Engtex Group Berhad Proposes Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions and Share Buy-Back Authority

Kuala Lumpur, 29 April 2026 – Engtex Group Berhad has issued a comprehensive circular to shareholders detailing two significant proposals to be tabled at the upcoming Twenty-Fifth Annual General Meeting (AGM) on 28 May 2026. These proposals comprise the renewal of the shareholders’ mandate for recurrent related party transactions (RRPT) of a revenue or trading nature, and the renewal of authority to buy back up to 10% of its issued shares. Both items are highlighted as special business for the AGM and carry potentially price-sensitive implications for investors.

1. Key Points of the Proposals

• Renewal of Shareholders’ Mandate for RRPT: The Group seeks authority to continue entering into recurrent transactions with related parties. These transactions, essential for day-to-day operations, include the purchase and sale of hardware, building materials, rentals, consultancy, and project management services with entities in which directors or major shareholders have interests.
• Renewal of Share Buy-Back Authority: The Company requests approval to renew its mandate to buy back up to 10% of its issued shares, funded by retained earnings and/or borrowings. As of 31 December 2025, Engtex’s audited retained earnings stood at RM49.95 million.

2. Details of the Recurrent Related Party Transactions (RRPT)

• Nature of Transactions & Related Parties:
  • NKG Group: Sale and purchase of plumbing/building materials and related products, and rental of properties between Engtex and NKG Group. NKG is controlled by directors and major shareholders, the Ng family.
  • Firomaz Sdn. Bhd.: Rental and project management fees (property owned by directors Tan Sri Dato’ Ng Hook and Puan Sri Datin Yap Seng Kuan).
  • TG Pipeline Marketing Sdn. Bhd.: Sale and purchase of hardware and steel products.
  • Lead On Resources and RW Management & Enterprise: Consultancy services.
  • CSB, Puan Sri Datin Yap Seng Kuan, Ng Peck Kee: Rental income.
  • Northern Solar Sdn. Bhd.: EPCC, operation and maintenance of rooftop solar projects, with estimated transaction value of RM50 million for the coming period.
• Value of Transactions:
  • The total estimated RRPT value for the period up to the next AGM is significant, e.g., RM30 million (sale to NKG Group), RM33 million (purchase from NKG Group), RM50 million (Northern Solar), amongst others.
  • Actual transacted values in the last period are provided, e.g., RM2.8 million (sale to NKG Group), RM17.7 million (purchase from NKG Group), RM178,000 (Northern Solar).
• Procedures and Safeguards:
  • Transactions must be at arm’s length and on terms not more favourable to related parties than those available to the public.
  • Review and approval procedures involve both the management and Audit Committee, with abstention by interested directors and parties where necessary.
  • Quarterly internal audits and disclosures in the annual report ensure transparency and compliance.

3. Renewal of Share Buy-Back Authority

• Authority Details:
  • Buy-back limit is 10% of issued shares (up to approximately 81.5 million shares in the minimum scenario, or 94.3 million if all warrants are exercised).
  • Shares bought back can be cancelled, retained as treasury shares, resold, used for share schemes, or distributed as dividends.
  • In the past year, 1,367,800 shares were bought back for RM686,841 and retained as treasury shares.
• Potential Impact:
  • Share buy-back can support the share price by stabilizing supply-demand dynamics and potentially increasing EPS if shares are cancelled.
  • Buy-backs can enhance shareholder value if treasury shares are resold at higher prices or distributed as dividends.
  • The exercise will temporarily reduce financial resources and may lower funds available for dividends or investments, but may strengthen capital structure.
• Shareholding and Spread:
  • Board is mindful of maintaining a minimum 25% public shareholding spread (current level: 52.18%).
  • Illustrative tables show that the buy-back could increase major shareholders’ percentage holdings, potentially triggering mandatory general offer obligations if not managed.

4. Interests of Directors & Major Shareholders

• Conflict of Interest:
  • Several directors and major shareholders (notably Tan Sri Dato’ Ng Hook, Puan Sri Datin Yap Seng Kuan, and others) have direct and indirect interests in the RRPTs.
  • These parties will abstain from voting on the relevant resolutions, and have undertaken to ensure connected persons do the same.
• No director or major shareholder has any interest in the share buy-back authority or resale of treasury shares.

5. Material Contracts and Absence of Litigation

• Significant Completed Transactions (Past Two Years):
  • Disposal of hotel property for RM22 million (SMSB to Medan Artes Sdn. Bhd.).
  • Acquisition of land and building in Kuching for RM6.56 million (Engtex to VSB).
  • Various property disposals and acquisitions totaling tens of millions of ringgit (details in the appendix).
• No Material Litigation: The Group confirms it is not engaged in any material litigations or claims that may affect its financial position.

6. Points of Importance and Price Sensitivity

• Magnitude of RRPTs: The scale of related party transactions, particularly with NKG Group and Northern Solar, is large enough to impact revenue, costs, and ultimately profitability. Investors should monitor the actual values transacted against estimates.
• Share Buy-Backs: The ability to repurchase up to 10% of shares gives the Board a significant tool to support the share price, increase EPS, and manage capital structure – all price-sensitive matters.
• Director/Shareholder Participation: Abstentions by major interested parties and adherence to governance procedures provide assurance but also underline the interconnectedness of business dealings.
• Recent Asset Transactions: The Group’s completed asset sales and acquisitions (including properties and a hotel) may affect asset base, liquidity, and future earnings potential.

7. Shareholders’ Action Required

Shareholders are urged to review the details in full and vote on the resolutions at the forthcoming AGM. Proxy forms must be lodged at least 48 hours before the meeting.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisers before making investment decisions. The information is compiled from the Engtex Group Berhad Circular dated 29 April 2026 and may be subject to further updates or clarifications by the company.

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