THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
THISIf you CIRCULARare in any doubt IS IMPORTANT as to the course AND of action REQUIRES you should YOUR take, IMMEDIATE you should consult ATTENTION your stockbroker,.. bank manager, solicitor, THISaccountant CIRCULAR or other professionalIS IMPORTANT adviser AND immediately. REQUIRES If you YOUR have soldIMMEDIATE or transferred ATTENTION all your shares. in Boustead Holdings Berhad, IfIfyou youyou should areare inin at any anyonce doubtdoubt hand as asthis toto Circularthethe coursecourse together ofof actionaction with youyou the shouldshouldaccompanying take,take, youyou Proxy shouldshould Form consultconsultto the youryour purchaser, stockbroker,stockbroker, transferee bankbank or manager,manager, the agent solicisolici throughtor,tor, accountantIfwhom you areyou inaffectedor anyother doubt theprofessional saleas to or the transfer adviser course for immediately.of onward action transmissionyou If should you have take, to thesold you purchaser or should transferred orconsult transferee. all youryour stockbroker,shares in Boustead bank manager, Holdings solici Berrhad,tor, youaccountant should orat onceother handprofessional this Circular adviser together immediately. with the If accompanying you have sold Proxyor transferred Form toto allthethe your purchaser,purchaser, shares transfereetransfereein Boustead oror Holdingsthethe agentagent Bethroughthroughrhad, whomyouBursa should youMalaysia affectedat once Securities handthethe salesale this Berhadoror Circular transfertransfer (“Bursa together forfor onwardonward Malaysia”) with transmissiontransmission the accompanying has not toto perused thethe purchaserpurchaser Proxy the FormCircular, oror transferee.transferee.to the except purchaser, in respect transferee of the or new the agentshareholders’ through whommandate you for affected additionalthe saleRecurrent or transfer Related for onwardParty Transactions transmission on to a the limited purchaser review or basistransferee. pursuant to the provisions of Practice Note Bursa18 of theMalaysiaBursa Malaysia’sSecurities MainBerhad Market (“Bursa(“BursaListing Malaysia”)Malaysia”) Requirements, has not prior perused to the the issuance Circular, of theexcept Circular. in respect of the new shareholders’ mandateBursa Malaysia for additional Securities RecurrentBerhad Related (“Bursa Party Malaysia”) Transactions has not on peruseda limited the review Circular, basis exceptpursuant in torespect the provisions of the new of Practiceshareholders’ Note 18mandateBursa of the Malaysia forBursa additional Malaysia’stakes no Recurrent responsibilityMain Market Related forListing Party the contents TransactionsRequirements, of this on Circular,prior a limited to the makes review issuance no basisrepresentation of the pursuant Circular. toas theto its provisions accuracy ofor Practicecompleteness Note 18and of expressly the Bursa disclaims Malaysia’s anyMain liability Market whatsoeverListing Requirements,for any loss howsoever prior to the arising issuance from of theor in Circular. reliance upon the whole or any part of Bursathe contents Malaysia of this takestakes Circular. nono responsibilityresponsibility forfor thethe contentscontents ofof thisthis Circular,Circular, makesmakes nono representationrepresentation asas toto itsits accuracyaccuracy oror completenesscompleteness andBursa expressly Malaysia disclaims takes no anyresponsibility liability whatsoever for the contentsforfor anyany of lossloss this howsoeverhowsoeverCircular, makes arisingarising no fromfrom representation oror inin reliancereliance as to uponupon its accuracy thethe wholewhole or ororcompleteness anyany partpart ofof theandthe contentscontentsexpressly ofof disclaims thisthis Circular.Circular. any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.
(Company No. 3871-H) (Incorporated in Malaysia) (Company No. 3871-H) (Company No. 3871-H) (Incorporated in Malaysia) (Incorporated (Company No. in Malaysia)3871-H) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS CIRCULAR TO SHAREHOLDERS CIRCULARIN RELATION TO SHAREHOLDERS TO THE IN RELATION TO THE IN RELATION TO THE 1. PROPOSED RENEWAL OF THE 2018 SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. PROPOSED RENEWAL OF THE 2018 SHAREHOLDERS’ MANDATEMANDATE FORFOR RECURRENTRECURRENT 1. PROPOSEDRELATED PARTY RENEWAL TRANSACTIONS OF THE 2018 OFSHAREHOLDERS’ A REVENUE OR MANDATETRADING NATURE FOR RECURRENT 2. RELATEDPROPOSED PARTY ADDITIONAL TRANSACTIONS SHAREHOLDERS’ OF A REVENUE MANDATEOR TRADING FOR NATURE RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2. PROPOSED ADDITIONAL SHAREHOLDERS’ MANDATE FOR RECURRENT 2. RELATEDPROPOSED PARTY ADDITIONAL TRANSACTIONS SHAREHOLDERS’ OF A REVENUE MANDATE OR TRADING FOR NATURE RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
The resolutions pertaining to the above Proposals are set out in the Notice of the Company’s Fifty-Seventh Annual General Meeting which is attached in the enclosed Annual Report. The Fifty-Seventh Annual General Meeting is to be held at Mutiara Ballroom, Ground Floor, Royale The resolutions pertaining to the above Proposals are set out in the Notice of the Company’s Fifty-Seventh Annual General Meeting which is TheChulan resolutionsDamansara, pertaining 2 Jalan to PJUthe above 7/3, Mutiara Proposals Damansara, are set out 47810,in the PetalingNotice of Jaya, the Company’sSelangor on Fifty24 April-Seventh 2019Annual. General Meeting which is attached in the enclosed Annual Report. The Fifty-Seventh Annual General Meeting is to be held at Mutiara Ballroom, Ground Floor, Royale attachedThe resolutions in the enclosed pertaining Annual to the Report. above ProposalsThe Fifty- Seventhare set outAnnual in the General Notice Meetingof the Company’sis to be held Fifty at -MutiaraSeventh Ballroom,Annual General Ground Meeting Floor ,which Royale is Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, 47810, Petaling Jaya, Selangor on 24 April 2019. attachedChulanA Proxy Damansara, inForm the enclosedis set 2out Jalan Annual in the PJU AnnualReport. 7/3, Mutiara ReportThe Fifty ofDamansara, -SeventhBousteadAnnual Holdings 47810, General Petaling Berhad Meeting Jaya,for the Selangoris financial to be heldon year24 at AprilendedMutiara 201 31 9Ballroom,December. G201round8. You Floor are ,urged Royale to ChulancompleteDamansara, and deposit 2the Jalan Proxy PJUForm 7/3, at Mutiara the office Damansara, of the Company’s 47810, Share Petaling Registrar, Jaya, SelangorTricor Investoron 24 &April Issuing 201 9House. Services Sdn Bhd, located at A Proxy Form is set out in the Annual Report of Boustead Holdings Berhad for the financial year ended 31 December 2018. You are urged to AUnitProxy 32- 01,Form Level is set 32, out Tower in the A, Annual Vertical Report Business of BousteadSuite, Avenue Holdings 3, Bangsar Berhad South,for the No financial. 8, Jala yearn Kerinchi, ended 3159200 December Kuala Lumpur2018. Youor itsare Customer urged to complete and deposit the Proxy Form at the office of the Company’s Share Registrar, Tricor Investor & Issuing House Services Sdn Bhd, located at AcompleteServiceProxy Centre Formand deposit isat setUn ittheout G -Proxyin3, theGround FormAnnual Floor, at theReport Verticaloffice of ofBoustead P theodium, Company’s HoldingsAvenue Share 3, Berhad Bangsar Registrar, for South, the Tricor financial No. Investor 8, Jalanyear &Kerinchi,ended Issuing 31 House59200December ServicesKuala 201 Lumpur,8 Sdn. You Bhd, noare located laterurged than toat Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or its Customer completeUnitMonday 32-,01, and22 Level Aprildeposit 32,201 the Tower9 atProxy 2.30 A,Form p.m.Vertical atThe the Business return office ofof Suite, thethe completedCompany’s Avenue 3, Proxy ShareBangsar FormRegistrar, South, will NoTricornot. preclude8, InvestorJalan Kyou erinchi,& Issuingfrom 59200attending House Kuala Services and Lumpur voting Sdn in orBhd, personits Customerlocated at the at Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, no later than UnitServicemeeting 32 -Centre 01,should Level atyou Un32, subsequentlyit TowerG-3, Ground A, Vertical wish Floor, to doBusiness Vertical so. Suite,Podium, Avenue Avenue 3, Bangsar3, Bangsar South, South, No No.. 8, Jala8, Jalann Kerinchi, Kerinchi,59200 59200 Kuala Kuala Lumpur Lumpur,or itsno Customerlater than Monday, 22 April 2019 at 2.30 p.m. The return of the completed Proxy Form will not preclude you from attending and voting in person at the ServiceMonday Centre, 22 April at Un 201it 9G-at3, 2.30Ground p.m. Floor, The returnVertical of Ptheodium, completed Avenue Proxy 3, BangsarForm willSouth, not No. preclude 8, Jalan you Kerinchi, from attending 59200 Kuala and voting Lumpur, in personno later at than the meeting should you subsequently wish to do so. meetingMondayLast date ,should22andApril time you for201 subsequently lodging9 at 2.30 the p.m. wish Proxy The to Formdo return so. of the completed : 22ProxyAprilForm 201 9willat 2.not30 precludep.m. you from attending and voting in person at the meetingDate and should time of you the subsequently Fifty-Seventh wish Annual to do General so. Meeting : 24 April 2019 at 2.30 p.m. Last date and time for lodging the Proxy Form : 22 April 2019 at 2.30 p.m. Last date and time for lodging the Proxy Form : 22 April 2019 at 2.30 p.m. Date and time of the Fifty-Seventh Annual General Meeting : 24 April 2019 at 2.30 p.m. DateLast dateand timeand time of the for Fifty lodging-Seventh the Proxy AnnualForm General Meeting :: 2422AprilApril 20120199atat 2.2.3030pp.m..m. Date and time of the Fifty-Seventh Annual General Meeting : 24 April 2019 at 2.30 p.m. This Circular is dated 26 March 2019
This Circular is dated 26 MarchMarch 2019 This Circular is dated 26 March 2019 DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this Circular:-
(Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations.)
“ABB” : Affin Bank Berhad
“Act” : Companies Act 2016 including all amendments made from time to time and any re-enactment thereof
“AGM” : Annual General Meeting
“Balau” : Boustead Balau Sdn Bhd (107809-H), a wholly owned subsidiary of Boustead Properties which involves in property development
“BBM” : Boustead Building Materials Sdn Bhd (349696-W), a wholly owned subsidiary of BHB which involves in marketing and distribution of building materials
“BCurve” : Boustead Curve Sdn Bhd (103320-D), a wholly owned subsidiary of Boustead Properties which involves in property investment
“BHB” or “Company” : Boustead Holdings Berhad (3871-H)
“BHB Group” or “Group” : Boustead Holdings Berhad and its subsidiaries
“BHIC” : Boustead Heavy Industries Corporation Berhad (11106-V), a 65% owned subsidiary of BHB, which is an investment holding company
“BHR” : Boustead Hotels & Resorts Sdn Bhd (147089-A), a wholly owned subsidiary of Boustead Properties which involves in hotel operation
“BNS” : Boustead Naval Shipyard Sdn Bhd (199302-K), a 68.9% owned subsidiary of BHB which involves in construction, repair and maintenance of naval and merchant ships
“Board” : Board of Directors of BHB
“Boustead Plantations” : Boustead Plantations Berhad (1245-M), a 57.4% owned subsidiary of BHB, which is an investment holding company and involves in oil palm plantations business
“BPSB” : Boustead Petroleum Sdn Bhd (40996-P), a 59.8% owned subsidiary of BHB, which is an investment holding company
“Boustead Properties” : Boustead Properties Berhad (84-W), a wholly owned subsidiary of BHB which involves in investment holding, property development, property investment, ownership and operating of hotels and production and supply of chilled water for air conditioning
“Boustead Properties Group” : Boustead Properties and its subsidiaries
“BRSB” : Boustead Realty Sdn Bhd (270648-A), a wholly owned subsidiary of Boustead Properties which involves in property investment
“BTS” : Boustead Travel Services Sdn Bhd (11708-P), a wholly owned subsidiary of BHB which involves in travel agencies and tour operations
1 1 “Bursa Malaysia” : Bursa Malaysia Securities Berhad
“BWQ” : Boustead Weld Quay Sdn Bhd (71504-A), a wholly owned subsidiary of Boustead Properties which involves in renting of property and hotel operation
“CMSA” : Capital Markets and Services Act, 2007, including all amendments made from time to time and any re-enactment thereof
“DEC” : Damansara Entertainment Centre Sdn Bhd (547844-U), a wholly owned subsidiary of Boustead Properties which involves in property investment
“Director” : Shall have the meaning given in Section 2(1) of CMSA and for the purpose of the Proposals includes any person who is or was within the preceding 6 months of the date on which the terms of the transactions were agreed upon, a Director of BHB or any other company which is its subsidiary or holding company; or chief executive officer of BHB, its subsidiary or holding company
“Listing Requirements” : Main Market Listing Requirements of Bursa Malaysia including all amendments made from time to time and any re-enactment thereof
“LPD” : 28 February 2019 being the latest practicable date which shall not be more than 30 days prior to the date of the Circular
“LTAT” : Lembaga Tabung Angkatan Tentera, a statutory body established under the Tabung Angkatan Tentera Act 1973
“Major Shareholder” : A person who has an interest or interests in one or more voting shares in a corporation and the number or aggregate number of those shares, is:-
(a) 10% or more of the total number of voting shares in BHB; or
(b) 5% or more of the total number of voting shares in BHB where such person is the largest shareholder in the company
For the purpose of this definition, “interest” shall have the meaning of “interest in shares” given in Section 8 of the Act
It also includes any person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, a major shareholder (as defined above) of BHB or any other company which is its subsidiary or holding company
“MRini” : Mutiara Rini Sdn Bhd (311297-H), a wholly owned subsidiary of Boustead Properties which involves in property development
“Person Connected ” : Shall be as defined in Chapter 1 of the Listing Requirements
“Pharma” : Pharmaniaga Berhad (467709-M), a 56.1% owned subsidiary of BHB which is an investment holding company
“Proposed Additional : Proposed shareholders’ mandate for the BHB Group to enter into new Shareholders’ Mandate” Recurrent Related Party Transactions (i.e. Recurrent Related Party Transactions not covered in the 2018 Mandate)
“Proposed Renewal of : Proposed renewal of the 2018 Mandate Shareholders’ Mandate”
2 2 “Proposals” : Proposed Renewal of Shareholders’ Mandate and Proposed Additional Shareholders’ Mandate
“Recurrent Related Party A recurrent related party transaction of a revenue or trading nature Transaction” : which is necessary for the day to day operations and is entered into by the Company or its subsidiaries in the ordinary course of business which involves the interest, direct or indirect, of a Related Party
“Related Party” : A Director, Major Shareholder or a Person Connected with such Director or Major Shareholder
“UAC” : UAC Berhad (5149-H), a wholly owned subsidiary of BHB which involves in manufacture of fibre cement products and property investment
“UNIM” : The University of Nottingham in Malaysia Sdn Bhd (473520-K), a 66.41% subsidiary of BHB which involves in operation of a university
“2018 Annual Report” : The annual report of the Company for the financial year ended 31 December 2018
“2018 Mandate” : The shareholders’ mandate obtained on 12 April 2018 for the BHB Group to enter into Recurrent Related Party Transactions
“2019 Mandate” : The shareholders’ mandate to be obtained at the Company’s forthcoming AGM for the BHB Group to enter into Recurrent Related Party Transactions
33
CONTENTS Page
1. INTRODUCTION 5
2. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND 6 PROPOSED ADDITIONAL SHAREHOLDERS’ MANDATE
2.1 Details 6 2.2 Classes of Related Party 6 2.3 Nature of Recurrent Related Party Transactions and Estimated Values 8 2.4 Amount Due and Owing Under Recurrent Related Party Transactions 19 2.5 Review Procedures and Guidelines for Recurrent Related Party Transactions 19 2.6 Statement by Audit Committee 22 2.7 Disclosure 22
3. RATIONALE AND BENEFIT 22
3.1 Rationale of the Proposals 22 3.2 Benefits to the BHB Group from Transacting With the Related Parties 23
4. CONDITION OF THE PROPOSALS 23
5. FINANCIAL EFFECTS OF THE PROPOSALS 23
6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS 23 CONNECTED TO THEM
7. DIRECTORS’ RECOMMENDATION 24
8. AGM 24
9. FURTHER INFORMATION 24
APPENDICES
I. FURTHER INFORMATION 2527
II. ADDRESSES OF PROPERTIES RENTED 3032
4 4 BOUSTEAD HOLDINGS BERHAD (Company No. 3871-H) (Incorporated in Malaysia)
RegisteredRegistered Office:Office:
th 2828th Floor, Menara Boustead 69 Jalan Raja Chulan 5020050200 KualaKuala LumpurLumpur
26 26 MarchMarch 20192019
DIRECTORS: -
Gen. Tan Sri Dato’ Seri Panglima Mohd Ghazali Hj. Che Mat (R) (Chairman) Dato’ Wira (Dr.) Megat Abdul Rahman Megat Ahmad Datuk Azzat Kamaludin Dato’ Sri Ghazali Mohd Ali Datuk Francis Tan Leh Kiah Datuk Zainun Aishah Ahmad Puan Nik Amlizan Mohamed (Appointed on 1 November 2018)
To: The Shareholders of BOUSTEAD HOLDINGS BERHAD
Dear Sir/Madam
BOUSTEAD HOLDINGS BERHAD
(I) PROPOSED RENEWAL OF THE 2018 SHAREHOLDERS’ MANDATEMANDATE FORFOR RECURRENTRECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
(II) PROPOSED ADDITIONAL SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTION OF A REVENUE OR TRADING NATURE
1. INTRODUCTION
At the AGM held on 12 AprilApril 2018,2018, thethe CompanyCompany hadhad obtainedobtained thethe 20182018 MandateMandate toto enterenter intointo Recurrent Related Party Transactions. The 2018 Mandate shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM unless authority for its renewal is obtained from the shareholders of the Company at the AGM.
Accordingly, the Company had on 28 FebruaryFebruary 20192019 announcedannounced toto BursaBursa MalaysiaMalaysia ofof itsits intentionintention toto seek shareholders’ approval on the Proposals at the forthcoming AGM.
The purpose of this Circular is to provide you with information relating to the Proposals and to seek your approvals on the Ordinary Resolutions pertaining to the Proposals to be tabled at the forthcoming AGM. Notice of the AGM together with the Proxy Form is enclosed in the Annual Report of the Company.
5 5 2. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED ADDITIONAL SHAREHOLDERS’ MANDATE
2.1 Details
Provisions under the Listing Requirements
Pursuant to Part E, Paragraph 10.09 of the Listing Requirements, listed issuers with share capital of RM60 million and above must immediately announce a Recurrent Related Party Transaction as follows:
(i) the consideration, value of the assets, capital outlay or costs of the Recurrent Related Party Transaction is RM1 million or more; or
(ii) the percentage ratio of such Recurrent Related Party Transaction is 1% or more
whichever is higher.
Paragraph 2.4 of Practice Note 12 states that where a listed issuer has obtained a shareholders’ mandate in respect of any Recurrent Related Party Transaction, the above disclosure obligation will not apply to the Recurrent Related Party Transactions which are comprised in the mandate.
Accordingly, the Company proposes to seek its shareholders’ approval for the Proposals to enable the BHB Group to enter into transactions with the Related Parties which are of a revenue or trading nature and necessary for its day-to-day operations, on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders.
If approved at the forthcoming AGM, the Proposals will take effect from the passing of the ordinary resolutions relating thereto and will continue to be in force until:-
i) The conclusion of the next AGM of the Company following the forthcoming AGM, at which time it shall lapse, unless the authority is renewed by an ordinary resolution at the said next AGM; or
ii) The expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or
iii) Revoked or varied by resolution passed by the shareholders in a general meeting
whichever is the earlier.
Thereafter, shareholders’ approval will be sought for the renewal of the shareholders' mandate at each subsequent AGM, subject to a satisfactory review by the Company’s Audit and Risk Committee.
2.2 Classes of Related Party
BHB is a conglomerate with diverse business operations. The principal activity of BHB is investment holding. The principal activities of its subsidiaries include the ownership and/or management of oil palm plantations, marketing, selling and distributing imported and locally manufactured products, travel services, property development, property investment, hotels, leasing, ship building, vessel repair and maintenance, fabrication of offshore structures, and provision of defence-related services, education, fabrication and marketing of materials handling systems, provision of air transportation, flight support, engineering and technical services, manufacturing of fiber cement products, manufacturing of pharmaceutical products, marketing of petroleum products, shipping and forwarding agencies and provision of port facilities and services to cruise and navy 6 vessels. The principal activities of its associated companies are operating a commercial bank, Islamic bank and an investment bank, and engaging in general and life insurance, manufacturing of confectionary, marketing of toiletries and merchandising of chemical products.
The holding corporation of BHB is LTAT. LTAT owns 59.45% of the total number of issued shares of BHB as at LPD.
BHB’s subsidiaries, Pharma, BHIC, Boustead Plantations and an associated company, ABB, are listed on the Bursa Malaysia’s Main Market. The BHB Group, comprising more than 100 subsidiaries and associate companies, has substantial interests in various sectors of the Malaysian economy.
The Proposals will apply to the following companies (the effective interest is at LPD):-
I. SUBSIDIARIES NOT WHOLLY OWNED BY BHB
BHB's Effective Interest Company Principal Activities (%)
1. BNS Construction, repair & maintenance of naval ships, 82.4 weapons and electronics, design and engineering, fabrication of steel structures and commercial shipbuilding
2. Boustead Petroleum Marketing of petroleum products 42.0 Marketing Sdn Bhd (“BPM”)
3. Pharma Investment holdings 56.1
4. Boustead Plantations Investment holdings 57.4
5. BPSB Investment holdings 59.8
6. BHIC Investment holdings 65.0
II. BHB'S ASSOCIATES
1. ABB Financial services group 20.7
2. Drew Ameroid (M) Merchandising of chemical products 50.0 Sdn Bhd (“DAMSB”)
III. BHB'S JOINT VENTURE
1. Irat Hotel and Property investment 35.0 Resorts Sdn Bhd (“Irat”)
7 IV. LTAT’S SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE IV. LTAT’S SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE
LTAT’s Direct/Indirect Company Principal Activities LTAT’s Direct/Indirect Company Principal Activities Interest (%) Interest (%)
1. ABB Financial services group 35.5 1. ABB Financial services group 35.5
2. Boustead Plantations Investment holding and oil palm cultivation 12.1 2. Boustead Plantations Investment holding and oil palm cultivation 12.1
3. BNS Construction, repair & maintenance of naval ships, 10.4 3. BNS weaponsConstruction, and repairelectronics, & maintenance design andof navalengineering, ships, 10.4 fabricationweapons ofand steel electronics, structures anddesign commercial and shipbuildingengineering, fabrication of steel structures and commercial shipbuilding
4. BHIC Investment holdings 8.2 4. BHIC Investment holdings 8.2
5. Perbadanan Perwira Property development 100.0 5. HartaPerbadanan Malaysia Perwira Property development 100.0 (“HartaPPHM Malaysia”) (“PPHM”)
6. Irat Property investment 35.0 6. Irat Property investment 35.0
7. BPM Marketing of petroleum products 30.0 7. BPM Marketing of petroleum products 30.0
8. Pharma Investment holdings 11.2 8. Pharma Investment holdings 11.2
9. Perbadanan Perwira Trading of consumer goods 100.0 9. NiagaPerbadanan Malaysia Perwira Trading of consumer goods 100.0 (“NiagaPERNAMA Malaysia”) (“PERNAMA”) 10. Perbadanan Hal Promotion of socio-economic development programmes for 100.0 10. EhwalPerbadanan Bekas Hal thePromotion retired andof socio retiring-economic Malaysian development Armed Forces programmes personnel for 100.0 AngkatanEhwal Bekas Tentera the retired and retiring Malaysian Armed Forces personnel (“PERHEBAT”)Angkatan Tentera (“PERHEBAT”) V. FIRMS / CORPORATIONS CONNECTED WITH A DIRECTOR V. FIRMS / CORPORATIONS CONNECTED WITH A DIRECTOR
1. Arkitek MAA Sdn Architect firm Dato’ Sri Ghazali Mohd Ali is a Director of BHB, Boustead 1. BhdArkitek MAA Sdn Architect firm PropertiesDato’ Sri ,Ghazali UAC, MohdIrat and Ali PPHMis a Director. He i sof alsoBHB the, B ousteadformer (“ArkitekBhd MAA”) PropertiesDirector of, UAC,LTAT Iratand hadand resignedPPHM. onHe 31is Augustalso the 2018. former He (“Arkitek MAA”) Directorowns 10 %ofof LTAT share andin Arkitek had resigned MAA. on 31 August 2018. He owns 10% of share in Arkitek MAA.
2. Messrs. Azzat & Legal firm Datuk Azzat Kamaludin is a Director of BHB and BNS. He is 2. IzzatMessrs. Azzat & Legal firm aDatukpartnerAzzat of the Kamaludin legal firm. is a Director of BHB and BNS. He is Izzat a partner of the legal firm.
2.3 Nature of Recurrent Related Party Transactions and Estimated Values 2.3 Nature of Recurrent Related Party Transactions and Estimated Values It is anticipated that the Group would, in the normal course of business, enter into transactions It is anticipated that the Group would, in the normal course of business, enter into transactions involving Related Parties set out in Section 2.2 above. The shareholdings of BHB, LTAT and other involving Related Parties set out in Section 2.2 above. The shareholdings of BHB, LTAT and other interested parties in the Related Party are also set out in Section 2.2 above. It is likely that such interested parties in the Related Party are also set out in Section 2.2 above. It is likely that such transactions will occur with some degree of frequency and could arise at any time. transactions will occur with some degree of frequency and could arise at any time.
Indirect interest Indirect interest 8 8 2.3.12.3.1ExistingExisting Recurrent Recurrent Related Related Party Party Transactions Transactions ExistingExisting Recurrent Recurrent Related Related Party Party Transactions Transactions for whichfor which approval approval is now is now being being sought sought for thefor Proposedthe Proposed RenewalRenewal of Shareholders’ of Shareholders’ Mandate Mandate at the at forthcomingthe forthcoming AGM AGM are asare follows: as follows:
CompanyCompanyTransactingTransacting NatureNature of of RelatedRelated 2019 201Mandate9 Mandate 2018 201Mandate8 Mandate PartyParty TransactionsTransactions PartyParty (A) (A) (B) (B)
EstimatedEstimated EstimatedEstimated value value ActualActualvaluevalue DeviationDeviationof of valuevalue of of of transactionof transaction of transactionof transaction moremore than than transactiontransaction discloseddisclosed in 201 in8 2018 conductedconducted 10% 10%between between pursuantpursuant to to MandateMandate# # pursuantpursuant to to (A) and(A) (B and) (B) 2019 201Mandate9 Mandate# # 2018 201Mandate8 Mandate [as at[as LPD] at LPD]# #
(RM’000)(RM’000) (RM’000)(RM’000) (RM'000)(RM'000) (%) (%)
I. SUBSIDIARIESI. SUBSIDIARIES NOT NOTWHOLLY WHOLLY OWNED OWNED BY BHB BY BHB(LTAT (LTAT has direct has direct interest interest ≤10, other≤10, other than viathan BHB via )BHB)
1 BHIC1 BHIC BNS BNS a) Salea) Saleof equipment of equipment DirectorDirector - - 20,00020,000 162 162 N/A N/A and machineryand machinery for for. NAM.NAM(Note 2(Note) 2) ship relatedship related .GMA.GMA(Note 3)(Note 3) activitiesactivities to BNS to BNS .AK(Note.AK 4)(Note 4) .LWK.LWK(Note 5(Note) 5) BNSBNS b) Shipb) Shipbuilding building and and - - 1,090,9001,090,900 364,994364,994 N/A N/A ship repairsship repairs works works Major Major providedprovided to BNS to BNS ShareholderShareholder .LTAT.LTATA A BNSBNS c) Premisec) Premise rental rental - - 1,7001,700 1,0501,050 N/A N/A paid paidby BNS by BNS
BNSBNS d) Provisiond) Provision of of - - 2,0002,000 47 47 N/A N/A trainingtraining to BNS to BNS
BTS BTS e) Purchasee) Purchase of air of air - - 6,4606,460 2,2592,259 N/A N/A ticketstickets and travel and travel relatedrelated services services from fromBTS BTS
BHBBHB f) Officef) O fficerental rental* at * at - - 160 160 107 107 N/A N/A MenaraMenara Boustead Boustead, , PenangPenang paid paidto to BHBBHB
BHBBHB g) Provisiong) Provision of of - - 750 750 606 606 N/A N/A training,training, managementmanagement and and relatedrelated services services from fromBHB BHB
+ + BRSBBRSB h) Officeh) Office rental rentalat at - - 150 150 120 120 N/A N/A MenaraMenara Boustead Boustead paid paidto BRSB to BRSB
TOTALTOTAL - - 1,122,1201,122,120 369,345369,345 N/A N/A
TransactionTransaction with BHICwith BHIC is not isregarded not regarded as RRPT as RRPT pursuant pursuant to Paragraph to Paragraph 10.08(11)(l). 10.08(11)(l). Hence, Hence, the Group the Group does notdoes seek not anyseek mandate any mandate for 2019. for 2019. The The data preserveddata preserved for mandate for mandate obtained obtained in 2018. in 2018. PremisePremise rented rented at Block at Block 3502, 3502, Enterprise Enterprise Building Building 2, Jalan 2, JalanTeknokrat Teknokrat 4, Cyber 4, Cyber 5 63000 5 63000 Cyberjaya Cyberjaya Selangor. Selangor. The leaseThe leaseperiod period is 3 yearsis 3 yearswhich which involvesinvolves payments payments of rental of rental on monthly on monthly basis. basis. * The *lease The leaseperiod period is 3 years is 3 yearswhich which involves involves payments payments of rental of rental on monthly on monthly basis. basis. + The +lease The leaseperiod period is 3 years is 3 yearswhich which involves involves payments payments of rental of rental on monthly on monthly basis. basis. A LTATA LTAT holds holds8.2% 8.2%of BHIC of BHIC directly. directly. LTAT LTAT is indirectly is indirectly interested interested in BHIC in BHIC via BHB’s via BHB’s 65.0% 65.0% shareholding shareholding in BHIC. in BHIC. # The #amountsThe amounts are exclusive are exclusive of 6% of SST/GST. 6% SST/GST.
99 9 2.3.12.3.1 ExistingExisting Recurrent Recurrent Related Related Party Party Transactions Transactions (cont’d) (cont’d)
CompanyCompanyTransactingTransacting NatureNature of of RelatedRelated Party Party 20192019MandateMandate 20182018 Mandate Mandate PartyParty TransactionsTransactions (A) (A) (B) (B)
EstimatedEstimated value value EstimatedEstimated value value of of ActualActualvaluevalue DeviationDeviationof of of transactionof transaction transactiontransaction of transactionof transaction moremore than than pursuantpursuant to 2019 to 2019 discloseddisclosed in 2018 in 2018 conductedconducted 10%10% # # MandateMandate# MandateMandate# pursuantpursuant to to betweenbetween (A) (A) 20182018 Mandate Mandate andand (B) (B) # [as at[as LPD] at LPD]#
(RM’000)(RM’000) (RM’000)(RM’000) (RM'000)(RM'000) (%)(%)
I. I.SUBSIDIARIESSUBSIDIARIES NOT NOT WHOLLY WHOLLY OWNED OWNED BY BYBHB BHB (LTAT (LTAT has hasdirect direct interests interests of ≥ of 10%, ≥ 10%, other other than than via BHB)via BHB)(cont’d(cont’d) )
2 2BNSBNS BHICBHIC a) Shipa) Ship building building and and Director Director - - 2,1202,120 120120 N/AN/A repairrepair works works .NAM.NAM(Note(Note 2) 2) providedprovidedto BHICto BHIC.GMA.GMA(Note(Note 3) 3) .AK.AK(Note(Note 4) 4) BRSBBRSB b)Officeb)Office rental^ rental^ at at .LWK.LWK(Note(Note 5) 5) 2,7002,700 2,7002,700 2,0022,002 N/AN/A MenaraMenara Boustead Boustead paidpaid to BRSB to BRSB MajorMajor ShareholderShareholder B BHICBHIC c) Premisec) Premise rental rental .LTAT.LTATB - - 7,8007,800 1,8511,851 N/AN/A paidpaid by BHICby BHIC
BHICBHIC d)Provisiond)Provision of of - - 2,4002,400 - - N/AN/A constructionconstruction worksworks to BHIC to BHIC
BTSBTS e) Purchasee) Purchase of air of air 1,7001,700 1,7501,750 1,6751,675 N/AN/A ticketstickets and and travel travel relatedrelated services services fromfrom BTS BTS
TOTALTOTAL 4,404,400 0 16,77016,770 5,6485,648 N/AN/A
Transaction Transaction with with BHIC BHIC is not is notregarded regarded as RRPT as RRPT pursuant pursuant to Paragraph to Paragraph 10.08(11)(l). 10.08(11)(l). Hence, Hence, the Groupthe Group does does not notseek seek any anymandate mandate for 2019.for 2019. The The datadata preserved preserved for mandatefor mandate obtained obtained in 2018. in 2018. ^The^The lease lease period period is 3 isyears 3 years which which involves involves payments payments of rental of rental on monthly on monthly basis. basis. PremisePremise rented rented comprises comprises of the of followings:the followings: a) a)Office,Office, workshop, workshop, lamination lamination facility facility and andhangar hangar space space located located at Bukit at Bukit Malut, Malut, Mukim Mukim Kedawang, Kedawang, 07000, 07000, Langkawi, Langkawi, Kedah. Kedah. The Thelease lease periodperiod is 2 isyears 2 years which which involves involves payments payments of rental of rental on monthly on monthly basis. basis. b) b)OfficeOffice space space at Menara at Menara Boustead. Boustead. The Thelease lease period period is between is between 25.5 25.5 months months to 3 toyears 3 years which which involves involves payments payments of rental of rental on monthly on monthly basis. basis. c) c)OfficeOffice and andworkshop/working workshop/working areas areas at Pangkalan at Pangkalan TLDM, TLDM, 32100 32100 Lumut, Lumut, Perak. Perak. The Thelease lease period period is between is between 1 to 15 to years 5 years which which involves involves paymentspayments of rental of rental on monthly on monthly basis. basis. B LTATB LTAT holds holds 10.4% 10.4% of BNS of BNS directly directly other other than than via BHB.via BHB. # The# Theamounts amounts are exclusiveare exclusive of 6% of SST/GST.6% SST/GST.
10 10 2.3.1 Existing Recurrent Related Party Transactions (cont’d) 2.3.1 Existing Recurrent Related Party Transactions (cont’d)
Company Transacting Nature of Related 2019 Mandate 2018 Mandate 2019 Mandate 2018 Mandate Company TransactingParty TransactionsNature of RelatedParty Party Transactions Party (A) (B) (A) (B) Estimated value Estimated value Actual value Deviation of Estimatedof transaction value Estimatedof transaction value ofActual transactionvalue Deviationmore than of pursuantof transaction to 2019 disclosedof transactionin 2018 ofconducted transaction more10% than pursuant to 2019# disclosed in 2018# pursuantconducted to between10% (A) Mandate# Mandate# Mandate Mandate 2018pursuant Mandate to betweenand (B) (A) 2018[as at Mandate LPD] # and (B) [as at LPD] # (RM’000) (RM’000) (RM'000) (%) (RM’000) (RM’000) (RM'000) (%) I. SUBSIDIARIES NOT WHOLLY OWNED BY BHB (LTAT has direct interests of ≥ 10%, other than via BHB ) (cont’d) I. SUBSIDIARIES NOT WHOLLY OWNED BY BHB (LTAT has direct interests of ≥ 10%, other than via BHB ) (cont’d)
3 BPM BHB Group a) Sale of non- Director 10,230 9,930 7,699 N/A 3 BPM BHB Group a) Sale of non- .Director(Note 2) 10,230 9,930 7,699 N/A regulated NAM(Note 2) regulated .NAM(Note 3) petroleum GMA(Note 3) petroleum .GMA(Note 5) products to LWK(Note 5) productsBHB Group to .LWK BHB Group Major BTS b) Purchase of air ShareholderMajor 1,800 1,700 556 N/A BTS b) Purchase of air .ShareholderC 1,800 1,700 556 N/A tickets and LTATC ticketstravel related and .LTAT travelservices relatedfrom servicesBTS from BTS
4 Boustead Boustead a) Office rental* at Director 2,000 2,000 1,212 N/A 4 Boustead Boustead * .Director(Note 1) 2,000 2,000 1,212 N/A Plantations Properties a) MenaraOffice rental at MGCM(Note 1) Plantations Properties .MGCM(Note 2) BousteadMenara paid NAM(Note 2) .NAM(Note 3) toBoustead Boustead paid GMA(Note 3) .GMA(Note 5) Propertiesto Boustead LWK(Note 5) Properties .LWK BHB Major 2,500 2,500 1,920 N/A BHB b) General Major 2,500 2,500 1,920 N/A b) managementGeneral Shareholder management .ShareholderLTATD fees, internal .LTATD auditfees, internalfees and taxaudit consultancy fees and feestax consultancy paid to BHBfees paid to BHB BTS 2,500 2,500 408 N/A BTS c) Purchase of air 2,500 2,500 408 N/A c) ticketsPurchase and of air traveltickets related and servicestravel related from BTSservices from BTS
TOTAL 19,030 18,630 11,795 N/A TOTAL 19,030 18,630 11,795 N/A
C LTAT holds 30.0% of BPM, other than via BHB. *C LTAT holds 30.0% of BPM, other than via BHB. * The lease period is 3 years which involves payments of rental on monthly basis. D TheLTAT lease holds period 12.10 is% 3 yearsof Boustead which involvesPlantations, payments other than of rental via BHB. on monthly basis. D # TheLTAT amounts holds 12.are 10exclusive% of Boustead of 6% SST/GST.Plantations, other than via BHB. # The amounts are exclusive of 6% SST/GST.
11 11 2.3.1 Existing Recurrent Related Party Transactions (cont’d) 2.3.1 Existing Recurrent Related Party Transactions (cont’d) Company Transacting Nature of Related Party 2019 Mandate 2018 Mandate Party Transactions Company Transacting Nature of Related Party 2019 Mandate (A) 2018 Mandate(B) Party Transactions Estimated value Estimated(A) value Actual(B)value Deviation of of transaction of transaction of transaction more than pursuantEstimated to value 2019 disclosedEstimated in value 2018 Actualconductedvalue Deviation10% of of transaction# of transaction# of transaction more than Mandate Mandate pursuant to between (A) pursuant to 2019 disclosed in 2018 conducted 10% # # 2018 Mandate and (B) pursuant to# between (A) Mandate Mandate [as at LPD] 2018 Mandate and (B) # (RM’000) (RM’000) [as(RM'000) at LPD] (%) (RM’000) (RM’000) (RM'000) (%) I. SUBSIDIARIES NOT WHOLLY OWNED BY BHB (LTAT has direct interests of ≥ 10%, other than via BHB) (cont’d) I. SUBSIDIARIES NOT WHOLLY OWNED BY BHB (LTAT has direct interests of ≥ 10%, other than via BHB) (cont’d) 5 Pharma BTS a) Purchase of air Director 2,000 2,000 1,309 N/A tickets and travel .NAM(Note 2) 5 Pharma BTS a) Purchase of air Director(Note 3) 2,000 2,000 1,309 N/A related services .GMA(Note 2) tickets and travel .NAM(Note 5) from BTS .LWK(Note 3) related services .GMA from BTS .LWK(Note 5) BHB b) Provision of Major 2,100 2,100 884 N/A corporate and Shareholder BHB b) Provision of Major 2,100 2,100 884 N/A administrative .LTATE corporate and Shareholder administrativesupport services .LTATE and training from support services BHB and training from BHB
II. BHB’S ASSOCIATE & JOINT VENTURE (LTAT has direct interests of ≥ 10%, other than via BHB) II. BHB’S ASSOCIATE & JOINT VENTURE (LTAT has direct interests of ≥ 10%, other than via BHB) 1 ABB BRSB, a) Office* rental at Director 14,938 17,834 16,252 N/A BCurve, Menara Boustead, .NAM(Note 2) 1 ABB BRSB, a) Office* rental at Director(Note 3) 14,938 17,834 16,252 N/A Boustead Menara Affin and .GMA(Note 2) BCurve, Menara Boustead, .NAM(Note 5) Properties the Curve paid to .LWK(Note 3) Boustead Menara Affin and .GMA Properties theBRSB, Curve BCurvepaid to .LWK(Note 5) and Boustead BRSB, BCurve Major Properties Shareholder and Boustead Major .LTATF Properties Shareholder BHB, b)Provision of .LTATF 21,600 19,500 976 N/A BNS, professional BHB, b)Provision of 21,600 19,500 976 N/A Boustead service to BHB, BNS, professional Properties BNS and Boustead service to BHB, Properties BNSBoustead and Properties Boustead N/A Properties BTS c) Purchase of air 7,000 7,000 5,164 N/A BTS c) Purchasetickets and of travel air 7,000 7,000 5,164 related services tickets and travel from BTS related services from BTS TOTAL 47,638 48,434 24,585 N/A TOTAL 47,638 48,434 24,585 N/A
E LTAT holds 11.23% of Pharma, other than via BHB. F LTAT owns 35. 51 % of ABB, other than via BHB. E LTAT holds 11.23% of Pharma, other than via BHB. F* The lease periods are 2 years for Menara Boustead and the Curve, and 5 years for Menara Affin, all of which involve payment of rental on a LTATmonthly owns basis. 35. 51% of ABB, other than via BHB. #*The The amounts lease periods are exclusive are 2 years of 6% for SST/GST. Menara Boustead and the Curve, and 5 years for Menara Affin, all of which involve payment of rental on a monthly basis. # The amounts are exclusive of 6% SST/GST.
12 12 2.3.1 Existing Recurrent Related Party Transactions (cont’d)
Company Transacting Nature of Related Party 2019 Mandate 2018 Mandate Party Transactions (A) (B)
Estimated value Estimated value Actual value Deviation of of transaction of transaction of transaction more than pursuant to 2019 disclosed in 2018 conducted 10% between # # Mandate# Mandate# pursuant to (A) and (B) 2018 Mandate # [as at LPD] #
(RM’000) (RM’000) (RM'000) (%)
II. BHB’S ASSOCIATE & JOINT VENTURE (LTAT has direct interests of ≥ 10%, other than via BHB) (cont’d.)
2 Irat BHR a) Rental^ of hotel Director 12,098 12,440 11,031 N/A building paid by .NAM(Note 2) BHR .GMA(Note 3) .LWK(Note 5)
UNIM b)Office rental+ at Major 867 1,000 792 N/A Chulan Tower Shareholder paid by UNIM .LTATG
3 DAMSB Boustead Provision of Director - 1,500 808 N/A Plantations chemical products .MGCM(Note 1) for raw and boiler .NAM(Note 2) water treatment to .GMA(Note 3) Boustead .LWK(Note 5) Plantations Major Shareholder .LTATH
TOTAL 12,965 14,940 12,631 N/A
G LTAT owns 35.0% of Irat, other than via BHB through 50% shares in Irat Properties Sdn Bhd, which holds 70.0% of Irat. ^ The lease period is 3 years which involves payments of rental on monthly basis. + Premise rented at Chulan Tower, Level 2, No.3 Jalan Conlay, 50450 Kuala Lumpur. The lease period is 3 years which involves payments of rental on monthly basis. H LTAT holds 59.45% interest in BHB directly. LTAT holds 12.10% interest in BPB directly. LTAT indirectly interested in DAMSB via BHB’s 50% shareholding in DAMSB. # The amounts are exclusive of 6% SST/GST.
13 2.3.1 Existing Recurrent Related Party Transactions (cont’d) 2.3.1 Existing Recurrent Related Party Transactions (cont’d)
Company Transacting Nature of Related Party 2019 Mandate 2018 Mandate Transacting 2019 Mandate 2018 Mandate Company Party TransactionsNature of Related Party Party Transactions (A) (B) (A) (B) Estimated value Estimated value Actual value Deviation of Estimatedof transaction value Estimatedof transaction value ofActual transactionvalue Deviationmore thanof pursuantof transaction to 2019 disclosedof transaction in 2018 of conductedtransaction 10%more between than pursuant to 2019# disclosed in 2018# conducted 10% between Mandate# Mandate# pursuant to (A) and (B) Mandate Mandate 2018pursuant Mandate to (A) and (B) 2018[as at Mandate LPD] # [as at LPD] # (RM’000) (RM’000) (RM'000) (%) (RM’000) (RM’000) (RM'000) (%) III. LTAT’S SUBSIDIARIES III. LTAT’S SUBSIDIARIES
1 PPHM BBM a) Provision of Director 25,000 40,000 17,689 N/A 1 PPHM BBM a) Provision of Director(Note 2) 25,000 40,000 17,689 N/A renovation .NAM(Note 2) renovation .NAM (Note 3) works from .GMA(Note 3) . (Note 5) worksBBM from .GMALWK BBM .LWK(Note 5) UAC b) Construction Major 52,000 265,000 195,640 N/A UAC b) Constructionof low cost MajorShareholder 52,000 265,000 195,640 N/A ofhousing low cost Shareholder.LTATI . I housingproject by LTAT projectUAC by UAC 2 PERNAMA BPM Sale of non- Director 1,300 1,300 588 N/A 2 PERNAMA BPM Sale of non- Director(Note 2) 1,300 1,300 588 N/A regulated .NAM(Note 2) regulated .NAM (Note 3) petroleum .GMA(Note 3) . (Note 5) petroleumproducts by .GMALWK . (Note 5) productsBPM by LWK BPM Major MajorShareholder Shareholder.LTATJ .LTATJ TOTAL 78,300 306,300 213,917 N/A TOTAL 78,300 306,300 213,917 N/A
I I LTAT owns 100.0% of PPHM directly. JLTAT owns 100.0% of PPHM directly. J LTAT owns 100.0% of PERNAMA directly. # LTATThe amounts owns 100.0% are exclusive of PERNAMA of 6% SST/GST. directly. # The amounts are exclusive of 6% SST/GST. 14 14 2.3.1 Existing Recurrent Related Party Transactions (cont’d)
Company Transacting Nature of Related Party 2019 Mandate 2018 Mandate Party Transactions (A) (B)
Estimated value Estimated value Actual value Deviation of of transaction of transaction of transaction more than pursuant to 2019 disclosed in 2018 conducted 10% between Mandate Mandate pursuant to (A) and (B) 2018 Mandate [as at LPD]
(RM’000) (RM’000) (RM'000) (%)
IV. FIRMS / CORPORATIONS CONNECTED WITH A DIRECTOR
1 Arkitek BWQ, Provision of Director 12,500 23,600 5,459 N/A MAA BCurve, architectural .GMA(Note 3) MRini, services to BWQ, DEC and BCurve, MRini, Balau DEC and Balau
2 Messrs. BHB, Provision of legal Director 2,600 8,000 2,163 N/A Azzat & Boustead services to BHB, .AK(Note 4) Izzat Properties Boustead Group, Properties Group, and BNS and BNS
The amounts are exclusive of 6% SST/GST.
15 2.3.1 Existing Recurrent Related Party Transactions (cont’d)
Company Transacting Nature of Related Party 2019 Mandate 2018 Mandate Party Transactions (A) (B)
Estimated value Estimated value Actual value Deviation of of transaction of transaction of transaction more than pursuant to 2019 disclosed in 2018 conducted 10% Mandate# Mandate# pursuant to between (A) 2018 Mandate and (B) [as at LPD] #
(RM’000) (RM’000) (RM'000) (%)
V. LTAT
1 LTAT Boustead a) Provision of Director - 5,000 - N/A Properties project .NAM(Note 2) management .GMA(Note 3) service from .LWK(Note 5) Boustead Properties
BTS b) Purchase of air 300 300 29 N/A tickets and travel related services from BTS
BPM c) Office rental at 1,320 1,200 806 N/A Surian Tower paid by BPM
TOTAL 1,620 6,500 835 N/A
GRAND TOTAL 179,053 1,565,294 646,378 N/A
Premise rented at Surian Tower, No.1 Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya. The lease period is 3 years which involves payment of rental on a monthly basis. # The amounts are exclusive of 6% SST/GST.
1616 2.3.2 Additional Recurrent Related Party Transactions
Additional Recurrent Related Party Transactions for which approval is now being sought for the Proposed Additional Shareholders’ Mandate at the forthcoming AGM are as follows:- 2.3.2 Additional Recurrent Related Party Transactions
Additional Recurrent Related Party Transactions for which approval is now being2019 Mandatesought for the CompanyProposed AdditionalTransacting Shareholders’ Nature ofMandate at the forthcomingRelated Party AGM are asEstimated follows: value- of transaction Party Transactions pursuant to 2019 Mandate# 2019 Mandate (RM’000) Company Transacting Nature of Related Party Estimated value of transaction I. LTAT’S SUBSIDIARYParty Transactions pursuant to 2019 Mandate# 1 PERHEBAT BTS Purchase of air Director 500 tickets and travel .NAM(Note 2) (RM’000) related services .GMA(Note 3) I. LTAT’S SUBSIDIARY from BTS .LWK(Note 5)
1 PERHEBAT BTS Purchase of air Major Shareholder 500 DirectorK tickets and travel .LTATNAM(Note 2) related services .GMA(Note 3) from BTS .LWK(Note 5) II. LTAT Major Shareholder 1 LTAT Boustead Provision of Director.LTATK 348 Properties property .NAM(Note 2) management .GMA(Note 3) (Note 5) II. LTAT service from .LWK Boustead 1 LTAT Boustead ProvisionProperties of Director 348 Properties property .NAM(Note 2) (Note 3) GRAND TOTALmanagement .GMA 848 service from .LWK(Note 5) Boustead Properties
GRAND TOTAL 848
K LTAT owns 100.0% of PERHEBAT directly. # The amounts are exclusive of 6% SST/GST.
17 K LTAT owns 100.0% of PERHEBAT directly. # The amounts are exclusive of 6% SST/GST.
17 17 Notes:
1. MGCM - Gen. Tan Sri Dato’ Seri Panglima Mohd Ghazali Hj. Che Mat (R). He is the Chairman of BHB, Boustead Plantations, UAC and Boustead Properties. As at LPD, he owns 2,184,000 Boustead Plantations shares, 220,000 Pharma shares and 122,000 ABB shares.
2. NAM - Puan Nik Amlizan Mohamed. She is the Director of BHB and Chief Executive of LTAT. She does not own any shares in BHB and other related companies.
3. GMA - Dato’ Sri Ghazali Mohd Ali. He is a Director of BHB, Boustead Properties, UAC, Irat and PPHM. He was also former Director of LTAT and had resigned on 31 August 2018. As at LPD, he owns 1,727,600 Boustead Plantations shares, 143,000 Pharma shares and 10% shareholding in Arkitek MAA.
4. AK - Datuk Azzat Kamaludin. He is a Director of BHB and BNS. As at LPD, he owns 112,000 BHB shares, 2,250,000 Boustead Plantations shares and 226,260 Pharma shares. He is a partner in the legal firm of Messrs. Azzat & Izzat.
5. LWK - Tan Sri Dato’ Seri Lodin Wok Kamaruddin. He was the Chief Executive of LTAT and had resigned on 7 September 2018. He was also the Deputy Chairman & Group Managing Director of BHB. However, his service agreement with BHB as Managing Director had been mutually terminated with effect from 31 December 2018. He is also a former Director of Pharma, Boustead Plantations, Boustead Properties, UAC, PPHM, BPM, BNS and PERNAMA. As at LPD, he owns 52,257,805 BHB shares, 39,171,520 Boustead Plantations shares, 1,076,400 ABB shares and 12,500,148 Pharma shares. Tan Sri Dato’ Seri Lodin Wok Kamaruddin also owns 5,916,465 shares in BPSB, a holding company of BPM.
The abovementioned values of transactions are based on accounting records, and the estimated figures during the validity of the Proposals are based on management’s estimate (on the assumption that the current level of operations will continue and all external conditions remain constant) and that the next AGM will be held in March/April 2020.
In view of the time-sensitive and frequent nature of such Recurrent Related Party Transactions, the Board is seeking the approvals on the Proposals which would allow the Group, in their normal course of business, to enter into Recurrent Related Party Transactions with the classes of Related Party set out above, provided such transactions are made at arm’s length and on normal commercial terms and are on terms not more favourable to the Related Party than those generally available to the public and are not detrimental to minority shareholders. Such Recurrent Related Party Transactions will be subject to the review procedures as set out in Section 2.5 of this Circular.
18 18 2.4 Amount Due and Owing Under Recurrent Related Party Transactions
The breakdown of the principal sum (without interest) for the total outstanding amount due and owing to the BHB Group under the Recurrent Related Party Transactions as per Section 2.3.1 and 2.3.2 of this Circular which exceeded the credit terms as at 31 December 2018 are as follows:
Outstanding Amount (RM’000) Company Transacting Nature of Transactions More than 1 More than 3 Party 1 year or less to 3 years to 5 years
1 Pharma BHB Provision of corporate and 117 - - administrative support services and training from BHB
2 Pharma BTS Purchase of air tickets and 390 - - travel related services from BTS
3 BHIC BRSB Office rental at Menara 9 - - Boustead paid to BRSB
4 PERNAMA BPM Sale of non-regulated 935 - - petroleum products by BPM
5 PPHM BBM Provision of renovation 8,658 - - works from BBM
6 PPHM UAC Construction of low cost 90,050 90 - housing project by UAC
TOTAL 100,159 90 -
There were no late payment charges imposed by the BHB Group on the above outstanding amounts as they were trade in nature. The Management has and will continuously meet and discuss with the debtors for early settlement of the outstanding amounts. The Board is of the opinion that there will be no recoverability issues as the debtors are related parties with a long-standing business relationship with the Group and has proven to be creditworthy debtors with good payment records.
2.5 Review Procedures and Guidelines for Recurrent Related Party Transactions
2.5.1 Review Procedures
To ensure that Recurrent Related Party Transactions are undertaken on BHB Group’s normal commercial terms, and to supplement the existing internal control procedures of the Group, the Audit Committee is tasked with the review of the procedures of such transactions.
The Audit Committee currently comprises:- Dato’ Wira (Dr.) Megat Abdul Rahman Megat Ahmad (Chairman) Datuk Azzat Kamaludin Datuk Francis Tan Leh Kiah
19 The following guidelines apply to the review and approval of Recurrent Related Party Transactions to ensure that the terms of the Recurrent Related Party Transactions are fair, reasonable and on normal commercial terms; are not more favourable to the Related Party than those generally available to the public; are not detrimental to minority shareholders and are in the best interest of the Group:-
The Related Parties and interested Directors will be advised that they are subject to the shareholders’ mandate and will also be advised of the review and disclosure procedures.
Records will be maintained by the Company to capture all Recurrent Related Party Transactions, which are entered into pursuant to the Proposals.
The annual internal audit plan shall incorporate a review of the sufficiency and compliance of the guidelines and reviews procedures established to monitor Recurrent Related Party Transactions.
The Board and the Audit Committee shall review the internal audit reports to ascertain that the guidelines and procedures established to monitor Recurrent Related Party Transactions have been complied with.
Any member of the Audit Committee may, as he deems fit, request for additional information pertaining to the transaction from independent sources or advisers, including obtaining of valuations from professional valuers.
If a member of the Board or Audit Committee has an interest (direct or indirect) in any Recurrent Related Party Transactions, he shall abstain from any decision making by the Board or Audit Committee in respect of such transactions and continue to abstain from voting on the resolutions approving the transactions.
Should the Audit Committee during its review form an opinion that the Recurrent Related Party Transactions are not being conducted in accordance with established terms and procedures and/or are not being conducted on an arm’s length basis and on normal commercial terms, or are detrimental to the interests of shareholders, it will advise the Board to convene a General Meeting of shareholders to seek a fresh shareholders’ mandate for the Recurrent Related Party Transactions.
The interested Director or interested Major Shareholder shall also ensure that the persons connected with him abstain from voting on the resolutions approving the transactions.
At least 2 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 types of products/services and/or quantities. In the event the quotation or comparative pricing from unrelated third parties cannot be obtained (for instance, if there are no unrelated third party vendors/customers of similar products or services, or if the product/service is a proprietary item), the transaction price will be determined by those offered by/to other unrelated parties for substantially similar type of transactions and approved by the respective Board of Directors of both the transacting entities to ensure that the price and terms of the Recurrent Related Party Transactions are not detrimental to the Group. In addition, the management of the transacting entities shall retain a proper documentation to support the basis in arriving at the relevant transaction prices.
Notwithstanding the above paragraph, the Audit Committee shall review proposals by the management of the transacting entities (including their audit committee if applicable) for onward approval by the Board.
20 Group Finance or Group Secretarial shall be informed through a written communication of knowledge of any Related Party Transaction or Recurrent Related Party Transactions which will be entered into or has been entered into. Due care shall also be exercised prior to entering contracts with related party that may give rise to Related Party Transaction or Recurrent Related Party Transactions.
Bursa Malaysia Listing Requirements pertaining to Related Party Transaction or Recurrent Related Party Transactions are to be communicated to all relevant personnel in company/division who are involved in the day to day operations.
All major shareholders with equity interest of 10% or more and Directors shall be informed on their responsibilities and obligations in respect to Related Party Transaction or Recurrent Related Party Transactions.
The Group Secretarial Department shall be informed on changes of Director’s interest in other companies, directorship and BHB Group of Companies.
Heads of Division and Heads of Subsidiary shall be informed on their responsibilities and obligations to ensure proper identification, tracking and reporting of Related Party Transaction or Recurrent Related Party Transactions.
Tracking of the value of Recurrent Related Party Transactions shall be done for the purpose of disclosure in the Annual Report. Where the transaction value exceed 10% or more of the mandated amount, the respective Head of operating units is responsible to notify and provide explanation to Group Secretarial Department so that immediate announcement to Bursa Malaysia can be made.
For Recurrent Related Party Transactions that are not included in the mandate but are expected to exceed percentage ratio of 1% or RM1 million (whichever is the higher) in a 12 months period, respective Head of operating units is responsible to track transaction values for immediate announcement to Bursa Malaysia.
2.5.2 Guidelines
There are no specific thresholds for approvals of Recurrent Related Party Transactions within the BHB Group. However, there are commercial considerations which the BHB Group takes into account before entering into transactions for the sale/supply of goods and provision of services, in the ordinary course of business:-
The ability and track record of the purchaser to pay for the goods supplied or services provided;
Whether past experience and working relationship with the purchaser have been satisfactory;
The BHB Group’s pricing for the goods to be provided or supplied and/or received or purchased is negotiated between the BHB Group and Related Party based on the prevailing market prices as agreed with unrelated third parties;
The terms are no more favourable to the Related Party than those extended to unrelated third parties and available to the public and the Recurrent Related Party Transactions are not detrimental to minority shareholders;
The transactions are provided after taking into account factors such as pricing, quality, delivery schedules and, where applicable, preferential rates, rebates or discounts accorded for bulk purchases, the terms offered are fair and reasonable and in the BHB Group’s commercial interests;
21 The competitiveness in pricing;
The standard and quality of the goods/services and whether it meets the requirements of the BHB Group;
The responsiveness and level of service provided by the goods or service providers and whether past experience and working relationship have been satisfactory; and
The track record and competence of the goods or service provider and whether the goods or service provider has sufficient resources to perform its obligations.
The BHB Group would only enter into transactions with the relevant parties based on the above criteria, regardless of whether or not the party is related.
2.6 Statement by Audit Committee
The Audit Committee of the Company has seen and reviewed the procedures mentioned in Section 2.5 above and is satisfied that:-
(i) the Group has in place adequate procedures and processes to monitor, track and identify Recurrent Related Party Transactions in a timely and orderly manner, and that these procedures and processes are reviewed annually; and
(ii) the procedures above are sufficient to ensure the terms of the Recurrent Related Party Transactions are fair, reasonable and on normal commercial terms; are not more favourable to the Related Party than those generally available to the public; are not detrimental to minority shareholders and are in the best interest of the Group.
2.7 Disclosure
Disclosure has been made in the 2018 Annual Report of the Company of the aggregate value of transactions conducted pursuant to the 2018 Shareholders’ Mandate. Similar disclosure will be made in the Annual Report for the subsequent financial year during which the shareholders’ mandate and additional shareholders’ mandate for recurrent related party transaction are in force, providing amongst others, the following information:-
(i) The type of Recurrent Related Party Transactions made; and
(ii) The names of the Related Parties involved in each type of the Recurrent Related Party Transactions made and their relationship with the Company.
3. RATIONALE AND BENEFIT
3.1 Rationale of the Proposals
The Proposals are intended to enhance the Group’s ability to pursue business opportunities, which are time-sensitive in nature, and will eliminate the need to announce, or to announce and convene separate general meetings on each occasion to seek shareholders’ prior approval for the entry by the relevant company in the Group into such transactions. This will substantially reduce the expenses associated with the convening of general meetings on an ad hoc basis, improve administrative efficacy considerably, and allow manpower resources and time to be channelled towards attaining other corporate objectives.
22 3.2 Benefits to the BHB Group from Transacting With the Related Parties
The Recurrent Related Party Transactions entered into by the BHB Group are intended to meet business needs at the best possible terms. The BHB Group should be able to have access to all available markets and products and services provided by all vendors including its Related Parties. Transacting with its Related Parties also enhances the ability to explore beneficial business opportunities within the BHB Group, which will be of benefit to all the companies within the BHB Group. In most instances, companies within the BHB Group have a better understanding of each other’s business needs, thus providing a platform where all parties can benefit from relatively cheaper transaction costs.
4. CONDITION OF THE PROPOSALS
The Proposals are conditional upon the approval being obtained from the shareholders of BHB at the forthcoming AGM.
5. FINANCIAL EFFECTS OF THE PROPOSALS
The Proposals are not expected to have any effect on the share capital, earnings, net assets and gearing of the BHB Group.
6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM
The direct and indirect shareholding of the interested Major Shareholders, interested Directors of the Company and Persons Connected to them as at LPD are as follows:-
Direct Shareholding Indirect Shareholding Name No of Shares % No of Shares %
Interested Major Shareholder Lembaga Tabung Angkatan Tentera 1,204,952,018 59.45 - -
Interested Directors
Gen. Tan Sri Dato’ Seri Panglima - - - - Mohd Ghazali Hj. Che Mat (R)
Puan Nik Amlizan Mohamed^ - - - -
Datuk Azzat Kamaludin 112,000 0.005 - -
Dato’ Sri Ghazali Mohd Ali - - - -
Tan Sri Dato’ Seri Lodin Wok 52,257,805 2.58 - - Kamaruddin*
Interested Persons Connected
None
Notes: ^ Appointed on 1 November 2018. * Director until 31 December 2018.
23 Gen. Tan Sri Dato’ Seri Panglima Mohd Ghazali Hj. Che Mat (R), Puan Nik Amlizan Mohamed, Datuk Azzat Kamaludin, Dato’ Sri Ghazali Mohd Ali and Tan Sri Dato’ Seri Lodin Wok Kamaruddin (“the Interested Directors”), being the interested directors as mentioned in Section 2.3 above have abstained from deliberations and voting at the board meetings with regard to the Proposals. The Interested Directors (except for Tan Sri Dato’ Seri Lodin Wok Kamaruddin) will also continue to abstain from deliberations and voting at the board meetings with regard to the Proposals.
The Interested Directors together with LTAT will also abstain from voting in the resolutions pertaining to the Proposals in respect of their direct and indirect interest in BHB at the AGM.
The Interested Directors and LTAT have undertaken that they will ensure that the Persons Connected with them will abstain from voting on the resolutions relating to the Proposals at the AGM to be convened.
Save as disclosed above, none of the other Directors and/or Major Shareholder of BHB and/or Persons Connected to them has any interest, direct or indirect, in the Proposals.
7. DIRECTORS' RECOMMENDATION
The Directors (except for the Interested Directors and Tan Sri Dato’ Seri Lodin Wok Kamaruddin) after careful deliberation on the Proposals, are of the opinion that the Proposals are in the best interests of the Company. Accordingly, the Directors (except for the Interested Directors and Tan Sri Dato’ Seri Lodin Wok Kamaruddin) recommend that you vote in favour of the resolutions pertaining to the Proposals to be tabled at the forthcoming AGM.
8. AGM
The Fifty-Seventh AGM of the Company will be held at Mutiara Ballroom, Ground Floor, Royale Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, 47810, Petaling Jaya, Selangor on Wednesday, 24 April 2019 at 2.30 p.m, for the purpose of considering and if thought fit, passing the Ordinary Resolutions as set out in the Notice of AGM to approve the Proposals.
If you are unable to attend and vote in person at the AGM, you are requested to complete, sign, and return the Proxy Form enclosed in the Annual Report of the Company in accordance with the instructions therein as soon as possible and in any event so as to arrive at the office of the Company’s Share Registrar, Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or its Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, no later than Monday, 22 April 2019 at 2.30 p.m. The lodging of the Proxy Form does not preclude you from attending and voting in person should you subsequently wish to do so.
9. FURTHER INFORMATION
Shareholders are advised to refer to the attached appendices for further information.
Yours faithfully For and on behalf of the Board of Directors BOUSTEAD HOLDINGS BERHAD
Dato’ Wira (Dr.) Megat Abdul Rahman Megat Ahmad Senior Independent Non-Executive Director
24 APPENDIX I FURTHER INFORMATION
1. RESPONSIBILITY
This Circular has been seen and approved by the Directors of BHB and they collectively and individually accept full responsibility for the accuracy of the information given, and confirm that, after making all enquiries as are reasonable in the circumstances and that to the best of their knowledge and belief, there are no other facts and information the omission of which, would make any statement herein misleading.
2. MATERIAL LITIGATION
Save as disclosed below, neither BHB nor its subsidiary companies are engaged in any material litigation, claims or arbitration either as plaintiff or defendant or otherwise, nor are the Directors of BHB aware of any proceedings pending or threatened against BHB and/or its subsidiary companies, or of any facts likely to give rise to any proceedings which might materially or adversely affect the position or business of BHB and/or its subsidiary companies.
(i) Federal Court Civil Appeal No. 02(f)-46-07/2016(A) (Court of Appeal Civil Appeal No. A-02(IM)(NCVC)-786-04/2013) (Ipoh High Court Suit No. 22NCVC-193-08/2012)
Plaintiff/Respondent: Ingat Kawan (M) Sdn Bhd (“Plaintiff”) Defendant/Appellant: Boustead Naval Shipyard Sdn Bhd (“BNS”)
On 4 September 2012, the Group’s Subsidiary BNS was served with a Writ of Summons by the Plaintiff. The Plaintiff was claiming against BNS for unspecified general damages, special damages of RM50 million, interest at 10% per annum on the said amount of RM50 million calculated from 7 September 2011 until full settlement, interest at 8% per annum on the said amount of RM50 million calculated from the date of filing the Writ of Summons until full settlement, costs and other reliefs that the Court deems fit, arising from an alleged breach of contract by BNS. On 11 September 2012, BNS filed its defence and counterclaims and sought to add 5 parties as co-defendants in the said counterclaims. On 30 November 2012, the Court dismissed the Plaintiff’s objections to BNS’s addition of the 5 co-defendants.
On 14 March 2013, the High Court allowed with cost BNS’s application to strike out the Plaintiff’s claims. Thus, on 1 April 2013, BNS withdrew its counterclaims against the Plaintiff, but with liberty to file afresh. On 22 March 2013, the Plaintiff filed a Notice of Appeal to the Court of Appeal. On 11 November 2013, the Court of Appeal allowed the Plaintiff’s appeal and ordered the case to be tried at the High Court. On 10 December 2013, BNS filed a Notice of Motion for the leave to appeal to the Federal Court. This leave to appeal was granted by the Federal Court to BNS on 13 July 2016. The Federal Court also allowed six leave questions and ordered that cost be in the cause.
During the hearing of appeal at the Federal Court on 22 August 2017, the judges unanimously set aside the decision of the Court of Appeal and High Court and ordered the matter to be tried at the Ipoh High Court. The Federal Court also ordered cost to be in cause and deposit to be refunded.
On 28 March 2018, the Court allowed the Plaintiff’s application to enter the shipyard and inspect and/or collect samples of ‘abandoned’ copper cables.
Trials took place on 16 and 17 April 2018, 7 May 2018, 22 and 23 November 2018 during which BNS’ lawyer cross-examined the Plaintiff’s second witness and the Plaintiff closed its case after its lawyers re-examined the said witness. At a trial on 22 January 2019, BNS’ fourth witness testified on the worthiness of the copper cables. Next trial dates have been fixed to 5 and 10 April 2019.
2525 BNS, upon consultation with the solicitors, is of the view that it has a good defence to the claim by the Plaintiff.
(ii) Arbitration Proceedings By MHS Aviation Berhad Against Petronas Carigali Sdn Bhd
On 1 September 2016, the Group’s subsidiary MHS Aviation Berhad (“MHS”) issued a Notice of Arbitration against Petronas Carigali Sdn Bhd (“PCSB”) in connection with a contract dated 29 June 2011 made between MHS and PCSB for the Provision of Rotary Wing Aircraft, Equipment and Services (for Heavy Type Aircraft-EC225) (“Contract”). In the Contract, MHS was engaged to provide PCSB with five (5) EC225 helicopters for use in PCSB’s oil and gas exploration and production operations. This contract mirrors contracts with ExxonMobil Exploration and Production Malaysia Inc, EQ Petroleum Production Malaysia Ltd and Sapura Exploration and Production (PM) Inc. Nevertheless, the use of all five helicopters was suspended by PCSB unilaterally following an accident that was unconnected to MHS and PCSB.
MHS viewed this suspension as a breach of contract by PCSB and was claiming in the Arbitration for damages of RM42.8 million, general damages, declaration that PCSB was liable to pay MHS the Monthly Standby Rate and the Monthly Standing Charges during the suspension period, interest on awarded sum, cost and any further sum in damages and other orders deemed fit by the Arbitral Tribunal appointed.
On 9 June 2017, MHS received termination letter from PCSB giving MHS a 90 days’ notice of PCSB’s intention to terminate the Contract. Subsequent to the PCSB’s termination of the Contract, on 16 June 2017, MHSA also receive termination notice from Sapura Exploration Production (PM) Inc. On 19 June 2017, MHSA received a termination notice from EQ Petroleum Production Malaysia Ltd and ExxonMobil Exploration and Production Malaysia Inc. Together with PCSB, all the three companies above are Joint Operating Partners (JOPs) for the Contract.
MHS has put on record that it did not agree that these termination notices have been validly issued and viewed this as a breach of contract on the part of the JOPs.
MHS had agreed on mutual settlements with PCSB and all the JOPs, and had entered into separate confidential agreements with all the JOPs. On 4 April 2018, the arbitration proceedings against PCSB have been withdrawn as full payment of the settlement sum has been received.
In consultation with the Company’s solicitors, the Board is of the view that MHS has good claims in this matter.
(iii) Kuala Lumpur High Court Civil Suit No: WA-22NCVC-679-10/2018 Plaintiff : Deepak Jaikishan A/L Jaikishan Rewachand (“Plaintiff”) Defendants :1. Dato’ Seri Najib Bin Tun Razak 2. Datin Paduka Seri Rosmah Mansor 3. Boustead Holdings Berhad (“BHB”) 4. Bakti Wira Development Sdn Bhd (“BWSB”)
BHB and its wholly-owned subsidiary, BWSB had, on 16 October 2018 and 18 October 2018 respectively, being served with a Writ of Summons by the Plaintiff. BHB has been made the Third Defendant and BWSB the Fourth Defendant while the First and Second Defendants are Dato’ Seri Najib Bin Tun Razak and Datin Paduka Seri Rosmah Mansor. The suit was filed in the Kuala Lumpur High Court on 12 October 2018.
Under the Writ of Summons, the Plaintiff is alleging tort of conspiracy and/or conspiracy to defraud and/or tort of conversion and/or undue influence by the Defendants in the following transactions:
i) the acquisition of 16,000,000 ordinary shares of Astacanggih Sdn Bhd (Astacanggih) by BWSB for a cash consideration of RM30 million from Prestige Dimension Sdn Bhd and other minority shareholders of Astacanggih pursuant to the Share Sale Agreement dated 20 December 2012; and 26 ii) the acquisition of 200 acres of freehold lands in Selangor from Awan Megah (M) Sdn Bhd at ii) the acquisition of 200 acres of freehold lands in Selangor from Awan Megah (M) Sdn Bhd at a cash consideration of RM130 million by BWSB and Astacanggih pursuant to the Land a cash consideration of RM130 million by BWSB and Astacanggih pursuant to the Land Sale Agreement dated 27 December 2012. Sale Agreement dated 27 December 2012. The Plaintiff is claiming against the Defendants joint and/or severally for, among others, general The Plaintiff is claiming against the Defendants joint and/or severally for, among others, general damages of RM600 million, exemplary damages of RM50 million, aggravated damages of RM26 damages of RM600 million, exemplary damages of RM50 million, aggravated damages of RM26 million, interest on each damages, special damages equivalent to 80% of current market value of million, interest on each damages, special damages equivalent to 80% of current market value of certain lands, return of shares in Astacanggih which was acquired by BHB and BWSB, declaration certain lands, return of shares in Astacanggih which was acquired by BHB and BWSB, declaration that certain past transactions are null and void and declaration that the Plaintiff’s rights over certain that certain past transactions are null and void and declaration that the Plaintiff’s rights over certain lands be returned to him. lands be returned to him. BHB and BWSB entered their appearances on 23 October 2018, and on 9 November 2018, filed their BHB and BWSB entered their appearances on 23 October 2018, and on 9 November 2018, filed their Statement of Defence and requested for further and better particulars from the Plaintiff. On 17 Statement of Defence and requested for further and better particulars from the Plaintiff. On 17 December 2018, BHB and BWSB filed an application to the Court to strike out the Plaintiff’s suit December 2018, BHB and BWSB filed an application to the Court to strike out the Plaintiff’s suit against them. Meanwhile, the First and Second Defendants filed their striking out application on 7 against them. Meanwhile, the First and Second Defendants filed their striking out application on 7 January 2019. Hearing of all the Defendants’ striking out applications will be on 4 April 2019. January 2019. Hearing of all the Defendants’ striking out applications will be on 4 April 2019. The Directors of BHB and BWSB believe that the Plaintiff’s claims are untenable and are therefore The Directors of BHB and BWSB believe that the Plaintiff’s claims are untenable and are therefore positive that both companies will prevail in this litigation. positive that both companies will prevail in this litigation. (iv) Kuala Lumpur High Court Suit No. WA-22NCvC-860-12/2018 (iv) Kuala Lumpur High Court Suit No. WA-22NCvC-860-12/2018 Plaintiffs :1. CIMB Islamic Trustee Berhad Plaintiffs :1. CIMB Islamic Trustee Berhad 2.Boustead Plantations Berhad (“Boustead Plantations”) 2.Boustead Plantations Berhad (“Boustead Plantations”) Defendant :Setia Fontaines Sdn Bhd (“Defendant”) Defendant :Setia Fontaines Sdn Bhd (“Defendant”)
On 28 December 2018, CIMB Islamic Trustee Berhad acting as trustee for Boustead Plantations, and On 28 December 2018, CIMB Islamic Trustee Berhad acting as trustee for Boustead Plantations, and Boustead Plantations filed a Writ of Summons and Statement of Claim on the Defendant for breach Boustead Plantations filed a Writ of Summons and Statement of Claim on the Defendant for breach of a Sale and Purchase Agreement dated 22 December 2016. The claim is in respect of damages of a Sale and Purchase Agreement dated 22 December 2016. The claim is in respect of damages amounting to RM37,207,353.35 for goods and services tax (GST) due from the Defendant together amounting to RM37,207,353.35 for goods and services tax (GST) due from the Defendant together with interest at the rate of 8% per annum and other costs and relief deemed fit by the Court. with interest at the rate of 8% per annum and other costs and relief deemed fit by the Court. The Defendant filed their Statement of Defence on 21 January 2019 and the Plaintiffs filed their The Defendant filed their Statement of Defence on 21 January 2019 and the Plaintiffs filed their Reply to the Statement of Defence on 21 February 2019. The case is now fixed for case management Reply to the Statement of Defence on 21 February 2019. The case is now fixed for case management on 19 March 2019. on 19 March 2019. The Directors, upon consultation with its solicitors, is of the view that Boustead Plantations has a The Directors, upon consultation with its solicitors, is of the view that Boustead Plantations has a good case in this suit and are positive of its outcome. good case in this suit and are positive of its outcome. 3. MATERIAL CONTRACTS 3. MATERIAL CONTRACTS Save as disclosed below, no material contracts, not being contracts entered into in the ordinary Save as disclosed below, no material contracts, not being contracts entered into in the ordinary course of business, have been entered into by BHB or its subsidiary companies within the past course of business, have been entered into by BHB or its subsidiary companies within the past two (2) years preceding the date of this Circular: two (2) years preceding the date of this Circular: (i) On 25 August 2017, BHB executed agreements for the proposed issue of, offer for (i) On 25 August 2017, BHB executed agreements for the proposed issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of, Islamic medium subscription or purchase of, or invitation to subscribe for or purchase of, Islamic medium term notes (“IMTN”) under an Islamic term note programme of up to RM2.0 billion in term notes (“IMTN”) under an Islamic term note programme of up to RM2.0 billion in nominal value (“Sukuk Programme”). The Sukuk Programme, which is an unrated sukuk nominal value (“Sukuk Programme”). The Sukuk Programme, which is an unrated sukuk programme, is implemented under Securities Commission Malaysia’s Guidelines on programme, is implemented under Securities Commission Malaysia’s Guidelines on Unlisted Capital Market Products under The Lodge and Launch Framework. The tenure of Unlisted Capital Market Products under The Lodge and Launch Framework. The tenure of the Sukuk Programme is 10 years. The proceeds raised from the first issuance will be utilised the Sukuk Programme is 10 years. The proceeds raised from the first issuance will be utilised to refinance existing borrowings/financing, funding of reserve account to meet minimum to refinance existing borrowings/financing, funding of reserve account to meet minimum required balance under the terms and conditions of the Sukuk Programme and to pay fees required balance under the terms and conditions of the Sukuk Programme and to pay fees and expenses relating to the Sukuk Programme. On 12 September 2017, BHB had issued a and expenses relating to the Sukuk Programme. On 12 September 2017, BHB had issued a total RM500.0 million of IMTN being the first issuance under the Sukuk Programme. total RM500.0 million of IMTN being the first issuance under the Sukuk Programme. Subsequently, on 24 April 2018, 29 August 2018, 15 October 2018 and 30 January 2019, Subsequently, on 24 April 2018, 29 August 2018, 15 October 2018 and 30 January 2019, BHB issued a total of RM150.0 million, RM200.0 million, RM150.0 million and RM200.0 BHB issued a total of RM150.0 million, RM200.0 million, RM150.0 million and RM200.0 million of IMTN respectively under this Sukuk Programme. million of IMTN respectively under this Sukuk Programme. 27 27 (ii) On 21 September 2017, BHB executed agreements for the proposed issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of, Islamic medium term notes (“IMTN”) under an Islamic term note programme of up to RM500.0 million in nominal value (“Sukuk Programme”). This Sukuk Programme together with the Sukuk Programme in item (iv) above (collectively, the “BHB Sukuk Programmes”), will have a combined programme size of RM2.5 billion. The proceeds to be raised from the BHB Sukuk Programmes may be utilised, where applicable, to finance future property development projects and capital expenditures, investments in subsidiaries and/or associates, working capital requirements to refinance existing borrowings of the Company, to fund the reserve account to meet minimum required balance under the terms and conditions of the BHB Sukuk Programmes and pay fees and expenses relating to the BHB Sukuk Programmes. This Sukuk Programme, which is an unrated sukuk programme, is implemented under Securities Commission Malaysia’s Guidelines on Unlisted Capital Market Products under The Lodge and Launch Framework. The tenure of the Sukuk Programme is 10 years. The proceeds raised from this issuance will be utilised to refinance existing borrowings/financing, to fund the reserve account to meet minimum required balance under the terms and conditions of this Sukuk Programme and to pay fees and expenses relating to this Sukuk Programme. On 28 September 2017, BHB issued a total of RM500.0 million of IMTN under this Sukuk Programme.
(iii) Sale and Purchase Agreement dated 30 October 2017 between Boustead Rimba Nilai Sdn Bhd (“BRNSB”) a wholly-owned subsidiary of Boustead Plantations Berhad and Pertama Land & Development Sdn Bhd for the proposed acquisition by BRNSB of Pertama Estate, Sungai Sapa Payau Estate, Sungai Lokan Estate, Sungai Ruku-Ruku Estate and Sungai Lokan Baru Estate (consisting of 42 parcels of plantation land) located in the Districts of Labuk and Sugut, Sabah measuring approximately 11,579.31 hectares inclusive of all buildings, plant and machinery, vehicles and equipment located at the property for a cash consideration of RM750 million. The acquisition was completed on 16 May 2018.
(iv) Sale and Purchase Agreement dated 22 December 2017 entered into between Mutiara Rini Sdn Bhd (“MRSB”) a wholly-owned subsidiary of BHB and LTAT for the acquisition by MRSB of a parcel of freehold land measuring 6.59 acres held under HSD 118499 PT 484 Section 90, Town of Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur for a total cash consideration of RM143.5 million. The acquisition was completed on 11 October 2018.
(v) Sale and Purchase Agreements dated 24 January 2018 between CIMB Islamic Trustee Berhad (“CIMBIT”) (acting solely in the capacity as a trustee for Boustead Plantations Berhad) and:
a) Sunrich Conquest Sdn Bhd (“SCSB”) for the proposed disposal by CIMBIT of a parcel of freehold land held under GRN 57798 Lot 4358, Mukim 12, District of Seberang Perai Utara, Pulau Pinang measuring of 82.84 hectares for a cash consideration of RM81.14 million.
b) Titanium Greenview Sdn Bhd (“TGSB”) for the proposed disposal by CIMBIT of 2 parcels of freehold land held under GM 288 Lot 248 and GRN 19398 Lot 249, both in Mukim 12, District of Seberang Perai Utara, Pulau Pinang measuring of 0.20 hectares and 55.85 hectares respectively for a cash consideration of RM54.9 million.
The proposed disposal is expected to be completed in the first quarter of 2019.
2828 (vi) Sale and Purchase Agreement dated 1 August 2018 between Boustead Rimba Nilai Sdn Bhd (“BRNSB”) a wholly-owned subsidiary of Boustead Plantations Berhad and Sit Seng & Sons Realty Sdn Bhd, Ever-Yield Sdn Bhd, Sapatanian Sdn Bhd, Belutanian Sdn Bhd, Realwood Enterprise Sdn Bhd, Syarikat Tani Desa, Upaya Abadi Sdn Bhd, Lubah Plantations (S) Sdn Bhd, Sri Istisafa Sdn Bhd, Aikbee Timbers (Sabah) Sdn Bhd, Borneo Glow Sdn Bhd and Vibrant Voyage Sdn Bhd for the proposed acquisition by BRNSB of oil palm plantation lands comprising 17 land titles located in the District of Labuk and Sugut, Beluran and Kinabatangan measuring approximately 4,915.25 hectares in Sabah together with a palm oil mill inclusive of all buildings, movable assets, machineries and vehicles for a cash consideration of RM397 million. The proposed acquisition is expected to be completed in the second quarter of 2019.
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at the Registered Office of Boustead Holdings Berhad at 28th Floor, Menara Boustead, 69 Jalan Raja Chulan, 50200 Kuala Lumpur, during normal business hours on any weekday (except public holidays) from the date of this Circular up to and including the date of the AGM:
(i) The Constitution of BHB;
(ii) The audited consolidated financial statements of BHB for the last two (2) financial years ended 31 December 2018 and 31 December 2017;
(iii) The relevant cause papers in respect of material litigation referred to in Paragraph 2; and
(iv) Material contracts referred to in Paragraph 3 above.
29 29 APPENDIX II
ADDRESSES OF PROPERTIES RENTED
1. The transactions are in compliance with Paragraph 3.2(c) of Practice Note 12 of the Listing Requirements.
2. The addresses of properties rented by the Related Parties as set out in Section 2.3 herein are as follows:-
Section Ref. Transacting Address Subsidiary / Associate & Joint Venture
2.3.1 I(1)(c) BNS Block 3502, Enterprise Building 2, Jalan Teknokrat 4, Cyber 5, 63000 Cyberjaya Selangor
1(1)(f) BHIC Menara Boustead Penang – 39 Jalan Sultan Ahmad Shah, 10050 Georgetown, Penang
I(1)(h) BHIC Menara Boustead KL – 69, Jalan Raja Chulan, 50200 KL
I(2)(b) BNS Menara Boustead KL – 69, Jalan Raja Chulan, 50200 KL
I(2)(c) BHIC (i) Bukit Malut, Mukim Kedawang, 07000, Langkawi, Kedah (ii) Menara Boustead KL – 69, Jalan Raja Chulan, 50200 KL (iii) Pangkalan TLDM, 32100 Lumut, Perak
I(4)(a) Boustead Menara Boustead KL – 69, Jalan Raja Chulan, 50200 KL Plantations
II(1)(a) ABB Menara Boustead KL – 69, Jalan Raja Chulan, 50200 KL
Menara Affin KL – 80, Jalan Raja Chulan, 50200 KL
The Curve – No. 6, Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor
II(2) (a) Irat Royale Chulan Hotel, Jalan Conlay, 50450 KL
II(2) (b) Irat Chulan Tower – No.3 Jalan Conlay, 50450 KL
IV(1)(c) LTAT Surian Tower – No.1 Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya
3030