THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional adviser immediately. Bursa Malaysia Securities Berhad ( Bursa Securities ) has not perused this Circular prior to its issuance and 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. MQ TECHNOLOGY BERHAD (Company No: H) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED NEW AND RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE The Resolution in respect of the above will be tabled as Special Business at the Company s Thirteenth Annual General Meeting to be held at MQ s Conference Room, Plot 86-B, Lintang Bayan Lepas 9, Bayan Lepas Industrial Park 4, Bayan Lepas, Penang on Monday, 16 May 2016 at a.m. Notice of the Thirteenth Annual General Meeting together with the Form of Proxy are set out in the Annual Report of the Company for the financial year ended 31 December 2015 despatched together with this Circular. The Form of Proxy must be lodged at the registered office of the Company at 39,Salween Road,10050 Penang not less than forty-eight (48) hours before the time stipulated 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 decide to do so. Last day and time for lodging the Form of Proxy : Saturday, 14 May 2016 at a.m. Date and time of the AGM : Monday, 16 May 2016 at a.m. Place of the AGM : MQ s Conference Room, Plot 86-B, Lintang Bayan Lepas 9, Bayan Lepas Industrial Park 4, Bayan Lepas, Penang This Circular is dated 22 April 2016

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular:- ACE Market ACE Market of Bursa Securities ACELR Act Bursa Securities ACE Market Listing Requirements, as amended from time to time The Companies Act, 1965 or any statutory modification, amendment or reenactment thereof for the time being in force AGM Annual General Meeting Board The Board of Directors of MQ Bursa Securities Bursa Malaysia Securities Berhad ( W) Director ITCB Latest Practicable Date/ LPD Has the meaning given in Section 2(1) of the Capital Markets and Services Act For the purposes of the Proposed Shareholders Mandate, this includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a Director of the Company, its subsidiary or holding Company or a Chief Executive of the Company, its subsidiary or holding company Ire-Tex Corporation Berhad( A) 31 March 2016, being the latest practicable date prior to printing of this Circular Major Shareholder A person who has an interest or interests in one or more voting shares in the Company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is (a) 10% or more of the aggregate of the nominal amounts of all the voting shares in the Company; or (b) 5% or more of the aggregate of the nominal amounts of all the voting shares in the Company where such person is the largest shareholder of the Company. For the purpose of this definition, interest in shares has the meaning given in Section 6A of the Act. This includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a major shareholder of the Company as defined above or any other corporation which is its subsidiary or holding company Microlead Microlead Precision Technology Sdn Bhd ( U), a wholly owned subsidiary of MQ MPT Magnecomp Precision Technology Public Company Limited (Company No.: ) i

3 DEFINITIONS (Cont d) MPTS MPT Solution Co., Ltd ( ), a wholly owned subsidiary of MQ MQ or the Company MQ Technology Berhad ( H) MQ Group or the Group MQ and its subsidiaries Person(s) Connected In relation to a director or a major shareholder, means such person who falls under any one of the following categories:- (a) a family* member of the director or major shareholder; (b) 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; (c) a partner # of the director, major shareholder or a partner of a person connected with that director or major shareholder; (d) a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director or major shareholder; (e) a person in accordance with whose directions, instructions or wishes the director or major shareholder is accustomed or is under an obligation, whether formal or informal, to act; (f) a body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director or major shareholder; (g) a body corporate or its directors whose directions, instructions or wishes the director or major shareholder is accustomed or under an obligation, whether formal or informal, to act; (h) a body corporate in which the director, major shareholder or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or (i) a body corporate which is a related corporation. Notes:- * Family in relation to a person means such person who falls within any one of the following categories:- (i) spouse; (ii) parent; (iii) child including an adopted child and step-child; (iv) brother or sister; and (v) spouse of the persons referred to in subparagraphs (iii) and (iv) above. ii

4 DEFINITIONS (Cont d) Person(s) Connected (Cont d) Notes (Cont d):- # Partner in relation to a director, major shareholder or a person connected with the director or major shareholder, means such person who falls within any one of the following categories:- (i) (ii) a person with whom the director, major shareholder or person connected with the director or major shareholder, is in or proposes to enter into partnership with. Partnership for this purpose has the meaning given in Section 3 of the Partnership Act 1961; and a person with whom the director, major shareholder or person connected with a director or major shareholder has entered or proposes to enter into a joint venture, whether incorporated or not. Proposed Shareholders Mandate RRPT Related Party (ies) RM and sen Share(s) SASB WI ZA Proposed new and renewal of existing Shareholders Mandate for the MQ Group to enter into RRPT with a Related Party which are necessary for the day-to-day operations and are in the ordinary course of business of the MQ Group Recurrent related party transaction(s) of a revenue or trading nature with a Related Party and which are necessary for the day-to-day operations and are in the ordinary course of business of the MQ Group and are on terms not more favourable to the Related Party than those generally available to the public Any Director, Major Shareholder or Person Connected with such Director or Major Shareholder Ringgit Malaysia and sen respectively Ordinary share(s) of RM0.10 each in MQ Star Acres Sdn. Bhd. ( A), a wholly owned subsidiary of MQ Wistech Integration Sdn Bhd ( X) Zoomic Automation (M) Sdn Bhd ( W) ZT Zoomic Technology (Thailand) Co., Ltd ( ) 2015 Mandate The shareholders mandate obtained at 12 th AGM held on 22 June 2015 for MQ Group to enter into Recurrent Related Party Transaction THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK iii

5 TABLE OF CONTENTS Page LETTER FROM THE BOARD TO SHAREHOLDERS CONTAINING:- 1. INTRODUCTION THE PROPOSED SHAREHOLDERS MANDATE Provisions under the ACELR Principal Activities of MQ Group Principal Activity of the other Related Transacting Party Nature and Estimated Aggregate Value of RRPT Outstanding RRPT Receivables Review Procedures or Methods for RRPT Statement by the Audit Committee RATIONALE AND BENEFITS FOR THE PROPOSED SHAREHOLDERS MANDATE EFFECTS OF THE PROPOSED SHAREHOLDERS MANDATE DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS CONDITIONS TO THE PROPOSED SHAREHOLDERS MANDATE DIRECTORS RECOMMENDATION AGM FURTHER INFORMATION... 8 APPENDIX APPENDIX I FURTHER INFORMATION... 9 EXTRACT OF RESOLUTION iv

6 MQ TECHNOLOGY BERHAD (Company No: H) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office 39 Salween Road Penang 22 April 2016 Directors Dr. Ch ng Huck Khoon (Chairman/Independent Non-Executive Director) Teh Eng Huat (Executive Director) Khoo Hun Sniah (Executive Director) Mr. Wong Yu Sun (Executive Director) Lim Soon Seng (Executive Director) Na Chiang Seng (Independent Non-Executive Director) Lim Char Boo (Independent Non-Executive Director) Mohd Anuar Bin Mohd Hanadzlah (Independent Non-Executive Director) To: The Shareholders of MQ Dear Sir/ Madam, PROPOSED NEW AND RENEWAL OF EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION At the Company s last AGM held on 22 June 2015, the Company had obtained the shareholders mandate to allow the MQ Group to enter into RRPT as set out in the circular to shareholders of MQ dated 29 May The aforesaid existing shareholders mandate shall, in accordance with the ACELR lapse at the conclusion of the forthcoming AGM unless the renewal of the shareholders mandate is obtained at the forthcoming AGM. In connection thereto, the Board had on 18 April 2016 announced to Bursa Securities that the Company proposed to seek its shareholders approval for new and renewal of existing mandate in respect of RRPT at the forthcoming AGM to be convened. The purpose of this Circular is to provide you with the relevant information on the Proposed Shareholders Mandate and to seek your approval on the resolution pertaining to the Proposed Shareholders Mandate to be tabled at the forthcoming AGM. SHAREHOLDERS ARE ADVISED TO READ CAREFULLY THE CONTENTS OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTION TO GIVE EFFECT TO THE PROPOSED SHAREHOLDERS MANDATE. 1

7 2. THE PROPOSED SHAREHOLDERS MANDATE 2.1 Provisions under the ACELR Pursuant to Rule 10.09(2) and Guidance Note 8 of the ACELR, a listed corporation may seek a mandate from its shareholders for RRPT subject to the following:- (i) (ii) (iii) (iv) (v) the transactions are in the ordinary course of business and are on terms not more favourable to the Related Party than those generally available to the public; the shareholders mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders mandate during the financial year where the aggregate value is equal to or more than the threshold under Rule 10.09(1) of the ACELR; the listed corporation s circular to shareholders for the shareholders mandate includes the information as may be prescribed by the Bursa Securities. The circular must be submitted to Bursa Securities together with a checklist showing compliance with such information; in a meeting to obtain a shareholders mandate, the interested Director, interested Major Shareholder or interested Person Connected with a Director or Major Shareholder; and where it involves the interest of an interested Person Connected with a Director or Major Shareholder, such Director or Major Shareholder, must not vote on the resolution to approve the transactions. An interested Director or interested Major Shareholder must ensure that Persons Connected with him abstain from voting on the resolution approving the transactions; and the listed corporation immediately announces to the Bursa Securities when the actual value of a RRPT entered into by the listed corporation, exceeds the estimated value of the RRPT disclosed in the circular by 10% or more and the announcement must include the information as may be prescribed by the Bursa Securities. Pursuant to Rule 10.09(3) of the ACELR, where the listed company has procured shareholders mandate pursuant to Rule 10.09(2) of the ACELR as disclosed above, the provisions of Rule of the ACELR will not apply. Paragraph of Guidance Note 8 further states that the proposed shareholders mandate, if approved by the shareholders of the Company at the forthcoming AGM, is subject to annual renewal and will only continue to be in force until - (i) (ii) (iii) the conclusion of the next AGM of the Company following the general meeting at which such mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or 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 will 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. Accordingly, the Company proposes to seek the approval from the shareholders for the Proposed Shareholders Mandate as set out in Section 2.4 for the MQ Group to enter into transactions with Related Parties which are of a revenue or trading nature and necessary for its day-to-day operations, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the Company s minority shareholders. 2

8 2. THE PROPOSED SHAREHOLDERS MANDATE (Cont d) 2.2 Principal Activities of MQ Group MQ is principally an investment holding company while the principal activities of its subsidiaries are as follows:- Subsidiaries % Equity Interest Principal Activities Microlead (i) Manufacture of moulds, tools, dies, jigs and fixtures mainly for use in the manufacture of hard disk drives (ii) Design, development and manufacture of advanced suspension tooling, progressive tooling, semiconductor cavity/ encapsulation moulds for application in hard disk drives and semiconductor industries (iii) Design, development and manufacture of advanced automation modules/assemblies for digital data storage, medical instrument systems/devices and optoelectronics applications and related components MPTS Manufacture of car spare parts, plastic moulds, metal moulds and blowing moulds for plastic products, tooling, jig and fixtures for electronic and semiconductor SASB Develop and carry on the business of theme park 2.3 The Principal Activities of the other related transacting parties The principal activities of the other related transacting parties which are not part of MQ Group that are involved in the RRPT with the MQ Group are set out below:- Other transacting parties Place of incorporation Principal activities ZA Malaysia Design & manufacture of industries machine and automation system ZT Thailand Precision tooling WI Malaysia Dealer of electronic products 3

9 2. THE PROPOSED SHAREHOLDERS MANDATE (Cont d) 2.4 Nature and Estimated Aggregate Value of RRPT The details of the nature and estimated annual value of the RRPT are as follows :- a) Proposed Renewal of Shareholders Mandate Company within the Group Involved Related Party with whom the Group is transacting Related Party Nature of Transaction Estimated Aggregated Value as disclosed in the preceding year s circular to shareholders dated 29 May 2015 Actual Value transacted from 22 June 2015 (date 2015 Mandate was obtained) to Latest Practicable Date Estimated Aggregated Value* from forthcoming AGM to next AGM ( Estimated Value ) (RM 000) MPTS ZT Teh Eng Huat is a Director and substantial shareholder of MQ. He is also a Director and major shareholder of ZT MPTS ZT Teh Eng Huat is a Director and substantial shareholder of MQ. He is also a Director and major shareholder of ZT Supply of Wirecut and Electric Discharge Machining (EDM) process to ZT Provision of Computer Numerical Control (CNC) milling and auto lathe to MPTS ( Estimated Value ) (RM 000) ( Actual Value ) (RM 000) 1, , ,000 b) Proposed New Shareholders Mandate Company within the Group Involved Related Party with whom the Group is transacting Related Party Nature of Transaction Estimated Aggregated Value as disclosed in the preceding year s circular to shareholders dated 29 May 2015 Actual Value transacted from 22 June 2015 (date 2015Mandate was obtained) to Latest Practicable Date Estimated Aggregated Value* from forthcoming AGM to next AGM ( Estimated Value ) (RM 000) Microlead WI Khoo Hun Sniah is a Director of MQ. Teh Gaik Tiang, Khoo Hun Sniah s spouse is a Director & major shareholder of WI. Microlead WI Khoo Hun Sniah is a Director of MQ. Teh Gaik Tiang, Khoo Hun Sniah s spouse is a Director & major shareholder of WI. Supply of automation and precision parts to WI Purchase of automation and electronics parts from WI ( Estimated Value ) (RM 000) ( Actual Value ) (RM 000) - - 1, ,000 Notes: * The estimated aggregate values of the transactions for the period from the date of the Thirteenth AGM to the date of the next AGM in year 2017 are based on information available at the point of estimation. Due to the nature of the transactions, the actual value of the transactions may vary from the estimated aggregate value disclosed above. 4

10 2. THE PROPOSED SHAREHOLDERS MANDATE (Cont d) 2.4 Nature and Estimated Aggregate Value of RRPT (cont d) c) 2015 Mandate not for renewal in 2016 AGM Company within the Group Involved Related Party with whom the Group is transacting Related Party Nature of Transaction Estimated Aggregated Value as disclosed in the preceding year s circular to shareholders dated 29 May 2015 Actual Value transacted from 22 June 2015 (date 2015Mandate was obtained) to Latest Practicable Date ( Estimated Value ) (RM 000) ( Actual Value ) (RM 000) Microlead ZA Teh Eng Huat is a Director and substantial shareholder of MQ. He is also a substantial shareholder of ITCB, the holding Company of ZA Microlead ZA Teh Eng Huat is a Director and substantial shareholder of MQ. He is also a substantial shareholder of ITCB, the holding Company of ZA Supply of precision parts and fabrication to ZA Purchase of automation solutions from ZA 3, , The above RRPT was approved under the preceding year mandate but does not require the renewal of shareholder mandate at the forthcoming AGM because MQ Group foresees only minimal or nil transactions in year 2016 and Outstanding RRPT Receivables As at 31 December 2015, there is no outstanding amount due and owing to MQ Group arising from RRPT which has exceeded the credit term. 2.6 Review Procedures or Methods for RRPT The MQ Group has established the following procedures or methods for the RRPT to ensure that the RRPT are undertaken on transaction prices on an arm s length basis and on normal commercial terms that are consistent with the Group s usual business practices and policies, which are not on terms that are more favourable to the Related Parties than those extended to the public and are not to the detriment of the Company s minority shareholders:- (i) The Group will ensure that the transactions with the Related Parties will only be entered into after taking into account the pricing, quality of product and other related factors such as availability of stock. At least two other contemporaneous transactions with unrelated 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 or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be based on the usual business practices of the Group on terms not more favourable to the Related Parties than those generally available to the public to ensure that the RRPT is not detrimental to the interest of minority shareholders; 5

11 2. THE PROPOSED SHAREHOLDERS MANDATE (Cont d) 2.6 Review Procedures or Methods for RRPT (cont d) (ii) (iii) (iv) (v) (vi) (vii) All RRPT are subject to the approval of the appropriate levels of authority as determined by the Board from time to time, subject to the provisions in the Listing Requirements and/ or the Act, where necessary. Currently, an executive director (who has no interest in the transaction) together with a senior management are authorised to approve RRPT of up to RM200,000 and any RRPT above RM200,000 would be subject to the approval of the Board. Where any Director has an interest (direct or indirect) in any RRPT, such Director shall abstain from any decision-making by the Board in respect of such transactions and continue to abstain from voting on the resolution approving the transactions; A list of related parties shall be circulated within the Group from time to time for reference and at the same time, the related party will be notified to ensure that all RRPT are undertaken in accordance with the policies; A register will be maintained by the Company to record all the RRPT which are entered into pursuant to the Proposed Shareholders Mandate; The Board and Audit Committee shall review the RRPT reports to ascertain that the guidelines and procedures established for monitoring the RRPT have been complied with; The Audit Committee has and shall continuously review the adequacy and appropriateness of the procedures, as and when required, with the authority to sub-delegate to individuals or committee within the Company as they deem appropriate; In the review of the RRPT, the Audit Committee may, as they deem fit, request for additional information pertaining to the transactions from independent sources and advisers; (viii) If a member of the Board or Audit Committee has an interest whether direct or indirect in the RRPT, he/she will abstain from any decision-making by the Board or Audit Committee in respect of such transactions and continue to abstain from voting on the resolution approving the transactions; (ix) Disclosure will be made in the annual report of the Company of the breakdown of the aggregate value of the RRPT conducted pursuant to the Proposed Shareholders Mandate during the financial year, amongst others, based on the type of the RRPT made, the name of the Related Parties involved and their relationship with the Company, for so long as the Proposed Shareholders Mandate remains in force in accordance with Paragraph of Guidance Note 8 of the ACELR. 2.7 Statement by the Audit Committee The Audit Committee of the Company has seen and reviewed the procedures mentioned in Section 2.6 above and is of the view that the said review procedures are sufficient to ensure that the RRPT are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the Company s minority shareholders. The Audit Committee is also of the view that the MQ Group has in place adequate procedures and processes to monitor, track and identify RRPT in a timely and orderly manner. The Audit Committee reviews these procedures and processes as and when required. 6

12 3. RATIONALE AND BENEFITS FOR THE PROPOSED SHAREHOLDERS MANDATE The RRPT are in the ordinary course of business of the Group and are undertaken at arm s length on normal commercial terms and on terms not more favourable to the Related Parties than those generally available to the public. They are likely to occur to some degree of frequency and arise at any time and from time to time. The RRPT, subject to annual review, will enhance the ability of the Group to pursue business opportunities which are time-sensitive in nature and will eliminate the need for MQ to announce and convene separate general meetings on each occasion to seek prior approval of the shareholders of the Company for the RRPT. This will substantially reduce the expenses associated with convening general meetings on an ad hoc basis, improve administrative efficiency considerably and allow resources and time to be channelled towards attaining corporate objectives. The Group should have access to all available markets, including the Related Parties. The RRPT are intended to meet the business needs of the Group at the best possible terms. By transacting with the Related Parties, the Group 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, the Group 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 RRPT. 4. EFFECTS OF THE PROPOSED SHAREHOLDERS MANDATE The Proposed Shareholders Mandate is not expected to have any effect on the issued and paid-up share capital and the substantial shareholders shareholdings of the Company, and is not expected to have any material effect on the earnings per Share, net assets per Share and gearing of the MQ Group, and the dividends to be declared by the Company, if any, for the financial year ending 31 December DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS Save as disclosed below, none of the Directors and/or Major Shareholders and/or Persons Connected to the Directors and/or Major Shareholders of MQ has any interest, either direct or indirect, in the Proposed Shareholders Mandate. Interested Directors No. of Shares held as at the Latest Practicable Date Direct Interest % Indirect Interest % Teh Eng Huat 15,480,000(1) Khoo Hun Sniah 500, Person connected Teh Gaik Tiang 80, Note: (1) held through Kenanga Nominess (Tempatan) Sdn Bhd., AllianceGroup Nominees (Tempatan) Sdn Bhd, Public Nominees (Tempatan) Sdn Bhd and Affin Hwang Nominees (Tempatan) Sdn Bhd The interested Directors have abstained and will continue to abstain from Board deliberation and voting in respect of their direct and/or indirect interest in MQ on the ordinary resolution pertaining to the Proposed Shareholders Mandate in which they are interested at the Board level and at the forthcoming AGM. Teh Eng Huat and Khoo Hun Sniah have undertaken to ensure that all the Persons Connected with them will abstain from voting in respect of their direct and/or indirect interest on the resolution deliberating or approving the Proposed Shareholders Mandate to be tabled at the forthcoming AGM. 7

13 6. CONDITIONS TO THE PROPOSED SHAREHOLDERS MANDATE The Proposed Shareholders Mandate is subject to the approval of the shareholders of the Company at the forthcoming AGM. 7. DIRECTORS RECOMMENDATION 8. AGM The Board (with the exception of Teh Eng Huat and Khoo Hun Sniah who have abstained from expressing any opinion in relation to the Proposed Shareholders Mandate), having taken into consideration the rationale for the Proposed Shareholders Mandate, is of the opinion that the Proposed Shareholders Mandate is in the best interest of the Company and its shareholders. Accordingly, the Board (with the exception of Teh Eng Huat and Khoo Hun Sniah) recommends that you vote in favour of the resolution pertaining to the Proposed Shareholders Mandate to be tabled at the forthcoming AGM to be convened. An AGM, the Notice of which is enclosed with this Circular, to be held at MQ s Conference Room, Plot 86-B, Lintang Bayan Lepas 9, Bayan Lepas Industrial Park 4, Bayan Lepas, Penang on Monday, 16 May 2016 at 10.00a.m. for the purposes of considering the Proposed Shareholders Mandate contained herein and if thought fit, passing the resolution so as to give effect to the Proposed Shareholders Mandate. If you are unable to attend and vote in person at the AGM, you may complete and return the enclosed Form of Proxy in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the registered office of the Company not less than forty-eight (48) hours before the time stipulated 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 decide to do so. 9. FURTHER INFORMATION Shareholders are requested to refer to the attached Appendix I for further information. Yours faithfully For and on behalf of the Board MQ TECHNOLOGY BERHAD DR. CH NG HUCK KHOON Chairman/Independent Non-Executive Director THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 8

14 APPENDIX I - FURTHER INFORMATION 1. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board and they collectively and individually accept full responsibility for the accuracy of the information given herein 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, CLAIMS OR ARBITRATION As at the LPD, neither MQ nor its subsidiaries are engaged in any material litigation, claims and arbitration, either as plaintiff or defendant, which has a material effect on the business or financial position of MQ and/or its subsidiaries and the Board has no knowledge of any proceeding pending or threatened against MQ and/or its subsidiaries or of any fact likely to give rise to any proceeding which might materially and adversely affect the business or financial position of MQ and/or its subsidiaries. 3. MATERIAL CONTRACTS As at the LPD, neither MQ nor its subsidiaries have entered into any contracts which are or may be material (not being contracts entered into in the ordinary course of business) during the two (2) years immediately preceding the date of this Circular, except for the following: On 19 January 2016, SASB entered into a subscription and shareholders agreement (SSA) with Cash Support Sdn Bhd ( M) (CSSB) to regulate their rights as shareholders of Cash Support Property Sdn Bhd ( V) (JVCo) following their subscription of new ordinary shares in JVCo which will function as the joint venture company to develop and carry on the business of theme park. In accordance with the terms of the SSA, CSSB entered into a sale and purchase agreement with JVCo on 19 January 2016 wherein CSSB agrees to sell a parcel of 99-year leasehold land held under H.S.(D) 80529, No. PT 146, Pekan Klebang Seksyen II, District of Melaka Tengah, State of Melaka measuring approximately 9.16 acres (Project Land) to the JVCo for the purchase consideration of RM28,300,000 (Purchase Consideration), for the development of a theme park. SASB and CSSB will subscribe to new JVCo shares such that SASB holds 51% and CSSB holds 49% equity interests respectively in the JVCo. SASB will fully satisfy its subscription consideration of RM15,900,000 by cash payment. CSSB will fully satisfy its subscription amount of RM13,033,900 by offsetting it against part of the Purchase Consideration due from the JVCo. The above are expected to be completed in the second (2nd) half of DOCUMENTS FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company during normal office hours from Monday to Friday (except public holidays) from the date of this Circular up to and including the date of the forthcoming AGM:- (a) (b) (c) The Memorandum and Articles of Association of MQ; The audited financial statements of MQ for the past two (2) financial years ended 31 December 2014 and 31 December 2015; and The material contracts as referred to in Section 3 above. 9

15 MQ TECHNOLOGY BERHAD (Company No: H) (Incorporated in Malaysia under the Companies Act, 1965) EXTRACT OF RESOLUTION TO BE TABLED AT THE FORTHCOMING THIRTEENTH ANNUAL GENERAL MEETING ORDINARY RESOLUTION 8 PROPOSED NEW AND RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE ( PROPOSED SHAREHOLDERS MANDATE ) That, subject to the provisions of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiaries to enter into and to give effect to the recurrent related party transactions of a revenue or trading nature with the related parties as stated in Section 2.4 of the Circular to Shareholders dated 22 April 2016 ( Circular ) provided that such transactions are undertaken in the ordinary course of business, on arm s length basis, on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the Company s minority shareholders. That such approval shall continue to be in force until:- (i) (ii) (iii) the conclusion of the next annual general meeting of the Company at which time it will lapse, unless the authority is renewed by a resolution passed at the next annual general meeting; or the expiration of the period within which the next annual general meeting of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but will 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 that, the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders Mandate. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 10

16