Sunway Construction Berhad

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

IF YOU ARE IN ANY DOUBT AS TO THE COURSE OF ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER IMMEDIATELY. If you have sold all your ordinary shares in SUNWAY CONSTRUCTION BERHAD, you should at once hand this Circular to the agent through whom the sale was effected for transmission to the purchaser.

The Kuala Lumpur Stock Exchange 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.

SUNWAY CONSTRUCTION BERHAD (Company No. 27175-V) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

In Relation To

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE AND GENERAL MANDATE FOR PROVISION OF FINANCIAL ASSISTANCE

EXTRACT OF THE NOTICE OF ANNUAL GENERAL MEETING

The Notice convening an Annual General Meeting of the Company to be held at Bahamas 1 & 2, Level 12, Sunway Lagoon Resort Hotel, Persiaran Lagoon, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 24 June 2003 at 3.30 p.m. is set out in the Company’s 2002 Annual Report.

A Proxy Form is enclosed in the Company’s 2002 Annual Report which you are urged to complete and return in accordance with the instructions therein as soon as possible so as to arrive at the Registered Office of the Company not later than 48 hours before the time set for holding the meeting. The lodging of the Proxy Form will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so.

The last day and time for lodging the Proxy Form is on Sunday, 22 June 2003 at 3.30 p.m.

This Circular is dated 2 June 2003 DEFINITIONS

Except where the context otherwise requires, the following definitions shall apply throughout this Circular:

“Act” : The Malaysian Companies Act 1965 as amended from time to time and any re-enactment thereof

“AGM” : Annual General Meeting

“Board” : The Board of Directors of Suncon

“Director” : Includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director and includes any person who is or was within the preceding 12 months of the date on which the terms of the transaction were agreed upon, a director of the company (or any other company which is its subsidiary or holding company or a subsidiary of its holding company)

“KLSE” : Kuala Lumpur Stock Exchange (30632-P)

“Major Shareholder” : Includes any person who has an interest or interests in one or more voting shares in a company and the nominal amount of that share or the aggregate of the nominal amounts of those shares, is not less than 5% of the aggregate of the nominal amounts of all the voting shares in the company including any person who is or was within the preceding 12 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 company which is its subsidiary or holding company or a subsidiary of its holding company). For the purpose of this definition, "interest in shares" shall have the meaning given in Section 6A of the Act

“Mandated Related Parties” : Suncity Group, Suninc Group, Sunway Infrastructure Group, Sunway College Group, Sungei Way Enterprise (1988) Sdn Bhd, Sunway Technology Group, Sunway Hydraulic Industries Sdn Bhd, Adasia (M) Sdn Bhd and Asian Strategy & Leadership Incorporated Sdn Bhd

“Person Connected” : Such person, in relation to the Director or Major Shareholder, who falls under any one of the following categories:

(a) a member of the Director’s or Major Shareholder’s family, which family shall have the meaning given in Section 122A of the Act; (b) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the i Director, Major Shareholder or a member of the Director’s or Major Shareholder’s family 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 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 (i) a body corporate which is a related corporation

“RRPT Mandate” : Proposed shareholders’ mandate for recurrent related party transactions of a revenue or trading nature which are necessary for day-to-day operations for the Company and/or its subsidiaries, in their normal course of business, to enter into the transactions as set out in paragraph 2D below (“Recurrent Related Party Transactions") with persons who are considered to be "related parties" as defined in Paragraphs 1.01 and 10.02 of the Listing Requirements of the KLSE

“Proposals” or “Mandate” : (1) RRPT Mandate; and (2) general mandate for the provision of financial assistance to persons who are considered to be "related parties" as defined in Paragraphs 1.01 and 10.02 of the Listing Requirements of the KLSE

“Related Party” : Director, Major Shareholder or Person Connected

“Related Party Transaction” : A transaction entered into by the Company or its subsidiaries which involves the interest, direct or indirect, of a Related Party

“Share(s)” : Ordinary share(s) of RM1.00 each in the Company

“Suncon” or “the Company” : Sunway Construction Berhad (27175-V)

“Suncon Group” or “the Group” : Suncon and its subsidiaries

ii “Suncity” : Sunway City Berhad (87564-X)

“Suncity Group” : Sunway City Berhad (87564-X), its subsidiaries and associated companies

“Suninc” : Sunway Holdings Incorporated Berhad (37465-A)

“Suninc Group” : Sunway Holdings Incorporated Berhad (37465-A), its subsidiaries (including Suntech Group) and associated companies

“Suntech” : Sunway Building Technology Berhad (290455-W)

“Suntech Group” : Suntech, its subsidiaries and associated companies

“Sunway Infrastructure Group” : Sunway Infrastructure Berhad (405897-V) and its subsidiaries

“Sunway College Group” : Sunway College Sdn Bhd (146440-K) and its subsidiaries

“Sunway Technology Group” : Sunway Technology Sdn Bhd (210079-H), its subsidiaries and associated companies

iii CONTENTS

LETTER TO THE SHAREHOLDERS CONTAINING:

1. INTRODUCTION 1

2. DETAILS OF THE PROPOSALS 2

A. PART E, PARAGRAPHS 10.08 AND 10.09, AND PARAGRAPH 5.0 OF 2 PRACTICE NOTE NO. 14/2002 OF THE LISTING REQUIREMENTS

B. PROPOSED SHAREHOLDERS' MANDATE FOR RECURRENT 4 RELATED PARTY TRANSACTIONS AND GENERAL MANDATE FOR PROVISION OF FINANCIAL ASSISTANCE

C. CLASSES OF RELATED PARTIES 5

D. NATURE OF RECURRENT RELATED PARTY TRANSACTIONS AND 10 ESTIMATED VALUES

E. RATIONALE FOR, AND THE BENEFIT TO, THE GROUP FOR 13 TRANSACTING WITH MANDATED RELATED PARTIES

F. REVIEW METHODS OR PROCEDURES FOR RECURRENT RELATED 14 PARTY TRANSACTIONS

G. AUDIT COMMITTEE'S STATEMENTS 15

3. INTERESTS OF DIRECTORS AND MAJOR SHAREHOLDERS 15

4. CONDITION OF THE PROPOSALS 17

5. DIRECTORS' RECOMMENDATION 17

6. AGM 17

7. FURTHER INFORMATION 17

APPENDIX

APPENDIX I FURTHER INFORMATION 18

EXTRACT OF THE NOTICE OF ANNUAL GENERAL MEETING Enclosed

iv SUNWAY CONSTRUCTION BERHAD (Company No. 27175-V) (Incorporated in Malaysia) Registered Office: Level 16, Menara Sunway Jalan Lagoon Timur Bandar Sunway 46150 Petaling Jaya Selangor Darul Ehsan

2 June 2003 Board of Directors: Tan Sri Dato’ Seri (Dr) Cheah Fook Ling (Non-Independent Non-Executive Chairman) Dato’ Tan Kia Loke (Senior Managing Director) Kwan Foh Kwai (Managing Director) Tan Sri Dato’ (Dr) R V Navaratnam (Non-Independent Executive Director) Dato’ Chew Chee Kin (Non-Independent Non-Executive Director) Datuk Abdul Malek bin Abdul Aziz (Senior Independent Non-Executive Director) Datuk Low Seng Kuan (Independent Non-Executive Director) Chong Kok Keong (Independent Non-Executive Director)

To : The Shareholders of Sunway Construction Berhad

Dear Sir/Madam

 PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE AND GENERAL MANDATE FOR PROVISION OF FINANCIAL ASSISTANCE

1. INTRODUCTION

Pursuant to Paragraph 10.09(1) of the KLSE Listing Requirements ("Listing Requirements"), the Company has procured the renewal of the shareholders’ mandate at its AGM held on 25 June 2002, for the Company and/or its subsidiaries, in their normal course of business, to enter into those transactions which are recurrent and of a revenue or trading nature which are necessary for the Group’s day-to-day operations as set out in paragraph 2D below with persons who are considered to be "related parties" as defined in Paragraphs 1.01 and 10.02 of the Listing Requirements.

The Board proposes to seek its shareholders’ approval for a RRPT Mandate at the forthcoming AGM of the Company. The Board also proposes to seek a general mandate for the provision of financial assistance to persons who are considered to be "related parties" as defined in Paragraphs 1.01 and 10.02 of the Listing Requirements.

The purpose of this Circular is to provide you with details pertaining to the Proposals and to seek your approval for the resolution thereto to be tabled at the forthcoming AGM of the Company scheduled to be held at Bahamas 1 & 2, Level 12, Sunway Lagoon Resort Hotel, Persiaran Lagoon, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 24 June 2003 at 3.30 p.m.

The Company had on 23 May 2003 made the announcement to the KLSE pertaining to the Proposals.

1 SHAREHOLDERS OF SUNCON ARE ADVISED TO READ THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RELEVANT RESOLUTION PERTAINING TO THE PROPOSALS.

2. DETAILS OF THE PROPOSALS

A. Part E, Paragraphs 10.08 and 10.09, and Paragraph 5.0 of Practice Note No. 14/2002 of the Listing Requirements

The details of the recurrent related party transactions of a revenue or trading nature pursuant to Part E, Paragraph 10.09, which should be read in conjunction with Paragraph 10.08 of the Listing Requirements to be dealt with at the forthcoming AGM are as follows:

Under Part E, Paragraph 10.08 (1)-(4) of the Listing Requirements, where transactions are entered into by the Company or its subsidiary(ies) with a Related Party, the Company must make an immediate announcement to the KLSE in respect of such transactions and compliance in accordance with the following categories of transactions:

(a) For a Related Party Transaction where any one of the percentage ratios is equal to or exceeds 5%, the Company must comply with the following:

(i) Issuing of circular to shareholders; (ii) Obtain shareholders' approval in general meeting; and (iii) Appointment of independent adviser or expert who is independent of the management and Board which appoints it and free from any business or other relationship which could interfere with the exercise of independent judgement by such adviser or expert.

The independent adviser referred to in (iii) above must be appointed by the Company before terms of the transaction are agreed upon, and it shall be the duty and responsibility of the independent adviser to comment as to whether the transaction is fair and reasonable so far as the shareholders are concerned and whether the transaction is to the detriment of minority shareholders and, such opinion must set out the reasons for, the key assumptions made and the factors taken into consideration in forming that opinion.

(b) For a Related Party Transaction where any one of the percentage ratios is equal to or exceeds 25%, the Company must comply with the following:

(i) A main adviser, which shall be a merchant bank or a member company approved by the Securities Commission to act as an adviser in the same manner as advisers under the Securities Commission's Policies and Guidelines on Issue/Offer of Securities, must be appointed by the Company before terms of the transaction are agreed upon, and it shall be the duty and responsibility of the main adviser to:

(aa) ensure that such transaction is carried out on fair and reasonable terms and conditions, and not to the detriment of minority shareholders of the Company; (bb) ensure that such transaction complies with the relevant laws/regulations/guidelines, where applicable; (cc) ensure full disclosure of all information required to be disclosed in the announcement and circular; and (dd) confirm to the KLSE and the Securities Commission, after the transaction has been completed and all the necessary approvals have been obtained, that it has discharged its responsibility with due care in regard to the transaction.

2 (ii) An independent adviser, which shall be a merchant bank or a member company approved by the Securities Commission to act as an adviser in the same manner as advisers under the Securities Commission's Policies and Guidelines on Issue/Offer of Securities, must be appointed by the Company before terms of the transaction are agreed upon, and it shall be the duty and responsibility of the independent adviser to:

(aa) comment as to whether the transaction is fair and reasonable so far as the shareholders are concerned and whether the transaction is to the detriment of minority shareholders and such opinion must set out the reasons for, the key assumptions made and factors taken into consideration in forming that opinion; and (bb) confirm to the KLSE and the Securities Commission of its eligibility to act as an independent adviser within a period of 2 weeks after the announcement of the transaction.

Under Part E, Paragraph 10.09 of the Listing Requirements, the Company may seek 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 such as supplies of materials, subject to the following:

(a) 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;

(b) The shareholders’ mandate is subject to annual renewal and disclosure of the aggregate value of such transactions conducted during the financial year is made in the annual report;

(c) Issuing of circular to shareholders by the Company for the shareholders’ mandate; and

(d) In a meeting to obtain shareholders’ mandate, the interested Director, Major Shareholder or Persons Connected with a Director or Major Shareholder; and where it involves the interest of the Persons Connected with a Director or Major Shareholder, such Director or Major Shareholder must not vote on the resolution approving the transactions. An interested Director or Major Shareholder must ensure that Persons Connected with him abstain from voting on the resolution approving the transactions.

Paragraph 5.0 of Practice Note No. 14/2002 (“PN14”) which took effect on 1 January 2003, stipulates that notwithstanding Paragraph 4.2(d) of Practice Note No. 12/2001 (“PN12”) and subject to Paragraph 10.09 of the Listing Requirements and other provisions of PN12, the Company may seek a general mandate for the provision of financial assistance to its Related Parties as provision of financial assistance is regarded as a recurrent transaction under PN14. The general mandate in respect to the provision of financial assistance comprised the following transactions:- (a) the pooling of funds within the listed company's group of companies via a centralised treasury management function or such similar arrangements which entails the provision of financial assistance by the listed company and/or its unlisted subsidiaries on a short or medium term basis provided that:-

(i) the listed company in seeking such a mandate in accordance with Paragraphs 8.23 and 10.09 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 (hereinafter referred to as "the Estimate"); and

3 (ii) if the actual amount of financial assistance provided or rendered exceeds the Estimate, the listed 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 listed company must comply with Paragraph 10.08 of the Listing Requirements.

For purposes of this paragraph:-

(aa)"short or medium term basis" shall mean for a duration not exceeding 3 years; and

(bb) "group of companies" shall mean the subsidiaries, associated companies of the listed company and the listed company's immediate holding company which is listed.

(b) 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 listed company or its subsidiaries.

(c) provision of financial assistance in respect of the business of :-

(i) leasing, factoring or hire purchase carried out by a listed company or its unlisted subsidiaries; or

(ii) share financing or share margin financing carried out by a listed company or its unlisted subsidiaries which is a member company; or

(iii) such other similar business that may be determined by the KLSE.

Where the Company has procured shareholders' mandate pursuant to Paragraph 10.09(1) of the Listing Requirements, the provisions of Paragraph 10.08 of the Listing Requirements shall not apply.

B. Proposed Shareholders' Mandate for Recurrent Related Party Transactions and General Mandate for Provision of Financial Assistance

The principal activities of the Company are construction of civil and building works. Its subsidiaries are principally involved in the provision of mechanical, electrical and engineering works; renting of machinery and site equipment; management and renting of properties; prefabricated construction of building and civil works; property development; project management; and manufacturing and sale of precast concrete building components.

The Board is seeking approval from the shareholders for a RRPT Mandate which will allow the Company and/or its subsidiaries, in their normal course of business, to enter into the categories of Recurrent Related Party Transactions referred to in paragraph 2D below with the classes of Related Parties as set out in paragraph 2C below provided that such transactions of a revenue or trading nature which are necessary for the Group’s day-to-day operations are made at arm’s length on the Suncon Group’s normal commercial terms and on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders of the Company.

The Board is also seeking approval from the shareholders for a general mandate for the provision of financial assistance pursuant to Paragraph 5.0 of PN14 to the classes of Related Parties as set out in paragraph 2C below.

4 The Proposals will, if approved by the shareholders at the AGM, apply in respect of Recurrent Related Party Transactions entered or to be entered into as stipulated in paragraph 2D below and shall take effect from and including 24 June 2003, being the date of the forthcoming AGM, and shall continue to be in force until:-

(a) the conclusion of the next AGM of the Company at which time the Mandate will lapse, unless by a resolution passed at the next AGM, the Mandate is renewed; or

(b) the expiration of the period within which the next AGM of the Company 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

(c) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier.

Thereafter, approval from shareholders for a renewal of the Mandate will be sought at each subsequent AGM of the Company.

C. Classes of Related Parties

The Proposals will apply to the following classes of Related Parties:-

Mandated Related Parties Principal Activities

(i) Suncity Group Investment holding; property development and investment; rendering recreational club facilities; operation of hotels, theme park, travel, tour business and related activities; operation of a medical centre; and management and letting of property.

(ii) Suninc Group Investment holding and provision of management services; construction of building and civil works; manufacturing and sale of ready-mixed concrete; quarrying; property and housing development; property investment and management; general trading; marketing, manufacturing and sale of vitrified clay pipes and other similar clay products; trading of construction related products; provision of lease and hire purchase financing; provision of insurance underwriting and consultancy services; provision of share registration and secretarial services; management and letting of properties; hotel business; import, export and wholesale of building materials, heavy equipment and industrial hardware; car park management; constructing, maintaining, contracting, transportation, irrigation and construction projects; production of natural rubber and cultivation of oil palm; distribution of architectural building products, interior decorations and related services; manufacturing and sales of concrete blocks and pavers; manufacturing of precast

Mandated Related Parties Principal Activities

5 concrete building components and undertaking of precast concrete building contracts; production of concrete pipes; manufacturing and sales of precast micro injection piles and reinforced concrete piles, undertaking of piling contracts and hire of heavy machineries; design, manufacturing, supply and installation of concrete based foundation and other concrete products.

(iii) Sunway Infrastructure Investment holding and toll road concession. Group

(iv) Sunway College Group Provision of educational related products and services.

(v) Sungei Way Enterprise Trading and hiring of heavy machinery and spare parts. (1988) Sdn Bhd

(vi) Sunway Technology Group Investment holding; trading in computers and related components; and provision of training and consultancy services.

(vii) Sunway Hydraulic Industries Manufacturing of couplings and assembly of hydraulic Sdn Bhd hoses.

(viii) Adasia (M) Sdn Bhd Advertising consultants and agents.

(ix) Asian Strategy & Leadership Providing consultancy, organizing and conducting Incorporated Sdn Bhd conferences and seminars.

(collectively called the “Mandated Related Parties”)

Relationships with the above Mandated Related Parties

(i) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling who is a Director and Major Shareholder of Suncity, is also a Director and has direct as well as deemed interests in Suncon via Suninc. Puan Sri Datin Seri Susan Cheah Seok Cheng, the spouse of Tan Sri Dato’ Seri (Dr) Cheah Fook Ling is a Director of Sunway Lagoon Club Berhad, a 84% owned subsidiary of Suncity and a shareholder of Suncity. Sarena Cheah Yean Tih, the child of Tan Sri Dato’ Seri (Dr) Cheah Fook Ling who is a Director of Sunway Lagoon Club Berhad, a 84% owned subsidiary of Suncity and a shareholder of Suncity, has direct and deemed interests in Suncon by virtue of her parent’s direct and deemed interests in Suncon.

(ii) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling is a Director and Major Shareholder of Suncon and Suninc. Dato’ Chew Chee Kin and Dato’ Tan Kia Loke are Directors with direct interests in Suncon and Suninc. Puan Sri Datin Seri Susan Cheah Seok Cheng is a Director of Sunway Management Sdn Bhd, a wholly-owned subsidiary of Suninc and a shareholder of Suninc. Sarena Cheah Yean Tih has direct and deemed interests in Suncon by virtue of her parent’s direct and deemed interests in Suncon.

6 (iii) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling and Dato’ Tan Kia Loke are Directors of Suncon and Sunway Infrastructure Group. Dato’ Tan Kia Loke is a shareholder of Suncon. Tan Sri Dato’ Seri (Dr) Cheah Fook Ling who is a Major Shareholder of Suncon, has deemed interest in Sunway Infrastructure Berhad via a corporation where he has more than 15% shareholding.

(iv) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Dato’ Chew Chee Kin and Tan Sri Dato’ (Dr) R V Navaratnam are Directors of Suncon and Sunway College Group. Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway College Sdn Bhd via Sunway College Trust. Puan Sri Datin Seri Susan Cheah Seok Cheng is a Director of Sunway College Group and has deemed interest in Sunway College Sdn Bhd by virtue of her spouse’s deemed interest in Sunway College Sdn Bhd.

(v) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd via corporations where he has more than 15% shareholding. Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Sungei Way Enterprise (1988) Sdn Bhd. Sarena Cheah Yean Tih has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sungei Way Enterprise (1988) Sdn Bhd.

(vi) Puan Sri Datin Seri Susan Cheah Seok Cheng and Sarena Cheah Yean Tih are Directors of Sunway Technology Group. Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway Technology Sdn Bhd via corporations where he has more than 15% shareholding. Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Sunway Technology Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Sunway Technology Sdn Bhd. Sarena Cheah Yean Tih has deemed interest in Sunway Technology Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sunway Technology Sdn Bhd.

(vii) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway Hydraulic Industries Sdn Bhd via a corporation where he has more than 15% shareholding. Sarena Cheah Yean Tih has deemed interest in Sunway Hydraulic Industries Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sunway Hydraulic Industries Sdn Bhd.

(viii) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Adasia (M) Sdn Bhd via corporations where he has more than 15% shareholding. Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Adasia (M) Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Adasia (M) Sdn Bhd. Sarena Cheah Yean Tih is a Director and has deemed interest in Adasia (M) Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Adasia (M) Sdn Bhd.

(ix) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Dato’ Chew Chee Kin and Tan Sri Dato’ (Dr) R V Navaratnam are Directors of Suncon and Asian Strategy & Leadership Incorporated Sdn Bhd. Tan Sri Dato’ Seri (Dr) Cheah Fook Ling is a Major Shareholder of Asian Strategy & Leadership Incorporated Sdn Bhd. Puan Sri Datin Seri Susan Cheah Seok Cheng is a Director and has deemed interest in Asian Strategy & Leadership Incorporated Sdn Bhd by virtue of her deemed interest as well as her spouse’s direct and deemed interests in Asian Strategy & Leadership Incorporated Sdn Bhd.

7 The number of shares and percentage of shareholdings held by the Related Parties in the Mandated Related Parties as at 20 May 2003 are as follows:- Sunway Suncity Suninc Infrastructure Berhad

Name Direct Deemed Direct Deemed Deemed

Tan Sri Dato’ Seri (Dr) Cheah 10,823,251 152,177,017 4,192,094 186,937,577 60,000,002 Fook Ling [2.70%] [38.03%] [1.04%] [46.16%] [50%] (a1) (a2) (a3)

Puan Sri Datin Seri Susan 10,000 162,990,268 1,332,284 189,797,387 - Cheah Seok [0.003%] [40.73%] [0.33%] [46.87%] Cheng (b1) (b2)

Sarena Cheah Yean Tih 10,000 162,990,268 - - - [0.003%] [40.73%] (c)

Dato’ Chew Chee Kin - - 120,000 - - [0.03%]

The number of unexercised options held by the Related Parties pursuant to Suninc’s Employees’ Share Option Scheme as at 20 May 2003 are as follows:-

Name Direct %

Tan Sri Dato’ Seri (Dr) Cheah Fook Ling 2,500,000 0.62

Puan Sri Datin Seri Susan Cheah Seok Cheng 1,000,000 0.25

Dato’ Chew Chee Kin 1,000,000 0.25

Dato’ Tan Kia Loke 1,000,000 0.25

Sarena Cheah Yean Tih 450,000 0.11

The number of Warrants held by the Related Parties in Suninc as at 20 May 2003 are as follows:-

Name Direct % Deemed %

Tan Sri Dato’ Seri (Dr) Cheah Fook Ling 314,274 0.74 26,256,782 a 61.84

Puan Sri Datin Seri Susan Cheah Seok Cheng 54,905 0.13 26,516,151 b 62.45

Notes: a Deemed interest through Active Equity Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Sungei Way Corporation Sdn Bhd and spouse. b Deemed interest through the warrant holding of her spouse.

Sunway Sungei Way Sunway Sunway Hydraulic

8 College Enterprise Technology Industries Sdn Bhd (1988) Sdn Bhd Sdn Bhd Sdn Bhd

Name Deemed Deemed Deemed Deemed

Tan Sri Dato’ Seri (Dr) 2,940,000 4,037,500 1,495,002 525,001 Cheah Fook Ling [70%] [100%] [46%] [35%] (d1) (d2) (d3) (d4)

Puan Sri Datin Seri 2,940,000 4,037,500 1,495,002 - Susan Cheah Seok Cheng [70%] [100%] [46%] (e1) (e2) (e3)

Sarena Cheah Yean Tih - 4,037,500 1,495,002 525,001 [100%] [46%] [35%] (f1) (f2) (f3)

Adasia (M) Asian Strategy & Leadership Sdn Bhd Incorporated Sdn Bhd

Name Deemed Direct Deemed

Tan Sri Dato’ Seri (Dr) Cheah Fook Ling 350,000 69,200 549,900 [100%] [9.89%] [78.56%] (g1) (g2)

Puan Sri Datin Seri Susan Cheah Seok Cheng 350,000 - 619,100 [100%] [88.44%] (h1) (h2)

Sarena Cheah Yean Tih 350,000 - - [100%] (i)

Notes: (a1) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Suncity via Active Equity Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Sungei Menderang Sdn Bhd, Progressive Traders Sendirian Berhad, Sungei Jaya Sdn Bhd, Active Builder Sdn Bhd, Perusahaan Menderang Sdn Bhd, Perusahaan Saladin Sdn Bhd, JSSE Corporation Sdn Bhd, Perusahaan Dunia Sdn Bhd, Jef-San Enterprise Sdn Bhd, Sungei Way Corporation Sdn Bhd, Timah Sini-Sana Sdn Bhd, spouse and child.

(a2) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Suninc via Active Equity Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Sungei Way Corporation Sdn Bhd and spouse.

(a3) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway Infrastructure Berhad via a corporation where he has more than 15% shareholding.

(b1) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Suncity by virtue of her spouse’s direct and deemed interests in Suncity.

(b2) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Suninc by virtue of her spouse’s direct and deemed interests in Suninc.

(c) Sarena Cheah Yean Tih has deemed interest in Suncity by virtue of her parent’s direct and deemed interests in Suncity. 9 (d1) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway College Sdn Bhd via Sunway College Trust.

(d2) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd via corporations where he has more than 15% shareholding.

(d3) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway Technology Sdn Bhd via corporations where he has more than 15% shareholding.

(d4) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Sunway Hydraulic Industries Sdn Bhd via a corporation where he has more than 15% shareholding.

(e1) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Sunway College Sdn Bhd by virtue of her spouse’s deemed interest in Sunway College Sdn Bhd.

(e2) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Sungei Way Enterprise (1988) Sdn Bhd.

(e3) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Sunway Technology Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Sunway Technology Sdn Bhd.

(f1) Sarena Cheah Yean Tih has deemed interest in Sungei Way Enterprise (1988) Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sungei Way Enterprise (1988) Sdn Bhd.

(f2) Sarena Cheah Yean Tih has deemed interest in Sunway Technology Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sunway Technology Sdn Bhd.

(f3) Sarena Cheah Yean Tih has deemed interest in Sunway Hydraulic Industries Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Sunway Hydraulic Industries Sdn Bhd.

(g1) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Adasia (M) Sdn Bhd via corporations where he has more than 15% shareholding.

(g2) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling has deemed interest in Asian Strategy & Leadership Incorporated Sdn Bhd via corporations where he has more than 15% shareholding.

(h1) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Adasia (M) Sdn Bhd by virtue of her deemed interest as well as her spouse’s deemed interest in Adasia (M) Sdn Bhd.

(h2) Puan Sri Datin Seri Susan Cheah Seok Cheng has deemed interest in Asian Strategy & Leadership Incorporated Sdn Bhd by virtue of her deemed interest as well as her spouse’s direct and deemed interests in Asian Strategy & Leadership Incorporated Sdn Bhd.

(i) Sarena Cheah Yean Tih has deemed interest in Adasia (M) Sdn Bhd by virtue of her deemed interest as well as her parent’s deemed interest in Adasia (M) Sdn Bhd.

D. Nature of Recurrent Related Party Transactions and Estimated Values

The Recurrent Related Party Transactions which will be covered by the RRPT Mandate are the transactions of a revenue or trading nature which are necessary for the day-to-day operations of the Suncon Group as follows:-

Nature of transactions Estimated Estimated Classes of Value for Value for Rel Products/Services Purchases Sales ate during the during the d validity validity 10 Par period of period of ties the the Mandate Mandate RM RM (i) Suncity Group - Construction contract revenue - # ie. provision of construction works. - Provision of construction works - # as a turnkey contractor in the joint development of land on a profit-sharing basis. - Procurement of project # - management services for the development of land owned by Suncon Group or its joint venture companies on a profit- sharing basis. - Travel and tour services. 600,000 - - Medical related services. 400,000 - - Hotel, hospitality and 400,000 - subscription fees. - Rental of office premises.(a) 600,000 -

(ii) Suninc Group - Construction contract revenue - # ie. provision of construction works. - Raw materials. # - - Insurance products. # - - Rental of plant and # # machineries. 150,000 - - Management services. 100,000 - - Share registration/secretarial services. - (b) 1,500,000 - Rental of office premises. - 5,000,000 - Sale of developed properties.

(iii) Sunway - Construction of highways, roads - # Infr and tolls including astr infrastructure work. uct - Highway maintenance and - # ure related services. Gro - Mechanical engineering and - # up related services.

(iv) Sunway College - Construction contract revenue - # Group ie. provision of construction works. - Education and training services. 100,000 - Nature of transactions Estimated Estimated Classes of Value for Value for Rel Products/Services Purchases Sales ate during the during the d validity validity Par period of period of 11 ties the the Mandate Mandate RM RM (v) Sungei Way - Rental and purchase of spare 3,500,000 - Enterprise (1988) parts and heavy machinery. Sdn Bhd

(vi) Sunway - Software support, maintenance 1,500,000 - Technology Group and consultancy services for IT software and hardware.

(vii) Sunway Hydraulic - Spare parts eg. hose assy, 200,000 - Industries Sdn Bhd hydraulic hose, pick hammer, Furukawa breaker, etc.

(viii) Adasia (M) Sdn - Advertising and related 200,000 - Bhd services.

(ix) Asian Strategy & - Participation in conference, 50,000 - Leadership events and seminar related Incorporated Sdn activities. Bhd

Notes: # The estimated value of transactions cannot be determined as the transactions are on project-by- project basis.

The address/location of the office premises rented are as follows:- (a) Lot 656, Jalan Subang 2, Off Persiaran Subang, 47500 Petaling Jaya, Selangor Darul Ehsan. (b) Levels 7-9, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan and No. 55, Cairnhill Road, #30-06 Cairnhill Plaza, Singapore 229666.

The tenures of the office premises are of varying lengths but are for a lease period of not more than 3 years. The rental is paid on a monthly basis.

In addition, the Company wishes to seek approval from its shareholders for a general mandate for the provision of financial assistance pursuant to PN14 to the following Mandated Related Party:- Classes of Provision of Financial Assistance Estimated Value Rel during the validity ate period of the d Mandate Par RM ties (i) Suninc Group Pooling of funds via a centralized 15,000,000 treasury management function or such similar arrangements on a short or medium term basis (ie. for a duration not exceeding 3 years).

E. Rationale for, and the benefit to, the Group for transacting with Mandated Related Parties

The Suncon Group has a long-standing business relationship with the Mandated Related Parties. Over the years, the Mandated Related Parties have proven to be good customers of the Suncon 12 Group as well as reliable suppliers of raw materials, goods and services required by the Suncon Group for its businesses. The raw materials, goods and services provided by as well as sales to the Mandated Related Parties are priced competitively and all transactions between the Suncon Group and the Mandated Related Parties are carried out on an arm’s length basis and on terms not more favourable to the Related Parties than those generally available to the public. The raw materials, goods and services can be obtained from the Mandated Related Parties even when short notice is given to them, in order to meet the tight orders of the Group’s customers. The Group can also obtain various products, which are out of the product range of the Group, from the Mandated Related Parties, to meet the orders of its customers.

In this regard, Suncon would like to seek its shareholders’ approval for the RRPT Mandate as the close co-operation between the Suncon Group and the Mandated Related Parties has reaped mutual benefits.

The RRPT Mandate is intended to facilitate transactions in the normal course of business of the Suncon Group which are transacted from time to time with the Mandated Related Parties, provided that they are carried out at arm's length and on the Suncon Group's normal commercial terms and are not prejudicial to its shareholders and on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders.

The procurement of a general mandate for the provision of financial assistance would facilitate the pooling of funds within the Suncon Group and to Suncon’s immediate holding listed company, Suninc and/or Suninc’s subsidiaries, via a centralized treasury management function or such similar arrangements on a short or medium term basis. The “short or medium term basis” shall mean for a duration not exceeding 3 years.

The procurement of the RRPT Mandate and a general mandate for the provision of financial assistance on an annual basis would eliminate the need to convene separate general meetings from time to time to seek shareholders' approval as and when potential Recurrent Related Party Transactions with the Mandated Related Parties arise, thereby substantially reducing administrative time and expenses in convening such meetings, without compromising the corporate objectives and business opportunities available to the Suncon Group.

Disclosure will be made in the annual report of the Company of the aggregate value of Recurrent Related Party Transactions conducted pursuant to the RRPT Mandate during the financial year, and in the annual reports for the subsequent financial years during which a shareholders' mandate is in force. In making the disclosure, the Company must provide a breakdown of the aggregate value of the Recurrent Related Party Transactions made during the financial year, amongst others, based on the following information:-

(a) the type of Recurrent Related Party Transactions made; and

(b) the names of the Related Parties involved in each type of the Recurrent Related Party Transactions made and their relationship with the Company.

F. Review Methods or Procedures for Recurrent Related Party Transactions

There are procedures established by the Suncon Group to ensure that Recurrent Related Party Transactions are undertaken on an arm’s length basis and on the Suncon Group’s normal commercial terms and on terms not more favourable to the Mandated Related Parties than those generally available to the public. The terms are consistent with the Suncon Group’s usual business practices and policies, which are generally no more favourable to the Mandated Related 13 Parties than those extended to unrelated third parties and are not to the detriment of the minority shareholders.

The Suncon Group’s review methods and procedures governing Recurrent Related Party Transactions are as follows:-

(i) For the supply of general goods and services, a minimum of 3 quotations, where applicable, shall be obtained every year. These quotations shall be reviewed in respect of pricing, quality and service level by a team comprising different functional management staff;

(ii) For the award of construction contracts, the management shall approve an internal budget to form the basis for comparison with tenders received. Tenders are invited for all projects and they are evaluated based on pricing as well as technical and financial capabilities of the tenderers. The whole process of tendering, evaluation and selection of tenderer is reviewed and approved by a Management Tender Committee;

(iii) For the award of contracts on a turnkey basis, an independent cost consultant(s)/quantity surveyor(s) will be appointed to review the cost in order to ensure that the contracts are undertaken on normal commercial terms;

(iv) For the provision of financial assistance in respect of the pooling of funds via a centralized treasury management function or such similar arrangements for a duration not exceeding 3 years, an interest rate of 5% per annum will be charged on the total amount of financial assistance provided;

(v) A fee of 0.25% will be charged to Suncon on the total amount of corporate guarantees provided by Suninc to or in favour of third parties as security for the due performance of the Suncon Group in respect of contracts secured from the public and private sectors;

(vi) A list of Mandated Related Parties has been circulated to the Company’s subsidiaries to notify that all Recurrent Related Party Transactions are required to be undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the Related Parties than those generally available to the public;

(vii) Records are maintained by the Company to capture all Recurrent Related Party Transactions which are entered into pursuant to this Mandate;

(viii) All Recurrent Related Party Transactions with value equal to or exceeding RM1 million per transaction are reviewed and approved by a committee to ensure compliance with the Listing Requirements on Recurrent Related Party Transactions;

(ix) Where any person(s) has an interest in the transactions to be reviewed, such person(s) shall abstain from deliberation and decision making in respect of that transaction;

(x) The annual internal audit plan shall incorporate a review of Recurrent Related Party Transactions entered into pursuant to the Mandate to ensure that the relevant approvals have been obtained and the review procedures in respect of such transactions are adhered to;

(xi) The Board and the Audit Committee shall review the internal audit report to ascertain that the procedures established to monitor Recurrent Related Party Transactions have been complied with and the review shall be done at every quarter together with the review of quarterly results; and

14 (xii) The Board and the Audit Committee have reviewed and shall continue to review the adequacy and appropriateness of the procedures as and when required, with the authority to sub-delegate to individuals or committees within the Company as they deem appropriate.

G. Audit Committee's Statements

With the support and assistance from the Group Internal Audit and the management, the Audit Committee will review the relevant Recurrent Related Party Transactions and also review the established procedures as stated in paragraph 2F above to ascertain that they have been complied with. Further, if during these periodic reviews by the Audit Committee, the Audit Committee is of the view that the procedures as stated above are not sufficient to ensure that the Recurrent Related Party Transactions will be on the Suncon Group's normal commercial terms and on terms not more favourable to the classes of Related Parties than those generally available to the public and will be prejudicial to the shareholders, the Company will revert immediately to its shareholders for a fresh mandate based on new or additional procedures, and in any case before the next transaction is entered into.

The Audit Committee, comprising Chong Kok Keong (Chairman), Datuk Abdul Malek bin Abdul Aziz and Datuk Low Seng Kuan, who are independent non-executive directors and Kwan Foh Kwai, has reviewed the procedures mentioned in paragraph 2F above and is satisfied that the said procedures are sufficient to ensure that the Recurrent Related Party Transactions will be made with the relevant classes of Related Parties in accordance with the Suncon Group's normal commercial terms and on terms not more favourable to the Related Parties than those generally available to the public, and hence, not prejudicial to the shareholders, nor disadvantageous to the Company and/or its subsidiaries and are not to the detriment of the minority shareholders.

3. INTERESTS OF DIRECTORS AND MAJOR SHAREHOLDERS

As at 20 May 2003, the direct and indirect/deemed interests of the interested Directors, Major Shareholders and Person Connected with a Major Shareholder of Suncon are as follows:-

No. of unexercised No. of Ordinary Shares of RM1.00 each Options

Directors Direct % Deemed % Direct Indirect Tan Sri Dato’ Seri (Dr) 10,000 0.01 *112,972,000 62.69 - - Cheah Fook Ling Tan Sri Dato’ (Dr) R V 5,000 0.003 - - 80,000 - Navaratnam Dato’ Chew Chee Kin 10,000 0.01 - - - - Dato’ Tan Kia Loke 10,000 0.01 - - - -

Note: * Deemed interest via Active Equity Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Sungei Way Corporation Sdn Bhd, Suninc and child.

No. of Ordinary Shares of RM1.00 each Major Shareholders Direct % Deemed % Tan Sri Dato’ Seri (Dr) Cheah Fook Ling 10,000 0.01 112,972,000 62.69 #1 Suninc 112,967,000 62.68 - - Sungei Way Corporation Sdn Bhd - - 112,967,000 62.68 #2

15 Timah Dunia Dredging Sdn Bhd - - 112,967,000 62.68 #3 Active Equity Sdn Bhd - - 112,967,000 62.68 #4

Notes: #1 Deemed interest via Active Equity Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Sungei Way Corporation Sdn Bhd, Suninc and child. #2 Deemed interest via Suninc. #3 Deemed interest via Sungei Way Corporation Sdn Bhd and Suninc. #4 Deemed interest via Timah Dunia Dredging Sdn Bhd, Sungei Way Corporation Sdn Bhd and Suninc.

No. of Ordinary Shares of RM1.00 each Person Connected with Tan Sri Dato’ Seri Direct % Deemed % (Dr) Cheah Fook Ling Sarena Cheah Yean Tih 5,000 0.003 112,977,000 ^ 62.69

Note: ^ Deemed interest via her parent’s direct and deemed interests in Suncon.

Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Tan Sri Dato’ (Dr) R V Navaratnam, Dato’ Chew Chee Kin and Dato’ Tan Kia Loke are Directors of Suncon while Suninc, Sungei Way Corporation Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Active Equity Sdn Bhd and Tan Sri Dato’ Seri (Dr) Cheah Fook Ling are Major Shareholders of Suncon. Puan Sri Datin Seri Susan Cheah Seok Cheng and Sarena Cheah Yean Tih are Persons Connected with Tan Sri Dato’ Seri (Dr) Cheah Fook Ling. They are deemed interested in the Proposals due to the following:-

(a) Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Tan Sri Dato’ (Dr) R V Navaratnam, Dato’ Chew Chee Kin, Dato’ Tan Kia Loke, Puan Sri Datin Seri Susan Cheah Seok Cheng and Sarena Cheah Yean Tih are also Directors and/or Major Shareholders of the Mandated Related Parties as stated in paragraph 2C under “Relationships with the above Mandated Related Parties”.

(b) Suninc has major shareholding of 62.68% in Suncon while Sungei Way Corporation Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Active Equity Sdn Bhd and Tan Sri Dato’ Seri (Dr) Cheah Fook Ling have deemed interests in Suncon via Suninc.

The Directors namely Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Tan Sri Dato’ (Dr) R V Navaratnam, Dato’ Chew Chee Kin and Dato’ Tan Kia Loke are deemed interested in the RRPT Mandate whilst Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Dato’ Chew Chee Kin and Dato’ Tan Kia Loke are deemed interested in the general mandate for the provision of financial assistance. Accordingly, they have abstained and will continue to abstain from Board deliberations and voting on the Proposals in respect of their direct and/or indirect shareholdings in Suncon at the AGM to be convened.

The interested Major Shareholders namely Suninc, Sungei Way Corporation Sdn Bhd, Timah Dunia Dredging Sdn Bhd, Active Equity Sdn Bhd and Tan Sri Dato’ Seri (Dr) Cheah Fook Ling as well as Puan Sri Datin Seri Susan Cheah Seok Cheng and Sarena Cheah Yean Tih, being Persons Connected with Tan Sri Dato’ Seri (Dr) Cheah Fook Ling will abstain from voting on the Proposals in respect of their direct and/or indirect shareholdings in Suncon at the AGM to be convened.

In addition, the interested Directors and Major Shareholders also undertake to ensure that Persons Connected with them will abstain from voting on the resolution in respect of their direct and/or indirect shareholdings in Suncon at the AGM.

16 Save as disclosed above, none of the other Directors and/or Major Shareholders of Suncon or Persons Connected with them has any interest, directly or indirectly in the Proposals.

4. CONDITION OF THE PROPOSALS

The Proposals are conditional upon the approval of the shareholders of Suncon being obtained at the forthcoming AGM.

5. DIRECTORS' RECOMMENDATION

The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company and accordingly, the Directors (save and except for Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Tan Sri Dato’ (Dr) R V Navaratnam, Dato’ Chew Chee Kin and Dato’ Tan Kia Loke who are deemed interested in the Proposals) recommend that you vote in favour of the resolution pertaining to the Proposals to be tabled at the forthcoming AGM.

6. AGM

The AGM, the notice of which is set out in the Company’s 2002 Annual Report and an extract of which in relation to the Proposals is also enclosed in this Circular, will be held at Bahamas 1 & 2, Level 12, Sunway Lagoon Resort Hotel, Persiaran Lagoon, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 24 June 2003 at 3.30 p.m. for the purpose of considering and, if thought fit, passing the resolution to give effect to the Proposals pursuant to the agenda of Special Business as detailed in the Company’s 2002 Annual Report.

A Proxy Form is enclosed in the Company’s 2002 Annual Report which you are urged to complete and deposit at the Registered Office of the Company at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the time set for the AGM or any adjournment thereof. The lodging of the Proxy Form will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so.

7. FURTHER INFORMATION

Shareholders are requested to refer to the attached Appendix I contained in this Circular for further information.

Yours faithfully For and on behalf of the Board of SUNWAY CONSTRUCTION BERHAD

Datuk Abdul Malek bin Abdul Aziz Senior Independent Non-Executive Director

17 APPENDIX I

FURTHER INFORMATION

1. DIRECTORS' RESPONSIBILITY

This Circular has been seen and approved by the Directors of Suncon and they individually and collectively accept full responsibility for the accuracy of the information given in this Circular and confirm that after having made all reasonable inquiries, and to the best of their knowledge and belief, there are no material facts, the omission of which would make any statement herein misleading.

2. MATERIAL CONTRACTS

Save as disclosed below, there are no material contracts (not being contracts entered into in the ordinary course of business) entered into by Suncon and/or its subsidiaries within the past two (2) years preceding 20 May 2003 (being the latest practicable date prior to the printing of this Circular):

(i) Restructuring Agreement dated 13 May 2002 between Suncon, Suntech, Suninc, Dolomite Berhad, Mr Lim Beng Keat and Mr Huang Jen Soong to effect a proposed corporate restructuring scheme to be undertaken by the Suntech Group.

(ii) Supplemental Restructuring Agreement dated 27 June 2002 between Suntech, Suncon, Suninc, Dolomite Berhad, Mr Lim Beng Keat and Mr Huang Jen Soong as a supplement to the Restructuring Agreement dated 13 May 2002.

(iii) Sale and Purchase Agreement dated 27 June 2002 between Suntech, Sun-Block PMI Sdn Bhd (“Sun-Block PMI”) and Suncon for and in relation to the proposed disposal of Sunway Machineries Services Sdn Bhd (“SMSB”) by Sun-Block PMI and the transfer of the liabilities of Suntech to Suncon for a cash consideration of RM1.00 as part of the proposed corporate restructuring scheme to be undertaken by the Suntech Group (“Proposed Acquisition of SMSB and Transfer of Suntech Liabilities”).

(iv) Collateral Agreement dated 27 June 2002 between Suninc and Suncon whereby Suninc has undertaken with Suncon certain obligations in relation to the financial position of inter-alia, SMSB on the completion of the Proposed Acquisition of SMSB and Transfer of Suntech Liabilities.

(v) Sale and Purchase Agreement dated 31 July 2002 between Sunway Concrete Products (S) Pte Ltd and Sunway Asphalt & Readymix (S) Pte Ltd (“SAR”) for the purpose of selling the readymix business together with the assets and rights in relation to the readymix business to SAR at a total consideration of RM4,727,000.

(vi) Share Sale Agreement dated 2 August 2002 between Sunway Marketing Sendirian Berhad and Suncon to acquire the entire interest of two (2) Shares in Sunway Industrial Products Sdn Bhd for a total cash consideration of RM220,383.

18 (vii) Forward Sale Agreement dated 11 September 2002 between Suncon and Standard Bank Asia Limited (“SBA”) for the purchase by SBA a portion of the USD54,832,248.25 Variable Rate Bonds (“Bonds”) issued by Suninc in December 1996 up to a maximum cash outlay of USD20 million and the subsequent purchase of the Bonds by Suncon from SBA at the end of twelve (12) months from the date of SBA’s purchase of the Bonds.

(viii) Letter of Agreement dated 11 September 2002 between Suninc and Suncon in relation to the proposed offer to buy-back any Bonds so acquired by Suncon from SBA at 95% of the outstanding principal amount of the Bonds.

(ix) Supplemental Collateral Agreement dated 24 September 2002 between Suncon and Suninc in relation to the Collateral Agreement dated 27 June 2002 to bring forward the cut-off date of debts undertaken by Suninc to be collectible to 31 July 2002.

(x) Further Supplemental Restructuring Agreement dated 14 April 2003 between Suncon, Suninc, Suntech, Mr Huang Jen Soong, Mr Lim Beng Keat and Dolomite Berhad as a further supplement to the Restructuring Agreement dated 13 May 2002 and the Supplemental Restructuring Agreement dated 27 June 2002.

Sunway Industrial Products Sdn Bhd

(i) Sale and Purchase Agreement dated 2 January 2002 between Sunway Industrial Products Sdn Bhd and Sunway Juarasama Sdn Bhd to acquire the entire interest of 5,000,000 Shares in Sunway Concrete Products (S) Pte Ltd for a total cash consideration of RM4,727,000.

3. MATERIAL LITIGATION

Save as disclosed below, neither Suncon nor any of its subsidiaries is engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Directors of Suncon do not have any knowledge of any proceedings, pending or threatened, against Suncon and/or its subsidiaries or of any facts likely to give rise to any proceedings which may materially affect the financial position or business of Suncon and/or its subsidiaries:

Suncon Vs Atlas Corporation Sdn Bhd (“Atlas”) and Malaysia Building Society Berhad (“MBSB”)

An action has been brought by Suncon against Atlas and MBSB under Kuala Lumpur High Court Originating Summons No. S2-24-4345-2001 in respect of works performed and completed under the project known as “Cadangan Membina Bangunan Pejabat Mengandungi Blok A-20 Tingkat, Blok B-19 Tingkat, Blok C-18 Tingkat, Blok D dan E-17 Tingkat dan Blok F-30 Tingkat dengan 3 Paras Tempat Letak Kereta Bawah Tanah di atas Lot 2508 hingga 2511, 4096 dan 4099, Lebuhraya Persekutuan, Mukim Kuala Lumpur” (“the Project”) wherein Altas was the main developer of the Project and Suncon the main contractor thereto. As at the date of filing of the suit on 20 November 2001, there remained an outstanding amount of certified debts of RM18,331,230.77 which was due and payable by Atlas to Suncon. Additionally there also existed works which had been completed by Suncon on the Project which had not yet been certified by Atlas, the amount of which had been estimated at RM10,406,292.90 (hereinafter referred to as “the Uncertified Works”). Despite numerous demands and/or requests by Suncon for the payment of the Certified Debts and for the certification of the Uncertified Works, Atlas had nevertheless failed, neglected and/or refused to do so. On or about 2 November 2001, Atlas proceeded to unlawfully, unjustifiably and forcefully evict Suncon from the Project site and thereafter proceeded to totally bar Suncon from entering the

19 Project site. To protect their rights and interests in the matter, Suncon initiated the above suit seeking various declarations from the court, inter-alia, that Suncon should still be allowed access to the Project site as the main contractor of the Project (as Atlas had never formally terminated Suncon’s position as the main contractor) and for the Uncertified Works to be certified by an independent party.

In order to preserve the existing Uncertified Works to enable the same to be properly measured and quantified, Suncon applied and was, on 21 November 2001, allowed an ex-parte interim injunction preventing Atlas and/or MBSB (the chargees of the Project site) from engaging any other contractor to complete the existing Uncertified Works to the adversity and/or detriment of Suncon. Atlas then proceeded to file an application to strike out the ex-parte interim injunction of 2 November 2001 whilst MBSB applied for the suit to be struck out against them. At the inter-partes hearing of the injunction on 10 December 2001, the ex-parte injunction was lifted by consent between Suncon and Atlas on Atlas’ agreement to allow Suncon access to the Project site to carry out the requisite measurements and qualification as well as to allow Suncon to remove its belongings from the Project site. The action was also withdrawn by Suncon against MBSB on the same date.

Despite the ex-parte injunction being lifted by consent on 10 December 2001, Atlas proceeded with the hearing of the application to strike out the ex-parte injunction. This, it has been derived, stems from Atlas’ desire to realise Suncon’s requisite undertaking as to damages as pleaded by Suncon in Suncon’s application for the ex-parte injunction. Atlas’ application was heard in the High Court on 30 September 2002 and was allowed with cost. Suncon has appealed against the decision.

The solicitors for Suncon, Messrs David Lingam & Co have stated and opined that the Judge has erred in the appreciation of the facts of the action as presented by Altas and that Suncon’s chance of success at the stage of appeal remain fair provided that the Court of Appeal carefully and thoroughly studies the evidence presented before it.

4. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal office hours (except public holidays) at the Registered Office of Suncon at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan from the date of this Circular up to the date of AGM:

(a) the Memorandum and Articles of Association of Suncon;

(b) the audited financial statements of Suncon for the past two (2) financial years ended 31 December 2002 and the unaudited quarterly results for the quarter ended 31 March 2003;

(c) the material contracts referred to in paragraph 2 above; and

(d) the relevant cause papers in respect of material litigation referred to in paragraph 3 above.

20 SUNWAY CONSTRUCTION BERHAD (27175-V) (Incorporated in Malaysia)

EXTRACT OF THE NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 26th Annual General Meeting of SUNWAY CONSTRUCTION BERHAD will be held at Bahamas 1 & 2, Level 12, Sunway Lagoon Resort Hotel, Persiaran Lagoon, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 24 June 2003 at 3.30 p.m. for the following purposes:-

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following Ordinary Resolutions:-

6. PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE AND GENERAL MANDATE FOR PROVISION OF FINANCIAL ASSISTANCE

“THAT approval be and is hereby given to the Company and/or its subsidiaries to enter into recurrent related party transactions from time to time, which are necessary for day-to-day operations as set out in the Circular to Shareholders dated 2 June 2003 which are of a revenue or trading nature and in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company, subject to the compliance with the Listing Requirements of the Kuala Lumpur Stock Exchange, Companies Act, 1965 (“the Act”), the Company’s Memorandum and Articles of Association and all other applicable laws, guidelines, rules and regulations.

THAT such authority shall commence upon the passing of this resolution and shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time the mandate will lapse, unless by a resolution passed at the next AGM, the mandate is renewed; or

(b) the expiration of the period within which the next AGM of the Company 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

(c) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier.

THAT authority be and is hereby given to the Directors of the Company to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.” (Resolution 8) By Order Of the Board

PUAN SRI DATIN SERI SUSAN CHEAH SEOK CHENG (MIA 5601) TAN KIM AUN (MAICSA 7002988) Company Secretaries

Petaling Jaya 2 June 2003

NOTES:

1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing, or, if the appointer is a corporation, under its common seal, or the hand of its attorney or duly authorised officer.

3. The instrument appointing a proxy must be deposited at the registered office of the Company at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

Explanatory Notes on Special Business:

2. Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature and General Mandate for Provision Of Financial Assistance

The proposed Ordinary Resolution 8, if passed, will allow the Group to enter into recurrent related party transactions of a revenue or trading nature and in the ordinary course of business which are necessary for day-to- day operations pursuant to Paragraph 10.09(1) of the Kuala Lumpur Stock Exchange Listing Requirements. The details of the proposals are set out in the Circular to Shareholders dated 2 June 2003.