MALAYAN UNITED INDUSTRIES BERHAD (Company No W) (Incorporated in Malaysia)

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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 you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other appropriate independent professional advisers immediately. If you have sold or transferred all your ordinary shares in MALAYAN UNITED INDUSTRIES BERHAD, you should at once send this Circular to the person through whom the sale or transfer was effected for transmission to the purchaser or transferee. Pursuant to the provisions of Practice Note 18 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) on the perusal of draft circulars and other documents, Bursa Securities has not perused Part B of this Circular prior to its issuance, as they are Exempt Circulars. 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. MALAYAN UNITED INDUSTRIES BERHAD (Company No W) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE PART B PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY MALAYAN UNITED INDUSTRIES BERHAD The Notice of the Forty-Sixth Annual General Meeting of the Company to be held at Rembau Room, Corus Paradise resort Port Dickson, 3.5km, Jalan Pantai, Port Dickson, Negeri Sembilan Darul Khusus on Thursday, 7 December 2017 at 4.00 p.m. is set out in Malayan United Industries Berhad s 2017 Annual Report. A Form of Proxy is enclosed with Malayan United Industries Berhad s 2017 Annual Report. The Form of Proxy must be lodged at the registered office of Malayan United Industries Berhad at Unit 3, 191, Jalan Ampang, Kuala Lumpur on or before the date and time indicated below or any adjournment thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last date and time for lodging the Form of Proxy : Tuesday, 5 December 2017 at 4.00 p.m. This Circular is dated 31 October 2017.

2 DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular:- Act : Companies Act, 2016 as amended from time to time and any reenactment thereof AGM : Annual General Meeting Board : The Board of Directors of MUIB Bursa Securities : Bursa Malaysia Securities Berhad Code : Malaysian Code on Take-overs and Mergers, 2016 Director : Shall have the meaning given in Section 2(1) of the Capital Markets and Services Act 2007 and for purposes of the Proposed Shareholders Mandate, includes any person who is or was within the preceding six (6) months from the date on which the terms of the relevant transactions were agreed upon, a Director of MUIB (or of its subsidiaries or holding company or any subsidiary of its holding company) Laura Ashley : Laura Ashley Limited, a company incorporated in England and Wales and is wholly-owned by Laura Ashley Holdings Laura Ashley Holdings : Laura Ashley Holdings plc, a company incorporated in England and Wales and listed on the London Stock Exchange Listing Requirements : Main Market Listing Requirements of Bursa Securities including any amendment thereto that may be made from time to time LPD : 10 October 2017, being the latest practicable date prior to the issuance of this Circular Major Shareholder : A person who has an interest or interest in one or more voting shares in MUIB and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is:- (a) 10% of the aggregate of the nominal amounts of all the voting shares in MUIB; or (b) 5% or more of the aggregate of the nominal amounts of all the voting shares in MUIB where such person is the largest shareholder of MUIB MUIB or Company : Malayan United Industries Berhad and includes any person who is or was within the preceding six (6) months of the date on which the terms of the relevant transactions were agreed upon, a major shareholder of MUIB (or of its subsidiaries or holding company or any subsidiary of its holding company); and major shareholders shall be constructed accordingly) MUIB Group : MUIB and its subsidiary and associated companies MUIB Share(s) : Ordinary shares of MUIB Person connected : Shall have the same meaning as in Paragraph 1.01 of the Listing Requirements. Proposed Share Buy-Back : Proposed renewal of authority to enable MUIB to purchase and/or hold not more than ten per centum (10%) of the existing issued and paid-up share capital of the Company i

3 Proposed Shareholders Mandate or Shareholders Mandate : Proposed renewal of shareholders mandate pursuant to Paragraph of the Listing Requirements for the MUIB Group to enter into recurrent related party transactions of a revenue or trading nature which are necessary for the day to day operations and are in the ordinary course of business of the MUIB Group Related Party : A Director, Major shareholder or person connected with such Director or Major shareholder RM and sen : Ringgit Malaysia and Sen respectively Substantial Shareholder : A person who has an interest or interest in one or more voting shares in MUIB and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is not less than 5% per centum of the aggregate of the nominal amounts of all the voting shares in MUIB. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. ii

4 CONTENTS LETTER TO SHAREHOLDERS CONTAINING: PART A PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE Page 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED SHAREHOLDERS MANDATE 1 3. RATIONALE OF THE PROPOSED SHAREHOLDERS MANDATE 6 4. APPROVAL REQUIRED 6 5. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST 6 6. EFFECT OF THE PROPOSED SHAREHOLDERS MANDATE 7 7. DIRECTORS RECOMMENDATION 7 8. AGM 7 9. FURTHER INFORMATION 7 PART B PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY MUIB Page 1. INTRODUCTION 8 2. DETAILS OF THE PROPOSED SHARE BUY-BACK 8 3. RATIONALE OF THE PROPOSED SHARE BUY-BACK 9 4. RISK FACTORS OF THE PROPOSED SHARE BUY-BACK EFFECT OF THE PROPOSED SHARE BUY-BACK DIRECTORS AND SUBTANTIAL SHAREHOLDERS SHAREHOLDINGS 7. HISTORICAL SHARE PRICE PUBLIC SHAREHOLDING SPREAD IMPLICATION OF THE CODE SUBSTANTIAL SHAREHOLDERS AND DIRECTORS INTERESTS PURCHASES, RESALE OR CANCELLATIONS OF MUIB SHARES IN THE PREVIOUS TWELVE (12) MONTHS 12. APPROVAL REQUIRED DIRECTORS RECOMMENDATION FURTHER INFORMATION 13 APPENDIX I 14 APPENDIX II iii

5 PART A PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR THE RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

6 Board of Directors:- MALAYAN UNITED INDUSTRIES BERHAD (Company No W) (Incorporated in Malaysia) Tan Sri Dato Khoo Kay Peng (Chairman & Chief Executive) Tan Sri Dato Paduka Dr Mazlan Bin Ahmad Dato Dr Tan Kee Kwong Dr Wong Hong Meng To: The Shareholders of Malayan United Industries Berhad Dear Sir/Madam Registered Office: Unit 3, 191 Jalan Ampang Kuala Lumpur 31 October 2017 PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION The Board had on 20 October 2017 announced to Bursa Securities of its intention to seek shareholders approval for the Proposed Shareholders Mandate at the forthcoming AGM. The Company had, during the AGM held on 8 December 2016, obtained shareholders mandate to allow the Group to enter into recurrent related party transactions of a revenue or trading nature with the Related Party. In accordance with the Listing Requirements, the aforesaid approval will continue in force until the conclusion of the forthcoming Forty-Sixth AGM of MUIB which will be held on 7 December 2017 unless renewal is obtained from the shareholders of the Company at the AGM. Your Directors intend to seek shareholders approval for the Proposed Shareholders Mandate at the forthcoming AGM. The purpose of this Circular is to provide you with details of the Proposed Shareholders Mandate and to seek your approval for the ordinary resolution to be tabled at the forthcoming AGM to be convened at Rembau Room, Corus Paradise resort Port Dickson, 3.5km, Jalan Pantai Port Dickson Negeri Sembilan Darul Khusus on Thursday, 7 December 2017 at 4.00 p.m. The Notice of AGM together with the Form of Proxy are enclosed with MUIB s 2017 Annual Report. 2. DETAILS OF THE PROPOSED SHAREHOLDERS MANDATE 2.1 Provisions under the Listing Requirements Under paragraph 10.09, Part E of Chapter 10 of the Listing Requirements, a listed issuer may seek shareholders mandate in respect of recurrent related party transactions of a revenue or trading nature which are necessary for its day-to-day operations, subject to the following:- (i) 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; (ii) the shareholders mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders mandate during the financial year; 1

7 (iii) the listed issuer s circular to shareholders for the shareholders mandate shall include information set out in Appendix 10D of the Listing Requirements; and (iv) in the meeting to obtain shareholders mandate, the interested director(s), interested major shareholder(s) or interested person(s) connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder must not vote on the resolution approving the transactions. An interested director or major shareholder must ensure that persons connected with him abstain from voting on the approving the transactions. Paragraph of the Listing Requirements imposes obligations on listed issuers to make an immediate announcement and/or procure shareholders approval when listed issuers and their subsidiaries enter into transactions with persons who are considered for the purposes of Chapter 10 of the Listing Requirements to be related parties. Where the Company has procured shareholders mandate pursuant to the above, the provision of paragraph of the Listing Requirements shall not apply during the period of validity of the shareholders mandate. 2.2 Principal activities of the MUIB The principal activity of MUIB is an investment holding company. The principal activities of the subsidiaries and associates are retailing, hotel, property development, food and financial services. The subsidiaries and associates of MUIB, together with MUIB s equity interests and principal activities are listed in Appendix II. The recurrent related party transactions are in respect of transactions made from time to time between the Company and its subsidiary companies with a Director or Major shareholder or persons connected with such Director or Major shareholder and such transactions are necessary for the day-to-day operations of the MUIB Group and on terms 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. Such transaction includes the transactions referred to Section 2.4 below. 2.3 Classes of Related Parties The Proposed Shareholders Mandate will apply, inter alia, to the following classes of related parties as tabled in Section 2.4 below. 2

8 2.4 Nature of Recurrent Related Party Transaction and Estimated value Recurrent related party transactions which will be covered by the Proposed Shareholders Mandate are identified in table set out below:- Provider of Goods/ Services Nature of Transaction Laura Ashley Purchase of merchandise. Recipient(s) of Goods/ Services Laura Ashley (SEA) Sdn Bhd* New Mandate Estimated transacted value from forthcoming AGM to next AGM (RM) Estimated transacted value as disclosed in preceding Circular to Shareholders dated 31 October 2016 (RM) Actual transacted value from last AGM to LPD (RM) Interested Related Party 7,000,000 3,097,087 Tan Sri Dato Khoo Kay Peng ( TSKKP ) Merchandise shall include fashion wear, home furnishing as well as accessories under the name Laura Ashley. KKP Holdings Sdn Bhd, Soo Lay Holdings Sdn Bhd, Cherubim Investment (HK) Limited, Norcross Limited, Bonham Industries Limited and KKP Enterprises Sdn Bhd ( Interested Major Shareholders ) *Laura Ashley (SEA) Sdn Bhd is a wholly-owned subsidiary of Metrojaya Berhad, which in turn a subsidiary of estimated value for mandate is based on management forecast of transaction value that have been undertaken and anticipated. The estimated value is subject to changes. 3 Relationship TSKKP is the Chairman & Chief Executive of MUIB and he is also the Chairman of Laura Ashley Holdings. TSKKP is a Major Shareholder of MUIB. Laura Ashley Holdings is an associate of MUIB, with an indirect stake of 35.17%. In addition, TSKKP has an indirect interest in Laura Ashley Holdings of 25.81% held through Bonham Industries Limited. Interested Major Shareholders are companies that have interests in the equity in MUIB, both direct and indirect. Further details are disclosed in Section 5

9 2.5 Guidelines on which transaction prices are determined To ensure that the recurrent related party transactions contemplated under the Proposed Shareholders Mandate are undertaken on terms 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, the Company has established the following guidelines:- The recurrent related party transaction shall be determined based on prevailing market rates/prices (including) where applicable, based on the cost/wholesale pricing of Laura Ashley plus mark-up in accordance with the Merchandise Supply Agreement dated 21 April 2009 entered between Laura Ashley and Laura Ashley (SEA) Sdn Bhd. 2.6 Threshold of Authority There are no specific thresholds for the approval of the recurrent related party transaction of a revenue and trading nature. All the recurrent related transactions will be reviewed by the Audit Committee and approved by the Board. 2.7 Amount owing by the Related Party to MUIB Group There are no amounts due and owing by the Related Party to MUIB Group which exceed the credit term. 2.8 Review procedures for recurrent related party transactions The Company has established the following review procedures to be carried out to ensure that recurrent related party transactions are conducted at arm s length basis and undertaken on transaction prices and on normal commercial terms not more favorable to the related party(ies) than those generally available to the public and are not detrimental to the minority shareholders:- (i) (ii) (iii) (iv) (v) (vi) (vii) A list of related party(ies) is presented to the Audit Committee of MUIB with expressed notification that all recurrent related party transactions are required to be conducted at arm s length basis on normal commercial terms not more favourable to the related party(ies) than those generally available to the public and are not detrimental to minority shareholders; For the recurring related party transaction as outlined in Section 2.4 above, MUIB is unable to obtain 2 other contemporaneous transactions with unrelated third parties for similar products as the purchases made by Laura Ashley (SEA) Sdn Bhd from Laura Ashley are franchise products in accordance with the Master License Agreement entered into between the parties on 21 April Laura Ashley (SEA) Sdn Bhd is the sole franchisee of the Laura Ashley products in Malaysia and Singapore. The Audit Committee will review the recurrent related party transaction to be in accordance with the Merchandise Supply Agreement as disclosed in Section 2.5 above. Records will be maintained to record all recurrent related party transactions, entered into pursuant to the shareholders mandate; The internal audit team to review the systems and procedures of the MUIB Group concerning recurrent related party transactions, so as to reasonably provide assurance to the Board of Directors, audit committees and management of the proper conduct and adherence to such systems and procedures; The duties and roles of the Audit Committee include the review of recurrent related party transactions on a quarterly basis; The Audit Committee shall have responsibility of determining review procedures with authority to sub-delegate to individuals or committees within the Company as they deem appropriate. If a member of the Audit Committee of MUIB has an interest in a transaction, as the case may be, he will abstain from any decision making by the Audit Committee in respect of the said transaction. Such review methods and procedures may be modified, supplemented or replaced from time to time by the Audit Committee; If during the reviews, the Audit Committee is of the view that the guidelines or procedures are not adhered to or are not sufficient to ensure normal commercial terms and/or the transaction is detrimental to the minority shareholders, the Audit Committee will:- 4

10 (a) Firstly, discuss and ascertain whether it is the guideline or procedure which is at fault or whether it is the fault the person(s) delegated with the task of ensuring compliance or otherwise, and (b) Secondly, if the fault is the person rather than the guideline or procedure, appropriate action will be taken against the person concerned. If the defect lies with the guideline or procedure, then the Audit Committee will modify, supplement or replace as may be required, the relevant guideline or procedure and report such modification, supplement or replacement to the Board of Directors, and (viii) Any member of the Audit Committee may, as he deems fit, request for additional information pertaining to the recurrent related party transactions from independent sources or advisers. 2.9 Statement by Audit Committee The Audit Committee has seen and reviewed the procedures mentioned in Section 2.8 above and is of the view that the guidelines and procedures are sufficient to ensure that such transactions are carried out at arm s length and based on normal commercial terms 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. The MUIB Group has in place adequate procedures and processes to monitor, track and identify recurrent related party transaction of a revenue and trading nature in a timely and orderly manner. The Audit Committee reviews these procedures on an annual basis. 2.10Validity period of the Proposed Shareholders Mandate The Shareholders Mandate, if approved, will take effect from the date of the passing of the ordinary resolution relating thereto at the AGM and will continue to be in force until:- (i) (ii) the conclusion of the next AGM of the Company following the general meeting at which such Shareholders Mandate is passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; the expiration of the period within which the next AGM is required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or (iii) revoked or varied by resolution passed by the shareholders in general meeting, whichever is earlier. Disclosure will be made in the annual report of the Company of the breakdown of the aggregate value of transactions conducted pursuant to the Shareholders Mandate during the current financial year based on information, such as the type of recurrent related party transaction made, and their relationship with the Company and in annual reports of subsequent years during which the Shareholders Mandate continues to be in force. 5

11 3. RATIONALE OF THE PROPOSED SHAREHOLDERS MANDATE The recurrent related party transactions to be entered into by the MUIB Group are all in the ordinary course of business of the MUIB Group which are undertaken at arms length, on normal commercial terms which are not prejudicial to the interests of the minority shareholders. These transactions entered into by MUIB Group are intended to meet business needs at the best possible commercial terms by tapping into the business network and opportunities of the MUIB Group which will be of benefit to MUIB. The recurring related party transactions will enable the MUIB Group to market the Laura Ashley Brand products in Malaysia and Singapore pursuant to the Master Licensing Agreement, thus benefitting the MUIB Group in terms of additional revenue and profits to be generated. The recurrent related party transactions are recurring transactions of a revenue or trading nature which are likely to occur with some degree of frequency and arise at any time and from time to time. By obtaining the shareholders mandate and the 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 related party transactions occurs would not arise. This would in return reduce substantial administrative time and expenses associated with the convening of such meeting, without compromising the corporate objectives or adversely affecting business opportunities available to the MUIB Group. 4. APPROVAL REQUIRED The Shareholders Mandate is subject to approval of the shareholders of MUIB at the forthcoming AGM to be convened. 5. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST According to Register of Directors Shareholdings and Register of Substantial Shareholders as at LPD, the direct and indirect interests of the Directors and major shareholders in MUIB having an interest, direct or indirect in the Proposed Shareholders Mandate is as follows: Interested Director Tan Sri Dato Khoo Kay Peng (Chairman & Chief Executive) Direct Indirect No. of Ordinary Shares held % No. of Ordinary Shares held - - 1,395,355, % Direct Indirect Interested Major Shareholders No. of Ordinary Shares held % No. of Ordinary Shares held % KKP Holdings Sdn Bhd - - 1,395,355, Soo Lay Holdings Sdn Bhd - - 1,395,355, Tan Sri Dato Khoo Kay Peng - - 1,395,355, Cherubim Investment (HK) 297,848, ,239, Limited Norcross Limited 300,154, ,239, Bonham Industries Limited 411,764, KKP Enterprises Sdn Bhd 304,347, Note 1 Deemed interested by virtue of his deemed substantial interest in Pan Malaysian Industries Berhad ( PMI ), Cherubim Investment (HK) Limited ( Cherubim ), Norcross Limited ( Norcross ), Bonham Industries Limited ( Bonham ) and KKP Enterprises Sdn Bhd ( KKPE ). The interest in PMI is held by Cherubim, Norcross and Soo Lay Holdings Sdn Bhd ( Soo Lay ). The interest in Bonham is held by Soo Lay, KKP Holdings Sdn Bhd ( KKPH ) and Norcross. The interest in KKPE is held by Soo Lay and KKPH. Cherubim and Norcross are associated companies of Soo Lay and KKPH, companies which are 99.9% owned by him. 2 Deemed interested by virtue of its deemed substantial interest in PMI (held through Cherubim and Norcross) and its substantial interest in Bonham, Cherubim, Norcross and KKPE. 3 Deemed interested by virtue of its substantial interest in PMI (held directly and indirectly through Cherubim and Norcross) and its substantial interest in Bonham, Cherubim, Norcross and KKPE. 4 Deemed interested by virtue of its substantial interest in PMI. 6

12 Tan Sri Dato Khoo Kay Peng, who is interested in the Proposed Shareholders Mandate in the manner disclosed in this Circular, have abstained and shall continue to abstain from the Board s deliberation and voting in respect of the Proposed Shareholders Mandate. The Interested Major Shareholders namely Tan Sri Dato Khoo Kay Peng, KKP Holdings Sdn Bhd, Soo Lay Holdings Sdn Bhd, Cherubim Investment (HK) Limited, Norcross Limited, KKP Enterprises Sdn Bhd and Bonham Industries Limited and the Interested Director and/or person connected to the Interested Major Shareholders and/or Interested Director will abstain from voting in respect of his/or their direct and/or indirect shareholdings on the ordinary resolution pertaining to the Proposed Shareholders Mandate at the forthcoming AGM. The Interested Major Shareholders and/or the Interested Director has/have undertaken that he/they will ensure that the persons connected with him/them abstain from voting on the ordinary resolution pertaining to the Proposed Shareholders Mandate at the forthcoming AGM. Save as disclosed above, none of the other Directors and/or Major Shareholders of MUIB and/or person connected with them, has any interest, direct or indirect, in the Proposed Shareholders Mandate. 6. EFFECT OF THE PROPOSED SHAREHOLDERS MANDATE The Proposed Shareholders Mandate is not expected to have any effect on the issued and paid-up share capital, the substantial shareholders shareholdings of the Company, the net assets per share and gearing of the MUIB Group for the financial year ending 30 June DIRECTORS RECOMMENDATION Having considered the rationale for the Proposed Shareholders Mandate, the Board with the exception of Tan Sri Dato Khoo Kay Peng, is of the opinion that the Proposed Shareholders Mandate is in the best interest of the MUIB Group. With the exception of Tan Sri Dato Khoo Kay Peng, who is interested in the Proposed Shareholders Mandate in the manner disclosed in this Circular, and therefore will abstain and shall continue to abstain from making any recommendation in respect of the recurrent related party transaction in which they are involved, the Board recommends that you vote in favour of the ordinary resolution on the Proposed Shareholders Mandate to be tabled at the forthcoming AGM to be convened. 8. AGM The AGM will be held at Rembau Room, Corus Paradise resort Port Dickson, 3.5km, Jalan Pantai Port Dickson Negeri Sembilan Darul Khusus on Thursday, 7 December 2017 at 4.00 p.m. for the purpose of considering, and if though fit, passing the resolution to give effect to the Proposed Shareholders Mandate. If you are unable to attend the AGM in person, please complete, sign and return the Form of Proxy in accordance with the instructions printed therein as soon as possible and in any event, to arrive at the Registered Office of the Company at Unit 3, 191 Jalan Ampang Kuala Lumpur not less than 48 hours before the time appointed for holding the AGM. The completion, signing and return of the Form of Proxy will not preclude you from attending and voting at the AGM in person should you subsequently wish to do so. 9. FURTHER INFORMATION Shareholders are requested to refer to the attached Appendix I for further information. Yours faithfully By order of the Board of MALAYAN UNITED INDUSTRIES BERHAD LEE CHIK SIONG NORLYN BINTI KAMAL BASHA Joint Company Secretaries 7

13 PART B PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY MALAYAN UNITED INDUSTRIES BERHAD

14 MALAYAN UNITED INDUSTRIES BERHAD (Company No W) (Incorporated in Malaysia) Registered Office: Unit 3, 191 Jalan Ampang Kuala Lumpur Board of Directors:- 31 October 2017 Tan Sri Dato Khoo Kay Peng (Chairman & Chief Executive) Tan Sri Dato Paduka Dr Mazlan Bin Ahmad Dato Dr Tan Kee Kwong Dr Wong Hong Meng To: The Shareholders of Malayan United Industries Berhad Dear Sir/Madam PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF OWN SHARES BY MALAYAN UNITED INDUSTRIES BERHAD 1. INTRODUCTION The Board had on 20 October 2017 announced that the Company proposed to seek shareholders' approval for the renewal of the authority to enable the Company to purchase and/or hold shares of the Company of up to 10% of the issued and paid-up share capital of the Company through Bursa Securities in accordance with Section 127 of the Act. The Company had, during the AGM held on 8 December 2016, obtained shareholders approval to purchase up to 10% of the issued and paid-up share capital of the Company for the time being. In accordance with the Listing Requirements, the aforesaid approval will continue in force until the conclusion of the forthcoming Forty-Sixth AGM of MUIB which will be held on 7 December 2017 unless renewal is obtained from the shareholders of the Company at the AGM. Your Directors intend to seek shareholders approval for the Proposed Share Buy-Back at the forthcoming AGM. The purpose of this Circular is to provide you with details of the Proposed Share Buy-Back and to seek your approval for the ordinary resolution to be tabled at the forthcoming AGM to be held at Rembau Room, Corus Paradise resort Port Dickson, 3.5km, Jalan Pantai, Port Dickson, Negeri Sembilan Darul Khusus on Thursday, 7 December 2017 at 4.00 p.m. The Notice of MUIB s Forty-Sixth AGM and the Form of Proxy are enclosed with MUIB s 2017 Annual Report. SHAREHOLDERS OF THE COMPANY ARE ADVISED TO READ THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED SHARE BUY-BACK. 2. DETAILS OF THE PROPOSED SHARE BUY-BACK Based on the issued and paid-up share capital of the Company as at LPD of RM3,152,866,000 comprising 2,932,561,192 ordinary shares, the number of shares that can be purchased by the Company is up to 293,256,119 MUIB Shares representing not more than 10% of the existing issued and paid-up share capital of MUIB quoted on Bursa Securities. Such authority granted will be effective upon the passing of the proposed ordinary resolution for the Proposed Share Buy-Back and will expire at the conclusion of the next AGM of MUIB in the year 2018 or the expiry of the period within which the next AGM is required by law to be held, or revoked or varied by ordinary resolution of the shareholders of the Company in a general meeting, whichever occurs first. 8

15 The maximum amount of funds to be allocated by the Company for the Proposed Share Buy-Back shall not exceed the aggregate of the retained profits. As at 30 June 2017, the audited accumulated losses of the Company stood at RM2,429,542,000. The amount allocated for the Proposed Share Buy-Back will be financed through internally-generated funds and/or borrowings. In the event the Proposed Share Buy-Back is funded partly and/or wholly by bank borrowings, the Board shall ensure that the Company will be capable of repaying such borrowings and such funding is not expected to have any material effect on the cash flow of the Company. In accordance with the Listing Requirements, the Company may only purchase MUIB Shares on Bursa Securities at a price which is not more than 15% above the weighted average market price of MUIB Shares for the past five (5) market days immediately preceding the date(s) of the purchase(s). The Company may only resell the treasury shares on Bursa Securities at a price which is:- (a) (b) not less than the weighted average market price for the shares for the past five (5) market days immediately prior to the resale; or not less than 5% below the weighted average market price for the shares for the past five (5) markets days immediately prior to the resale, provided that:- (i) (ii) the resale takes place no earlier than thirty (30) days from the date of purchase; and the resale price is not less than the cost of purchase of the shares being resold. The authority for the Proposed Share Buy-Back will allow your Directors to exercise the power of the Company to purchase its own shares at any time within the abovementioned time period. The actual number of MUIB Shares to be purchased, the total amount of funds involved for each purchase and the date(s) of purchase(s) will depend on market conditions and sentiments of the stock market as well as the financial resources available to the Company. The Directors can deal with the MUIB Shares purchased in the following manner:- (a) (b) (c) (d) to cancel the MUIB Shares so purchased; or to retain the MUIB Shares so purchased as treasury shares; or to retain part of the MUIB Shares so purchased as treasury shares and cancel the remainder; or to distribute the treasury shares as dividends to shareholders and/or resell on Bursa Securities and/or cancel all or part of them. Where the Directors resolve to cancel the MUIB Shares so purchased, or cancel any treasury shares, the issued capital of the Company shall be diminished by the shares so cancelled. An immediate announcement will be made to Bursa Securities upon purchase or resale of the MUIB Shares. In addition, the Company will announce whether the MUIB Shares purchased under the Proposed Share Buy-Back will be cancelled or retained as treasury shares or a combination of both. In the event that the Company ceases to hold all or any part of such shares as a result of the above actions, the Company may further purchase and/or hold such additional number of shares (in aggregate with the shares then still held by the Company) which shall not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company for the time being quoted on Bursa Securities. The Company shall also include in its annual report, information with respect to the purchase of its own MUIB Shares. 3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back is expected to potentially benefit the Company and its shareholders in the following manner:- (i) (ii) if the MUIB Shares bought back are cancelled, the net earnings per share of MUIB would generally be envisaged to improve, thereby enhancing the value of shareholders' investment in the Company; if the MUIB Shares bought back are kept as treasury shares, it will give the Board an opportunity to sell the shares so purchased at a higher price, therefore will improve the net assets of the Company; 9

16 (iii) (iv) the Company may be able to stabilise the supply and demand of its shares in the open market, thereby supporting its fundamental value; and MUIB Shares bought back and retained as treasury shares can be distributed as share dividends to shareholders. 4. RISK FACTORS OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back, if implemented, will reduce the financial resources of the MUIB Group and may result in the MUIB Group forgoing other feasible investment opportunities that may emerge in the future. It may also result in a lower amount of cash reserves available for dividends to be declared to shareholders as funds would have been utilised to purchase MUIB Shares. On the other hand, the financial resources of the MUIB Group may increase if the purchased MUIB Shares held as treasury shares are resold at prices higher than their purchase price. The Board, in exercising any decision on the Proposed Share Buy-Back, will be mindful of the interests of the Company and its shareholders. 5. EFFECTS OF THE PROPOSED SHARE BUY-BACK On the assumption that the Proposed Share Buy-Back is carried out in full, the effects of the Proposed Share Buy-Back on the share capital, net assets, working capital, earnings and dividends of MUIB are set out below:- 5.1 Share Capital On the assumption that the Proposed Share Buy-Back is carried out in full and all the MUIB Shares so purchased are cancelled, the issued and paid-up share capital of the Company will be reduced as follows:- No. of MUIB Shares Existing issued and paid-up share capital as at LPD 2,932,561,192 Less: No. of shares to be cancelled pursuant to the Proposed Share Buy-Back 293,256,119 Resultant issued and paid-up share capital upon completion of the Proposed Share Buy-Back 2,639,305,073 If the MUIB Shares so purchased are retained as treasury shares, the issued and paid-up share capital of the Company will not be reduced but the rights attaching to the treasury shares as to voting, dividend and participation in other distribution or otherwise will be suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares in the Company for any purpose whatsoever including substantial shareholdings, take-overs, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting. 5.2 Net Assets The effects of the Proposed Share Buy-Back on the net assets per share of the MUIB Group are dependent on the purchase price of the MUIB Shares. 10

17 If all the MUIB Shares purchased are cancelled, the Proposed Share Buy-Back is likely to reduce the net assets per share of the MUIB Group if the purchase price exceeds the net assets per share of the MUIB Group at the time of the purchase. Conversely, the net assets per share of the MUIB Group is likely to increase if the purchase price is less than the net assets per share of the MUIB Group at the time of the purchase. For MUIB Shares so purchased which are kept as treasury shares, the net assets of the MUIB Group will, upon their resale, increase assuming that a gain has been realised or vice versa. Again, the quantum of the increase or decrease in net assets will depend on the actual selling price of the treasury shares and the number of treasury shares resold. 5.3 Working Capital The Proposed Share Buy-Back will reduce the working capital of the MUIB Group, the quantum of which depends on, amongst others, the number of MUIB Shares eventually purchased and the purchase prices of the MUIB Shares. The impact on the cash flow of the Company and the MUIB Group will be dependent on the number of MUIB Shares eventually purchased and the purchase prices of the MUIB Shares. For MUIB Shares so purchased which are kept as treasury shares, the working capital of the Company will, upon their resale, increase assuming that a gain has been realised. Again, the quantum of the increase in the working capital will depend on the actual selling price of the treasury shares and the number of treasury shares resold. 5.4 Earnings Per Share ( EPS ) On the assumption that the MUIB Shares bought back are retained as treasury shares, the extent of the effect of the EPS of the MUIB Group will depend on the actual selling price, the number of treasury shares resold and the effective gain or interest savings arising. If the shares so purchased are cancelled, the Proposed Share Buy-Back will increase the EPS of MUIB provided that the income forgone and/or interest expense incurred on the shares purchased is less than the EPS before the share buy-back. 6. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' SHAREHOLDINGS The effects of the Proposed Share Buy-Back (on the assumption that the Proposed Share Buy-Back of up to ten per centum (10%) of the issued and paid-up share capital of MUIB is carried out in full) on the shareholdings of the Directors, substantial shareholders of MUIB and persons connected with them based on the Register of Directors' Shareholdings and Register of Substantial Shareholders will, for the purpose of illustration only, be as follows:- Directors Direct Interest No. of MUIB Shares held Existing as at LPD % Indirect % Direct Interest Interest After the Proposed Share Buy-Back % Indirect Interest % Tan Sri Dato Khoo Kay - - 1,395,355, ,395,355, Peng (Chairman & Chief Executive) Tan Sri Dato Paduka Dr Mazlan bin Ahmad Dato Dr Tan Kee Kwong Dr Wong Hong Meng

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19 8. PUBLIC SHAREHOLDING SPREAD The Proposed Share Buy-Back will be carried out in accordance with the relevant laws prevailing at the time of the purchase including the compliance with 25% public shareholding spread as provided under the Listing Requirements. As at LPD, the public shareholding spread of the Company was 38.2%. The Board is mindful of the requirement that any purchase of MUIB Shares by the Company must not result in the public shareholding spread of the Company falling below 25% of its issued and paid-up share capital. 9. IMPLICATION OF THE CODE Pursuant to the Code, if an acquirer holds more than 33% but less than 50% of the voting shares of a company and such acquirer acquires in any period of six months more than 2% of the voting shares of the company, there is an obligation to undertake a mandatory general offer for the remaining ordinary shares of the company not already owned by the acquirer. Paragraph 24 Practice Note 9 of the Code allows an exemption from the obligation to undertake a mandatory offer, to a holder of voting shares who, as a result of a reduction of the voting shares of the company through a buy-back scheme under the Act, has increased his holding of voting shares to more than 33% or, if his existing holding of voting shares is more than 33% but less than 50%, by more than 2% in any 6 month period, if the increase in his holding is inadvertent and as a result of any action that is outside his direct participation. In the event that the Company decides to purchase its own shares which will result in the substantial shareholders shareholdings in the Company increasing by more than 2% in any period of six (6) months ( Mandatory Offer Level ), the Substantial Parties will seek an exemption from the Securities Commission under Paragraph 24 Practice Note 9 (previously known as Practice Note ) of the Code before the Mandatory Offer Level is exceeded. 10. SUBSTANTIAL SHAREHOLDERS' AND DIRECTORS' INTERESTS Save for the inadvertent increase in the percentage shareholding as a consequence of the Proposed Share- Buy Back as disclosed in paragraph 6, to the best knowledge of the Directors, none of the Directors, substantial shareholders and/or persons connected with them have any interest, direct or indirect, in the Proposed Share Buy-Back or in the resale of the treasury shares, if any. 11. PURCHASES, RESALE OR CANCELLATIONS OF MUIB SHARES IN THE PREVIOUS TWELVE (12) MONTHS The Company has not made any purchase, resale or cancellation of its own shares in the financial year ended 30 June The Company currently does not hold any treasury share. 12. APPROVAL REQUIRED The Proposed Share Buy-Back is conditional upon approval of the shareholders of the Company at the forthcoming AGM. 13. DIRECTORS' RECOMMENDATION Your Directors are of the opinion that the Proposed Share Buy-Back is in the best interest of the Company. Accordingly, they recommend that you vote in favour of the ordinary resolution to be tabled at the forthcoming AGM. 14. FURTHER INFORMATION Shareholders are requested to refer to the attached Appendix I for further information. Yours faithfully By order of the Board of MALAYAN UNITED INDUSTRIES BERHAD LEE CHIK SIONG NORLYN BINTI KAMAL BASHA Joint Company Secretaries 13

20 APPENDIX I FURTHER INFORMATION 1. RESPONSIBILITY STATEMENT Your Directors have been seen and approved this Circular and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that after having made 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 herein misleading. 2. MATERIAL CONTRACTS Save for the following, there are no material contracts (not being contracts entered into in the ordinary course of business) that have been entered into by the Company and/or its subsidiary companies during the two (2) years immediately preceding the date of this Circular:- a. On 12 December 2014, the Group had entered into a shares sale agreement ("SSA") with Dato' Dr Yu Kuan Chon to dispose of 642,700,783 ordinary shares representing % of the issued and paid-up share capital of Pan Malaysia Holdings Berhad for a total disposal consideration of RM77,124,094. On 13 September 2016, the Company announced that Dato Dr Yu and the Vendors had mutually agreed to terminate the SSA due to the Condition Precedent not being fulfilled by the Cut-Off Date of 12 September 2016 ( Termination ). Upon Termination, the SSA shall be of no further effect and the parties shall be released from all further obligations to each other. The Termination is not expected to have any material effect on the earnings, net assets and gearing of the Group for the financial year ended 30 June MATERIAL LITIGATION Neither the Company nor its subsidiaries is engaged in any material litigation either as plaintiff or defendant and the Directors do not have any knowledge of any proceedings, pending or threatened, against the Company or any of its subsidiaries or any facts likely to give rise to any proceedings which might materially affect the position or business of the Company and/or its subsidiaries. 4. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection on weekdays during normal office hours (expect for public holidays) at the registered Office of the Company at Unit 3, 191, Jalan Ampang Kuala Lumpur from the date of this Circular to the date of the AGM:- a. Memorandum and Articles of Association of MUIB; b. Audited financial statements of MUIB for the past two (2) financial period/year ended 30 June 2016 and 30 June 2017; c. Material contracts referred to in paragraph 2 of this Appendix; and d. Master License Agreement and Merchandise Supply Agreement, both dated 21 April 2009 entered between Laura Ashley and Laura Ashley (SEA) Sdn Bhd. 14

21 APPENDIX II SUBSIDIARIES AND ASSOCIATES OF MUIB Equity Interest Principal Country of Subsidiary (Nominal) Activities Incorporation % 1. Acquiline Sdn Bhd 100 Investment holding Malaysia 2. Alameda Enterprises Limited 100 Investment holding British Virgin Islands 3. Ample Line Sdn Bhd 100 Investment holding Malaysia 4. Ascada Sdn Bhd 100 Investment holding Malaysia 5. Carulli Holdings Sdn Bhd 100 Investment holding Malaysia 6. Continental Capitals Sdn Bhd 100 Investment holding Malaysia 7. Corus Hotels Limited 100 Investment holding & United Kingdom hotel operations 8. Corus Hotels Sdn Bhd 100 Investment holding Malaysia 9. Creative Vest (M) Sdn Bhd 100 Investment holding Malaysia 10. Davson Limited 100 Investment holding Hong Kong 11. Farrago Sdn Bhd 100 Investment holding Malaysia 12. Fuchsia Enterprises Limited 100 Investment holding British Virgin Islands 13. Grand Oak Sdn Bhd 100 Under Striking-off Malaysia 14. Honoraire Sdn Bhd 100 Under Striking-off Malaysia 15. Libertyray (M) Sdn Bhd 100 Investment holding Malaysia 16. London Vista Hotel Limited 100 Investment holding United Kingdom 17. Loyal Design Sdn Bhd 100 Investment holding Malaysia 18. Malayan United Management Sdn Bhd 100 Management services Malaysia 19. Malayan United Nominees (Tempatan) Sdn Bhd 100 Under Striking-off Malaysia 20. Malayan United Security Services Sdn Bhd 100 Security services Malaysia 21. Marco Polo Trading Sdn Bhd 100 Investment holding Malaysia 22. Mayang Unggul Sdn Bhd 100 Under Striking-off Malaysia 23. Merchant Network Sdn Bhd 100 Under Striking-off Malaysia 24. Metrojaya Berhad Investment holding Malaysia 25. Ming Court Beach Hotel (P.D.) Sdn Bhd 100 Hotel ownership Malaysia 26. Ming Court Hotel (KL) Sdn Bhd 100 Hotel operations Malaysia 27. Ming Court Inn (Penang) Sdn Bhd 100 Under Members Malaysia Voluntary Winding-up 28. Ming Court Hotels International Sdn Bhd 100 Inactive Malaysia 29. MUI Asia Limited 100 Investment holding Hong Kong 30. MUI Capital Sdn Bhd 100 Investment holding & Malaysia money lending 31. MUI China Limited 100 Investment holding Hong Kong 32. MUI Continental Berhad Under Members Malaysia Voluntary Winding-up 33. MUI Enterprises Limited 100 Investment holding Hong Kong 34. MUI Enterprises Sdn Bhd 100 Investment holding Malaysia 35. MUI Resources Limited 100 Dormant Hong Kong 36. MUI Media Ltd 100 Investment holding British Virgin Islands 37. MUI Philippines, Inc 100 Investment holding Philippines 38. MUI Properties Berhad Investment holding Malaysia 15

22 Equity Interest Principal Country of Subsidiary (Cont d) (Nominal) Activities Incorporation % 39. MUI Singapore Private Limited 100 Dormant Singapore 40. MUI (U.K.) Limited 100 Investment holding United Kingdom 41. Natloyal (M) Sdn Bhd 100 Property investment Malaysia 42. Novimax (M) Sdn Bhd 100 Investment holding Malaysia 43. Oriental Omega Sdn Bhd 100 Investment holding Malaysia 44. Pan Malaysia Corporation Berhad Investment holding Malaysia 45. Pan Malaysia Holdings Berhad Investment holding Malaysia 46. Regal Classic Sdn Bhd 100 Investment holding Malaysia 47. Southern Challenger (M) Sdn Bhd 100 Under Striking-off Malaysia 48. Tarrega Holdings Sdn Bhd 100 Investment holding Malaysia 49. Two Holdings Sdn Bhd 100 Property investment Malaysia 50. United Review (M) Sdn Bhd 100 Investment holding Malaysia 51. Universal Growth Limited 100 Investment holding British Virgin Islands Associate 1. Asia Pacific Media Corporation 50 Inactive U.S.A. 2. Asian Capital Equities, Inc 20 Inactive Philippines 3. Farrago Holdings, Inc 40 Investment holding Philippines 4. Laura Ashley Holdings plc Design, sourcing, United Kingdom distribution & sale of clothing, accessories & home furnishings 5. Mansara International Limited 35 Investment holding British Virgin Islands 6. Pan Malaysia Capital Berhad Investment holding Malaysia 7. Regent Corporation 49 Investment holding U.S.A. 8. Zhaodaola Limited Inactive Bermuda Subsidiaries of Regent Corporation (The list comprises major subsidiaries only) 1. Laura Ashley (North America), Inc 100 Licensing and sub- U.S.A. licensing trademarks and copyright designs 2. Regent Carolina Corporation 100 Hotel operation & U.S.A. property investment 3. Regent Park Corporation 100 Property investment U.S.A. Subsidiaries of Pan Malaysia Capital Berhad ( PMC ) (The list comprises major subsidiaries only) 1. PCB Asset Management Sdn Bhd 100 Research & fund management services 2. PM Securities Sdn Bhd 100 Stock & sharebroking & corporate advisory services 3. Pan Malaysia Equities Sdn Bhd 100 Property & investment holding Malaysia Malaysia Malaysia 16