Вы находитесь на странице: 1из 16

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. The Notice of the Eleventh Annual General Meeting of RAMATEX BERHAD to be held at Opal Room, Level M, The Katerina Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Friday, 22 June 2007 at 3:30 p.m., which sets out the ordinary resolution 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) takes no responsibility for the contents of this Circular 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

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

Last day, date and time for lodging the Form of Proxy Day, date and time of the Annual General Meeting

: Wednesday, 20 June 2007 at 3:30 p.m. : Friday, 22 June 2007 at 3:30 p.m.

This Circular is dated 31 May 2007

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 reenactment thereof Annual General Meeting Board of Directors of Ramatex Bursa Malaysia Securities Berhad (635998-W) Eco Water Technologies (Pte) Ltd (200300493-D) : : : : Gimmill Industrial (M) Sdn. Bhd. (43351-M) Gimmill Industrial (Pte) Ltd (197602414-C) Listing Requirements of Bursa Securities A person who has an interest or interests in one 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. It also 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 (as defined above) of the Company or any other company which is its subsidiary or 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 Net assets attributable to ordinary equity holders of the parent. : : Ordinary resolution as set out in the Notice of AGM herein A proposal to seek for renewal of shareholders mandate from the shareholders of the Company pursuant to Chapter 10, Paragraph 10.09 of the Listing Requirements in relation to the RRPT Ramatex Berhad (372672-K) Ramatex and its subsidiary companies Ordinary Shares of RM1.00 each in Ramatex

AGM Board or Directors Bursa Securities EWTPL Gimmill(M) Gimmill(S) Listing Requirements Major Shareholder

: : :

NA Ordinary Resolution Proposed Renewal of Shareholders Mandate or Proposal Ramatex or the Company Ramatex Group or the Group Ramatex Share(s)

: : :

Recurrent Related Party Transactions or RRPT

Transactions of a revenue or trading nature which are necessary for 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 Directors or major shareholders of Ramatex or persons connected with such director or major shareholder as defined under Chapters 1 and 10 of the Listing Requirements Ramatex Industrial (Suzhou) Ltd (60820737-6) Ringgit Malaysia and sen respectively Ramatex Textiles Industrial Sdn. Bhd. (191854-P) Ramatex Textiles Namibia (Proprietary) Limited (2001/0158) A mandate from the shareholders of the Company pursuant to Chapter 10, Paragraph 10.09 of the Listing Requirements in relation to RRPT

Related Party(ies)

RISL RM and sen RTI RTN Shareholders Mandate

: : : : :

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 reenacted. 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

1.0 2.0

INTRODUCTION PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 Details of the Proposed Shareholders Mandate Principal Activities Class of Related Parties Terms and Nature of the RRPT Disclosure and Review Procedures for the RRPT Statement by Audit Committee Validity Period Rationale for the Proposed Shareholders Mandate Directors and Major Shareholders Interests in the Proposed Shareholders Mandate Effect of the Proposed Shareholders Mandate

2 2-4 5-6 6 7 8 8 8-9 9-10 10 10 10 10 11

3.0 4.0 5.0 6.0

APPROVAL REQUIRED DIRECTORS RECOMMENDATION ANNUAL GENERAL MEETING FURTHER INFORMATION

APPENDIX I APPENDIX I FURTHER INFORMATION 12

iii

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

Registered Office: Sri Gading Industrial Estate 83000 Batu Pahat, Johor 31 May 2007 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) Lee Yan Min @ Liow Yok Min (Executive Director) Chew Teck Cheng (Independent Non-Executive Director) Boo Chin Liong (Independent Non-Executive Director) Nurulizwani binti Ahmad Zahid (Independent Non-Executive Director) To: The Shareholders of Ramatex Berhad

Dear Sir / Madam PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1.0 INTRODUCTION The Company had on 14 May, 2007 announced its intention to seek shareholders approval for the Proposed Renewal Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature which are necessary for Ramatex Groups day-to-day operations in connection with Paragraph 10.09 of the Listing Requirements. The existing authority for Shareholders Mandate which was approved by the shareholders at the AGM held on 12 June 2006 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 shareholders of Ramatex with details of the Proposal and to seek your approval for the Ordinary Resolution 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, Level M, The Katerina Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Friday, 22 June 2007 at 3:30 p.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 Resolution to approve the Proposal.
SHAREHOLDERS ARE ADVISED TO READ THE CONTENTS AND APPENDICES OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

-1-

2.1

Details of the Proposed Renewal of Shareholders Mandate At the Companys AGM on 12 June 2006, the Company had obtained Shareholders Mandate to enter into and/or carry out the RRPT as set out in Paragraph 2.3 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 22 June 2007 unless the approval is renewed. The Company is seeking approval from the shareholders for the Proposed Renewal of Shareholders Mandate to enter into the existing RRPT as set out in Paragraph 2.3 of this Circular provided such transactions are made at arms length basis and based on the Ramatex Groups 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:(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:(i) (ii) the consideration, value of the assets, capital outlay or costs of the aggregated transactions is equal to or exceeds RM1 million; or any one of the percentage ratios or such aggregated transactions is equal to or exceeds 1%

whichever is the higher; and (c) 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 resolution approving the transactions. An interested director or interested major shareholder must also ensure that persons connected to him abstain from voting on the resolution approving the transactions. 2.2 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 interest 100%

Name of Company Subsidiaries of Ramatex RTI

Principal activities Manufacturing of yarn, knitting, dyeing and printing of fabrics Manufacturing of garments Dormant Manufacturing and sales of corrugated cartons Property holding International procurement Dormant Investment holding and trading Investment holding trading and

Gimmill(M) Fulong Sdn. Bhd. Greenpaper Products Sdn. Bhd. Summit Deal Sdn. Bhd. Dynamic Capacity Sdn. Bhd. Cosmos Water Sdn. Bhd. RB (Labuan) Ltd. Ramatex Capital Limited

100% 100% 100% 100% 100% 51% 100% 100%

-2-

Name of Company Ramatex (North Asia) Pte. Ltd. Gimmill Corporation Pte. Ltd. RISL

Effective equity interest 100% 100% 100%

Principal activities Dormant Dormant Manufacturing of yarn, knitting, dyeing, printing of fabrics and manufacturing of garments Manufacturing of garments Manufacture, sell and provide after sales service to the garments related products. Manufacture, sell and provide after sales service to the garments related products. Dormant Manufacture and sell knitted fabrics, design, develop, manufacture, sell and provide after sales service to the garments related products Manufacturing of yarn, knitting, dyeing and printing of fabrics Dormant

Ramatex Apparel (Suzhou) Ltd Cherry (Suzhou) Garment Ltd

100% 100%

Kiwi (Suzhou) Garment Ltd

100%

Lemon (Suzhou) Garment Ltd Ramatex Printing Garment (Suzhou) Ltd

100% 100%

RTN

100%

Kiwi Textiles Sdn. Bhd. Subsidiary of RTI Tai Wah Garments Industry Sdn. Bhd. Subsidiary of Gimmill (M) Ramatex Spinning Industries Sdn. Bhd. Subsidiary of RB (Labuan) Ltd. June Textiles Co., Ltd. Violet Apparel (Cambodia) Co., Ltd. Berry Apparel (Cambodia) Co., Ltd. PT Gimmill Industrial Bintan Sinolac (Singapore) Pte. Ltd. Associate Company of RB (Labuan) Ltd SinoSpring Utility Ltd.

100%

100%

Manufacturing of garments

100%

Property holding

100% 100% 100% 100% 65.25%

Manufacturing of garments Manufacturing of garments Manufacturing of garments Manufacturing of garments Investment holding

20%

Undertake integrated privatisation projects in relation to water treatment plants and related facilities which include seawater desalination, water and wastewater processing.

-3-

Subsidiary of Sinolac (Singapore) Pte. Ltd. Sinolac (Yixing) Biotech Co., Ltd. Sinolac (Huludao) Biotech Co., Ltd. 100% 100% Dormant Research and manufacturing of lactic acid emulsion and related products and provision of technical consultancy service.

Subsidiary of RTN Flamingo Garments (Proprietary) Limited Lichen Apparel Namibia (Proprietary) Limited 100% 100% Manufacturing of garments 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 2.3, provided such transactions are made at arms 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 2.4 in this Circular.

THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK

-4-

2.3

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:Estimated aggregate value from 22 June 2007 (date of AGM) to the next AGM (RM000)

Company

Interested Directors / Major Shareholders / Person Connected to them (Interested Parties) Ma On May(2) and Ma Wong Ching(2) are directors and major shareholders of Ramatex and Gimmill(S) (4). Wong Lang Piow(3) was a major shareholder of Ramatex and is a major shareholder of Gimmill(S) (4). Gimmill (S) (4) was a major shareholder of Ramatex.

Nature of transactions Sale of fabric by RTI(1) to Gimmill(S) (4) Sales of fabric by RISL(1) to Gimmill(S) (4) Purchase of fabric and accessories by from Gimmill(M)(1) Gimmill(S) (4)

Benefits to the Group

Gimmill(S)

The sales are a source of business income The sales are a source of business income Cost savings from bulk purchases from Gimmill(S) (4)

20,000

8,000

2,000

EWTPL

EWTPL is a wholly-owned subsidiary of Eco Water Limited. Gimmill (S)(4) is a major shareholder of Eco Water Limited and was a major shareholder of Ramatex. Ma On May(2) and Ma Wong Ching(2) are directors and major shareholders of Ramatex and Gimmill(S) (4). Wong Lang Piow(3) was a major shareholder of Ramatex and is a major shareholder of Gimmill(S) (4).

Provide industrial wastewater treatment systems, specialty chemical products and maintenance services to RTI (1) by EWTPL Provide industrial wastewater treatment systems, specialty chemical products and maintenance services to RTN(1) by EWTPL

Industrial wastewater treatment and compliance with environmental standards

4,000

Cost savings from bulk purchases of specialty chemical products from EWTPL

1,000

TOTAL

35,000

Notes:(1) (2) The transacting parties, RTI, RISL, RTN and Gimmill(M) are 100% wholly-owned subsidiaries of Ramatex. Ma On May and Ma Wong Ching are brothers. Ma On May and Ma Wong Ching are deemed interested by virtue of their indirect interests of 89.19% held through Amphoteric Capital Limited (ACL) in the Company. Ma Wong Ching and Ma On May are deemed interested by virtue of them holding 80% and 20% respectively of the total shares in ACL. Wong Lang Piow is the brother-in-law of Ma On May and Ma Wong Ching. He previously held more than 10% (direct and indirect) of all the voting shares in the Company prior to disposal pursuant to the Amphoteric Capital Limiteds Unconditional Take-Over Offer in March 2007. As such, he is deemed a person connected within the preceding six (6) months from the date on which the terms of the transactions were agreed upon.

(3)

-5-

(4)

Gimmill(S) previously held more than 10% (direct) of all the voting shares in the Company prior to disposal pursuant to the Amphoteric Capital Limiteds Unconditional Take-Over Offer in March 2007. As such, Gimmill(S) is deemed a person connected within the preceding six (6) months from the date on which the terms of the transactions were agreed upon. Gimmill (S) is also a major shareholder of Eco Water Limited holding 13.76% shares.

The shareholdings of Ma Wong Ching, Ma On May and Wong Lang Piow in Gimmill (S) are as follows:Direct Interest Gimmill(S) Ma Wong Ching Ma On May Wong Lang Piow 70% 20% 10% Indirect Interest -

2.4

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 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 arms 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 vast experience 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.

-6-

2.5

Disclosure and Review Procedures for the RRPT To ensure that the RRPT are undertaken 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 and that they are conducted at arms length and on normal commercial terms consistent with the Groups 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. The Directors have established the following review procedures which are to be carried out for each proposed RRPT:(a) The sale of fabric 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 of fabric 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/water 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 maintenance services and support offered. 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 an arms 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. 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. Disclosure shall be made in the Companys Annual Report of a breakdown of the aggregate value of all RRPT conducted pursuant to the Proposed Renewal of 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. The annual internal audit plan shall incorporate a review of all RRPT entered into pursuant to the Proposed Renewal of 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. The Audit Committee has the responsibility of reviewing the RRPT and report the same to the Board. 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. 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. 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. -7-

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

2.6

Statement by Audit Committee The Audit Committee of Ramatex has seen and reviewed the terms of the Proposed Renewal of Shareholders Mandate and is satisfied that the review procedures for RRPT (as set out in Section 2.5 above) are sufficient to ensure that such transactions will be carried out on an arms 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.

2.7

Validity Period If approved at the forthcoming AGM, the Proposed Renewal of Shareholders Mandate will take effect from the date of the passing of the Ordinary Resolution 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 Renewal of 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 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 revoked or varied by resolution passed by the shareholders in a general meeting,

(ii)

(iii)

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. 2.8 Rationale for the Proposed Renewal of 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 Boards 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 Renewal of 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 Groups operations and is able to meet the Groups 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 2.3 above, the Group would be able to derive additional income for its businesses.

-8-

The sale of fabric 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 transactions 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 Groups 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 guidance and support which other suppliers may not be able to provide such as the finishing treatment techniques on the companys 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 vast experience of EWTPL in industrial wastewater treatment systems, compliance with environmental standards and cost savings from bulk purchase of specialty chemical products. This will assist Ramatex Group to manage its industrial wastewater treatment systems more effectively, economically and efficiently. 2.9 Directors and Major Shareholders Interests in the Proposed Shareholders Mandate Save as disclosed below, none of the other directors, major shareholders and/or persons connected with the directors and/or major shareholders (as defined in the Listing Requirements) of Ramatex, have any interest, either direct or indirect, in the Proposed Shareholders Mandate. The shareholding of the interested directors and interested major shareholders as at 10 May, 2007 is as follow: Direct No. of Shares Directors Ma Wong Ching Ma On May Major Shareholder Amphoteric Capital Limited Wong Lang Piow Gimmill (S)
1.

% -

Indirect No. of Shares 377,496,406 377,496,406

% 89.19 89.19

Notes 1 1

377,496,406 -

89.19 -

2 3

Ma Wong Ching and Ma On May are deemed interested by virtue of them holding 80% and 20% of the total shares in Amphoteric Capital Limited. Wong Lang Piow is the brother-in-law of Ma On May and Ma Wong Ching. He previously held more than 10% (direct and indirect) of all the voting shares in the Company prior to disposal pursuant to the Amphoteric Capital Limiteds Unconditional Take-Over Offer in March 2007. As such, he is deemed a person connected within the preceding six (6) months from the date on which the terms of the transactions were agreed upon. Gimmill(S) previously held more than 10% (direct) of all the voting shares in the Company prior to disposal pursuant to the Amphoteric Capital Limiteds Unconditional Take-Over Offer in March 2007. As such, Gimmill(S) is deemed a person connected within the preceding six (6) months from the date on which the terms of the transactions were agreed upon. Gimmill (S) is also a major shareholder of Eco Water Limited holding 13.76% shares.

2.

3.

-9-

Ma On May and Ma Wong Ching, Directors of Ramatex who are interested in the Proposed Renewal of Shareholders Mandate have and will continue to abstain from Board deliberations and voting in relation to the Proposed Shareholders Mandate. Ma On May and Ma Wong Ching will also abstain from voting in respect of their indirect shareholdings in Ramatex at the forthcoming AGM to be convened for considering the Proposed Shareholders Mandate. The major shareholders of Ramatex, Ma Wong Ching, Ma On May and Amphoteric Capital Limited who are interested in the Proposed Shareholders Mandate, will also abstain from voting in respect of its direct shareholdings in Ramatex on the Ordinary Resolution relating to the Proposed Renewal of Shareholders Mandate to be tabled at the forthcoming AGM or at any adjournment thereof. In addition, the abovementioned interested directors and interested major shareholders have undertaken to ensure that persons connected to them will abstain from voting on the resolution approving the Proposed Shareholders Mandate to be tabled at the forthcoming AGM or at any adjournment thereof. 2.10 Effects of the Proposed Renewal of Shareholders Mandate The Proposed Renewal of Shareholders Mandate will not have any material effects on the issued and paid up share capital, Net Assets per share, earnings, dividends and the substantial shareholders of the Ramatex Group are 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 2006. The Proposed Renewal of Shareholders Mandate will also have no material effects on the major shareholder and its respective shareholdings including any benefit which is expected to accrue to the Company as a result of the transactions. 3.0 APPROVAL REQUIRED The Proposal is conditional upon approvals being obtained from the shareholders of Ramatex at the forthcoming AGM to be convened and other relevant regulatory authority, if any. 4.0 DIRECTORS RECOMMENDATION The Board of Directors of Ramatex, save for Ma Wong Ching and Ma On May, being interested Directors and interested major shareholders to the Proposed Renewal of Shareholders Mandate (who had and will continue to abstain from expressing an opinion and making any recommendation by virtue of their indirect shareholding), is of the opinion that the Proposed Renewal of Shareholders Mandate is fair, reasonable and in the best interest of the Company and accordingly, recommends that you vote in favour of the Ordinary Resolution to be tabled at the forthcoming AGM to approve the Proposal. 5.0 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 2006 accompanying this Circular, will be held at Opal Room, Level M, The Katerina Hotel, No. 8, Jalan Zabedah, 83000 Batu Pahat, Johor on Friday, 22 June 2007 at 3:30 p.m. for the purpose of considering and if thought fit, passing the Ordinary Resolution on the Proposed Renewal of Shareholders Mandate under the agenda of Special Business as set out in the said Annual Report. If you are not able 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 2006, 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.

- 10 -

6.0

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

- 11 -

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) (b) Memorandum and Articles of Association of Ramatex. Audited Consolidated Financial Statements of Ramatex Group for the past two (2) financial years ended 31 December, 2005 and 31 December, 2006. Agreements and contracts for the RRPT.

(c)

- 12 -