HIAP TECK VENTURE BERHAD (Company No.: 421340-U ... · U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 12 December 2012 at 2.00 p.m. The Form

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank

manager, solicitor, accountant or other independent adviser immediately.

Bursa Malaysia Securities Berhad 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.

In line with the provisions of Practice Note 18 on Perusal of Draft Circulars and Other Documents, Bursa Malaysia Securities Berhad has not perused the section of the Circular in relation to the Proposed Renewal of Shareholders’ Mandate for Share Buy-Back as this transaction falls under the category of Exempt Circulars as outlined in the aforesaid Practice Note.

HIAP TECK VENTURE BERHAD

(Company No.: 421340-U) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO

PART A

PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE FOR RECURRENT

RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

PART B

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY

The Notice of the Sixteenth Annual General Meeting of HIAP TECK VENTURE BERHAD is enclosed in the 2012 Annual Report and sent to you together with this Circular. The Sixteenth Annual General Meeting will be held at Setia City Convention Centre, Function Room 8, 1st Floor, No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 12 December 2012 at 2.00 p.m. The Form of Proxy is included in the 2012 Annual Report and you are requested to complete the enclosed Form of Proxy and deposit it at the Registered Office of the Company at Lot 6096, Jalan Haji Abdul Manan, Batu 5 , Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan on or before the time and date indicated below should you be unable to attend the Sixteenth Annual General Meeting.

Last day, date and time for lodging the Form of Proxy : Monday, 10 December 2012 at 2.00 p.m. Day, date and time of the Sixteenth Annual General Meeting : Wednesday, 12 December 2012 at 2.00 p.m.

This Circular is dated 20 November 2012

i

DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular: “Act” : The Companies Act, 1965 as amended from time to time and any re-enactment

thereof.

“AGM” : Annual General Meeting.

“Amardale” : Amardale Offshore Inc. (BVI Co. No. 500174).

“APM” : Alpine Pipe Manufacturing Sdn. Bhd. (267844-V), a wholly-owned subsidiary of HTVB.

“Articles” : Articles of Association of HTVB, as amended from time to time.

“BD” : Briliant Decade Transport Agency Sdn. Bhd. (270261-D), a wholly-owned subsidiary of HTVB.

“Board” : The Board of Directors of HTVB.

“Bursa Securities” : Bursa Malaysia Securities Berhad (635998-W).

“China Shougang” : China Shougang International Trade & Engineering Corporation.

“Code” : Malaysian Code on Take-Overs and Mergers, 2010.

“Director” : Shall have the same meaning given in Section 2 (1) of the Capital Markets and Services Act, 2007 and includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a Director of the Company, its subsidiary or holding company or a Chief Executive of the Company, its subsidiary or holding company.

“EPS” : Earnings per share.

“ES” : Eastern Steel Sdn. Bhd. (557033-V), a 55% owned jointly controlled entity by HTVB.

“HC” : Huatraco Contracts Sdn. Bhd. (282720-D), a wholly-owned subsidiary of HS.

“HI” : Huatraco Industries Sdn. Bhd. (164409-A), a wholly-owned subsidiary of HS.

“HIPL” : Huatraco Investment Pte. Ltd. (201102260E), a wholly-owned subsidiary of HS.

“HN” : Huatraco Natscreen Sdn. Bhd. (966683-D), a wholly-owned subsidiary of HS (in the process of striking off).

“HS” : Huatraco Scaffold Sdn. Bhd. (240510-T), a wholly-owned subsidiary of HTVB.

“HSPL” : Huatraco Singapore Pte. Ltd. (201103457N), a wholly owned subsidiary of HIPL.

“HTH” : Hiap Teck Hardware Sdn. Bhd. (276336-A), a wholly-owned subsidiary of HTVB.

“HTMS” : Hiap Teck Management Services Sdn. Bhd. (Formerly known as Hiap Teck Steel Manufacturing Sdn. Bhd.) (409923-P), a wholly-owned subsidiary of HTVB.

ii

DEFINITIONS (cont’d) “HTP” : Hiap Teck Property Sdn Bhd (313284-V), a wholly-owned subsidiary of HTH.

“HTVB” or “the Company”

: Hiap Teck Venture Berhad (421340-U).

“HTVB Group” or “the Group”

: HTVB and its subsidiary companies, collectively.

“JKJS” : JK Ji Seng Sdn. Bhd. (748292-A).

“Listing Requirements” : Main Market Listing Requirements of Bursa Securities.

“Major Shareholder” : A person who has an interest or interests in one (1) or more voting shares in the 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

For the purpose of this definition, “interest in shares” shall have the meaning given in section 6A of the Act. A Major Shareholder includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a major shareholder of the Company or any other corporation which is its subsidiary or holding company.

“NA” : Net assets.

“Person(s) Connected : In relation to a Director or a Major Shareholder, means such person who falls under any one of the following categories: (a) a member of the Director’s or Major Shareholder’s family; (b) 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;

(c) a partner of the Director, Major Shareholder or a partner of a person connected with that Director or Major Shareholder;

(d) a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder;

(e) a person in accordance with whose directions, instructions or wishes the Director or Major Shareholder is accustomed or is under an obligation, whether formal or informal, to act;

(f) a body corporate or its Directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the Director or Major Shareholder;

iii

DEFINITIONS (cont’d) (g) a body corporate or its Directors whose directions, instructions or

wishes the Director or Major Shareholder is accustomed or under an obligation, whether formal or informal, to act;

(h) a body corporate in which the Director, Major Shareholder and/or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or

(i) a body corporate which is a related corporation.

“Proposed Renewal of and new Shareholders’ Mandate”

: Proposed Renewal of and new Shareholders’ Mandate for Recurrent Related Party Transactions of a revenue or trading nature which are necessary for its day-to-day operations and are in the ordinary course of business of the Group as highlighted in Section 2.3.2 of this Circular.

“Proposed Share Buy-Back”

: Proposal to enable HTVB to purchase and/or hold its own Shares up to 10% of the Company’s issued and paid-up share capital.

“Proposed Renewal of Share Buy-Back Mandate”

: Proposed renewal of Shareholders’ Mandate for the Proposed Share Buy-Back.

“Purchased HTVB Shares”

: HTVB Shares that are purchased pursuant to the Proposed Share Buy-Back.

“Recurrent Transaction(s) /RRPT(s)”

: Transactions entered into by the Company and/or its subsidiary companies involving the interest, direct or indirect, of related parties involving recurrent 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 Group.

“Related Party(ies)” : A Director, Major Shareholder of the HTVB Group or Person Connected with such Director or Major Shareholder.

“RM or Sen” : Ringgit Malaysia and sen respectively.

“SBCA” : S.B. Cheah & Associates.

“Share(s) or HTVB Share(s)”

: Ordinary shares of RM0.50 each in HTVB.

“Shougang Malaysia” : Shougang International (Malaysia) Sdn. Bhd. (989148-K).

“Shougang Singapore” : Shougang International (Singapore) Pte. Ltd.

“Substantial Shareholder”

: Shall have the meaning given in Section 69D of the Act.

“THH” : Tiek Hong Hardware (B’worth) Sdn. Bhd. (278478-T), a wholly-owned subsidiary of HTVB.

“Treasury Shares” : The Purchased HTVB Shares which are retained by the Company and shall have the meaning given in Section 67A of the Act.

“TS Law” : T.S. Law Holding Sdn. Bhd. (66041-U).

“TSLI” : TS Law Investments Limited (BVI Co. No. 1572156), major shareholder of HTVB.

iv

DEFINITIONS (cont’d) “UOA” : United Overseas Australia Ltd, a company incorporated in Australia.

“UOA Group” : UOA and its subsidiaries and associated companies, collectively.

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 corporation, unless otherwise specified. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to a Malaysian time, unless otherwise stated.

THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK

v

TABLE OF CONTENTS

PART A

LETTER TO THE SHAREHOLDERS IN RELATION TO PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE CONTAINING:

SECTION

Page

1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’

MANDATE 2

2.1 Provision under the Listing Requirements 2 2.2 Principal Activities 3 2.3 Class and Nature of RRPTs

4

2.3.1 Classes of Related Parties 4-5 2.3.2 Nature of RRPTs 6-8 2.3.3 Amount Due and Owing by Related Parties 9 2.4 Review Method or Procedures of RRPTs

9

2.4.1 Review Methods or Procedures 9-10 2.4.2 Abstention from Voting 11 2.5 Disclosure 11 3. STATEMENT BY AUDIT COMMITTEE 11-12 4. RATIONALE AND BENEFITS OF THE PROPOSED RENEWAL OF AND NEW

SHAREHOLDERS’ MANDATE

12

4.1

Rationale 12

4.2 Benefits

12

5. APPROVAL REQUIRED 13 6. FINANCIAL EFFECTS 13 7. INTERESTS OF INTERESTED DIRECTORS, MAJOR SHAREHOLDERS AND/OR

PERSONS CONNECTED WITH THEM 13-14

8. DIRECTORS’ RECOMMENDATION 14 9. SIXTEENTH AGM 14 10. FURTHER INFORMATION 14

vi

PART B LETTER TO THE SHAREHOLDERS IN RELATION TO PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY CONTAINING:

SECTION Page 1. INTRODUCTION 16 2. DETAILS OF PROPOSED RENEWAL OF SHARE BUY-BACK MANDATE

17

2.1 Proposed Renewal of Share Buy-Back Mandate

17

2.2 The Maximum Number or Percentage of Shares to be Acquired

17

2.3 Funding

17-18

2.4 Treatment of Shares Purchased

18

2.5 Ranking of Treasury Shares

18

2.6 Purchase and Resale Price

19

2.7 Regulatory Requirements

19

2.8 Historical Share Prices

20

2.9 The Public Shareholding Spread

20

2.10 Purchases and Resales Made in the Previous Twelve (12) Months

20

2.11 Potential Advantages and Disadvantages of the Proposed Share Buy-Back

21

3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK 21 4. FINANCIAL EFFECTS

22

4.1 Share Capital

22

4.2 Dividends

22

4.3 NA per Share and EPS

22

4.4 Working Capital 22 5. APPROVAL REQUIRED

23

6. IMPLICATION OF THE CODE

23

7.

INTERESTS OF DIRECTORS, SUBSTANTIAL SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

23-24

8. DIRECTORS’ RECOMMENDATION

24

9. SIXTEENTH AGM

24

10. FURTHER INFORMATION 24

vii

APPENDICES

I

FURTHER INFORMATION 25-26

II EXTRACT OF ORDINARY RESOLUTIONS 27-29


PART A

PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE

FOR RECURRENT RELATED PARTY TRANSACTIONS

OF A REVENUE OR TRADING NATURE

1



Registered Office:

Lot 6096, Jalan Haji Abdul Manan Batu 5 , Off Jalan Meru 41050 Klang Selangor Darul Ehsan

20 November 2012 Board of Directors: Tan Sri Dato’ Alwi Jantan (Independent Non-Executive Chairman) Tan Sri Dato’ Law Tien Seng (Executive Deputy Chairman) Tan Sri Abdul Rahman Bin Mamat (Independent Non-Executive Director) Mr. Ng Soon Lai @ Ng Siek Chuan (Independent Non-Executive Director) Mr. Cheah Shu Boon (Independent Non-Executive Director) Mr. Foo Kok Siew (Independent Non-Executive Director) Mr. Lee Ching Kion (Non-Independent Non-Executive Director) Mr. Low Choong Sing (Executive Director) Mr. Lu Zongyou (Executive Director) To: The Shareholders of HTVB Dear Sir/Madam, PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

1. INTRODUCTION

On 8 December 2011, the Company obtained a general mandate from its shareholders for the Company and its subsidiaries to enter into RRPTs in the ordinary course of business of a revenue or trading nature which are necessary for the day-to-day operations based on commercial terms which are not more favourable to the Related Parties than those generally available to the public. The said general mandate for RRPTs shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming Sixteenth AGM unless authority for its renewal is obtained from the shareholders of the Company. On 31 October 2012, the Board of Directors of the Company announced that HTVB proposes to seek a renewal of the existing shareholders’ mandate for the RRPTs of a revenue or trading nature.

The purpose of this Circular is to provide you with the relevant details of the Proposed Renewal of Shareholders’ Mandate and to seek your approval for the ordinary resolution therein to be tabled at the forthcoming Sixteenth AGM, which will be convened at Setia City Convention Centre, Function Room 8, 1st Floor, No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 12 December 2012 at 2.00 p.m.

2

2. DETAILS OF THE PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE

2.1 Provision under the Listing Requirements

Under Part E, Paragraph 10.09 of the Listing Requirements allows the Company to seek a shareholders’ mandate in respect of RRPTs subject to the following: (a) the transactions are in the ordinary course of business and are on terms not more favourable

to the related party than those generally available to the public; (b) the shareholders’ mandate is subject to annual renewal and disclosure is made in the annual

report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year where the aggregate value is equal to or more than the threshold prescribed under Paragraph 10.09 (1) of the Listing Requirements;

(c) the listed issuer’s circular to shareholders for the shareholders’ mandate includes the information as may be prescribed by Bursa Securities. The draft circular must be submitted to Bursa Securities together with a checklist showing compliance with such information;

(d) in a meeting to obtain shareholders’ mandate, the interested Director, interested Major Shareholder or interested Person 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 to approve the transactions. An interested Director or interested Major Shareholder must ensure that Persons Connected with him abstain from voting on the resolution approving the transactions; and

(e) the listed issuer immediately announce to Bursa Securities when the actual value of a RRPT entered into by the listed issuer, exceeds the estimated value of the RRPT disclosed in the circular by 10% or more and must include the information as may be prescribed by Bursa Securities in its announcement.

It is anticipated that the companies within the Group will, in the ordinary course of business, continue to enter into RRPTs which are detailed in Section 2.3.2 below. It is likely that such transactions will occur with some degree of frequency and can arise at any time. In view of the time-sensitive, confidential and frequent nature of such RRPTs, the Board is seeking the shareholders’ approval for the Proposed Renewal of Shareholders’ Mandate for the Group to enter into transactions in the normal course of business within the classes of Related Parties set out in Section 2.3.1 below, provided that such transactions are entered into at arm’s length and on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public and which will not be to the detriment of the minority shareholders. The RRPTs will also be subject to the review procedures set out in Section 2.4 below. The Proposed Renewal of Shareholders’ Mandate will, if approved by shareholders at the forthcoming Sixteenth AGM, be subject to annual renewal. In this respect, any authority conferred by the Proposed Renewal of Shareholders’ Mandate shall only continue to be in force until:

(a) the conclusion of the next AGM of the Company following the general meeting at which the ordinary resolution in respect of such Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by a resolution passed at the AGM, the authority is renewed;

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

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

whichever is earlier.

3

2.2 Principal Activities

The Company is principally an investment holding company whilst the principal activities of its subsidiaries are as follows:

HTVB’s Wholly-owned

Subsidiaries

Equity Interest

Principal Activity

APM 100% Manufacturing and selling of pipes, hollow sections

and other steel products.

BD 100% Provision of transportation services.

HS 100% Manufacturing, selling and renting of scaffolding equipment and range of steel products.

HTH 100% Importer, exporter and general dealer of steel products, hardware and building materials.

THH

100% Dormant.

HTMS 100% Provision of management services to related companies (previously engaged in manufacturer and general dealer in steel products, hardware and building materials).

HTH’s

Wholly-owned Subsidiary

Equity Interest

Principal Activity

HTP

100% Dormant.

HS’s

Wholly-owned Subsidiaries

Equity Interest

Principal Activity

HI 100% Dormant.

HC

100% Selling and renting of scaffolding components and accessories.

HIPL

100% Investment holding companies.

HN

100% Dormant

HIPL’s

Subsidiary

Equity Interest

Principal Activity

HSPL 100% Scaffolding works and wholesale of industrial, construction and related machinery and equipment.

4

HTVB’s jointly-

controlled entity

Equity Interest

Principal Activity

ES 55% Manufacturing, selling and dealing in a range of steel products using blast furnace plant (under construction).

2.3 Class and Nature of RRPTs

The Proposed Renewal of and new Shareholders’ Mandate will apply to transactions with

Related Parties comprising Directors and/or Major Shareholders of the HTVB Group and/or Persons Connected with such Directors and/or Major Shareholders and includes any person who is or was within the preceding six (6) months of the date on which the terms of the transactions were agreed upon, a Director or Major Shareholder of HTVB or any other company which is its subsidiary.

The Related Parties are as described below:

2.3.1 Classes of Related Parties

Directors:

Related Parties

Nature of Relationships

Tan Sri Dato’ Alwi Jantan

• Independent Non-Executive Director and Chairman and shareholder of HTVB.

Tan Sri Dato’ Law Tien Seng • Director and Executive Deputy Chairman of HTVB. • Major Shareholder of Amardale which has

controlling interest in TSLI which in turn is the Major Shareholder of HTVB.

• Director and Major Shareholder of TS Law. • Major Shareholder of JKJS by virtue of his major

shareholdings in TS Law. • Spouse of Puan Sri Datin Saw Geok Ngor.

Mr. Cheah Shu Boon • Independent Non-Executive Director and shareholder of HTVB.

Lu Zongyou • Director of the Company and, Director and Chief Executive Officer of ES

Major Shareholders:-

Related Party

Principal Activities


TSLI Investment Company

• Major Shareholder of HTVB.

5

Related Party



Amardale Investment Company

• TSLI is the wholly-owned subsidiary of Amardale.

Puan Sri Datin Saw Geok Ngor

- • Director and Major Shareholder of TS Law which in turn is a Major Shareholder of JKJS by virtue of her shareholding in TS Law.

• Spouse of Tan Sri Dato’ Law Tien Seng.

Shougang Singapore

Investment holding and international trading

• Major Shareholder of HTVB.

China Shougang Import & export business, contracting, overseas projects, international economic and technological cooperation, real estate development, hotel & apartment management, logistic, estate management, domestic trade and etc.

• Major Shareholder of HTVB by virtue of it major shareholding in Shougang Singapore.

Shougang Corporation

Steelmakers Company

• Major Shareholder of HTVB by virtue of it major shareholding in China Shougang.

Persons Connected to Directors and Major Shareholders:

Related Party



SBCA

Advocates and solicitors

• Mr. Cheah Shu Boon is directly interested in SBCA by virtue of him being a partner of SBCA.

UOA Developer and

property investment • Tan Sri Dato’ Alwi Jantan is directly

interested in UOA by virtue of him being a director and a shareholder of UOA Development Berhad which is a company related to UOA.

6

Related Party



TS Law Investment Holding • Tan Sri Dato’ Law Tien Seng and his spouse, Puan Sri Datin Saw Geok Ngor are the Directors and Major Shareholders of TS Law which in turn is the Major Shareholder of JKJS.

JKJS Marketing company

dealing with steel plates

• Tan Sri Dato’ Law Tien Seng and Puan Sri Datin Saw Geok Ngor are the Major Shareholders of JKJS by virtue of their shareholdings in TS Law.

Shougang Malaysia

• Subsidiary of China Shougang, a major Shareholder of HTVB by virtue of it major shareholding in Shougang Singapore.

The details of the direct and indirect interests of the interested Directors, Major Shareholders

and Persons Connected with them are indicated in Section 7 below. 2.3.2 Nature of RRPTs

HTVB and its subsidiaries have entered into RRPTs whose consideration, or costs of the

RRPTs have not exceeded 5% of any one (1) of the percentage ratios. Nevertheless, for purposes of transparency and good corporate governance, HTVB wishes to voluntarily obtain the Proposed Renewal of Shareholders’ Mandate for such RRPTs which are necessary for the HTVB Group’s day-to-day operations.

The types of RRPTs which are to be covered by the Proposed Renewal of Shareholders’

Mandate together with the estimated value of the RRPTs and the actual value transacted of each RRPT from the date on which the existing Shareholders’ Mandate was obtained on 8 December 2011 to 31 October 2012, being the latest practicable date before the printing of this Circular, together with the estimated value as disclosed in the Circular to shareholders dated 20 November 2012 are disclosed in the following tabulation:

7

Proposed Renewal of the Existing Shareholders’ Mandate


Nature of RRPT

Subsidiary of HTVB Involved

in the Transaction

Related Party

Interested Directors/Major Shareholders/

Persons Connected to Directors and Major Shareholders

Estimated value from Forthcoming Sixteenth AGM to Next AGM*

(RM’000)

Actual value transacted from 8 December 2011

to 31 October 2012 (RM’000)

Estimated value as disclosed in the Circular to shareholders dated 16

November 2011 (RM’000)

Provisions of legal services provided by SBCA to HTVB Group.

All the subsidiaries within the

Group

SBCA Mr. Cheah Shu Boon 300 - 300

Renting of scaffolding equipment and sales of steel products by the HTVB Group to UOA Group.

HTVB Group UOA Group

Tan Sri Dato’ Alwi Jantan 5,000 - 5,000

Purchase of prime hot rolled steel plates by HTVB Group from JKJS

HTVB Group JKJS Tan Sri Dato’ Law Tien Seng and Puan Sri Datin Saw Geok Ngor

250,000 123,867 200,000

Aggregate

8

Proposed New Shareholders’ Mandate

No.

Nature of Recurrent Related Party Transaction

Related Parties

Interested Director, Major Shareholder and Person

Connected

* Estimated Value of the transaction from the Sixteenth

AGM to Seventeenth AGM (RM’000)

1. Sales of steel products by HTVB Group

to ES Shougang Singapore Tan Sri Dato’ Law Tien Seng,

the Director of ES, major shareholder and Director of

HTVB, Mr. Lu Zongyou and Shougang Singapore

30,000


Notes: The estimates are based on the information available at the point of estimation and the value in respect of each transaction referred to above is an annual amount based on prevailing prices obtained from the Related Parties which are reasonable market-competitive prices. The estimated amounts are derived from the sums incurred or received in the past years. For the new mandate, the estimated amounts are based on the estimated consumption of steel products of the construction of ES’s blast furnace project. Due to the nature of the transactions, the actual value of transactions may vary from the estimated value as disclosed above. Disclosure will be made in the 2012 Annual Report of the Company of the actual breakdown of the aggregate value of transactions conducted pursuant to the Proposed Renewal of Shareholders’ Mandate for the financial year ended 31 July 2012.

9

2.3.3 Amount Due and Owing by Related Parties

The breakdown of the principal sum (without interest) for the outstanding amount from UOA Group (‘the Debtor”) to HTVB Group under the Recurrent Related Party Transaction which exceeded the credit term as at 31 July 2012 was as follows:-

Outstanding Amount (RM)

Related Party

Nature of Transaction

1 year or

less

More than 1 to 3 years

More than 3 to 5 years

More than 5 years

HTVB Group

Renting of scaffolding equipment and sales of steel products by the HTVB Group

- - - -

As at 31 July 2012, there is no outstanding amount which exceeded the credit term due to HTVB Group as there was no transaction with UOA Group during the financial period. Therefore, there is no outstanding amount due to HTVB Group.

2.4 Review Methods or Procedures of RRPTs

2.4.1 Review Methods or Procedures

To ensure that RRPTs which are in the ordinary course of business are conducted at

arm’s length and based on normal commercial terms which are not more favourable to the Related Party or Parties than those generally available to the public and are not detrimental to the minority shareholders, the sales of goods shall be determined based on prevailing rates or prices of the goods (including where applicable, preferential rates or discounts accorded to a class or classes of customers) according to their usual commercial terms, business practices and policies or otherwise in accordance with other applicable industry norms or considerations.

(a) The transactions with the Related Party or Parties will only be entered into after taking into account the pricing, quality of product and other related factors, which are generally on terms not more favourable to the Related Party or Parties than those extended to unrelated third parties and are not to the detriment of the minority shareholders;

(b) The pricing and quality of products shall be at the prevailing market rates/prices of

the product including where appropriate preferential rates and discounts accorded for bulk purchases (the same as are accorded to third party bulk purchase) and on product provider’s usual commercial terms, and otherwise in accordance with applicable industry norm;

(c) The terms and conditions on purchases and sales are determined by market force,

under similar commercial terms for transaction with third parties which depend on the demand and supply of the products and subject to the availability of the products in the market;

10

(d) The cost plus method will be used where appropriate in the determination of fair price or contract rates. This method determines the arm’s length price or rate by adding an appropriate mark-up to the cost of production;

(e) At least two (2) other contemporaneous transactions with unrelated third parties

for similar products and/or quantities will be used as comparison, wherever possible, to determine whether the price and terms offered to/by the Related Party or 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 and/or quantities. In the event that quotation or comparative pricing from unrelated third parties cannot be obtained (for instance, if there are no unrelated third party vendors/customers of similar products, or if the product is a propriety item), the transaction price will be determined by the HTVB Group based on similar costing method of pricing used for other products and/or quantities to ensure that the RRPTs is not detrimental to the HTVB Group;

(f) The Internal Auditors of the Company will on a yearly basis review the adequacy

of the procedures and processes of the HTVB Group to monitor, track and identify RRPTs.

(g) A list of Related Parties will be circulated to the Directors of the Company and its

subsidiaries to notify them that all transactions with such Related Parties are deemed to be RRPTs and therefore, are required to be undertaken on an arm’s length basis, on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders;

(h) a register is maintained by the Company to record all RRPTs which are entered

into pursuant to the Proposed Renewal of Shareholders’ Mandate;

(i) all RRPTs are reviewed by the Audit Committee of the Company periodically; and

(j) the Audit Committee had periodically review the internal audit reports to ascertain if the guidelines and procedures established to monitor the RRPTs have been complied with.

The guidelines for the relevant approving authority practised by HTVB Group in

relation to the RRPTs are as follows:-

a) Transactions below RM3,000,000 each in value, will be reviewed and approved by the Executive Director (not Being a Person Connected to the Related Party) and tabled for review by the Audit Committee on a quarterly basis; and

b) Transactions equal to or exceeding RM3,000,000 each in value will be reviewed and approved by the Audit Committee and Executive Director (not being the Related Party or Person Connected to Related Party).

The Audit Committee has reviewed the guidelines and procedures mentioned above and

are satisfied that the guidelines and procedures are sufficient to ensure that the RRPTs are:-

• undertaken in the ordinary course of business; • carried out at arm’s length and based on normal commercial terms consistent with

the Group’s usual business practices and policies; • on terms not more favourable to the Related Party or Parties than those generally

available to the public; and • not detrimental to the minority shareholders of the Company.

The Board and the Audit Committee have reviewed the procedures and shall continue to review the procedures as and when required, with the authority to sub-delegate the review process to individuals or committees within the HTVB Group as they deem appropriate.

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2.4.2 Abstention From Voting

Categories of persons who will abstain from voting are as follows:

(a) Any interested Director(s); (b) Any interested Major Shareholder(s); (c) Any Person(s) Connected to the interested Director(s) or interested Major

Shareholder(s); and (d) Any Director(s) or Major Shareholder(s) whose Person(s) Connected is/are

interested in the RRPTs.

2.5 Disclosure

In accordance with Section 3.1.5 of the Practice Note 12 of the Listing Requirements, disclosure will be made in the Company’s 2012 Annual Report of a breakdown of the aggregate value of the RRPTs made during the financial year, amongst others, based on the following information: (a) the types of the RRPTs made; and (b) the names of the Related Parties involved in each type of the RRPTs made and their

relationship with HTVB. Disclosure will also be made in the annual reports for subsequent financial years during which the shareholders’ mandate remains in force. Shareholders’ approval will be sought for the renewal of such mandate at each AGM subject to a satisfactory review by the Audit Committee of its continued application to the RRPTs.

3. STATEMENT BY AUDIT COMMITTEE

The overall responsibility of determining whether the procedures for reviewing all RRPTs are appropriate, rest on the Audit Committee. Review and ascertainment of whether the guidelines and procedures established to monitor RRPTs have been complied with will be conducted by the Audit Committee through the Internal Auditors at least once a year. Should the Audit Committee determine that the guidelines and/or procedures stated in Section 2.4.1 are inadequate to ensure that:

(i) the RRPTs will be conducted at arm’s length and on normal commercial terms; and

(ii) such transactions are not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders, the Company will obtain a fresh shareholders’ mandate based on the new guidelines and procedures.

The Audit Committee shall also have the discretion to request for the limits to be imposed or for the additional procedures to be followed if it considers such a request to be appropriate. In that event, such limits or procedures may be implemented without the approval of shareholders, provided that they are more stringent than the existing limits or procedures. The Audit Committee of the Company has seen and reviewed the terms of the Proposed Renewal of Shareholders’ Mandate at least once a year and is satisfied that the review methods or procedures for RRPTs, as well as the reviews made by the Audit Committee in relation thereto, are sufficient to ensure that RRPTs are not more favourable to the Related Parties than those generally available to the public and will be made at arm’s length and in accordance with the Group’s normal commercial terms, and hence, will not be detrimental to minority shareholders or disadvantageous to the Group. The HTVB Group has in place adequate procedures and processes to monitor, track and identify the RRPTs in a timely and orderly manner. The Audit Committee conducts the review of these procedures and processes at least once a year.

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The members of the Audit Committee of the Company are as follows:

Name

Designation Directorship

(a) Mr. Ng Soon Lai @ Ng Siek Chuan

Chairman Independent Non-Executive Director

(b) Tan Sri Abdul Rahman Bin Mamat

Member Independent Non-Executive Director

(c) Mr. Cheah Shu Boon

Member Independent Non-Executive Director

(d) Mr. Foo Kok Siew Member Independent Non-Executive Director 4.

RATIONALE AND BENEFITS OF THE PROPOSED RENEWAL OF AND NEW SHAREHOLDERS’ MANDATE

4.1 Rationale

The Proposed Renewal of and new Shareholders’ Mandate will enable the HTVB Group to enter into the RRPTs that are in its 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 arise at any time and from time to time. These transactions may be constrained by the time-sensitive nature and confidentiality of such transactions, and it may be impractical to seek shareholders’ approval on a case by case basis before entering into such RRPTs. As such, the Board is seeking a shareholders’ mandate pursuant to Paragraph 10.09 of the Listing Requirements for the RRPTs described in Section 2.3.2 above to allow the Group to enter into such RRPTs made on an arm’s length basis and on normal commercial terms consistent with the Group’s business practices and policies and are not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders of HTVB.

The obtaining of the Proposed Renewal of and new Shareholders’ Mandate on an annual basis would eliminate the need to convene separate general meetings from time to time to seek shareholders’ approval as and when potential RRPTs with Related Parties arise; thereby reducing substantially administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group.

4.2 Benefits

The HTVB Group has over the years engaged the legal services provided by SBCA which include but not limited to perusal of agreements to be entered into by the Group, preparation of agreements and initiating of legal proceedings on behalf of the Group. This arrangement particularly benefits the HTVB Group in terms of legal compliances and because of SBCA’s familiarities with the Group’s legal matters since its incorporation. UOA Group is involved in construction which consumes building materials and steel products in the construction activities. HTVB Group deals in building materials and a wide range of steel products. The sales transactions with the UOA Group will benefit the HTVB Group by generating more sales. JKJS is involved in supplying prime hot steel plates to the HTVB Group. This is part of the day to day operation of the HTVB Group in the ordinary course of business. The goods provided by JKJS are price competitive and the transaction between the HTVB Group and JKJS are carried out on an arm’s length basis in the ordinary course of business and on normal commercial terms not more favourable to the related party than those generally available to the public. ES is building a blast furnace plant in Kemaman which consumes building materials and steel products for its construction. HTVB Group being one of the largest group in Malaysia dealing in building materials and a wide range of steels products, the arrangement for ES to purchase from HTVB will not only supply the demand of ES but also benefit HTVB Group by generating more sales.

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5. APPROVAL REQUIRED

The Proposed Renewal of and new Shareholders’ Mandate is subject to the approval being obtained from the shareholders of the Company at the forthcoming Sixteenth AGM to be convened.

6. FINANCIAL EFFECTS

The Proposed Renewal of and new Shareholders’ Mandate, if obtained at the Sixteenth AGM, will not have any effect on the EPS and NA per share at the Group level, issued and paid-up share capital, substantial shareholding and dividend rate of the Company.

7. INTERESTS OF THE INTERESTED DIRECTORS, MAJOR SHAREHOLDERS AND/OR

PERSONS CONNECTED WITH THEM

The direct and indirect interests of the interested Directors, interested Major Shareholders and interested Persons Connected with them as at 31 October 2012 are as follows:-

<--------Direct interest-----> <--------Indirect Interest------>

Name

No. of Shares % No. of Shares % Interested Directors

Tan Sri Dato’ Alwi Jantan 2,000,000 0.28 - - Tan Sri Dato’ Law Tien Seng - - 187,582,048 (a) 26.48 Mr. Cheah Shu Boon 132,000 0.02 - - Mr. Lu Zongyou - - -(e) -

Interested Major Shareholders

TSLI 187,582,048 26.48 - - Amardale - - 187,582,048(b) 26.48 Puan Sri Datin Saw Geok Ngor - - 187,582,048(c) 26.48 Shougang Singapore 64,392,000 9.09 - - China Shougang - - 64,392,000(d) 9.09 Shougang Corporation - - 64,392,000(d) 9.09 Interested Persons Connected

UOA Group - - - - TS Law - - - - JKJS - - - - Shougang Malaysia - - -(f) -

Notes: (a) Deemed interest pursuant to Section 6A(4) of the Companies Act, 1965 by virtue of his shareholdings in

Amardale which has controlling interest in TSLI which in turn is the major shareholder of HTVB. (b) Deemed interest by virtue of its shareholdings in TSLI which is the major shareholder of HTVB. (c) Deemed interest by virtue of her spouse, Tan Sri Dato’ Law Tien Seng’s shareholdings in Amardale which

has a controlling interest in TSLI, a major shareholder of HTVB. (d) Deemed interest pursuant to Section 6A(4) of the Act by virtue of Shougang Corporation being the holding

company of China Shougang which in turn controls Shougang Singapore. (e) Deemed interest by virtue of him being a person connected to Shougang Singapore, China Shougang and

Shougang Corporation. (f) Deemed interest pursuant to Section 6A(4) of the Act by virtue of Shougang Malaysia being the subsidiary

of Shougang Singapore, a major shareholder of HTVB. The interested Directors, Tan Sri Dato’ Alwi Jantan, Tan Sri Dato’ Law Tien Seng, Mr. Lu Zongyou

and Mr. Cheah Shu Boon have abstained from deliberation and voting at the board meeting(s) of HTVB in respect of the resolution which they are interested.

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The interested Directors, Tan Sri Dato’ Law Tien Seng (who is also an interested Major Shareholder), Tan Sri Dato’ Alwi Jantan, Mr Lu Zongyou and Mr. Cheah Shu Boon and the interested Major Shareholders, TSLI and Shougang Singapore with the Persons Connected with them shall abstain from voting in respect of their direct and indirect shareholdings on the resolution which they are interested, and which is to be tabled at the forthcoming Sixteenth AGM.

The interested Directors, Tan Sri Dato’ Law Tien Seng (who is also an interested Major Shareholder), Tan Sri Dato’ Alwi Jantan, Mr. Lu Zongyou and Mr. Cheah Shu Boon, and the interested Major Shareholders, TSLI and Shougang Singapore. have undertaken to ensure that the Persons Connected with them will also abstain from voting in respect of their direct and indirect shareholdings on the resolution, deliberating or approving the Proposed Renewal of Shareholders’ Mandate to be tabled at the forthcoming Sixteenth AGM. Save as disclosed above, none of the other Directors and/or Major Shareholders of HTVB or Persons Connected with them has any interest, direct or indirect, in the Proposed Renewal of Shareholders’ Mandate.


The Board, except for Tan Sri Dato’ Alwi Jantan, Tan Sri Dato’ Law Tien Seng, Mr. Cheah Shu Boon and Mr. Lu Zongyou who shall abstain from voting on the resolution pertaining to the Proposed Renewal of Shareholders’ Mandate at the forthcoming Sixteenth AGM, having considered all aspects of the Proposed Renewal of Shareholders’ Mandate, is of the opinion that the Proposed Renewal of Shareholders’ Mandate is in the best interest of the Company and its shareholders. Accordingly, the Directors, except for Tan Sri Dato’ Alwi Jantan, Tan Sri Dato’ Law Tien Seng and Mr. Cheah Shu Boon and Mr. Lu Zongyou recommend that you vote in favour of the ordinary resolution pertaining to the Proposed Renewal of Shareholders’ Mandate to be tabled at the forthcoming Sixteenth AGM.

9. SIXTEENTH AGM

The Sixteenth AGM, notice of which is enclosed in the 2012 Annual Report, will be held on Wednesday, 12 December 2012 for the purpose of considering and if thought fit, passing the ordinary resolution pertaining to the Proposed Renewal of Shareholders’ Mandate. If you are unable to attend and vote in person at the Sixteenth AGM, you are requested to complete, sign and deposit the Form of Proxy which is enclosed in the Company’s 2012 Annual Report in accordance with the instructions printed thereon, at the Registered Office of the Company at Lot 6096, Jalan Haji Abdul Manan, Batu 5 ½, Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan not later than forty-eight (48) hours before the time fixed for the Sixteenth AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the forthcoming Sixteenth AGM should you subsequently wish to do so.

10. FURTHER INFORMATION

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

Yours faithfully, For and on behalf of the Board of Directors of HIAP TECK VENTURE BERHAD ______________________________ TAN SRI DATO’ ALWI JANTAN Independent Non-Executive Chairman

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PART B

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE

FOR SHARE BUY-BACK OF UP TO 10% OF

THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY

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Registered Office: Lot 6096, Jalan Haji Abdul Manan Batu 5 , Off Jalan Meru 41050 Klang Selangor Darul Ehsan

20 November 2012 Board of Directors: Tan Sri Dato’ Alwi Jantan (Independent Non-Executive Chairman) Tan Sri Dato’ Law Tien Seng (Executive Deputy Chairman) Tan Sri Abdul Rahman Bin Mamat (Independent Non-Executive Director) Mr. Ng Soon Lai @ Ng Siek Chuan (Independent Non-Executive Director) Mr. Cheah Shu Boon (Independent Non-Executive Director) Mr. Foo Kok Siew (Independent Non-Executive Director) Mr. Lee Ching Kion (Non-Independent Non-Executive Director) Mr. Low Choong Sing (Executive Director) Mr. Lu Zongyou (Executive Director) To: The Shareholders of HTVB Dear Sir/Madam, PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY

1. INTRODUCTION

On 31 October 2012, the Board of Directors of the Company announced that HTVB proposes to seek

approval of its shareholders for the Proposed Renewal of Shareholders’ Mandate for Share Buy-Back of up to 10% of the issued and paid-up share capital of the Company at the forthcoming Sixteenth AGM to be convened.

The purpose of this Circular is to provide you with the relevant information on the Proposed Share Buy-Back and to seek your approval on the ordinary resolution therein to be tabled at the forthcoming Sixteenth AGM, which will be convened at Setia City Convention Centre, Function Room 8, 1st Floor, No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 12 December 2012 at 2.00 p.m.

YOU ARE ADVISED TO READ AND CAREFULLY CONSIDER THE CONTENTS OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED RENEWAL OF SHARE BUY-BACK MANDATE AT THE FORTHCOMING SIXTEENTH AGM.

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2. DETAILS OF PROPOSED RENEWAL OF SHARE BUY-BACK MANDATE

2.1 Proposed Renewal of Share Buy-Back Mandate

At the last AGM of the Company held on 8 December 2011, the Company was authorised to

purchase and/or hold up to a maximum of 10% of the issued and paid-up share capital of the Company. The authority conferred by the shareholders will expire at the conclusion of the forthcoming Sixteenth AGM to be held on 12 December 2012 unless the authority is renewed.

Any purchases or acquisitions of its own shares by the Company would have to be made in accordance with, and in the manner prescribed by the Act and the Listing Requirements and such other laws and regulations as may for the time being be applicable. The authority for the Proposed Renewal of Share Buy-Back Mandate, if approved at the forthcoming Sixteenth AGM, shall be effective immediately upon the passing of the ordinary resolution for the Proposed Renewal of Share Buy-Back Mandate at the forthcoming Sixteenth AGM until:-

(i) the conclusion of the next AGM of the Company at which time the authority shall lapse

unless by ordinary resolution passed at a general meeting, the authority is renewed, either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM after that date is required by

law to be held; or

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting;

whichever occurs first.

2.2 The Maximum Number or Percentage of Shares to be Acquired

The total number of Shares which may be purchased or acquired and/or held by the Company is limited to 10% of the issued and paid-up share capital (including Shares which have been purchased previously and retained as Treasury Shares) at the time of purchase. Based on the issued and paid-up share capital of the Company of RM356,871,037.50 comprising of 713,742,075 HTVB Shares as at 31 October 2012, a total of 71,374,207 HTVB Shares may be purchased by the Company, upon passing of the resolution pertaining to the Proposed Renewal of Share Buy-Back Mandate.

2.3 Funding

The Listing Requirements stipulate that the proposed purchase(s) by a listed issuer of its own shares must be made wholly out of retained profits and/or the share premium account of the listed corporation.

Based on latest audited financial statements for the financial year ended 31 July 2012, the retained profits and share premium account of HTVB were approximately RM26,004,552 and RM37,985,657 respectively. The total consideration paid for the purchase of Treasury Shares as at financial year ended 31 July 2012 was RM5,550. Hence, the Company shall allocate an amount not exceeding RM63,984,659 for the Share Buy-Back. The Proposed Share Buy-Back will be financed from internally generated funds and/or borrowings, the proportion of which will depend on the quantum of purchase consideration as well as the availability of the internally generated funds and bank borrowings at the time of purchase(s).

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In the event the Company decides to utilise bank borrowings to finance the Proposed Share

Buy-Back, it will ensure that it has sufficient financial capability to repay the bank borrowings and that the bank borrowings will not have a material impact on the cash flow of the Company.

2.4 Treatment of Shares Purchased

In accordance with Section 67A(3A) of the Act, the Purchased HTVB Shares may, at the

discretion of the Board, be dealt with in the following manner:

(a) to cancel the Purchased HTVB Shares;

(b) to retain the Purchased HTVB Shares as Treasury Shares for distribution as share dividends to the shareholders and/or resell on Bursa Securities or subsequently cancel the Purchased HTVB Shares; or

(c) to retain part of the Purchased HTVB Shares as Treasury Shares and cancel the remainder.

To date, the Company has yet to determine the manner in which the Purchased HTVB Shares will be treated. The Board may decide to cancel the Purchased HTVB Shares if the cancellation of the Shares is expected to enhance the EPS of HTVB as a result of the reduction in issued and paid-up share capital of the Company and thereby in the long term, have a positive impact on the market price of the HTVB Shares. If the Board decides to retain the Purchased HTVB Shares as Treasury Shares, it may distribute the Treasury Shares as dividend to the shareholders and/or resell the Purchased HTVB Shares on Bursa Securities and utilise the proceeds for any feasible investment opportunity arising in the future, or as working capital. In the event the Company decides to resell the Company’s Treasury Shares, the Company will make an announcement on the day of the resale is made providing details of the description of the Shares resold, the number of Shares resold, the resale price of the Shares resold or, where relevant, the highest and lowest resale price, the total consideration received and the cumulative net outstanding Treasury Shares at the date of resale. In the event that HTVB decides to cancel the Company’s Treasury Shares, HTVB will make an announcement on the day the cancellation is made providing details of the number of Treasury Shares cancelled, the date of the cancellation and the outstanding paid-up share capital after the cancellation.

2.5 Ranking of Treasury Shares

In the event that the Purchased HTVB Shares are held as Treasury Shares, Section 67A(3C) of the Act states that the rights attached to them as to voting, dividends and participation in other distributions and otherwise are suspended and the Purchased HTVB Shares shall not be taken into account in calculating the number or percentage of Shares or of a class of Shares in HTVB for any purposes including substantial shareholdings, take-overs, notices, the requisitioning of meetings, the quorum for meetings and the result of votes on resolutions at a meeting of shareholders.

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2.6 Purchase and Resale Price

The Company shall purchase its own Shares or resell its Treasury Shares (if applicable) only

on the market of Bursa Securities. Pursuant to Paragraph 12.17 of the Listing Requirements, HTVB may only purchase its own Shares at a price which is not more than 15% above the weighted average market price of HTVB Shares for the five (5) market days immediately before the purchase. Pursuant to Paragraph 12.18 of the Listing Requirements, the Company may only resell the Treasury Shares on Bursa Securities at:

(a) a price which is not less than the weighted average market price for HTVB Shares for the five (5) market days immediately before the resale; or

(b) a discounted price of not more than 5% to the weighted average market price for HTVB Shares for the five (5) market days immediately before the resale provided that:

(i) the resale takes place not earlier than thirty (30) days from the date of the purchase; and

(ii) the resale price is not less than the cost of purchase of the HTVB Shares being resold.

2.7 Regulatory Requirements

Based on the current requirements of Bursa Securities, the Proposed Share Buy-Back is subject to, inter-alia, the following:

(a) the public shareholding spread of 25% of the issued and paid-up share capital of the Company (excluding Treasury Shares) is to be maintained at all times. The Company, in implementing the Proposed Share Buy-Back, will be mindful in ensuring compliance with the minimum public shareholding spread of 25% as required under the Listing Requirements;

(b) the maximum funds to be utilised for the purchase of the Company’s own Shares cannot exceed the level of retained profits and share premium reserves of the Company;

(c) the Proposed Share Buy-Back shall only be effected on the market of Bursa Securities via its Automated Trading System and shall exclude any direct business transactions as defined in accordance with the rules of Bursa Securities. Consequently, the Proposed Share Buy-Back shall be transacted through stockbroker(s) as approved by Bursa Securities; and

(d) the Company must make an immediate announcement to Bursa Securities of any purchase(s) of its own Shares, any resale of its Treasury Shares or any cancellation of its Shares or Treasury Shares, no later than 6.30 p.m. on the day the purchase, the resale or the cancellation is made.

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2.8 Historical Share Prices

The following table sets out the monthly highest and lowest transacted prices of the Shares on Bursa Securities for the past twelve (12) months from November 2011 to October 2012:-

High Low (RM) (RM) 2011 November 0.92 0.87 December 0.88 0.88 2012 January 0.60 0.58 February 0.68 0.65 March 0.67 0.64 April 0.61 0.60 May 0.60 0.59 June 0.58 0.56 July 0.56 0.56 August 0.56 0.56 September 0.56 0.55

October 0.50 0.50 The last transacted price of Shares of the Company on 31 October 2012: RM0.87

(being the last practicable date prior to the printing of this Circular) (Source: The Star)

2.9 The public shareholding spread

The public shareholding spread of 25% of the issued and paid-up share capital of the Company is

maintained at all times. Based on the Record of Depositors of the Company as at 31 October 2012, the public shareholding spread of HTVB is 58.48%.

2.10 Purchases and Resales Made in the Previous 12 months

As at 31 October 2012, the Company has purchased a total of 5,460,000 of its own Shares and retained as Treasury Shares. The Company has not resold or cancelled any of the Treasury Shares in the preceding twelve (12) months. The details of Shares purchased in the preceding twelve (12) months up to 31 October 2012 and retained as Treasury Shares were as follows:

Date No. of Shares

Buy-Back

Lowest Price (RM)

Highest Price (RM)

Average Price (RM)

Total Consideration

(RM) 05.07.2012 10,000 0.555 0.555 0.555 5,550.00 Total: 10,000 5,550.00

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2.11 Potential Advantages and Disadvantages of the Proposed Share Buy-Back

(a) The potential advantages of the Proposed Share Buy-Back to the Company and its shareholders are as follows:

(i) allows the Company to take preventive measures against speculation

particularly when the HTVB Shares are undervalued which would in turn stabilise the market price of HTVB Shares and hence, enhance investors’ confidence;

(ii) the shareholders of HTVB may enjoy an increase in value of their investment due to the strengthening of EPS of the Company as a result of a reduced share capital base if the Purchased HTVB Shares are cancelled; and

(iii) if the Purchased HTVB Shares are retained as Treasury Shares, the Company may increase its financial resources and realise potential gains from the resale of Treasury Shares at a higher price than when it was purchased or give as share dividends to the shareholders to enable the shareholders to further participate in the potential prospect of HIVB.

(b) The potential disadvantages of the Proposed Share Buy-Back to the Company and its

shareholders are as follows:

(i) As the Proposed Share Buy-Back can only be made out of retained profits and the share premium reserves, it may reduce the distributable reserves available for dividends to be declared to the shareholders of the Company in the immediate future.

(ii) It may result in the Company foregoing other investment opportunities that may emerge in the future due to the reduction in financial resources of the HTVB Group after financing the Proposed Share Buy-Back.

Nevertheless, the Board will be mindful of the interests of the Company and its shareholders in implementing the Proposed Share Buy-Back.

3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK

The Proposed Share Buy-Back will enable the Company to utilise its surplus financial resources not

immediately required, to purchase its own Shares. It may stabilise the supply and demand of HTVB Shares traded on Bursa Securities and thereby supports the fundamental values of the Shares. The Proposed Share Buy Back may enhance the EPS of the Group (in the case where the Directors resolve to cancel the Purchased HTVB Shares so purchased and/or retain the Purchased HTVB Shares as Treasury Shares and the Treasury Shares are not subsequently resold), and thereby long term and genuine investors are expected to enjoy a corresponding increase in the value of their investments in the Company. If the Purchased HTVB Shares are kept as Treasury Shares, it will give the Directors an option to sell the Purchased HTVB Shares at a higher price and therefore, make an exceptional gain for the Company. Alternatively, the Purchased HTVB Shares can be distributed as share dividends to shareholders.

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4. FINANCIAL EFFECTS

Based on the assumption that the Proposed Share Buy-Back is carried out in full, the effect of the Proposed Share Buy-Back on the share capital, dividend, NA, EPS and working capital of HTVB are as set out below:

4.1 Share Capital

Assuming the 10% Proposed Share Buy-Back is carried out in full and all the Purchased

HTVB Shares are cancelled, the proforma effects of the Proposed Share Buy-Back on the issued and paid-up share capital of the Company will be as follows:

No. of HTVB Shares

RM

Existing as at 31 October 2012 713,742,075 356,871,037.50 Less: Number of HTVB Shares to be cancelled

pursuant to the Proposed Share Buy-Back of up to 10% of the existing share capital

(71,374,207)

(35,687,103) #

___________ ____________ Upon completion of the Proposed Share Buy-Back 642,367,868

========== 321,183,934.50 ===========

# Assuming 71,374,207 HTVB Shares or 10% of the existing share capital are fully purchased.

4.2 Dividends

Assuming the Proposed Share Buy-Back is implemented in full and the dividend quantum is

maintained at historical levels, the Proposed Share Buy-Back will have the effect of increasing the dividend rate of HTVB as a result of the reduction in the issued and paid-up share capital of HTVB as described under Section 4.1 above.

4.3 NA per Share and EPS

The NA per share of the Company and the Group may be increased or decreased, depending on the purchase prices of the Shares to be bought back by the Company. Should the purchase prices exceed the existing NA per share, the NA of the remaining shares should decrease accordingly. Should the Purchased HTVB Shares be held as Treasury Shares and later resold, the NA per share of the Company and the Group will increase if the Company realise a gain from the resale and vice versa. The effective reduction in the issued and paid-up share capital of the Company pursuant to the Proposed Share Buy-Back would generally, all else being equal, increase the consolidated EPS of the Company for the financial year when the Shares Buy-Back is implemented. Should the Purchased HTVB Shares be held as Treasury Shares and later resold, the extent of the impact to the earning of HTVB Group will depend on the actual selling price, the number of Treasury Shares resold and the gain or loss on the disposal, if any. However, the Proposed Share Buy-Back, if exercised, is not expected to have any material effect on the NA per share and EPS of the Company or the Group for the financial year ending 31 July 2013.

4.4 Working Capital

Although the Proposed Share Buy-Back will reduce the working capital of the Company to the extent of the amount of funds utilised for the purchase of the Company’s Shares, it is not expected to have a material effect on the working capital of the Company.

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5. APPROVAL REQUIRED

The Proposed Share Buy-Back is subject to the approval being obtained from the shareholders of the Company at the forthcoming Sixteenth AGM.

6. IMPLICATION OF THE CODE

Based on the Company’s issued and paid-up share capital and the shareholding of the Substantial

Shareholders of the Company as at 31 October 2012, the Proposed Share Buy-Back is not expected to trigger any obligation by the Substantial Shareholders of the Company and/or parties acting in concert with them to undertake a mandatory offer under the Code. The effect on the shareholdings of the Substantial Shareholders of the Company after the implementation of the Proposed Share Buy-Back is shown in Section 7 of this Circular. In the event that the Proposed Share Buy-Back results in any Substantial Shareholder holding more than 33% of the voting shares of the Company, pursuant to the Code, the affected party will be obliged to make a mandatory offer for the remaining Shares not held by it. However, under Practice No. 2.9.10 of the Code, the affected party may apply for an exemption from making a mandatory offer arising from the circumstances mentioned above.

7. INTERESTS OF DIRECTORS, SUBSTANTIAL SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

If the Proposed Share Buy-Back is implemented in full, and there is no change in the number of Shares held by the Directors and/or Substantial Shareholders of HTVB as at 31 October 2012, the effect of the Proposed Share Buy-Back on the shareholdings of the Directors, Substantial Shareholders and/or persons connected with them will be to increase the percentage of their shareholdings in the Company. This effect is illustrated below:-

< --------------------------------------------- Proposed Share Buy-Back ------------------------------------>

Before After < ----- Direct -----> <-------Indirect-------> < ----- Direct -----> <--------Indirect--------

>

No. of Shares % No. of Shares % No. of Shares % No. of Shares %

Substantial Shareholders Tan Sri Dato’ Law Tien Seng

- - 187,582,048 (a) 26.48 - - 187,582,048 (a) 29.20

Puan Sri Datin Saw Geok Ngor

- - 187,582,048 (b) 26.48 - - 187,582,048 (b) 29.20

TSLI 187,582,048 26.48 - - 187,582,048 29.20 - - Amardale - - 187,582,048 (c) 26.48 - - 187,582,048 (c) 29.20 Lembaga Tabung Haji 48,763,400 6.88 - - 48,763,400 7.58 - - Shougang Singapore 64,392,000 9.09 - - 64,392,000 10.02 - - China Shougang - - 64,392,000(d) 9.09 - - 64,392,000(d) 10.02 Shougang Corporation - - 64,392,000(d) 9.09 - - 64,392,000(d) 10.02 Mr. Kua Hock Lai - - 38,114,100(f) 5.38 - - 38,114,100(f) 5.93 Madam Lim Ah Eng - - 38,114,100(f) 5.38 - - 38,114,100(f) 5.93 K.H.L. Sdn. Bhd. 38,114,100 5.38 - - 38,114,100 5.93 - -

Directors Tan Sri Dato’ Alwi Jantan

2,000,000 0.28 - - 2,000,000 0.31 - -

Tan Sri Abdul Rahman Bin Mamat

- - - - - - - -

Tan Sri Dato’ Law Tien Seng

- - 187,582,048 (a) 26.48 - - 187,582,048 (a) 29.20

Mr. Lee Ching Kion - - 41,864 (e) 0.01 - - 41,864 (e) 0.01 Mr. Ng Soon Lai @ Ng Siek Chuan

- - - - - - - -

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Directors Mr. Cheah Shu Boon 132,000 0.02 - - 132,000 0.02 - - Mr. Foo Kok Siew - - - - - - - - Mr. Low Choong Sing - - - - - - - - Mr.Lu Zongyou - - - - - - - - Notes:

Save for the consequential increase in the percentage of shareholdings and/or voting rights of the

shareholders of the Company as a result of the Proposed Share Buy-Back, none of the Directors or Substantial Shareholders and/or Persons Connected with them have any interest, whether direct or indirect, in the Proposed Share Buy-Back and in the resale of Treasury Shares, if any.


The Board having considered all aspects of the Proposed Renewal of Share Buy-Back Mandate, is of the opinion that the Proposed Renewal of Share Buy-Back Mandate is in the best interest of the Company and its shareholders. Accordingly, the Directors recommend that you vote in favour of the ordinary resolution pertaining to the Proposed Renewal Share Buy-Back Mandate to be tabled at the forthcoming Sixteenth AGM.

9. SIXTEENTH AGM

The Sixteenth AGM, notice of which is enclosed in the 2012 Annual Report, will be held on Wednesday, 12 December 2012 for the purpose of considering and if thought fit, passing the ordinary resolution pertaining to the Proposed Renewal of Share Buy-Back Mandate. If you are unable to attend and vote in person at the Sixteenth AGM, you are requested to complete, sign and deposit the Form of Proxy which is enclosed in the Company’s 2012 Annual Report in accordance with the instructions printed thereon, at the Registered Office of the Company at Lot 6096, Jalan Haji Abdul Manan, Batu 5 ½, Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan not later than forty-eight (48) hours before the time fixed for the Sixteenth AGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the forthcoming Sixteenth AGM should you subsequently wish to do so.

10. FURTHER INFORMATION

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

Yours faithfully, For and on behalf of the Board of Directors of HIAP TECK VENTURE BERHAD ______________________________ TAN SRI DATO’ ALWI JANTAN Independent Non-Executive Chairman

(a) Deemed interest pursuant to Section 6A(4) of the Companies Act, 1965 by virtue of his shareholdings in Amardale which has a controlling interest in TSLI, a substantial shareholder HTVB.

(b) Deemed interest by virtue of her spouse, Tan Sri Dato’ Law Tien Seng’s indirect shareholdings in HTVB vide his shareholdings in Amardale which has a controlling interest in TSLI, a substantial shareholder of HTVB.

(c) Deemed interest by virtue of its shareholdings in TSLI which is a substantial shareholder of HTVB. (d) Deemed interest pursuant to Section 6A(4) of the Act by virtue of Shougang Corporation being the holding

company of China Shougang which in turn controls Shougang Singapore. (e) Deemed interest by virtue of his spouse, Madam Mok Quee Hwa’s direct shareholdings in HTVB. (f) Deemed interest by virtue of his/her shareholdings in K.H. L. Sdn. Bhd., which is turn is a substantial shareholder of

HTVB.

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APPENDIX I FURTHER INFORMATION 1. RESPONSIBILITY STATEMENT

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

2. MATERIAL LITIGATION

The Board of Directors of the Company has confirmed that the Company and/or its subsidiaries are not presently engaged in any material litigation, material claim and arbitration either as plaintiff or defendant and the Directors do not have any knowledge of any proceedings pending or threatened against the Company and/or its subsidiaries or of any facts likely to give rise to any proceedings which may materially affect the financial position or business of the Company and/or its subsidiaries.

3. MATERIAL CONTRACTS

Save as disclosed below, there are no material contracts, not being contracts entered into in the ordinary course of business, which have been entered into by HTVB and/or its subsidiary companies during the two (2) years immediately preceding the date of this Circular: • On 21 July 2011, ES had entered into (i) an Engineering and Procurement Contract and (ii) a

Construction Contract with China Shougang International Trade and Engineering Corporation for the design, procurement and construction of first phase of an integrated steel mill in Teluk Kalung, Kemaman, Terengganu Darul Iman. The first phase of the integrated steel mill comprises a material handling system, coke oven plant, sinter plant, blast furnace, BPRT blowing system, iron caster and dry de-dusting system, converter with ladle refining furnace and slab continuous casting machine and oxygen making system ad would have an annual capacity of 0.7 million tones of steel.

• On 22 July 2011, HTVB had entered in to a Co-operation Agreement with Shougang International

(Singapore) Pte Ltd (“Shougang Singapore”), ES, Tan Sri Dato’ Law Tien Seng and Chinaco Investment Pte Ltd to set out the overall mode and structure of the participation of Shougang Singapore in the construction and operation of an integrated steel mill in Teluk Kalung, Kemaman, Terengaganu Darul Iman, the primary rights and obligations of the parties prior to, upon and following completion of the acquisition by Shougang Singapore of the entire equity interest in Orient Steel Investment Pte Ltd from Tan Sri Dato’ Law Tien Seng and the relationship and connection between the Co-operation Agreement and the agreement for the SG Acquisition, the Shareholders’ Agreement and the Shareholders’ Loan Agreement.

• On 15 March 2012, HTVB entered into the Shareholders’ Agreement with other shareholders of

ES, namely Orient Steel Investment Pte. Ltd. (“Orient Steel”) and Chinaco Investment Pte. Ltd. (“Chinaco”) which set out the primary rights and obligations and regulate the relationship of the three parties in respect of dealing with ES on the project.

• On 6 July 2012, HTVB entered into Loan Agreement with the other shareholders of the ES where

the agreement stipulated that the shareholders of ES shall provide a shareholder loan to ES for the construction of the integrated steel mill project in accordance with the Co-operation Agreement dated 22 July 2011.

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4. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the Registered Office of the Company at Lot 6096, Jalan Haji Abdul Manan, Batu 5 ½, Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan, during normal business hours from the date of this Circular up to and including the date of the Sixteenth AGM:

(a) the Memorandum and Articles of Association of the Company; (b) the material contract referred to in Section 3; (c) the audited financial statements of the HTVB Group for the two (2) financial years ended 31

July 2011 and 31 July 2012.

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APPENDIX II

EXTRACT OF ORDINARY RESOLUTIONS

H T V B HIAP TECK VENTURE BERHAD


EXTRACT OF ORDINARY RESOLUTIONS TO BE TABLED AS SPECIAL BUSINESS AT THE FORTHCOMING SIXTEENTH AGM

ORDINARY RESOLUTION 9 • Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue

or Trading Nature (“Proposed Renewal of Shareholders’ Mandate”) “THAT the Company and/or its subsidiaries be and are hereby authorised to enter into recurrent related party transactions of a revenue or trading nature as specified in Section 2.3.2 of the Circular to Shareholders dated 20 November 2012, provided that such arrangements and/or transactions which are necessary for the Group’s day-to-day operations are undertaken in the ordinary course of business, at arm’s length basis, on normal commercial terms and on prices and terms which are not more favourable to the Related Parties than those generally available to the public and not detrimental to the minority shareholders of the Company. AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary or in the best interest of the Company to give effect to the Proposed Renewal of Shareholders’ Mandate. AND FURTHER THAT such authority shall continue to be in force until: (i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general

meeting at which such Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by ordinary resolution passed at the meeting, the authority is renewed either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to

Section 143(1) of the Companies Act, 1965 (“the Act”) (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting, whichever is the earlier.”

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ORDINARY RESOLUTION 10 • Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or

Trading Nature (“Proposed New Shareholders’ Mandate”) “THAT the Company and/or its subsidiaries be and are hereby authorised to enter into recurrent related party transactions of a revenue or trading nature as specified in Section 2.3.2 of the Circular to Shareholders dated 20 November 2012, provided that such arrangements and/or transactions which are necessary for the Group’s day-to-day operations are undertaken in the ordinary course of business, at arm’s length basis, on normal commercial terms and on prices and terms which are not more favourable to the Related Parties than those generally available to the public and not detrimental to the minority shareholders of the Company. AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary or in the best interest of the Company to give effect to the Proposed New Shareholders’ Mandate. AND FURTHER THAT such authority shall continue to be in force until: (iv) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general

meeting at which such Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by ordinary resolution passed at the meeting, the authority is renewed either unconditionally or subject to conditions;

(v) the expiration of the period within which the next AGM after the date it is required to be held pursuant to

Section 143(1) of the Companies Act, 1965 (“the Act”) (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(vi) revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting, whichever is the earlier.”

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ORDINARY RESOLUTION 11 • Proposed Renewal of Shareholders’ Mandate for Share Buy-Back “THAT subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other prevailing laws, rules, regulations and orders issued and/or amended from time to time by the relevant regulatory authorities, the Company be and is hereby authorised to renew the approval granted by the shareholders of the Company at Fifteenth Annual General Meeting of the Company held on 8 December 2011, authorising the Company to purchase and/or hold up to 10% of the issued and paid-up share capital of the Company (“Proposed Share Buy-Back”) as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors of the Company may deem fit and expedient in the interest of the Company and an amount not exceeding the retained profits and share premium reserves of the Company, be allocated by the Company for the Proposed Share Buy-Back. The retained profits and share premium reserves of the Company stood at RM26,004,552 and RM37,985,657 respectively for the financial year ended 31 July 2012. AND THAT upon completion of the purchase by the Company of its own shares, the Directors of the Company be and are hereby authorised to cancel such shares or retain such shares as the Treasury Shares or a combination of both. The Directors of the Company are further authorised to resell the Treasury Shares on Bursa Securities or distribute the Treasury Shares as dividends to the shareholders of the Company or subsequently cancel the Treasury Shares or any combination of the three. AND FURTHER THAT the Directors of the Company be and are hereby authorised to carry out the Proposed Share Buy-Back immediately upon the passing of this resolution until: (a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time the

authority shall lapse, unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM is required by law to be held; or (c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general

meeting, whichever occur first but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and to take all steps as are necessary and/or to do all such acts and things as the Directors of the Company deem fit and expedient in the interest of the Company to give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, amendments and/or variations as may be imposed by the relevant authorities.”