If you are in any doubt as to what action you should take, please consult an appropriate independent professional adviser.

Transcription

1 THIS CIRCULAR CONTAINS IMPORTANT INFORMATION FOR YOUR ATTENTION. If you are in any doubt as to what action you should take, please consult an appropriate independent professional adviser. Bursa Malaysia Securities Berhad (Bursa Securities) has not perused the Circular on Proposed Shareholders Mandate for Share Buy-Back as set out in Part A of this Circular as it is an exempt Circular. Bursa Securities 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. (Company No M) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO PART A PROPOSED SHAREHOLDERS MANDATE FOR SHARE BUY-BACK PART B PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS PROPOSED GENERAL MANDATE FOR THE PROVISION OF FINANCIAL ASSISTANCE The above proposals will be tabled as Special Business at the Company s 48th Annual General Meeting (AGM). The Notice of AGM as set out in the Company s Annual Report 2008 is sent together with this Circular. The AGM of the Company will be held at Nirwana Ballroom 2, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, Kuala Lumpur, on Wednesday, 24 June 2009 at a.m. Shareholders are advised to refer to the Notice of AGM and the Form of Proxy which are incorporated in the Company s Annual Report As a shareholder, you can appoint a proxy or proxies to attend and vote on your behalf. You must complete and deposit the Form of Proxy at the office of the Company s share registrar, Securities Services (Holdings) Sdn Bhd, at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur not later than forty-eight (48) hours before the time set for the meeting or any adjournment thereof. You are not precluded from attending and voting in person at the AGM should you wish to do so subsequent to the lodging of the Form of Proxy. Last date and time for lodging the Form of Proxy : Monday, 22 June 2009 at a.m. Date and time for the AGM : Wednesday, 24 June 2009 at a. m. Venue of the AGM : Nirwana Ballroom 2, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, Kuala Lumpur This Circular is dated 2 June 2009 i

2 DEFINITIONS Unless otherwise stated, the following definitions shall have the following meanings: Companies AIM : Ascott International Management (Malaysia) Sdn Bhd, an indirect whollyowned subsidiary of The Ascott Group Limited, which in turn is an indirect wholly- owned subsidiary of CapitaLand AR : Alpine Return Sdn Bhd, a jointly controlled entity in which UMLand has equity interest of 50.00% BHD : Bangi Heights Development Sdn Bhd, a 70.00% owned subsidiary of UMLand CapitaLand : CapitaLand Limited, a major shareholder of UMLand with equity interest of 20.75% in UMLand via Opal Holdings Pte Ltd and Prime Equities Pte Ltd EC : Extreme Consolidated Sdn Bhd, a wholly-owned subsidiary of UMLand ES : Exquisite Skyline Sdn Bhd, a 71.00% owned subsidiary of UMLand LCM : Liang Court (Malaysia) Sdn Bhd, an indirect wholly-owned subsidiary of The Ascott Group Limited, which in turn is an indirect wholly- owned subsidiary of CapitaLand MRCB : Malaysian Resources Corporation Berhad NC : Nusajaya Consolidated Sdn Bhd, a jointly controlled entity in which UMLand has equity interest of 50.00% OSP : OneSentral Park Sdn Bhd, a company in which MRCB and CapitaLand have direct interest of 51.00% and indirect interest of 49.00% respectively SSBC : SSBC Sdn Bhd, a 50.53% owned subsidiary of UM Residences Sdn Bhd, which in turn is a wholly-owned subsidiary of UMLand SSTwo : Suasana Sentral Two Sdn Bhd, a company in which UMLand and MRCB have equity interest of 70.00% and 30.00% respectively TCB : Tradewinds Corporation Berhad, a substantial shareholder of UMLand with indirect equity interest of 7.39% in UMLand TCB Group : TCB and its subsidiary companies, collectively TIIB : Tradewinds International Insurance Broker Sdn Bhd, a wholly-owned subsidiary of TCB TP : Tradewinds Properties Sdn Bhd, a wholly-owned subsidiary of TCB TRSB : Tradewinds Resources Sdn Bhd, a wholly-owned subsidiary of TCB UMLand or Company : United Malayan Land Bhd UMLand Group or Group : UMLand, its subsidiaries and associated companies, collectively i

3 DEFINITIONS (Cont d) Proposals Mandated Related Parties : AIM, BHD, ES, LCM, SSBC, SSTwo, TIIB and TP Proposals : Proposed Shareholders Mandate and Proposed Provision of Financial Assistance, collectively Proposed Provision of Financial : Proposed general mandate for the provision of financial assistance Assistance Proposed Shareholders : Proposed shareholders mandate for Recurrent Related Party Transactions Mandate Proposed Share Buy-Back : Proposed shareholders mandate for the Company to buy back its own shares up to 5.80 million ordinary shares of RM1.00 each or 2.40% of the existing issued and paid-up share capital (net of treasury shares) of UMLand Recurrent Related Party Transaction : A recurrent transaction of a revenue or trading nature entered into by UMLand Group which involves the interest, direct or indirect, of a related party Authorities/Regulations Act : Companies Act, 1965, as amended from time to time Bursa Securities : Bursa Malaysia Securities Berhad Listing Requirements : Listing Requirements of Bursa Securities, including any amendments that may be made from time to time Others AGM : Annual General Meeting Board : The Board of Directors of UMLand EGM : Extraordinary General Meeting EPS : Earnings per share NA : Net assets RM and sen : Ringgit Malaysia and sen, respectively Share(s) : Ordinary share(s) of RM1.00 each in UMLand We have inserted headings and sub-headings in this Circular for convenience of reference only. ii

4 TABLE OF CONTENTS PART A LETTER TO SHAREHOLDERS OF UMLAND IN RELATION TO PROPOSED SHAREHOLDERS MANDATE FOR SHARE BUY-BACK, CONTAINING: SECTION PAGE 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED SHARE BUY-BACK 2 3. FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK 4 4. PUBLIC SHAREHOLDING SPREAD 5 5. MALAYSIAN CODE ON TAKE-OVERS AND MERGERS, SHARE PRICES 5 7. SHAREHOLDINGS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS 6 8. CONDITIONS OF THE PROPOSALS 7 9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS DIRECTORS RECOMMENDATION TH AGM FURTHER INFORMATION 8 PART B LETTER TO SHAREHOLDERS OF UMLAND IN RELATION TO PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS AND PROPOSED GENERAL MANDATE FOR THE PROVISION OF FINANCIAL ASSISTANCE, CONTAINING: SECTION PAGE 1. INTRODUCTION 9 2. THE PROPOSALS RATIONALE FOR THE PROPOSALS FINANCIAL EFFECTS OF THE PROPOSALS CONDITIONS OF THE PROPOSALS INTERESTS OF INTERESTED DIRECTORS AND MAJOR SHAREHOLDERS DIRECTORS RECOMMENDATION TH AGM FURTHER INFORMATION 21 APPENDICES I FURTHER INFORMATION 22 II EXTRACT OF THE NOTICE OF 48 TH AGM 24 iii

5 PART A LETTER TO SHAREHOLDERS OF UMLAND IN RELATION TO PROPOSED SHAREHOLDERS MANDATE FOR SHARE BUY-BACK iv

6 (Company No M) (Incorporated in Malaysia) Registered Office: Suite 1.1, 1 st Floor Kompleks Antarabangsa Jalan Sultan Ismail Kuala Lumpur 2 June 2009 Board of Directors: Tun Musa Hitam (Chairman & Independent Non-Executive Director) Dato Ng Eng Tee (Deputy Chairman & Non-Independent Executive Director) Chen Lian Pang (Non Independent, Non-Executive Director) Datuk Syed Ahmad Khalid Bin Syed Mohammed (Independent, Non-Executive Director) Datuk Nur Jazlan Bin Tan Sri Mohamed (Independent, Non-Executive Director) Syed Azmin Bin Mohd Syed Nor (Non-Independent, Non-Executive Director) Chan Say Yeong (Non Independent, Non-Executive Director) Ng Eng Soon (Non-Independent, Non-Executive Director) Pakhruddin Bin Sulaiman (Independent, Non-Executive Director) Lim Wie Shan (Alternate Director to Chen Lian Pang and Chan Say Yeong) To: The Shareholders of United Malayan Land Bhd Dear Sirs, PROPOSED SHAREHOLDERS MANDATE FOR SHARE BUY-BACK 1. INTRODUCTION On 8 April 2009, the Board announced that the Company is proposing to seek shareholders mandate for the Company to buy back up to a maximum of 5.80 million ordinary shares of RM1.00 each or 2.40% of the existing issued and paid-up share capital (net of treasury shares) of the Company. The Proposed Share Buy-Back would become valid immediately upon the passing of the ordinary resolution and would expire at the conclusion of the next AGM of the Company unless the authority is further renewed by a resolution passed at that AGM, or upon the expiration of the period within which the next AGM is required to be held by the Act, or revoked or varied by a resolution passed by the shareholders of the Company in a general meeting, whichever is the earlier. The purpose of this Circular is to provide you with the relevant information on the Proposed Share Buy- Back, to set out your Board s recommendation on the Proposed Share Buy-Back and to seek your approval for the ordinary resolution to be tabled at the forthcoming 48 th AGM to be convened at Nirwana Ballroom 2, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, Kuala Lumpur on 24 June 2009 at a.m. The Notice of AGM together with the Form of Proxy are incorporated in the Company s Annual Report 2008 and an extract of the AGM Notice is appended in this Circular as Appendix II. WE ADVISE THE SHAREHOLDERS OF UMLAND TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTION TO GIVE EFFECT TO THE PROPOSED SHARE BUY-BACK AT THE FORTHCOMING 48 TH AGM. 1

7 2. DETAILS OF THE PROPOSED SHARE BUY-BACK 2.1 Quantum of Share Buy Back The Board proposes to seek the approval of the shareholders of the Company to purchase on Bursa Securities, up to a maximum of 5,800,000 Shares representing approximately 2.40% of the issued and paid-up share capital of the Company as at 30 April 2009 comprising 241,303,433 Shares (net of treasury shares), subject to compliance with Section 67A of the Act and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by the relevant authorities at the time of the purchase. The Proposed Share Buy-Back is in compliance with paragraph of the Listing Requirements. 2.2 Funding The Proposed Share Buy-Back shall be made wholly out of the retained profits and/or share premium account of the Company. For the implementation of the Proposed Share Buy-Back, an appropriate amount of internally generated funds and/or external borrowings of the Group would need to be allocated by the Company and such allocation shall not exceed the aggregate balance standing in the retained profits and/or share premium account of the Company. Based on the audited accounts as at 31 December 2008, the retained profits and share premium account of the Company were RM53,291,813 and RM63,970,442 respectively. As at 30 April 2009, the unaudited retained profits and share premium account of the Company stood at RM100,163,840 and RM63,970,442 respectively based on the unaudited results of the Group for the four (4)-month period ended 30 April The Proposed Share Buy-Back would reduce the cash reserves of the Group and the sum reduced will depend on the actual purchase prices and number of Shares. The Proposed Share Buy-Back will not affect the Company s ability to fulfill its other financial obligations as and when they fall due. 2.3 Treatment of Shares Purchased Section 67A of the Act allows for the Shares purchased from Bursa Securities to be cancelled upon purchase, held as treasury shares or a combination of both. Where the Shares purchased are cancelled, the Company s issued and paid up capital shall be reduced by the Shares so cancelled and the amount by which the Company's issued capital is reduced shall be transferred to a capital redemption reserve account. The cancellation of shares made pursuant to Section 67A of the Act, shall not be deemed to be a reduction in share capital. The purchased shares held as treasury shares may be distributed as share dividends or resold on Bursa Securities in accordance with the relevant rules of Bursa Securities. An immediate announcement will be made to Bursa Securities in respect of the intention of the Board, whether to retain the Shares so purchased as treasury shares or cancel them or a combination of both, as and when the the shares are bought back. The distribution of treasury shares as share dividends may be applied as a reduction of the retained profits or share premium account of the Company subject to all prevailing laws, rules, regulations, orders, guidelines and requirements issued by the relevant authorities at the time of the purchase. While the purchased shares are held as treasury shares, the rights attached to them as to voting, dividends and participation in other distributions or otherwise are suspended. The treasury shares shall not be taken into account in calculating the number or percentage of Shares or of a class of Shares for any purposes including substantial shareholding, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting. The treatment of the purchased Shares to be held as treasury shares, either distributed as share dividends or resold by the Company on Bursa Securities, or both, will depend on the availability of, amongst others, retained profits, share premium account and tax credit (in relation to Section 108 of the Income Tax Act, 1967) of the Company. 2

8 2.4 Purchase Price In accordance with the Listing Requirements, UMLand may only purchase its own shares on Bursa Securities at a price which is not more than fifteen percent (15%) above the weighted average market price for the past five (5) market days immediately preceding the date of the purchase(s). In case of subsequent resale of the retained treasury shares, the Company may only resell the treasury shares on Bursa Securities at: (ii) a price which is not less than the weighted average market price for the shares for the past five (5) market days immediately prior to the resale; or a discounted price of not more than 5% to the weighted average market price for the shares for the past five (5) market days immediately prior to the resale provided that: (a) (b) the resale takes place no earlier than 30 days from the date of purchase; and the resale price is not less than the cost of purchase of the shares being resold. The Proposed Share Buy-Back will allow your Directors to exercise the power of the Company to purchase and/or hold its own shares at any time within the abovementioned time period. The actual number of Shares to be purchased, total funds involved for each purchase and the timing of the purchase will depend on the market conditions and sentiments of Bursa Securities as well as the retained profits and share premium account balances and financial resources available to the Company. 2.5 Rationale for the Proposed Share Buy-Back Advantages The Proposed Share Buy-Back, if carried out, is expected to benefit the Company and its shareholders in the following manner: The Proposed Share Buy-Back is expected to support the fundamental value of the Shares; (ii) If the Shares purchased are retained as treasury shares or cancelled, it would generally have a positive impact, all else being equal, on the EPS of the Company; and (iii) If the Shares purchased are retained as treasury shares, such shares can be distributed as dividends to the shareholders Disadvantages The Directors, in exercising any decision on the Proposed Share Buy-Back, will be mindful of the interests of the Company and its shareholders. Notwithstanding the above, the Proposed Share Buy-Back may, to the extent of the Shares purchased: Reduce the financial resources of the Company; (ii) Reduce the liquidity of the Shares on Bursa Securities; and (iii) Reduce the amount of retained profits available for distribution of dividends to shareholders as the funds to be allocated for the Proposed Share Buy-Back must be made wholly out of the retained profits and share premium accounts of the Company. 2.6 Details of Purchases Made in the Previous 12 Months The Company did not purchase any Shares in the preceding 12 months. 3

9 2.7 Details of Shares Held as Treasury Shares The Company has 401,800 treasury shares. None of the treasury shares has been resold. 2.8 Details of Shares Cancelled in the Previous Months The Company did not cancel any of the treasury shares in the preceding 12 months. 3. FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK 3.1 Share Capital Assuming the Proposed Share Buy-Back is implemented in full, and: If the Shares purchased are cancelled, it will have the following effect on the existing issued and paidup share capital of the Company: 3.2 EPS No. of Shares Issued and paid-up share capital as at 31 December ,705,233 Assuming the cancellation of all treasury shares previously purchased (401,800) 241,303,433 Assuming the cancellation of all Shares purchased pursuant to the Proposed (5,800,000) Share Buy-Back Resultant issued and paid-up share capital 235,503,433 (ii) If the Shares purchased are not cancelled and held as treasury shares, it will not have any effect on the issued and paid-up share capital of the Company. If the Shares purchased are retained as treasury shares or cancelled, it would generally have a positive impact, all else being equal, on the EPS of the Group. However, the effects of the Proposed Share Buy- Back on the EPS of the Group will depend on the actual purchase prices and number of Shares bought back and the effective funding cost to the Group, if such purchases are made out of external borrowings. 3.3 NA per Share The effects of the Proposed Share Buy-Back on the NA per Share of the Group will depend on the actual purchase prices and number of Shares and the effective funding cost to the Company. If the purchase price is less than the NA per share of the Group, the Proposed Share Buy-Back will increase the NA per share of the Group. If the purchase price exceeds the NA per share of the Group, the Proposed Share Buy-Back will reduce the NA per share of the Group. 3.4 Gearing The Proposed Share Buy-Back, if implemented in full, will not have any material effect on the gearing of the Group. The effects of the Proposed Share Buy-Back on the gearing of the Group will depend on the actual purchase prices and number of Shares and the amount of borrowings used for the shares bought back. 4

10 3.5 Working Capital The Proposed Share Buy-Back is likely to reduce the working capital of the Group to the extent of the amount of funds utilised for the purchases of the Shares. Similarly, the working capital of the Group will increase to the extent of the amount of funds obtained from the resale of the Shares so purchased which are retained as treasury shares. 3.6 Dividends The Directors will fully consider the interests of the Company and its shareholders in implementing the Proposed Share Buy-Back as the Proposed Share Buy-Back will reduce the amount of retained profits available for payment of cash dividends to the shareholders. 4. PUBLIC SHAREHOLDING SPREAD The public shareholding spread of the Company as at 30 April 2009 was 27.78%, representing 67,043,620 Shares. The public shareholding spread is expected to reduce to 26.01% assuming the Proposed Share Buy-Back is fully implemented. 5. MALAYSIAN CODE ON TAKE-OVERS AND MERGERS, 1998 The Proposed Share Buy-Back, if fully implemented, will not trigger the provision for a mandatory general offer under the Malaysian Code on Take-overs and Mergers, SHARE PRICES The monthly highest and lowest prices of the Shares transacted on Bursa Securities for the past 12 months from May 2008 to April 2009 are as follows: High RM Low RM 2008 May June July August September October November December January February March April Source: The Star The last transacted price of the Shares on 21 May 2009, being the last practicable date prior to the printing of this Circular was RM

11 7. SHAREHOLDINGS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS 7.1 Shareholdings of Directors The shareholdings of the Directors of the Company based on the Register of Directors Shareholdings as at 30 April 2009 are as follows: Name < Direct > < Indirect > No. of Shares No. of Shares % % Dato Ng Eng Tee 6, ,967 a Datuk Syed Ahmad Khalid bin Syed Mohammed 10 Negligible - - Ng Eng Soon 7, ,829 b 7.39 Notes: a. Deemed interested by virtue of his interests in Chee Tat Holdings (S) Pte Ltd, King George Financial Corporation, Netson Investments Ltd, King George Park Ltd pursuant to Section 6A of the Act and through his spouse and children b. Deemed interested by virtue of his interest in Chee Tat Holdings (S) Pte Ltd pursuant to Section 6A of the Act 7.2 Shareholdings of Substantial Shareholders The shareholdings of the substantial shareholders of the Company based on the Register of Substantial Shareholders as at 30 April 2009 are as follows: Name < Direct > < Indirect > No. of Shares No. of Shares % % Wawasan Perangsang Mewah Sdn Bhd 57, Opal Holdings Pte Ltd 48, Chee Tat Holdings (S) Pte Ltd 17, TRSB 17, TCB ,826 ai 7.39 Perspective Lane (M) Sdn Bhd ,826 bi 7.39 Restu Jernih Sdn Bhd ,826 ci 7.39 Tan Sri Dato Syed Mokhtar Shah bin Syed Nor ,826 di 7.39 Muhammad Nor bin Saliman ,154 e Azman Hanafi bin Abdullah ,154 e CapitaLand Residential Malaysia Pte Ltd ,085 fii CapitaLand Commercial Limited 48,085 g CapitaLand ,065 h Temasek Holdings (Private) Limited 50,065 iii Dato Ng Eng Tee 6, ,967 jii Ng Eng Soon 7, ,829 ki 7.39 Ng Eng Ghee 6, ,829 ki

12 Notes: a. Deemed interested by virtue of its interest in TRSB pursuant to Section 6A of the Act b. Deemed interested by virtue of its interest in TCB pursuant to Section 6A of the Act c. Deemed interested by virtue of its interest in Perspective Lane (M) Sdn Bhd pursuant to Section 6A of the Act. d. Deemed interested by virtue of his interest in Restu Jernih Sdn Bhd pursuant to Section 6A of the Act e. Deemed interested by virtue of their interests in Wawasan Perangsang Mewah Sdn Bhd pursuant to Section 6A of the Act f. Deemed interested by virtue of its interest in Opal Holdings Pte Ltd pursuant to Section 6A of the Act g. Deemed interested by virtue of its interest in CapitaLand Residential Malaysia Pte Ltd pursuant to Section 6A of the Act h. Deemed interested by virtue of its interest in CapitaLand Commercial Limited and CapitaLand Residential Limited, via its wholly-owned subsidiary, Prime Equities Pte Ltd pursuant to Section 6A of the Act i. Deemed interested by virtue of its interest in CapitaLand pursuant to Section 6A of the Act j. Deemed interested by virtue of his interests in Chee Tat Holdings (S) Pte Ltd, King George Financial Corporation, Netson Investments Ltd, King George Park Ltd pursuant to Section 6A of the Act and through his spouse and children. k. Deemed interested by virtue of their interests in Chee Tat Holdings (S) Pte Ltd pursuant to Section 6A of the Act 8. CONDITIONS OF THE PROPOSALS The Proposed Share Buy-Back is conditional upon the approval of the shareholders of UMLand at the forthcoming AGM. 9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS None of the directors and substantial shareholders of UMLand and/or persons connected to them have any interest, direct or indirect, in the Proposed Share Buy Back and resale of treasury shares, if any. 10. DIRECTORS RECOMMENDATION Having considered all aspects of the Proposed Share Buy-Back, your Directors are of the opinion that the Proposed Share Buy-Back is in the best interest of the UMLand Group. Accordingly, your Directors recommend that you vote in favour of the ordinary resolution in relation to the Proposed Share Buy-Back to be tabled at the forthcoming AGM TH AGM The 48 th AGM, the notice of which is enclosed in the Company s Annual Report 2008 and an extract of which is appended in this Circular as Appendix II, will be held at Nirwana Ballroom 2, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, Kuala Lumpur on 24 June 2009 at a.m., for the purpose of considering and, if thought fit, passing inter alia the ordinary resolution to give effect to the Proposed Share Buy-Back. If you are unable to attend or vote in person at the AGM you may appoint a proxy by executing the Form of Proxy enclosed in the Company s Annual Report 2008 in accordance with the instructions printed thereon as soon as possible and in any event to reach the Company s share registrar, Securities Services (Holdings) Sdn Bhd at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur not later than forty-eight (48) hours before the time set for the holding of AGM. 7

13 You are not precluded from attending and voting in person at the AGM should you wish to do so subsequent to the lodging of the Form of Proxy. 12. FURTHER INFORMATION We advise the shareholders to refer to the accompanying Appendix I for further information. Yours faithfully For and on behalf of the Board of UNITED MALAYAN LAND BHD TUN MUSA HITAM CHAIRMAN The rest of this page has been intentionally left blank 8

14 PART B LETTER TO SHAREHOLDERS OF UMLAND IN RELATION TO PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS PROPOSED GENERAL MANDATE FOR THE PROVISION OF FINANCIAL ASSISTANCE 9

15 (Company No M) (Incorporated in Malaysia) Registered Office: Suite 1.1, 1 st Floor Kompleks Antarabangsa Jalan Sultan Ismail Kuala Lumpur 2 June 2009 Board of Directors: Tun Musa Hitam (Chairman & Independent, Non-Executive Director) Dato Ng Eng Tee (Deputy Chairman & Non-Independent, Executive Director) Chen Lian Pang (Non Independent, Non-Executive Director) Datuk Syed Ahmad Khalid Bin Syed Mohammed (Independent, Non-Executive Director) Datuk Nur Jazlan Bin Tan Sri Mohamed (Independent, Non-Executive Director) Syed Azmin Bin Mohd Syed Nor (Non-Independent, Non-Executive Director) Chan Say Yeong (Non Independent, Non-Executive Director) Ng Eng Soon (Non-Independent, Non-Executive Director) Pakhruddin Bin Sulaiman (Independent, Non-Executive Director) Lim Wie Shan (Alternate Director to Chen Lian Pang and Chan Say Yeong) To: The Shareholders of United Malayan Land Bhd Dear Sirs, PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS PROPOSED GENERAL MANDATE FOR THE PROVISION OF FINANCIAL ASSISTANCE 1. INTRODUCTION On 24 June 2008, the Company announced that the shareholders of UMLand had at the EGM held on 24 June 2008 approved, inter alia, the following: renewal of shareholders mandate for the Company and its subsidiaries to enter into Recurrent Related Party Transactions and authority for the Company and its subsidiaries to enter into additional Recurrent Related Party Transactions until: (a) (b) (c) the conclusion of the 48 th AGM of the Company on 24 June 2009 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 the date it 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 in general meeting; whichever is the earlier; and 9

16 (ii) authority for the Company and/or its subsidiaries to provide/procure recurring financial assistance on a short term basis to/from AR, BHD, ES, SSBC and SSTwo via the pooling of funds. The above approvals shall expire at the conclusion of the 48 th AGM of the Company, which will be held on 24 June On 8 April 2009, the Company announced that it is proposing to: (ii) (iii) renew the shareholders mandate for the Company and/or its subsidiaries to enter into Recurrent Related Party Transactions; renew the shareholders mandate for the Company and/or its subsidiaries to provide/procure recurring financial assistance on a short term basis to/from its non-wholly owned subsidiaries and jointly controlled entities via the pooling of funds; and seek approval from its shareholders for the Company and/or its subsidiaries to provide/procure additional recurring financial assistance on a short term basis to/from its non-wholly owned subsidiaries and jointly controlled entities via the pooling of funds. The purpose of this Circular is to provide you with the relevant information on the Proposals, to set out your Board s recommendation on the Proposals and to seek your approval for the resolutions to be tabled at the forthcoming 48 th AGM to be convened at Nirwana Ballroom 2, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, Kuala Lumpur on 24 June 2009 at a.m. The Notice of AGM together with the Form of Proxy are incorporated in the Company s Annual Report 2008 and an extract of the AGM Notice is appended in this Circular as Appendix II. WE ADVISE THE SHAREHOLDERS OF UMLAND TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTIONS TO GIVE EFFECT TO THE PROPOSALS AT THE FORTHCOMING 48 TH AGM. 2. THE PROPOSALS 2.1 Proposed Shareholders Mandate Paragraph of the Listing Requirements Under Paragraph (1) of the Listing Requirements, the 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: (ii) (iii) (iv) 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 exceed the applicable prescribed threshold under paragraph 2.1 of Practice Note 12/2001 of the Listing Requirements;. the issuing of a Circular to shareholders; and in a meeting to obtain shareholders mandate, the interested Director, interested major shareholder or interested persons connected to a Director or major shareholder; and where it involves the interest of an interested person connected to a Director or major shareholder, such Director or major shareholder, must not vote on the resolution approving the transactions. An interested Director or interested major shareholder must ensure that persons connected to him abstain from voting on the resolution approving the transactions Shareholders Mandate for Recurrent Related Party Transactions The principal activities of UMLand consist of investment holding and provision of management services. Its subsidiaries are principally involved in property development, property investment and investment holding. 10

17 It is anticipated that the Group would, in the ordinary course of business, continue to transact and/or may from time to time enter into Recurrent Related Party Transactions which are necessary for its day-to-day operations as set out in Section below. It is likely that such transactions will occur with some degree of frequency and could arise at any time. The Board is seeking a renewal of the shareholders mandate which will allow the Group to enter into the Recurrent Related Party Transactions as required under Paragraph of the Listing Requirements with the Mandated Related Parties set out in Section below provided that: they are carried out at arm s length; they are on normal commercial terms consistent with the Group s usual business practices and policies; they are on terms not more favourable to the Mandated Related Parties than those generally available to the public; and they are not to the detriment of the minority shareholders. The Recurrent Related Party Transactions will also be subject to the review methods or procedures set out in Section below. Disclosure will be made in the annual report of the Company of the aggregate value of transactions conducted pursuant to the shareholders mandate during the financial year based on the type of the recurrent transactions made, and the names of the Mandated Related Parties involved in each type of the recurrent transactions made and their relationship with the Company and in the annual report of the subsequent year during which the shareholders mandate remains in force Classes of Related Parties The classes of related parties of the existing Recurrent Related Party Transactions to be renewed are as follows: Mandated Related Parties Principal Activities Interested Directors, Major Shareholders and Connected Persons AIM Management of serviced residences Interested major shareholders Opal Holdings Pte Ltd CapitaLand Residential Malaysia Pte Ltd CapitaLand Commercial Limited CapitaLand Temasek Holdings (Private) Limited Interested directors Chen Lian Pang Chan Say Yeong Lim Wie Shan (ii) BHD Property development and property investment 11 Interested major shareholders Opal Holdings Pte Ltd CapitaLand Residential Malaysia Pte Ltd CapitaLand Commercial Limited CapitaLand Temasek Holdings (Private) Limited Interested directors Chen Lian Pang Chan Say Yeong Lim Wie Shan

18 Mandated Related Parties Principal Activities Interested Directors, Major Shareholders and Connected Persons (iii) ES Property development Interested director Syed Azmin Bin Mohd Syed Nor (iv) SSBC Letting, subletting, operating, maintaining, managing and marketing Somerset Seri Bukit Ceylon Serviced Residences Interested major shareholders Opal Holdings Pte Ltd CapitaLand Residential Malaysia Pte Ltd CapitaLand Commercial Limited CapitaLand Temasek Holdings (Private) Limited Interested directors Chen Lian Pang Chan Say Yeong Lim Wie Shan (v) SSTwo Property development Interested major shareholders Opal Holdings Pte Ltd CapitaLand Residential Malaysia Pte Ltd CapitaLand Commercial Limited CapitaLand Temasek Holdings (Private) Limited Interested directors Chen Lian Pang Chan Say Yeong Lim Wie Shan Persons connected to major shareholder MRCB Shahril Ridza Bin Ridzuan (vi) TIIB Insurance broker for direct insurance and reinsurance business Interested director Syed Azmin Bin Mohd Syed Nor (vii) TP Property investment Interested director Syed Azmin Bin Mohd Syed Nor (viii) LCM Investment holding Interested major shareholders Opal Holdings Pte Ltd CapitaLand Residential Malaysia Pte Ltd CapitaLand Commercial Limited CapitaLand Temasek Holdings (Private) Limited Interested directors Chen Lian Pang Chan Say Yeong Lim Wie Shan 12

19 The Proposed Shareholders Mandate will apply to all the above related party transactions and the details of the nature of the Recurrent Related Party Transactions and estimated values are set out in Section below. Relationships of UMLand with the Mandated Related Parties: AIM AIM is an indirect wholly-owned subsidiary of CapitaLand which in turn is a major shareholder of UMLand, with equity interest of 20.75% in UMLand. Chen Lian Pang, Chan Say Yeong and Lim Wie Shan are Directors of UMLand who are nominated to the Board by CapitaLand. They are deemed persons connected to CapitaLand. (ii) BHD BHD is a 70.00% owned subsidiary of UMLand. Other than through its interest in UMLand, CapitaLand also has a 30.00% equity interest in BHD via its subsidiary, Sapphire Investment Pte Ltd. Chen Lian Pang, Chan Say Yeong and Lim Wie Shan are Directors of UMLand who are nominated to the Board by CapitaLand. They are deemed persons connected to CapitaLand. (iii) ES ES is a 71.00% owned subsidiary of UMLand. ES has a subsisting joint land development arrangement with MMC Frigstad Offshore Sdn Bhd which is a wholly-owned subsidiary of MMC Corporation Berhad (MMC) through Anglo-Oriental (Malaya) Sdn Bhd. Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor is deemed a major shareholder of MMC with direct and indirect interests totaling 51.76%. Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor is also a substantial shareholder of UMLand, with indirect equity interest of 7.39% in UMLand by virtue of his indirect interest in TCB, which is also a substantial shareholder in UMLand. His interest in TCB arises via his 99.99% interest in Restu Jernih Sdn Bhd and Perspective Lane (M) Sdn Bhd. Restu Jernih Sdn Bhd owns the entire equity interest in Perspective Lane (M) Sdn Bhd which in turn holds 47.07% equity interest in TCB. Syed Azmin Bin Mohd Syed Nor is a Director of UMLand who is nominated to the Board by TCB. Syed Azmin Bin Mohd Syed Nor is also the brother of Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor, a substantial shareholder of UMLand. As such, he is deemed a person connected to TCB and Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor. (iv) SSBC SSBC is a 50.53% owned subsidiary of UM Residences Sdn Bhd, which in turn is a whollyowned subsidiary of UMLand. CapitaLand has 49.47% equity interest in SSBC through LCM, which in turn is an indirect wholly-owned subsidiary of The Ascott Group Limited. Chen Lian Pang, Chan Say Yeong and Lim Wie Shan are Directors of UMLand who are nominated to the Board by CapitaLand. They are deemed persons connected to CapitaLand. (v) SSTwo SSTwo is a 70.00% owned subsidiary of UMLand and 30.00% owned associated company of MRCB. CapitaLand has a subsisting joint venture arrangement with MRCB through OSP in which CapitaLand and MRCB have indirect equity interest of 49.00% and direct equity interest of 51.00% respectively. As such, MRCB is deemed a person connected to CapitaLand. Chen Lian Pang, Chan Say Yeong and Lim Wie Shan are Directors of UMLand who are nominated to the Board by CapitaLand. They are deemed persons connected to CapitaLand. Shahril Ridza Bin Ridzuan is a Director of MRCB and SSTwo and therefore deemed a person connected to CapitaLand. 13

20 (vi) TCB Group TCB is a substantial shareholder of UMLand through TRSB, with indirect equity interest of 7.39% in UMLand. TIIB is a wholly-owned subsidiary of TCB. Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor is a substantial shareholder of UMLand, with indirect equity interest of 7.39% in UMLand by virtue of his indirect interest in TCB, which is also a substantial shareholder in UMLand. His interest in TCB arises via his 99.99% interest in Restu Jernih Sdn Bhd and Perspective Lane (M) Sdn Bhd. Restu Jernih Sdn Bhd owns the entire equity interest in Perspective Lane (M) Sdn Bhd which in turn holds 47.07% equity interest in TCB. Syed Azmin Bin Mohd Syed Nor is a Director of UMLand who is nominated to the Board by TCB. Syed Azmin Bin Mohd Syed Nor is also the brother of Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor, a substantial shareholder of UMLand. As such, he is deemed a person connected to TCB and Tan Sri Dato Syed Mokhtar Shah Bin Syed Nor. (vii) LCM LCM is an indirect wholly-owned subsidiary of The Ascott Group Limited, which in turn is an indirect wholly-owned subsidiary of CapitaLand. LCM has a 49.47% equity interest in SSBC, a 50.53% owned subsidiary of UM Residences Sdn Bhd, which in turn is a wholly-owned subsidiary of UMLand. Chen Lian Pang, Chan Say Yeong and Lim Wie Shan are Directors of UMLand who are nominated to the Board by CapitaLand. They are deemed persons connected to CapitaLand Nature of Recurrent Related Party Transactions and Estimated Value The Recurrent Related Party Transactions which will be covered by the Proposed Shareholders Mandate are general transactions by the UMLand Group relating to the provisions of or procurement from, the Mandated Related Parties, products and services in the ordinary course of business of the UMLand Group which are as follows: Mandated Related Parties Nature of Transactions Income / (Expense) to the UMLand Group Estimated Value During the Validity Period of Mandate RM AIM Procurement of technical consultancy and management services (1,200,000) (ii) BHD Provision of management services 1,920,000 (iii) ES Provision of project management services 450,000 Provision of management services 600,000 (iv) TP Rental of office premises a, parking, maintenance and other services (920,000) (v) SSTwo Provision of management services 270,000 (vi) TIIB Procurement of insurance services (200,000) (vii) SSBC Rental income of serviced residences b 1,500,000 (viii) LCM Rental expense for serviced residences b (1,500,000) Notes: a. The office premises is located in Kompleks Antarabangsa, Kuala Lumpur. The lease period is for two (2) years and the payments are payable on an equal pro-rated monthly basis. The lease arrangement is in compliance with Paragraph 4.2(c) of Practice Note 12/2001 of the Listing Requirements b. The lease period is for three (3) years with an automatic renewal of a further six months and the income/expense is receivable/payable on a quarterly basis. The lease arrangement is in compliance with Paragraph 4.2(c) of Practice Note 12/2001 of the Listing Requirements 14

21 2.1.5 Review Methods or Procedures for Recurrent Related Party Transactions The following review methods or procedures have been formulated to ensure that Recurrent Related Party Transactions contemplated under the Proposed Shareholders Mandate are undertaken on terms not more favourable to the related party than those generally available to the public and are not to the detriment of the minority shareholders: (a) Identification All companies within the UMLand Group are required to inform the holding company before entering into any Recurrent Related Party Transactions other than those entered pursuant to the shareholders mandate. In addition, all heads of business unit and department are advised to report to the holding company on all transactions involving related parties to ensure appropriate compliance with the Listing Requirements in respect of such transactions. All related party transactions are to be tabled to the Audit Committee for review on a quarterly basis. (b) Authorisation (ii) The transaction prices, terms and conditions are to be determined by market forces, under similar commercial terms for transactions with the public, which depend on the demand and supply of the products and services. Each Recurrent Related Party Transaction shall comply with UMLand Group s existing internal procurement procedures. Where quotations are required to be obtained, at least one of the quotations is to be obtained from a third party. If a member of the Board or Audit Committee has an interest, direct or indirect, in any related party transactions as the case may be, he shall abstain from any decisionmaking by the Board or Audit Committee in respect of the said transaction. (c) Monitoring and Reporting (ii) (iii) (iv) Appropriate records shall be maintained by respective companies within the UMLand Group to record all related party transactions, including Recurrent Related Party Transactions, which are entered into pursuant to the shareholders mandate. All related party transactions shall be reported to the Audit Committee on a quarterly basis together with the quarterly financial reports. The Audit Committee shall review the quarterly reports on related party transactions to ascertain that the guidelines and procedures established to monitor Recurrent Related Party Transactions have been complied with. The Audit Committee has reviewed and shall continue to review the adequacy and appropriateness of the procedures as and when required, with the authority to subdelegate to individuals or committee within the Company, as they deem appropriate. If during the periodic review as mentioned in paragraphs (c) (ii) and (c) (iii) above, the Audit Committee is of the opinion that the guidelines and procedures are not sufficient to ensure that the Recurrent Related Party Transactions are undertaken: on arm s length basis; under normal commercial terms consistent with the Group s business practices and policies; on terms not more favourable to the related parties than those generally available to the public; and not to the detriment of the minority shareholders of the Company; the Company will procure a fresh mandate from the shareholders based on a new or additional set of review procedures and guidelines. 15

22 2.1.6 Audit Committee s Statement The Audit Committee of the Company has reviewed the methods or procedures set out in Section above and are satisfied that the said methods or procedures are sufficient to ensure that the Recurrent Related Party Transactions will be undertaken: on arm s length basis; under normal commercial terms consistent with the Group s business practices and policies; on terms not more favourable to the related parties than those generally available to the public; and not to the detriment of the minority shareholders of the Company. 2.2 Proposed Provision of Financial Assistance Paragraph 5.0 of Practice Note 14/2002 of the Listing Requirements Under Paragraph 5.0 of Practice Note 14/2002 of the Listing Requirements, the Company may seek a shareholders mandate in respect of the following recurrent transactions: The pooling of funds within the Group via a centralised treasury management function or such similar arrangements which involves the provision of financial assistance by the Group for a duration not exceeding three (3) years provided that: (a) (b) the Company in seeking such a mandate in accordance with Paragraphs 8.23 and of the Listing Requirements, must include in its circular, in addition to such other information as prescribed under the Listing Requirements, the estimated amounts or value of financial assistance (Estimate); and if the actual amount of financial assistance provided or rendered exceeds the Estimate, the Company must make an immediate announcement of the same. If the percentage ratio of the amount of financial assistance provided or rendered in excess of the Estimate is 5% or more, the Company must comply with paragraph of the Listing Requirements. (ii) (iii) The provision of guarantee, indemnity or such other collateral to or in favour of another person which is necessary in order to procure a contract or secure work from the other person or to enable the other person to commence and/or complete a contract or work for the Company or its subsidiaries. The provision of financial assistance in respect of: (a) (b) (c) leasing, factoring or hire purchase carried out by the Company or its unlisted subsidiaries; or share financing or share margin financing carried out by the Company or its unlisted subsidiaries which is a Participating Organisation (as defined in the Listing Requirements); or such other similar business that may be determined by the Bursa Securities. The provision of such financial assistance must be fair and reasonable to the Company and is not to the detriment of the Company and its shareholders. And in a meeting to obtain shareholders mandate, the interested Director, interested major shareholder or interested person connected to a Director or major shareholder, and where it involves the interest of an interested person connected to a Director or major shareholder, such Director or major shareholder must not vote on the resolution approving the transactions. An interested Director or interested major shareholder must ensure that persons connected to him abstain from voting on the resolution approving the transactions. 16

23 2.2.2 Shareholders Mandate for the provision of financial assistance It is anticipated that the Group would, in the ordinary course of business, provide financial assistance as set out in Section below. Furthermore, it is likely that such transactions will occur with some degree of frequency and could arise at any time. The Board is seeking a shareholders mandate for the existing financial assistance provided/received which will allow the Group to provide as well as procure financial assistance from the parties set out in Section below provided that it is fair and reasonable to the Company and not to the detriment of the Company and its shareholders. In addition, the Board is seeking the approval from the shareholders for the Company and/or its subsidiaries to provide/receive additional financial assistance on a short term basis to/from NC and EC, via pooling of funds. Disclosure will be made in the annual report of the Company of the aggregate value of financial assistance provided pursuant to the shareholders mandate during the financial year and the names of the parties involved in each transaction as well as their relationship with the Company in the annual report of the subsequent year during which the shareholders mandate remains in force Nature and Estimated Value of Financial Assistance The financial assistance comprises the pooling of funds via centralized treasury management for a duration not exceeding three (3) years. The financial assistance for which the shareholders mandate is sought is as follows: Existing Financial Assistance Provided By Provided To Company and/or its subsidiaries Estimated Value During the Validity Period of Mandate RM AR 55,000,000 (ii) Company and/or its BHD 5,000,000 subsidiaries (iii) BHD Company and/or its 70,200,000 subsidiaries (iv) Company and/or its ES 55,000,000 subsidiaries (v) Company and/or its SSBC 1,200,000 subsidiaries (vi) SSBC Company and/or its 500,000 subsidiaries (vii) Company and/or its SSTwo 5,500,000 subsidiaries New (viii) Company and/or its NC 16,000,000 subsidiaries (ix) Company and/or its subsidiaries EC a 5,500,000 Note: a. EC is currently a wholly-owned subsidiary of UMLand. Upon the completion of the subscription and joint venture agreement entered into between UMLand, Tradewinds Johor Sdn Bhd and EC on 12 February 2009, UMLand s shareholdings in EC will reduce to 51.00% as referred to in para 3(v) of Appendix I of this Circular. 17