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 professional advisers immediately.

If you have sold or transferred all your shares in RAMATEX BERHAD, you should immediately hand this Circular
together with the enclosed Form of Proxy to the Agent through whom the sale was effected for onward transmission to the
purchaser or the transferee.

The Notice of the Ninth Annual General Meeting of RAMATEX BERHAD to be held at Opal Room, Mezzanine Floor,
The Katerina Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Monday, 13 June 2005 at 11.30 a.m., which sets
out the ordinary resolutions to consider the belowmentioned together with the Form of Proxy relating thereto are
incorporated in the Annual Report of the Company despatched together with this Circular. Shareholders are advised to refer
to the Notice of Annual General Meeting and the Form of Proxy which are enclosed.

A member entitled to attend and vote at the Meeting is entitled to appoint one (1) or more proxies to attend and vote instead
of him. The Form of Proxy should be lodged at the Registered Office of the Company at Sri Gading Industrial Estate,
83000 Batu Pahat, Johor not later than forty-eight (48) hours before the time set for the Meeting or at any adjournment
thereof. The lodgement 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.

Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of Part I of this Circular in respect of the
Proposed Renewal of Authority for Share Buy-Back prior to its issuance and takes no responsibility for the contents of Part I
of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability for any loss
whatsoever arising from or in reliance upon the whole or any part of the contents of Part I of this Circular.

Bursa Securities takes no responsibility for the contents of Part II of this Circular in respect of the Proposed Renewal of
Shareholders’ Mandate for existing Recurrent Related Party Transactions and Proposed New Shareholders’ Mandate for
additional Recurrent Related Party Transactions of a Revenue or Trading Nature and 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.

RAMATEX BERHAD
(372672-K)
(Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

in relation to the

(I) PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

(II) PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR

EXISTING RECURRENT RELATED PARTY TRANSACTIONS AND
PROPOSED NEW SHAREHOLDERS’ MANDATE FOR ADDITIONAL
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR
TRADING NATURE

Last day, date and time for lodging the Form of Proxy : Saturday, 11 June 2005 at 11.30 a.m.
Day, date and time of the Annual General Meeting : Monday, 13 June 2005 at 11.30 a.m.

This Circular is dated 21 May 2005

 DEFINITIONS

In this Circular and the accompanying appendices, the following abbreviations shall have the following
meanings unless otherwise stated:-

“Act” : Companies Act, 1965 as amended from time to time and any re-
enactment thereof

“AGM” : Annual General Meeting

“Board” or “Directors” : Board of Directors of Ramatex

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

“Code” : Malaysian Code on Take-Overs and Mergers, 1998 as amended from

time to time

“EGM” : Extraordinary General Meeting

“EPS” : Earnings Per Share

“EWTPL” : Eco Water Technologies Pte Ltd (200300493-D)

“Gimmill(M)” : Gimmill Industrial (M) Sdn. Bhd. (43351-M)

“Gimmill(S)” : Gimmill Industrial (Pte) Ltd (197602414-C)

“Listing Requirements” : Listing Requirements of Bursa Securities

“Major Shareholder”
: A person who has an interest or interests in one or more voting shares
in a company and the nominal amount of that share, or the aggregate
of the nominal amounts of those shares, is not less than 5% of the
aggregate of the nominal amounts of all the voting shares in the
Company. For the purpose of this definition, “interest in shares” shall
have the meaning given in section 6A of the Act.

It also includes any person who is or was within the preceding 12

months of the date on which the terms of the transaction were agreed
upon, a major shareholder (as defined above) of the listed issuer or
any other company which is its subsidiary or holding company or a
subsidiary of its holding company.

“Market day” : Any day between Monday and Friday (inclusive) which is not a public
holiday and on which Bursa Securities is open for trading of securities

“NTA” : Net Tangible Assets

“Ordinary Resolution(s)” : Ordinary resolutions as set out in the Notice of AGM herein

“Proposed Renewal of Authority : A proposal to seek for renewal of authority from the shareholders of
for Share Buy-Back” the Company to enable Ramatex to purchase and/or hold up to ten
percent (10%) of its issued and paid-up share capital pursuant to
Section 67A of the Act

“Proposed Renewal of : A proposal to seek for renewal of shareholders’ mandate from the
Shareholders’ Mandate” shareholders of the Company pursuant to Chapter 10, Paragraph 10.09
of the Listing Requirements in relation to the three (3) existing RRPT

i
“Proposed New Shareholders’ : A proposal to seek for new shareholders’ mandate from the
Mandate” shareholders of the Company pursuant to Chapter 10, Paragraph 10.09
of the Listing Requirements in relation to the additional two (2) new
RRPT

“Proposed Shareholders’ Mandate” : Proposed Renewal of Shareholders’ Mandate and Proposed New
Shareholders’ Mandate, collectively

“Proposals” : The Proposed Renewal of Authority for Share Buy-Back, Proposed

Renewal of Shareholders’ Mandate and Proposed New Shareholders’
Mandate

“Purchased Shares” : Shares purchased pursuant to the Proposed Renewal of Authority for
Share Buy-Back

“Ramatex” or “the Company” : Ramatex Berhad (372672-K)

“Ramatex Group” or “the Group” : Ramatex and its subsidiary companies

“Ramatex Share(s)” : Ordinary Shares of RM1.00 each in Ramatex

“Recurrent Related Party : Transactions of a revenue or trading nature which are necessary for
Transactions” or “RRPT” the day-to-day operations and are entered into by Ramatex or its
subsidiary companies in the ordinary course of business which
involves the interest, direct or indirect, of a Related Party

“Related Party(ies)” : Directors or major shareholders of Ramatex or persons connected

with such director or major shareholder as defined under Chapter 1
and 10 of the Listing Requirements

“RISL” : Ramatex Industrial (Suzhou) Ltd (60820737-6)

“RM” and “sen” : Ringgit Malaysia and sen respectively

“RTI” : Ramatex Textiles Industrial Sdn. Bhd. (191854-P)

“RTN” : Ramatex Textiles Namibia (Proprietary) Limited (2001/0158)

“Share Buy-Back” : Purchase by the Company of its own shares in accordance with
Section 67A of the Act and the requirements of the Bursa Securities
and/or any other authority

“Shareholders’ Mandate” : A mandate from the shareholders of the Company pursuant to Chapter
10, Paragraph 10.09 of the Listing Requirements in relation to RRPT

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.

Any reference in this Circular to any enactment is a reference to that enactment for the time being amended or re-
enacted.

Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise stated.

ii
CONTENTS

LETTER TO THE SHAREHOLDERS OF RAMATEX CONTAINING:-

Page
1.0 INTRODUCTION 1

2.0 PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

2.1 Details of the Proposed Renewal of Authority For Share Buy-Back 3-4
2.2 Potential Advantages and Disadvantages of the Proposed Renewal of Authority 5
for Share Buy-Back
2.3 Risk Factors of the Proposed Renewal of Authority For Share Buy-Back 5
2.4 Rationale for the Proposed Renewal of Authority For Share Buy-Back 5
2.5 Effects of the Proposed Renewal of Authority For Share Buy-Back 6
2.5.1 Share capital 6
2.5.2 NTA 6
2.5.3 Working Capital 6
2.5.4 EPS 6
2.5.5 Dividends 7
2.6 Major Shareholders’ Shareholdings 7
2.7 Directors’ Shareholdings 7-8
2.8 Public Shareholding Spread 8
2.9 Implication Relating to the Code 8
2.10 Purchase, Resale and Cancellation of Ramatex Shares made in the previous 9
twelve (12) months
2.11 Historical Share Prices of Ramatex 9
2.12 Directors’ and Major Shareholders’ Interests in the Proposed Renewal of 9
Authority for Share Buy-Back

3.0 PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR EXISTING

RECURRENT RELATED PARTY TRANSACTIONS AND PROPOSED NEW
SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT
RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING
NATURE
3.1 Details of the Proposed Shareholders’ Mandate 11
3.2 Principal Activities 11 -13
3.3 Class of Related Parties 14 -15
3.4 Terms and Nature of the RRPT 16
3.5 Disclosure and Review Procedures for the RRPT 16 - 17
3.6 Statement by Audit Committee 17
3.7 Validity Period 18
3.8 Rationale for the Proposed Renewal of Shareholders’ Mandate 18 - 19
3.9 Directors’ and Major Shareholders’ Interests in the Proposed Shareholders’
Mandate 19 - 20
3.10 Effect of the Proposed Shareholders’ Mandate 20

4.0 APPROVAL REQUIRED 20

5.0 DIRECTORS’ RECOMMENDATION

5.1 Proposed Renewal of Authority for Share Buy-Back 20
5.2 Proposed Shareholders’ Mandate 21

6.0 ANNUAL GENERAL MEETING 21

7.0 FURTHER INFORMATION 21

APPENDIX I

APPENDIX I FURTHER INFORMATION 22

iii
 RAMATEX BERHAD
(372672-K)
(Incorporated in Malaysia)

Registered Office:

Sri Gading Industrial Estate

83000 Batu Pahat, Johor

21 May 2005
The Board of Directors

Tan Sri Dato’ Lodin bin Wok Kamaruddin (Non-Independent Non-Executive Chairman)
Ma Wong Ching (Managing Director)
Lim Poh Boon (Chief Executive Officer)
Ma On May (Executive Director)
Ma Ong Kee (Executive Director)
Lee Yan Min @ Liow Yok Min (Executive Director)
Boo Chin Liong (Independent Non-Executive Director)
Chew Teck Cheng (Independent Non-Executive Director)
Nurulizwani binti Ahmad Zahid (Independent Non-Executive Director)

To: The Shareholders of Ramatex Berhad

Dear Sir / Madam

(I) PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

(II) PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR EXISTING RECURRENT

RELATED PARTY TRANSACTIONS AND PROPOSED NEW SHAREHOLDERS’
MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A
REVENUE OR TRADING NATURE

1.0 INTRODUCTION

The Company had on 5 May 2005 announced its intention to seek shareholders’ approval for the
Proposed Renewal of Authority for Share Buy-Back in accordance with Section 67A of the Act,
Proposed Renewal of Shareholders’ Mandate for existing Recurrent Related Party Transactions and
Proposed New Shareholders’ Mandate for additional Recurrent Related Party Transactions of a
Revenue or Trading Nature which are necessary for Ramatex Group’s day-to-day operations in
connection with Paragraph 10.09 of the Listing Requirements.

The existing authority for Shareholders’ Mandate and Share Buy-Back which were approved by the
shareholders at the AGM and EGM held on 3 June 2004 and 15 July 2004 respectively shall in
accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM, unless
renewal is obtained.

The purpose of this Circular is to provide the shareholders of Ramatex with details of the Proposals and
to seek your approval for the Ordinary Resolutions under the agenda of Special Business to be tabled at
the forthcoming AGM of the Company.

The AGM of the Company is scheduled to be held at Opal Room, Mezzanine Floor, The Katerina
Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Monday, 13 June 2005 at 11.30 a.m. The
Notice of the AGM is set out in the Annual Report of the Company for the purpose of considering and
if thought fit, passing the Ordinary Resolutions to approve the Proposals.

SHAREHOLDERS ARE ADVISED TO READ THE CONTENTS AND APPENDICES OF THIS

CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE
PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK, PROPOSED RENEWAL OF
EXISTING SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS
AND PROPOSED NEW SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

1
PART I - PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

2
2.0 PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

2.1 Details of the Proposed Renewal of Authority for Share Buy-Back

The Board proposes to seek the approval of the shareholders of the Company to purchase and/or hold
from time to time and at any time up to 42,720,000 Ramatex Shares, representing ten percent (10%) of
the existing issued and paid-up share capital of the Company as at 11 May 2005.

In compliance with Section 67A of the Act and any prevailing laws, rules and regulations, orders,
guidelines and requirements issued by the relevant authorities, the Company is allowed to purchase its
own shares on Bursa Securities through its appointed stockbroker(s) as approved by Bursa Securities.
In compliance with Listing Requirements, the Company will not purchase any shares which will result
in its issued and paid-up capital falling below the minimum share capital requirement of RM60 million
or such other amount as may be determined by Bursa Securities from time to time.

The authority from shareholders, if approved, shall be effective upon passing of the Ordinary
Resolution for the Proposed Renewal of Authority for Share Buy-Back until:-

(a) the conclusion of the next AGM of the Company following the general meeting at which such
resolution was passed at which time it shall lapse unless by ordinary resolution passed at that
meeting, the authority is renewed, either unconditionally or subject to conditions;

(b) the expiration of the period within which the next AGM after that date is required by law to
be held; or

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

whichever occurs first (“Proposed Authorised Period”).

Under the provisions of Paragraph 12.10(1) of the Listing Requirements, the Share Buy-Back must be
made wholly out of retained profits and/or share premium account of the listed company. Based on the
audited financial statements of the Company for the financial year ended 31 December 2004, the
retained profit and share premium of the Company were RM21,767,000 and RM44,129,000
respectively. Based on the latest management account of Ramatex for the three (3) months period
ended 31 March 2005, the retained profits and share premium were RM20,882,000 and RM44,129,000
respectively. The Company will ensure that the maximum amount of funds to be utilised for the Share
Buy-Back shall not exceed the aggregate of the retained profits and share premium of the Company.

In accordance with Section 67A of the Act and any prevailing laws, rules, regulations, orders,
guidelines and requirements issued by the relevant authorities, the number of Ramatex Shares to be
purchased and timing of the purchase will depend on the market conditions and sentiments of share
market together with the amount of funds (retained profit and share premium) and financial resources
available to the Group. In the event that the Company intends to purchase its own shares using external
borrowings, the Board shall ensure that the Company shall have sufficient funds to repay the external
borrowings and that the repayment would have no material effect on the cash flow of Ramatex Group.

The Board will deal with the Purchased Shares in accordance with Section 67A of the Act in the
following manner:-

(a) cancel the Purchased Shares; and/or

(b) retain the Purchased Shares as treasury shares for distribution as dividend to the shareholders
and/or to be resold on Bursa Securities in accordance with the rules of Bursa Securities and/or
to be subsequently cancelled; and/or

(c) retain part of the Purchased Shares as treasury shares and cancel the remainder.

The Board may decide to cancel the Purchased Shares if it is of the opinion that, in the foreseeable
future, there are no investment opportunities that would result in gains adding value to Ramatex and
hence the value of the Ramatex Shares. If the Purchased Shares are cancelled, the Company’s issued
and paid-up share capital shall be diminished by the cancellation of the shares so purchased and the
amount by which the Company’s issued and paid-up share capital is diminished shall be transferred to

3
a capital redemption reserve. If the Board decides to retain the Purchased Shares as treasury shares, it
may distribute the treasury shares as share dividends to the shareholders and/or resell the Purchased
Shares on Bursa Securities and utilise the proceeds for any feasible investment opportunity arising in
the future, or as working capital.

The treatment of the Purchased Shares to be held as treasury shares, either distributed as share
dividends or resold on Bursa Securities by the Company, or both, or subsequently be cancelled will
depend on the availability of retained profits, share premium account and tax credit (in accordance
with Section 108 of the Income Tax Act, 1967) of the Company.

In the event that the Company decides to purchase its own shares, the Company will announce on the
day the purchase is made providing details of the description of the shares purchased, the number of
the shares purchased, the price of each share or, where relevant, the highest and lowest price paid, the
total consideration paid and the shares purchased either held as treasury shares or proposed to be
cancelled.

In the event that the Company decides to resell the Company’s treasury shares, the Company will
announce on the day the resale is made providing details of the description of the shares resold, the
number of the shares resold, the resale price of each share resold or, where relevant, the highest and
lowest resale price paid and the total consideration received.

In the event that the Company decides to cancel the Company’s treasury shares, the Company will
announce on the day the cancellation is made providing details of the number of treasury shares, the
date of cancellation and the outstanding and paid-up share capital of the Company after the
cancellation.

While the Purchased Shares are held as treasury shares, the rights attached to them in relation to
voting, dividends and participation in any other distributions or otherwise are suspended and the
treasury shares shall not be taken into account in calculating the number or percentage of shares or of a
class of shares in the Company for any purposes including major shareholding, take-overs, notices, the
requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a
meeting.

Pursuant to the provisions of Paragraph 12.18 of the Listing Requirements, the Company may only
purchase its own shares at a price which is not more than fifteen percent (15%) above the weighted
average market price of Ramatex Shares for the five (5) market days immediately preceding the date of
the purchase(s).

Pursuant to the amended provisions of Paragraph 12.19 of the Listing Requirements, the Company
may only resell the Purchased Shares held as treasury shares at a price which:-

(a) not less than the weighted average market price of Ramatex Shares for five (5) market days
immediately preceding the date of resale; or

(b) not less than five percent (5%) below the weighted average market price of Ramatex Shares
for five (5) market days immediately prior to the resale provided that :-

(i) the resale takes place no earlier than thirty (30) days from the date of purchase; and

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

The Proposed Renewal of Authority for Share Buy-Back will allow the Board to exercise the power of
the Company to purchase and/or hold its own shares at any time within the Proposed Authorised
Period as stated above using the internally generated funds of the Company and/or external
borrowings. The actual number of Ramatex Shares to be purchased, the total amount of internally
generated funds and/or external borrowings involved for each purchase and the timing of the purchase
will only be determined later depending on the availability of internally generated funds, the
repayment capabilities, the actual number of Ramatex Shares to be purchased and other relevant cost
factors.

4
2.2 Potential Advantages and Disadvantages of the Proposed Renewal of Authority for Share Buy-
Back

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

• The EPS of Ramatex Group would be enhanced (all things being equal). This is expected to have a
positive impact on the market price of Ramatex Shares, which will benefit the shareholders of
Ramatex.

• The proposed purchase will also result in reduction of the share capital base which may enhance
the possibility of declaring a higher rate of dividend in the future.

• If the Purchased Shares are retained as treasury shares, it will provide the Board an option to sell
the Purchased Shares at a higher price and therefore make an exceptional gain for the Company.
Alternatively, the Purchased Shares can be distributed as share dividends to shareholders.

The potential disadvantages of the Share Buy-Back to the Company and its shareholders are as
follows:-

• It will reduce the financial resources of the Group and may result in the Group foregoing better
investment opportunities in future or, at least deprive Ramatex Group of interest income that can
be derived from the funds utilised for the Share Buy-Back; and

• As the Share Buy-Back can only be made out of retained profits and share premium of the
Company, it may result in the reduction of financial resources available for distribution to
shareholders in the immediate future.

2.3 Risk Factors of the Proposed Renewal of Authority for Share Buy-Back

The Board is not aware of any risk factors relating to the Proposed Renewal of Authority for Share
Buy-Back which could have a material adverse effect on the business or financial position of Ramatex
Group.

2.4 Rationale for the Proposed Renewal of Authority for Share Buy-Back

The Proposed Renewal of Authority for Share Buy-Back is expected to potentially benefit the
Company and its shareholders in the following manner:-

• The Proposed Renewal of Authority for Share Buy-Back will provide the Company the option
to return its surplus financial resources to its shareholders.

• The Company is also expected to stabilise the supply and demand of its shares in the open
market and thereby supporting its fundamental values.

• If the Purchased Shares are cancelled, it would enhance the EPS of the Company and thereby
long term investors are expected to enjoy a corresponding increase in the value of their
investments in the Company.

• As permitted under Section 67A of the Act, the Purchased Shares may be held as treasury
shares and/or resold on the Bursa Securities with potential gain without affecting the total
issued and paid-up share capital of the Company. Alternatively, the Purchased Shares can be
distributed as share dividends to reward the shareholders of the Company.

The Proposed Renewal of Authority for Share Buy-Back is not expected to have any potential material
disadvantages to the Company and its shareholders, as it will be exercised only after in depth
consideration of the financial resources of Ramatex and of the resultant impact on its shareholders.
The Board in exercising any decision on the Share Buy-Back will be mindful of the interest of the
Company and its shareholders.

5
2.5 Effects of the Proposed Renewal of Authority for Share Buy-Back
On the assumption that the Share Buy-Back is carried out in full, the effects of the Proposed Renewal
of Authority for Share Buy-Back on the share capital, NTA, working capital and EPS of Ramatex are
set out below:-
2.5.1 Share Capital
The effect of the Proposed Renewal of Authority for Share Buy-Back on the issued and paid-up share
capital of the Company are as follows:-

No. of Ramatex Shares RM

at RM1/- each (RM)
Existing issued and paid-up share capital as at 11 427,200,000 427,200,000
May 2005

Assuming cancellation of 10% shares pursuant to (42,720,000) (42,720,000)

the Proposed Renewal of Authority for Share Buy-
Back

Issued and paid-up share capital after the Proposed 384,480,000 384,480,000
Renewal of Authority for Share Buy-Back and
cancellation

If the Ramatex 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,
dividends and participation in other distributions or otherwise will be suspended. While these Ramatex
Shares remain as treasury shares, the Act prohibits the taking into account of such shares in calculating
the number of percentage of shares in the Company for a purpose whatsoever including substantial
shareholdings, takeovers, notices, requisitioning of meetings, quorum for meetings and the result of
votes on resolutions.
2.5.2 NTA
The effects of the Share Buy-Back on the NTA per share of the Ramatex Group are dependent on the
purchase price of the Ramatex Shares at the time of buy back. If all Ramatex Shares so purchased are
cancelled, the consolidated NTA per share of the Group is likely to be reduced if the purchase price
exceeds the NTA per share of the Group, whereas the NTA per share of the Group will increase if the
purchase price is less than the NTA per share of the Group at the time of purchase. The audited NTA
per share of the Group as at 31 December 2004 is RM2.1147.
For Purchased Shares which are kept as treasury shares, upon resale, the NTA per share of the Group
would increase assuming that a gain has been realised or decrease if a loss is realized. If treasury shares
are distributed as share dividends, the NTA per share of the Group would decrease by cost of the
treasury shares.
2.5.3 Working Capital
The Share Buy-Back will reduce the working capital of Ramatex Group, the quantum of which
depends on the purchase price of the Ramatex Shares and the number of Ramatex Shares that would be
purchased pursuant to the Share Buy-Back.
2.5.4 EPS

Assuming that the Purchased Shares under the Share Buy-Back are cancelled, the Share Buy-Back may
increase the EPS of Ramatex Group. Similarly, on the assumption that the Purchased Shares are treated
as treasury shares and subsequently resold, the extent of the effect on earnings of Ramatex Group will
depend on the actual selling price and number of treasury shares resold and the effective gain arising.
In the event the Purchased Shares are held as treasury shares, i.e., neither cancelled nor resold, the
effective reduction in the issued and paid-up share capital of Ramatex pursuant to the Share Buy-Back
would generally, all else being equal, increase the consolidated EPS of the Company.

6
2.5.5 Dividends

For the financial year ended 31 December 2004, the Company has proposed a final tax exempt
dividend of 5% subject to the approval of the shareholders at the forthcoming AGM on 13 June 2005.
If approved, the dividend will be payable on 23 June 2005 and the book closure date will fall on 16
June 2005.

Assuming the Share Buy-Back is implemented in full and the Company’s quantum of dividends is
maintained at historical levels, the Share Buy-Back will have the effect of increasing the dividend rate
of the Company as a result of the reduction in the issued and paid-up share capital of the Company.

The Share Buy-Back may have an impact on the Company’s dividend policy for the financial year
ending 31 December 2005 as it would reduce the cash available, which may otherwise be used for
dividend payment. Nonetheless, the treasury shares purchased may be distributed as dividends to
shareholders of the Company, if the Company so decides.

2.6 Major Shareholders’ Shareholdings

The effects of the Share Buy-Back on the shareholdings of the major shareholders as at 11 May 2005
assuming 42,720,000 Ramatex Shares, being the maximum number of shares that are purchased and
retained as treasury shares authorised under the Proposed Renewal of Authority for Share Buy-Back
and there is no change in the number of shares held by the major shareholders of Ramatex as at 11
May 2005, are as follows:-

<Before the Proposed Share Buy-Back> <After the Proposed Share Buy-Back #>
Direct Indirect Direct Indirect
Major
Shareholders No. of % No. of % No. of % No. of %
Shares Shares Shares Shares

Ma Wong Ching 30,921,643 7.24 *194,473,655 45.52 30,921,643 8.04 *194,473,655 50.58

Wong Lang Piow 3,945,483 0.92 *194,473,655 45.52 3,945,483 1.03 *194,473,655 50.58

Ma On May 7,870,963 1.84 **184,190,717 43.12 7,870,963 2.05 **184,190,717 47.90

Gimmill Industrial 124,534,316 29.15 - - 124,534,316 32.39 - -

(Pte.) Ltd

Ma Ong Kee 14,565,292 3.41 ***10,282,938 2.41 14,565,292 3.79 ***10,282,938 2.67

Effect Trading Sdn. 24,936,169 5.84 - - 24,936,169 6.49 - -

Bhd.

Lembaga Tabung 22,729,460 5.32 - - 22,729,460 5.91 - -

Angkatan Tentera

Great Hero Industries 30,072,289 7.04 - - 30,072,289 7.82 - -

Sdn. Bhd.

# Assuming that 10% of the existing issued and paid-up share capital of Ramatex are bought and retained as treasury
shares subsequently.
* Deemed interested by virtue of his substantial shareholdings in Ramatex Holdings Sdn. Bhd., Effect Trading Sdn.
Bhd., Great Hero Industries Sdn. Bhd., Gimmill Industrial (Pte.) Ltd. and Elitex Trading Pte. Ltd.
** Deemed interested by virtue of his substantial shareholdings in Ramatex Holdings Sdn. Bhd., Effect Trading Sdn.
Bhd., Great Hero Industries Sdn. Bhd. and Gimmill Industrial (Pte.) Ltd.
*** Deemed interested by virtue of his substantial shareholding in Elitex Trading Pte. Ltd.

2.7 Directors’ Shareholdings

The effects of the Share Buy-Back on the shareholdings of the directors as at 11 May 2005 assuming
42,720,000 Ramatex Shares, being the maximum number of shares that are purchased and retained as
treasury shares authorised under the Proposed Renewal of Authority for Share Buy-Back and there is
no change in the number of shares held by the directors of Ramatex as at 11 May 2005, are as follows:-

7
 <Before the Proposed <After the Proposed
Share Buy-Back> Share Buy-Back #>

Direct Indirect Direct Indirect

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

Ma Wong Ching 30,921,643 7.24 *194,473,655 45.52 30,921,643 8.04 *194,473,655 50.58

Ma On May 7,870,963 1.84 **184,190,717 43.12 7,870,963 2.05 **184,190,717 47.90

Ma Ong Kee 14,565,292 3.41 ***10,282,938 2.41 14,565,292 3.79 ***10,282,938 2.67

Lim Poh Boon 1,700,000 0.40 - - 1,700,000 0.44 - -

Boo Chin Liong 13,000 0.00 - - 13,000 0.00 - -

Lee Yan Min @ 10,318 0.00 - - 10,318 0.00 - -

Liow Yok Min
Chew Teck Cheng 3,000 0.00 - - 3,000 0.00 - -

Tan Sri Dato’ - - - - - - - -

Lodin bin Wok
Kamaruddin
Nurulizwani binti - - - - - - - -
Ahmad Zahid
* Deemed interested by virtue of his substantial shareholdings in Ramatex Holdings Sdn. Bhd., Effect Trading Sdn.
Bhd., Great Hero Industries Sdn. Bhd., Gimmill Industrial (Pte.) Ltd. and Elitex Trading Pte. Ltd.
** Deemed interested by virtue of his substantial shareholdings in Ramatex Holdings Sdn. Bhd., Effect Trading Sdn.
Bhd., Great Hero Industries Sdn. Bhd. and Gimmill Industrial (Pte.) Ltd.
*** Deemed interested by virtue of his substantial shareholding in Elitex Trading Pte. Ltd.

2.8 Public Shareholding Spread

As at 11 May 2005, the public shareholding spread of Ramatex was 29.26%. The public shareholding
spread is expected to be reduced to 26.33% assuming the Share Buy-Back is 42,720,000 Ramatex
Shares with the purchase from the market and all the Ramatex Shares so purchased are cancelled. The
Company will not undertake any Share Buy-Back if that will result in breach of Paragraph 8.15(1) of
the Listing Requirements, which requires the Company to maintain a shareholding spread of at least
25% of its total listed shares in the hands of 1,000 public shareholders holding not less than 100 shares
each applicable in relation to companies having nominal value of issued and paid-up capital of RM60
million. The Board is mindful of the shareholding spread requirement and will continue to be mindful
of the requirement when making any purchase of Ramatex Shares by the Company.

2.9 Implication Relating to the Code

Under the Code, a director and any person acting in concert with him or a relevant shareholder will be
required to make a mandatory general offer for the remaining ordinary shares of the Company not
already owned by him/them if his/their stake in the Company is increased beyond thirty-three (33%) or
if his/their existing shareholding is between thirty-three percent (33%) and fifty percent (50%) and
exceeds by another two percent (2%) in any six (6) months period.
Assuming that the Proposed Renewal of Authority for Share Buy-Back is carried out in full, the
shareholdings of the Directors and parties acting in concert, namely, Ma Wong Ching, Ma On May,
Ma Woon Cheong, Ma Oon Kwong, Ma Ong Kee, Wong Lang Piow, Gimmill Industrial (Pte.) Ltd,
Elitex Trading Pte Ltd, Great Hero Industries Sdn. Bhd., Ramatex Holdings Sdn. Bhd. and Effect
Trading Sdn. Bhd. (hereinafter referred to as “Directors and Parties Acting In Concert”) will be
increased beyond fifty percent (50%) as a result of the Share Buy-Back. Thus, the Proposed Renewal
of Authority for Share Buy-Back has no implications to any of the Directors and Parties Acting In
Concert.
It is the intention of Ramatex to implement the Proposed Renewal of Authority for Share Buy-Back in
a manner that it will not result in any of the shareholders of Ramatex having to undertake a mandatory
offer pursuant to the Code.
Should such circumstances arises and if required, the Directors and Parties Acting In Concert are
expected to submit an application to Securities Commission for a waiver from implementing a
mandatory general offer under the Code.

8
2.10 Purchase, Resale and Cancellation of Ramatex shares made in the previous twelve (12) months

The Company has not made any purchase or resale or cancellation of any of its own shares in the past
twelve (12) months preceding the date of this Circular.

2.11 Historical Share Prices of Ramatex

The monthly highest and lowest closing prices of Ramatex Shares traded on Bursa Securities for the
past twelve (12) months from May 2004 to April 2005 were as follows:-

High Low
Year 2004/2005 RM RM

2004

May 4.00 3.56

June 3.60 3.46
July 3.58 3.40
August 3.56 3.30
September 3.34 3.00
October 3.20 3.00
November 3.50 3.00
December 3.50 3.02

2005

January 3.36 3.20

February 3.40 2.98
March 3.20 2.80
April 3.20 3.00

The last transacted price of Ramatex Shares on 29 April 2005, being the : RM3.00
last practicable date prior to announcement on Proposed Renewal of
Authority for Share Buy-Back

The last transacted price of Ramatex Shares on 16 May 2005, being the last : RM3.08
practicable date prior to the date of printing of this Circular

2.12 Directors’ and Major Shareholders’ Interests in the Proposed Renewal of Authority for Share
Buy-Back

None of the Directors and/or major shareholders nor persons connected with the Directors and/or major
shareholders of Ramatex have any interest, direct or indirect, in the Proposed Renewal of Authority for
Share Buy-Back and the proposed resale of treasury shares, if any.

As such, none of the Directors, major shareholders nor persons connected with them need to abstain
from voting in respect of their direct and indirect shareholdings on the ordinary resolution approving
the Proposed Renewal of Authority for Share Buy-Back.

9
 PART II
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR EXISTING
RECURRENT RELATED PARTY TRANSACTIONS AND PROPOSED NEW
SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

10
3.0 PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR EXISTING RECURRENT
RELATED PARTY TRANSACTIONS AND PROPOSED NEW SHAREHOLDERS’
MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A
REVENUE OR TRADING NATURE

3.1 Details of the Proposed Shareholders’ Mandate

At the Company’s AGM on 3 June 2004, the Company had obtained Shareholders’ Mandate to enter
into and/or carry out the RRPT as set out in Paragraph 3.3 Table 1 in their ordinary course of business,
with the Related Parties. This approval shall, in accordance with the Listing Requirements, lapse at the
conclusion of the forthcoming AGM which has been scheduled to be held on 13 June 2005 unless the
approval is renewed.

The Board seeks the approval of the shareholders for the Proposed Renewal of Shareholders’ Mandate
to enter into the existing RRPT as set out in Paragraph 3.3 Table 1 and further seeks the approval of
the shareholders for the Proposed New Shareholders’ Mandate to enter into additional RRPT as set out
in Paragraph 3.3 Table 2 of this Circular provided such transactions are made at arm’s length basis and
based on the Ramatex Group’s normal commercial terms and on terms not more favourable to the
Related Parties than those generally available to the public and not detrimental to the minority
shareholders.

Under paragraph 10.09 of the Listing Requirements, the Company may seek Shareholders’ Mandate in
respect of RRPT 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 favourable 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; and

(iii) the interested directors, interested major shareholders and interested persons 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 resolutions approving the transactions. An interested director or interested major
shareholder must also ensure that persons connected with him abstain from voting on the
resolutions approving the transactions.

3.2 Principal Activities

The principal activities of Ramatex are investment holding and provision of management services.
The principal activities of its subsidiary companies are as follows:-

Effective equity
Name of Company interest Principal activities
Subsidiaries of Ramatex
RTI 100% Manufacturing of yarn,
knitting, dyeing and printing of
fabrics
Gimmill(M) 100% Manufacturing of garments
Fulong Sdn. Bhd. 100% Dormant
Greenpaper Products Sdn. Bhd. 100% Manufacturing and sales of
corrugated cartons
Summit Deal Sdn. Bhd. 100% Property holding
Dynamic Capacity Sdn. Bhd. 100% International trading and
procurement

11
 Effective equity
Name of Company interest Principal activities
Cosmos Water Sdn. Bhd. 51% Dormant
RB (Labuan) Ltd. 100% Investment holding and trading
Ramatex Capital Limited 100% Investment holding
Ramatex (North Asia) Pte. Ltd. 100% Dormant
Gimmill Corporation Pte. Ltd. 100% Dormant
RISL 100% Manufacturing of yarn,
knitting, dyeing, printing of
fabrics and manufacturing of
garments
Ramatex Apparel (Suzhou) Ltd 100% Manufacturing of garments
Cherry (Suzhou) Garment Ltd 100% Manufacture, sell and provide
after sales service to the
garments related products.
Kiwi (Suzhou) Garment Ltd 100% Manufacture, sell and provide
after sales service to the
garments related products.
Lemon (Suzhou) Garment Ltd. 100% Dormant

Ramatex Printing Garment (Suzhou) Ltd. 100% Manufacture and sell knitted
fabrics, design, develop,
manufacture, sell and provide
after sales service to the
garments related products

RTN 100% Manufacturing of yarn,

knitting, dyeing and printing of
fabrics
Subsidiary of RTI
Tai Wah Garments Industry Sdn. Bhd. 100% Manufacturing of garments

Subsidiary of Gimmill (M)

Ramatex Spinning Industries Sdn. Bhd. 100% Property holding

Subsidiary of RB (Labuan) Ltd.

June Textiles Co., Ltd. 100% Manufacturing of garments
Violet Apparel (Cambodia) Co., Ltd 100% Manufacturing of garments
Berry Apparel (Cambodia) Co., Ltd. 100% Manufacturing of garments
Sentosa Enterprises Ltd 100% Manufacturing of garments
PT Gimmill Industrial Bintan 100% Manufacturing of garments
Sinolac (Singapore) Pte. Ltd. 65.25% Investment holding

Subsidiary of Sinolac (Singapore) Pte. Ltd.

Sinolac (Yixing) Biotech Co., Ltd. 100% Dormant
Sinolac (Huludao) Biotech Co., Ltd. 100% Dormant
Subsidiary of RTN
Flamingo Garments (Proprietary) Limited 100% Manufacturing of garments

12
 Effective equity
Name of Company interest Principal activities
Lichen Apparel Namibia (Proprietary) Limited 100% Dormant

In view of the time sensitive, confidential and frequent nature of such RRPT, the Board is seeking the
Shareholders’ Mandate which will allow the Group, in their normal course of business, to enter into
RRPT with the classes of Related Parties set out in Section 3.3, provided such transactions are made at
arm’s length and on normal commercial terms of the Group and are on terms 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 RRPT are also subject to the review procedures set out in Section 3.4 in this Circular.

THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK

13
3.3 Class of Related Parties

Details of the RRPT, including the classes of Related Parties with whom the transactions will be carried
out and the nature of such transactions contemplated shall include those described below:-

Table 1 : Transactions for renewal

Estimated
aggregate value
Interested Directors / from 13 June
Major Shareholders / 2005 (date of
Person Connected to AGM) to the next
them (Interested Nature of Benefits to the AGM
Company Parties) transactions Group (RM’000)

Gimmill(S) Ma On May(2) and Ma Sale of fabric by The sales are a source 25,000
Wong Ching(2) are RTI(1) to of business income
directors and major Gimmill(S)
shareholders of Ramatex
and Gimmill(S). Sales of fabric by The sales are a source 6,000
RISL(1) to of business income
Ma Ong Kee(2) is a Gimmill(S)
director of Ramatex and
Gimmill(S) and a major Purchase of fabric Cost savings from 2,000
shareholder of Ramatex. and accessories by bulk purchases from
Gimmill(M)(1) from Gimmill(S)
Wong Lang Piow(3) is a Gimmill(S)
major shareholder of
Ramatex and
Gimmill(S).

Gimmill(S)(4) is a major
shareholder of Ramatex.
TOTAL 33,000

Notes:-

(1) The transacting parties, RTI, RISL and Gimmill(M) are 100% wholly-owned subsidiaries of Ramatex.

(2) Ma On May, Ma Wong Ching and Ma Ong Kee are brothers.

(3) Wong Lang Piow is the brother-in-law of Ma On May, Ma Wong Ching and Ma Ong Kee. He is deemed
person connected to the interested Directors and major shareholders.

(4) The major shareholder (direct and indirect interests) of the Company, namely Gimmill(S) is deemed
person connected to the interested Directors and major shareholders.

The shareholdings of the Interested Parties in the related companies are as follows:-

Direct Interest Indirect Interest

Gimmill(S)
Ma Wong Ching 70% -
Ma On May 20% -
Wong Lang Piow 10% -

14
Table 2 : New Transactions

Estimated
aggregate value
Interested Directors / from 13 June
Major Shareholders / 2005 (date of
Person Connected to AGM) to the next
them (Interested Nature of Benefits to the AGM
Company Parties) transactions Group (RM’000)

Eco Water EWTPL is a wholly- Provide industrial Technical expertise of 4,200

Technologies owned subsidiary of Eco wastewater EWTPL in industrial
(Pte) Ltd Water Limited. treatment systems, wastewater treatment
(“EWTPL”) specialty chemical systems and
Gimmill (S)(5) is a major products and compliance with
shareholder of Eco Water maintenance environmental
Limited and Ramatex. services to RTI (1) standards
by EWTPL
Ma On May(2) and Ma Cost savings from
Wong Ching(2) are bulk purchases of
directors and major specialty chemical
shareholders of Ramatex products from
and Gimmill(S). EWTPL

Ma Ong Kee(2) is a Provide industrial Technical expertise of 1,700

director of Ramatex and wastewater EWTPL in industrial
Gimmill(S) and a major treatment systems, wastewater treatment
shareholder of Ramatex. specialty chemical systems and
products and compliance with
Wong Lang Piow(3) is a maintenance environmental
major shareholder of services to RTN(1) standards
Ramatex and by EWTPL
Gimmill(S). Cost savings from
bulk purchases of
specialty chemical
products from
EWTPL

TOTAL 5,900

Notes:-

(1) The transacting parties, RTI and RTN are 100% wholly-owned subsidiaries of Ramatex.

(2) Ma On May, Ma Wong Ching and Ma Ong Kee are brothers.

(3) Wong Lang Piow is the brother-in-law of Ma On May, Ma Wong Ching and Ma Ong Kee. He is deemed
person connected to the interested Directors and major shareholders.

(4) The major shareholder (direct and indirect interests) of the Company, namely Gimmill(S) is deemed
person connected to the interested Directors and major shareholders.

(5) Gimmill (S), a major shareholder of Ramatex is also a major shareholder of Eco Water Limited which
holds 21.08% of shareholding in Eco Water Limited.

15
3.4 Terms and Nature of the RRPT

The nature of the RRPT which have been entered into and contemplated between Ramatex Group and
the Related Parties are as follows:-

(a) Sale of Fabric and Accessories

The business transaction on the sale of fabric by RTI to Gimmill(S) is long-term business
relationship which existed prior to Ramatex going public.

The above transaction was made on arm’s length basis. The sales are made by way of delivery
orders and invoices where the pricing is negotiated and mutually agreed by both parties based
on normal commercial terms and on terms which are not more favourable to the Related
Parties than those generally available to other customers.

As RTI is not able to cope with the increasing orders from the fabric customers, the Group
took a bold step to set up another fabric manufacturing plant in Suzhou, China and commenced
the fabric production in RISL in 1998.

Again, the terms and conditions on the sale of fabric by RISL to Gimmill(S) are in the ordinary
course of business and are on terms not more favourable to the Related Parties than those
generally available to other customers and are not to the detriment of the minority
shareholders.

(b) Purchase of Fabric and Accessories

The purchase of fabric and accessories by Gimmill(M) from Gimmill(S) was a commercial
business transaction to fulfil the special fabric and accessories requirements of garments clients
and for the purpose of securing more garments orders for Gimmill(M) as it was not economical
for RTI to produce some of the special fabric required.

The purchases are made by way of purchase orders and invoices where the pricing is
negotiated and mutually agreed by both parties based on normal commercial terms and are not
more favourable to the Related Parties than those generally available to other customers.

(c) Industrial Wastewater Treatment Systems, Specialty Chemical Products and

Maintenance Services

The provision of industrial wastewater treatment systems, specialty chemical products and
maintenance services to RTI and RTN by EWTPL was in view of the technical expertise of
EWTPL in industrial wastewater treatment systems, compliance with environmental standards
and cost savings from bulk purchase of specialty chemical products.

The provision of industrial wastewater treatment systems and maintenance services will be
made by way of terms of agreement negotiated and mutually agreed by both parties based on
normal commercial terms and are not more favourable to the Related Parties than those
generally available to other customers. The purchase of specialty chemical products will be
made by way of purchase orders and invoices where the pricing is negotiated and mutually
agreed by both parties based on normal commercial terms and are not more favourable to the
Related Parties than those generally available to other customers.

3.5 Disclosure and Review Procedures for the RRPT

To ensure that the RRPT are undertaken on terms not more favourable to the Related Party than those
generally available to the public and are not to the detriment of the minority shareholders and that they
are conducted at arm’s length and on normal commercial terms consistent with the Group’s usual
business practices and policies and will not be prejudicial to shareholders, the Board will ensure that
all transactions with Related Parties will only be entered into after taking into consideration the
pricing, level and quality of products or services.

The pricing of products or services shall be determined based on the usual commercial terms, business
practices and policies or otherwise in accordance with other applicable industry norms/consideration.

16
 The Directors have established the following review procedures which are to be carried out for each
proposed RRPT:-

(a) The sale and purchase of fabric and accessories, provision of industrial wastewater treatment
systems and maintenance services and purchase of specialty chemical products shall be
determined based on prevailing rates / prices / terms of the fabric, accessories, industrial
wastewater treatment systems and maintenance services and specialty chemical products
(including where applicable, preferential rates / prices / discounts / terms accorded to classes
of customers) according to their usual commercial terms, business practices and policies. The
transaction prices for the sale and purchase of fabric and accessories are determined based on,
inter-alia, the nature of fibres in the fabric, the production cost in each value chain, the market
price from competitors and the feedback from sales and purchasing personnel on the
indicative pricing. The transaction terms for industrial wastewater treatment systems and
maintenance services and price for purchase of specialty chemical products will be
determined by comparing the quotations from other suppliers and the level of technical
expertise and services offered.

(b) An updated list of Interested Parties shall be circulated to the Management from time to time
for reference in ensuring that all transactions with such Interested Parties are undertaken on
arm’s length basis and on normal commercial terms and on terms which are not more
favourable to the Interested Parties than those generally available to the public.

(c) Records will be maintained by the Company to capture all RRPT entered into pursuant to the
Proposed Shareholders’ Mandate to ensure that relevant approvals have been obtained and
the review procedures in respect of such transactions are adhered to.

(d) Disclosure shall be made in the Company’s Annual Report of a breakdown of the aggregate
value of all RRPT conducted pursuant to the Proposed Shareholders’ Mandate during the
financial year and, amongst others, based on the type of the RRPT made and their relationship
with the Company, to which the Annual Report relates, for so long as the shareholders’
mandate remains in force.

(e) The annual internal audit plan shall incorporate a review of all RRPT entered into pursuant to
the Proposed Shareholders’ Mandate to ensure that relevant approvals have been obtained
and the review procedures in respect of such transactions are adhered to. Should any
discrepancies arise relating to the procedures and guidelines, proper steps would be taken to
rectify them accordingly. The external auditors shall also review all RRPT as part of their
work scope.

(f) The Audit Committee has the responsibility of reviewing the RRPT and report the same to the
Board.

(g) In the review of RRPT, Audit Committee may, as they deem fit, request for additional
information pertaining to the transactions from independent sources and advisers.

(h) If a member of the Board or Audit Committee has an interest in the RRPT, he shall abstain
from any decision-making by the Board or Audit Committee in respect of such transactions
and continue to abstain from voting on the resolution approving the transactions.

(i) The interested directors or interested major shareholders shall also ensure that the persons
connected with them abstain from voting on the resolution approving the transactions.

3.6 Statement by Audit Committee

The Audit Committee of Ramatex has seen and reviewed the terms of the Proposed Shareholders’
Mandate and is satisfied that the review procedures for RRPT (as set out in Section 3.5 above) are
sufficient to ensure that such transactions will be carried out on an arm’s length basis and on normal
commercial terms and on terms which are not more favourable to the Related Parties than those
generally available to the public and not to the detriment of the minority shareholders of Ramatex.

17
3.7 Validity Period

If approved at the forthcoming AGM, the Proposed Shareholders’ Mandate will take effect from the
date of the passing of the Ordinary Resolutions relating thereto at the AGM and will continue in force
until :-

(i) the conclusion of the next AGM of the Company following this AGM at which the Proposed
Shareholders’ Mandate was passed, at which time it shall lapse, unless by Ordinary Resolution
passed at an AGM, the authority is renewed, either unconditionally or subject to conditions; or

(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 Act (but shall not extend to such extension as may be
allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier.

Thereafter, shareholders’ approval will be sought for the renewal of such mandate at each subsequent
AGM subject to a satisfactory review by the Audit Committee of its continued application to RRPT.

3.8 Rationale for the Proposed Shareholders’ Mandate

The RRPT to be entered into by the Group are all in the ordinary course of business. They 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 RRPT. As such, the Board is seeking Shareholders' Mandate pursuant to Paragraph
10.09 of the Listing Requirements to allow the Group to enter into such RRPT made on arm's length
basis and on normal commercial terms and which are in the Board’s opinion, not prejudicial to the
interests of the shareholders and are on terms not more favourable to the Related Party than those
generally available to the public and are not to the detriment of the minority shareholders.

By obtaining the shareholders’ approval for the Proposed 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 RRPT occur would not arise. This would reduce
substantial administrative time, inconvenience and expenses associated with the convening of such
meetings and allow manpower resources and time to be channelled towards attaining other corporate
objectives without compromising the corporate objectives of the Group or adversely affecting the
business opportunities available to the Group.

In addition to the above benefits, the Related Parties had also proven to be reliable in its delivery of
services and products as well as fulfilling the quality expectations of the Group. Due to previous
business dealings with the Related Parties, the Related Parties are familiar with the Group’s operations
and is able to meet the Group’s business requirements even when short notice is given. This has
allowed the Group to benefit from sudden business opportunities that had arisen. By entering into the
RRPT detailed in Section 3.3 above, the Group would be able to derive additional income for its
businesses.

The sale of fabric and accessories transactions are considered by the Board to be beneficial to the
Ramatex Group as they constitute transactions which are necessary for the day-to-day operations of the
Ramatex Group, and which contribute to the generation of its turnover and profit. As the transactions
are export transactions, the transactions will indirectly provide the earnings of foreign currency to the
Group. The Group will also be able to monitor and to take the necessary steps to improve the products
quality in the event of any defects on the products before products are sold to foreign buyers. In
addition, the transaction will also provide additional market information to the Group which other
customers may not be able to provide such as the colour charts or trends, future fashion trends or
apparel patterns, technical information relating to fabric engineering which are crucial to the product
development plan of the Group. Both market and technical information will enhance the Group’s

18
 competitive edge over the regional textile manufacturers in regards to the global textile business.
The purchase of fabric and accessories by Gimmill(M) from Gimmill(S) is considered to be necessary
as Gimmill(M) enjoys cost savings from bulk purchases from Gimmill(S). This is also to fulfil the
special fabric and accessories requirements of garments clients and for the purpose of securing more
garments orders for Gimmill(M). The transaction will assist the Group in outsourcing fabric of a
specialized nature which is not economical for RTI to produce. Further, Gimmill(S) also provides
technical information and support which other suppliers may not be able to provide such as the
finishing treatment techniques on the company’s specialty fabrics and the specialized sewing and
production techniques to produce quality fabric.
The provision of industrial wastewater treatment systems and maintenance services and specialty
chemical products to RTI and RTN by EWTPL was in view of the technical expertise of EWTPL in
industrial wastewater treatment systems, compliance with environmental standards and cost savings
from bulk purchase of specialty chemical products. This will assist the Group to manage its industrial
wastewater treatment systems more effectively, economically and efficiently.
3.9 Directors’ and Major Shareholders’ Interests in the Proposed Shareholders’ Mandate
Save as disclosed below, none of the other directors of Ramatex, major shareholders and/or persons
connected with the directors and/or major shareholders of Ramatex, have any interest, either direct or
indirect, in the Proposed Shareholders’ Mandate.
The shareholding of the interested directors, major shareholders and persons connected to them as at
11 May 2005 is as follow:

Direct Indirect
No. of Shares % No. of Shares % Notes
Directors
Ma Wong Ching (a) 30,921,643 7.24 194,473,655 45.52 1
Ma On May (a) 7,870,963 1.84 184,190,717 43.12 2
Ma Ong Kee (a) 14,565,292 3.41 10,282,938 2.41 3
Major Shareholder
Gimmill(S) 124,534,316 29.15 - - -
Wong Lang Piow (b) 3,945,483 0.92 194,473,655 45.52 4

Persons Connected
Ma Woon Cheong (a) 2,774,000 0.65 - - -
Ma Oon Kwong (a) 2,837,000 0.66 - - -
Ma Sook Ting (a) 22,000 * - - -
Ma Chao Yeng (c) 3,000 * - - -
Chuah Poh Tin (d) 10,000 * 10,282,938 2.41 5
Hoo Kia Hoi (e) 553,000 0.13 10,282,938 2.41 6

Hoo Kim Biau (f) 15,000 * - - -

Tan Soo Ling (g) 3,738,000 0.88 - - -
Wong Lap Tat (h) 8,000 * - - -

Notes:
* Negligible
(a) Ma On May, Ma Wong Ching, Ma Woon Cheong, Ma Oon Kwong, Ma Ong Kee, and Ma Sook Ting are
siblings.
(b) Wong Lang Piow is the spouse of Ma Sook Ting and the brother-in-law of Ma On May, Ma Wong Ching,
Ma Woon Cheong, Ma Oon Kwong and Ma Ong Kee. He is deemed person connected to Ma On May,
Ma Wong Ching, Ma Woon Cheong, Ma Oon Kwong and Ma Ong Kee.
(c) Ma Chao Yeng is the daughter of Ma Wong Ching.
(d) Chuah Poh Tin is the spouse of Ma On May.
(e) Hoo Kia Hoi is the spouse of Ma Wong Ching.
(f) Hoo Kim Biau is the spouse of Ma Woon Cheong.
(g) Tan Soo Ling is the spouse of Ma Ong Kee.
(h) Wong Lap Tat is the brother of Wong Lang Piow.

19
 1. Deemed interested through his direct interests of 70% in Ramatex Holdings Sdn. Bhd., 70% in Effect
Trading Sdn. Bhd., 70% in Great Hero Industries Sdn. Bhd., 70% in Gimmill(S) and 25% in Elitex
Trading Pte. Ltd by virtue of Section 6A of the Act.
2. Deemed interested through his direct interests of 20% in Ramatex Holdings Sdn. Bhd., 20% in Effect
Trading Sdn. Bhd., 20% in Great Hero Industries Sdn. Bhd. and 20% in Gimmill(S).
3. Deemed interested through his direct interest of 31.25% in Elitex Trading Pte. Ltd. by virtue of Section
6A of the Act.
4. Deemed interested through his direct interests of 10% in Ramatex Holdings Sdn. Bhd., 10% in Effect
Trading Sdn. Bhd., 10% in Great Hero Industries Sdn. Bhd., 10% in Gimmill(S) and 6.25% in Elitex
Trading Pte. Ltd by virtue of Section 6A of the Act.
5. Deemed interested through her direct interest of 12.5% in Elitex Trading Pte. Ltd by virtue of Section 6A
of the Act.
6. Deemed interested through her direct interest of 18.75% in Elitex Trading Pte. Ltd by virtue of Section
6A of the Act.

Ma On May, Ma Wong Ching and Ma Ong Kee, Directors of Ramatex who are interested in the
Proposed Shareholders’ Mandate have and will continue to abstain from Board deliberations and voting
in relation to the Proposed Shareholders’ Mandate. Ma On May, Ma Wong Ching and Ma Ong Kee
will also abstain from voting in respect of their direct and/or indirect shareholding in Ramatex at the
forthcoming AGM to be convened for considering the Proposed Shareholders’ Mandate.

Gimmill(S) and Wong Lang Piow, the major shareholders of Ramatex and/or person connected with
the interested Directors or major shareholders, who are interested in the Proposed Shareholders’
Mandate, will also abstain from voting in respect of their direct and/or indirect shareholding in
Ramatex on the Ordinary Resolutions relating to the Proposed Shareholders’ Mandate to be tabled at
the forthcoming AGM or at any adjournment thereof.

In addition, the abovementioned interested directors and major shareholders have undertaken that they
shall ensure that persons connected to them will abstain from voting on the resolutions approving the
Proposed Shareholders’ Mandate at the forthcoming AGM to be convened or at any adjournment
thereof.

3.10 Effects of the Proposed Shareholders’ Mandate

The Proposed Shareholders’ Mandate will not have any material effects on the issued and paid up share
capital, NTA, earnings, dividends and substantial shareholders of the Ramatex Group is not expected to
be any different from similar transactions with a non-related party based on the latest audited
consolidated financial statements for the financial year ended 31 December 2004. The Proposed
Shareholders’ Mandate will also have no material effects on the major shareholders and their respective
shareholdings including any benefit which is expected to accrue to the Company as a result of the
transactions.

4.0 APPROVAL REQUIRED

The Proposals are conditional upon approvals being obtained from the shareholders of Ramatex at the
forthcoming AGM to be convened and other relevant regulatory authority, if any.

5.0 DIRECTORS’ RECOMMENDATION

5.1 Proposed Renewal of Authority for Share Buy-Back

Having considered all aspects of the Proposed Renewal of Authority for Share Buy-Back, the Board is
of the opinion that the Proposed Renewal of Authority for Share Buy-Back is fair, reasonable and in
the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary
Resolution for the Proposed Renewal of Authority for Share Buy-Back to be tabled at the forthcoming
AGM.

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5.2 Proposed Shareholders’ Mandate

The Board of Directors of Ramatex, save for Ma Wong Ching, Ma On May and Ma Ong Kee, being
interested Directors and major shareholders to the Proposed Shareholders’ Mandate (who had and will
continue to abstain from expressing an opinion and making any recommendation by virtue of their
respective direct and indirect shareholding), is of the opinion that the Proposed Shareholders’ Mandate
is fair, reasonable and in the best interest of the Company and accordingly, recommends that you vote
in favour of the Ordinary Resolutions to be tabled at the forthcoming AGM to approve the Proposals.

6.0 ANNUAL GENERAL MEETING

The AGM, the notice of which is enclosed in the Annual Report of the Company for the financial year
ended 31 December 2004 accompanying this Circular, will be held at Opal Room, Mezzanine Floor,
The Katerina Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Monday, 13 June 2005 at 11.30
a.m. for the purpose of considering and if thought fit, passing the Ordinary Resolutions on the Proposed
Renewal of Authority for Share Buy-Back, Proposed Renewal of Shareholders’ Mandate and Proposed
New Shareholders’ Mandate under the agenda of Special Business as set out in the said Annual Report.

If you are unable to attend and vote in person at the AGM, you are requested to complete, sign and
return the enclosed Form of Proxy attached to the Annual Report of the Company for the financial year
ended 31 December 2004, in accordance with the instructions printed thereon as soon as possible, so as
to arrive at the Registered Office of the Company at Sri Gading Industrial Estate, 83000 Batu Pahat,
Johor not less than forty-eight (48) hours before the time appointed for holding the AGM. The lodging
of the Form of Proxy will not, however, preclude you from attending and voting in person at the
forthcoming AGM should you subsequently wish to do so.

7.0 FURTHER INFORMATION

Shareholders are requested to refer to Appendix I of this Circular for further information.

Yours faithfully
For and on behalf of the Board of Directors of
RAMATEX BERHAD

............................................................................................
CHEW TECK CHENG
Independent Non-Executive Director

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 APPENDIX I

FURTHER INFORMATION

1. Directors’ Responsibility Statement

This Circular has been seen and approved by the Board and they individually and collectively accept
full responsibility for the accuracy of the information given in this Circular and confirm that, after
making all reasonable enquiries, 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

There are no material contracts (not being contracts entered into in the ordinary course of business)
entered into by the Group within the 2 years immediately preceding the date of this Circular, other than
contracts entered into in the ordinary course of business.

3. Material Litigation

Neither Ramatex nor any of its subsidiary companies is engaged in any material litigation, claims or
arbitration, either as plaintiff or defendant and the Directors do not have any knowledge of any
proceedings pending or threatened against Ramatex or its subsidiary companies or of any facts likely
to give rise to any proceedings which might materially affect the position or business of the Ramatex
Group.

4. Documents For Inspection

Copies of the following documents will be available for inspection during normal office hours on any
weekday (except public holiday) at the Registered Office of Ramatex at Sri Gading Industrial Estate,
83000 Batu Pahat, Johor for a period from the date of this Circular to the date of the AGM:-

(a) Memorandum and Articles of Association of Ramatex;

(b) Audited Consolidated Financial Statements of Ramatex Group for the past two (2) financial
years ended 31 December 2003 and 2004; and

(c) Agreements and contracts for the RRPT.

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