eita resources berhad

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 (“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
howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.
EITA RESOURCES BERHAD
(Company No. 398748-T)
(Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS
in relation to the
PROPOSED SHAREHOLDERS’ MANDATE FOR
RECURRENT RELATED PARTY TRANSACTIONS
OF A REVENUE OR TRADING NATURE
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The above proposal will be tabled as Special Business at the Sixteenth (“16 ”) Annual General Meeting (“AGM”) of
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EITA Resources Berhad (“EITA” or “the Company”) to be held at Mauna Lani B, 1 Floor, Holiday Inn Kuala Lumpur
Glenmarie, No. 1, Jalan Usahawan U1/8, 40250 Shah Alam, Selangor Darul Ehsan on Tuesday, 26 June 2012 at
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10.30 a.m. The Notice of the 16 AGM together with the Form of Proxy are enclosed in the Annual Report of the
Company which is dispatched together with this Circular.
The Form of Proxy should be completed and deposited at the Registered Office of the Company at Third Floor, No.
79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than fortyeight (48) hours before the time stipulated for holding the AGM or at any adjournment thereof. The lodgement of the
Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to
do so.
Last date and time for depositing the Form of Proxy
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Date and time of the 16 AGM
:
:
Sunday, 24 June 2012 at 10.30 a.m
Tuesday, 26 June 2012 at 10.30 a.m
This Circular is dated 4 June 2012
DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this Circular:
“Act”
The Companies Act, 1965 as amended from time to time
and any re-enactment thereof.
“AGM”
Annual General Meeting.
“Board”
The Board of Directors of EITA.
“2011 Annual Report”
Annual Report of EITA issued for the financial year ended
31 December 2011.
“Bursa Securities”
Bursa Malaysia Securities Berhad (635998-W)
“EITA” or “the Company”
EITA Resources Berhad (398748-T)
“EITA Group” or “Group”
EITA and its subsidiary companies, as defined in Section 5
of the Act.
“Listing Requirements”
Main Market Listing Requirements of Bursa Securities,
including any amendments thereto that may be made from
time to time.
“LPD”
The latest practicable date prior to the printing of this
Circular, being 16 May 2012
“Proposed Mandate for RRPT”
Proposed shareholders’ mandate for RRPT.
“Recurrent Related Party Transaction”
or “RRPT”
Related party transactions which are recurrent, of a revenue
or trading nature and which are necessary for the EITA
Group’s day-today operations.
“Related Party(ies)”
Director(s), major shareholder(s) or person(s) connected
with such director(s) or major shareholder(s), as defined
under Chapter 1, Part A, paragraph 1.01 of the Listing
Requirements.
“Related Party Transaction”
A transaction entered into by EITA or its subsidiaries which
involves the interest, direct or indirect of a Related Party.
“RM” and “Sen”
Ringgit Malaysia and Sen respectively.
“Share(s)”
Ordinary Share(s) of RM0.50 each in EITA.
Unless specifically referred to words denoting the singular shall include the plural and vice versa and
words denoting the masculine gender shall also include the feminine gender and vice versa.
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TABLE OF CONTENTS
LETTER FROM THE BOARD TO THE SHAREHOLDERS OF EITA RESOURCES BERHAD IN
RELATION TO THE PROPOSED MANDATE FOR RRPT
1.
INTRODUCTION ................................................................................................................................... 1
2.
DETAILS OF THE PROPOSED MANDATE FOR RRPT ...................................................................... 2
3.
AUDIT COMMITTEE STATEMENT ....................................................................................................... 6
4.
RATIONALE FOR AND THE BENEFITS OF THE PROPOSED MANDATE FOR RRPT ................... 6
5. APPROVAL REQUIRED FOR THE PROPOSED MANDATE FOR RRPT ……………………….….…..6
6.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS.............................................................. 7
7.
DIRECTORS' RECOMMENDATION ………………………………………………………………………...8
8.
AGM ....................................................................................................................................................... 8
9.
FURTHER INFORMATION.................................................................................................................... 8
APPENDIX I - FURTHER INFORMATION .................................................................................................. 9
EXTRACT OF RESOLUTION
Enclosed
THIS REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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EITA RESOURCES BERHAD
(Company No. 398748-T)
(Incorporated in Malaysia)
Registered Office
Third Floor, No. 79 (Room A),
Jalan SS21/60,
Damansara Utama,
47400 Petaling Jaya,
Selangor Darul Ehsan
4 June 2012
Board of Directors
Dato’ Siow Kim Lun (Independent Non-Executive Chairman)
Fu Wing Hoong (Group Managing Director)
Lim Joo Swee (Executive Director)
Chong Yoke Peng (Executive Director)
Lee Peng Sian (Executive Director)
Chia Mak Hooi (Non-Independent Non-Executive Director)
Chia Lik Khai (Non-Independent Non-Executive Director)
Tan Chuan Hock (Independent Non-Executive Director)
Chong Lee Chang (Independent Non-Executive Director)
Dear Shareholders,
PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS
OF A REVENUE OR TRADING NATURE
1.
INTRODUCTION
On 25 April 2012, the Directors had announced that the Company proposes to seek a mandate
for RRPT from the shareholders.
The purpose of this Circular is to provide shareholders with the details and information on the
Proposed Mandate for RRPT, to set out the recommendation made by the Board and to seek
your approval for the resolution pertaining to the Proposed Mandate for RRPT to be tabled at the
forthcoming AGM.
The Notice of the AGM is set out in the 2011 Annual Report of the Company, which is sent
together with this Circular.
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2.
DETAILS OF THE PROPOSED MANDATE FOR RRPT
2.1
Introduction
EITA is principally an investment holding company and provider of management services
to its subsidiaries. Through its operating subsidiaries, the Group focuses on three (3)
main sectors namely Electrical and Electronics (“E&E”) components and equipment,
Elevator and Busduct systems. Within these sectors, the business activities are in the
marketing and distribution of E&E components and equipment, design and manufacture
of Elevator and Busduct systems. In addition, the Group is also supported by other
revenue streams namely maintenance of Elevator systems and provision of electrical and
security system solutions as well as manufacture of E&E components and equipment
namely Centralised Dimming Systems, Ballasts and connectors for lighting systems.
Pursuant to Paragraph 10.09(2) of the Listing Requirements, a listed issuer may seek
shareholders’ mandate in respect of RRPT subject to the following:(a)
the transactions are in the ordinary course of business and are on terms not
more favourable to the related party than those generally available to the public;
(b)
the shareholders’ mandate is subject to annual renewal and disclosure is made
in the annual report of the aggregate value of transactions conducted pursuant to
the shareholders’ mandate during the financial year where the aggregate value is
equal to or more than the threshold prescribed under Paragraph 10.09 (1) of the
Listing Requirements;
(c)
issuing of Circular to shareholders;
(d)
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 to approve the
transactions. An interested director or interested major shareholder must ensure
that persons connected to him abstain from voting on the resolution approving
the transactions; and
(e)
the Company immediately announces to Bursa Securities when the actual value
of RRPT entered into by the Company, exceeds the estimated value of the RRPT
disclosed in the Circular by 10% or more and must include such information
prescribed by Bursa Securities in its announcement.
In this respect, any authority conferred by the Proposed Mandate for RRPT will take
effect from the date of passing of the ordinary resolution at the forthcoming AGM and
shall only continue to be in force until:(a)
the conclusion of the next AGM of the Company following the general meeting at
which such mandate was passed, at which time it will lapse, unless by a
resolution passed at the meeting, the authority is renewed;
(b)
the expiration of the period within which the next AGM after 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
(c)
revoked or varied by resolution passed by the shareholders in general meeting,
whichever is the earlier.
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2.2
Classes of Related Parties
The Proposed Mandate for RRPT will apply to the following Related Parties:
2.3
2.2.1
CTL Automation Sdn Bhd (“CTL”) is a company involved in repairing and
supplying elevator parts. The company directors and substantial shareholders
are Mr. Lim Joo Peng and Miss. Mong Hooi Woon who are the brother and
sister-in-law of the Company’s Executive Director, Mr. Lim Joo Swee respectively.
2.2.2
Platinum Victory Development Sdn. Bhd. ("PVD") is a company involved in
project and construction. The director and major shareholder is Mr. Gan Yu Chai
who is the brother-in-law of the Company’s Executive Director, Mr. Lee Peng
Sian.
Relationships of persons connected to EITA’s interested directors and/or interested
major shareholders
Name of person
connected
Interested directors
and/or interested
major shareholders
Nature of relationship with
interested directors and/or
interested major
shareholders
Lim Joo Peng
Lim Joo Swee
Brother
Mong Hooi Woon
Lim Joo Swee
Sister-in-law
Gan Yu Chai
Lee Peng Sian
Brother-in-law
Lim Joo Swee
Jasa Simbolik Sdn. Bhd
(“JS”)
Director and shareholder
Goh Kin Bee
JS
Director and shareholder
Goh Kin Bee
Lim Joo Swee
Spouse
THIS REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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2.4
Nature of RRPT and Estimated Value
Estimated value from the
date of the forthcoming AGM
to the date of next AGM *
(RM’000)
Nature of Transaction
Related Parties
Interested Directors(s), Major
Shareholder(s) and/or person(s)
connected with them
The EITA Group supplies
equipment and provides
installation, testing and
commissioning of electrical
works to PVD
Platinum Victory
Development Sdn. Bhd.
Lee Peng Sian and Gan Yu
Chai
1,300
The EITA Group purchases
elevator parts and services
from CTL
CTL Automation Sdn Bhd
Lim Joo Swee, Goh Kin Bee,
Lim Joo Peng, Mong Hooi Woon
and JS
1,100
Notes:
*
The above estimated value of transactions are based on the actual transacted value for the financial year ended 31 December 2011. However, the value of these
transactions may be subjected to changes in the current financial year in light of the changing economic and competitive environment. Announcement will be made
accordingly if the actual value exceeds the estimated value by 10% or more.
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2.5
Amount due and owing by the Related Parties
For the financial year ended 31 December 2011, there were no amount due and owing by
the Related Parties pursuant to the RRPT that exceeded the credit terms. Hence, there
was no late payment charges imposed on the Related Parties.
2.6
Review and disclosure procedures for RRPT
The EITA Group has established the following procedures to ensure that the RRPT are
undertaken on transaction prices at arm’s length, on normal commercial terms which are
not more favourable to the Related Party(ies) than those generally available to the public
and are not detrimental to the interest of the minority shareholders of EITA Group:a)
A list of related parties is circulated within the EITA Group on a quarterly basis.
b)
The pricing for services and products to be provided/supplied and/or received is
determined based on the Group’s business practices and policies to ensure that
prices and terms and conditions are based on competitive prices of similar
products and services in the open market.
c)
All RRPT of RM1.0 million and below in value for each transaction are subject to
the approval of any one of the Executive Directors of the Company. RRPT which
has the value more than RM1.0 million or 1% of any percentage ratios (as
defined under Paragraph 10.02(g) of the Listing Requirements) shall be reviewed
and approved by the Audit Committee and the Board before the transaction is
entered into.
d)
All the RRPT are tabled to the Audit Committee for review on a quarterly basis.
The Audit Committee will report its findings to the Board for further action if
during the quarterly review the Audit Committee is of the view that the guidelines
and procedures are not sufficient to ensure normal commercial terms and/or the
transaction is deemed detrimental to the minority shareholders.
e)
Where a member of the Board or Audit Committee has an interest (direct or
indirect) in the RRPT, as the case may be, he shall declare his interest in the
RRPT and abstain from participating in the decisions of the Board or Audit
Committee in respect of the said RRPT.
f)
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
products/services and/or quantities.
In the event that quotation or comparative pricing from unrelated third parties
cannot be obtained, the transactions price will be based on prevailing market
rates/prices that are agreed based on usual business practices and policies and
on terms which are generally in line with industry norms in order to ensure that
the RRPT is not detrimental to the Company or the Group.
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3.
AUDIT COMMITTEE STATEMENT
The Audit Committee of the Company has seen and reviewed the procedures set forth in Section
2.6 above and is of the opinion that the said procedures are sufficient to ensure that the RRPT
are carried out on terms not more favourable to the Related Parties than those generally available
to the public and are not detrimental to the interests of the minority shareholders.
The Audit Committee of the Company is also of the view that the Group has in place adequate
procedures and processes to monitor, track and identify the RRPT in a timely and orderly manner,
and such procedures and processes are reviewed by the Audit Committee and/or the
management staff on a quarterly basis or whenever the need arises.
4.
RATIONALE FOR AND THE BENEFITS OF THE PROPOSED MANDATE FOR RRPT
4.1
Rationale
The Proposed Mandate for RRPT will enhance the Group’s ability to pursue business
opportunities which are time-sensitive in nature, and will eliminate the need to announce
and convene separate general meetings on each occasion to seek shareholders’ prior
approval for the relevant company in the Group to enter into such transactions. This will
substantially reduce the expenses associated with the convening of general meetings on
an ad-hoc basis, improve administrative efficiency considerably, and allow manpower
resources and time to be channelled towards attaining other corporate objectives.
4.2
Benefits
Some of the benefits to be derived from the RRPT are:-
5.
a)
the Related Parties with whom the Group transacts are reliable suppliers of the
goods/services required for the Group’s business and therefore, risk of any
interruption to the Group’s day-to-day operations would be minimised;
b)
the prices of the RRPT are competitive and the terms are not more favourable to
the Related Parties than those generally available to the public; and
c)
prompt and better service can be obtained as the Related Parties have in-depth
understanding of the Group’s businesses and industries in which the Group
operates.
APPROVAL REQUIRED FOR THE PROPOSED MANDATE FOR RRPT
The Proposed Mandate for RRPT is conditional upon approval being obtained from the
shareholders EITA at the forthcoming AGM to be convened.
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6.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
Save as disclosed below, none of the other directors and/or major shareholders of EITA and
persons connected to them are interested in the Proposed Mandate for RRPT.
The direct and indirect interests of the interested directors and/or major shareholders and
persons connected to them in EITA as at 16 May 2012 are as follows:-
Indirect interest
Direct interest
Name/Company
No. of
shares
Interested Directors
Lim Joo Swee
Lee Peng Sian
Interested Major Shareholders
Jasa Simbolik Sdn. Bhd.
Goh Kin Bee
Interested Person connected to
Directors and/or Major
Shareholders
Lim Joo Peng
Mong Hooi Woon
Gan Yu Chai
%(1)
No. of
shares
%(1)
1,641,241
6,293,008
1.26 18,511,853^
4.84
-
14.24
-
11,893,574
6,618,279
9.15
5.09 13,534,815#
10.41
-
-
10,000
-
0.01
-
-
Notes:(1) The percentage shareholding is calculated based on 130,000,000 Shares in circulation.
^ Deemed interested by virtue of his spouse, Goh Kin Bee and his and his spouse’s shareholdings in Jasa Simbolik Sdn.
Bhd. pursuant to Section 6A of the Act.
# Deemed interested by virtue of her spouse, Lim Joo Swee and her and her spouse’s shareholdings in Jasa Simbolik
Sdn. Bhd. pursuant to Section 6A of the Act.
The aforesaid interested directors, namely Lim Joo Swee and Lee Peng Sian, and the interested
major shareholders, namely Goh Kin Bee and Jasa Simbolik Sdn. Bhd., will abstain from voting in
respect of his/her/its direct or indirect shareholdings on the resolution pertaining to the Proposed
Mandate for RRPT at the AGM. The aforesaid interested directors have and will continue to
abstain from board deliberation and voting on relevant transactions that they are interested in.
The aforesaid interested directors and/or major shareholders will undertake to ensure that the
persons connected with them, namely Lim Joo Peng, Mong Hooi Woon and Gan Yu Chai, will
abstain from voting in respect of their direct and indirect shareholdings, if any, on the resolution
pertaining to the Proposed Mandate for RRPT at the forthcoming AGM.
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7.
DIRECTORS’ RECOMMENDATION
The Board (save and except for Mr. Lim Joo Swee and Mr. Lee Peng Sian being the interested
Directors and had abstained from Board deliberation and voting), having considered all aspects of
the Proposed Mandate for RRPT, is of the opinion that the Proposed Mandate for RRPT is in the
best interest of EITA Group. Accordingly, they (save and except for Mr. Lim Joo Swee and Mr.
Lee Peng Sian) recommend that you vote in favour of the resolution pertaining to the Proposed
Mandate for RRPT to be tabled at the forthcoming 16th AGM.
8.
AGM
The 16th AGM of EITA will be held at Mauna Lani B, 1st Floor, Holiday Inn Kuala Lumpur
Glenmarie, No. 1, Jalan Usahawan U1/8, 40250 Shah Alam, Selangor Darul Ehsan on Tuesday,
26 June 2012 at 10.30 a.m. for the purpose of considering and if thought fit, passing, inter alia,
the ordinary resolution on the Proposed Mandate for RRPT as set out in the Notice of AGM which
is enclosed in the 2011 Annual Report.
If you wish to appoint a Proxy to attend the AGM, you must complete the Form of Proxy enclosed
in the 2011 Annual Report in accordance with the instructions printed thereon. The Form of Proxy
must be deposited at the Company’s Registered Office at Third Floor, No. 79 (Room A), Jalan
SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not later than fortyeight (48) hours before the time fixed for holding the AGM or any adjournment thereof. The
lodging of the Form of Proxy does not preclude you from attending and voting in person at the
forthcoming AGM should you subsequently decide to do so.
9.
FURTHER INFORMATION
Shareholders are requested to refer to the attached Appendix I for further information.
Yours faithfully
For and on behalf of the Board of Directors
EITA RESOURCES BERHAD
Dato’ Siow Kim Lun
Independent Non-Executive Chairman
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APPENDIX I
FURTHER INFORMATION
1. DIRECTORS’ RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Directors of EITA who collectively and individually
accept full responsibility for the accuracy of the information given and confirm that after having made
all reasonable enquiries and to the best of their knowledge and belief, there are no material facts, the
omission of which would make any statement misleading in this Circular.
2. MATERIAL LITIGATIONS
Neither EITA nor its subsidiaries are engaged in any material litigation, claims and/or arbitration,
either as plaintiff or defendant, and the Directors of EITA do not have any knowledge of any
proceedings pending or threatened against the Group or of any facts likely to give rise to any
proceedings which might adversely and materially affect the position or business of the Group.
3. MATERIAL CONTRACTS
Save as disclosed below, EITA Group has not entered into any material contracts (not being
contracts entered into in the ordinary course of business) within the two (2) years preceding the date
of this Circular:(a) On 24 October 2010 and 21 October 2011, Furutec Electrical Sdn. Bhd. entered into a
Memorandum of Understanding and Research Collaboration Agreement with University Sains Malaysia
respectively upon terms and conditions as contained therein;
(b) By way of a sale and purchase agreement dated 30 May 2011, EITA Elevator (Malaysia) Sdn. Bhd.
disposed of a property held under Strata Title M1/19/257, on Geran 5424 Lot 2000 Seksyen 46,
Bandar Kuala Lumpur, Negeri Wilayah Persekutuan measuring approximately 1,270 square feet for a
sale consideration of RM350,000 to Ho Swee Peng & Ho Swee Fong;
(c) By way of a sale and purchase agreement between EITA-Schneider (MFG) Sdn. Bhd. (“EITASchneider”), Sime Darby USJ Development Sdn. Bhd. and Sime Darby Property (Klang) Sdn. Bhd.
dated 30 June 2011, EITA-Schneider agreed to purchase all that industrial land bearing Lot No. 14
measuring approximately 2.90 acres located at Bandar Bukit Raja (Eastern Division), Klang for a
purchase price of RM5,684,580. As at todate, the sale and purchase agreement is pending completion
and RM3,126,519 representing 55.0% of the purchase consideration has been paid; and
(d) Underwriting Agreement dated 6 March 2012 between the Company and the sole underwriter,
AmInvestment Bank Berhad, for the underwriting of 10,000,000 Public Issue Shares (“Underwritten
Shares”) at an underwriting commission of 2.0% of the total value of the Underwritten Shares and upon
the terms and conditions contained therein.
4. DOCUMENTS FOR INSPECTION
The following documents are available for inspection at the Registered Office of the Company during
normal office hours from Mondays to Fridays (except public holidays) from the date of this Circular
and up to the time set for convening the AGM :(a) Memorandum and Articles of Association of EITA;
(b) Audited financial statements of EITA for the past two years ended 31 December 2010 and 31
December 2011;
(c) Latest unaudited results for the financial quarter ended 31 March 2012; and
(d) Material contracts referred to in Section 3 above.
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EITA RESOURCES BERHAD
(Company No. 398748-T)
(Incorporated in Malaysia)
EXTRACT OF RESOLUTION
ORDINARY RESOLUTION 2
PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS
OF A REVENUE AND/OR TRADING NATURE (“PROPOSED MANDATE FOR RRPT”)
“THAT authority be and is hereby given in line with Chapter 10.09 of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad, for the Company, its subsidiaries or any of them to
enter into any of the transactions falling within the types of the recurrent related party transactions,
particulars of which are set out in the Circular to Shareholders dated 4 June 2012 with the related parties
as described in the said Circular, provided that such transactions are of revenue and/or trading nature,
which are necessary for the day-to-day operations of the Company and/or its subsidiaries within the
ordinary course of business of the Company and/or its subsidiaries, made on an arm’s length basis and
on normal commercial terms which are those generally available to the public and are not detrimental to
the minority shareholders of the Company; AND THAT such authority shall commence immediately upon
the passing of this Ordinary Resolution until:
i)
the conclusion of the next annual general meeting of the Company at which time the authority shall
lapse unless by a resolution passed at a general meeting, the authority is renewed; or
ii)
the expiration of the period within which the next annual general meeting after the date that is
required by law to be held pursuant to Section 143(1) of the Companies Act, 1965; or
iii)
revoked or varied by a resolution passed by the shareholders of the Company at a general meeting
whichever is earlier.
AND FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts,
deeds and things as they may be deemed fit, necessary, expedient and/or appropriate in order to
implement the Proposed Mandate for RRPT with full power to assent to all or any conditions, variations,
modifications and/or amendments in any manner as may be required by any relevant authorities or
otherwise and to deal with all matters relating thereto and to take all such steps and to execute, sign and
deliver for and on behalf of the Company all such documents, agreements, arrangements and/or
undertakings, with any party or parties and to carry out any other matters as may be required to
implement, finalise and complete, and give full effect to the Proposed Mandate for RRPT in the best
interest of the Company.”
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