THETA EDGE BERHAD. (Company No.: W) CIRCULAR TO SHAREHOLDERS. in relation to

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1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. Bursa Malaysia Securities Berhad ( Bursa Securities ) 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. THETA EDGE BERHAD (Company No.: W) CIRCULAR TO SHAREHOLDERS in relation to PROPOSED RENEWAL OF THE EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING IN NATURE AND RENEWAL OF THE EXISTING GENERAL MANDATE FOR CONTRACTS WHICH ARE REVENUE IN NATURE The Notice of the Twenty-Third Annual General Meeting ( AGM ) of Theta Edge Berhad to be held at TH Hotel Kelana Jaya, Jalan SS 6/1, Kelana Jaya, Petaling Jaya, Selangor Darul Ehsan on 18 May 2016 at a.m. together with the Proxy Form are set out in the 2015 Annual Report. Shareholders are advised to refer to the Notice of the Twenty-Third AGM and the Proxy Form. The Proxy Form must be deposited at the Office of the Share Registrar, Tricor Investor & Issuing House Services Sdn. Bhd. at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur, Wilayah Persekutuan not later than forty-eight (48) hours before the time appointed for holding the AGM or any adjournment thereof. The lodging of the Proxy Form will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so. Last day and time for lodging the Proxy Form Date and time of the AGM 16 May 2016 at a.m. 18 May 2016 at a.m. This Circular is dated 26 April 2016

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular : Act : The Companies Act, 1965 as amended from time to time and any re-enactment thereof AGM : Annual General Meeting Board : Board of Directors of The Company Bursa Securities : Bursa Malaysia Securities Berhad (Company No.: W) CCM : Companies Commission of Malaysia Director(s) : Shall have the meaning given in Section 2(1) of the Capital Markets & Services Act 2007 and for purposes of the Proposal 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 director or a chief executive officer of the Company (or its subsidiary or holding company in accordance with the definition in Chapter 10 of the Listing Requirements) Interested related party : A related party with any interest, direct or indirect, who fall under any one of the following categories:- a) in the case of a corporation, a director or major shareholder; b) in the case of a business trust, a trustee-manager, a director or major shareholder of the trustee-manager or major unit holder of the business trust; or c) in the case of a closed-end fund, a director or major shareholder of the closedend fund, the Manager or a director or major shareholder of the Manager IT : Information Technology ICT : Information Communication Technology LTH : Lembaga Tabung Haji, a statutory body established under the Tabung Haji Act 1995 (Act 535) LTH Group : LTH and its subsidiaries Listing Requirements : The Main Market Listing Requirements of Bursa Securities, as amended from time to time and any re-enactment thereof Major Shareholder : A person who has an interest or interests in one or more voting shares in a company and the nominal amount of that share or the aggregate of the nominal amounts of those shares, is:- a) equal to or more than 10% of the aggregate of the nominal amounts of all the voting shares in the company; or b) equal to or more than 5% of the aggregate of the nominal amounts of all the voting shares in the company where such person is the largest shareholder of the company and 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 or any other company which is its subsidiary or holding company. For the purpose of this definition, interest in shares shall have the meaning given in Section 6A of the Act. (i)

3 Person Connected : This shall have the same meaning as in Chapter 1, Paragraph 1.01 of the Listing Requirements, in relation to a Director or a Major Shareholder, means such person who fall under any one of the following categories:- (a) a member of the Director s or a Major Shareholder s family, which family means such person who falls within any one of the following categories:- (i) spouse; (ii) parent; (iii) child including an adopted child and step-child; (iv) brother or sister; and (v) spouse of person referred to in subparagraph (iii) and (iv) above; (b) (c) (d) (e) (f) (g) (h) (i) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the Director, Major Shareholder or a member of the Director s or Major Shareholder s family is the sole beneficiary; a partner of a Director, Major Shareholder or a partner of a person connected with that Director or Major Shareholder; a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; a person in accordance with whose directions, instructions or wishes the Director or Major Shareholder is accustomed or is under an obligation, whether formal or informal, to act; a body corporate or its Directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder; a body corporate or its directors whose directions, instructions or wishes the Director or Major Shareholder is accustomed or under an obligation, whether formal or informal, to act; a body corporate in which the Director, Major Shareholder and/or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or a body corporate which is a related corporation. Proposal or Mandate : Proposed renewal of the existing Shareholders Mandate and proposed renewal of the existing General Mandate collectively as set out in Section of this Circular Proposed General Mandate Proposed Shareholders Mandate Recurrent Transactions : Proposed renewal of the existing General Mandate for contracts which are revenue in nature from Related Party(ies) as allowed under Paragraph of the Listing Requirements : Proposed renewal of the existing Shareholders Mandate for the Group to enter into Recurrent Related Party Transactions of a revenue or trading nature with Related Party(ies) : Related Party Transactions involving recurrent transactions of a revenue or trading nature and contracts entered into from time to time which are necessary for the dayto-day operations of the Group Related Party : Director, Major Shareholder or Persons Connected with such Director or Major Shareholder (ii)

4 Related Party Transactions : A transaction entered into by the Company or its subsidiaries which involves the interest, direct or indirect, of a Related Party RM and Sen : Ringgit Malaysia and sen respectively Shares : Ordinary shares of RM1.00 each THETA or the Company THETA Group or the Group : Theta Edge Berhad : The Company and its subsidiaries Words denoting the singular shall include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and neuter gender and vice versa. Reference to persons shall include corporations. Any reference to any enactments in the Circular is a reference to that enactment as for the time being amended or reenacted. Any reference in time or day in this Circular shall be reference to Malaysian time, unless otherwise stated. [The remaining section of this page is intentionally left blank] (iii)

5 TABLE OF CONTENTS PROPOSED RENEWAL OF THE EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING IN NATURE AND RENEWAL OF THE EXISTING GENERAL MANDATE FOR CONTRACTS WHICH ARE REVENUE IN NATURE LETTER FROM OUR BOARD TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSAL CONTAINING:- 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSAL 2 3. AMOUNT DUE AND OWING TO THE GROUP BY RELATED PARTIES 4 4. RATIONALE FOR AND BENEFITS OF THE PROPOSAL 4 5. REVIEW PROCEDURES OF THE RECURRENT TRANSACTIONS 4 6. VALIDITY PERIOD OF THE PROPOSAL 6 7. STATEMENT BY AUDIT AND RISK MANAGEMENT COMMITTEE 6 8. CONDITION FOR THE PROPOSAL 6 PAGE 9. INTEREST OF THE DIRECTORS, MAJOR SHAREHOLDER AND PERSONS CONNECTED WITH THEM FINANCIAL EFFECT OF THE PROPOSAL DIRECTORS RECOMMENDATION ANNUAL GENERAL MEETING FURTHER INFORMATION 8 APPENDICES APPENDIX I - FURTHER INFORMATION 9 APPENDIX A - LIST OF LTH GROUP AND ITS ASSOCIATED COMPANIES 11 APPENDIX B - LIST OF THE GROUP OF COMPANIES 15 (iv)

6 THETA EDGE BERHAD (Company No: W) (Incorporated in Malaysia) Registered Office: Bangunan C, Peremba Square Saujana Resort, Section U Shah Alam Selangor Darul Ehsan Date: 26 April 2016 Directors Tan Sri Dato Hashim bin Meon (Chairman, Non-Independent Non-Executive Director) Dato Syed Saleh bin Syed Abdul Rahman (Non-Independent Non-Executive Director) Dato Adi Azuan bin Abdul Ghani (Non-Independent Non-Executive Director) Mohamed Ridza bin Mohamed Abdulla (Senior Independent Non-Executive Director) Abdul Halim bin Jantan (Independent Non-Executive Director) Anis Zuhani binti Ahmad (Non-Independent Non-Executive Director) Datuk Nor Badli Munawir bin Mohamad Alias Lafti (Independent Non-Executive Director) Dato Richard George Azlan bin Abas (Non-Independent Non-Executive Director) A. Shukor bin S.A. Karim (Group Managing Director and Chief Executive Officer) To: Our Shareholders Dear Sir/Madam PROPOSED RENEWAL OF THE EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING IN NATURE AND RENEWAL OF THE EXISTING GENERAL MANDATE FOR CONTRACTS WHICH ARE REVENUE IN NATURE 1. INTRODUCTION At the Company s AGM on 15 June 2015, your Board obtained the shareholders approval for the existing shareholders mandate for recurrent related party transactions of a revenue or trading in nature and general mandate for contracts which are revenue in nature. The approval for the existing shareholders mandate and general mandate shall lapse at the conclusion of the forthcoming AGM, which has been scheduled to be held on 18 May 2016 unless the approval is renewed. On 10 March 2016, the Board of the Company announced the Company s intention to seek shareholders approval for the Proposal at the forthcoming AGM. The purpose of this Circular is to provide you with the details of the Proposal and to seek your approval for the resolution in respect thereof to be tabled at the forthcoming AGM, notice of which has been set out in the Notice of AGM in the 2015 Annual Report. SHAREHOLDERS ARE ADVISED TO READ THIS CIRCULAR AND TO CONSIDER CAREFULLY THE RECOMMENDATION CONTAINED HEREIN BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSAL 1

7 2. PROPOSAL 2.1 Details of the Proposal Paragraph of the Listing Requirements stipulates the obligations of a listed issuer to comply in relation to Related Party Transactions. However, pursuant to Paragraph of the Listing Requirements and Practice Note 12, a listed issuer may seek a mandate from shareholders in respect of Recurrent Transactions, subject to the following:- (i) (ii) (iii) (iv) (v) the transactions are in the ordinary course of business and are on terms not more favorable to the Related Party than those generally available to the public; the mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the mandate during the financial year where the aggregate value is equal to or exceeds the applicable prescribed threshold as follows:- (a) the consideration, value of the assets, capital outlay or costs of the Recurrent Transactions is equal to or exceeds RM1 million; or (b) the percentage ratios of such transactions is equal to or exceeds 1%, whichever is higher. a circular to shareholders is issued by the Company for the mandate; in a meeting to obtain a mandate from the shareholders, the interested related party and persons connected with them, and where the interested related party is a person connected with:- (a) in the case of a corporation, a director or major shareholder; (b) in the case of a business trust, a trustee-manager, a director or major shareholder of the trustee-manager or major unit holder of the business trust; or (c) in the case of a closed-end fund, a director or major shareholder of the closed-end fund, the Manager or a director or major shareholder of the Manager, the interested related party, persons connected with them and such persons stated in subparagraphs (a), (b) or (c) above, as the case may be, must not vote on the resolution approving the transactions; and the Company immediately announces to Bursa Securities when the actual value of a Recurrent Related Party Transaction entered into by the Company, exceeds the estimated value of the Recurrent Related Party Transaction disclosed in the Circular by 10% or more and must include the information as may be prescribed by Bursa Securities in its announcement. Where the Company has obtained a mandate from the shareholders in respect of Recurrent Transactions, the provisions under paragraph of the Listing Requirements shall not apply during the validity period of the Mandate. The Company proposes to seek its shareholders approval for renewal of the existing Shareholders Mandate for the Recurrent Transactions and the existing General Mandate for contracts as set out in Section which was approved by the shareholders at the AGM held on 15 June 2015 to enable the Company and/or its subsidiaries to enter into Recurrent Transactions with the classes of Related Party(ies) set out in Section below. The Proposed Mandate will take effect from the passing of the ordinary resolution at the forthcoming AGM and will continue to be in force (unless revoked or varied by the Company in general meeting) until the conclusion of the next AGM of the Company. Thereafter, approval from the shareholders for subsequent renewals will be sought at each subsequent AGM of the Company Principal Activity of the Group The Company is principally an investment holding company. Through its subsidiary companies, the Group is engaged in selling, marketing and provision of maintenance services and rental of computer equipment and telecommunication equipment, peripherals, other office equipment and supplies, public mobile data network operator, provision of building maintenance and management services, selling and provision of maintenance and professional services on data communication and information networking systems, dealers, software writers, compilers and testers, systems developers, trainers and consultants in computers and all services related to information technology industry. 2

8 2.1.2 Nature of RRPT and Class of Related Parties The details of the nature and estimated value of the RRPT in respect of which the Company is seeking a renewal mandate from its shareholders as contemplated under the Proposal are as follows:- Related Party with whom the Group is transacting LTH Group and/or its associated company(ies) (As per Appendix A) (Recipient) (i) Nature of Transactions The Provision of ICT application support services (ii) The Provision of maintenance for ICT hardware and software systems (iii) The Provision of all related ICT system integration, system implementation and related services Company within the Group involved in RRPT THETA Group and/or its associated company (As per Appendix B) (Provider) Estimated value of preceding year s Mandate* (RM 000) Actual value transacted from 15/06/ to 31/03/ (RM 000) Estimated value of transactions for the Proposed Renewal of Shareholders Mandate and General Mandate# (RM 000) Interested Related Party 40,000 20,112 40,000 LTH Group, Tan Sri Dato Hashim bin Meon, Dato Syed Saleh bin Syed Abdul Rahman, Dato Adi Azuan bin Abdul Ghani and Anis Zuhani binti Ahmad Relationship LTH is the holding company of the Company, holding 68.7% of the issued and paid up capital of the Company. (iv) The Provision of telecommunication and data transmission services (v) The Provision of desktop management services and hardware leasing LTH Group and/or its associated company(ies) (As per Appendix A) Rental of office premises THETA Group and/or its associated company (As per Appendix B) (Tenant) 2,520-2,520 LTH Group, Tan Sri Dato Hashim bin Meon, Dato Syed Saleh bin Syed Abdul Rahman, Dato Adi Azuan bin Abdul Ghani and Anis Zuhani binti Ahmad LTH is the holding company of the Company, holding 68.7% of the issued and paid up capital of the Company. Note: The estimated value as disclosed in the preceding year s circular to shareholders dated 22 May The estimated value for the Mandate is based on the management forecast of transaction value that have been anticipated. There was no deviation of the Actual Value exceeding the Estimated Value by 10% or more in the Existing Mandate. + Being the latest practicable date prior to the printing of this Circular. # The estimated value of the transaction from 18 May 2016 up to next AGM expected to be held in the month of May/June The estimated value for the mandate is based on the management forecast of transaction value that have been anticipated. The estimated value is subject to The tenancy is not exceeding 3 years and the payment of rental is on a monthly basis. The estimated value is for the renting of the office premise in any of LTH s premises with a tenanted area of approximately 40,000 square feet. The renting of office premise at Menara TH, Block D, Glomac Damansara, Jalan Damansara,Kuala Lumpur did not materialise and the Company is in the midst of identifying a new location. 3

9 3. AMOUNT DUE AND OWING TO THE GROUP BY RELATED PARTIES The breakdown of the total outstanding amount due under the RRPT which exceeded the credit term as at end of the financial period ended 31 December 2015 are as follows:- Name of Related Party Principal Sum (RM 000) Late payment charges Amount due which exceeded the credit term ( Overdue Sum ) (RM) < 1 year >1year to 3 years (RM) THP Development Consultancy Sdn Bhd TH Heavy Engineering Berhad THHE Fabricator Sdn Bhd 1,710-1, There were no late payment charges imposed on the outstanding amount due by the related parties. The Overdue Sum were all trade in nature and the Group does not impose late payment charges based on its current business practices. The same basis applies to both related and non-related parties. The Company has and will continue to meet and discuss with the relevant Related Parties to pursue for settlement of the outstanding amounts due. The Board of Directors has reviewed the outstanding amounts and are of the opinion that the Related Parties are long term business partners which are all within the LTH Group and that the outstanding amounts will be recovered in due course. 4. RATIONALE FOR AND BENEFITS OF THE PROPOSAL The RRPTs that have been entered into and that will be entered into by our Group with the Related Party would enhance the Company s ability to explore business opportunities and enable them to network within the Related Party Group of Companies. The Recurrent Transactions to be entered into by the Group are all in the ordinary course of business. These are recurring transactions of a revenue or trading nature which are likely to occur with some degree of frequency and may arise at any time and from time to time. These transactions are intended to enhance the ability of the Company and/or its subsidiary companies to pursue business opportunities, especially those which may be time sensitive by nature and it may not be practical to seek shareholders approval on a case by case basis before entering into such transactions. By obtaining the Proposal and renewal of the same on an annual basis, the necessity to convene separate general meetings from time to time to seek shareholders approval as and when such Recurrent Transactions occur would not arise. This would substantially reduce the time, administrative requirements, and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available therein. 5. REVIEW PROCEDURES OF THE RECURRENT TRANSACTIONS The Group has established the following procedures and guidelines to ensure that Recurrent Transactions are undertaken on an arm s length basis and on transaction price and on normal commercial terms that are not more favourable to the Related Party(ies) than those generally available to the public and not detrimental to the minority shareholders. (a) The procedures and principles established by the Group are as follows:- (i) (ii) In general, the Group shall only enter into Recurrent Transactions after taking into account the pricing, quality, delivery schedules, levels of service and other related factors which shall be determined based on prevailing rates/prices of the goods and services according to their usual commercial terms, business practices and policies or in accordance with other applicable industry norms/consideration (after taking into account factors such as quality, schedules including where applicable, preferential rates/ prices/ discounts to a class or classes of customers or for bulk purchases); A list of Related Party(ies) shall be circulated within the Group from time to time for reference and all Related Party(ies) are notified that all Recurrent Related Party Transactions are required to be undertaken on arm s length basis and on normal commercial terms. 4

10 (iii) The Group have been informed of the Related Party Transactions procedures applicable to all Recurrent Transactions with such Related Party(ies). Any tender, quotation or contract to be submitted for an open tender or proposed to be entered into with a Related Party(ies) will not be approved unless the pricing for the contract/project is determined in accordance with the Group s usual business practices and policies, consistent with the usual margin of the Group for the same or substantially similar type of transactions made by the Group with unrelated third parties. (b) To monitor the Recurrent Transactions, the following review procedures will be implemented:- (i) (ii) Records will be maintained to capture all Recurrent Transactions which are entered into pursuant to the Proposal. In accordance with the Listing Requirements, disclosure in relation to the breakdown of the aggregate value of the Recurrent Transactions entered into during the financial year based on amongst others, the following information:- (a) (b) the type of Recurrent Transactions; and the names of the Related Party(ies) involved in each type of Recurrent Transactions made and their relationship with the Company, will be made in the Company s annual reports for the financial years during which the Proposal is in force. (iii) (iv) (v) (vi) (vii) (viii) (ix) The Recurrent Transactions will only be entered into after taking into account the guidelines stated in 5(a)(i) above. The annual internal audit plan will include a review of all the Recurrent Transactions entered or to be entered into under the Proposal to ensure that relevant approvals for the Recurrent Transactions have been obtained and the review procedures in respect of such transactions are adhered to. All Recurrent Transactions will be reviewed by the internal auditors and presented at the Audit and Risk Management Committee (ARMC) meetings. In its review of such transactions, the ARMC shall have the right of access to information on the Related Party(ies) and is entitled to the services of independent advisers, if required, in the discharge of its duties. The ARMC shall review on an annual basis the internal audit reports pertaining to the Recurrent Transactions to ascertain that the guidelines and procedures established to monitor the Recurrent Transactions have been complied with. The Board and ARMC shall have the overall responsibility of determining whether the review procedures and guidelines on the Recurrent Transactions are appropriate and sufficient. If a member of the Board or the ARMC has an interest (direct or indirect) in a Recurrent Transaction, he/she will abstain from deliberation and any decision making in respect of the Recurrent Transaction. If the Board and ARMC are of the view that the review procedures are no longer sufficient to ensure that the Recurrent Transactions are made on arm s length basis, on terms not more favorable to the Related Party(ies) than those generally available to the public and are not to the detriment of the minority shareholders, they shall have the discretion to discharge, vary and/or modify or implement new and/or additional procedures and guidelines without the approval of the shareholders provided that such amended, varied, modified, new or additional procedures are no less stringent then the existing procedures and guidelines. Where practical or feasible, at least two (2) other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison, to determine whether the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of products/services and/or quantities. 5

11 However, for certain transactions, the terms of the transactions (including pricing) cannot be compared with unrelated third parties. For example, the provision of the IT contracts for the development, service, maintenance and other related IT services relating to the pilgrimage fund to LTH and/or its group of company(ies) and there are no such other equivalent transaction with third parties. The terms of these transactions, thus, are negotiated on a willing buyer willing seller basis. Likewise, for contracts with certain vendors, the prices for the computer equipments and peripherals for are dependent upon the prices set by the principal for that particular project. The pricing would also be negotiated on a willing buyer willing seller basis. Nevertheless, the Management will ensure that in the event the quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be based on willing buyer and willing seller basis, based on the Group s usual business practice, and in the best interest of the Company, including any discount given for bulk purchases and preferential rates, where applicable. The Company will ensure that the Recurrent Transactions are not detrimental to it or its group of companies. There are no specific thresholds for approval of Recurrent Transactions. All the transactions will be reviewed and approved by the Group Managing Director or the Chief Financial Officer. 6. VALIDITY PERIOD OF THE PROPOSAL If approved at the AGM, the Proposal will take effect from the passing of the Ordinary Resolution at the AGM and the authority will continue to be in force until:- (i) (ii) (iii) the conclusion of the next AGM of the Company following the forthcoming AGM at which the Proposal is passed, at which time such Mandate will lapse, unless by a resolution passed at the meeting, the authority for the Proposal is renewed; the expiration of the period, within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier. 7. STATEMENT BY AUDIT AND RISK MANAGEMENT COMMITTEE (ARMC) The ARMC has the overall responsibility of determining whether the procedures for reviewing all Related Party(ies) transactions are appropriate to ensure that the Recurrent Transactions are within the limits approved by the Proposal. The ARMC of the Company has reviewed the procedures mentioned in Section 5 above and is of the view that:- (i) (ii) the Group has in place adequate procedures and processes to monitor, track and identify Recurrent Transactions in a timely and orderly manner, and that these procedures and processes are reviewed half yearly; and the said procedures are sufficient to ensure that the Recurrent Transactions are not more favourable to the Related Party(ies) than those generally available to the public and are not to the detriment of the minority shareholders. 8. CONDITION FOR THE PROPOSAL The Proposal is conditional upon approval being obtained from the shareholders of the Company at the forthcoming AGM. 6

12 9. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDER AND PERSONS CONNECTED WITH THEM The direct and indirect interests in the Company of the interested Director, interested Major Shareholder, and Persons Connected with them as at 31 March 2016 are as follows:- Interested Directors No. of Shares Direct Indirect Direct Indirect % No. of Shares % No. of Warrants 2011/2016 % No. of Warrants 2011/2016 * Tan Sri Dato' Hashim bin Meon * Dato' Syed Saleh bin Syed Abdul Rahman * Dato Adi Azuan bin Abdul Ghani * Anis Zuhani binti Ahmad % Interested Major Shareholder No. of Shares Direct Indirect Direct Indirect % No. of Shares % No. of Warrants 2011/2016 % No. of Warrants 2011/2016 LTH 73,679, ,101, Notes: * Tan Sri Dato Hashim bin Meon, Dato Syed Saleh bin Syed Abdul Rahman, Dato Adi Azuan bin Abdul Ghani and Anis Zuhani binti Ahmad are the Directors of the Company and were nominated and appointed by LTH and they are deemed interested in the is the holding company of the Company. Tan Sri Dato Hashim bin Meon, Dato Syed Saleh bin Syed Abdul Rahman, Dato Adi Azuan bin Abdul Ghani and Anis Zuhani binti Ahmad, being interested Directors have abstained and will continue to abstain from all Board deliberations and voting in relation to the RRPT as set out in Section of this Circular. The interested Directors and LTH, being the interested Major Shareholder shall also abstain from voting in respect of their direct and/or indirect shareholdings on the ordinary resolution relating to the Proposal at the forthcoming AGM. In addition, the interested Directors and/or the interested Major Shareholder have undertaken that they will ensure that Persons Connected with them will abstain from voting in respect of their direct and/or indirect shareholdings on the ordinary resolution relating to the Proposal at the forthcoming AGM. Save for the interested Directors and the interested Major Shareholder, who are deemed interested in the RRPT as set out in Section 9 of this Circular, none of the other Directors, and Major Shareholders of the Company or persons connected to them has any interest, direct or indirect in the Proposal. 10. FINANCIAL EFFECT OF THE PROPOSAL With the assumption that all external conditions and factors in the industry and business environment remain constant, the Proposal is expected to contribute positively to the earnings per share and the net assets of the Company for the financial year ending 31 December DIRECTORS RECOMMENDATION The Directors (save for the interested Directors), having considered all aspects of the Proposal, are of the opinion that the Proposal is of the best interest of the Company and its shareholders and not to the detriment of the minority shareholders of the Company. Accordingly, the Board (save for the interested Directors) recommend that you vote in favour of the Ordinary Resolution pertaining to the Proposal to be tabled at the forthcoming AGM. 7

13 12. ANNUAL GENERAL MEETING The Notice convening the AGM is set out in the 2015 Annual Report. The AGM will be held at TH Hotel Kelana Jaya, Jalan SS 6/1, Kelana Jaya, Petaling Jaya, Selangor Darul Ehsan on 18 May 2016 at a.m. for the purpose of considering and if thought fit, passing the Ordinary Resolution 2 on the Proposal as set out in the said Notice. If you are unable to attend and vote in person at the AGM, you are requested to complete, sign and return the Proxy Form (in accordance with the instructions printed thereon) and to arrive at the office of the Share Registrar not later than forty-eight (48) hours before the time fixed for holding the AGM. 13. FURTHER INFORMATION Shareholders are requested to refer to Appendix I for further information. Yours faithfully On behalf of the Board of Directors THETA EDGE BERHAD Mohamed Ridza bin Mohamed Abdulla Senior Independent Non-Executive Director 8

14 FURTHER INFORMATION APPENDIX I 1. RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Directors of the Company and they individually and collectively accept full responsibility for the accuracy of the information given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated in the Circular are accurate and that there are no other facts the omission of which would make any statement in this Circular misleading. 2. MATERIAL CONTRACTS There are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by the Group within the past two (2) years preceding the date of this circular. 3. MATERIAL LITIGATION Save as disclosed below, the Group is not engaged in any material litigation either as plaintiff or defendant, claims or arbitration and the Board is not aware of any proceedings pending or threatened or of any fact likely to give rise to any proceedings which might materially and adversely affect the income from, title to, or possession of any of the Group s assets and/or businesses :- Infornential Sdn Bhd ( Plaintiff ) v. Theta Edge Berhad ( 1 st Defendant ) & 4 ors On 17 May 2012, a Writ of Summons and Statement of Claim was served on the Defendant and four (4) others by the Plaintiff to claim the following:- (j) A declaration that the 1st, 2nd, 3rd, 4th and 5th defendants or any of them have together conspired to act fraudulently against the Plaintiff to deprive the Plaintiff from recovering on its judgment against Lityan Systems Sdn. Bhd. ( LSSB ) obtained in Kuala Lumpur High Court Suit No S ; (ii) A declaration that the 1st, 2nd, 3rd, 4th and 5th defendants or any of them have breached Section 257 of the Companies Act, 1965; (iii) Damages in the sum of RM2,105, outstanding as at 3 May 2012; (iv) Aggravated and/or exemplary damages; (v) Interest at the rate of 4% per annum on any judgment sum from the date this Writ of Summons is filed until full settlement; (vi) Costs; (vii) Such further and other relief as the Honourable Court deems fit. The Court had on 23 January 2013 dismissed the Defendants Application to strike out the civil suit with cost awarded to the Plaintiff in the sum of RM5, only. The trial commenced on 19 August 2013 and concluded on 10 July The Defendant had filed their written submission to the Court on 20 October 2014 and the Plaintiff had filed their written submission to the Court on 23 October On 27 April 2015, the High Court Judge, had delivered her judgment in the aforementioned case as follows: (i) (ii) (iii) Plaintiff's claim against 1st Defendant is allowed with interest running at 5% per annum from the date of judgment until full settlement; Plaintiff's claim against the 2nd, 3rd, 4th and 5th Defendants is dismissed; 1st Defendant to pay RM15, as cost to the Plaintiff. The 1 st Defendant is unable to discern the full effect of the aforementioned judgement since the Honourable High Court Judge had only delivered the judgement without citing the grounds in arriving with the decision. The 1 st Defendant filed a Notice of Appeal against the said judgement on 6 May 2015 and the Record of Appeal was filed on 29 June However, the hearing date of the appeal is yet to be fixed by the Court of Appeal and still awaiting for the grounds of Judgment of the High Court Judge. In this case, the Plaintiff also filed an appeal on 26 May 2015 against the decision of the High Court in dismissing its claim against the 2nd to the 5th Defendant. 9

15 The 1 st Defendant filed an Application for stay of execution at the High Court, Kuala Lumpur and on 3 July 2015 the Court allowed the said Application pending the hearing and disposal of the 1 st Defendant s appeal at the Court of Appeal. The case is now fixed for Case Management in respect of both appeals on 21 April 2016, pending receipt of the Grounds of Judgment by the High Court 4. DOCUMENTS FOR INSPECTION The following documents can be inspected at the Company s Registered Office at Bangunan C, Peremba Square, Saujana Resort, Section U2, Shah Alam, Selangor Darul Ehsan from Monday to Friday (except public holidays) during business hours for a period from the date of this Circular to the date of the AGM: (i) Memorandum and Articles of Association of The Company; (ii) The audited financial statements of the Company for the two (2) financial years ended 31 December 2014 and 31 December 2015; and (iii) The relevant cause papers in respect of material litigation referred to Section 3 above. 10

16 APPENDIX A-LIST OF LTH GROUP AND ITS ASSOCIATED COMPANIES Subsidiary Companies Company No Shareholdings Principal Activities (%) BIMB Holdings Berhad X Theta Edge Berhad W 68.7 TH Plantations Berhad M TH Indo Industries Sdn Bhd A 100 Investment holding which is involved in Islamic banking, Takaful insurance and stockbroking. Investment holding and Telecommunication segments namely system integration and turnkey solutions, managed services, distributions, application development & Intellectual Properties and communication provider. Investment holding which is involved in cultivation of oil palm, processing of fresh fruit bunches, marketing of crude palm oil, palm kernel and fresh fruit bunches and provision of management services. Investment holding and leasing of transportation. TH Indopalms Sdn Bhd TH Estates (Holdings) Sdn Bhd Deru Semangat Sdn Bhd H 100 Investment holding W 100 Investment holding K 55 Cultivation of oil palm. TH Hotel & Residence Sdn Bhd D 100 TH Properties Sdn Bhd D 100 TH Marine Holding (L) Inc LL Investment holding which is involved in hotels operation, transportation services for hajj pilgrims, hajj and umrah packages, ticketing and trading and supplying Halal food products. Investment holding and property development, consultancy, property construction and facilities management service. Investment holding and owner and operator of modern Anchor Handling Tug Supply vessels. LTH Property Investment (L) Inc LL Investment holding and property leasing. LTH Property Holdings Ltd Investment holding and property leasing. LTH Property Holdings 2 Ltd Investment holding and property leasing. * TH Marine Sdn Bhd X 100 Dormant. *THC International Sdn Bhd H 60 Dormant. Subsidiary Cos of Company No Shareholdings Principal Activities BIMB Holdings Berhad (%) Bank Islam Malaysia Berhad X 100 Islamic banking business. Syarikat Takaful Malaysia Berhad K 60 Family and General Takaful business. BIMB Securities (Holdings) Sdn Bhd X 100 Investment Holding. Syarikat Al-Ijarah Sdn Bhd P 100 Leasing of assets. 11

17 Subsidiary Cos of Company No Shareholdings Principal Activities TH Plantations Berhad (%) THP Ibok Sdn Bhd T 100 THP Gemas Sdn Bhd V 100 THP Bukit Belian Sdn Bhd P 100 THP Kota Bahagia Sdn Bhd H 100 THP Agro Management Sdn Bhd M 100 Management service company. THP-YT Plantation Sdn Bhd D 70 THP Sabaco Sdn Bhd K 51 THP Saribas Sdn Bhd K 80 Investment holding company, Cultivation of oil palm and selling of fresh fruit Hydroflow Sdn Bhd D 70 TH Ladang (Sabah & Sarawak) Sdn Bhd Bumi Suria Ventures Sdn Bhd U U 100 Investment holding. Maju Warisanmas Sdn Bhd M 100 Letting of investment property. PT Persada Kencana Prima N/A 93 Manisraya Sdn Bhd U 100 Cultivation of oil palm. THP Suria Mekar Sdn Bhd K 100 Cultivation of oil palm. Subsidiary Cos of Company No Shareholdings Principal Activities TH Indo Industries Sdn Bhd (%) PT Synergy Oil Nusantara N/A 50 Engage in trading, refining, processing and packing of palm oil based product. Subsidiary Cos of Company No Shareholdings Principal Activities TH Hotel & Residence Sdn Bhd (%) TH Travel & Services Sdn Bhd H 100 Transportation services for hajj pilgrims, hajj and umrah packages, ticketing and security services. TH Global Services Sdn Bhd K 100 Trading and supplying Halal food products. TH Hotel Alor Setar Sdn Bhd X 100 Hotel Industry. TH Hotel Terengganu Sdn Bhd W 100 Hotel Industry. TH Real Estate, Jeddah Management of investment property in Kingdom of Saudi Arabia. 12

18 Subsidiary Cos of Company No Shareholdings Principal Activities TH Properties Sdn Bhd (%) THP-SBB JV Sdn Bhd V 100 Property development. THP Sinar Sdn Bhd D 60 Facility Management service. THP Hartanah Sdn Bhd V 100 Property development. TH Universal Builders Sdn Bhd A 100 Construction. THP Bina Sdn Bhd M 100 Construction. THP Enstek Development Sdn Bhd A 100 Property development. THP Development Consultancy Sdn Bhd M 100 Project management. Keramat Green Development Sdn Bhd H 100 Dormant. THP Pelindung Sdn Bhd W 100 Dormant. THP Timur Sdn Bhd U 100 Dormant. THP Mutiara Sdn Bhd K 100 Dormant. THP Australia Capital Sdn Bhd M 100 Investment holding. THP Bay Pavilions Corporation LL Investment holding. THP Australia Developments Corporation LL Dormant. Subsidiary Cos of Company No Shareholdings Principal Activities TH Marine Holding (L) Inc (%) Marine 1 (L) Inc LL TH Alam Holdings (L) Inc LL Owner and operator of modern Anchor Handling Tug Supply vessels. Investment holding which involve in owning and operator of modern Anchor Handling Tug Supply vessels. Subsidiary Cos of Company No Shareholdings Principal Activities LTH Property Holdings Ltd (%) 151 BPR One Limited N/A 100 Investment holding. 151 BPR Two Limited N/A 100 Investment holding. 10 Queen Street Place London Limited N/A 100 Property holding. Subsidiary Cos of Company No Shareholdings Principal Activities LTH Property Holdings 2 Ltd (%) Leatherhead Properties Limited N/A 100 Investment property. JOINT VENTURE COMPANIES Joint Venture Cos by Company No Shareholdings Principal Activities Lembaga Tabung Haji (%) Trurich Resources Sdn Bhd M 50 Investment holding. TH Alam Management (M) Sdn Bhd K 50 Ship managing agent and management services company. Abraj Sdn Bhd M 50 Investment holding. Abraj Management Sdn Bhd P 50 Real estate portfolio management services. 13

19 Subsidiary Cos of Company No Shareholdings Principal Activities Trurich Resources Sdn Bhd (%) PT Anugrah Kembang Sawit Sejahtera N/A 95 PT Teknik Utama Mandiri N/A 95 PT Usaha Kaltim Mandiri N/A 95 PT Gemareksa Mekarsari N/A 95 PT Satria Hupasarana N/A 95 PT TH Felda Nusantara N/A 95 Management service company. Associated Cos of Company No Shareholdings Principal Activities Lembaga Tabung Haji (%) Pelikan International Corporation Berhad U 28 Manufacturing and distribution of writing instruments, art & hobby products, school products, office stationery. TH Heavy Engineering Berhad D 30 Fabrication of oil & gas related structures and other related civil works. Express Rail Link Sdn Bhd H 40 Design, construction, maintenance and management of railway system. CCM Fertilizers Sdn Bhd W 49 Manufacturing of compound fertilisers. Nihon Canpack (Malaysia) Sdn Bhd M 40 Industrial goods. Associated Cos of Company No Shareholdings Principal Activities Lembaga Tabung Haji (%) Consolidated Fertiliser Corporation Sdn Bhd D 20 Manufacturing of compound fertilisers. Bata (Malaysia) Sdn Bhd P 20 Shoe manufacturing. Maju-TH Sdn Bhd U 49 Property development. Perumahan Kinrara Berhad 305-P 25 Property development. I&P Kota Bayuemas Sdn Bhd V 23 Property development. Prizevest Sdn Bhd P 30 Property management. Top Priority Sdn Bhd T 30 Property management. Victec Enterprise Sdn Bhd T 30 Property management. 14

20 APPENDIX B - LIST OF THETA GROUP OF COMPANIES THETA Group of Companies Equity Interest held Direct (%) Indirect (%) Principal activities Theta Edge Berhad - - Investment holding company Subsidiaries of the Company Konsortium Jaya Sdn Bhd Sale and maintenance of computers and telecommunication equipment, peripherals and related services Sistem Komunikasi Gelombang Sdn Bhd Supply of equipment and services to the telecommunication industry and the provision of customised total systems integration services and solutions Impianas Sdn Bhd Public mobile data network operator THT Integrated Solutions Sdn. Bhd Provision of information technology solutions Advanced Business Solutions (M) Sdn Bhd Dealers, software writers, compilers and testers, system developers, trainers and consultants in computers and all services related to information technology industry Lityan Applications Sdn. Bhd Marketing of computer products, provision of application development services and all other computer related activities TH Computers Sdn Bhd TH2.0 Sdn Bhd Distributing computers and computer related equipments Investment holding company Subsidiary of Advanced Business Solutions (M) Sdn Bhd Theta Mobile Sdn Bhd (Formerly known as Hi Pro Edar (M) Sdn Bhd) Carrying on business associated with or in promotion of IT industry Joint-venture company of TH2.0 Sdn Bhd Taha Alam Sdn Bhd - 50 To carry on the business of providing product and services relating to Hajj and Umrah related operations globally 15