On 7 May 2013 RHB Trustees Berhad (formerly known as OSK Trustees Berhad) as trustee for SUNREIT (“the Trustee”) had approved the capital expenditure for the refurbishment of Sunway Putra Tower ("Project") and has duly authorised Sunway REIT Management Sdn Bhd, the Manager for SUNREIT (”the Manager”) to appoint the relevant contractors and consultants for the said Project. On 21 May 2014, the Manager has, pursuant to the authority given by the Trustee, awarded Deco Style Sdn Bhd (“Deco Style”), a wholly-owned subsidiary of Sunway City Sdn Bhd (“SunCity”) which in turn is a wholly-owned subsidiary of Sunway Berhad (“Sunway”) as the project delivery partner (PDP) for the refurbishment of the following areas of Sunway Putra Tower including upgrading works to the mechanical and electrical equipment and services:-
i.          Ground Floor Reception & Lift Lobby

iii.           Level 10 – Level 19 & Level 22 – Level 33 Office Lift Lobby, Public Washroom & Executive Washroom

iv.           Signages

v.            Supply and Install of New Lift Cars (C4 to C6, C1 to C3)

vi.           Common mechanical and electrical (M&E) Works

[hereinafter referred to as the “Works/Award”].
2.  INFORMATION ON SUNWAY, SUNCITY, DECO STYLE, THE MANAGER, THE TRUSTEE AND SUNREIT 
2.1 Sunway
Sunway is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of Sunway are RM10,000,000,000.00 and RM1,723,678,466.00 respectively. The principal activities of Sunway are investment holding and provision of management services.
2.2 SunCity
SunCity, a wholly-owned subsidiary of Sunway, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of SunCity are RM3,500,000,000.00 and RM251,354.14 respectively. The principal activity of SunCity is investment holding.

2.3 Deco Style
Deco Style, a wholly-owned subsidiary of SunCity, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of Deco Style are RM5,000,000.00 and RM2,000,000.00 respectively. The principal activity of Deco Style is specialising in renovation of commercial projects.
2.3 The Manager
The Manager (also referred to as “the Employer” under the Award), a subsidiary of Sunway, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of the Manager are RM1,000,000.00 respectively. The principal activity of the Manager is management of real estate investment fund.
2.4 The Trustee
       The Trustee is a company incorporated in Malaysia and having its registered office at Level 10, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur. It is registered as a trust company under the Trust Companies Act, 1949.
The principal activity of the Trustee is providing professional private and corporate trustee services.
The present authorised share capital of the Trustee is RM25,000,000.00 comprising 2,500,000 ordinary shares of RM10.00 each, of which 1,200,000 are currently issued and credited as partially paid-up of RM5.00 each in the Trustee.
2.5 SUNREIT
SUNREIT was established pursuant to a Deed dated 20 May 2010 (as amended by a Supplementary Deed dated 10 June 2010) entered into between the Manager and the Trustee. The principal investment policy of SUNREIT is to invest in commercial, office, industrial and other real estate assets.
3.   SALIENT TERMS OF THE AWARD
The salient terms of the Award are as follows:-
3.1   The Provisional Contract Sum shall be in the amount of RM21,661,631.01 (Ringgit Malaysia Twenty One Million Six Hundred Sixty One Thousand Six Hundred Thirty One and Sen One Only). The price is deemed to include the cost of all works necessary for the timely and satisfactory completion of the Works in its entirety.
3.2   The Works shall be fully completed within (a) eleven (11) months from the date of commencement  which is the date that possession of site is handed over to Deco Style (“Completion Date”).      
3.3   Deco Style shall be responsible for delivering to the Employer the Works fully functional and operational within the Completion Date. Deco Style is fully responsible and liable for the due performance by all the Work Contractors who are awarded the works packages comprised in the Works.
3.4   In the event of any delay to the completion of the Works as specified, an amount of Ringgit Malaysia Two Thousand (RM2,000.00) per day shall be imposed on Deco Style  as liquidated damages.
3.5   The Defect Liability Period (DLP) shall be twenty four (24) months after issuance of Certificate of Practical Completion (CPC) of the Works.
3.6   Before the expiry of the Tender Bond, Deco Style shall submit to the Employer a Performance Bond in the form of an approved Banker's Guarantee for the sum of Ringgit Malaysia One Million Eighty Three Thousand Eighty One and Sen Fifty Five only (RM1,083,081.55) being 5% of the Contract Sum as security for the proper and due performance of the Works.
4.   RATIONALE
The refurbishment of Sunway Putra Tower is to be undertaken via a PDP arrangement. A PDP is based on a cost-plus arrangement whereby a PDP is appointed at a pre-refurbishment stage to leverage on the PDP’s capability, experience and resources from an early stage to potentially achieve lower cost and shorter completion period.
Deco Style is appointed as the PDP based on the following justifications:-
-     It is a reputable company with good track record;
-     It has the necessary expertise and resources to undertake the project; and
-     All sub-contractors’ packages forming the total construction cost will be competitively tendered and the margin for such PDP arrangement is within market range.
 
5.  EFFECTS OF THE AWARD
5.1 On Unit Capital and Substantial Unitholders’ Unitholding
The Award will not have any effect on the total units of SUNREIT in issue and substantial unitholders’ unitholding of SUNREIT as they do not involve any allotment or issuance of new units by SUNREIT.
5.2 On Net Asset Value (“NAV”)
      The Award will have no material impact or changes to the unaudited NAV of SUNREIT at the time of completion.
5.3 On Earnings
       The Award is not expected to have any material effect on the earnings of SUNREIT for the financial year ending 30 June 2014.
6.   APPROVALS REQUIRED
Pursuant to the Securities Commission’s Guidelines on Real Estate Investment Trusts, the Award does not require approvals from the Securities Commission or the unitholders of SUNREIT.
7.    DIRECTORS' AND MAJOR UNITHOLDERS' INTERESTS 
Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling is the Chairman and Non-Independent Non-Executive Director of the Manager and the Executive Chairman and a Non-Independent Executive Director of Sunway.
Ms Sarena Cheah Yean Tih is a Non-Independent Non-Executive Director of the Manager and a Non-Independent Executive Director of Sunway.
Dato’ Ngeow Voon Yean is a Non-Independent Non-Executive Director of the Manager who has direct interest in Sunway and indirect interest in SUNREIT’s units through his spouse and child. In the interest of good corporate governance, as he also sits on the Board of Management Committee of Sunway and on the board of directors of certain subsidiaries of Sunway, he has opted to abstain and will continue to abstain from all deliberations and from voting in respect of the Award.
Sunway is a major unitholder of SUNREIT. Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling has direct as well as indirect interests in SUNREIT via Sunway. Puan Sri Datin Seri (Dr) Susan Cheah Seok Cheng, Sarena Cheah Yean Tih, Evan Cheah Yean Shin, Sungei Way Corporation Sdn Bhd and Active Equity Sdn Bhd being major shareholders of Sunway also have deemed interest in SUNREIT via Sunway.
Accordingly, Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling, Sarena Cheah Yean Tih and Dato’ Ngeow Voon Yean have abstained from all deliberations and from voting in respect of the Award.
Save as disclosed above, none of the other directors of the Manager or major unitholders of SUNREIT or persons connected with them has any interest, direct or indirect, in the Award.
8.    THE MANAGER’S AUDIT COMMITTEE’S RECOMMENDATION
The Audit Committee of the Manager, approved the Award in-principle on the basis that it is a PDP approach (cost-plus) for a construction related project provided that a post reporting and evaluation of the performance of Deco Style is conducted. As such, the Audit Committee is of the opinion that the Award is in the best interests of SUNREIT and is not detrimental to the interests of the non-interested unitholders of SUNREIT. The Audit Committee of the Manager is of the view that the Award is fair, reasonable, on normal commercial terms and carried out on an arm’s length basis.

9.    STATEMENT BY THE BOARD OF DIRECTORS
Save and except for Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling, Sarena Cheah Yean Tih and Dato’ Ngeow Voon Yean (who have abstained from deliberation and voting in the Board of the Manager in respect of the Award), the Board of Directors of the Manager (subject to the basis recommended by the Audit Committee) is of the opinion that the Award is in the best interests of SUNREIT and is not detrimental to the interests of the non-interested unitholders of SUNREIT. The Board of Directors of the Manager is of the view that the Award is fair, reasonable, on normal commercial terms and carried out on an arm’s length basis.