TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia)

Transcription

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 advisers immediately. Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. Under Practice Note 18 of the Main Market Listing Requirements, Bursa Malaysia Securities Berhad has not perused the Proposed Renewal of Authority for the Purchase of Own Shares by the Company before issuance as they fall under the category of Exempt Circulars. TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS in relation to the 1. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY The above Proposed Shareholders Mandate on Recurrent Related Party Transactions of a Revenue or Trading Nature and Proposed Renewal of Authority for the Purchase of Own Shares by the Company will be tabled as Special Business at the Company s 52 nd Annual General Meeting. The Notice of the 52 nd Annual General Meeting (which is to be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Monday, 29 April 2013 at a.m.) together with the Form of Proxy are set out in the Company s Annual Report 2012 despatched along with this Circular. The Form of Proxy should be completed and lodged with the Company at its Registered Office, 6 th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Malaysia not later than forty-eight (48) hours before the time appointed for holding the Annual General Meeting in order for the appointment of Proxy to be valid. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the Annual General Meeting should you subsequently decide to do so. Important dates: Last date and time for lodging the Form of Proxy : Saturday, 27 April 2013 at 10:00 a.m. Date and time of the 52 nd Annual General Meeting : Monday, 29 April 2013 at 10:00 a.m. This Circular is dated 5 April 2013

2 DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular and words importing the singular number include the plural and vice-versa:- Act : Malaysian Companies Act, 1965 as amended from time to time and includes any re-enactment thereof. AGM : Annual General Meeting. Board : Board of Directors of TCB. Code : Malaysian Code on Take-overs and Mergers 2010 as amended from time to time and includes any re-enactment thereof. Director : Shall have the meaning given in Section 2(1) of the Capital Markets and Services Act 2007 and for the purposes of Recurrent RPT under Chapter 10 of the Listing Requirements, 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 TCB, its subsidiary or holding company; or the chief executive of TCB, its subsidiary or holding company. EPS : Earnings per Share. Goods : Includes stocks-in-trade, parts, accessories, works-inprogress, finished goods, components and raw materials. Bursa Securities or Exchange : Bursa Malaysia Securities Berhad. Listing Requirements : Main Market Listing Requirements of Bursa Securities. Major Shareholder : A person who has an interest or interests in one or more voting shares in TCB and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is:- (a) (b) 10% or more of the aggregate of the nominal amounts of all the voting shares in TCB; or 5% or more of the aggregate of the nominal amounts of all the voting shares in TCB where such person is the largest shareholder of TCB. For the purpose of this definition, interest in shares shall have the meaning given in section 6A of the Act. A major shareholder 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 TCB or any other company which is its subsidiary or holding company. Ordinary Shares : Issued and paid-up ordinary shares of RM1.00 each in TCB. i

3 DEFINITIONS (cont d) Participating Organisation : A company which carries on the business of dealing in securities and for the time being recognised as a participating organisation of the Exchange pursuant to the Rules of the Exchange. Person Connected : In relation to the Director or a Major Shareholder, means such person or persons who falls under any one of the following categories:- (a) (b) (c) (d) (e) (f) (g) (h) (i) a member of the Director s or Major Shareholder s family; a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the Director, Major Shareholder or a member of the Director s or Major Shareholder s family is the sole beneficiary; a partner of the Director, Major Shareholder or a partner of a person connected with that Director or Major Shareholder; a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; a person in accordance with whose directions, instructions or wishes the Director or Major Shareholder is accustomed or is under an obligation, whether formal or informal, to act; a body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; a body corporate or its directors whose directions, instructions or wishes the Director or Major Shareholder is accustomed or under an obligation, whether formal or informal, to act; a body corporate in which the Director, Major Shareholder and/or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or a body corporate which is a related corporation. Proposals : The Proposed Shareholders Mandate and Proposed Share Buy-back. Proposed Shareholders Mandate : Shareholders approval for renewal of and new general mandate in relation to Recurrent RPT. ii

4 DEFINITIONS (cont d) Proposed Share Buy-back : Proposal to renew the authority for the purchase of own shares by TCB to enable TCB to purchase and/or hold up to ten per centum (10%) of its own Ordinary Shares. Ringgit Malaysia or RM and sen : Lawful currency of Malaysia. Shares : Issued and paid-up Ordinary Shares of RM1.00 each and 6% Cumulative Participating Preference Shares of RM1.00 each of TCB. Recurrent Related Party Transaction or Recurrent RPT : A related party transaction which is recurrent, of a revenue or trading nature and which is necessary for day-to-day operations of TCB or its subsidiaries. Related party transaction is a transaction entered into by TCB or its subsidiaries which involves the interest, direct or indirect, of a Related Party. Related Party : A Director, Major Shareholder or person connected with such Director or Major Shareholder. Substantial Shareholder : Shall have the meaning given in Section 69D of the Act. TCB or Company : Tasek Corporation Berhad (Company No W). TCB Group : Tasek Corporation Berhad and its subsidiaries. Treasury Shares : The Ordinary Shares which are bought and held by TCB as treasury shares and shall have the meaning given under Section 67A of the Act. iii

5 CONTENTS LETTER TO SHAREHOLDERS Page A. INTRODUCTION 1 1. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1.1 DETAILS CLASSES OF RELATED PARTIES NATURE OF RELATED PARTY TRANSACTIONS CONTEMPLATED REVIEW PROCEDURES FOR RECURRENT RPT STATEMENT BY BOARD AUDIT AND RISK MANAGEMENT COMMITTEE VALIDITY PERIOD OF THE PROPOSED SHAREHOLDERS MANDATE DISCLOSURE EXISTING MANDATE ON RECURRENT RPT (NOT SEEKING FOR RENEWAL) DUE AND OWING BY RELATED PARTY 1.2 RATIONALE FOR AND THE BENEFITS OF THE PROPOSED SHAREHOLDERS MANDATE 1.3 CONDITION OF THE PROPOSED SHAREHOLDERS MANDATE 2. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY 2.1 DETAILS OF THE PROPOSED SHARE BUY-BACK RATIONALE FOR THE PROPOSED SHARE BUY-BACK POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY- BACK 2.4 EFFECTS OF THE PROPOSED SHARE BUY-BACK ORDINARY SHARE CAPITAL NTA, WORKING CAPITAL AND CASH FLOW EARNINGS DIVIDENDS DIRECTORS AND SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS PUBLIC S SHAREHOLDING SPREAD PURCHASES OR RESALE OF TREASURY SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS IMPLICATION OF THE CODE SHARE PRICES 12 iv

6 CONTENTS (cont d) Page B. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS 13 C. DIRECTORS RECOMMENDATION 14 D. ANNUAL GENERAL MEETING 14 E. ADDITIONAL INFORMATION 15 APPENDICES APPENDIX I - MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH DIRECTORS 16 APPENDIX II - DETAILS OF RECURRENT RPT CONTEMPLATED 17 APPENDIX III - FURTHER INFORMATION 20 v

7 TASEK CORPORATION BERHAD (4698-W) (Incorporated in Malaysia) Registered Office: 6 th Floor, Office Block, Grand Millennium Kuala Lumpur 160 Jalan Bukit Bintang Kuala Lumpur, Malaysia 5 April 2013 Directors: Kwek Leng Peck (Non-Executive Director) (Chairman) Ting Sii Yao Sik Tien (Executive Director / Group Chief Executive Officer) Dato Chong Pah Aung (Independent Director) Wan Mohd Shukri bin Ariffin (Independent Director) Kwek Kon Chun (Non-Executive Director) Lim Eng Khoon (Independent Director) Spencer Lee Tien Chye (Independent Director) To: The Shareholders of the Company Dear Sir/Madam 1. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY A. INTRODUCTION On 18 February, 2013 the Company had announced that it proposes to seek shareholders approval for the Proposals. At the Company s 51 st AGM held on 30 April 2012, shareholders had approved the following ordinary and special resolutions in respect of the following:- i) Proposed Shareholders Mandate on Recurrent Related Party Transactions of a Revenue or Trading Nature; ii) Proposed Renewal of Authority for the Purchase of Own Shares by the Company; and iii) Proposed Amendments to Articles of Association. The above approval by shareholders for items (i) and (ii) will lapse at the conclusion of the forthcoming 52 nd AGM unless renewed. The purpose of this Circular is to provide you with details of the Proposals and to seek your approval for the Proposals to be tabled at the 52 nd AGM to be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160, Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Monday, 29 April 2013 at 10:00 a.m. 1. PROPOSED SHAREHOLDERS MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1.1 DETAILS The approval for renewal of and new general mandate will permit the TCB Group to enter into all Recurrent Related Party Transactions with the classes of Related Parties as listed in Appendix II on terms not more favourable to the Related Parties than those generally available to the public. 1

8 1.1.1 Classes of Related Parties The TCB Group s day-to-day operations carried out between companies within the TCB Group and any of the following classes of Related Parties are:- a) Major Shareholders of companies within the TCB Group, Hong Leong Investment Holdings Pte. Ltd. ( HLIH ) and persons connected with HLIH ( HLIH Group ), as listed in Appendix I; and b) Directors of companies within the TCB Group and Persons Connected with such Directors, as listed in Appendix I. The details of shareholdings of the aforesaid classes of Related Parties are set out in paragraph 2.5 below Nature of Related Party Transactions Contemplated The principal activities of TCB are manufacture and sale of cement and related products and investment holding whereas the principal activity of the subsidiaries, namely Tasek Concrete Sdn. Bhd. are in manufacturing and supply of ready-mixed concrete; Tasek Cement Quarries Sdn. Bhd. in quarry operations; Tasek Property Holdings Sdn. Bhd. in investment holding; and Posek Pembangunan Sdn. Bhd., Tasek Plantation Sdn. Bhd., Tasek Industries Sdn. Bhd. and Tasek Holdings Pte Ltd, are dormant. The Related Parties of the TCB Group are involved in a diverse range of industries, including inter alia, insurance and insurance broking, securities broking, fund management, hotel and property management, property development, distribution, marketing, trading and the provision of nominee, share registration, security, transport, logistic services, manufacturing and trading of ready mixed products. In view thereof, it is envisaged that in the normal course of business of TCB Group, transactions between companies in the TCB Group and its Related Parties will occur with some degree of frequency from time to time and may arise at any time. Accordingly, the Board considers it beneficial to have the flexibility to enter into such transactions, which are carried out at arms length and on normal commercial terms. The details of Recurrent RPT contemplated within the validity of the Proposed Shareholders Mandate would include those described in Appendix II Review Procedures for Recurrent RPT The TCB Group has in place the following review procedures for Recurrent RPT:- a) The Recurrent RPT are conducted at arm s length and based on normal commercial terms consistent with TCB Group s usual business practices and policies and on terms not more favourable to the Related Party than those generally available to the public and are not to the detriment of minority shareholders. b) A register is maintained to record Recurrent RPT, which are entered into pursuant to the Proposed Shareholders Mandate. c) Internal auditors will review the terms of the Recurrent RPT, which is entered into pursuant to the Proposed Shareholders Mandate. 2

9 The following are commercial considerations which the TCB Group takes into account before entering into transactions for the sale/supply of goods and provision of services to a purchaser, in the ordinary course of business:- a) the financial ability and track record of the purchaser to pay for the goods supplied or services provided; and b) whether past experience and working relationship with the purchaser has been satisfactory. The following are commercial considerations which the TCB Group takes into account before entering into transactions for the receipt of goods or services from a vendor/service provider, in the ordinary course of business:- a) the competitiveness in pricing; b) the standard and quality of the goods/services and whether it meets the requirements of the TCB Group; c) the responsiveness, level of service provided by the goods or services provider and whether past experience and working relationship has been satisfactory; and d) the financial ability, track record, competence of the goods or service provider and whether the goods or services provider has sufficient resources to perform its obligations. The TCB Group would only enter into transactions with the relevant parties based on the above criteria, regardless of whether or not the party is a Related Party. The methods and procedures on which transaction prices will be determined will take into consideration the pricing and contract rate, terms and conditions, level of service or expertise required, quality, reliability and consistency of the products and services as compared with the prevailing market rates and prices and general practices by the service or products providers of similar capacity and capability generally available in the open market of unrelated third parties. The Board Audit and Risk Management Committee will undertake periodic review of the Recurrent RPT to ensure that such transactions are undertaken at arm s length, normal commercial terms, on terms not more favourable to the Related Party than those generally available to the public and not to the detriment of minority shareholders and in the best interest of the TCB Group. If any member of the Board Audit and Risk Management Committee is interested in the Recurrent RPT, he will abstain from reviewing that particular Recurrent RPT. In their review and approval of such transactions, the Board Audit and Risk Management Committee may, as they deem fit, request for additional information pertaining to the transactions from independent sources or advisers. At least two other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison, wherever possible, to determine whether the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products/services and/or quantities. Where quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be determined by TCB Group based on those offered by/to other unrelated parties for the same or substantially similar type of transaction to ensure that the Recurrent RPT is not detrimental to TCB Group. The guidelines for the relevant approving authority practiced by TCB Group in relation to Recurrent RPT are as follows:- a) Transactions below RM250,000 each in value, will be reviewed and approved by the Executive Director/ Group Chief Executive Officer and/or Chief Financial Officer or such other senior executive(s) (not being a person connected to the Related 3

10 Party) designated by the Board Audit and Risk Management Committee from time to time for such purpose, and tabled for review by the Board Audit and Risk Management Committee on a quarterly basis. b) Transactions equal to or exceeding RM250,000 each in value will be reviewed and approved by the Board Audit and Risk Management Committee. c) The Executive Director/ Group Chief Executive Officer and/or Chief Financial Officer or other senior executive(s) designated by the Board Audit Risk and Management Committee from time to time for such purpose and the Board Audit and Risk Management Committee, may, as he/they deem fit, request for additional information pertaining to the transaction under review from independent sources or advisers, including obtaining independent valuations Statement by Board Audit and Risk Management Committee The Board Audit and Risk Management Committee has reviewed the above procedures and the terms of the Proposed Shareholders Mandate, and is of the view that:- a) it is satisfied that the review procedures for the Recurrent RPT as well as the periodic reviews to be made by the Board Audit and Risk Management Committee in relation thereto, are sufficient to ensure that the Recurrent RPT will be made at arm s length and in accordance with TCB Group s normal commercial terms and on terms not more favourable to the Related Party than those generally available to the public, and hence, not prejudicial to the shareholders and are not to the detriment of minority shareholders. b) TCB Group has in place adequate procedures and processes to monitor, track and identify Recurrent RPT in a timely and orderly manner, and such procedures and processes are reviewed on a yearly basis or whenever the need arises Validity Period of the Proposed Shareholders Mandate The Proposed Shareholders Mandate, if approved at the AGM, will take immediate effect and will (unless revoked or varied by the Company in general meeting) continue in force until the next AGM of the Company or the expiration of the period within which the next AGM 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, whichever is the earlier). Approval from shareholders will thereafter be sought for the renewal of the Proposed Shareholders Mandate at each subsequent AGM, subject to satisfactory review by the Board Audit and Risk Management Committee of the Company of its continued application to Recurrent RPT Disclosure TCB has disclosed a breakdown of the aggregate value of the Recurrent RPT conducted during the financial year ended 31 December 2012 in its Annual Report based on the following:- (i) (ii) type of Recurrent RPT made; and names of Related Parties involved in each type of Recurrent RPT and relationship with TCB. Disclosure will continue to be made in the Annual Reports for subsequent financial years that the Proposed Shareholders Mandate continues in force. 4

11 1.1.7 Existing Mandate on Recurrent RPT (Not seeking for renewal) Set out below is the actual value transacted of each Recurrent RPT, from the date on which the existing mandate was obtained on 30 April 2012 up to 20 March 2013 being, the latest practicable date before the printing of this Circular, together with its estimated value as disclosed in the Circular to Shareholders dated 6 April 2012:- TCB Group with the following Related Parties Island Concrete (Private) Limited Nature of Transactions Estimated Aggregate Value as disclosed in the Circular to Shareholders dated 6 April 2012 ( Estimated Value ) (RM) Actual Value transacted from date of AGM on 30 April 2012 up to 20 March 2013 ( Actual Value ) (RM) Sale of cement 35,000, ,591 PJ City Development Sdn Bhd Rental of land to Tasek Concrete Sdn. Bhd. 84, Due and Owing by Related Party As at 31 December 2012, the total outstanding amount due and owing to TCB s subsidiary by a Related Party under the Recurrent Related Party Transactions which exceeded the credit term of not more than one year amounted to RM27, No late payment charge was imposed by the TCB s subsidiary on amounts due and owing by the Related Party, Hume Industries (Malaysia) Sdn. Bhd. for the supply of ready-mixed concrete that exceeded the credit term as the amount owing is in dispute and under negotiation for settlement between the Related Party and TCB s subsidiary. The Board of TCB is of the view that such amount will be settled amicably between the parties. There are no other outstanding amounts due and owing by Related Parties under the Recurrent Related Party Transactions which exceeded credit term of more than one year. 1.2 RATIONALE FOR AND THE BENEFIT OF THE PROPOSED SHAREHOLDERS MANDATE The rationale for the Proposed Shareholders Mandate to the TCB Group are as follows:- a) The Proposed Shareholders Mandate will facilitate transactions with Related Parties, which are in the ordinary course of business of the TCB Group. The TCB Group has had a long-standing business relationship with many of the Related Parties ranging from 5 years to 48 years. The Related Parties are both good customers of the TCB Group as well as reliable suppliers of goods and services required by the TCB Group for its business. The goods and services provided by the Related Parties are priced competitively and all transactions between the TCB Group and the Related Parties are carried out at arm s length basis. Although, the TCB Group also sources similar goods or services from third parties, the TCB Group would like to seek approval from the shareholders as the close co-operation between the TCB Group and the Related Parties have been mutually beneficial and is expected to continue to be of benefit to the business of the TCB Group. 5

12 b) For certain transactions, where it is vital that confidentiality be maintained, it would not be viable to obtain prior shareholders approval, as releasing details of the transaction prematurely may adversely affect and prejudice the TCB Group s interests and place the TCB Group at a disadvantage as compared to its competitors who may not require shareholders approval to be obtained; and c) The Proposed Shareholders Mandate will substantially reduce the expenses associated with convening of general meetings on an ad hoc basis, improve administrative efficiency considerably and allow resources to be channelled towards attaining other corporate objectives. The benefit of the Proposed Shareholders Mandate is that it will enhance the TCB Group s ability to pursue business opportunities, which are time-sensitive in nature and will eliminate the need for the Company to convene separate general meetings to seek shareholders approval for each transaction. 1.3 CONDITION OF THE PROPOSED SHAREHOLDERS MANDATE The Proposed Shareholders Mandate is subject to the approval of the shareholders of TCB at the forthcoming AGM. 2. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY THE COMPANY 2.1 DETAILS OF THE PROPOSED SHARE BUY-BACK Your Directors propose to seek shareholders approval for a renewal of the authority to undertake the Proposed Share Buy-back at the forthcoming 52 nd AGM to be held on 29 April As at 20 March 2013, the total issued and paid-up ordinary share capital of the Company is RM123,621,231 comprising 123,621,231 Ordinary Shares of RM1.00 each. Hence, the maximum number of Ordinary Shares which may be purchased and/or held as Treasury Shares by the Company is 12,362,123 Ordinary Shares which is ten per centum (10%) of the total issued and paid-up ordinary share capital of TCB. The funding for the Proposed Share Buy-back will be from internally generated funds and/or borrowings, the proportion of which will depend on the quantum of Ordinary Shares purchased and the purchase consideration as well as the availability of funds of the TCB Group at the time of purchase(s). The amount of bank borrowings if any, to be used for the Proposed Share Buy-back would depend on the repayment capabilities of the Company. In the event, the Company decides to utilise the bank borrowings, the Company will ensure that it has sufficient funds to repay the bank borrowings so that the repayment would have no material effect on the Company s cash flow. The maximum funds to be allocated by the Company for the Proposed Share Buy-back will be made wholly out of retained profits and/or the share premium account. As of 31 December 2012, the audited retained profits and share premium of the Company were RM million and RM million respectively. The Proposed Share Buy-back will be effective immediately upon the passing of the ordinary resolution up to the conclusion of the next AGM of TCB (unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting or the expiration of the period within which the next AGM after the date is required by law to be held, whichever occurs first). In accordance with the guidelines of Bursa Securities, TCB may only purchase the Ordinary Shares on the Exchange at a price which is not more than fifteen per centum (15%) above the weighted average market price for the past five (5) market days immediately preceding the date of the purchase(s) and the Company may only resell the Treasury Shares on the Exchange at a price which is not less than the weighted average 6

13 market price for the shares for the past five (5) market days immediately prior to the resale or at a discounted price of not more than five per centum (5%) to the weighted average market price for the shares for the five (5) market days immediately prior to the resale provided that:- i) the resale takes place no earlier than 30 days from the date of purchase; and ii) 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 its own Ordinary Shares at any time within the abovementioned time period using the internal funds and/or borrowings of the Company. The actual number of Ordinary Shares to be purchased, the total amount of funds involved for each purchase, and the timing of the purchase will depend on the market conditions and sentiment of the stock market as well as the financial resources available to the Company. The Directors will deal with the Ordinary Shares so purchased in the following manner:- i) cancel the Ordinary Shares so purchased; or ii) retain the Ordinary Shares so purchased as Treasury Shares; or iii) retain part of the Ordinary Shares so purchased as Treasury Shares and cancel the remainder. The Treasury Shares may be distributed as dividends to the shareholders and/or resold on Bursa Securities and/or subsequently cancelled. An announcement will be made to Bursa Securities in respect of the intention of the Directors whether to retain the Ordinary Shares so purchased as Treasury Shares or cancel them or both if the Proposed Share Buy-back is executed. The rationale for the Proposed Share Buy-back if exercised is expected to potentially benefit the Company and its shareholders as follows:- The Company would expect to enhance the EPS of the Group (in the case where the Directors resolve to cancel the Ordinary Shares so purchased or retain the Ordinary Shares in Treasury Shares and are not subsequently resold) and thereby long term and genuine investors are expected to enjoy a corresponding increase in the value of their investments in the Company; If the Ordinary Shares bought back are kept as Treasury Shares, it will give the Directors an option to sell the Ordinary Shares so purchased at a higher price and therefore make an exceptional gain for the Company. Alternatively the Ordinary Shares so purchased can be distributed as share dividends to shareholders; and The Company may be able to stabilise the supply and demand of its Ordinary Shares in the open market and thereby supporting its fundamental values. The Listing Requirements state that a company intending to purchase its own ordinary shares and/or resell treasury shares on the Exchange may appoint up to two Participating Organisations for that purpose only. The Company and its Directors in exercising the power to purchase the Ordinary Shares and/or resell Treasury Shares, will be subject, at all times, to all such obligations imposed on the Company under the law, including without limitation, the provisions of the Capital Markets and Services Act In exercising its power to purchase the Ordinary Shares and/or resell Treasury Shares, the Company will not engage in speculative trading activities in relation thereto. 7

14 2.2 RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-back will enable TCB to utilise its financial resources not immediately required for use to purchase the Ordinary Shares. The Proposed Share Buy-back is expected to have the effect of stabilising the supply and demand as well as the price of the Ordinary Shares on Bursa Securities which may have a positive impact on the market price of the Ordinary Shares and may result in an increase in TCB s EPS with the cancellation of the Ordinary Shares bought back by the Company. 2.3 POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-back will allow the Company to utilise its financial resources with no immediate use to purchase the Ordinary Shares on the Exchange and as a result of which may help enhance the EPS of the Company. The maintenance of the share price is important, as it will reduce the effects of volatile fluctuation of the prices of the Ordinary Shares in the stock market as well as to protect investors confidence in TCB. Both are important in facilitating the Company s future fund raising exercises through the equity market. The Proposed Share Buy-back will, however, reduce the financial resources of TCB and may result in TCB having to forego any good investment opportunities, which may emerge in future. It may also result in a lower amount of cash dividends that can be declared to shareholders as funds are being diverted to purchase the Ordinary Shares. TCB may stand to realise a potential gain if the Ordinary Shares so purchased are kept as Treasury Shares and are subsequently resold at prices higher than the purchase prices. Nevertheless, the Directors will be mindful of the interests of TCB and its shareholders in implementing the same. 2.4 EFFECTS OF THE PROPOSED SHARE BUY-BACK The effects of the Proposed Share Buy-back on the ordinary share capital, NTA, working capital and earnings of TCB are set out below: Ordinary Share Capital On the assumption that the Proposed Share Buy-back is carried out in full and the Ordinary Shares so purchased are fully cancelled, the Proposed Share Buy-back will result in the issued and paid-up ordinary share capital of TCB as at 20 March 2013 to be reduced from RM123,621,231 comprising 123,621,231 Ordinary Shares to RM111,259,108 comprising 111,259,108 Ordinary Shares. Existing issued and paid-up ordinary share capital as at 20 March 2013 (before adjusting for the Treasury Shares held) No. of Ordinary Shares RM 123,621, ,621,231 Number of Ordinary Shares reduced 12,362,123 12,362,123 (Assuming the Ordinary Shares so purchased, including the Treasury Shares held, are fully cancelled) Upon completion of the Proposed Share Buy-back 111,259, ,259,108 8

15 Pursuant to the Act, if the Ordinary Shares so purchased are treated as Treasury Shares, the rights attached to them as to voting, dividends and participation in the other distribution and otherwise will be suspended and the Treasury Shares shall not be taken into account in calculating the number of shares or of a class of shares in the Company for any purpose including, without limiting the generality of this provision, the provisions of any law or requirement of the Articles of Association of the Company or the Listing Requirements on substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum and the result of a vote on a resolution at a meeting NTA, Working Capital and Cash Flow The Proposed Share Buy-back is likely to reduce the NTA of the TCB Group and will reduce the working capital of the TCB Group, the quantum of which depends on, among others, the number of Ordinary Shares eventually purchased and the purchase prices of the Ordinary Shares. For Ordinary Shares so purchased which are kept as Treasury Shares, upon its resale, the NTA of the Group and the working capital of the Company will increase assuming that a gain has been realised. Again, the quantum of the increase in NTA will depend on the actual selling price of the Treasury Shares and the number of Treasury Shares resold. The impact on the cash flow of the TCB Group will be reduced depending on the number of Ordinary Shares eventually purchased and the purchase price(s) of the Ordinary Shares Earnings The effects of the Proposed Share Buy-back on the earnings of TCB Group would depend on the purchase price and number of Ordinary Shares purchased. The effective reduction in the number of Ordinary Shares applied in the computation of the consolidated EPS pursuant to the Proposed Share Buy-back may generally, all else being equal, have a positive impact on the consolidated EPS of the Company for the next financial year Dividends For the financial year ended 31 December 2012, the Board of TCB has proposed a final dividend of 30 sen per share less Malaysian income tax of 25% and a special dividend of 60 sen per share less Malaysian income tax of 25% subject to shareholders approval. Assuming the Proposed Share Buy-back is implemented in full, dividends will be paid on the remaining issued capital of TCB (excluding the Ordinary Shares already purchased). The Proposed Share Buy-back may have an impact on the Company s payment of dividend for the next financial year as it will reduce the cash available which may be used for such payment. Nonetheless, the Treasury Shares purchased may be distributed as share dividends to shareholders, if the Company so decides. 9

16 2.5 DIRECTORS AND SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS The Directors shareholdings of TCB before and after the Proposed Share Buy-back are as follows:- Before Proposed Share Buy-back No. of Ordinary Shares held based on the Register of Directors Shareholdings as at 20 March 2013 After Proposed Share Buy-back No. of Ordinary Shares held Direct % Indirect % Direct % Indirect % Kwek Leng Peck Ting Sii Yao Sik Tien 50, , Dato Chong Pah Aung Wan Mohd Shukri bin Ariffin Kwek Kon Chun Lim Eng Khoon Spencer Lee Tien Chye The Substantial Shareholders and their respective shareholdings before and after the Proposed Share Buy-back are as follows:- Before Proposed Share Buy-back No. of Ordinary Shares held based on the Register of Substantial Shareholders as at 20 March 2013 After Proposed Share Buy-back No. of Ordinary Shares held Aberdeen International Fund Managers Limited Aberdeen Asset Management Asia Limited Aberdeen Asset Management PLC Mitsubishi UFJ Financial Group, Inc. HL Cement (Malaysia) Sdn. Bhd. Direct % Indirect % Direct % Indirect % - - 7,709,360 i ,709,360 i ,328,130 i ,328,130 i ,798,659 i ,798,659 i ,798,659 i ,798,659 i ,982, ,982,

17 Before Proposed Share Buy-back No. of Ordinary Shares held based on the Register of Substantial Shareholders as at 20 March 2013 After Proposed Share Buy-back No. of Ordinary Shares held HL Cement (Labuan) Limited HL Cement (HK) Limited Hong Leong Asia Ltd. Hong Leong Corporation Holdings Pte Ltd Hong Leong Enterprises Pte. Ltd. Hong Leong Investment Holdings Pte. Ltd. Kwek Holdings Pte Ltd Kwek Leng Beng Davos Investment Holdings Private Limited Salvador Pte. Ltd. Direct % Indirect % Direct % Indirect % ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # ,982,883 # Kwek Leng Kee ,982,883 # ,982,883 # Quek Leng Chye Tan Sri Quek Leng Chan ,982,883 # ,982,883 # , ,982,883 # , ,982,883 # Notes: i Disclosures include holdings of mandates delegated from other subsidiaries of Aberdeen Asset Management PLC. ii Deemed interest through Aberdeen Asset Management PLC and its subsidiaries by virtue of Section 6A of the Act. # Deemed interest through HL Cement (Malaysia) Sdn. Bhd. by virtue of Section 6A of the Act. 2.6 PUBLIC S SHAREHOLDING SPREAD As at 20 March 2013, the public s shareholding spread of the Company was 25.49%. The public shareholding spread is expected to be reduced to 18.87% assuming the Proposed Share Buy-back is implemented in full with the purchase from the market and all the Ordinary Shares so purchased are cancelled. The Directors will endeavour to ensure that the Company complies with the public s shareholding spread requirement in the event that the public s shareholding spread requirement is not met as a result of the Proposed Share Buy-back. 11

18 2.7 PURCHASES OR RESALE OF TREASURY SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS During the financial year ended 31 December 2012, the Company had purchased 2,478,300 Ordinary Shares of which the total purchase consideration was RM20,632,799.67, which the details are shown as below:- Date of Purchase Total No. of Ordinary Shares Purchased Lowest Price Paid (RM) Highest Price Paid (RM) Average Price Paid (RM) Total Purchase Consideration* (RM) 21 February ,478, ,632, ,478,300 =========== 20,632, ============ * Total purchase consideration is inclusive of brokerage fees, clearing fees and stamp duty. The Ordinary Shares bought back by the Company during the preceding twelve (12) months up to 20 March 2013 have been retained as Treasury Shares. 2.8 IMPLICATION OF THE CODE Based on the Company s Register of Substantial Shareholders as at 20 March 2013, it is unlikely that the provisions on mandatory takeovers under the Code will be triggered by any shareholder of the Company solely by reason of the Proposed Share Buy-back being carried out in full. 2.9 SHARE PRICES The monthly highest and lowest prices of the Company s Ordinary Shares traded on the Exchange for the last twelve (12) months from March 2012 to February 2013 are as follows: March April May June July August September October November December 2013 January February Low RM High RM The last transacted price of the Ordinary Shares on 20 March 2013, being the last practicable date prior to the announcement and printing of this Circular, was RM15.26 per share. (Source:-The Star Online) 12

19 B. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors and Substantial Shareholders or Persons Connected with the Directors and Substantial Shareholders has any interest, direct or indirect, in the Proposed Share Buyback or resale of Treasury Shares. Save as disclosed herein below, none of its other Directors and Major Shareholders or Persons Connected with the Directors and Major Shareholders of TCB have any interest, direct or indirect in the Proposed Shareholders Mandate. Name of Director No of Ordinary Shares held in TCB as at 20 March 2013 Direct % Indirect % Kwek Leng Peck Ting Sii Yao Sik Tien 50, Kwek Kon Chun Name of Major Shareholder and Persons Connected No of Ordinary Shares held in TCB as at 20 March 2013 Direct % Indirect % HL Cement (Malaysia) Sdn. Bhd. 89,982, HL Cement (Labuan) Limited ,982,883 # HL Cement (HK) Limited ,982,883 # Hong Leong Investment Holdings Pte. Ltd ,982,883 # Kwek Leng Beng ,982,883 # Tan Sri Quek Leng Chan 232, ,982,883 # Kwek Leng Kee ,982,883 # Quek Leng Chye ,982,883 # Kwek Holdings Pte Ltd ,982,883 # Davos Investment Holdings Private Limited ,982,883 # Hong Leong Enterprises Pte. Ltd ,982,883 # Hong Leong Corporation Holdings Pte Ltd ,982,883 # Hong Leong Asia Ltd ,982,883 # Salvador Pte. Ltd ,982,883 # # Deemed interest through HL Cement (Malaysia) Sdn. Bhd. by virtue of Section 6A of the Act Hong Leong Investment Holdings Pte. Ltd. is the ultimate holding company of all the above companies except for Kwek Holdings Pte Ltd and Davos Investment Holdings Private Limited. 13

20 Kwek Leng Peck and Kwek Kon Chun (being representatives of the Major Shareholders), and Ting Sii Yao Sik Tien (who is also a representative of the Major Shareholder in an executive capacity on the Board of Directors of TCB and a shareholder) (the Interested Directors ) have abstained and will continue to abstain from deliberating and voting in respect of their direct and indirect shareholdings on the resolution in respect of the Proposed Shareholders Mandate at the Board of Directors meetings and at the forthcoming AGM, and have ensured that persons connected to them will also abstain from voting on the resolution, deliberating or approving the Proposed Shareholders Mandate at the forthcoming AGM in respect of their direct and indirect shareholdings. Hong Leong Investment Holdings Pte. Ltd., Kwek Leng Beng, Tan Sri Quek Leng Chan, Kwek Leng Kee, Quek Leng Chye (brother of Tan Sri Quek Leng Chan), Kwek Holdings Pte Ltd, Davos Investment Holdings Private Limited, Hong Leong Enterprises Pte. Ltd., Hong Leong Corporation Holdings Pte Ltd, Hong Leong Asia Ltd., Salvador Pte. Ltd., HL Cement (HK) Limited, HL Cement (Labuan) Limited and HL Cement (Malaysia) Sdn. Bhd., will abstain from voting in respect of their direct and/or indirect interests, on the resolution pertaining to the Proposed Shareholders Mandate at the forthcoming AGM. Furthermore, Hong Leong Investment Holdings Pte. Ltd., Kwek Leng Beng, Tan Sri Quek Leng Chan, Kwek Leng Kee, Quek Leng Chye, Kwek Holdings Pte Ltd, Davos Investment Holdings Private Limited, Hong Leong Enterprises Pte. Ltd., Hong Leong Corporation Holdings Pte Ltd, Hong Leong Asia Ltd., Salvador Pte. Ltd., HL Cement (HK) Limited, HL Cement (Labuan) Limited and HL Cement (Malaysia) Sdn. Bhd. have ensured that the persons connected with them as mentioned above will abstain from voting in respect of their direct and/or indirect interests on the resolution, deliberating or approving the Proposed Shareholders Mandate at the AGM. C. DIRECTORS' RECOMMENDATION The Board of Directors of TCB, having taken into consideration all aspects of the Proposed Share Buy-back is of the opinion that the Proposed Share Buy-back is in the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary Resolution for the Proposed Share Buy-back to be tabled at the forthcoming AGM. The Board of Directors of TCB (excluding the Interested Directors), having taken into consideration all aspects of the Proposed Shareholders Mandate, is of the opinion that the Proposed Shareholders Mandate is in the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary Resolution for the Proposed Shareholders Mandate to be tabled at the forthcoming AGM. D. ANNUAL GENERAL MEETING The 52 nd AGM of the Company, the Notice of Meeting of which is incorporated in the Annual Report 2012 accompanying this Circular, will be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Malaysia on Monday, 29 April 2013 at 10:00 a.m. for the purpose of considering and if though fit, passing the Ordinary Resolutions in respect of the Proposals under the Agenda on Special Business as set out in the said Annual Report. If you are unable to attend the AGM in person, please complete the Form of Proxy enclosed in the Annual Report 2012 and to lodge the completed Form of Proxy at the Company s Registered Office, 6 th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Malaysia not later than forty-eight (48) hours before the time for convening the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the Annual General Meeting should you subsequently decide to do so. The Form of Proxy should be completed strictly in accordance with the instructions contained therein. 14

21 E. ADDITIONAL INFORMATION Shareholders are advised to refer to the attached Appendices for additional information. Yours faithfully For and on behalf of the Board of TASEK CORPORATION BERHAD Lim Eng Khoon Independent Director 15

22 APPENDIX I MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH DIRECTORS MAJOR SHAREHOLDERS OF TCB HONG LEONG INVESTMENT HOLDINGS PTE. LTD. ( HLIH ) GROUP Name of Company HL-Manufacturing Industries Sdn. Bhd. CDL Hotels (Malaysia) Sdn. Bhd. HL Building Materials Pte Ltd Relationship with TCB This company is a wholly-owned subsidiary of Hong Leong Asia Ltd. ( HLA ). Kwek Leng Peck is a director of this company. This company is an indirect wholly-owned subsidiary of Millennium & Copthorne Hotels plc, a subsidiary of City Developments Limited, which in turn is a subsidiary of HLIH. Kwek Leng Beng and Kwek Leng Peck are directors of this company. This company is a wholly-owned subsidiary of HLA. Kwek Leng Peck is a director of this company. MAJOR SHAREHOLDERS OF TCB TAN SRI QUEK LENG CHAN, KWEK LENG BENG, KWEK LENG KEE AND QUEK LENG CHYE Name of Company Hume Marketing Co Sdn. Bhd. (formerly known as Hong Leong Marketing Co Berhad) Hong Leong Share Registration Services Sdn. Bhd. Kimsik Company Sdn. Bhd. Hume Industries (Malaysia) Sdn. Bhd. ( HIMB ) Hume Cemboard Industries Sdn. Bhd. Relationship with TCB This company is a wholly-owned subsidiary of Hong Leong Industries Berhad ( HLI ). Tan Sri Quek Leng Chan has deemed interest of 77.04% in HLI. Kwek Leng Beng, Kwek Leng Kee and Quek Leng Chye have deemed interest of 76.02% in HLI. This company is a wholly-owned indirect subsidiary of Hong Leong Company (Malaysia) Berhad ( HLCM ). Tan Sri Quek Leng Chan and Kwek Leng Beng are directors and major shareholders of HLCM. Kwek Leng Kee and Quek Leng Chye are major shareholders of HLCM. Kwek Leng Peck is a director and shareholder of HLCM. Tan Sri Quek Leng Chan and Kwek Leng Beng have deemed interests of 8.75% and 10.45% respectively in this company. This company is a wholly-owned subsidiary of Hong Leong Industries Berhad ( HLI ), which in turn is a 75.39% subsidiary HLCM. This company is a wholly-owned subsidiary of HIMB, which in turn is a wholly-owned subsidiary HLI. 16

23 APPENDIX II DETAILS OF RECURRENT RPT CONTEMPLATED Renewal of Existing Transactions for Shareholders Mandate Transaction Transacting Parties Related Parties Estimated Aggregate Value as disclosed in the Circular to Shareholders dated 6 April 2012 ( Estimated Value ) (RM) Actual Value transacted from date of AGM on 30 April 2012 up to 20 March 2013 ( Actual Value ) (RM) Estimated Aggregate Value * from date of the forthcoming AGM to the next AGM (RM) (a) Sale of cement by TCB to:- Hume Marketing Co Sdn. Bhd. (formerly known as Hong Leong Marketing Co Berhad) Hong Leong Investment Holdings Pte. Ltd. ( HLIH ) Tan Sri Quek Leng Chan Kwek Leng Beng Kwek Leng Kee Quek Leng Chye 45,000,000 22,757,573 25,000,000 Kimsik Company Sdn. Bhd. Tan Sri Quek Leng Chan Kwek Leng Beng 17,000,000 6,013,949 15,000,000 HL- Manufacturing Industries Sdn. Bhd. HLA HLIH Kwek Leng Beng Tan Sri Quek Leng Chan Kwek Leng Kee Quek Leng Chye Kwek Leng Peck 10,000,000 3,208,340 4,000,000 Hume Industries (Malaysia) Sdn. Bhd. HLIH Tan Sri Quek Leng Chan Kwek Leng Beng Kwek Leng Kee Quek Leng Chye 5,000, ,755 2,000,000 HL Building Materials Pte Ltd HLA HLIH Kwek Leng Beng Tan Sri Quek Leng Chan Kwek Leng Kee Quek Leng Chye Kwek Leng Peck 55,000,000 11,078,376 45,000,000 * Estimated value based on existing records with adjustments where necessary in accordance with budget figures and/or contracted amounts. The estimated values may vary and are subject to changes. 17