D&O Green Technologies Berhad Issues Circular on Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT)

Key Points for Investors

• Renewal of Shareholders’ Mandate: D&O Green Technologies Berhad (“D&O”) is seeking shareholder approval at its upcoming 22^nd Annual General Meeting (AGM) for the renewal of an existing mandate to carry out recurrent related party transactions (RRPT) of a revenue or trading nature. These transactions are considered necessary for the company’s day-to-day operations and are a common practice among Bursa Malaysia-listed companies to streamline business processes.
• AGM Details: The 22^nd AGM is scheduled for 26 May 2026 at 10:00 a.m. at Robert’s Theatre, The Campus Ampang, Selangor. Shareholders unable to attend are encouraged to submit their proxy forms by 24 May 2026 at 10:00 a.m.
• Main RRPT Counterparty – Ennostar Corporation: The most significant RRPT involves the supply of chips or dies manufactured by Ennostar Corporation to Dominant Opto Technologies Sdn Bhd (“Dominant Malaysia”), a core subsidiary of D&O. Ennostar is a major shareholder in Dominant Malaysia, holding 10% of issued shares.
• Transaction Value: The estimated aggregate value of the RRPT for the period from the 22^nd AGM (26 May 2026) to the expected date of the next AGM (30 June 2027) is RM600 million. The value of actual transactions from the previous AGM to the latest practicable date (31 March 2026) was RM165.94 million. The estimates are based on historical and projected sales and purchases and are subject to change.

Details and Implications for Shareholders

Background and Structure of D&O Group

D&O operates primarily as an investment holding company with several subsidiaries involved in the manufacturing and merchandising of semiconductor components, printed circuit board assemblies, and integrated circuits. The group includes operations in Malaysia, Germany, Korea, China, the United States, Japan, Singapore, and Taiwan. A key contributor to group revenue is Dominant Malaysia, which is also the main entity involved in the RRPT with Ennostar.

Nature of the RRPT and Rationale

• Transaction: The principal transaction under this mandate is the purchase of chips or dies from Ennostar by Dominant Malaysia, which are critical inputs for the group’s semiconductor manufacturing business.
• Rationale: The arrangement with Ennostar is described as highly beneficial. Ennostar offers competitive pricing and priority order fulfillment, enhancing D&O’s cost structure and supply reliability. The mandate allows the company to avoid the administrative burden and delays of seeking separate shareholder approval or making Bursa announcements for each RRPT, thus streamlining operations and potentially improving financial performance.
• Safeguards: The company has established robust internal procedures for reviewing RRPTs, including oversight by the Audit Committee, comparison with unrelated third-party transactions, and abstention from decision-making for interested parties. This is to ensure all transactions are at arm’s length, not detrimental to minority shareholders, and are in line with normal commercial practices.

Financial and Shareholder Impact

• No Immediate Financial Dilution: The mandate renewal itself will not affect earnings per share, net assets per share, share capital, or the major shareholding structure for the year ending 31 December 2026.
• No Outstanding Receivables: As of the latest practicable date, there were no amounts owed by Ennostar to the Group under the RRPT.
• Price Sensitivity: The volume and value of the RRPT are significant (potentially up to RM600 million). Any material change in the terms of supply, pricing, or relationship with Ennostar could materially affect D&O’s cost structure and profitability, and thus share value. Investors should monitor updates on this relationship and the outcome of the AGM closely.
• Risk Disclosure: There is no material litigation or non-ordinary business contract disclosed that would adversely affect the group’s assets or income. The only significant agreements are comprehensive insurance policies covering property, loss of profits, and product liability, with coverage in excess of RM1.7 billion.

Shareholder Action Required

• Voting: Shareholders are advised to read the full circular and understand the rationale and safeguards before voting on the mandate, which is tabled as Ordinary Resolution 14 at the AGM. Interested major shareholders and their connected persons are not allowed to vote on the resolution.
• Proxy Submission: Shareholders unable to attend in person can submit their proxies in hard copy or electronically via Vistra Share Registry portal.

Conclusion and Recommendation

The board recommends that shareholders vote in favor of the renewal, citing the operational necessity, business efficiency, and competitive advantage derived from the arrangement with Ennostar. This mandate is viewed as being in the best interests of D&O and its shareholders.

Potential Share Price Implications

• The renewal of a RM600 million RRPT mandate with a major strategic supplier is a material event for D&O, underscoring its reliance on Ennostar for key components. Any change in this relationship or failure to secure the mandate could have a significant impact on business continuity, cost structure, and ultimately, share price.
• Investors should also note the absence of adverse litigation or undisclosed material agreements, which supports business stability.

Disclaimer

The above article is based on company-issued documents and is intended for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell securities. Investors are urged to read the full circular, consider their own circumstances, and seek professional advice before making investment decisions. The company’s future performance may be affected by factors not discussed in this summary.

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