emas kiara industries berhad - Announcements

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the course of action to be taken, you should consult your stockbroker,
bank manager, solicitor, accountant or other independent adviser immediately.
Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, 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.
EMAS KIARA INDUSTRIES BERHAD
(Company No. 485144-H)
(Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND
PROPOSED NEW SHAREHOLDERS’ MANDATE FOR
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
The Resolutions in respect of the above will be tabled as Special Business at the Company’s Fifteenth
Annual General Meeting to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan
Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Monday, 9 June 2014 at 10.00 a.m. Notice
of the Annual General Meeting together with a Form of Proxy are set out in the Annual Report of
the Company for the financial year ended 31 December 2013 despatched together with this Circular.
The Form of Proxy should be lodged at the Registered Office of the Company at Level 18, The
Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48
hours before the time set for the Meeting. The lodging of Form of Proxy will not preclude you from
attending and voting in person at the Meeting or any adjournment thereof should you subsequently
wish to do so.
This Circular is dated 16 May 2014
DEFINITIONS
Unless where the context otherwise requires, the following definitions shall apply throughout this Circular:
“Act”
:The Companies Act, 1965, or any statutory modification,
amendment or re-enactment thereof for the time being in
force
“AGM”
:Annual General Meeting
“BSSB”
:Beringin Sanctuary Sdn Bhd (675881-M)
“Bursa Securities”
:Bursa Malaysia Securities Berhad (635998-W)
“Board”
:The Board of Directors of EKIB
“DYBY”
:Datuk Yahya Bin Ya’acob
“EKE”
:Emas Kiara Electrical Sdn Bhd (382558-A)
“EKIB” or “the Company”
:Emas Kiara Industries Berhad (485144-H)
“EKIB Group” or “Group”
:EKIB and its subsidiaries as defined in Section 5 of the Act
“EKIB Shares”
:Ordinary shares of RM0.50 each in the Company
“EKM”
:Emas Kiara Marketing Sdn Bhd (226612-W)
“EKSB”
:Emas Kiara Sdn Bhd (221063-P)
“EPS”
:Earnings per share
“Excel”
:Excel Engineering & Construction Sdn Bhd (274399-K)
“IES”
:Innovative Ecological System Sdn Bhd (554498-K)
“IKL”
:Intan Kuala Lumpur Sdn Bhd (37292-H)
“LYH”
:Lim Yew Hoe
“Listing Requirements”
:Main Market Listing Requirements of Bursa Securities
“Major Shareholder(s)”
:A person who has an interest or interests in one or more
voting shares in a corporation and the nominal amount of
that share, or the aggregate of the nominal amounts of those
shares, is 10% or more of the aggregate of nominal amounts
of all the voting shares in the company; 5% or more of the
aggregate of the nominal amounts of all the voting shares in
the corporation where such person is the largest shareholder
of the corporation. For the purpose of this definition, “interest
in shares” has the meaning given in Section 6A of the Act.
It also includes any person who is or was within the
preceding 6 months of the date on which the terms of the
transaction were agreed upon, a major shareholder of the
Company (as defined above) or any other company which
is its subsidiary or holding company.
i
DEFINITIONS (continued)
“MESB”
:Midlane Entity Sdn Bhd (398804-K)
“NBSB”
:Noblecorp Builders Sdn Bhd (937709-X)
(Formerly known as Melody Eco Park Sdn Bhd)
“NESB”
:Noblecorp Engineering Sdn Bhd (675882-H)
(Formerly known as Emas Kiara Engineering Sdn Bhd)
“NTA”
:Net tangible assets
“Person(s) Connected”
:As defined in Chapter 1 Paragraph 1.01 of the Listing
Requirements.
“Proposed Renewal of Shareholders’
:Proposed Renewal of Shareholders’ Mandate for the EKIB
Mandate” Group to enter into recurrent related party transactions of a
revenue and/or trading nature which are necessary for the
day-to-day operations of the Group.
“Proposed New Shareholders’
:Proposed New Shareholders’ Mandate for the EKIB Group to
Mandate” enter into recurrent related party transactions of a revenue
and/or trading nature which are necessary for the day-to-day
operations of the Group.
“Proposal” Proposed Renewal of Shareholders’ Mandate and Proposed
New Shareholders’ Mandate.
“PSDS”
:Puan Sri Datin Sharifah Binti Ahmad, spouse of TSDK
“Raswill”
:RasWILL Representative Pte. Ltd. (Registration No. 198104117K)
“Recurrent Related Party
:Recurrent related party transactions of a revenue and/or
Transactions” or “RRPTs” trading nature which are necessary for the day-to-day
operations 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
which involves the interest, direct or indirect, of the Related
Parties.
“Related Party(ies)”
:A director, Major Shareholder or person connected with such
director or Major Shareholder including 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 director or
a Major Shareholder or chief executive of the Company and/
or its subsidiary or holding company.
“RM” and “sen”
:Ringgit Malaysia and sen respectively
“Rules”
:Rules of the Central Depository
“SICDA”
:Securities Industry (Central Depositories) Act, 1991
“SK”
:Shariza Binti Kamaruzzaman, daughter of TSDK
“SRD”
:Sandanasamy Richard Douglas
“TSDK”
:Tan Sri Dato’ Kamaruzzaman Bin Shariff
“WKF”
:Wong Kong Foo
ii
CONTENTS
Page
Letter to shareholders containing:
1.
INTRODUCTION
1
2. DETAILS OF THE PROPOSAL
2-6
3. AUDIT COMMITTEE STATEMENT
6
4. RATIONALE AND BENEFITS FOR THE PROPOSAL
5. APPROVAL REQUIRED
6-7
7
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
7-8
7. AGM
8
8. DIRECTORS’ RECOMMENDATION
8
9. FURTHER INFORMATION
9-10
iii
EMAS KIARA INDUSTRIES BERHAD
(Company No. 485144-H)
(Incorporated in Malaysia)
Registered Office
Level 18, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
16 May 2014
Board of Directors
Tan Sri Dato’ Kamaruzzaman Bin Shariff (Executive Chairman)
Wong Kong Foo (Deputy Executive Chairman)
Lim Yew Hoe (Executive Director)
Datuk Yahya Bin Ya’acob (Independent Non-Executive Director)
Haji Abd Talib Bin Baba (Independent Non-Executive Director)
Siew Kah Toong (Independent Non-Executive Director)
To: The Shareholders of Emas Kiara Industries Berhad
Dear Sir/Madam,
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED NEW SHAREHOLDERS’
MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
1. INTRODUCTION
At its Annual General Meeting held on 24 June 2013, the Company obtained a mandate from
its shareholders for the Company and its subsidiaries to enter into Recurrent Related Party
Transactions. Pursuant to Paragraph 10.09 and Practice Note 12 of the Listing Requirements the
mandate conferred by the shareholders for the EKIB Group to enter into RRPTs shall expire at
the conclusion of the forthcoming AGM unless a renewal is obtained from the shareholders of the
Company at the meeting.
On 24 April 2014, the Company announced its intention to seek its shareholders’ approval for
the Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’ Mandate at its
forthcoming AGM.
The purpose of this Circular is to provide you with the details of the Proposal, to set out the
recommendation by the Board and to seek your approval for the ordinary resolutions pertaining
to the Proposal to be tabled at the forthcoming AGM.
2. DETAILS OF THE PROPOSAL
2.1 Paragraph 10.09 and Practice Note 12 of the Listing Requirements
Pursuant to Paragraph 10.09 of the Listing Requirements, a listed issuer may seek a shareholders’
mandate for RRPTs, 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 the aggregate value is equal to or more than the
threshold prescribed under paragraph 10.09(1) of the Listing Requirements;
(c) the issuance of a circular to shareholders by the listed issuer for the shareholders’ mandate;
(d) in a meeting to obtain shareholders’ mandate, the interested directors, major shareholders
or 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 ensure that persons connected
with him abstain from voting on the resolution approving the transactions; and
(e) the Company will immediately announce to Bursa Securities when the actual value of the
RRPTs entered into by the Company exceeds the estimated value of the RRPTs disclosed
in the Circular by 10% or more inclusive of any information as may be prescribed by Bursa
Securities.
2.2 Validity Period
Pursuant to Practice Note 12 of the Listing Requirements, the shareholders’ mandate is subject
to annual renewal and any authority conferred by the mandate shall only continue to be in force
until:
(a) the conclusion of the first AGM of the listed issuer following the general meeting at which
such mandate was passed, at which time it will lapse, unless by a resolution passed at the
meeting, the authority is renewed;
(b) the expiration of the period within which the next AGM after that date is required to be held
pursuant to Section 143(1) of the Act, (but must not extend to such extension as may be
allowed pursuant to Section 143(2) of the Act); or
(c)
revoked or varied by resolution passed by the shareholders in general meeting;
whichever is the earlier.
In view of the time-sensitive and frequent nature of such related party transactions, the Board now
proposes to seek your approval for the Proposal in respect of related party transactions entered
or to be entered into with the classes of Related Parties as set out in Section 2.5 provided that
such transactions of a revenue or trading nature which are necessary for day-to-day operations
are made at arms’ length on normal commercial terms and on terms not more favourable to
the Related Parties than those generally available to the public and are not detrimental to the
minority shareholders of the Company.
2
2.3 The Principal Activities of the EKIB Group
The principal activity of EKIB is investment holding whilst its subsidiaries are principally
involved in the marketing, trading and installation services of geosynthetic products,
distribution, installation of lighting products and project management as well as property
development. The subsidiaries involved in the Proposal are:
Subsidiary Equity Interest (%)
Principal Activities
NBSB 100 Trades and businesses of builders, developers,
contractors, construction and sub-contractors
for all kinds of construction
EKE 80 Distribution of lighting products, contractor for
installation and project management
EKM 100 Marketing, trading and installation services of
geosynthetic products and materials and provision
of geoservices
EKSB 100 Management services and trading of geosynthetic
products and technical fabrics for engineering
and industrial applications
NESB 100 General contracting work and trading
BSSB 100 Business of project construction and management,
mechanical and electrical.
2.4 The Principal Activities of the Related Parties
The Proposal will apply to the following Related Parties:
Related Party Principal Activities
Excel Civil engineering and construction
IES Manufacture of erosion control products
Raswill Trading, research and development in geosynthetic and related construction equipment
2.5 Information on RRPTs
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE
Estimated
Value **
for the
validity
of the
proposed
mandate
(RM’000)
Related
Parties
Nature
of
Interest
Company
in the
EKIB
Group
involved
in the
RRPT
1.
IES
Note (1)
EKM
EKM sources supply of
biodegradable erosion
control products and
gabion from IES
5,000
662
3,000
2.
Excel
Note (2)
EKM
EKM supplies their full range
of geosynthetic products to
Excel to meet its tender or
design requirements as civil
engineering contractor
25,000
1,104
8,000
Nature of Transactions
3
Estimated Actual Value
value
*Transacted
per last
as at 21
Mandate
April 2014
(RM’000)
(RM’000)
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE
Related
Parties
Nature
of
Interest
Company
in the
EKIB
Group
involved
in the
RRPT
3.
IES
Note (1)
EKSB
4.
Excel
Note (2)
EKE
Nature of Transactions
EKSB rents to IES factory
area measuring 13,500 sq
ft for a monthly rental of
RM10,800 (Note 3)
EKE supplies their full
range of lighting and
electrical products and
installation services to
Excel to meet its tender or
design requirements as civil
engineering contractor
Estimated Actual Value
value
*Transacted
per last
as at 21
Mandate
April 2014
(RM’000)
(RM’000)
Estimated
Value **
for the
validity
of the
proposed
mandate
(RM’000)
150
108
150
3,000
3.5
5,000
PROPOSED NEW SHAREHOLDERS’ MANDATE
5.
Excel
Note (2)
NBSB
NBSB provides building
Not
construction services to Applicable
Excel to meet its tender or
design requirements as civil
engineering contractor
Nil
25,000
6.
Raswill
Note (4)
EKM
EKM supplies full range of
Not
geosynthetic products to Applicable
Raswill to meet its tender
or design requirements.
Raswill provides project
management and export
of geosynthetic products
services to EKM
Nil
15,000
7.
Excel
Note (2)
BSSB
BSSB provides mechanical
Not
and electrical services Applicable
including general construction
to meet its tender or projects
requirements
Nil
15,000
*
The actual value transacted of each RRPT is from 24 June 2013 (being the date of the previous
AGM) up to the latest practicable date before the printing of the Circular i.e. 21 April 2014.
** The estimated values of the RRPTs is from the date of the forthcoming AGM to the next AGM.
The estimated values may be subject to changes.
Note (1) :
TSDK is a director and substantial shareholder of EKIB and is also a substantial shareholder holding 23.5%
equity interest in IES. LYH is a director and substantial shareholder of EKIB and is also a director and substantial
shareholder holding 43% equity interest in IES. Excel is a substantial shareholder holding 15% equity interest
in IES. Excel is a company controlled by the spouse of DYBY, a director of EKIB. WKF is a director and major
shareholder of EKIB and is also a director and substantial shareholder holding 20% equity interest in Excel. PSDS
and SK are persons connected to TSDK and are therefore deemed interested in IES and EKIB.
Note (2) : DYBY is a director of EKIB. The spouse of DYBY, Datin Salibah @ Arfah Bt Hj Daud, is a substantial shareholder
holding 32.5% equity interest in Excel. WKF is a director and major shareholder of EKIB and is also a director and
substantial shareholder holding 20% equity interest in Excel. IKL is a person connected to WKF and is therefore
deemed interested in Excel and EKIB.
Note (3) :
The factory is located at Lot 13A, Jalan RP3, Rawang Industrial Estate, 48000 Rawang, Selangor. The rental rate
was determined after taking into consideration the current market rates for rental of similar properties in the
general vicinity.
Note (4) : SRD is a director of EKM and is also the managing director and substantial shareholder holding 75% equity
interest in Raswill.
4
It is anticipated that the Group would, in the ordinary course of business, continue to enter
into the mandated RRPTs which are detailed above. It is likely that such RRPTs will occur
with some degree of frequency and could arise at any time. In view of the time-sensitive,
confidential and frequent nature of such RRPTs, the Board is seeking shareholders’ approval
for the Proposal with the classes of Related Parties set out above provided that such
transactions are entered into at arms’ length and on normal commercial terms which are
not more favourable to the Related Parties than those generally available to the public and
are not detrimental to the minority shareholders.
2.6 Deviation from Mandate
The actual value of the RRPTs did not exceed the estimated value as approved under the
previous mandate granted to the Company at the last AGM.
2.7 Review Procedures for the RRPTs
To ensure that such RRPTs are undertaken at arm’s length and on transaction prices and on
normal commercial terms not more favourable to the Related Parties than those generally
available to the public and are not detrimental to the minority shareholders, the following
methods and processes will be adopted:(a) the transactions with the Related Parties shall be determined based on prevailing rates
or prices according to their usual commercial terms, business practices and policies or
otherwise in accordance with other applicable industry norms. Consideration will also
be given to the expertise required, quality of product, level of service and other related
factors.
(b) Standard procedures have been established to ensure that these RRPTs will only be
entered into after taking into consideration, inter-alia, the pricing, quality of products
and level of services provided;
(c) Terms and conditions of transactions will be based on competitive prices of similar
products and services in the open market having regard to the flexibility needed by the
Group in terms of delivery and pricing options. At least two (2) other contemporaneous
quotes with unrelated third parties for similar products/services and/or quantities
will be used as comparison, whenever possible, to determine whether the price and
terms offered to/by the related parties are fair and reasonable and comparable to
those offered to/by other unrelated third parties for the same or substantially similar
type of products/services and/or quantities. As certain of the Group’s products and
services are proprietory in nature the prices of these products/services are negotiated
specifically between the proprietor and purchaser. In the event that quotation or
comparative pricing from unrelated third parties cannot be obtained, the terms of the
transactions will be in accordance with the Group’s usual business practices in order to
ensure that the RRPT is not detrimental to the Group;
(d) All RRPTs entered into pursuant to the Shareholders’ Mandate will be recorded for
review by the Audit Committee once a year;
(e) All RRPTs will be reviewed by the Audit Committee on a periodic basis. The Audit
Committee, may as they deem fit, request for additional information pertaining to the
transactions from independent sources or advisers;
(f) Where any member of the Audit Committee is interested in any transactions, that
member shall abstain from all deliberations and also voting on any matter relating to
any decisions to be taken by the Audit Committee with respect to such transactions;
and
5
(g) In accordance with the Listing Requirements, the Company must disclose in the
Company’s annual reports for the financial years during which the shareholders’
mandate are in force a breakdown of the aggregate value of the RRPTs made during
the financial year, amongst others, based on the following information:
(i) the type of the RRPTs made; and
(ii) the names of the Related Parties involved in each type of the RRPTs made and
their relationship with the EKIB Group.
2.8 Thresholds for Approval
The nature of business of the EKIB Group is that of marketing, trading and installation services
of geosynthetic products, distribution and installation of lighting products and project
management. Materials are sourced from Related Parties who are contracted to manufacture
the components parts based on specific specifications.
Due to the nature of the products and the various specifications required product prices with
regards to purchases as well as supplies are assessed by executives, engineers or managers
prior to confirmation. All supplies and purchases require the prior approval of the respective
Head of Business Unit.
2.9 Amount Due and Owing to the EKIB Group by Related Parties
As at 21 April 2014, there is no amount due and owing to EKIB Group which has exceeded the
credit term given arising from the RRPTs as per Section 2.5.
3. AUDIT COMMITTEE STATEMENT
The Audit Committee of the Company has reviewed the procedures set out in Section 2.7 and is of
the view that the said procedures are sufficient to ensure that the RRPTs are conducted at arm’s
length basis, 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 Company has put in place adequate procedures and processes to monitor, track and identify
RRPTs in a timely and orderly manner. The Audit Committee conducts review of these procedures
and processes on a yearly basis.
DYBY, a member of the Audit Committee, who is interested in some of the RRPTs set out in
Section 2.5 above, have abstained and will continue to abstain from all deliberations and voting
on any matter relating to any decisions to be taken by the Audit Committee with respect to such
transactions.
4. RATIONALE AND BENEFITS OF THE PROPOSAL
The RRPTs entered or to be entered into by the EKIB Group are intended to meet the Group’s day
to day business needs at the best possible terms and to enhance the Group’s ability to explore
beneficial business opportunities.
As such, the rationale for and benefits of the Proposal to the EKIB Group are as follows:
(a) to facilitate transactions with Related Parties which are in the ordinary course of business of
the Group, are undertaken at arms’ length, normal commercial terms and on prices which are
not more favourable to the Related Parties than those generally available to the public and are
not detrimental to the interests of minority shareholders;
(b) to enable the Group to transact with Related Parties in an expeditious manner to meet business
needs for the supply and/or provision of goods and services which are necessary for its dayto-day operations particularly business needs which are time sensitive in nature;
6
(c) the Group has established relationships with the Related Parties, and share complimentary
activities in one or more of its principal business activities with Related Parties. Therefore, it is in
the interests of the Group to transact with such Related Parties (in addition to transactions with
third parties in the ordinary course of business) so that the Group can enjoy synergistic benefits,
where applicable; and
(d) to eliminate the need to announce and/or convene separate general meetings from time to time
to seek shareholders’ approval for entering into the RRPTs, as required pursuant to Chapter 10
of the Listing Requirements and thereby enables resources and time to be channelled towards
achieving the Group’s business objectives.
5. APPROVAL REQUIRED
The Proposal is subject to the approval of the shareholders of EKIB at the forthcoming AGM to be
convened.
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
The direct and/or indirect interests of the directors and major shareholders of EKIB and persons
connected to the directors and major shareholders in respect of the Proposal are disclosed below:
Shareholdings as at 21 April 2014
<------------------- Direct ------------------><--------------Indirect------------------>
No. of EKIB Shares No. of EKIB Shares
Interested Directors
held
%
held
%
EKIB
WKF21,350,1501 23.9217,299,804219.38
TSDK
6,611,411
7.411,645,00031.84
4
LYH
5,914,020 6.635,129,00055.75
DYBY
-
-
-EKM
SRD
2,885,081
3.23
Interested Major Shareholder
WKF21,350,1501
Interested persons connected to
Directors and Major Shareholders
IKL
PSDS
SK
Datin Salibah @ Arfah bt Hj Daud
6,810,804
-
-
-
-
-
23.9217,299,804219.38
7.63
-
-1,645,00061.84
-
1,645,00061.84
-
-
-
Notes:
1
Shares held in WKF’s own name and/or nominee account.
2
Deemed interest by virtue of his interest in IKL, Impiana Venture Sdn Bhd and Eastern Courtyard Sdn Bhd pursuant
to Section 6A of the Act and his spouse’s direct interest in EKIB pursuant to Section 134 of the Act.
3
Deemed interest by virtue of his interest in MESB pursuant to Section 6A of the Act.
4
Shares held in LYH’s own name and/or nominee account.
5
Deemed interest by virtue of his interest in Eastern Courtyard Sdn Bhd pursuant to Section 6A of the Act.
6
Deemed interest by virtue of her interest in MESB pursuant to Section 6A of the Act.
Save for WKF (“Interested Major Shareholder”), none of the other major shareholders of EKIB and/
or Person Connected to them (as defined in the Listing Requirements) have any interest, direct or
indirect, in the Proposal. The nature of interest of the Interested Major Shareholder in the RRPTs is
set out in Section 2.5 of this Circular.
The Interested Major Shareholder and persons connected to him will abstain from voting in respect
of his interests, direct or indirect, on the ordinary resolution deliberating or approving the Proposal
at the forthcoming AGM and have undertaken that he will ensure that persons connected to him
(as defined in the Listing Requirements) will abstain from deliberating or voting on the ordinary
resolution to approve the Proposal at the forthcoming AGM.
7
Save for WKF, TSDK, LYH and DYBY (“Interested Directors”), none of the other directors of EKIB
and/or Person Connected to them as defined in the Listing Requirements have any interest, direct or
indirect, in the Proposal. The nature of interests of the Interested Directors in the RRPTs are set out
in Section 2.5 of this Circular. The Interested Directors have accordingly abstained and will continue
to abstain from deliberation and voting on the ordinary resolution at Board of Directors’ meetings
of EKIB. The Interested Directors and persons connected to them will abstain from deliberating
or voting in respect of their interests, direct or indirect, on the ordinary resolution to approve the
Proposal at the forthcoming AGM and, have also undertaken that they will ensure that persons
connected with them (as defined in the Listing Requirements) will abstain from deliberating or
voting on the relevant ordinary resolution to approve the Proposal at the forthcoming AGM.
SRD who is interested in the Proposal (the nature of his interests in the RRPTs are set out in Section
2.5 of this Circular) has abstained and will continue to abstain from deliberation and voting on
the RRPTs with Raswill at Board of Directors’ meetings of EKM. He will abstain from deliberating
or voting in respect of his interests on the ordinary resolution to approve the Proposal at the
forthcoming AGM and has also undertaken that he will ensure that persons connected with him
(as defined in the Listing Requirements) will abstain from deliberating or voting on the relevant
ordinary resolution to approve the Proposal at the forthcoming AGM.
The Interested Directors and Interested Major Shareholder have all consented that a general
mandate be sought under one resolution for all the RRPTs despite several related parties and
categories or classes of related parties being involved and they have also undertaken that they will
ensure that persons connected to them (as defined in the Listing Requirements) will abstain from
voting on the proposed resolution granting the mandate at the forthcoming AGM.
7. AGM
The Fifteenth AGM of the Company will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country
Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Monday, 9 June 2014 at
10.00 a.m. and at any adjournment thereof for the purpose of considering and if thought fit, to
pass the resolution so as to give effect to the Proposal under special business in the Notice of AGM
which is enclosed in the Annual Report of the Company for the financial year ended 31 December
2013 accompanying this Circular.
If you are unable to attend and vote in person at the AGM and wish to appoint a Proxy instead, you
should complete and return the Form of Proxy enclosed in the Annual Report in accordance with
the instructions printed thereon. The Form of Proxy must be lodged at the registered office of the
Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala
Lumpur not less than forty eight (48) hours before the time fixed for the AGM or any adjournment
thereof. The lodging of the Form of Proxy does not preclude you from attending and voting in
person should you subsequently decide to do so.
8. DIRECTORS’ RECOMMENDATION
The Board (with the exception of WKF, TSDK, LYH, DYBY), having taken into consideration all
relevant aspects of the Proposal are of the opinion that the Proposal is in the best interest of
EKIB, are fair, reasonable and on normal commercial terms and not detrimental to the interest of
the minority shareholders and accordingly they (with the exception of WKF, TSDK, LYH, DYBY)
recommend that you vote in favour of the ordinary resolution pertaining to the Proposal to be
tabled at the forthcoming AGM.
8
9. FURTHER INFORMATION
9.1 DIRECTORS’ RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Board and they collectively and individually
accept full responsibility for the accuracy of the information given herein and confirm that
after making all reasonable enquiries and to the best of their knowledge and belief, there are
no other material facts the omission of which would make any statement herein misleading.
9.2 MATERIAL LITIGATION
Save as disclosed below EKIB and/or its subsidiaries are not engaged in any material litigation,
claims or arbitration either as plaintiff or defendant, which may have a material effect on the
financial position of the EKIB Group and the Directors of EKIB do not have any knowledge
of any proceedings, pending or threatened, against the EKIB Group or of any facts which is
likely to give rise to any proceedings which may materially and adversely affect the financial
position or business of the EKIB Group.
Kuala Lumpur High Court vide Civil Suit No. 22NCVC-722-06/2012
Emas Kiara Sdn Bhd (“Plaintiff”), a wholly-owned subsidiary of EKIB, filed a Writ of Summons
and Statement of Claim against Michael Joseph Monteiro and Heng Ji Keng, the Receivers
and Managers of Lembah Beringin Sdn Bhd’s land (Receivers and Managers appointed) (In
Liquidation) (“Defendants”) at the Kuala Lumpur High Court (“Court”) vide Civil Suit No.
22NCVC-722-06/2012 (“Suit”) as the rightful purchaser of the property (“Lands”) and on 20
December 2012, the Court allowed to include Lembah Beringin Sdn Bhd as a party to the Suit.
Farcoll Estate Sdn Bhd and 7 Others (“Farcoll”) had on 17 October 2012 served a notice of
application to intervene the Suit. Following thereto, on 16 May 2013, the Plaintiff, Defendants
and Farcoll entered into a Consent Order not to deal with the Lands until the Suit is heard up
to the Federal Court, where applicable.
On 14 October 2013, the Plaintiff filed an application to further amend the Writ of Summons
and Statement of Claim to add the Interveners (“Farcoll and 7 Others”) together with the
debenture holder, RHB Bank Berhad, as Defendants in the Suit. The matter was heard on 14
February 2014 and dismissed with cost of RM10,000 to the Defendant and the Intervener
respectively. The Judge has fixed 24 April 2014 as the next case management date.
9.3 MATERIAL CONTRACTS
Save as disclosed below, there are no material contracts (including contracts not reduced into
writing), not being in the ordinary course of business entered into by the Company and/or its
subsidiaries within two (2) years preceding the date of this Circular:
(i) Sale and purchase agreement dated 19 October 2012 (“SPA”) entered into between Asian
Culture Food Sdn Bhd, as purchaser (“ACF”), Yik Khang Frozen Foodstuff Sdn Bhd, as
vendor, (“Yik Khang”) and the shareholders of Yik Khang in relation to ACF’s proposed
acquisition of the business and assets of Yik Khang, free from encumbrances, for a total
purchase consideration of RM2,300,000.00, to be satisfied partly by cash payment of
RM1,000,000.00 and partly by the issuance of 1,300,000 ordinary shares of RM1.00 each
in ACF in favour of Yik Khang. The SPA was mutually terminated by all parties on 19
February 2013;
(ii) Shareholders agreement dated 19 October 2012 (“SA”) entered into between Innovative
Industrial Textiles Sdn Bhd (“IIT”) and Yik Khang to record the intention of both parties
in respect of the organisation, management and operation of ACF and to specify the
relationship between IIT and Yik Khang. The SA was mutually terminated by all parties
on 19 February 2013;
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(iii) Sale and purchase agreement dated 18 December 2012 entered into between IIT as the
purchaser, and Indahpura Jaya Development Sdn Bhd as the vendor in respect of the
acquisition of a piece of freehold industrial land held under Lot No. 58917, Geran No.
285652, Mukim Kulai, District Kulaijaya, Johor measuring approximately 30,149.68 square
feet (“Lot”) with a single storey detached factory with double storey office (“Building”)
erected on the Lot for a total purchase consideration of RM3,200,000.00;
(iv) Conditional Sale and purchase agreement and Conditional Joint Venture Agreement
respectively dated 1 July 2013 entered into between Noblecorp Property (Sabah) Sdn
Bhd and Noblecorp Lands Sdn Bhd and K.K.I.P. Sdn Bhd (“KKIP”), a company owned
by the State Government of Sabah, in respect of the acquisition of a piece of vacant
leasehold industrial land measuring 80 acres in Kota Kinabalu Industrial Park, Sabah
(“Land”) from KKIP for a total consideration of RM33,454,080.00 and in connection with
the development of the Land; and
(v) Sale and purchase agreement dated 23 August 2013 entered into between Noblecorp
Sdn Bhd (“NSB”) and Red Swallow Sdn Bhd for the disposal of a piece of vacant freehold
industrial land held under HS(D) 58454, PTD 106667, Mukim Kulai, Daerah Kulaijaya,
Negeri Johor measuring approximately 1.809 hectares (4.47 acres) by NSB for a total
consideration of RM8,957,466.84.
9.4 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 Circular from Mondays to Fridays (except public
holidays) during business hours up to and including the date of the AGM:
(i) the Memorandum and Articles of Association of EKIB;
(ii) the audited consolidated financial statements of EKIB and its subsidiaries for the past
two (2) financial years ended 31 December 2012 and 31 December 2013;
(iii) the cause papers in relation to the material litigation referred to in Section 9.2 above; and
(iv) the material contracts referred to in Section 9.3 above.
Yours faithfully
For and on behalf of the Board
Siew Kah Toong
Independent Non-Executive Director
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