lingui developments berhad - i3investor · maxis, kuala lumpur city centre, 50088 kuala lumpur...

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m. This Circular is dated 7 December 2012 (Company No. 7574-D) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE LINGUI DEVELOPMENTS BERHAD

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY

TRANSACTIONS OF A REVENUE OR TRADING NATURE

The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m.

This Circular is dated 7 December 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY

TRANSACTIONS OF A REVENUE OR TRADING NATURE

The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m.

This Circular is dated 7 December 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY

TRANSACTIONS OF A REVENUE OR TRADING NATURE

The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m.

This Circular is dated 7 December 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY

TRANSACTIONS OF A REVENUE OR TRADING NATURE

The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m.

This Circular is dated 7 December 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY

TRANSACTIONS OF A REVENUE OR TRADING NATURE

The Notice of an Annual General Meeting [“AGM”] of Lingui Developments Berhad to be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10.00 a.m. together with a Form of Proxy for the purpose of considering the abovementioned proposal, are enclosed in the Annual Report for the year ended 30 June 2012. Shareholders are requested to complete and deposit the Form of Proxy at the Registered Office of the Company at Level 42, Menara Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur not less than forty eight (48) hours before the time set for holding the AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. The last day and time for lodging the Form of Proxy is on 27 December 2012 at 10.00 a.m.

This Circular is dated 7 December 2012

DEFINITIONS In this Circular, except where the context otherwise requires, the following definitions shall apply: Act : Companies Act, 1965 AGM : Annual General Meeting AinoFurnishing : AinoFurnishing Sdn. Bhd. Alpenview : Alpenview Sdn. Bhd. Ang Cheng Ho : Ang Cheng Ho Quarry Sdn. Bhd. Board : Board of Directors of Lingui Bursa Securities : Bursa Malaysia Securities Berhad Bukit Pareh : Bukit Pareh Quarry Sdn. Bhd. East Coast Forests : East Coast Forests Limited Fuji Milestone : Fuji Milestone Sdn. Bhd. Grand Paragon : Grand Paragon Sdn. Bhd. Glenealy : Glenealy Plantations (Malaya) Berhad Glenealy Group : Glenealy and its subsidiary companies Hikurangi Forest : Hikurangi Forest Farms Limited Hock Lee Enterprises : Hock Lee Enterprises (M) Sdn. Bhd. Hock Lee Plantations : Hock Lee Plantations Sdn. Bhd. Hock Lee Rubber : Hock Lee Rubber Products Sdn. Bhd. Lingui Corporation : Lingui Corporation Sdn. Bhd. Lingui Group or Group : Lingui, its subsidiary and associated companies Lingui or Company : Lingui Developments Berhad Listing Requirements : Listing Requirements of Bursa Securities Mandate Period : The period from 29 December 2012 (being the date of expiry of the

existing shareholders’ mandate and the date of our forthcoming AGM) until the conclusion of the next AGM estimated to be held not later than 31 December 2013

Meridian Magic Miri Parts

: :

Meridian Magic Sdn. Bhd. Miri Parts Trading Sdn. Bhd.

Planet One : Planet One Pte. Ltd. Plenitude Spectrum : Plenitude Spectrum Sdn. Bhd. Prominent Target : Prominent Target Sdn. Bhd.

Propel Formula : Propel Formula Sdn. Bhd. Proposed Shareholders’ Mandate

:

Proposed new and renewal of shareholders’ mandate(s) for Recurrent Transactions

RM : Ringgit Malaysia Recurrent Transactions : Recurrent Related Party Transactions of a revenue or trading nature

which are necessary for day-to-day operations of the Lingui Group Registered Office : The registered address of Lingui which is at Level 42, Menara

Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur Related Party or Related Parties : A Director(s), major shareholder(s) or person(s) connected with

such Director(s) or major shareholder(s). For the purpose of this definition, Director(s) and major shareholder(s) shall have the same meanings given in Paragraph 10.02 of the Listing Requirements

Related Party Transaction : A transaction entered into by the Lingui Group which involves the

interest, direct or indirect, of a Related Party Revenue Avenue : Revenue Avenue Sdn. Bhd. Samling Global : Samling Global Limited, a subsidiary company of Samling Strategic

Corporation (93.19%) Samling Global Group : Samling Global, its subsidiary and associated companies Samling Housing Products : Samling Housing Products Sdn. Bhd., a subsidiary company of

Syarikat Samling Timber (56.1%) Samling Malaysia Inc : Samling Malaysia Inc, a wholly-owned subsidiary company of

Samling Global Samling Plywood Baramas : Samling Plywood (Baramas) Sdn. Bhd. Samling Plywood Bintulu : Samling Plywood (Bintulu) Sdn. Bhd. Samling Plywood Lawas : Samling Plywood (Lawas) Sdn. Bhd. Samling Plywood Miri : Samling Plywood (Miri) Sdn. Bhd. Samling Power : Samling Power Sdn. Bhd.

Samling Strategic Corporation : Samling Strategic Corporation Sdn. Bhd., a wholly-owned

subsidiary company of Yaw Holding

Stigang Resources : Stigang Resources Sdn. Bhd. Syarikat Samling Timber : Syarikat Samling Timber Sdn. Bhd., a wholly-owned subsidiary

company of Samling Global TOLS : TreeOne Logistic Services Sdn. Bhd. TOM : TreeOne (Malaysia) Sdn. Bhd. TONZ : TreeOne (NZ) Limited Tamex Timber : Tamex Timber Sdn. Bhd Tasman Forestry : Tasman Forestry (Gisborne) Limited

Propel Formula : Propel Formula Sdn. Bhd. Proposed Shareholders’ Mandate

:

Proposed new and renewal of shareholders’ mandate(s) for Recurrent Transactions

RM : Ringgit Malaysia Recurrent Transactions : Recurrent Related Party Transactions of a revenue or trading nature

which are necessary for day-to-day operations of the Lingui Group Registered Office : The registered address of Lingui which is at Level 42, Menara

Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur Related Party or Related Parties : A Director(s), major shareholder(s) or person(s) connected with

such Director(s) or major shareholder(s). For the purpose of this definition, Director(s) and major shareholder(s) shall have the same meanings given in Paragraph 10.02 of the Listing Requirements

Related Party Transaction : A transaction entered into by the Lingui Group which involves the

interest, direct or indirect, of a Related Party Revenue Avenue : Revenue Avenue Sdn. Bhd. Samling Global : Samling Global Limited, a subsidiary company of Samling Strategic

Corporation (93.19%) Samling Global Group : Samling Global, its subsidiary and associated companies Samling Housing Products : Samling Housing Products Sdn. Bhd., a subsidiary company of

Syarikat Samling Timber (56.1%) Samling Malaysia Inc : Samling Malaysia Inc, a wholly-owned subsidiary company of

Samling Global Samling Plywood Baramas : Samling Plywood (Baramas) Sdn. Bhd. Samling Plywood Bintulu : Samling Plywood (Bintulu) Sdn. Bhd. Samling Plywood Lawas : Samling Plywood (Lawas) Sdn. Bhd. Samling Plywood Miri : Samling Plywood (Miri) Sdn. Bhd. Samling Power : Samling Power Sdn. Bhd.

Samling Strategic Corporation : Samling Strategic Corporation Sdn. Bhd., a wholly-owned

subsidiary company of Yaw Holding

Stigang Resources : Stigang Resources Sdn. Bhd. Syarikat Samling Timber : Syarikat Samling Timber Sdn. Bhd., a wholly-owned subsidiary

company of Samling Global TOLS : TreeOne Logistic Services Sdn. Bhd. TOM : TreeOne (Malaysia) Sdn. Bhd. TONZ : TreeOne (NZ) Limited Tamex Timber : Tamex Timber Sdn. Bhd Tasman Forestry : Tasman Forestry (Gisborne) Limited

Tinjar Transport : Tinjar Transport Sdn. Bhd. Yaw Holding : Yaw Holding Sdn. Bhd. Yaw Holding Group : Yaw Holding, its subsidiary and associated companies 3D Networks :

3D Networks Sdn. Bhd.

0

TABLE OF CONTENTS

Page LETTER TO THE SHAREHOLDERS OF LINGUI CONTAINING: 1. INTRODUCTION 1 2. PROPOSED SHAREHOLDERS’ MANDATE

2.1. PRINCIPAL BUSINESS ACTIVITIES OF THE GROUP 2 - 3 2.2. CLASS AND NATURE OF THE RECURRENT TRANSACTIONS FOR THE PROPOSED

SHAREHOLDERS’ MANDATE 4 - 7 2.3. DETAILS ON THE RELATED PARTIES 8 - 9 2.4. RATIONALE FOR THE RECURRENT TRANSACTIONS 10 2.5. BENEFITS OF THE RECURRENT TRANSACTIONS 10 2.6. METHODS OR PROCEDURES OF DETERMINING PRICES OF RECURRENT

TRANSACTIONS 10 - 11 2.7. CONDITIONS AND DISCLOSURE OF THE PROPOSED SHAREHOLDERS’

MANDATE 11 - 12  

2.8. EXISTING MANDATE ON RECURRENT RELATED PARTY TRANSACTIONS 12 - 13  

2.9. AMOUNT DUE AND OWING BY THE RELATED PARTIES PURSUANT TO THE RECURRENT RELATED PARTY TRANSACTIONS 14

 2.10. THRESHOLD OF AUTHORITY 14 2.11. STATEMENT BY THE AUDIT COMMITTEE 15

3. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS 15 4. DIRECTORS’ RECOMMENDATION 15 5. ANNUAL GENERAL MEETING 16 6. FURTHER INFORMATION 16

APPENDIX I 17 - 18

1

LINGUI DEVELOPMENTS BERHAD (Company No. 7574-D)

(Incorporated in Malaysia)

Registered Office

Level 42, Menara Maxis Kuala Lumpur City Centre 50088 Kuala Lumpur 7 December 2012

Directors Mr. Chan Hua Eng (Chairman/Independent Non-Executive Director) Dato’ Seri Datuk Dr. Haji Jalaluddin bin Abdul Rahim (Deputy Chairman/Independent Non-Executive Director) Dato Sri Yaw Chee Ming (Managing Director/Non-Independent Executive Director) Mr. Geh Cheng Hooi (Independent Non-Executive Director) Datuk Fong Joo Chung (Independent Non-Executive Director) Mr. Ho Yam Kuan (Non-Independent Executive Director) Tan Sri Amirsham bin A Aziz (Independent Non-Executive Director) To: The Shareholders of Lingui Developments Berhad Dear Sir/Madam, PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION

The Company had on 3 November 2011 obtained a general mandate from its shareholders for the Group to enter into Recurrent Transactions pursuant to Paragraph 10.09 of the Listing Requirements. This general mandate shall lapse at the conclusion of the forthcoming AGM of the Company, which has been scheduled on 29 December 2012.

The Board of Directors had on 30 November 2012 announced to the Bursa Securities its intention to seek approval from its shareholders for Proposed Shareholders’ Mandate pursuant to Paragraph 10.09 of the Listing Requirements.

The purpose of this Circular is to provide you with the relevant information on the Proposed Shareholders’ Mandate, to set out your Board’s recommendation and to seek your approval for the ordinary resolutions to be tabled at the forthcoming AGM.

1

2

2. PROPOSED SHAREHOLDERS’ MANDATE

2.1 Principal business activities of the Group

The principal business activities of Lingui are investment, property holding and provision of management services. The principal activities of the subsidiary companies of Lingui as at the date of this Circular are set out in the table below:

Name of Company Country of Incorporation

Date of Incorporation

Effective Equity Interest Principal Activities

% Alpenview Malaysia 11.10.1991 100 Investment holding

Ang Cheng Ho Malaysia 28.02.1970 100 Quarry licensee and

operator

AinoFurnishing

Malaysia 14.07.2005 100 Kitchen, cookware, dining ware retail and rendering of kitchen products in housing development projects

Bukit Pareh

Malaysia 29.09.1977 100 Dormant

East Coast Forests

New Zealand 23.04.1951 100 Non-trading

Fuji Milestone Malaysia 01.01.2011 100 Dormant Grand Paragon Malaysia 11.10.1996 100 Investment holding

Hikurangi Forest

New Zealand 19.06.1980 100 Forest plantation

Hock Lee Enterprises Malaysia 28.11.1967 100 Property investment and letting of industrial properties

Hock Lee Plantations Malaysia 08.04.1970 100 Investment holding

Hock Lee Rubber Malaysia 15.01.1980

100 Manufacture and sale of rubber retread compounds

Lingui Corporation Malaysia 29.03.1985 100 Provision of management services

Miri Parts Malaysia 29.11.1980 100 Non-trading

Plenitude Spectrum Malaysia 11.01.2011 100 Dormant

Prominent Target Malaysia 11.01.2011 100 Dormant

Propel Formula Malaysia 01.01.2011 100 Dormant

Revenue Avenue Malaysia 08.10.2012 100 Treasury management services

Samling Power

Malaysia 28.05.1996 100 Operation of power generating facilities

Samling Plywood Baramas

Malaysia 22.08.1987 100

Manufacture and sale of plywood and veneer, extraction and sale of timber logs

2

3

Name of Company Country of Incorporation

Date of Incorporation

Effective Equity Interest Principal Activities

Samling Plywood Bintulu

Malaysia

19.03.1986

100

Manufacture and sale of plywood and veneer, extraction and sale of timber logs

Samling Plywood Lawas

Malaysia 09.05.1986 100

Extraction and sale of timber logs

Samling Plywood Miri

Malaysia 18.01.1984 100

Manufacture and sale of plywood, extraction and sale of timber logs

Stigang Resources Malaysia 15.07.1976 100 Quarry licensee and operator

Tamex Timber

Malaysia 23.12.1980 100 Contractor for timber extraction, riverine transportation services, spare parts, petrol, oil and lubricant traders, insurance agents and provision of repair services

Tasman Forestry

New Zealand 16.04.1980 100 Non-trading

Tinjar Transport Malaysia 15.09.1976 100 Non-trading

TOLS Malaysia 01.04.1997 97 Provision of logistic services

TOM Malaysia 20.01.1997 100 Investment holding

TONZ

New Zealand 13.01.1997 100 Investment holding

[The remainder of this page is intentionally left blank]

2

2. PROPOSED SHAREHOLDERS’ MANDATE

2.1 Principal business activities of the Group

The principal business activities of Lingui are investment, property holding and provision of management services. The principal activities of the subsidiary companies of Lingui as at the date of this Circular are set out in the table below:

Name of Company Country of Incorporation

Date of Incorporation

Effective Equity Interest Principal Activities

% Alpenview Malaysia 11.10.1991 100 Investment holding

Ang Cheng Ho Malaysia 28.02.1970 100 Quarry licensee and

operator

AinoFurnishing

Malaysia 14.07.2005 100 Kitchen, cookware, dining ware retail and rendering of kitchen products in housing development projects

Bukit Pareh

Malaysia 29.09.1977 100 Dormant

East Coast Forests

New Zealand 23.04.1951 100 Non-trading

Fuji Milestone Malaysia 01.01.2011 100 Dormant Grand Paragon Malaysia 11.10.1996 100 Investment holding

Hikurangi Forest

New Zealand 19.06.1980 100 Forest plantation

Hock Lee Enterprises Malaysia 28.11.1967 100 Property investment and letting of industrial properties

Hock Lee Plantations Malaysia 08.04.1970 100 Investment holding

Hock Lee Rubber Malaysia 15.01.1980

100 Manufacture and sale of rubber retread compounds

Lingui Corporation Malaysia 29.03.1985 100 Provision of management services

Miri Parts Malaysia 29.11.1980 100 Non-trading

Plenitude Spectrum Malaysia 11.01.2011 100 Dormant

Prominent Target Malaysia 11.01.2011 100 Dormant

Propel Formula Malaysia 01.01.2011 100 Dormant

Revenue Avenue Malaysia 08.10.2012 100 Treasury management services

Samling Power

Malaysia 28.05.1996 100 Operation of power generating facilities

Samling Plywood Baramas

Malaysia 22.08.1987 100

Manufacture and sale of plywood and veneer, extraction and sale of timber logs

3

4

2.2 Class and nature of the Recurrent Transactions for the Proposed Shareholders’ Mandate The Proposed Shareholders’ Mandate will apply to the Recurrent Transactions to be entered into by the Lingui Group with the Related Parties during the Mandate Period. The Recurrent Transactions of which the Directors and/or the major shareholders and/or persons connected to the Directors or major shareholders of Lingui has/have interest(s) are as follows:

Type of Transactions Related Parties

Estimated value duringthe Mandate Period*

Receivable Payable RM’000 RM’000 1 Agency commission

payable(a) Samling Global Group (1) 1,200

2 Construction of roads

and bridges and purchase of motor vehicles and equipment

Yaw Holding Group (1)

Samling Global Group (1)

600

20,000

3 Disposal of motor

vehicles and equipment

Samling Global Group (1) 6,000

4 Lighterage income

receivable (b)

Samling Global Group (1)

Glenealy Group (2)

32,000

2,500

5 Logging contract fees payable (c)

Samling Global Group (1) 171,000

6 Logging contract fees

receivable (c) Samling Global Group (1) 295,000

7 Purchase of fuel,

spare parts and other materials

Yaw Holding Group (1)

Samling Global Group (1)

3D Networks (3) **

100

26,000

1,600 8 Purchase of logs,

plywood, veneer and sawn timber

Samling Global Group (1) 195,000

9 Property maintenance

income Samling Global Group (1)

150

10 Rental of

premises/equipment Yaw Holding Group (1) 1,700

payable (d) Samling Global Group (1) 700

4

5

2.2 Class and nature of the Recurrent Transactions for the Proposed Shareholders’ Mandate (continued)

Type of Transactions Related Parties

Estimated value during the Mandate Period*

Receivable Payable RM’000 RM’000 11 Rental of Yaw Holding Group (1) 1,200 premises/equipment receivable (e) Samling Gobal Group(1)

3D Networks (3)

Meridian Magic (4)

2,500

200

400

12 Repair and

reconditioning expenses(f)

Samling Global Group (1)

3,000

13 Road construction

and trucking income Samling Global Group (1)

3,000

14 Road construction and trucking expenses

Samling Global Group (1)

16,000

15 Sale of fuel, spare

parts and other materials

Yaw Holding Group (1)

Samling Global Group (1)

2,000

239,000

16 Sale of logs, plywood, veneer and sawn timber

Samling Global Group (1) 75,000

658,950 436,900 Notes * The estimated transaction values are based on the information available at the point of estimation,

which is derived from the Group’s budget for the period of the mandate. Due to the nature of the transactions, the actual value may vary from the estimated value disclosed above. These figures may also vary according to the level of operations.

** This relates to the proposed new Recurrent Transactions to be entered into by the Lingui Group.

5

6

Brief Description of the Recurrent Transactions Notes (a) Agency commission payable relates to commission payable for handling and logistic services in

respect of the export of logs. (b) Lighterage relates to transportation of logs through rivers.

(c) Logging contract fees are fees payable to/receivable from related parties for extraction of logs.

(d) The rental of premises payable on a monthly basis relate to the following:

Type of Premises Address Tenure Condominium #

Unit A3A-1 Brighton Condominium, MCLD Jalan Temenggong Datuk Oyong Lawai Jau 98000 Miri

1 July 2012 to 30 June 2014

Condominium #

Unit A7-3A-A Brighton Condominium, MCLD Jalan Temenggong Datuk Oyong Lawai Jau 98000 Miri

1 July 2012 to 30 June 2014

Condominium #

Unit A5-1A Brighton Condominium, MCLD Jalan Temenggong Datuk Oyong Lawai Jau 98000 Miri

1 July 2012 to 30 June 2014

Condominium #

Unit A6-3A-A Brighton Condominium, MCLD Jalan Temenggong Datuk Oyong Lawai Jau 98000 Miri

1 June 2011 to 31 May 2014

Office premises

Lot 296, Wisma Samling Jalan Temenggong Datuk Oyong Lawai Jau 98000 Miri

1 July 2012 to 30 June 2014

Shop lot

Lot No. GF-10 & GF-11 The Waterfront at Parkcity No. 5, Persiaran Residen Desa Parkcity, 52200 Kuala Lumpur

1 December 2010 to 30 November 2013

# The condominium is rented for the staff.

6

7

Brief Description of the Recurrent Transactions (continued)

(e) The rental of premises receivable on a monthly basis relate to the following: Type of Premises Address Tenure Staff quarters

FJ-03,RB-06,FO-03,FO-02,FA-10 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Ex-16,RF-11,FN-08,RA-11 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters No. 20, 21 & 22 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Kampung Cempaka Kampung Bunga Raya Kampung Melor Kuala Baram Land District Miri

By mutual agreement

Staff quarters

Lot 4366 & 4367, Block 32 Kemena Land District 97000 Bintulu

1 January 2011 to 31 December 2012

Show room

Lingui Industrial Park 15 ½ Miles, Sungai Pelong 47000 Sungai Buloh, Selangor

1 January 2011 31 December 2013

Office premises

Lot 826, Kuala Baram Industrial Estate PO Box 1678 98008, Miri, Sarawak

1 February 2010 until terminated by either party giving not less than one (1) month notice

Office premises

Unit C-10-4 & Unit C-10-5, 10th Floor, Block C, Megan Avenue II 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

1 April 2011 to 31 March 2013

(f) Repair and reconditioning expenses relate to the repair and reconditioning of machines, trucks, log

loaders, tractors and other machines and equipment used in logging operations.

Relationships of the Related Parties

Notes (1) Please refer to Section 2.3(a) (2) Please refer to Section 2.3(b) (3) Please refer to Section 2.3(c) (4) Please refer to Section 2.3(d)

7

Brief Description of the Recurrent Transactions (continued)

(e) The rental of premises receivable on a monthly basis relate to the following: Type of Premises Address Tenure Staff quarters

FJ-03,RB-06,FO-03,FO-02,FA-10 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Ex-16,RF-11,FN-08,RA-11 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters No. 20, 21 & 22 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Kampung Cempaka Kampung Bunga Raya Kampung Melor Kuala Baram Land District Miri

By mutual agreement

Staff quarters

Lot 4366 & 4367, Block 32 Kemena Land District 97000 Bintulu

1 January 2011 to 31 December 2012

Show room

Lingui Industrial Park 15 ½ Miles, Sungai Pelong 47000 Sungai Buloh, Selangor

1 January 2011 31 December 2013

Office premises

Lot 826, Kuala Baram Industrial Estate PO Box 1678 98008, Miri, Sarawak

1 February 2010 until terminated by either party giving not less than one (1) month notice

Office premises

Unit C-10-4 & Unit C-10-5, 10th Floor, Block C, Megan Avenue II 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

1 April 2011 to 31 March 2013

(f) Repair and reconditioning expenses relate to the repair and reconditioning of machines, trucks, log

loaders, tractors and other machines and equipment used in logging operations.

Relationships of the Related Parties

Notes (1) Please refer to Section 2.3(a) (2) Please refer to Section 2.3(b) (3) Please refer to Section 2.3(c) (4) Please refer to Section 2.3(d)

7

Brief Description of the Recurrent Transactions (continued)

(e) The rental of premises receivable on a monthly basis relate to the following: Type of Premises Address Tenure Staff quarters

FJ-03,RB-06,FO-03,FO-02,FA-10 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Ex-16,RF-11,FN-08,RA-11 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters No. 20, 21 & 22 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Kampung Cempaka Kampung Bunga Raya Kampung Melor Kuala Baram Land District Miri

By mutual agreement

Staff quarters

Lot 4366 & 4367, Block 32 Kemena Land District 97000 Bintulu

1 January 2011 to 31 December 2012

Show room

Lingui Industrial Park 15 ½ Miles, Sungai Pelong 47000 Sungai Buloh, Selangor

1 January 2011 31 December 2013

Office premises

Lot 826, Kuala Baram Industrial Estate PO Box 1678 98008, Miri, Sarawak

1 February 2010 until terminated by either party giving not less than one (1) month notice

Office premises

Unit C-10-4 & Unit C-10-5, 10th Floor, Block C, Megan Avenue II 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

1 April 2011 to 31 March 2013

(f) Repair and reconditioning expenses relate to the repair and reconditioning of machines, trucks, log

loaders, tractors and other machines and equipment used in logging operations.

Relationships of the Related Parties

Notes (1) Please refer to Section 2.3(a) (2) Please refer to Section 2.3(b) (3) Please refer to Section 2.3(c) (4) Please refer to Section 2.3(d)

7

Brief Description of the Recurrent Transactions (continued)

(e) The rental of premises receivable on a monthly basis relate to the following: Type of Premises Address Tenure Staff quarters

FJ-03,RB-06,FO-03,FO-02,FA-10 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Ex-16,RF-11,FN-08,RA-11 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters No. 20, 21 & 22 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Kampung Cempaka Kampung Bunga Raya Kampung Melor Kuala Baram Land District Miri

By mutual agreement

Staff quarters

Lot 4366 & 4367, Block 32 Kemena Land District 97000 Bintulu

1 January 2011 to 31 December 2012

Show room

Lingui Industrial Park 15 ½ Miles, Sungai Pelong 47000 Sungai Buloh, Selangor

1 January 2011 31 December 2013

Office premises

Lot 826, Kuala Baram Industrial Estate PO Box 1678 98008, Miri, Sarawak

1 February 2010 until terminated by either party giving not less than one (1) month notice

Office premises

Unit C-10-4 & Unit C-10-5, 10th Floor, Block C, Megan Avenue II 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

1 April 2011 to 31 March 2013

(f) Repair and reconditioning expenses relate to the repair and reconditioning of machines, trucks, log

loaders, tractors and other machines and equipment used in logging operations.

Relationships of the Related Parties

Notes (1) Please refer to Section 2.3(a) (2) Please refer to Section 2.3(b) (3) Please refer to Section 2.3(c) (4) Please refer to Section 2.3(d)

7

Brief Description of the Recurrent Transactions (continued)

(e) The rental of premises receivable on a monthly basis relate to the following: Type of Premises Address Tenure Staff quarters

FJ-03,RB-06,FO-03,FO-02,FA-10 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Ex-16,RF-11,FN-08,RA-11 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters No. 20, 21 & 22 Lot 389, Block 38 Kemena Land District 97000 Bintulu

By mutual agreement

Staff quarters Kampung Cempaka Kampung Bunga Raya Kampung Melor Kuala Baram Land District Miri

By mutual agreement

Staff quarters

Lot 4366 & 4367, Block 32 Kemena Land District 97000 Bintulu

1 January 2011 to 31 December 2012

Show room

Lingui Industrial Park 15 ½ Miles, Sungai Pelong 47000 Sungai Buloh, Selangor

1 January 2011 31 December 2013

Office premises

Lot 826, Kuala Baram Industrial Estate PO Box 1678 98008, Miri, Sarawak

1 February 2010 until terminated by either party giving not less than one (1) month notice

Office premises

Unit C-10-4 & Unit C-10-5, 10th Floor, Block C, Megan Avenue II 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

1 April 2011 to 31 March 2013

(f) Repair and reconditioning expenses relate to the repair and reconditioning of machines, trucks, log

loaders, tractors and other machines and equipment used in logging operations.

Relationships of the Related Parties

Notes (1) Please refer to Section 2.3(a) (2) Please refer to Section 2.3(b) (3) Please refer to Section 2.3(c) (4) Please refer to Section 2.3(d)

7

8

2.3 Details on the Related Parties

The interests of the Related Parties in the Recurrent Transactions as set out in Section 2.2 above are as follows: (a) Yaw Holding Group and Samling Global Group

Lingui Group transacts with certain companies in the Yaw Holding Group and Samling Global Group. Yaw Holding is a major shareholder of Samling Strategic Corporation (direct interest of 100%) and is deemed a major shareholder of Samling Global (indirect interest of 93.19%) by virtue of its substantial shareholding through Samling Strategic Corporation. Samling Global is a major shareholder of Lingui (indirect interest of 67.23%) by virtue of its substantial shareholding through Samling Malaysia Inc. Tan Sri Datuk Yaw Teck Seng and Dato Sri Yaw Chee Ming are both deemed major shareholders of Lingui by virtue of their substantial shareholdings through Yaw Holding and Samling Strategic Corporation in Samling Global (indirect interest of 67.23% collectively). Dato Sri Yaw Chee Ming is the common Director of Lingui, Yaw Holding and Samling Global. He is also a Director in certain subsidiaries of Lingui and certain companies of Yaw Holding Group and Samling Global Group. He has indirect equity interest in Samling Global of 4,022,479,810 ordinary shares of USD0.10 each. Yaw Chee Chik, a Director of Yaw Holding, is also a Director in certain subsidiaries of Lingui and certain companies of Yaw Holding Group and Samling Global Group.

Tan Sri Datuk Yaw Teck Seng is the father of Dato Sri Yaw Chee Ming and Yaw Chee Chik. Hence, Tan Sri Datuk Yaw Teck Seng, Dato Sri Yaw Chee Ming and Yaw Chee Chik are persons connected to each other. Chan Hua Eng is the common Chairman of Lingui and Samling Global. He has a direct and indirect equity interest in Lingui of 58,333 and 4,236,290 ordinary shares of RM0.50 each respectively.

Transactions between Yaw Holding Group (exclude Samling Global Group) with Lingui Group and Samling Global Group with Lingui Group are disclosed separately.

(b) Glenealy Group Dato Sri Yaw Chee Ming is the Managing Director of Glenealy. Tan Sri Datuk Yaw Teck Seng and Dato Sri Yaw Chee Ming are deemed major shareholders of Glenealy (respective indirect interests of 100%) by virtue of their substantial shareholdings through Yaw Holding in Samling Strategic Corporation, Samling Global and Lingui. Yaw Holding (indirect interest of 100%), Samling Strategic (direct and indirect interests of 15.35% and 84.65% respectively), Samling Global (indirect interest of 84.65%) and Lingui (direct and indirect interests of 1.91% and 36.42% respectively) are major shareholders of Glenealy.

8

9

2.3 Details on the Related Parties (continued)

(c) 3D Networks

Dato Sri Yaw Chee Ming, is deemed a major shareholder of 3D Networks by virtue of his substantial shareholding in Planet One (direct and indirect interests of 15.06% and 84.94% respectively). Yaw Chee Siew is a director of Planet One. Yaw Chee Siew is the brother of Dato Sri Yaw Chee Ming. Hence, Yaw Chee Siew and Dato Sri Yaw Chee Ming are persons connected to each other.

(d) Meridian Magic Yaw Chee Yun, is a director of Meridian Magic and a major shareholder of Meridian Magic (direct interest of 30%). Yaw Chee Yun is the brother of Dato Sri Yaw Chee Ming. Hence, Yaw Chee Yun and Dato Sri Yaw Chee Ming are persons connected to each other.

The direct and indirect interests of major shareholders of Lingui as at 2 November 2012 based on the Register of Substantial Shareholdings are as follows:

Direct Indirect

No. of Ordinary Shares of RM0.50 each

% No. of Ordinary Shares of RM0.50 each

%

Samling Strategic Corporation - - 443,473,768 (1) 67.23 Samling Global - - 443,473,768 (2) 67.23 Samling Malaysia Inc - - 443,473,768 (3) 67.23 Yaw Holding - - 443,473,768 (4) 67.23 Tan Sri Datuk Yaw Teck Seng - - 443,473,768 (5) 67.23 Dato Sri Yaw Chee Ming - - 443,473,768 (6) 67.23

Notes (1) Deemed interest by virtue of its substantial shareholding in Samling Global (2) Deemed interest by virtue of its substantial shareholding in Samling Malaysia Inc (3) Held by CIMSEC Nominees (Asing) Sdn. Bhd., The Bank of Tokyo – Mitsubishi UFJ, Ltd. Singapore

for Samling Malaysia Inc (59.69%) and CIMSEC Nominees (Asing) Sdn. Bhd.,CIMB for Samling Malaysia Inc (7.54%)

(4) Deemed interest by virtue of its substantial shareholding in Samling Strategic Corporation (5) Deemed interest by virtue of his substantial shareholding in Yaw Holding (direct and indirect interests

of 100% collectively) (6) Deemed interest by virtue of his substantial shareholding in Yaw Holding

The direct and indirect interests of interested Directors of Lingui as at 2 November 2012 based on the Register of Directors’ Shareholdings are as follows:

Direct Indirect

No. of Ordinary Shares of RM0.50 each % No. of Ordinary Shares

of RM0.50 each %

Chan Hua Eng 58,333 * 4,236,290 (1) 0.64 Dato Sri Yaw Chee Ming - - 443,473,768 (2) 67.23

Notes (1) Deemed interested in 336,290 shares by virtue of his substantial shareholding in Tysim Holdings

Sdn. Bhd. and 3,900,000 shares by virtue of connected person’s substantial shareholding in Pacific & Orient Insurance Co. Berhad. .

(2) Deemed interest by virtue of his indirect substantial shareholding in Samling Malaysia Inc..

10

* Negligible

2.4 Rationale for the Recurrent Transactions

The Recurrent Transactions to be entered into by the Lingui Group are all in the ordinary course of business. The Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders. It is envisaged that in the normal course of their business, transactions between companies in the Lingui Group and the Related Parties are likely to occur from time to time and it may be impractical to seek shareholders’ approval on a case to case basis before entering into such Recurrent Transactions.

With the Proposed Shareholders’ Mandate and the renewal of the same on an annual basis in place, separate general meetings would not be necessary to be convened to seek shareholders’ approval as and when Recurrent Transactions occur. This would substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings on an ad-hoc basis, and allow manpower resources and time to be channeled towards attaining corporate objectives.

Additionally, the Related Parties have been reliable suppliers and/or customers of the Lingui Group for many years and the Group have benefited from price competitiveness and business efficiencies such as shorter delivery time.

Hence, the Board is seeking approval from shareholders on the Proposed Shareholders’ Mandate for the Recurrent Transactions as described in Section 2.2 above.

2.5 Benefits of the Recurrent Transactions

The Related Parties are mainly involved in businesses which are related to the timber operations of the Lingui Group. Due to the operating environment of the timber industry, effective control over the supply chain is important to achieve operational effectiveness and efficiency. The close relationships that had been established with the Related Parties have created an effective network that the Group can draw upon to support its operational needs, deriving synergistic and operational benefits to support its marketing, distribution and manufacturing functions. The continuous support that is extended by the Related Parties is important and forms an integral part of the Group’s corporate strategy to operate in a larger group with upstream and downstream linkages between the Lingui Group and the Related Parties deriving benefits which include improvements in allocation and utilisation of resources, sharing of the marketing network and consistent supply of materials.

2.6 Methods or procedures of determining prices of Recurrent Transactions

Generally, the prices, terms and conditions of the Recurrent Transactions are based on market rates, the availability of the amount/resources to be transacted and negotiated on a willing buyer willing seller basis. Where practical and feasible, quotations and tenders will be obtained from third parties to ascertain appropriate prices. At such, at least two (2) other contemporaneous transactions with unrelated parties for similar products and/or quantities will be used as comparison, wherever possible to determine the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products, services and/or quantities.

In the event that the quotation or comparative pricing from unrelated third parties cannot be obtained, the Group will rely on the prevailing market prices of the same or substantially similar type of products and services for comparison based on the terms which are generally in line with the industrial norms to ensure Recurrent Transactions are not detrimental to the Company and/or the Group.

9

10

* Negligible

2.4 Rationale for the Recurrent Transactions

The Recurrent Transactions to be entered into by the Lingui Group are all in the ordinary course of business. The Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders. It is envisaged that in the normal course of their business, transactions between companies in the Lingui Group and the Related Parties are likely to occur from time to time and it may be impractical to seek shareholders’ approval on a case to case basis before entering into such Recurrent Transactions.

With the Proposed Shareholders’ Mandate and the renewal of the same on an annual basis in place, separate general meetings would not be necessary to be convened to seek shareholders’ approval as and when Recurrent Transactions occur. This would substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings on an ad-hoc basis, and allow manpower resources and time to be channeled towards attaining corporate objectives.

Additionally, the Related Parties have been reliable suppliers and/or customers of the Lingui Group for many years and the Group have benefited from price competitiveness and business efficiencies such as shorter delivery time.

Hence, the Board is seeking approval from shareholders on the Proposed Shareholders’ Mandate for the Recurrent Transactions as described in Section 2.2 above.

2.5 Benefits of the Recurrent Transactions

The Related Parties are mainly involved in businesses which are related to the timber operations of the Lingui Group. Due to the operating environment of the timber industry, effective control over the supply chain is important to achieve operational effectiveness and efficiency. The close relationships that had been established with the Related Parties have created an effective network that the Group can draw upon to support its operational needs, deriving synergistic and operational benefits to support its marketing, distribution and manufacturing functions. The continuous support that is extended by the Related Parties is important and forms an integral part of the Group’s corporate strategy to operate in a larger group with upstream and downstream linkages between the Lingui Group and the Related Parties deriving benefits which include improvements in allocation and utilisation of resources, sharing of the marketing network and consistent supply of materials.

2.6 Methods or procedures of determining prices of Recurrent Transactions

Generally, the prices, terms and conditions of the Recurrent Transactions are based on market rates, the availability of the amount/resources to be transacted and negotiated on a willing buyer willing seller basis. Where practical and feasible, quotations and tenders will be obtained from third parties to ascertain appropriate prices. At such, at least two (2) other contemporaneous transactions with unrelated parties for similar products and/or quantities will be used as comparison, wherever possible to determine the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products, services and/or quantities.

In the event that the quotation or comparative pricing from unrelated third parties cannot be obtained, the Group will rely on the prevailing market prices of the same or substantially similar type of products and services for comparison based on the terms which are generally in line with the industrial norms to ensure Recurrent Transactions are not detrimental to the Company and/or the Group.

11

The Management will ensure that Recurrent Transaction with the Related Parties will only be entered into after taking into account the pricing, level of services, quality of products and other related factors.

2.6 Methods or procedures of determining prices of Recurrent Transactions (continued)

The following internal review procedures, of which are in place, have been established to ensure that the Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders:

(i) A list of the Related Parties mandated pursuant to the Proposed Shareholders’ Mandate will be circulated within the Lingui Group with notification that all Recurrent Transactions are required to be undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders;

(ii) A register within the accounting system has been created and will be maintained by the Group to capture all Recurrent Transactions which are entered into;

(iii) The shareholding interests of the Related Parties will be monitored continuously. Any changes in the shareholdings of the Related Parties will be duly notified to the respective subsidiary companies;

(iv) A register will be kept by Lingui to keep track on the appointment of Directors in Lingui and its subsidiary companies and the major shareholders of Lingui and its subsidiary companies. Additionally, the register will serve to capture the immediate disclosure required from the Directors of Lingui’s subsidiary companies on any interests in a corporation/partnership;

(v) The respective management teams of the subsidiary companies will update Lingui on a monthly basis on the Recurrent Transactions which will be reviewed monthly by the management of the Lingui Group; and

(vi) The Lingui Group’s internal audit plan shall include a critical review of the Recurrent Transactions entered into pursuant to the Proposed Shareholders’ Mandate to ensure that they are transacted on terms and conditions which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders in the light of the circumstances concerned. The Audit Committee shall review the internal audit reports to ascertain that the review procedures established to monitor the Recurrent Transactions have been complied with.

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate

The Proposed Shareholders’ Mandate is subject to an annual renewal and shall only continue to be in force until:

(a) the next AGM following the forthcoming AGM at which the Proposed Shareholders’ Mandate will be tabled;

(b) the expiration of the period within which the next AGM after the date it is required to be held pursuant to section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders of Lingui in a general meeting;

whichever is the earlier.

10

* Negligible

2.4 Rationale for the Recurrent Transactions

The Recurrent Transactions to be entered into by the Lingui Group are all in the ordinary course of business. The Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders. It is envisaged that in the normal course of their business, transactions between companies in the Lingui Group and the Related Parties are likely to occur from time to time and it may be impractical to seek shareholders’ approval on a case to case basis before entering into such Recurrent Transactions.

With the Proposed Shareholders’ Mandate and the renewal of the same on an annual basis in place, separate general meetings would not be necessary to be convened to seek shareholders’ approval as and when Recurrent Transactions occur. This would substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings on an ad-hoc basis, and allow manpower resources and time to be channeled towards attaining corporate objectives.

Additionally, the Related Parties have been reliable suppliers and/or customers of the Lingui Group for many years and the Group have benefited from price competitiveness and business efficiencies such as shorter delivery time.

Hence, the Board is seeking approval from shareholders on the Proposed Shareholders’ Mandate for the Recurrent Transactions as described in Section 2.2 above.

2.5 Benefits of the Recurrent Transactions

The Related Parties are mainly involved in businesses which are related to the timber operations of the Lingui Group. Due to the operating environment of the timber industry, effective control over the supply chain is important to achieve operational effectiveness and efficiency. The close relationships that had been established with the Related Parties have created an effective network that the Group can draw upon to support its operational needs, deriving synergistic and operational benefits to support its marketing, distribution and manufacturing functions. The continuous support that is extended by the Related Parties is important and forms an integral part of the Group’s corporate strategy to operate in a larger group with upstream and downstream linkages between the Lingui Group and the Related Parties deriving benefits which include improvements in allocation and utilisation of resources, sharing of the marketing network and consistent supply of materials.

2.6 Methods or procedures of determining prices of Recurrent Transactions

Generally, the prices, terms and conditions of the Recurrent Transactions are based on market rates, the availability of the amount/resources to be transacted and negotiated on a willing buyer willing seller basis. Where practical and feasible, quotations and tenders will be obtained from third parties to ascertain appropriate prices. At such, at least two (2) other contemporaneous transactions with unrelated parties for similar products and/or quantities will be used as comparison, wherever possible to determine the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products, services and/or quantities.

In the event that the quotation or comparative pricing from unrelated third parties cannot be obtained, the Group will rely on the prevailing market prices of the same or substantially similar type of products and services for comparison based on the terms which are generally in line with the industrial norms to ensure Recurrent Transactions are not detrimental to the Company and/or the Group.

10

11

The Management will ensure that Recurrent Transaction with the Related Parties will only be entered into after taking into account the pricing, level of services, quality of products and other related factors.

2.6 Methods or procedures of determining prices of Recurrent Transactions (continued)

The following internal review procedures, of which are in place, have been established to ensure that the Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders:

(i) A list of the Related Parties mandated pursuant to the Proposed Shareholders’ Mandate will be circulated within the Lingui Group with notification that all Recurrent Transactions are required to be undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders;

(ii) A register within the accounting system has been created and will be maintained by the Group to capture all Recurrent Transactions which are entered into;

(iii) The shareholding interests of the Related Parties will be monitored continuously. Any changes in the shareholdings of the Related Parties will be duly notified to the respective subsidiary companies;

(iv) A register will be kept by Lingui to keep track on the appointment of Directors in Lingui and its subsidiary companies and the major shareholders of Lingui and its subsidiary companies. Additionally, the register will serve to capture the immediate disclosure required from the Directors of Lingui’s subsidiary companies on any interests in a corporation/partnership;

(v) The respective management teams of the subsidiary companies will update Lingui on a monthly basis on the Recurrent Transactions which will be reviewed monthly by the management of the Lingui Group; and

(vi) The Lingui Group’s internal audit plan shall include a critical review of the Recurrent Transactions entered into pursuant to the Proposed Shareholders’ Mandate to ensure that they are transacted on terms and conditions which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders in the light of the circumstances concerned. The Audit Committee shall review the internal audit reports to ascertain that the review procedures established to monitor the Recurrent Transactions have been complied with.

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate

The Proposed Shareholders’ Mandate is subject to an annual renewal and shall only continue to be in force until:

(a) the next AGM following the forthcoming AGM at which the Proposed Shareholders’ Mandate will be tabled;

(b) the expiration of the period within which the next AGM after the date it is required to be held pursuant to section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders of Lingui in a general meeting;

whichever is the earlier.

11

12

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

12

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

12

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

12

2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

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2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

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2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

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2.8 Existing mandate on Recurrent Related Party Transactions (continued)

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31

October 2012 (RM’000)

Yaw Holding Group 1,700 1,571

Samling Global Group

Rental of premises/equipment payable

3,000 522

Yaw Holding Group 1,200 1,104

Samling Global Group 4,500 1,241

3D Networks 200 166

Meridian Magic

Rental of premises/equipment receivable

400 396

Samling Global Group Repair and reconditioning expenses

11,000 1,189

Samling Global Group

Road construction and trucking income

3,500

2,416

Samling Global Group Road construction and trucking expenses

13,000 10,927

Yaw Holding Group 450 15

Samling Global Group

Sale of fuel, spare parts and other materials

235,000 205,968

Samling Global Group Sale of logs, plywood, veneer and sawn timber

100,000 33,894

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2.7 Conditions and disclosure of the Proposed Shareholders’ Mandate (continued)

The breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year ended 30 June 2012 based on the following information in accordance with the Listing Requirements will be disclosed in the Annual Report of the Company:

(i) the type of the Recurrent Transactions made; and

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

2.8 Existing mandate on Recurrent Related Party Transactions

Related Parties Categories of Transaction Estimated Value as disclosed in the

Circular to Shareholders dated

12 October 2011 (RM’000)

Actual Value transacted from

3 November 2011 to 31 October

2012 (RM’000)

Samling Global Group Agency Commission payable 1,300 846

Yaw Holding Group 600 548

Samling Global Group

Construction of roads and bridges and purchase of motor vehicles and equipment

23,000 9,704

Samling Global Group Disposal of motor vehicles and equipment

12,000 -

Samling Global Group 42,000 28,519

Glenealy Group

Lighterage income receivable

1,600 798

Samling Global Group Logging contract fees payable 175,000 153,809

Samling Global Group Logging contract fees receivable 295,500 261,342

Yaw Holding Group 100 1

Samling Global Group 20,000 6,226

3D Networks

Purchase of fuel, spare parts and other materials

300 277

Samling Global Group Purchase of logs, plywood, veneer and sawn timber

251,000 178,517

Samling Global Group Property maintenance income

300 6

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2.9 Amount due and owing by the Related Parties pursuant to the Recurrent Related Party Transactions

The breakdown of the principal sum (without interest) for the outstanding amount due and owing from the Related Parties under the Recurrent Related Party Transactions which exceeded the credit term as at 30 June 2012 was as follows:-

Related Parties Outstanding Amount from Related Parties as at 30 June 2012

Principal (RM’000) Exceeded credit term for:-

a period of 1 year or less 152,953

a period of more than 1 to 3 years Nil

a period of more than 3 to 5 years Nil

a period of more than 5 years Nil

There were no late payment charges imposed on the above overdue amounts as the Group had reviewed the outstanding amounts and are of the opinion that the amounts were part of the normal business transactions and are recoverable. However, the management will continue to review and hold discussions with the related parties for early settlement of the outstanding due. The Board of Directors are of the opinion that the overdue amount is closely monitored and there is no recoverability issue in respect of the overdue amounts from the related parties.

2.10 Threshold of Authority

All Recurrent Transactions (which are operational in nature) entered into are subject to the approval of the respective Head of Departments who works within the limits as set out in this Circular. Where the approved limit as per this Circular is exceeded, the transactions will be subject to the approval from the Board and Audit Committee or Shareholders, whichever appropriate. Where any Director has an interest (direct or indirect) in any Recurrent Transactions, such Director shall abstain from deliberation and voting on the matter. If it is determined that the guidelines and/or procedures stated in Section 2.6 of this Circular are inadequate, to ensure that:-

(i) Recurrent Transactions will be conducted at arms’ length and on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public, and

(ii) Such transactions are not to the detriment of the minority shareholders of the Company or prejudicial to the interests of the shareholders,

the Company, will obtain a fresh shareholders’ mandate.

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2.11 Statement by the Audit Committee

The Audit Committee of Lingui has seen and reviewed the procedures as mentioned in Section 2.6 above and are satisfied that the procedures are sufficient to ensure that the Recurrent Transactions are undertaken on terms which are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders. The Audit Committee is also satisfied that the Lingui Group has in place adequate procedures and processes to monitor, track and identify Recurrent Transactions in a timely and orderly manner. The Audit Committee conducts the review of these procedures and processes on quarterly basis.

3. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS

Save as disclosed below, none of the other directors, major shareholders and persons connected to the directors and major shareholders have any interest, direct or indirect, in the Proposed Shareholders’ Mandate. 3.1 Proposed Shareholders’ Mandate for Recurrent Transactions with Yaw Holding Group,

Samling Global Group, Glenealy Group, 3D Networks and Meridian Magic The interested directors, namely, Chan Hua Eng and Dato Sri Yaw Chee Ming have each abstained and will continue to abstain from all deliberations and voting on the Proposed Shareholders’ Mandate in relation to the above transactions at all Board Meetings.

Chan Hua Eng, Dato Sri Yaw Chee Ming, and the interested major shareholders, namely, Tan Sri Datuk Yaw Teck Seng, Yaw Holding, Samling Strategic Corporation, Samling Global and Samling Malaysia Inc, will abstain from voting in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate in relation to the above transactions to be tabled at the forthcoming AGM.

The abovementioned parties have undertaken to ensure that persons connected to them as mentioned in Section 2.3 will abstain from voting in respect of their direct and/or indirect shareholdings on the resolution deliberating or approving the Proposed Shareholders’ Mandate in relation to the above transactions to be tabled at the forthcoming AGM.

4. DIRECTORS’ RECOMMENDATION

The Board (with the exception of Chan Hua Eng and Dato Sri Yaw Chee Ming who have abstained from giving an opinion), having considered all aspects of the Proposed Shareholders’ Mandate, is of the opinion that the Proposed Shareholders’ Mandate is in the best interest of Lingui and its shareholders. The Board wish to advise that the Recurrent Transactions are in the ordinary course of the Group’s business, will enhance the efficiency of the Group, and are in the best interest of the Company and its subsidiary companies. For the reasons stated in Section 2.4 above, the Board (with the exception of Chan Hua Eng and Dato Sri Yaw Chee Ming who have abstained from voting and deliberations at all Board meetings on the Recurrent Transactions on the bases set out in Section 3 above) recommends that you vote in favour of the resolutions in respect of the Proposed Shareholders’ Mandate to be tabled at the forthcoming AGM.

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5. ANNUAL GENERAL MEETING An AGM, the notice of which is enclosed in the Annual Report for the year ended 30 June 2012, will be held at Prince Room 2, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4 Jalan Conlay, 50450 Kuala Lumpur on 29 December 2012 at 10:00 a.m. to pass the resolutions to give effect to the Proposed Shareholders’ Mandate. A Form of Proxy is also enclosed in the Annual Report for the year ended 30 June 2012 for your completion, signature and return in accordance with the instructions printed thereon as soon as possible, so as to arrive at the Registered Office of the Company not later than 48 hours before the time fixed for the AGM, should you wish to appoint a proxy to attend and vote for you and on your behalf, at the AGM or at any adjournment thereof. The completion and return of the Form of Proxy does not preclude you from attending and voting in person at the meeting if you are able to do so but if you do, your proxy shall be precluded from attending the meeting.

6. FURTHER INFORMATION

Shareholders are requested to refer to Appendix I for further information. Yours faithfully, For and on behalf of the Board of Directors LINGUI DEVELOPMENTS BERHAD DATO’ SERI DATUK DR. HAJI JALALUDDIN BIN ABDUL RAHIM Deputy Chairman

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APPPENDIX I

FURTHER INFORMATION 1. RESPONSIBILITY STATEMENT

This Circular has been seen and approved by the Board and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement stated herein misleading.

2. MATERIAL LITIGATION As at the date of this Circular, none of the companies in the Group is engaged in any material litigation, claims or arbitration either as plaintiff or defendant, and the Directors do not have any knowledge of any proceedings, pending or threatened, against the Lingui Group or of any facts likely to give rise to any proceedings which might materially affect the position or business of the Lingui Group except as disclosed below:- (i) On 2 December 2009 and 11 May 2011, Samling Plywood Lawas Sdn. Bhd. (“Samling

Plywood Lawas”), a wholly owned subsidiary of the Company, together with the Director of Forests, Sarawak and State of Government of Sarawak were being jointly sued by certain inhabitants of longhouses and settlements situated on timber concessions held by Samling Plywood Lawas. The plaintiffs are claiming various orders, reliefs and damages including declarations that issuance of the forest timber licences by the Director of Forests, Sarawak to Samling Plywood Lawas which overlap the plaintiffs’ claimed areas are unlawful, unconstitutional, null and void. Applications had been filed by Samling Plywood Lawas in April 2012 and August 2012 to strike out the claims by the plaintiffs and were granted by the Court with the cost to be taxed unless agreed. The plaintiffs had filed an appeal to the Court of Appeal and no hearing date has been fixed.

(ii) On 21 December 2010, Samling Plywood (Miri) Sdn. Bhd. (“Samling Plywood Miri”), a wholly owned subsidiary of the Company, together with the Director of Forests, Sarawak and State of Government of Sarawak were jointly sued by certain inhabitants of longhouses and settlements situated on timber concessions held by Samling Plywood Miri. The plaintiffs are claiming various orders, reliefs and damages including declarations that issuance of the forest timber licences by the Director of Forests, Sarawak to Samling Plywood Miri which overlap the plaintiffs’ claimed areas are unlawful, unconstitutional, null and void. The proceedings against Samling Plywood Miri remained pending before the court.

The outcome of these litigations cannot be ascertained and the monetary value involved cannot be reliably qualified at this stage. However, the directors believe that these proceedings will not have a material adverse impact on the Group’s business, results of operations or financial condition.

3. MATERIAL CONTRACTS

As at the date of this Circular, neither Lingui nor its subsidiary companies have entered into any contracts (not being contracts entered into in the ordinary course of business) which are material within the two (2) years preceding the date of this Circular.

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FURTHER INFORMATION (continued) 4. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Registered Office of the Company

following the publication of this Circular from Mondays to Fridays (except Public Holidays) during business hours up to and including the date of the AGM:

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

(b) The audited consolidated financial statements of Lingui for each of the past two (2) financial years ended 30 June 2011 and 30 June 2012;

(c) The latest unaudited consolidated financial results of Lingui for the three months period ended 30 September 2012;

(d) The relevant cause papers in respect of the material litigation referred to at item 2 of this Appendix I; and

(e) The contracts and agreements, where available, for the Recurrent Transactions as set out in Section 2.2 of this Circular.

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