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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 you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused Part B and C of this Circular as they are prescribed as Exempt Circular pursuant to Practice Note 18/2004 of the Listing Requirements of Bursa Securities.
Bursa Securities 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 however arising from or in reliance upon the whole or any part of the contents of this Circular.
GUAN CHONG BERHAD(Company No. 646226-K)
(Incorporated in Malaysia under the Companies Act, 1965)
CIRCULAR TO THE SHAREHOLDERS IN RELATION TO
PART A
• PROPOSED RENEWAL OF EXISTING SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE;
• PROPOSED NEW SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE;
PART B
• PROPOSED TERMINATION OF THE EXISTING EMPLOYEES SHARE OPTION SCHEME OF THE COMPANY;
PART C
• PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
AND
EXTRACT OF THE NOTICE OF THE FOURTH ANNUAL GENERAL MEETING
The Notice of the Fourth General Meeting of the Company to be convened and held at Sri Ledang, 2nd Floor, Mutiara Hotel, Jalan Dato Sulaiman, Taman Century, K.B. No. 779, 80990 Johor Bahru, Johor on Thursday, 26 June 2008 at 11.00 a.m. or at adjournment thereof, together with the Proxy Form, are enclosed in the Annual Report 2007 of the Company.
The Proxy Form must be completed and lodged at the Company’s Registered Office, at No. 8 (1st Floor), Jalan Pesta 1/1, Taman Tun Dr. Ismail 1, Jalan Bakri, 84000 Muar, Johor, not less than forty-eight (48) hours before the time stipulated for holding the meeting or any adjournment thereof. The lodging of the Proxy Form will not preclude you from attending and voting in person at the meeting should you subsequently decide to do so.
This Circular is dated 4 June 2008
i
DEFINITIONS
Unless otherwise indicated the following abbreviations shall apply throughout this Circular:-
Act : Companies Act, 1965 or any statutory modification, amendment or re-enactment thereof for the time being in force
AGM : Annual General Meeting to be convened by GCB on 26 June 2008
Board or : The Board of Directors of the CompanyBoard of Directors
Bursa Securities : Bursa Malaysia Securities Berhad
Bye-laws : The rules, terms and conditions of the Scheme (as may be amended, varied or supplemented from time to time in accordance with Bye-law 22 under the ESOS)
Code : Malaysian Code on Take-overs and Mergers, 1998, as amended from time to time and any re-enactment thereof
Directors : The Directors of GCB for the time being, and shall have the same meaning given in Section 4 of the Act and includes any person who is or was within the preceding 12 months of the date on which the terms of the Recurrent Related Party Transactions were agreed upon, a Director of GCB (or any other company which is its subsidiary or holding company or a subsidiary of its holding company)
EGM : Extraordinary General Meeting
Eligible Employee : An Employee who is designated in writing by the Option Committee to be an Eligible Employee described in Bye-Laws 5, and falling within any of the categories of Employees set out in Bye-law 6 under the ESOS
EM : Enrich Mix Sdn Bhd (593768-K)
Employee : A natural person who is employed by and on the payroll of any company in the GCB Group. Employees include Executive Directors and Non-Executive Directors described in Bye-law 5 under the ESOS
EPS : Earning per Share
ESOS : GCB Employee Share Option Scheme
Executive Director : A natural person who holds a directorship in a full time executive capacity in the GCB Group and is on the payroll of the GCB Group
FYE : Financial year ended 31 December
GCB or the Company : Guan Chong Berhad (646226-K)
GCB Group or Group : GCB and its subsidiaries, collectively
GCB Share(s) : Ordinary shares of RM0.25 each in GCBor Share(s)
GCBA : GCB America, Inc. (98-0462084)
GCBF : GCB Foods Sdn Bhd (746441-K)
GCBM : GCB Marketing Sdn Bhd (776543-V)
GCBO : GCB Oversea Holdings Sdn Bhd (797889-U)
GCC : Guan Chong Cocoa Manufacturer Sdn Bhd (133057-U)
GCT : Guan Chong Trading Sdn Bhd (124042-P)
Grantee : An Eligible Employee who has accepted an Offer in the manner included in Bye-law 8 under the ESOS
Listing Requirements : Listing Requirements of Bursa Securities
Major Shareholder : Includes any person who is or was, within the preceding 6 months of the date on which the terms of the Recurrent Related Party Transactions were agreed upon, a major shareholder of GCB or any other company which is our subsidiary or holding company.
A major shareholder means a person who has an interest or interests in one or more voting shares in GCB and the nominal amount of those Shares, or the aggregate of the nominal amount of those Shares, is:-
ii
DEFINITIONS (cont’d)
(i) equal to or more than 10% of the aggregate of the nominal amounts of all voting shares in GCB; or
(ii) equal to or more than 5% of the aggregate of the nominal amounts of all voting shares GCB where such person is the largest shareholder of GCB.
For the purpose of this definition, “interest in shares” shall have the meaning given in Section 6A of the Act
Mandate Period : The mandate period for the Proposed Renewal of Shareholders’ Mandate commencing from the date of the AGM until:-
(i) the conclusion of the next annual general meeting of GCB following the general meeting at which the resolution for such mandate has been passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;
(ii) the expiration of the period within which the annual general meeting of GCB after the date it 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
(iii) revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is the earlier
NA : Net assets
Offer : A written offer made by the Option Committee to an Eligible Employee in the manner indicated in Bye-law 7 under the ESOS
Option : The rights of a Grantee to subscribe for one (1) new Share pursuant to the contract constituted by acceptance by the Grantee in the manner provided in Bye-law 8 of an Offer made to such Grantee by the Option Committee pursuant to Bye-law 7 under the ESOS
Option Committee : The committee comprising Directors and/or senior management personnel appointed by the Board to administer the Scheme
Proposals : Proposal Amendment; Proposed New Shareholders’ Mandate; Proposed Renewal of Shareholders’ Mandate; and Proposed Termination, collectively
Proposed Amendment : The proposed amendments to the Articles of Association of the Company
Proposed New : The proposed new shareholders’ mandate for additional Recurrent Related PartyShareholders’ Mandate Transactions to be entered into by the GCB Group during the Mandate Period
Proposed Renewal : The proposed renewal of existing shareholders’ mandate for Recurrent Relatedof Shareholders’ Party Transactions to be entered into by the GCB Group during the MandateMandate Period
Proposed Termination : The proposed termination of the existing ESOS effective from 30 June 2008
Recurrent Related : Recurrent related party transactions of a revenue or trading nature which areParty Transactions necessary for the day to day operations of the GCB Group
Registered Office : No. 8 (1st Floor), Jalan Pesta 1/1, Taman Tun Dr. Ismail 1, Jalan Bakri, 84000 Muar, Johor
Related Party(ies) : Director(s), Major Shareholder(s) or person(s) connected with such Director(s) or Major Shareholder(s)
Related Party : Transaction(s) entered into by GCB or its subsidiaries which involves the interest,Transactions direct or indirect, of a Related Party
RM and sen : Ringgit Malaysia and sen respectively
SC : Securities Commission
Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporation.
TABLE OF CONTENTS
DIRECTORS’ LETTER TO THE SHAREHOLDERS OF GCB CONTAINING:- Page
1. INTRODUCTION 1-2
PART A
2. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED NEW SHAREHOLDERS’ MANDATE
2.1 PROVISIONS UNDER THE LISTING REQUIREMENTS 3
2.2 THE RECURRENT RELATED PARTY TRANSACTIONS
2.2.1 Background information of GCB Group 4 2.2.2 Classes and nature of the Recurrent Related Party Transactions 4 2.2.3 Proposed Renewal of Shareholders’ Mandate 5-6 2.2.4 Proposed New Shareholders’ Mandate 7 2.2.5 Rationale for the Proposed Renewal of Shareholder’s Mandate and Proposed New Shareholders’ Mandate 8 2.2.6 Benefits of the Recurrent Related Party Transactions 8 2.2.7 Effects of the Proposed Renewal of Shareholder’s Mandate and Proposed New Shareholders’ Mandate 8 2.2.8 Basis of the estimates 9 2.2.9 Review procedures and disclosure of the Recurrent Related Party Transactions 9 2.2.10 Statement by the Audit Committee 9
2.3 CONDITIONS FOR THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND THE PROPOSED NEW SHAREHOLDERS’MANDATE 10
2.4 INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM 10
PART B
3. PROPOSED TERMINATION
3.1 DETAILS OF THE PROPOSED TERMINATION 10-11
3.2 RATIONALE FOR THE PROPOSED TERMINATION 11
3.3 EFFECTS OF THE PROPOSED TERMINATION 11
3.4 APPROVAL REQUIRED 11
3.5 INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM 11-12
PART C
4. PROPOSED AMENDMENT
4.1 DETAILS OF THE PROPOSED AMENDMENT 12
4.2 RATIONALE FOR THE PROPOSED AMENDMENT 12
4.3 EFFECT OF THE PROPOSED AMENDMENT 12
4.4 APPROVAL REQUIRED 12
4.5 INTEREST OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM 12
5. DIRECTORS’ RECOMMENDATION 12
6. AGM 12-13
APPENDICES
APPENDIX I - FURTHER INFORMATION 14
APPENDIX II - PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION 15-16
APPENDIX III - EXTRACT OF THE NOTICE OF THE FOURTH ANNUAL GENERAL MEETING 17-18
iii
1
GUAN CHONG BERHAD(Company No. 646226-K)
(Incorporated in Malaysia under the Companies Act, 1965)
RegisteredOffice:- 8 (1st Floor), Jalan Pesta 1/1 Taman Tun Dr. Ismail 1, Jalan Bakri 84000 Muar Johor
4 June 2008
Board of Directors:-
YBhg Dato Dr. Mohamad Musa Bin Md. Jamil (Executive Chairman)Tay Hoe Lian (Managing Director)Tay How Sik @ Tay How Sick (Executive Director)Hia Cheng (Executive Director)Tay Puay Chuan (Independent Non-Executive Director) YBhg Mej Jen Dato Pahlawan Amirudin Mahmud Bin Aladad Khan (Retired) (Independent Non-Executive Director) Tey Chi @ Tay Chin Chuan (JP) (Alternate Director to Tay Hoe Lian) Tay How Yeh (Alternate Director to Tay How Sik @ Tay How Sick)
To: The Shareholders of Guan Chong Berhad
Dear Sir/Madam
GUAN CHONG BERHAD (“GCB” or the “Company”)
• PROPOSED RENEWAL OF EXISTING SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE
• PROPOSED NEW SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE
• PROPOSED TERMINATION OF THE EXISTING ESOS
• PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
1 INTRODUCTION
During the last AGM on 22 June 2007, the Company had obtained its shareholders’ mandate for the GCB Group to enter into Recurrent Related Party Transaction which are necessary for the GCB Group’s day-to-day operations and which are in the ordinary course of business. The said shareholders’ mandate shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM of the Company unless approval for its renewal is obtained from the shareholders of the Company at the AGM.
The Board of Directors had on 23 May 2008 announced to Bursa Securities its intention to seek approval of shareholders to:-
(i) renew the existing shareholders’ mandate for Recurrent Related Party Transactions to be entered into by the GCB Group from the AGM to the next AGM;
2
(ii) obtain new shareholders’ mandate for additional Recurrent Related Party Transactions to be entered into by the GCB Group from the AGM to the next AGM;
(iii) terminate the existing ESOS of the Company with effective from 30 June 2008;
(iv) amend the existing Articles of Association of the Company;
The purpose of this Circular is to provide you with relevant information on the Proposals, to set out your Board’s recommendation and to seek your approval for the resolutions to be tabled at the forthcoming AGM of the Company. An extract of Notice of the Fourth AGM, is set out in this Circular. The Proxy Form is enclosed in the Annual Report 2007 of the Company.
SHAREHOLDERS ARE ADVISED TO READ THE CONTENTS AND APPENDICES OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS AT THE FORTHCOMING AGM OF THE COMPANY.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
3
PART A
2. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED NEW SHAREHOLDERS’ MANDATE
2.1 Provisions under the Listing Requirements
Pursuant to Paragraph 10.09 of the Listing Requirements, listed issuers may seek its shareholders’ mandate in respect of the Recurrent Related Party Transactions, which are necessary for the company’s day-to-day operations subject to, inter-alia, the following:-
(i) 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;
(ii) 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:-
(a) the consideration, value of assets, capital outlay or costs of the aggregated recurrent transactions is equal to or exceeds RM1 million; or
(b) any one of the percentage ratios of such aggregated recurrent transactions is equal to or exceeds 1%;
whichever is higher;
(iii) the issue of a circular to shareholders for the shareholders’ mandate containing information as specified in the Listing Requirements; and
(iv) in a meeting to obtain shareholders’ mandate, the interested director, interested major shareholder or interested person 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.
In order to comply with Paragraph 10.09 of the Listing Requirements, the Board of Directors hereby seeks its shareholders’ approval for the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate (as set out in Section 2.2.3 of this Circular). These Recurrent Related Party Transactions are in the ordinary course of business with the Related Parties are in the ordinary course of business and are on terms which are not more favourable to the Related Parties involved than generally available to the public and are not detrimental to the minority shareholders of GCB.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
2.2 THE RECURRENT RELATED PARTY TRANSACTIONS
2.2.1 Background information of the GCB Group
GCB is principally an investment holding company whilst the principal activities of its subsidiaries, all of which were incorporated in Malaysia, are as follows:-
Effective Equity Subsidiary Interest (%) Principal Activities
GCC 100.0 Producing cocoa-derived food ingredients
GCT 100.0 Buying and selling of cocoa beans
EM 51.0 Producing blended cocoa-derived food ingredients
GCBA 100.0 Purchasing and distribution of cocoa-derived food ingredients
GCBF 94.0 Manufacturing, marketing and promotion of cocoa related products
GCBM 94.0 Marketing and promotion of activities of chocolate related products and cocoa confectioneries
GCBO 100.0 Investment holding
The core business of GCB is in the manufacturing of high quality cocoa-derived food ingredients, namely cocoa liquor, cocoa butter, cocoa cake and cocoa powder and cocoa related products, and supported by trading activities of such products.
2.2.2 Classes and Nature of the Recurrent Related Party Transactions
The Recurrent Related Party Transactions are principally in respect of the following:-
(a) Category I - Sales to Related Parties
The Related Parties, namely SMC Food 21 Pte Ltd (“SMC”) act as indirect distribution channel of the GCB Group in Japan (i.e. the GCB Group will sell its products to SMC who will then sell these products to sub-distributors or end users in Japan). Products sold by the GCB Group include cocoa powder, cocoa liquor and cocoa butter.
SMC is a private limited company incorporated in Singapore with the core business as producer of blended food ingredients. The products of the GCB Group constitute only part of the range of products sold by SMC.
(b) Category II - Purchases from Related Parties
The purchases from Related Parties, namely SMC are mainly raw sugar, which are used for the manufacturing activities of the GCB Group as noted in Section 2.2.1 above.
5
2.2.
3 P
rop
ose
d R
enew
al o
f S
har
eho
lder
s’ M
and
ate
The
Pro
pose
d R
enew
al o
f Sha
reho
lder
s’ M
anda
te e
ncom
pass
es R
ecur
rent
Rel
ated
Par
ty T
rans
actio
ns a
s se
t out
bel
ow:-
CA
TE
GO
RY
I -
RE
CU
RR
EN
T R
EL
AT
ED
PA
RT
Y T
RA
NS
AC
TIO
NS
INV
OLV
ING
SA
LE
S T
O R
EL
AT
ED
PA
RT
IES
Val
ue o
f Tra
nsac
tions
S
hare
hold
ings
of
Inte
rest
ed D
irect
ors/
M
ajor
Sha
reho
lder
s
C
ompa
nies
N
atur
e
Est
imat
ed v
alue
M
ajor
Sha
reho
lder
s an
d/or
per
sons
Rel
ated
Par
ty
in th
e
of th
e
A
ctua
l for
du
ring
the
an
d/or
per
sons
co
nnec
ted
to th
em
N
o P
rinci
pal A
ctiv
ities
G
CB
Gro
up
tran
sact
ions
FY
E 2
007
Man
date
Per
iod
conn
ecte
d to
them
in
Rel
ated
Par
ty
R
M (
‘000
) R
M (
‘000
)
1
SM
C
GC
C
Sal
e of
5,84
5 16
,000
Che
ng L
iang
Chy
e*
49%
P
rodu
cing
ble
nded
coco
a po
wde
r,
Che
ng L
iang
Khe
ng*
49%
fo
od in
gred
ient
s
coco
a liq
uor
an
d
coco
a bu
tter
T
OTA
L
5,84
5 16
,000
Non
e of
the
Rel
ated
Par
ties
as s
et o
ut in
Cat
egor
ies
I and
II h
as a
ny s
hare
hold
ings
, dire
ct o
r in
dire
ct in
GC
B.
Ab
bre
viat
ion
* H
olds
a D
irect
orsh
ip a
nd e
quity
inte
rest
in th
e co
mpa
ny w
hich
is a
Rel
ated
Par
ty.
Nat
ure
of
the
Rel
atio
nsh
ips
(i)
Che
ng L
iang
Chy
e an
d C
heng
Lia
ng K
heng
are
bro
ther
s an
d th
e D
irect
ors
of E
M.
(ii)
Che
ng L
iang
Chy
e is
the
Man
agin
g D
irect
or a
nd S
ubst
antia
l Sha
reho
lder
of S
MC
.
(iii)
Che
ng L
iang
Khe
ng is
the
Dire
ctor
and
Sub
stan
tial S
hare
hold
er o
f SM
C.
6
CA
TE
GO
RY
II -
RE
CU
RR
EN
T R
EL
AT
ED
PA
RT
Y T
RA
NS
AC
TIO
NS
INV
OLV
ING
PU
RC
HA
SE
S F
RO
M R
EL
AT
ED
PA
RT
IES
Val
ue o
f Tra
nsac
tions
S
hare
hold
ings
of
Inte
rest
ed D
irect
ors/
M
ajor
Sha
reho
lder
s
C
ompa
nies
N
atur
e
Est
imat
ed v
alue
M
ajor
Sha
reho
lder
s an
d/or
per
sons
Rel
ated
Par
ty
in th
e
of th
e
A
ctua
l for
du
ring
the
an
d/or
per
sons
co
nnec
ted
to th
em
N
o P
rinci
pal A
ctiv
ities
G
CB
Gro
up
tran
sact
ions
FY
E 2
007
Man
date
Per
iod
conn
ecte
d to
them
in
Rel
ated
Par
ty
R
M (
‘000
) R
M (
‘000
)
1
SM
C
EM
P
urch
ase
6,81
0 15
,000
Che
ng L
iang
Chy
e*
49%
P
rodu
cing
ble
nded
of s
ugar
C
heng
Lia
ng K
heng
* 49
%
food
ingr
edie
nts
T
OTA
L
6,81
0 15
,000
G
RA
NT
12,6
55
31,0
00
TO
TAL
FO
R
CA
TE
GO
RIE
S
I AN
D II
Non
e of
the
Rel
ated
Par
ties
as s
et o
ut in
Cat
egor
ies
I and
II h
as a
ny s
hare
hold
ings
, dire
ct o
r in
dire
ct in
GC
B.
Ab
bre
viat
ion
* H
olds
a D
irect
orsh
ip a
nd e
quity
inte
rest
in th
e co
mpa
ny w
hich
is a
Rel
ated
Par
ty.
Nat
ure
of
the
Rel
atio
nsh
ips
(i)
Che
ng L
iang
Chy
e an
d C
heng
Lia
ng K
heng
are
bro
ther
s an
d th
e D
irect
ors
of E
M.
(ii)
Che
ng L
iang
Chy
e is
the
Man
agin
g D
irect
or a
nd S
ubst
antia
l Sha
reho
lder
of S
MC
.
(iii)
Che
ng L
iang
Khe
ng is
the
Dire
ctor
and
Sub
stan
tial S
hare
hold
er o
f SM
C.
7
2.2.
4 P
rop
ose
d N
ew S
har
eho
lder
s’ M
and
ate
The
Pro
pose
d N
ew S
hare
hold
ers’
Man
date
enc
ompa
sses
Rec
urre
nt R
elat
ed P
arty
Tra
nsac
tions
as
set o
ut b
elow
:-
CA
TE
GO
RY
I -
RE
CU
RR
EN
T R
EL
AT
ED
PA
RT
Y T
RA
NS
AC
TIO
NS
INV
OLV
ING
SA
LE
S T
O R
EL
AT
ED
PA
RT
IES
Val
ue o
f Tra
nsac
tions
S
hare
hold
ings
of
Inte
rest
ed D
irect
ors/
M
ajor
Sha
reho
lder
s
C
ompa
nies
N
atur
e
E
stim
ated
val
ue
Maj
or S
hare
hold
ers
and/
or p
erso
ns
R
elat
ed P
arty
in
the
of
the
durin
g th
e
an
d/or
per
sons
co
nnec
ted
to th
em
N
o P
rinci
pal A
ctiv
ities
G
CB
Gro
up
tran
sact
ions
Man
date
Per
iod
conn
ecte
d to
them
in
Rel
ated
Par
ty
R
M (
‘000
)
1
SM
C
EM
S
ale
of
10
,000
C
heng
Lia
ng C
hye*
49
%
Pro
duci
ng b
lend
ed
bl
ende
d
Che
ng L
iang
Khe
ng*
49%
fo
od in
gred
ient
s
coco
a de
rived
fo
od
ingr
edie
nts
Non
e of
the
Rel
ated
Par
ties
as s
et o
ut in
Cat
egor
ies
I and
II h
as a
ny s
hare
hold
ings
, dire
ct o
r in
dire
ct in
GC
B.
Ab
bre
viat
ion
* H
olds
a D
irect
orsh
ip a
nd e
quity
inte
rest
in th
e co
mpa
ny w
hich
is a
Rel
ated
Par
ty.
Nat
ure
of
the
Rel
atio
nsh
ips
(i)
Che
ng L
iang
Chy
e an
d C
heng
Lia
ng K
heng
are
bro
ther
s an
d th
e D
irect
ors
of E
M.
(ii)
Che
ng L
iang
Chy
e is
the
Man
agin
g D
irect
or a
nd S
ubst
antia
l Sha
reho
lder
of S
MC
.
(iii)
Che
ng L
iang
Khe
ng is
the
Dire
ctor
and
Sub
stan
tial S
hare
hold
er o
f SM
C.
8
2.2.5 Rationale for the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate
The Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate will enable the GCB Group to continue to carry out recurrent transactions necessary for the Group’s day-to-day operations and enhance the Group’s ability to pursue business opportunities which are time-sensitive in nature in a more expeditious manner. They will eliminate the need to announce and convene separate general meetings from time to time to seek shareholders’ approval as and when potential recurrent transactions with a Related Party arise. This will substantially reduce expenses associated with the convening of such meetings on an ad hoc basis, improve administrative efficiency and allow human resources and time to be channeled towards attaining other corporate objectives and opportunities.
Further, the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate are intended to facilitate transactions entered and to be entered into in the ordinary course of business of the GCB Group which are transacted from time to time with the Related Parties which are carried out at arm’s length on the Group’s normal commercial terms and are not prejudicial to the interest of the shareholders of GCB 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 GCB.
2.2.6 BenefitsoftheRecurrentRelatedPartyTransactions
The benefits of the Recurrent Related Party Transactions to the GCB Group are as follows:-
(i) The Recurrent Related Party Transactions to be entered into by the GCB Group are all in the ordinary course of business and intended to meet the business needs of the GCB Group at the best possible terms so as to achieve synergistic benefits within the GCB Group. As such, it is anticipated that the Recurrent Related Party Transactions would occur on a frequent and recurrent basis;
(ii) The Related Parties, who have established the extensive network in Japan, are the distributors of the products of the GCB Group. The GCB Group would be able to reduce its marketing costs as well as capitalize on the extensive network of the Related Parties as its direct and indirect distribution channels to market the Group’s products; and
(iii) Where the Recurrent Related Party Transactions involve the supply of goods from the Related Parties, the GCB Group is expected to benefit in terms of costs effectiveness and administrative efficiency in its procurement process. For instance, the GCB Group does not keep a high level of inventories and when there is an urgent need for certain raw materials from the Related Parties on an ad hoc basis, it can procure these raw materials promptly which will reduce the stock holding cost and eventually improve the profitability of the GCB Group.
2.2.7 Effects of the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate
The Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate will not have any effects on the issued and paid-up share capital and the shareholding of the substantial shareholders of GCB.
The Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate will not have any material effect on the consolidated NA and the consolidated earnings of GCB.
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2.2.8 Basis of estimates
The abovementioned estimated value in respect of each transaction referred to above are based on prevailing prices obtained from the Related Parties which are reasonably market-competitive prices and are derived from the sums incurred or received during the past year, based on the normal level of transactions entered into by the GCB Group. The estimated amounts are further based on the assumptions that current level of operations will continue and all external conditions remain constant.
2.2.9 Review Procedures and Disclosure of the Recurrent Related Party Transactions
The Directors of GCB propose the following measures to ensure the Recurrent Related Party Transactions are undertaken on an arm’s length basis and on normal commercial terms consistent with the Group’s usual business practices and policies, which are not more favourable to the Related Parties than those extended to third parties or public and are not prejudicial to the minority shareholders:-
(i) The interested Directors and Major Shareholders will be informed and briefed by the GCB Group of the procedures put in place by the management of the GCB Group in relation to transactions to be entered into by the GCB Group. The interested Directors and Major Shareholders are required to declare and disclose to the Board in a timely manner on transactions in which they are deemed interested;
(ii) Records pertaining to Recurrent Related Party Transactions will be analysed and monitored by the management of the GCB Group. The status of these Recurrent Related Party Transactions will be reported by the management of the GCB Group to the Audit Committee on a quarterly basis;
(iii) The management of the GCB Group will ensure that transactions are made based on terms that not more favourable to the Related Parties than those generally available to the public by considering the prevailing market prices, commercial terms of transactions with third parties, business practices and policies and on terms which are generally in line with the industry norms.;
(iv) During the course of the annual financial audit, an audit will be conducted on the transactions with the Related Parties entered into pursuant to the Proposed Renewal of Shareholders’ Mandate to ensure that such transactions are undertaken at an arm’s length, on commercial terms which are not more favourable to the Related Parties than those generally available to the public and not detrimental to our minority shareholders and are in the best interests of the GCB Group;
(v) The internal auditors shall review and report to the Board and the Audit Committee at least on a yearly basis on the effectiveness of the control procedures established by the management to monitor the Recurrent Related Parties Transactions and provide assurance that these transactions are undertaken in accordance with the management control procedures put in for the GCB Group; and
(vi) The Directors having interests in any Recurrent Related Party Transactions shall abstain from Board deliberations and shall ensure that the Major Shareholders and persons connected with them are also abstained from voting on the resolution approving the transactions.
2.2.10 Statement by the Audit Committee
The Audit Committee of the Company has seen and reviewed the procedures mentioned in Section 2.2.8 above and is satisfied that the abovementioned review procedures, are appropriate to ensure that these Recurrent Related Party Transactions will be made at arm’s length and is in accordance with the GCB Group’s commercial terms with third parties, business practices and policies and on terms generally in line with the industry norms, and hence, are not prejudicial to the interests of the shareholders or disadvantageous to the GCB Group.
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2.3 CONDITIONS FOR THE PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND THE PROPOSED NEW SHAREHOLDERS’ MANDATE
The Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate are conditional upon approval being obtained from shareholders of GCB at the AGM.
The Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate being procured from the shareholders of GCB shall only continue to be in force until:-
(i) the conclusion of the AGM of GCB following the general meeting at which the resolutions for the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Madate have been passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or
(ii) the expiration of the period within which the AGM after the date it 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
(iii) revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is the earlier.
2.4 INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM
The interested Directors, if any will each abstain and will continue to abstain from all deliberations and voting on the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate in relation to the Recurrent Related Party Transactions at all Board Meetings.
The interested Major Shareholders, if any will abstain from voting in respect of their respective shareholdings, direct or indirect in GCB on the ordinary resolution approving the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate to be tabled at the AGM.
The interested Directors and Major Shareholders, if any will also undertake to ensure that persons connected to them will abstain from all deliberations and voting in respect of their respective shareholdings, direct and indirect in GCB on the ordinary resolution approving the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate to be tabled at the AGM.
Save as disclosed in Sections 2.2.3 and 2.2.4, none of the other Directors and/or Major Shareholders or persons connected to them has any interest, direct or indirect, in the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate.
3. PROPOSED TERMINATION
3.1 DETAILS OF THE PROPOSED TERMINATION
At the EGM held on 30 July 2004, the shareholders of GCB approved the establishment of an ESOS for its Eligible Employees and Directors, which came into effect on 5 April 2005. It is valid for a period of five (5) years expiring on 4 April 2010 and may be extended for a further of five (5) years with the approval of Shareholders of GCB.
On 1 January 2006, a new financial reporting standard, namely FRS 2, Share-based Payment, came into effect in Malaysia. FRS 2 specifies the financial reporting by an entity when it undertakes share-based payment transactions including:-
(i) Equity-settled share-based payment transactions, in which the entity receives goods and services as consideration for equity instrument of the entity (including shares or share options);
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(ii) Cash-settles share-based payment transactions, in which the entity acquires goods or services by incurring liabilities to the suppliers of those goods or services for amounts that are based on the price (or value) of the entity’s shares or other equity instruments of the entity; and
(iii) Transactions in which the entity receives or acquires goods or services and the terms of the arrangement provide either the entity or the supplier of those goods or services with a choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments.
Prior to the implementation of the FRS 2, an entity that grants options to its employees under an ESOS would not have to incur a charge in its income statement. However, with the implementation of the new FRS 2, an entity that grants options under an ESOS would have to reflect in its income statement the fair value of the options granted to its employees.
Since the initial grant on 5 April 2005, there are a total of 20,360,000 Options granted to the Eligible Employees and Directors. As at FYE2007, 12,216,000 Options have vested to the Eligible Employees and Directors. However, no Options have been granted under the ESOS for any person to take up any unissued ordinary shares of GCB.
3.2 RATIONALE FOR THE PROPOSED TERMINATION
When the ESOS was established on 5 April 2005, FRS 2 has not been implemented. With the adoption of FRS 2, GCB will have to recognise the fair value of the Options granted to its Eligible Employees and Directors as an expense in its income statement annually. The Board recognises that any Options to be further grant under the ESOS will affect the performance of the Company and has thus decided to undertake the Proposed Termination.
As at FYE2007, GCB had recognized an expense of RM240,248 in its consolidated income statement and the share options reserve is stood at RM720,744 since its initial grant on 5 April 2005.
On 23 May 2008, GCB announced that the Board has resolved to terminate the Existing ESOS of GCB effective 30 June 2008.
3.3 EFFECTS OF THE PROPOSED TERMINATION
The Proposed Termination will not have any financial effects on the share capital, NA, working capital, earnings and dividends or on the Major Shareholders’ and Directors’ shareholdings of the GCB Group.
3.4 APPROVAL REQUIRED
For the Proposed Termination, Bye-law 19.6 under the ESOS stipulates that the Company may terminate the ESOS prior to the expiry of its duration or tenure, subject to:-
(a) the consent from the Shareholders of the Company at a general meeting had obtained wherein at least a majority of the Shareholders present must have voted in favour of the Proposed Termination; and
(b) the written consent from all Option holders who have yet to exercise their Options, either in part or in whole, have been obtained.
3.5 INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM
The Directors namely, YBhg Dato Dr. Mohamad Musa Bin Md. Jamil, Tay Hoe Lian, Tay How Sik @ Tay How Sick, Hia Cheng, Tay Puay Chuan, Tey Chi @ Tay Chin Chuan (JP) (who is the Alternate Director to Tay Hoe Lian) and Tay How Yeh (who is the Alternate Director to Tay How Sik @ Tay How Sick), who have existing Options under the ESOS in their respective capacity, offered to them during the Initial Grant are deemed to have interests in the Proposed Termination. Accordingly, they have each abstained and will be continued to abstain from all deliberations and voting on the ordinary resolution pertaining to the Proposed Termination.
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Save for who have existing Options under the ESOS in their respective capacity, offered to them during the Initial Grant, the other Directors of the Company were not offered any Options under the ESOS.
4. PROPOSED AMENDMENT
4.1 DETAILS OF THE PROPOSED AMENDMENT Details of the proposed amendments to the Articles are set out in Appendix II of this Circular.
4.2 RATIONALE FOR THE PROPOSED AMENDMENT
The rationale for the Proposed Amendment is, inter alia:-
(i) to streamline the Articles with the recent amendments to the Act, which took effect on 15 August 2007;
(ii) to add clarity to the existing Articles, where necessary; and
(iii) to better facilitate the administration of the affairs of the Company.
4.3 EFFECTS OF THE PROPOSED AMENDMENT
The Proposed Amendment will not have any financial effects on the share capital, NA, working capital, earnings and dividends or on the Major Shareholders’ and Directors’ shareholdings of the GCB Group.
4.4 APPROVAL REQUIRED
The Proposed Amendment is conditional upon approval being obtained from shareholders of the Company at the forthcoming AGM.
4.5 INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM
None of the Directors or Major Shareholders and/or persons connected to them has any interest, direct or indirect, in the Proposed Amendment.
5. DIRECTORS’ RECOMMENDATION
The Board, having considered all aspects of the Proposed Renewal of Shareholders’ Mandate, the Proposed New Shareholders’ Mandate and the Proposed Amendment, is of the opinion that they are in the best interests of the GCB Group and its shareholders and accordingly, recommends that you vote in favour of the resolutions in respect of the Proposed Renewal of Shareholders’ Mandate, the Proposed New Shareholders’ Mandate and the Proposed Amendment to be tabled at the forthcoming AGM.
The Board, with the exception of YBhg Dato Dr. Mohamad Musa Bin Md. Jamil, Tay Hoe Lian, Tay How Sik @ Tay How Sick, Hia Cheng, Tay Puay Chuan, Tey Chi @ Tay Chin Chuan (JP) (who is the Alternate Director to Tay Hoe Lian) and Tay How Yeh (who is the Alternate Director to Tay How Sik @ Tay How Sick), having considered all aspects of the Proposed Termination and after careful deliberation, is of the opinion that the Proposed Termination is in the best interests of the GCB and accordingly, recommends that you vote in favour of the resolution in respect of the Proposed Termination to be tabled at the forthcoming AGM.
6. AGM
The AGM, the Notice of which is enclosed in the Annual Report 2007 of the Company and an extract of which is enclosed in this Circular, will be held at Sri Ledang, 2nd Floor, Mutiara Hotel, Jalan Dato Sulaiman, Taman Century, K.B. No. 779, 80990 Johor Bahru, Johor on Thursday, 26 June 2008 at 11:00 a.m. for the purpose of considering and if thought fit, passing the resolutions on the Proposals.
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If you are unable to attend and vote at the AGM, you are requested to complete, sign and return the enclosed Proxy Form, which is set out in the Annual Report 2007 of the Company, in accordance with the instructions contained therein so as to arrive at the Registered Office of the Company not later than forty-eight (48) hours before the time fixed for the AGM or any adjournment thereof.
The lodging of the Proxy Form will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so.
Yours faithfullyFor and on behalf of the Board of Directors ofGUAN CHONG BERHAD
YBHG DATO DR. MOHAMAD MUSA BIN MD. JAMILExecutive Chairman
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APPENDIX I - FURTHER INFORMATION
1. Directors’ responsibility statement
This Circular has been seen and approved by the Directors of GCB 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 other facts, the omission of which would make any statement herein misleading.
2. Material Contracts
Save as disclosed below, the GCB Group has not entered into any material contract, which are not contracts entered into in the ordinary course of business during the two (2) years immediately preceding the date of this Circular:-
a. A sale and purchase agreement dated 30 November 2006 entered into between GCT and Koko Malaysia Sdn Bhd (Receiver and Manager Appointed)(“KMSB”) for the acquisition of a piece of freehold industrial land measuring approximately 4.0469 hectares held under HS(D) 11035, Lot No. PT 1157, Mukim Teluk Bharu, Hilir Perak, Perak together with a factory building erected thereon and the plant and machinery for a total cash consideration of RM6,600,000.
b. A sale and purchase agreement dated 30 November 2006 entered into between GCT and KMSB for the acquisition of a piece of freehold land measuring approximately 1.113 hectares held under Parent Lot No. 4541, Mukim Teluk Bharu, Hilir Perak, Perak together with five (5) units of bungalow house for a total cash consideration of RM300,000.
c. A sale and purchase agreement dated 25 June 2007 entered into between GCC and EMC Enterprise Sdn. Bhd. For the disposal of a parcel of leasehold industrial land together with a factory building erected thereon for a total cash consideration of RM1,000,000.
3. Material litigation
Save as disclosed below, the GCB Group is not engaged in any litigation or arbitration, either as plaintiff or defendant which has a material effect on the financial position of the GCB Group, and the Directors of the Company have no knowledge of any proceedings pending or threatened or of any fact likely to give rise to any proceedings which might materially and adversely affect the financial position or business of the GCB Group:-
(i) The marine cargo insurance claim made by GCC against Malaysian Assurance Alliance Berhad (“MAA”) by GCC for the damaged suffered on a shipment of bagged cocoa shipped on the vessel “Pratiwi” from Pantolon, Palu Indonesia to Pasir Gudang, Johor sometime in July 2001 was dismissed by the High Court on 15 May 2006.
However, GCC had filed an appeal notice to the Court of Appeal on 9 June 2006. As at todate, the matter is still pending for hearing.
4. Documents for Inspection
The following documents (or copies thereof) are available for inspection at the Registered Office of GCB at 8 (1st Floor), Jalan Pesta 1/1, Taman Tun Dr. Ismail 1, Jalan Bakri, 84000 Muar, Johor during normal business hours from Monday to Friday (except for public holidays) from the date of this Circular up to and including the date of the forthcoming AGM:-
(i) The existing Memorandum and Articles of Association of the Company and the Proposed Amendment.
(ii) The audited consolidated financial statements of GCB for the FYE 2006 and FYE 2007.
(iii) The material contracts referred to in Section 2 above.
(iv) The writs of material litigation referred to in Section 3 above.
(v) The Bye-laws of the existing ESOS.
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APPENDIX II - PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The highlights of the proposed amendments to the Articles of Association (or “Articles”) of the Company are as follows:-
No.
1
2
Existing Articles
To amend and insert the following new definitions in the existing Article 2 - Definitions
To amend the existing Article 5 - Rights of preference shareholders
Proposed Amended/New Articles
“Deposited Security Shall have the same meaning given in Section 2 of the Central Depositories Act.”
“Market Days Any day between Mondays and Fridays which is not a market holiday or a Public Holiday. A day on which the Exchange is open for trading of securities.”
“Member or holder or registered holder or shareholder Unless otherwise expressed to the contrary, includes a Depositor who shall be treated as if he were a member pursuant to section 35 of the Securities Industry (Central Depository) Act but excludes the Central Depository in its capacity as a bare trustee member. Any person/persons for the time being holding shares in the Company and whose names appear in the Register of Members (except Bursa Malaysia Depository Nominees Sdn. Bhd.) including depositors whose names appear on the Record of Depositors but excluding Bursa Malaysia Depositors Nominees Sdn. Bhd. in its capacity as a bare trustee.”
“Securities Shall have the meaning given in Section 2 of the Capital Markets and Services Act 2007.”
“Securities laws The Securities Industry Act, 1983; the Securities Industry (Central Depositories) Act 1991; the Securities Commission Act 1993; and the Futures Industry Act 1993. The Capital Markets and Services Act 2007; and the Central Depositories Act.”
“Subject to the Act, any preference shares may with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time and the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders in relation to receiving notices, reports and audited accounts and attending general meetings of the Company. Preference shareholders shall also have the rights to vote at any meeting convened:-
(a) when the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months;
(b) on a proposal to reduce the Company’s share capital;
(c) on a proposal for the disposal of the whole of the Company’s property, business and undertaking;
(d) on a proposal that affects rights attached to the preference shares;
(e) on a proposal to wind up the Company; and
(f) during the winding up of the Company.
The rights attaching to shares of a class other than ordinary shares shall be expressly set out in these Articles or provided by the terms of issue of such shares.”
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[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
No.
3
4
Existing Articles
To amend the existing Article 92 (h) – When office of Director deemed vacant
To amend the existing Article 81 – Retirement ofDirectors
Proposed Amended/New Articles
“The office of a Director shall become vacant if the Director:-
(h) is absent from more than fifty percent (50%) of the total Board of Directors’ meetings held during a financial year;
For the purpose of subparagraph (h) above, if a Director is appointed after the commencement of a financial year, then only the Board of Directors’ meetings held after his appointment will be taken into account.”
“At the first annual general meeting of the Company, all the Directors shall retire from office, and at the annual general meeting in every subsequent year, one-third of the Directors for the time being or, if their number is not three or a multiple of three, then the number nearest to one-third shall retire from office and be eligible for re-election PROVIDED ALWAYS that all Directors except a Managing Director shall retire from office at least once every three (3) years but shall be eligible for re-election. A retiring Director shall retain office until the close of the meeting at which he retires. An election of directors shall take place each year.”
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APPENDIX III - EXTRACT OF THE NOTICE OF FOURTH ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that Fourth General Meeting of the Company will be held at Sri Ledang, 2nd Floor, Mutiara Hotel, Jalan Dato Sulaiman, Taman Century, K.B. No. 779, 80990 Johor Bahru, Johor on Thursday, 26 June 2008 at 11.00 a.m. for the purpose of considering and if thought fit, passing the following resolutions, with or without any modifications:-
ORDINARY RESOLUTION
• Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature and the Proposed New Shareholders’ Mandate for additional Recurrent Related Party Transactions of a Revenue or Trading Nature
“THAT pursuant to paragraph 10.09 of the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for the renewal of the shareholders’ mandate for the GCB Group to enter into and to give effect to specified recurrent related party transactions of a revenue or trading nature and with the Related Parties as stated in Section 2.2.3 of the Circular to Shareholders dated 4 June 2008, which are necessary for its day-to-day operations, to be entered into by the GCB Group on the basis that these transactions are entered into on terms which are not more favorable to the Related Parties involved than generally available to the public and are not detrimental to the minority shareholders of the Company (hereinafter referred to as the “Proposed Renewal of Shareholders’ Mandate”);
THAT pursuant to paragraph 10.09 of the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for the shareholders’ mandate for the GCB Group to enter into and to give effect to additional recurrent related party transactions of a revenue or trading nature and with the Related Parties as stated in Section 2.2.4 of the Circular to Shareholders dated 4 June 2008, which are necessary for its day-to-day operations, to be entered into by the GCB Group on the basis that these transactions are entered into on terms which are not more favorable to the Related Parties involved than generally available to the public and are not detrimental to the minority shareholders of the Company (hereinafter referred to as the “Proposed New Shareholders’ Mandate”);
THAT the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate are subject to annual renewal. In this respect, any authority conferred by the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate shall only continue to be in force until:-
(a) the conclusion of the annual general meeting of the Company following the general meeting at which the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or
(b) the expiration of the period within which the annual general meeting after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“the Act”) (but shall 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 a general meeting,
whichever is the earlier;
AND THAT the Directors of the Company and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing such documents as may be required) to give effect to the Proposed Renewal of Shareholders’ Mandate and the Proposed New Shareholders’ Mandate.”
ORDINARY RESOLUTION
• Proposed Termination of the Existing Employee Share Option Scheme
“THAT subject to the approvals being obtained from the relevant authorities and parties, approval be and is hereby given for the Company, to terminate its existing Employees’ Share Option Scheme effective 30 June 2008 (“Proposed Termination”).
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AND THAT the Directors of the Company be and are hereby authorised and empowered to do all such acts and things as they may consider necessary, expedient and/or appropriate with full powers to assent to any conditions, modifications, variations and/or amendments as may be required by the relevant authorities and to take all such steps and enter into all such agreements, arrangements and undertakings and to carry out any other matters as may be required to implement, complete and give full effect to the Proposed Termination.”
SPECIAL RESOLUTION
• Proposed Amendments to the Articles of Association of the Company
“THAT the Articles of Association of the Company be and are hereby amended in the manner as set out in Appendix II of the Circular to Shareholders dated 4 June 2008 (“Proposed Amendment”) AND THAT the Directors of the Company and Company Secretary be and are hereby authorized to sign, do and execute all relevant documents, acts and things as may be required for or in connection with and to give effect to the Proposed Amendment with full power to assent to any conditions, modifications, variations and/or amendments as they may consider necessary or expedient”
BY ORDER OF THE BOARD
Pang Kah Man (MIA 18831)Secretary
Muar, Johor 4 June 2008
Notes:-
1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. Tobevalid,theProxyFormdulycompletedmustbedepositedattheRegisteredOfficeoftheCompanysituated at 8 (1st Floor), Jalan Pesta 1/1, Taman Tun Dr. Ismail 1, Jalan Bakri, 84000 Muar, Johor not less than forty-eight (48) hours before the time for holding the meeting provided that in the event the member(s) duly executes the Proxy Form but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, provided always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s).
3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Act are complied with.
4. Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiesthe proportion of his holdings to be represented by each proxy.
5. If the appointor is a corporation, the proxy form must be executed under its common seal or under the handofanofficerorattorneydulyauthorised.
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