Transactions (Chapter 10 Of Listing Requirements) : Recurrent Related Party Transactions

INTRODUCTION

The Board of Sarawak Plantation Berhad ('SPB') wishes to announce that its wholly owned subsidiary, Sarawak Plantation Agriculture Development Sdn. Bhd. ('SPAD') has in the ordinary course of its business, entered into recurrent related party transactions ('RRPT') with KUB Sepadu Sdn. Bhd. ('the Related Party'). For the period from 12 September 2016 to 10 January 2017, the aggregate amount of such RRPT stands at RM8,706,644-88, exceeding the 1% percentage ratio.

RATIONALE

The Related Party sold FFB to SPAD's mill based on commercial terms, business practices and policies similar to those offered to other sellers of FFB.

FINANCIAL IMPACT OF THIS RRPT

This RRPT does not have any material effect on the net assets of the Group, earnings per share, share capital and substantial shareholders' shareholding of SPB.

RISKS IN RELATION TO THIS RRPT

Barring any unforeseen circumstances, the Board of SPB does not foresee any major risks in relation to this RRPT.

DIRECTORS AND SHAREHOLDERS' INTEREST

The Chairman, Datuk Amar Abdul Hamed bin Sepawi, is a shareholder ot Medan Sepadu Sdn. Bhd., a company which holds 30% equity interest in the Related Party. Accordingly, Datuk Amar Abdul Hamed bin Sepawi is deemed to be interested in the transaction.

Encik Polit bin Hamzah, a director of SPB, is also a director of the Related Party.

Save as disclosed above, none of the other Directors and Shareholders of SPB and persons connected with them have any interests, direct or indirect, in this RRPT.

WHETHER THIS RRPT IS SUBJECT TO THE APPROVAL OF SHAREHOLDERS AND THE RELEVANT GOVERNMENT AUTHORITIES

This RRPT is not subject to the approval of the shareholders nor that of any government authorities.

STATEMENT BY THE AUDIT COMMITTEE

The Audit Committee, having considered the rationale of this RRPT, is of the view that this RRPT is:

(a) fair, reasonable and based on generally acceptable commercial terms not more favourable to the Related Party. In fact, the sale of the FFB is based on commercial terms, business practices and policies similar to those offered to other sellers of FFB to SPAD's mills;

(b) the terms, business practices and policies are in line with the industry's standards;

(c) not prejudicial / detrimental to the interests of the minority shareholders; and

(d) in the best interest of the Group.

DIRECTORS' RECOMMENDATION

The Board of SPB, with the exception of Datuk Amar Abdul Hamed bin Sepawi and Encik Polit bin Hamzah, has considered all aspects of this RRPT and is of the opinion that this RRPT is established on normal commercial terms, is in the best interest of the Group and is not prejudicial / detrimental to the interests of the minority shareholders of SPB.

This announcement is dated 13 January 2017.