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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 professional 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.
KIAN JOO CAN FACTORY BERHAD (Company No. 3186-P)
(Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS
in relation to the
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
The Notice of the 54th Annual General Meeting to be held at the Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Monday, 18 June 2012 at 3.00 p.m. has been set out in the Company’s Annual Report for the financial year ended 31 December 2011 which is sent to you together with this Circular. A Form of Proxy is enclosed in the Annual Report 2011 which must be deposited at the Company’s Share Registrar Office at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time appointed for holding the Annual General Meeting or adjournment thereof. Last day and time for lodging the Form of Proxy : Thursday, 14 June 2012 at 3.00 p.m. Day and time of the 54th Annual General Meeting : Monday, 18 June 2012 at 3.00 p.m.
This Circular is dated 25 May 2012
i
DEFINITIONS In this Circular, unless otherwise stated, the following abbreviations shall have the following meanings: Act : Companies Act, 1965, as amended from time to time and any re-
enactment thereof AGM : Annual General Meeting Annual Report 2011 : Annual Report of Kian Joo issued for the financial year ended
31 December 2011 Board : The Board of Directors of Kian Joo Box-Pak : Box-Pak (Malaysia) Berhad (21338-W) Box-Pak Group : Box-Pak and its subsidiaries Kian Joo Group or Group : Kian Joo and its subsidiaries and associates Kian Joo or Company : Kian Joo Can Factory Berhad (003186-P) Kian Joo Share(s) : Ordinary share(s) of RM0.25 each in Kian Joo Bursa Malaysia : Bursa Malaysia Securities Berhad (635998-W) Listing Requirements : Main Market Listing Requirements of Bursa Malaysia including any
amendments thereto that may be made from time to time NTA : Net tangible assets
Proposed Renewal of Shareholders’ Mandate
: Proposed renewal of shareholders' mandate for recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations and are in the ordinary course of business of Kian Joo Group
Related Party/ies : A director, major shareholder or persons connected with such director
or major shareholder Recurrent Related Party Transactions
: Recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations and are in the ordinary course of business of Kian Joo as specified in Section 2.2 of this Circular
RM and Sen : Ringgit Malaysia and Sen respectively LPD : 30 April 2012, being the latest practicable date prior to the printing of
this Circular
i
DEFINITIONS In this Circular, unless otherwise stated, the following abbreviations shall have the following meanings: Act : Companies Act, 1965, as amended from time to time and any re-
enactment thereof AGM : Annual General Meeting Annual Report 2011 : Annual Report of Kian Joo issued for the financial year ended
31 December 2011 Board : The Board of Directors of Kian Joo Box-Pak : Box-Pak (Malaysia) Berhad (21338-W) Box-Pak Group : Box-Pak and its subsidiaries Kian Joo Group or Group : Kian Joo and its subsidiaries and associates Kian Joo or Company : Kian Joo Can Factory Berhad (003186-P) Kian Joo Share(s) : Ordinary share(s) of RM0.25 each in Kian Joo Bursa Malaysia : Bursa Malaysia Securities Berhad (635998-W) Listing Requirements : Main Market Listing Requirements of Bursa Malaysia including any
amendments thereto that may be made from time to time NTA : Net tangible assets
Proposed Renewal of Shareholders’ Mandate
: Proposed renewal of shareholders' mandate for recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations and are in the ordinary course of business of Kian Joo Group
Related Party/ies : A director, major shareholder or persons connected with such director
or major shareholder Recurrent Related Party Transactions
: Recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations and are in the ordinary course of business of Kian Joo as specified in Section 2.2 of this Circular
RM and Sen : Ringgit Malaysia and Sen respectively LPD : 30 April 2012, being the latest practicable date prior to the printing of
this Circular
ii
TABLE OF CONTENTS Page A. LETTER TO SHAREHOLDERS OF KIAN JOO CONTAINING: 1. INTRODUCTION ..................................................................................................................................... 1 2. DETAILS OF THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE ............................. 2 2.1 Classes of Related Parties ............................................................................................................... 2 2.2 The nature of the transactions contemplated under the Proposed Renewal of
Shareholders’ Mandate ................................................................................................................... 2 2.3 Review methods or procedures for Recurrent Related Party Transactions ..................................... 4 2.4 Statement by the Audit Committee ................................................................................................. 5 2.5 Disclosure in Annual Report ........................................................................................................... 5 3. RATIONALE AND BENEFITS FOR THE PROPOSED RENEWAL OF SHAREHOLDERS’
MANDATE ............................................................................................................................................... 6 4. CONDITIONS OF THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE ......................6
5. INTEREST OF DIRECTORS AND PERSONS CONNECTED
TO THEM .................................................................................................................................................6 6. DIRECTORS’ RECOMMENDATION .................................................................................................... 7 7. AGM ........................................................................................................................................................ 7 8. FURTHER INFORMATION .................................................................................................................... 7 B. APPENDICES
APPENDIX 1 - FURTHER INFORMATION ......................................................................................... 8 APPENDIX 2 - EXTRACT OF RESOLUTIONS TO BE TABLED AT THE 54TH AGM
OF THE COMPANY ..................................................................................................... 9
1
KIAN JOO CAN FACTORY BERHAD
(Company No. 3186-P) (Incorporated in Malaysia)
Registered Office Lot 10, Jalan Perusahaan 1 68100 Batu Caves Selangor Darul Ehsan 25 May 2012
Directors: Y.A.M. Tunku Naquiyuddin Ibni Almarhum Tuanku Ja’afar (Chairman and Independent Non-Executive Director) Dato’ Anthony See Teow Guan (Executive Director) See Teow Koon (Executive Director) See Tiau Kee (Executive Director) Dato’ See Teow Chuan (Non-Independent Non-Executive Director) Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Almarhum Tuanku Ja’afar (Independent Non-Executive Director) Rick Loh Lap Sang (Independent Non-Executive Director) Onn Kien Hoe (Independent Non-Executive Director) To: The Shareholders of Kian Joo Can Factory Berhad Dear Sir/Madam, PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION
The shareholders of Kian Joo had on 28 April 2011 approved the shareholders’ mandate for the Company to enter into Recurrent Related Party Transactions that are necessary for the day-to-day operations in the ordinary course of business carried out on normal commercial terms and are on terms not more favourable to the Related Parties than those generally available to the public.
The said general mandate for Recurrent Related Party Transactions shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM unless authority for its renewal is obtained from the shareholders of the Company. In this regard, on 21 March 2012 the Company announced that it will be seeking its shareholders’ approval for a renewal of the general mandate in relation to Recurrent Related Party Transactions in line with Part E, Paragraph 10.09 of the Listing Requirements. The purpose of this circular is to provide you with the details of the proposed renewal of shareholders’ mandate and to seek your approval for the resolution pertaining thereto to be tabled at the forthcoming AGM.
SHAREHOLDERS ARE ADVISED TO READ THIS CIRCULAR BEFORE VOTING IN RELATION TO THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE.
1
KIAN JOO CAN FACTORY BERHAD
(Company No. 3186-P) (Incorporated in Malaysia)
Registered Office Lot 10, Jalan Perusahaan 1 68100 Batu Caves Selangor Darul Ehsan 25 May 2012
Directors: Y.A.M. Tunku Naquiyuddin Ibni Almarhum Tuanku Ja’afar (Chairman and Independent Non-Executive Director) Dato’ Anthony See Teow Guan (Executive Director) See Teow Koon (Executive Director) See Tiau Kee (Executive Director) Dato’ See Teow Chuan (Non-Independent Non-Executive Director) Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Almarhum Tuanku Ja’afar (Independent Non-Executive Director) Rick Loh Lap Sang (Independent Non-Executive Director) Onn Kien Hoe (Independent Non-Executive Director) To: The Shareholders of Kian Joo Can Factory Berhad Dear Sir/Madam, PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION
The shareholders of Kian Joo had on 28 April 2011 approved the shareholders’ mandate for the Company to enter into Recurrent Related Party Transactions that are necessary for the day-to-day operations in the ordinary course of business carried out on normal commercial terms and are on terms not more favourable to the Related Parties than those generally available to the public.
The said general mandate for Recurrent Related Party Transactions shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM unless authority for its renewal is obtained from the shareholders of the Company. In this regard, on 21 March 2012 the Company announced that it will be seeking its shareholders’ approval for a renewal of the general mandate in relation to Recurrent Related Party Transactions in line with Part E, Paragraph 10.09 of the Listing Requirements. The purpose of this circular is to provide you with the details of the proposed renewal of shareholders’ mandate and to seek your approval for the resolution pertaining thereto to be tabled at the forthcoming AGM.
SHAREHOLDERS ARE ADVISED TO READ THIS CIRCULAR BEFORE VOTING IN RELATION TO THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE.
2
2 DETAILS OF THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE The Board proposes to seek its shareholders’ approval for the Company to renew the general mandate in relation to Recurrent Related Party Transactions that 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.
2.1 Classes of Related Parties
The principal business activities of Kian Joo are the manufacture and distribution of tin cans and investment holding.
The principal activities of the subsidiaries and associated companies of Kian Joo in relation to Recurrent Related Party Transactions are described as follows:
Name of Company Principal Activities Equity Interest
(%) Subsidiary Companies of Kian
Joo Box-Pak (Malaysia) Berhad Metal-Pak (M) Sdn Bhd Federal Metal Printing Factory
Sdn Bhd KJ Can (Johore) Sdn Bhd KJ Can (Selangor) Sdn Bhd Kian Joo Can (Vietnam) Co.,
Ltd Kian Joo Canpack (Vietnam)
Co., Ltd Kian Joo Packaging Sdn Bhd KJM Aluminium Can Sdn Bhd Kian Joo Canpack Sdn Bhd Kian Joo Canpack (Shah Alam)
Sdn Bhd KJO Systems Sdn Bhd
Corrugated fibre board carton manufacturer Can manufacturer Can manufacturer Can manufacturer Can manufacturer Can manufacturer Provision of contract packing services 2-piece aluminium beverage cans manufacturer 2-piece aluminium retortable can manufacturer Provision of contract packing services Provision of contract packing services Manufacture of packaging machinery
54.83 100.00 100.00
100.00 100.00 100.00
60.00
100.00 100.00 100.00 100.00
100.00
Associated Company of Kian
Joo Kian Joo-Visypak Sdn Bhd
Manufacture and supply of recyclable plastic
bottles
50.00
Subsidiary Companies of Box-Pak
Box-Pak (Vietnam) Co., Ltd Box-Pak (Hanoi) Co., Ltd Box-Pak (Johore) Sdn Bhd
Corrugated fibre board carton manufacturer Corrugated fibre board carton manufacturer Corrugated fibre board carton manufacturer
54.83 54.83 54.83
2.2 The nature of the transactions contemplated under the Proposed Renewal of Shareholders’ Mandate
The types of Recurrent Related Party Transactions to be covered by the Proposed Renewal of Shareholders’ Mandate relate principally to supplying of cartons, technical and engineering services to Related Parties, which are necessary for Kian Joo’s day to day operations and in the ordinary course of the Kian Joo Group’s businesses as mentioned above.
3
The
natu
re a
nd th
e co
ntra
ctin
g pa
rty in
volv
ed in
the
Rec
urre
nt R
elat
ed P
arty
Tra
nsac
tion
are
set o
ut b
elow
:
C
ompa
ny
Rel
ated
pa
rtie
s N
atur
e of
tr
ansa
ctio
n In
tere
sted
Dir
ecto
rs /
Maj
or S
hare
hold
ers a
nd
pers
ons c
onne
cted
to
them
Est
imat
ed a
ggre
gate
va
lue
of tr
ansa
ctio
n fr
om d
ate
of 5
4th
AG
M to
the
next
A
GM
dat
e *
Est
imat
ed v
alue
di
sclo
sed
in th
e pr
eced
ing
year
’s
circ
ular
Act
ual v
alue
tran
sact
ed
from
the
prev
ious
AG
M
up to
LPD
**
R
M’0
00
RM
’000
R
M’0
00
(a)
Kia
n Jo
o K
ian
Joo-
V
isyp
ak S
dn
Bhd
(“K
VP”
)
Tech
nica
l fee
s re
ceiv
ed in
resp
ect o
f te
chni
cal a
nd
engi
neer
ing
serv
ices
Dat
o’ A
ntho
ny S
ee T
eow
G
uan (1
) , Dat
o’ S
ee T
eow
C
huan
(2) , S
ee T
eow
Koo
n(3)
1,00
0 1,
000
63
(b)
Kia
n Jo
o G
roup
B
ox-P
ak G
roup
Pu
rcha
se o
f car
tons
D
ato’
Ant
hony
See
Teo
w
Gua
n (1) , S
ee T
eow
Koo
n(3) ,
See
Tiau
Kee
(4)
6,00
0 4,
000
4,05
8
TO
TA
L
7,00
0 5,
000
4,12
1
Not
es:
* Th
e va
lues
are
mer
ely
estim
ates
, inc
lude
s va
lue
for
tran
sact
ions
ent
ered
into
from
dat
e of
AG
M o
n 18
Jun
e 20
12 to
the
follo
wing
AG
M (i
.e. a
roun
d 18
Jun
e 20
13).
(1)
Dat
o’ A
ntho
ny S
ee T
eow
Gua
n is
both
dir
ecto
r an
d sh
areh
olde
r of
Kia
n Jo
o an
d Bo
x-Pa
k an
d di
rect
or o
f KVP
. Dat
o’ A
ntho
ny S
ee T
eow
Gua
n ha
s di
rect
sha
reho
ldin
gs o
f 0.1
4% (a
mou
ntin
g to
85,
500
shar
es) a
nd a
n ag
greg
ate
0.06
% in
dire
ct s
hare
hold
ings
in B
ox-P
ak th
roug
h hi
s sp
ouse
Dat
in
Foo
Kim
Fon
g an
d ch
ildre
n (a
mou
ntin
g to
37,
500
shar
es).
(2
) D
ato’
See
Teo
w C
huan
is a
dir
ecto
r and
shar
ehol
der o
f Kia
n Jo
o an
d di
rect
or o
f KVP
. He
has d
irec
t sha
reho
ldin
g in
Box
-Pak
. (3
) Se
e Te
ow K
oon
is a
dir
ecto
r and
shar
ehol
der o
f Kia
n Jo
o an
d a
dire
ctor
of B
ox-P
ak. H
e is
an
alte
rnat
e di
rect
or to
Dat
o’ S
ee T
eow
Chu
an in
KVP
. (4
) Se
e Ti
au K
ee is
a d
irec
tor a
nd sh
areh
olde
r of K
ian
Joo
and
a di
rect
or o
f Box
-Pak
.
**
The
actu
al v
alue
tran
sact
ed fr
om th
e pr
evio
us A
GM
on
28 A
pril
2011
up
to th
e LP
D o
n 30
Apr
il 20
12 d
id n
ot e
xcee
d th
e es
timat
ed v
alue
by
10%
or
mor
e.
Th
ere
wer
e no
out
stand
ing
amou
nts d
ue fr
om re
late
d pa
rtie
s und
er th
e Re
curr
ent R
elat
ed P
arty
Tra
nsac
tion
whic
h ex
ceed
ed th
e cr
edit
term
as a
t 31
Dec
embe
r 201
1.
4
The bases in determining the estimated value of the Recurrent Related Party Transactions are as follows:
(a) Technical Fees
The fee is determined based on the lower of: 3% of KVP’s turnover; or 50% of the net profit of KVP.
(b) Purchase of Cartons
Box-Pak Group is a member of the Kian Joo Group and has been a reliable supplier of carton boxes to the Group. The transactions are undertaken on terms not more favourable to the Related Party than those generally available to the public and are not detrimental to the minority shareholders.
The respective direct and indirect interests of Dato’ Anthony See Teow Guan, Dato’ See Teow Chuan, See Teow Koon and See Tiau Kee are set out in Section 5.
2.3 Review methods or procedures for Recurrent Related Party Transactions
The Group had established various methods and procedures to supplement existing internal procedures with third parties to ensure that Recurrent Related Party Transactions are undertaken on normal commercial terms, which are consistent with the Group’s usual business practices, and are on terms not more favourable than those extended to third parties/public and are not detrimental to the minority shareholders. (a) All Recurrent Related Party Transactions of value up to RM250,000 must be reviewed and
approved by the Group General Manager / Executive Director. For transactions of a value above RM250,000 and up to RM2,000,000, approval from the Exco Committee (which consists of all the Executive Directors and Group Financial Controller) is required. All transactions with values equal to or exceeding RM2,000,000 must be reviewed by the Audit Committee and approved by the Board.
(b) For Recurrent Related Party Transactions, a Register must be maintained by the Company
to record all such transactions pursuant to the Proposed Renewal of Shareholders’ Mandate for reporting purposes in the annual reports. At no time, should the value of these transactions deviate materially from the amount that has been approved by the shareholders pursuant to the Proposed Renewal of Shareholders’ Mandate.
(c) At least two (2) other contemporaneous transactions with unrelated third parties for similar
products/services and/or quantities will be used as comparison, wherever 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 produces/services and/or quantities.
In the event that quotation or comparative pricing from unrelated third parties cannot be obtained, the Audit Committee in its review of the Recurrent Related Party Transaction may, as it deems fit and whenever available, request for additional information pertaining to the transactions from independent sources or advisers;
(d) The annual internal audit plan shall incorporate a review of all Recurrent Related Party
Transactions entered into pursuant to the Proposed Renewal of Shareholders’ Mandate to ensure that relevant approvals have been obtained and review procedures are followed.
5
(e) The Board and the Audit Committee shall review the internal audit report to ascertain that the guidelines and procedures established to monitor Recurrent Related Party Transactions have been compiled with. If during the review, the Audit Committee is of the opinion that the guidelines and procedures are not sufficient to ensure that the Recurrent Related Party Transactions will be conducted on normal commercial terms in the ordinary course of business and are on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders or be disadvantageous to the Company, the Company will obtain a fresh shareholders’ mandate based on new guidelines and procedures.
(f) If a member of a Board or Audit Committee has an interest as the case may be, he must
abstain from any decision making of the Board or Audit Committee in respect of the said transactions.
(g) The transaction prices, terms and conditions shall be determined by market forces, under
similar commercial terms for transactions with third parties. In addition, additional quotations shall be obtained from third parties by the Company who will perform suppliers’ evaluations and ranking on the price, delivery, services and other terms and conditions before entering into such transactions.
As at 30 April 2012, the Audit Committee comprises the following members:
i) Rick Loh Lap Sang (Independent Non-Executive Director)
ii) Onn Kien Hoe (Independent Non-Executive Director) A vacancy in the audit committee resulting from the passing of Y.T.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah, the Chairman of the Company’s Audit Committee on 30 March 2012 remains to be filled as at 30 April 2012.
2.4 Statement by the Audit Committee
The Audit Committee has reviewed the terms of the Proposed Renewal of Shareholders’ Mandate and is satisfied that the procedures for Recurrent Related Party Transactions as set out in Section 2.3, as well as the annual reviews to be made by the Audit Committee in relation thereto, are sufficient to ensure that Recurrent Related Party Transactions will be made in accordance with the Group’s normal commercial terms and are 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 Group has in place adequate procedures and processes to monitor, track and identify Recurrent Related Party Transaction in a timely and orderly manner, and that these procedures and processes are reviewed annually.
The Audit Committee shall annually review the Recurrent Related Party Transactions and also review the established guidelines and procedures to ascertain that they have been complied. If during the review, the Audit Committee is of the opinion that the guidelines and procedures are not sufficient to ensure that the Recurrent Related Party Transactions will be conducted on normal commercial terms in the ordinary course of business and are on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders or be disadvantageous to the Company, the Company will obtain a fresh shareholders’ mandate based on new guidelines and procedures.
2.5 Disclosure in Annual Report
Disclosure will be made in the Company’s annual report pursuant to the Proposed Renewal of Shareholders’ Mandate and in accordance with applicable accounting standards and Section 4.1.5 of Practice Note 12/2001 of the Listing Requirements, which requires a breakdown of the aggregate value of the Recurrent Related Party Transactions made during the financial year, amongst others, based on the following information:
5
(e) The Board and the Audit Committee shall review the internal audit report to ascertain that the guidelines and procedures established to monitor Recurrent Related Party Transactions have been compiled with. If during the review, the Audit Committee is of the opinion that the guidelines and procedures are not sufficient to ensure that the Recurrent Related Party Transactions will be conducted on normal commercial terms in the ordinary course of business and are on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders or be disadvantageous to the Company, the Company will obtain a fresh shareholders’ mandate based on new guidelines and procedures.
(f) If a member of a Board or Audit Committee has an interest as the case may be, he must
abstain from any decision making of the Board or Audit Committee in respect of the said transactions.
(g) The transaction prices, terms and conditions shall be determined by market forces, under
similar commercial terms for transactions with third parties. In addition, additional quotations shall be obtained from third parties by the Company who will perform suppliers’ evaluations and ranking on the price, delivery, services and other terms and conditions before entering into such transactions.
As at 30 April 2012, the Audit Committee comprises the following members:
i) Rick Loh Lap Sang (Independent Non-Executive Director)
ii) Onn Kien Hoe (Independent Non-Executive Director) A vacancy in the audit committee resulting from the passing of Y.T.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah, the Chairman of the Company’s Audit Committee on 30 March 2012 remains to be filled as at 30 April 2012.
2.4 Statement by the Audit Committee
The Audit Committee has reviewed the terms of the Proposed Renewal of Shareholders’ Mandate and is satisfied that the procedures for Recurrent Related Party Transactions as set out in Section 2.3, as well as the annual reviews to be made by the Audit Committee in relation thereto, are sufficient to ensure that Recurrent Related Party Transactions will be made in accordance with the Group’s normal commercial terms and are 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 Group has in place adequate procedures and processes to monitor, track and identify Recurrent Related Party Transaction in a timely and orderly manner, and that these procedures and processes are reviewed annually.
The Audit Committee shall annually review the Recurrent Related Party Transactions and also review the established guidelines and procedures to ascertain that they have been complied. If during the review, the Audit Committee is of the opinion that the guidelines and procedures are not sufficient to ensure that the Recurrent Related Party Transactions will be conducted on normal commercial terms in the ordinary course of business and are on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders or be disadvantageous to the Company, the Company will obtain a fresh shareholders’ mandate based on new guidelines and procedures.
2.5 Disclosure in Annual Report
Disclosure will be made in the Company’s annual report pursuant to the Proposed Renewal of Shareholders’ Mandate and in accordance with applicable accounting standards and Section 4.1.5 of Practice Note 12/2001 of the Listing Requirements, which requires a breakdown of the aggregate value of the Recurrent Related Party Transactions made during the financial year, amongst others, based on the following information:
6
(a) the type of the Recurrent Related Party Transactions made; and (b) the names of the Related Parties involved in each type of the Recurrent Related Party
Transactions made and their relationship with the Company. 3. RATIONALE AND BENEFITS FOR THE PROPOSED RENEWAL OF SHAREHOLDERS’
MANDATE The rationales for the Proposed Renewal of Shareholder’s Mandate to Kian Joo are as follows:
(a) the Proposed Renewal of Shareholders’ Mandate will empower Kian Joo to enter into transactions with Related Parties which are necessary for the day-to-day operations of Kian Joo, undertaken on normal commercial terms which are on terms not more favourable to the Related Parties than those generally made available to the public and are not detrimental to the minority shareholders;
(b) the Proposed Renewal of Shareholders’ Mandate will substantially reduce the expenses
associated with convening of general meetings on an ad hoc basis and hence will reduce the expenses associated therewith; and
(c) the Recurrent Related Party Transactions entered into by Kian Joo are intended to meet business
needs at the best possible terms which will be of benefit to Kian Joo. Box-Pak has been a reliable supplier of carton boxes and Kian Joo is reimbursed for the technical advisory that it renders to KVP.
4. CONDITIONS OF THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE The Proposed Renewal of Shareholders’ Mandate is subject to the approval of the shareholders of Kian Joo at the forthcoming AGM.
5 INTEREST OF DIRECTORS AND PERSONS CONNECTED TO THEM
The direct and indirect interests of the interested Directors and persons connected to them as at 30 April 2012 are as follows:
No. of ordinary shares of RM0.25 each in Kian Joo Direct Indirect No of Shares % No of shares %
Directors Dato’ See Teow Chuan 15,055,023 3.39 12,654,897(a) 2.85 Dato’ Anthony See Teow Guan 5,263,292 1.18 7,964,367(b) 1.79 See Teow Koon 1,496,678 0.34 8,152,809(c) 1.84 See Tiau Kee 1,992,000 0.45 7,866,117(d) 1.77
Notes: (a) Deemed interest through (1) his shareholding in Kian Joo Holdings Sdn Bhd - in liquidation, (2) shares held
by his spouse Datin Seow Luan Eng and (3) his children See Chin Lam, See Chin Joo and See Siok Gee amounting to 12,654,897 shares, or 2.85%.
(b) Deemed interest through (1) his shareholding in Kian Joo Holdings Sdn Bhd - in liquidation, (2) shares held by his spouse Datin Foo Kim Fong and (3) his children Doreen See Wai Ching and Maggie See Wai Yen amounting to 7,964,367 shares or 1.79%.
(c) Deemed interest through (1) his shareholding in Kian Joo Holdings Sdn Bhd - in liquidation, and (2) his spouse Khor Get Kim amounting to 8,152,809 shares or 1.84%.
(d) Deemed interest through (1) his shareholding in Kian Joo Holdings Sdn Bhd - in liquidation, and (2) his spouse Lim Yoke Choo amounting to 7,866,117 shares or 1.77%.
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The above Directors (namely, Dato’ Anthony See Teow Guan, Dato’ See Teow Chuan, See Teow Koon and See Tiau Kee) and persons connected to them as mentioned above will abstain from voting on the Proposed Renewal of Shareholders’ Mandate in respect of their direct and indirect shareholdings in Kian Joo at the forthcoming AGM. The abovementioned interested Directors have undertaken to ensure person connected to them (as disclosed above) will abstain from voting in respect of their direct and indirect shareholdings in Kian Joo on the resolutions pertaining to the Proposed Renewal of Shareholders’ Mandate. The interested Directors have abstained and will continue to abstain from deliberating and voting in Board meetings in relation to the Proposed Renewal of Shareholders’ Mandate. Save as disclosed above, none of the other Directors, major shareholder of Kian Joo and persons connected to them have any interest, direct or indirect, in the Proposed Renewal of Shareholders’ Mandate.
6. DIRECTORS’ RECOMMENDATION
The Board (save for Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, See Teow Koon and See Tiau Kee), having taken into consideration all aspects of the Proposed Renewal of Shareholders’ Mandate, are of the opinion that the Proposed Renewal of Shareholders’ Mandate is fair and reasonable and is in the best interest of the Company and its shareholders. They (save for Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, See Teow Koon and See Tiau Kee) recommend that you vote in favour of the resolutions on the Proposed Renewal of Shareholders’ Mandate to be tabled at the forthcoming AGM.
7. AGM The AGM, the Notice of which is set out in the Annual Report 2011, will be held at the Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Monday, 18 June 2012 at 3.00 p.m. for consideration of relevant resolutions on the ordinary and special businesses of the Company including the Ordinary Resolution to give effect to the Proposed Renewal of Shareholders’ Mandate, and if thought fit, to pass the same resolutions. If you are unable to attend and vote in person at the AGM, you are requested to complete and return the Form of Proxy enclosed in the Annual Report 2011 in accordance with the instructions thereon as soon as possible and in the event so as to arrive at the Company’s Share Registrar Office at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time stipulated for holding the AGM.
8. FURTHER INFORMATION
Shareholders are requested to refer to the appendices for further information. Yours faithfully for and on behalf of the Board of KIAN JOO CAN FACTORY BERHAD Y.A.M. Tunku Naquiyuddin Ibni Almarhum Tuanku Ja’afar Independent Non-Executive Chairman
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The above Directors (namely, Dato’ Anthony See Teow Guan, Dato’ See Teow Chuan, See Teow Koon and See Tiau Kee) and persons connected to them as mentioned above will abstain from voting on the Proposed Renewal of Shareholders’ Mandate in respect of their direct and indirect shareholdings in Kian Joo at the forthcoming AGM. The abovementioned interested Directors have undertaken to ensure person connected to them (as disclosed above) will abstain from voting in respect of their direct and indirect shareholdings in Kian Joo on the resolutions pertaining to the Proposed Renewal of Shareholders’ Mandate. The interested Directors have abstained and will continue to abstain from deliberating and voting in Board meetings in relation to the Proposed Renewal of Shareholders’ Mandate. Save as disclosed above, none of the other Directors, major shareholder of Kian Joo and persons connected to them have any interest, direct or indirect, in the Proposed Renewal of Shareholders’ Mandate.
6. DIRECTORS’ RECOMMENDATION
The Board (save for Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, See Teow Koon and See Tiau Kee), having taken into consideration all aspects of the Proposed Renewal of Shareholders’ Mandate, are of the opinion that the Proposed Renewal of Shareholders’ Mandate is fair and reasonable and is in the best interest of the Company and its shareholders. They (save for Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, See Teow Koon and See Tiau Kee) recommend that you vote in favour of the resolutions on the Proposed Renewal of Shareholders’ Mandate to be tabled at the forthcoming AGM.
7. AGM The AGM, the Notice of which is set out in the Annual Report 2011, will be held at the Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Monday, 18 June 2012 at 3.00 p.m. for consideration of relevant resolutions on the ordinary and special businesses of the Company including the Ordinary Resolution to give effect to the Proposed Renewal of Shareholders’ Mandate, and if thought fit, to pass the same resolutions. If you are unable to attend and vote in person at the AGM, you are requested to complete and return the Form of Proxy enclosed in the Annual Report 2011 in accordance with the instructions thereon as soon as possible and in the event so as to arrive at the Company’s Share Registrar Office at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time stipulated for holding the AGM.
8. FURTHER INFORMATION
Shareholders are requested to refer to the appendices for further information. Yours faithfully for and on behalf of the Board of KIAN JOO CAN FACTORY BERHAD Y.A.M. Tunku Naquiyuddin Ibni Almarhum Tuanku Ja’afar Independent Non-Executive Chairman
APPENDIX 1
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FURTHER INFORMATION 1. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of Kian Joo has seen and approved this Circular. They collectively and individually accept full responsibility for the accuracy of the information contained herein. The Directors confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement in this Circular misleading.
2. MATERIAL LITIGATION
The Kian Joo Group is not engaged in any material litigation, claims or arbitration either as plaintiff or defendant and that the Directors have no knowledge of any proceedings pending or threatened against Kian Joo Group or of any fact likely to give rise to any proceeding which might affect the financial position or business of the Kian Joo Group.
3. MATERIAL CONTRACTS
There are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by Kian Joo and its subsidiaries within the two (2) years immediately preceding the date of this Circular save as disclosed as follows: (a) On 3 December 2010, the Group entered into a conditional letter of offer with VSIP Bac Ninh
Co. Ltd., the developer of VSIP Bac Ninh, to acquire a piece of leasehold industrial land in VSIP Bac Ninh, Bac Ninh Province, Vietnam, measuring approximately 25,762 square meters for a purchase consideration of USD1,623,006. This purchase consideration was funded by term loan from bank borrowing.
4. DOCUMENTS FOR INSPECTION
Copies of the following documents will be made available for inspection at the Registered Office of Kian Joo at Lot 10 Jalan Perusahaan 1, 68100 Batu Caves, Selangor Darul Ehsan, Malaysia during normal business hours from Monday to Friday (except public holidays) from the date of this Circular up to and including the date of the forthcoming AGM:
(a) the Memorandum and Articles of Association of Kian Joo;
(b) audited financial statements of Kian Joo Group for the past three (3) financial years ended
31 December 2011; and (c) the material contracts referred to in Section 3 above.
APPENDIX 2
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EXTRACT OF RESOLUTIONS TO BE TABLED AT THE 54TH AGM OF THE COMPANY As Special Business To consider and, if thought fit, to pass the following Ordinary Resolution: Ordinary Resolution 9 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature “THAT, subject always to the Listing Requirements of the Bursa Malaysia Securities Berhad, approval is hereby given to the Company and its subsidiaries to enter into or transact all recurrent related party transactions of a revenue and trading nature which are necessary for the day to day operations of the Company from time to time, the nature and the contracting parties are set out in a table under Section 2.2 of the Circular to Shareholders dated 25 May 2012, PROVIDED THAT (i) the transactions are in the ordinary course of business on an arm's length basis 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; and
(ii) disclosure of the aggregate value of the transactions conducted pursuant to this shareholders’ mandate during the financial year of the Company is made in the annual report by providing a breakdown of the aggregate value of the transactions, amongst others, based on the following information:-
(a) the type of transactions made; and (b) the names of the related parties involved in each type of transactions made and their
relationships with the Company and its subsidiaries. AND THAT such authority shall commence upon the passing of this resolution and shall continue to be in force until: (a) the conclusion of next AGM of the Company, at which time it will lapse, unless by a resolution
passed at the said AGM, the authority is renewed; (b) the expiration of the period within which the next AGM after the date is required to be held pursuant
to Section 143(1) of the Act but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act; or
(c) revoke or varied by resolution passed by the shareholders in general meeting, whichever is the
earlier. AND THAT authority be and is hereby given to the Directors of the Company to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.”