Sri (Dr.) and 40.2% owned by Datuk is 16.73% Live, which in turn is 50.0% owned by Tan Sri (Dr.) Tony Fernandes and 50.0% owned by Datuk Tan Sri (Dr.) and Datuk Kamarudin are our Directors and directors of Provision of the right to our Company to access to s customer database to conduct telesales marketing on our Company and/or third party insurance products and the provision of management services by our Company to s travel insurance business. Provision of travel insurance by TPM to s customers for journeys originated from Malaysia resulting in underwriting commission received by , , ,700 5

10 Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM AirAsia X AirAsia X is a Person Connected to as AirAsia Berhad owns 13.76% equity interest in AirAsia X. is our Major Shareholder. is 15.45% Air, which in turn is 48.8% owned by Tan Sri (Dr.) and 40.2% owned by Datuk Provision of agency services to TPM in relation to the Travel Protection Plan originating in Malaysia to the passengers of AirAsia X pursuant to the Agency Agreement entered into between AirAsia X and TPM. 5,050 3,090 3,900 is 16.73% Live, which in turn is 50.0% owned by Tan Sri (Dr.) Tony Fernandes and 50.0% owned by Datuk Tan Sri (Dr.) and Datuk Kamarudin are our Directors and directors of AirAsia X. 6

11 Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM PT Indonesia AirAsia PT Indonesia AirAsia is a Person Connected to as AirAsia Berhad owns 100% equity interest in AirAsia Investment Ltd, which in turn owns 49% of equity interest in PT Indonesia AirAsia. is our Major Shareholder. is 15.45% Air, which in turn is 48.8% owned by Tan Sri (Dr.) and 40.2% owned by Datuk is 16.73% Live, which in turn is 50.0% owned by Tan Sri (Dr.) Tony Fernandes and 50.0% owned by Datuk Provision of the right to our Company to market insurance products to the customers of PT Indonesia AirAsia via direct marketing initiatives pursuant to the Distribution Agreement entered into between PT Indonesia AirAsia and our Company. Provision of marketing services to TPM in relation to the Travel Protection Plan originating in Malaysia to the passengers of PT Indonesia AirAsia pursuant to the Business Collaboration Agreement entered into between TPM and PT Indonesia AirAsia Tan Sri (Dr.) and Datuk Kamarudin are our Directors and directors of PT Indonesia AirAsia 7

12 Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM Tune Group.com Limited or its assignee Tune Group Tune Group.com Limited is jointly owned by Tan Sri (Dr.) Tony Fernandes and Datuk Kamarudin, who are Persons Connected to our Major Shareholders, Tune Group and. Provision of the license and right to our Company and subsidiaries to use the Tune Insurance trademark by Tune Group.com Limited or its assignee Tune Group Sdn Bhd. 12,700 9,550 11,500 Tune Group is jointly owned by Tan Sri (Dr.) and Datuk Rental and utilities charges at Wisma Tune ,000 is 15.45% Air, which in turn is 48.8% owned by Tan Sri (Dr.) and 40.2% owned by Datuk is 16.73% Live, which in turn is 50.0% owned by Tan Sri (Dr.) Tony Fernandes and 50.0% owned by Datuk Tan Sri (Dr.) and Datuk Kamarudin are our Directors and the directors of Tune Group. com Limited. 8

13 Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM SP&G Insurance Brokers SP&G Insurance Brokers is a company owned by Dato Zakaria Bin Meranun, the brother of Datuk Kamarudin, a Director and Person Connected to our Major Shareholders, Tune Group and. Tune Group is 50% owned by Datuk is 15.45% Air, which in turn is 40.2% owned by Datuk is 16.73% Live, which in turn is 50.0% owned by Datuk Provision of insurance broking and consultancy services by SP&G Insurance Brokers to TPM pursuant to the broking arrangement between SP&G Insurance Brokers and TPM. Provision of insurance broking and consultancy services by SP&G Insurance Brokers to TPR pursuant to the Personal Accident and Sickness Travel Facultative Reinsurance arrangement between SP&G Insurance Brokers and TPR ,050 9

14 Existing Mandate Related Parties Relationship Transaction from 3/6/2016 (date of AGM) up to the next AGM Actual value transacted from 3/6/2016 to LPD from 22/5/2017 (date of AGM) up to the next AGM Thai AirAsia Co. Ltd Thai AirAsia Co. Ltd is a Person Connected to as AirAsia Berhad owns 100% equity interest in AirAsia Investment Ltd, which in turn owns 45% equity interest in Thai AirAsia Co. Ltd. is our Major Shareholder. Provision of the right to our Company to market insurance products to the customers of Thai AirAsia Co. Ltd via direct marketing initiatives pursuant to the Distribution Agreement entered into between Thai AirAsia Co. Ltd and our Company is 15.45% Air, which in turn is 48.8% owned by Tan Sri (Dr.) and 40.2% owned by Datuk is 16.73% Live, which in turn is 50.0% owned by Tan Sri (Dr.) Tony Fernandes and 50.0% owned by Datuk Kamarudin Provision of marketing and administration services to TPM in relation to the Travel Protection Plan originating in Malaysia to the passengers of Thai AirAsia Co. Ltd pursuant to the Business Collaboration Agreement entered into between TPM and Thai AirAsia Co. Ltd Tan Sri (Dr.) and Datuk Kamarudin are our Directors and directors of Thai AirAsia Co. Ltd 10

15 2.5 Amount Due and Owing to our Company and Subsidiaries by Related Parties As at the LPD, there are no outstanding amounts due and owing to our Company and subsidiaries by Related Parties pursuant to the RRPTs referred to in Section 2.4 above which exceeded the credit terms. 2.6 Basis of Value of RRPTs The estimated transaction values of the RRPTs from 22 May 2017 up to the next AGM referred to in Section 2.4 of this Circular are based on (i) estimated prevailing prices, which are reasonably market-competitive; and (ii) the sums incurred or received over the past years for similar transactions. The estimated transaction values were also projected based on (i) our Company and subsidiaries usual levels of transactions; and (ii) our Company and subsidiaries projected business volume, from the LPD to the date of our next AGM. The actual values of transactions may, however, vary from the estimated values if there should occur any changes in the business, economic and/or competitive environment of our business. 2.7 Review Procedures for the RRPTs We have established the following procedures and guidelines and internal controls to ensure the RRPTs that have been or will be entered into are on terms which are not or will not be more favourable to the Related Parties than those generally available to third parties dealing at arm's length and are not or will not be detrimental to our minority shareholders: (i) (ii) (iii) (iv) (v) records will be maintained by our Company and subsidiaries to capture all RRPTs which we enter into; each Director must inform the Board, of the details of the nature and extent of his interest and/or deemed interest he or she may have in any business enterprise with an existing or proposed business relationship or transaction with our Company and/or our subsidiaries, including all matters in relation to the proposed RRPT that he is aware or should reasonably be aware of, which is not in the best interest of the Company and/or subsidiaries; Directors who have any interest in any RRPTs shall abstain from Audit Committee and Board deliberations and voting on the relevant resolution(s) in respect of the RRPT. The interested Director has a duty to ensure that he or she and any Persons Connected with them will also abstain from voting on the resolution at the EGM or AGM to be convened for the purpose of approving the RRPT; there are no specific thresholds for approval of RRPTs within our Company and subsidiaries. All potential RRPTs have to be disclosed by Management, being the relevant head of department in which the transaction falls under ( Management ). Management will then propose the RRPT by providing RRPT papers and other relevant documents to our Legal and Compliance Department and Internal Audit Department, at least two (2) weeks prior to our Audit Committee meeting to ensure that regulatory requirements are met and internal processes are adhered to. Upon obtaining clearance from our Legal and Compliance Department as well as our Internal Audit Department, Management will sign off on the RRPT papers and the matter shall be tabled to our Audit Committee for consideration and if deemed appropriate, recommended to our Board for approval; with the information provided in the RRPT papers, our Board ascertains that at least two (2) other contemporaneous transactions with unrelated third parties for similar products or services and/or quantities will be used as comparison, wherever possible, 11

16 to determine whether the price and terms offered to or by the Related Parties are fair and reasonable and comparable to those offered to or by other unrelated third parties for the same or substantially similar type of products or services and/or quantities. In the event that a quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be based on prevailing market prices that are agreed upon under similar commercial terms for transactions with third parties, business practices and policies and on terms which are generally in line with industry norms and not more favourable to the Related Party than those generally available to the public and are not to the detriment of our Company or our Group or our minority shareholders; (vi) (vii) our Internal Audit Department shall ensure that internal processes in respect of the RRPTs are followed. Our Board and Audit Committee shall review on a quarterly basis the Internal Audit Reports to ascertain that the guidelines and procedures established to monitor RRPTs have been complied; and if our Board and Audit Committee are of the view that the abovementioned procedures are insufficient to ensure that RRPTs are undertaken on an arm's length basis and on terms that are not more favourable to the Related Parties than those generally available to third parties dealing at arm's length during their periodic review of the procedures, our Board and Audit Committee have the discretion to request for additional procedures to be imposed on all RRPTs. 2.8 Audit and Risk Committee s Statement On 14 March 2017, our Audit and Risk Committee is of the view that the review procedures and guidelines for RRPTs as set out in Section 2.7 above are: (i) (ii) adequate and sufficient to monitor, track and identify RRPTs in a timely and orderly manner and that these procedures and processes are reviewed quarterly; and sufficient to ensure that the RRPTs that have been or will be entered into are on terms which are or will not be more favourable to the Related Parties than those generally available to the public and are not or will not be to the detriment of our minority shareholders. 2.9 Disclosure of RRPTs Disclosures will be made in our Annual Report of a breakdown of the of RRPTs made pursuant to the Proposed Renewal of RRPT Mandate during the financial year, based on the following: (i) (ii) type of RRPTs made; and names of the Related Parties involved in each type of RRPT made and their relationship with our Company and/or subsidiaries. If the actual value of a RRPT exceeds the estimated value of the RRPT disclosed in this Circular by 10% or more, we will make an immediate announcement, which will include the information as may be prescribed, to Bursa Securities. 12

17 3. RATIONALE AND BENEFITS OF THE PROPOSED RENEWAL OF RRPT MANDATE 3.1 Rationale of the Proposed Renewal of RRPT Mandate The Proposed Renewal of RRPT Mandate, subject to annual review, will enable our Company and/or subsidiaries to carry out RRPTs necessary for their day-to-day operations and will eliminate the need to frequently make announcements to Bursa Securities, convene separate general meetings and/or seek your approval from time to time as and when the RRPTs which are comprised within the Proposed Renewal of RRPT Mandate arise. In this respect, the Proposed Renewal of RRPT Mandate is intended to save administrative time and expenses which could be better utilised by our Company and subsidiaries to pursue our corporate objectives and realise business opportunities in a more timely and effective way. 3.2 Benefits to our Company and subsidiaries The benefits of the Proposed Renewal of RRPT Mandate are, amongst others, as follows: (i) (ii) (iii) the Proposed Renewal of RRPT Mandate will facilitate transactions of a revenue or trading nature with Related Parties which form part of our day-to-day operations undertaken at arm s length on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to our minority shareholders; by transacting with the Related Parties, we would have an advantage of familiarity with the background, financial well-being and management of the Related Parties, thus enabling more informed commercial decisions to be made. In most dealings with the Related Parties, our Company and subsidiaries and the Related Parties have a good understanding of each other s business needs and expectations, thus providing a platform where all parties can benefit from conducting the RRPTs; and the RRPTs are likely to continue in the future on a frequent and recurrent basis from time to time which are time-sensitive and/or confidential in nature, and it may be impractical to seek your prior approval on a case-by-case basis before entering into such transactions. 4. EFFECTS OF THE PROPOSED RENEWAL OF RRPT MANDATE The Proposed Renewal of RRPT Mandate is not expected to have any effect on our issued share capital and our substantial shareholders shareholdings in our Company. However, the Proposed Renewal of RRPT Mandate is in relation to transactions which are of a revenue or trading nature and which form an integral part of our day-to-day operations and hence are expected to contribute positively to our earnings and accordingly enhance our consolidated net assets and gearing. 5. APPROVAL REQUIRED The Proposed Renewal of RRPT Mandate is subject to your approval being obtained at our forthcoming AGM to be convened. 13

18 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM Save as disclosed below, none of our Directors, Major Shareholders and/or Persons Connected to them, have any interests, direct or indirect in the Proposed Renewal of RRPT Mandate: (i) (ii) Tan Sri (Dr.) and Datuk Kamarudin, by virtue of their directorship and shareholdings in our Company and by virtue of their directorship and/or shareholdings in the Related Parties as detailed in Section 2.4 of this Circular; and Tune Group and, by virtue of these companies being Major Shareholders of our Company and by virtue of their shareholdings in the Related Parties as detailed in Section 2.4 of this Circular. The shareholdings of the interested Directors and Major Shareholders in our Company as at the LPD are as follows: Direct No. of TPG Shares Indirect % No. of TPG Shares % Interested Directors Tan Sri (Dr.) Anthony Francis Fernandes 100, ,172,150 (1) Datuk Kamarudin Bin Meranun 81, (2) 221,172, Interested Major Shareholders Tune Group 118,563, ,609, Notes: (1) Deemed interested by virtue of his interest in Tune Group and pursuant to Section 8 of the Act (2) Deemed interested by virtue of his interest in Tune Group and pursuant to Section 8 of the Act All of our interested Directors have abstained and will continue to abstain from all board deliberations and voting on the resolution pertaining to the Proposed Renewal of RRPT Mandate. Our interested Directors and Major Shareholders will abstain from voting in respect of their direct and indirect shareholdings on the resolutions, pertaining to the Proposed Renewal of RRPT Mandate at our forthcoming AGM. Furthermore, our interested Directors and Major Shareholders have undertaken that they will ensure that Persons Connected to them, if any, will also abstain from voting on the resolutions, pertaining to the Proposed Renewal of RRPT Mandate at our forthcoming AGM. 7. DIRECTORS RECOMMENDATION Our Board (save for the interested Directors as identified in Section 6 above and who abstained from giving an opinion and make no recommendation on the Proposed Renewal of RRPT Mandate), having considered all aspects of the Proposed Renewal of RRPT Mandate is of the opinion that the Proposed Renewal of RRPT Mandate is in the best interest of our Group and our shareholders. 14

19 Accordingly, our Board (save for the interested Directors as identified in Section 6 above) recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Renewal of RRPT Mandate to be tabled at our forthcoming AGM. 8. AGM Our AGM, the Notice and Form of Proxy are despatched together with this Circular, will be held at Golden Screen Cinemas ( GSC ), 4th Floor, 1 Utama Shopping Centre, 1, Lebuh Bandar Utama, Bandar Utama City Centre, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan on Monday, 22 May 2017 at a.m. for the purpose of considering and if thought fit, passing the resolution to give effect to the Proposed Renewal of RRPT Mandate. If you are unable to attend and vote in person at our AGM, you are requested to complete and return the Form of Proxy, in accordance with the instructions contained therein, so as to arrive at our Registered Office at B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the date and time set for convening our AGM. However, the lodging of the Form of Proxy will not preclude you from attending and voting in person at our AGM should you subsequently wish to do so. 9. FURTHER INFORMATION Please refer to the attached Appendix for further information. Yours faithfully For and on behalf of the Board of Directors TUNE PROTECT GROUP BERHAD NG SOON NG SIEK CHUAN Acting Chairman and Senior Independent Non-Executive Director 15

20 APPENDIX FURTHER INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT Our Board has seen and approved this Circular and they, collectively and individually, accept full responsibility for the accuracy of the information in this Circular. They confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no false or misleading statements in this Circular or other facts which, if omitted, would make any statement in this Circular false or misleading. 2. MATERIAL CONTRACTS There are no material contracts (not being contracts in the ordinary course of business) that have been entered into by our Company and subsidiaries within the two (2) years immediately preceding the date of this Circular. 3. MATERIAL LITIGATION As at the LPD, neither we nor our subsidiaries are engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and our Board does not know of any proceedings, pending or threatened, against our Company and/or subsidiaries, or of any fact likely to give rise to any proceedings which may materially and adversely affect our financial position or business. 4. DOCUMENTS AVAILABLE FOR INSPECTION The following documents or copies of them are available for inspection at our registered office B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, Petaling Jaya, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except public holidays) from the date of this Circular up to and including the date of our AGM: (i) our Memorandum and Articles of Association; (ii) our audited consolidated financial statements for the years ended 31 December 2015 and 31 December