THIS STATEMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Bursa Malaysia Securities Berhad (Bursa Securities) has not perused the information relating to the Share Buy Back Statement (Statement) prior to its issuance as it is an exempt document. Bursa Securities takes no responsibility for the contents of this Statement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss arising from or in reliance upon the whole or any part of the contents of this Statement.

MALPAC HOLDINGS BERHAD

(Company No. 197424-V) (Incorporated in Malaysia under the Companies Act, 1965)

STATEMENT TO SHAREHOLDERS

IN RELATION TO THE

PROPOSED RENEWAL OF AUTHORITY FOR PURCHASE OF OWN SHARES BY THE COMPANY

The resolution pertaining to the above Proposal is set out in the Notice of the Companys Twentieth (20th) Annual General Meeting (20th AGM) which is attached in the enclosed Annual Report. The Companys 20th AGM is to be held at the Rasah Room of The Royale Bintang Resort & SPA Seremban, Jalan Dato A.S. Dawood, 70000 Seremban, Negeri Sembilan Darul Khusus on Friday, 18 June 2010 at 10.00 a.m. The Form of Proxy must be completed and lodged at the Registered Office of the Company at 1st Floor, 275, Jalan Haruan 1, Oakland Industrial Park, 70200 Seremban, Negeri Sembilan Darul Khusus not less than forty-eight (48) hours before the time set for holding the meeting. The lodging 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. The last date and time for lodging the Form of Proxy is on 16 June 2010 at 10.00 a.m.

This Statement is dated 26 May 2010

PROPOSED RENEWAL OF AUTHORITY FOR MALPAC HOLDINGS BERHAD (MALPAC OR THE COMPANY) TO PURCHASE UP TO 10% OF THE ISSUED AND PAID-UP ORDINARY SHARE CAPITAL OF THE COMPANY 1.0 INTRODUCTION At the Companys 19th Annual General Meeting (AGM), which was held on 19 June 2009, the Board of Directors of Malpac obtained a renewal of the authority from the Companys shareholders to undertake a Share Buy-Back of up to 10% of the issued and paid up share capital of the Company (Proposed Share Buy-Back). The authority to undertake the Proposed Share Buy-Back, in accordance with Chapter 12 of the Listing Requirements of Bursa Securities will lapse at the conclusion of the forthcoming AGM unless the authority is renewed. The Board proposes to seek authorization for a further renewal of the approval from the shareholders of the Company for the Proposed Share Buy-Back. The purpose of this Statement is to provide you with information on the Proposed Share Buy-Back and to seek your approval for the Ordinary Resolution to be tabled at the forthcoming AGM to be convened at Rasah Room of The Royale Bintang Resort & SPA Seremban, Jalan Dato A.S. Dawood, 70000 Seremban, Negeri Sembilan Darul Khusus on Friday, 18 June 2010 at 10.00 a.m. Consequently, on 17 March 2010, the Company had made the announcement to the Bursa Securities pertaining to the above-mentioned proposal. 2.0 DETAILS OF THE PROPOSED SHARE BUY-BACK The Board of Directors proposes to seek the approval from the shareholders of the Company to renew the authority to purchase and/or hold up to 10% of the existing issued and paid up share capital of Malpac at any given point in time, subject to compliance with Section 67A of the Companies Act, 1965 and all other applicable and prevailing laws, rules, regulations, orders, guidelines and requirements. The authorization for the Proposed Share Buy-Back will be effective immediately upon the passing of the Ordinary Resolution and will continue to be in force until the conclusion of the next AGM of Malpac (unless earlier revoked or varied by Ordinary Resolution of the shareholders of the Company in a general meeting). The Proposed Share Buy-Back will be financed through internally generated funds and shall be made out of the retained profits and/or share premium account of the Company. Under the Listing requirements, the maximum amount of funds to be utilised for the purchase of its own shares cannot exceed the aggregate of the retained profits and share premium balance of the Company. The audited retained profits and share premium balance of the Company as at 31 December 2009 is RM86.315 million and RM24.367 million respectively. Upon completion of buy-back by the Company of its own shares, the Directors of the Company are authorised to deal with the shares so purchased in any of the following manners:a) b) c) cancel the Shares so purchased; or retain the Shares so purchased as treasury shares and held by the Company; or retain part of the Shares so purchased as treasury shares and cancel the remainder.

In the event the Company retains the purchased Malpac Shares as treasury shares, the said Malpac Shares may either be distributed as dividends to shareholders and/or resold in the open market in accordance with the relevant rules of the Bursa Securities and/or subsequently cancelled or any combination of the three and in any other manner.

3.0

RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back, if implemented, is likely to potentially benefit the Company and its shareholders in the following manners:3.1 The Company may be able to stabilise the supply and demand of Malpac Shares traded on Bursa Securities and thereby support its fundamental value; The Group is able to utilize its financial resources, that it has no immediate usage, for the purchase of its shares; The shareholders value will be enhanced from a resultant reduction in the number of shares in the market, all things being equal. In addition, this may increase the earnings per share (EPS) when the shares so purchased are cancelled, thereby making the shares more attractive to investors; and The Company would have the opportunity to distribute the treasury shares as share dividends, thus benefiting the shareholders. The treasury shares may also be resold on the open market of Bursa Securities at a price higher than the purchase price, thereby realizing a potential gain for the Group without affecting the Companys issued and paid-up share capital.

3.2

3.3

3.4

4.0

POTENTIAL ADVANTAGES AND DISADVANTAGES OF PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back will reduce 4.1 the financial resources of Malpac, which may result in the Group foregoing other investment opportunities that may emerge in the future; the reserves available for distribution in the form of cash dividends to shareholders of the Company, in the event that the purchased shares are cancelled, or if the purchased shares are held as treasury shares and are subsequently resold on Bursa Securities at a loss.

4.2

Notwithstanding the above, the Board is of the view that the Company has sufficient surplus funds without adversely affecting its ability to take on investment opportunities that may arise in the future or to make cash dividend payments to the shareholders. If the purchased shares are kept as treasury shares, the Company may have the opportunity to realise capital gains if they are resold on Bursa Securities at a price higher than their purchase price. Alternatively, the purchased shares can be distributed as share dividends to shareholders. 5.0 EFFECTS OF THE PROPOSED SHARE BUY-BACK 5.1 Share Capital The effect of the Proposed Share Buy-Back on the share capital of Malpac will depend on the treatment of the purchased shares. In the event the purchased shares are retained as treasury shares, resold or distributed to its shareholders, the Proposed Share Buy-Back will have no effect on the issued and paid-up share capital of Malpac. However, the Proposed Share Buy-Back will result in reduction of the issued and paid-up share capital of the Company by a maximum of 7,500,000 shares if the purchased shares are cancelled. 5.2 Earnings There will be a positive effect to net EPS owing to the reduced capital and if the Malpac Shares purchased are subsequently resold at a gain in the open market.

5.3

Net Tangible Assets (NTA) The effect of the Proposed Share Buy-Back on the consolidated NTA of Malpac depends on the price at which Malpac shares are purchased and resold. The consolidated NTA will decrease if the purchase price exceeds the consolidated NTA per share while the consolidated NTA will increase if the purchase price is less than the consolidated NTA per share. The consolidated NTA will also increase if a gain is realised from the resale of treasury shares.

5.4

Working Capital The Proposed Share Buy-Back will reduce the cash flow and financial resources available for working capital depending on the purchase price and the number of Malpac Shares purchased. However, the cash flow position and financial resources of Malpac will be restored if the Malpac Shares purchased are resold at least at the purchase price.

5.5

Directors and Major Shareholders Shareholdings The effect of the Proposed Share Buy-Back on the shareholdings of the Directors and the major shareholders of Malpac as at 28 April 2010, assuming that Malpac purchases from parties other than the Directors and the major shareholders, is as follows:a) Directors Shareholdings
---------Name of Director Direct No. of Malpac Shares Held 12,377,108 10,315,393

As at 28/04/2010
Indirect No. of Malpac Shares Held 3,691,900* 1,986,300**

-----------

------- After Proposed Share Buy-Back ---Direct No. of Malpac Shares Held 12,377,108 10,315,393 Indirect No. of Malpac Shares Held 3,691,900* 1,986,300**

% 16.50 13.75

% 4.92 2.64

% 18.33 15.28

% 5.47 2.94

Lim Hong Liang Tan Chon Sing @Tan Kim Tieng

Gan Teck Chong @ Gan Kwan Chong Chew Loy Chee Kan Ah Chun Muhayuddin Bin Musa Johari Low Bin Abdullah

3,917,303

5.22

2,520,800**

3.36

3,917,303

5.80

2,520,800**

3.73

3,152,188 2,180,260 -

4.20 2.91 -

3,152,188 2,180,260 -

4.67 3.23 -

Notes: * Deemed indirect interest by virtue of him being a director and shareholder in Wawasan Lembaran Sdn Bhd which in turn holds 4.92% in Malpac Holdings Berhad. ** Indirect interest through family members.

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b)

Major Shareholders Shareholdings

---------As at 28/04/2010
Indirect No. of Malpac Shares Held 3,691,900* 1,986,300**

-----------

------- After Proposed Share Buy-Back ---Direct No. of Malpac Shares Held 12,377,108 10,315,393 Indirect No. of Malpac Shares Held 3,691,900* 1,986,300**

Name of Major Shareholder

Direct No. of Malpac Shares Held 12,377,108 10,315,393

% 16.50 13.75

% 4.92 2.64

% 18.33 15.28

% 5.47 2.94

Lim Hong Liang Tan Chon Sing @Tan Kim Tieng Advance Synergy Capital Sdn Bhd (ASCSB) Advance Synergy Berhad (ASB) Dato Ahmad Sebi Bakar Suasana Dinamik Sdn Bhd Gan Teck Chong @ Gan Kwan Chong

8,037,500

10.71

8,037,500

11.91

8,037,500^

10.71

8,037,500^

11.91

8,037,500+

10.71

8,037,500+

11.91

8,037,500#

10.71

8,037,500#

11.91

3,917,303

5.22

2,520,800**

3.36

3,917,303

5.80

2,520,800**

3.73

Notes: Deemed indirect interest by virtue of him being a director and shareholder in Wawasan Lembaran Sdn Bhd which in turn holds 4.92% in Malpac Holdings Berhad. ** Indirect interest through family members. ^ Deemed indirect interest by virtue of its 100% shareholding in ASCSB. + Deemed indirect interest by virtue of his interest in ASB which in turn holds100% in ASCSB. # Deemed indirect interest by virtue of its interest in ASB which in turn holds 100% in ASCSB. *

6.0

IMPLICATION OF THE PROPOSED SHARE BUY-BACK ON THE CODE Under Practice Note 2.7 of the Code, a mandatory offer obligation under Part II of the Code arises if a director or a shareholder, together with persons acting in concert with him, holds more than 33% but less than 50% of the voting shares of the Company and who as a result of a purchase by the Company of its own voting shares, increasing his holding by an additional 2% or more of the voting shares in the Company in any period of six (6) months. In this respect, the implementation of the Proposed Share Buy-Back will not give rise to any implication under the Code.

7.0

PURCHASE, RESALE AND CANCELLATION OF TREASURY SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS There has not been any purchase of own shares by Malpac in the previous twelve (12) months preceding the date of this statement. As at the date of this statement, the Company does not hold any treasury shares.

8.0

PUBLIC SHAREHOLDING SPREAD As at 28 April 2010, the public shareholding spread of the Company was 35.76%. The public shareholding spread is expected to be reduced to approximately 28.62% in the event the Proposed Share Buy-Back is implemented in full, with all purchases being from public shareholders, and all purchased Malpac Shares are held as treasury shares. As at the date hereof, the Company has yet to determine the actual percentage of its own shares to be purchased pursuant to the Proposed Share Buy-Back. However, the Company is mindful of the above implication relating to the public shareholding spread and will use its best endeavours in purchasing its own 4

shares to such an extent that it will not result in the Company being in breach of the minimum requirement of public shareholding spread of 25%. 9.0 DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors and/or major shareholders of the Company has any interest, direct or indirect, in the Proposed Share Buy-Back. In addition, none of the persons connected with the Directors and/or major shareholders of the Company has any interest, direct or indirect, in the Proposed Share Buy-Back. Under the Listing Requirements, any purchase by the Company of its own shares and/or resale of its treasury shares can only be effected in the open market. Therefore, none of the Directors, major shareholders or persons connected with them has or will have an interest, direct or indirect, in the Proposed Share Buy-Back. 10.0 DIRECTORS RECOMMENDATION Having considered all aspects of the Proposed Share Buy-Back, the Board is of the opinion that the Proposed Share Buy-Back is in the best interest of the Company. Accordingly, your Directors recommend that you vote in favour of the ordinary resolution pertaining to the Proposed Share Buy-Back to be tabled at the forthcoming AGM. 11.0 DIRECTORS RESPONSIBILITY STATEMENT This Statement has been seen and approved by the Board of Directors of Malpac and they, collectively and individually, accept full responsibility for the accuracy of the information given and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no material facts, the omission of which would make any statement herein misleading.

12.0

FURTHER INFORMATION Shareholders are requested to refer to Appendix I for further information.

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APPENDIX I FURTHER INFORMATION 1. MATERIAL LITIGATION Save as disclosed below, Malpac and its subsidiary companies are not engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Directors of Malpac do not have any knowledge of any proceedings, pending or threatened, against the Company and/or its subsidiary companies or of any facts likely to give rise to any proceedings which may materially or adversely affect the financial position or business of the Company and/or its subsidiary companies: (i) Ipoh High Court Suit No. 22-263-2003 dated 31 October 2003 The Company and two of its subsidiaries namely, Malpac Capital Sdn Bhd (MCSB) and Radiant Response Sdn Bhd (RRSB), Sri Ganda Oil Mill Sdn Bhd, BDO Binder Chartered Accountants, Lim Tian Huat and Chew Cheng Leong are named as defendants in a Writ filed by Menara Lagenda Sdn Bhd, Syed Azman Bin Syed Mohamed, Yahya Bin Bandan, Zaini Bin Abd Hamid, Mohd Hussain Bin Mohd Rafiei, Idros Bin Yahya, Leong Jee Wai and Ganda Plantation Sdn Bhd (the Plaintiffs). The nature of the claims are as follows:(a) the appointment of RRSB to manage Ganda Plantation (Perak) Sdn Bhd, Cempaka Sepakat Sdn Bhd and Ganda Edible Oil Sdn Bhd (the Plantation Companies) was fraudulent; and the transfers of two (2) parcels of leasehold land (the Oil Palm Lands) to RRSB as partial settlement of a debt owing to MCSB by Techno Asia Holdings Berhad (Special Administrators Appointed)(Techno) pursuant to certain workout proposal by the Special Administrators of Techno as approved by Pengurusan Danaharta Nasional Berhad (the Proposal) were fraudulent as they were carried out to deny the Plaintiffs of their interests in the Oil Palm Lands.

(b)

The reliefs sought by the Plaintiffs are:(a) an order that the Defendants do cease all management activities of the Plantation Companies on grounds of fraud and breach of trust; an injunction to stop the Defendants, their representatives or their agents from managing the affairs of the Plantation Companies so as to preserve the assets in the Plantation Companies and to vest upon the Plaintiffs the powers to manage the Plantation Companies upon the terms as deem fit just and equitable by the court; an order to restrain the Defendants, their representatives or their agents from interfering with and/or taking part in the management of the Plantation Companies; an order to set aside all administrative matters taken or done by the Defendants, their representatives or their agents including any agreements and/or transfer relating to the Plantation Companies; general damages; exemplary damages from the date of taking over the administration and management of the Plantation Companies; interest at the rate of 8% per annum on the general and exemplary damages from the date of the Writ till the date of full and final settlement;

(b)

(c)

(d)

(e) (f)

(g)

Appendix I (continued)

(h) (i)

costs; and other reliefs as the court shall deem fit and just.

The Company has been informed by its solicitors that the Companys Order 14A Application had been withdrawn on 27 October 2009 and the plaintiffs solicitors are to file a notice of case management to have a date fixed for purposes of obtaining directions for trial. As at the date of this statement, no date has been fixed for case management. In the opinion of the Companys solicitors, Messrs Logan Sabapathy & Co., the aforesaid claim is without basis and therefore not sustainable. (ii) Ipoh High Court Civil Suit No. 22-109-2007 dated 21 April 2007 The Companys wholly owned subsidiaries, Malpac Capital Sdn Bhd (MCSB) and Radiant Response Sdn Bhd (RRSB), and one other namely Fairyoung Enterprises Sdn Bhd are named the defendents in a Writ of Summons and Statement of Claim filed by Yong Toi Mee and Cheang Kim Leong (the Plaintiffs) on 21 April 2007. The principal basis of claims was that the Plaintiffs are seeking to enforce the conditional sale and purchase agreement entered into between MCSB and the Plaintiffs dated 5 April 2002 in respect of the following, as a composite arrangement:(a) for the acquisition of RRSB from MCSB with RRSB being the owner of the 2 parcels of oil palm lands located in Teluk Intan, Perak; and for the acquisition of palm oil mill and related assets sited on part of the oil palm lands.

(b)

The reliefs sought by the Plaintiffs are:(a) (b) (c) (d) (e) special performance of the subject composite arrangement; an order for MCSB to deliver up the shares of RRSB to the Plaintiffs or their nominees; an injunction to restrain MCSB from dealing with the shares and assets of RRSB; damages in addition to specific performance; and interest and costs.

On 12 November 2007, the Companys solicitors have filed in an Order 14A Application to High Court for determination of certain issues on point of law. This case has been part heard by the Ipoh Court Judge from 12th to 15th October 2009 and the continued trial was scheduled to resume from 18th to 21st January 2010. However the continued trial had been postponed due to the new fast track system implemented for redistribution of pending cases among the Judges who are assigned to hear civil suits. The matter is now fixed for mention on 27 May 2010. The Companys solicitors, Messrs Logan Sabapathy & Co., based on papers already filed and available information, are confident that MCSBs and RRSBs positions will ultimately prevail.

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Appendix I (continued)

2.

MATERIAL CONTRACTS There are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by Malpac and its subsidiary companies within the two (2) years immediately preceding the date of this Statement.

3.

DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Registered Office of the Company following the publication of this Statement from Mondays to Fridays (except Public Holidays) during business hours up to and including the date of the AGM: (a) (b) the Memorandum and Articles of Association of Malpac; the audited consolidated financial statements of Malpac for each of the past two (2) financial years ended 31 December 2008 and 31 December 2009 and its unaudited consolidated results for the three (3) months ended 31 March 2010; the Writs of Summons and relevant cause papers referred to in Section 1 above.

(c)

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