this circular is important and requires your immediate ... · 10/3/2013 · this circular is...
TRANSCRIPT
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Bursa Securities has not perused Part B of this Circular prior to its issuance and 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 reliance upon the whole or any part of the contents of this Circular.
CIRCULAR TO SHAREHOLDERS
IN RELATION TO THE
The Notice convening the 16th Annual General Meeting of Magni-Tech Industries Berhad which will be held at Berjaya 1, 7th Floor, Georgetown City Hotel, 1-Stop Midlands Park Centre, Jalan Burmah, 10350 Penang on Friday, 25 October 2013 at 10.30 am together with the Form of Proxy are enclosed in the Company’s 2013 Annual Report. The Form of Proxy should be deposited at the Registered Office of the Company at No. 51-21-A Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang not later than forty-eight (48) hours before the time appointed for holding the meeting. The lodging of the Form of Proxy will not prelude you from attending and voting in person at the meeting should you subsequently wish to do so.
This Circular is dated 3 October 2013
PART A
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE
FOR RECURRENT RELATED PARTY TRANSACTIONS
OF A REVENUE OR TRADING NATURE
PART B
PROPOSED AMENDMENTS TO
THE ARTICLES OF ASSOCIATION OF MAGNI
DEFINITIONS _____________________________________________________________________________________________ For the purpose of this Circular, except where the context otherwise requires, the following definitions shall apply:-
Act The Companies Act, 1965 or any statutory modification, amendment or re-enactment thereof for the time being in force
AGM Annual General Meeting Articles Articles of Association Board Board of Directors of Magni Company or Magni Magni-Tech Industries Berhad (422585-V) CCH Chang Chuen Hwa
Bursa Securities Bursa Malaysia Securities Berhad Directors The Directors for the time being of Magni and shall have the same meaning as in
Section 4 of the Act and for the purpose of the Proposed Shareholders’ Mandate, includes any person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, a director of Magni or any other company which is a subsidiary of Magni or a holding company of Magni or a Chief Executive Officer of Magni, its subsidiary or holding company
FYL Foo Yean Lee
GPS GPS Tech Solutions Sdn Bhd (454796-M),
a 26.26% owned associated company of Magni IPP Inter-Pacific Packaging Sdn Bhd (186388-V), a wholly-owned subsidiary of Magni
ISS Induscor Supplies (M) Sdn Bhd
KPH KP Holdings Sdn Bhd Magni Share(s) Ordinary share(s) of RM1.00 each of Magni Magni Group or Group Magni and its subsidiaries
Main Market LR Main Market Listing Requirements of Bursa Securities, as amended from time to time
PSB
Pen’ads (M) Sendirian Berhad
Proposed Shareholders’ Mandate
Proposed Renewal of Shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature
Proposed Articles Amendments
Proposed amendments to the Articles of Association of Magni
RM Ringgit Malaysia
Shareholders’ Mandate The mandate obtained by the Company from its shareholders on 18 October 2012 for the Group to enter into recurrent related party transactions of a revenue or trading nature
SIG
_
South Island Garment Sdn Bhd (24114-U), a wholly owned subsidiary of Magni
SIP _
South Island Plastics Sdn Bhd (89385-D), a wholly owned subsidiary of Magni
SIPP South Island Packaging (Penang) Sdn Bhd (23225-D), a 99.64% owned subsidiary
of Magni
SIB South Island Building Sdn Bhd
SID South Island Development Company Sdn Berhad
SIH South Island Holdings Sdn Bhd
SSB Sim Say Bee @ Sim Lay Bee
STE Sing Tat Enterprise Sdn Bhd
TSC
Dato’ Tan Su Chin
TKP
Tan Sri Dato’ Seri Tan Kok Ping
TKA
Tan Kok Aun
TKPO
Tan Kok Pooh
TKW
Tan Kok Wei
TKF
Tan Kok Fong
TKH
Tan Kok Hooi
TPS
Tan Poay Seng
TPT
Tan Poay Teik
TEL
Tan Ee Ling
TAL
Tan Ai Ling
TSL
Tan Soo Ling
CJM
Chang Jia Ming
YGH Yong Guan Heng & Co. Sdn Bhd
All references to “the Company” and “Magni” in this Circular are to Magni-Tech Industries Berhad, and all references to “the Group” and “Magni Group” are to the Company, subsidiaries and associated company. All references to “we”, “us” and “our” are to the Company, and save where the context otherwise requires, shall include our subsidiaries. All references to “you” in this Circular are to the shareholders of the Company.
TABLE OF CONTENTS _________________________________________________________________________________________
LETTER TO THE SHARHOLDERS IN RELATION TO THE PROPOSED SHAREHOLDERS’ MANDATE:- PART A
Page 1. INTRODUCTION ......................................................................................................................... 1
2. THE PROPOSED SHAREHOLDERS’ MANDATE .................................................................... 1
3. FINANCIAL EFFECTS OF THE PROPOSED SHAREHOLDERS’ MANDATE ...................... 6
4. DETAILS OF SHAREHOLDINGS .............................................................................................. 7
5. CONDITIONS OF THE PROPOSED SHAREHOLDERS’ MANDATE .................................... 9
6. DIRECTORS’ RECOMMENDATION .......................................................................................... 9
7. AGM .............................................................................................................................................. 9
8. FURTHER INFORMATION ......................................................................................................... 9
PART B
LETTER TO THE SHAREHOLDERS IN RELATION TO THE PROPOSED ARTICLES AMENDMENTS :-
Page 1. INTRODUCTION ......................................................................................................................... 10
2. DETAILS OF THE PROPOSED ARTICLES AMENDMENTS .................................................. 11
3. RATIONALE FOR THE PROPOSED ARTICLES AMENDMENTS ......................................... 18
4. EFFECTS OF THE PROPOSED ARTICLES AMENDMENTS .................................................. 18
5. APPROVALS REQUIRED AND CONDITIONS OF THE PROPOSED ARTICLES AMENDMENTS ...........................................................................................................................
18
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS ................................................ 18
7. DIRECTORS’ RECOMMENDATION ......................................................................................... 19
8. SIXTEENTH AGM ....................................................................................................................... 19
APPENDIX I – FURTHER INFORMATION ........................................................................................ 20
PART A
LETTER TO THE SHAREHOLDERS IN RELATION TO
THE PROPOSED SHAREHOLDERS’ MANDATE
Registered Office 51-21-A Menara BHL Bank Jalan Sultan Ahmad Shah 10050 Penang 3 October 2013
Directors
Tan Sri Dato’ Seri Tan Kok Ping (Executive Chairman) Tan Poay Seng (Managing Director) Tan Kok Aun (Executive Director) H’ng Cheok Seng (Non-Independent Non-Executive Director) Datuk Noor Zahidi Bin Omar (Independent Non-Executive Director) Tan Thiam Chai (Non-Independent Non-Executive Director) Mawan Noor Aini Binti Md. Ismail (Independent Non-Executive Director) Chang Chuen Hwa (Alternate Director to Tan Poay Seng)
To : The Shareholders of Magni-Tech Industries Berhad
Dear Sir/Madam,
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE
1. INTRODUCTION
At the AGM held on 18 October 2012, the Company obtained Shareholders’ Mandate for the Group to enter into recurrent related party transactions of a revenue or trading nature.
The Shareholders’ Mandate shall, in accordance with the Main Market LR, lapse at the conclusion of the forthcoming AGM unless authority for its renewal is obtained from shareholders of the Company.
In view of this, the Board had on 5 September 2013 announced the Proposed Renewal of Shareholders’ Mandate.
The purpose of this Circular is to provide you with details and rationale for the Proposed Shareholders’ Mandate and to seek your approval for the Ordinary Resolution to be tabled at the forthcoming AGM.
2. THE PROPOSED SHAREHOLDERS’ MANDATE Under Paragraph 10.09(2) of the Main Market LR, a listed issuer may seek a shareholders’ mandate
in respect of related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations subject to 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;
1
(ii) the shareholders’ mandate is subject to annual renewal and disclosure is made in annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year ;
(iii) the issuing of a Circular to shareholders which include information as set out in the Main Market LR ; and
(iv) in a meeting to obtain shareholders’ approval for a related party transaction, including a general
mandate, the following persons must abstain from voting on the resolution approving such transaction :-
(a) where the transaction involves the interest of a director, the interested director and persons connected with such director.
(b) where the transaction involves the interest of a major shareholder, the interested major shareholder and persons connected with such major shareholder.
(c) where the transaction involves the interest of a person connected with a director or major shareholder, the interested person connected with a director or major shareholder and such director or major shareholder, as the case may be.
(v) immediately announce to Bursa Securities when the actual value of the transactions entered into by the listed issuer, exceeds the estimated value of the transactions disclosed in the Circular by 10% or more and must include the information as may be prescribed by Bursa Securities in the announcement.
Magni is primarily an investment holding company whilst its subsidiaries are engaged in the manufacturing and sale of garments, and a wide range of corrugated and plastic packaging products including quality display boxes. The details of the subsidiaries of Magni are as follows :-
Subsidiaries Magni’s Effective Interest
Activities
SIG
100.00 %
Manufacturing and sale of garments.
IPP 100.00 % Manufacturing and distribution of corrugated fibreboards, cartons and boxes for industrial and commercial uses
SIP 100.00 % Manufacturing and distribution of flexible plastic packaging materials for industrial and commercial uses
SIPP 99.64 % Manufacturing and distribution of inner packaging, display boxes and cartons for industrial and commercial uses, providing printing related services and renting of printing related machinery.
2.1 Class and Nature of Recurrent Related Party Transactions
The recurrent related party transactions of a revenue or trading nature which will be covered by the shareholders’ mandate and relating to the provision of, or obtaining from, the related parties, products and services in the normal course of business of the Group as set out in column 2 of the table below.
2
TKP, TPS, TKA and CCH are the interested related parties for all the transactions as set out in the table below. TKP is a Director / Executive Chairman and major shareholder of Magni. TKP is also a Director of IPP, SIPP and SIG. TKA is a Director of Magni, IPP, SIP and SIPP. TPS is a Director of Magni, IPP, SIP, SIPP and SIG. CCH being the Alternate Director to TPS, is a Director of SIP.
The family relationship between the directors, major shareholder and persons connected to directors and/or major shareholder of Magni are as follows: -
(i) TKP and TKA are brothers (ii) TPS is the son of TKP (iii) CCH is the brother-in-law of TKP and TKA.
Companies
Nature of
Transactions
Magni and/or
Subsidiaries, etc. involved (N1)
Last Year Mandate
(N2) RM
Actual Value Transacted
(N3) RM
Proposed Mandate
(N4) RM
Relationship
YGH
(N5) SIPP 500,000 278,263 470,000 (N15)
ISS (N6) SIP & SIPP 10,000 - 5,000 (N15)
ISS (N7) SIP, SIPP & SIG
180,000 179,744 250,000 (N15)
ISS (N8) SIP 7,000 7,000 15,000 (N15)
PSB (N9) Magni Group 30,000 7,606 38,000 (N15)
PSB (N10) SIP & SIPP 20,000 - 5,000 (N15)
SIB (N11) SIP, SIPP 20,000 - 5,000 (N15)
SIB (N12) SIP, SIPP & SIG
5,000 5,000 10,000 (N15)
KPH (N13) Magni 145,000 122,948 145,000 (N16)
KPH (N14) GPS 55,000 35,590 42,000 (N16)
Total 972,000 636,151 985,000
Notes :
(N1) (N2) (N3) (N4) (N5) (N6) (N7)
Magni and / or subsidiaries or associated company involved in recurrent related party transactions. Estimated value of transactions from 18 October 2012 to 25 October 2013 as per Shareholders’ Mandate dated 18 October 2012. Actual value of transactions from 18 October 2012 to 10 September 2013, the latest practicable date before the printing of the draft circular. Estimated value of transactions from the date of AGM, 25 October 2013 to the date of next AGM in October 2014. The estimated value is subject to changes. SIPP sells inner packaging, cartons and display boxes and provides printing related services to YGH. SIPP also provides renting of printing machinery to YGH. SIPP sells cartons and display boxes, and SIP sells plastic packaging products to ISS. ISS sells indirect materials, such as packing tape and stationery to SIPP, SIP and SIG.
3
(N8)
(N9) (N10) (N11) (N12) (N13) (N14) (N15) (N16)
ISS provides rental of premises to SIP for use as hostel for its workers. SIP pays monthly rentals of RM550 and RM500 respectively for renting from ISS the first and second floors of a 3-storey shoplot at No. 76, Jalan Nagasari 1, Taman Nagasari, 13600 Prai, Penang. The rented areas are approximately 1,310 sq. ft. and 1,355 sq. ft. respectively and the tenancy is on a monthly basis. Magni Group pay for advertising, pre-press and related services, such as publication of annual reports and brochures to PSB.
PSB purchases cartons and display boxes from SIPP, and plastic packaging products from SIP. SIPP sells cartons, and SIP sells plastic packaging products to SIB. SIB provides repair of buildings and related works for SIP, SIPP & SIG. SIB also provides rental of premises to SIP for use as hostel for its workers. SIP pays a monthly rental of RM500 for renting from SIB the second floor of a 3-storey shoplot at No. 78, Jalan Nagasari 1, Taman Nagasari, 13600 Prai, Penang. The rented area is approximately 1,355 sq. ft. and the tenancy is on a monthly basis. KPH provides rental of office units to Magni at a rental of RM11,400 per month. The said office units are located at Level 18 Penas Tower, 10350 Penang with a built-up area of about 5,700 sq. ft. and the tenancy period is from 1 March 2011 to 28 February 2014.
KPH provides rental of office units to GPS at a rental of RM3,300 per month. The said office units are located at Level 17 Penas Tower, 10350 Penang with a built-up area of approximately 1,827 sq. ft. The tenancy period is from 1 January 2013 to 31 December 2016 TKP is a major shareholder of YGH, ISS and PSB. TKA is a Director of YGH. TKA is also a director and major shareholder of ISS, PSB and SIB. TKP and TPS are Directors and major shareholders of KPH. TKP also is a director of GPS.
The Board is also seeking approval from shareholders for the Proposed Shareholders’ Mandate which will allow the Group to enter into such recurrent related party transactions referred to in this section, provided such transactions are made on normal commercial terms and on terms not more favourable to the related party than those generally available to the public, and are not to the detriment of minority shareholders. The Shareholders’ Mandate is subject to annual renewal and will, if renewed by shareholders at the forthcoming AGM, take effect from the date of the passing of the Ordinary Resolution proposed at the AGM and shall only continue to be in force until :-
(i) the conclusion of the next AGM of the Company following the AGM at which such mandate was 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 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
(iii) revoked or varied by resolution passed by shareholders in general meeting ;
whichever is the earlier.
Thereafter, approval from shareholders for subsequent renewals of the Shareholders’ Mandate will be sought at each subsequent AGM of the Company. Disclosure will be made in the Annual Report of the Company and in the Annual Report for the subsequent year during which a shareholders’ mandate is in force of the breakdown of the aggregate value of the recurrent related party transactions conducted pursuant to the shareholders’ mandate during the financial year, amongst others, based on the following information :-
4
(i) the type of recurrent related party transactions made ; and
(ii) the names of the related parties involved in each type of the recurrent related party transactions made and their relationship with the Company.
2.2 Amounts due and owing by Related Party
There are no amounts due and owing to the Group by its related party pursuant to the recurrent related party transactions which exceeded the credit term as at the financial year ended 30 April 2013.
2.3 Rationale and Benefits of the Proposed Shareholders’ Mandate
The related party transactions entered or to be entered into by the Group as disclosed in section 2.1 above are all in the ordinary course of business and these are likely to occur with some degree of frequency and arise at any time and from time to time. These transactions may be of time-sensitive and confidential in nature and it may be impractical to seek shareholders’ approval on a case to case basis before entering into such related party transactions.
As such, the Board is seeking shareholders’ approval for the Proposed Shareholders’ Mandate pursuant to paragraph 10.09 of the Main Market LR for the Group to enter into such recurrent related party transactions set out in section 2.1 above, provided such transactions are made on normal commercial terms and are on terms not more favourable to the related parties than those generally available to the public, and are not to the detriment of minority shareholders. By obtaining the renewal of the same on annual basis would eliminate the necessity to convene separate general meetings from time to time to seek shareholders’ approval as and when recurrent related party transactions arise. This would reduce substantial administrative time, inconvenience and expenses associated with convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The recurrent related party transactions of a revenue or trading nature entered or to be entered into by the Group are mainly for the Group’s day to day operations. The related parties mentioned in section 2.1 above are reliable suppliers of goods and services, and faithful customers of the Group. The rationale for renting office units at Penas Tower, Penang by Magni from the related parties is to centralize as far as possible the Group’s offices in the same building. The goods and services supplied by the related parties are priced competitively and the close co-operation between the Group and these companies has enhanced the Group’s overall operating capabilities. As a result, Magni Group is able to better fulfill its customers’ demands and become more competitive in the Group’s business.
Likewise, Magni has established a long term and cordial business relationship with most of the said customers and the related sale transactions have enhanced the Group’s sale revenue. All the abovesaid transactions are carried out on normal commercial terms which 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.
5
2.4 The Procedures Established to Monitor Recurrent Related Party Transactions.
The Group had established the procedures to ensure that recurrent related party transactions are undertaken on normal commercial terms, which are consistent with the Group’s usual business practices and policies and on transaction prices and terms not more favourable to the related parties than those extended to third parties / public and not to the detriment of minority shareholders.
The procedures established by the Group shall include the following :
(a) A list of related party be circulated within the Group and at the same time, the related party will be informed that all recurrent related party transactions are required to be undertaken on normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and not to the detriment of minority shareholders.
(b) Records will be maintained by the Company in order to capture all recurrent related party transactions which are entered into pursuant to the shareholders’ mandate.
(c) The Audit Committee will review at least on a half yearly basis the transactions entered into to ascertain that the procedures established to monitor recurrent related party transactions have been complied with.
(d) The Audit Committee will also review and consider whether the procedures for recurrent related party transactions have become inappropriate. If a member of the Audit Committee has an interest, he will abstain from any decision making by the Audit Committee respectively in respect of the said transaction.
(e) The threshold for approval of recurrent related party transactions are consistent with those transactions entered into with unrelated parties. All recurrent related party transactions are to be reviewed and approved by the Head of Operations.
(f) At least 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 the similar type of products/services and/or quantities. Where quotation or comparative pricing from unrelated third parties cannot be obtained, the transaction price will be determined by the Group based on those offered by/to other unrelated parties for the same or substantially similar type of transaction to ensure that the recurrent related party transaction is not detrimental to the Group.
2.5 Statement by Audit Committee
The Audit Committee is of the view that the Group has in place adequate procedures and guidelines for recurrent related party transactions to monitor, track and identify such transactions in a timely and orderly manner.
The Audit Committee has reviewed the procedures mentioned in Section 2.4 above and is of the view that the said procedures are sufficient to ensure that the recurrent related party transactions are on terms not more favourable to the related parties than those generally available to the public and hence, are not to the detriment of minority shareholders. Such a review is carried out on a half yearly basis.
3. FINANCIAL EFFECTS OF THE PROPOSED SHAREHOLDERS’ MANDATE
The Proposed Shareholders’ Mandate is not expected to have any effect on the issued and paid-up share capital of the Company, the shareholdings of substantial shareholders, Group’s net assets and Group’s earnings.
6
4. DETAILS OF SHAREHOLDINGS The details of shareholdings in Magni held by the interested Directors as at 12 September 2013 are set out below:-
Number of Magni Shares Interested Directors
Direct
%
Indirect/Other
%
TKP + 5,625,527 5.19
^ 14,149,639 < 915,500
13.04 0.84
TPS
16,518,862
15.23
-
-
TKA
1,899,481
1.75
> 34,167
0.03
CCH I
330,000
0.30
> 50,144 < 5,000
0.05
#
Notes :
I +
^ <
>
#
CCH is deemed interested by virtue of his family relationship with TKP as the latter’s brother-in-law.
Shares registered in the names of UOB Kay Hian Nominees (Tempatan) Sdn Bhd and Mayban Nominees (Tempatan) Sdn Bhd.
Deemed interested by virtue of his interest in KPH pursuant to Section 6A of the Act.
Shares held by children in Magni are treated as interest of the Directors pursuant to Section 134(12)(c) of the Act.
Shares held by spouses in Magni are treated as interest of the Directors pursuant to Section 134(12)(c) of the Act.
Less than 0.01%
TKP, TKA and TPS (or his alternate, CCH) as interested Directors have been and will abstain from all deliberations and voting on the Proposed Shareholders’ Mandate at all Board Meetings. The interested major shareholders of Magni as at 12 September 2013 are set out below :-
Interested major shareholders
Number of Magni Shares
Direct
%
Indirect
%
TKP 5,625,527 5.19 * 14,149,639 13.04 KPH 14,149,639 13.04 - -
*
Deemed interested by virtue of his interest in KPH pursuant to Section 6A of the Act.
Persons who are connected with the interested Directors and major shareholders of Magni and their shareholding in Magni as at 12 September 2013 are set out below :-
Name
Relationship to TKP
Relationship to TKA
Number of Magni Shares
Direct % Indirect %
TSC Father Father 366,223 0.34 - -
TKPO Brother Brother 790,142 0.73 - -
7
Name
Relationship to TKP
Relationship to TKA
Number of Magni Shares
Direct % Indirect %
TKW Brother Brother 150,000 0.14 - -
TKF Sister Sister 125,000 0.12 - -
FYL Sister-in-law wife 44,167 0.04 - -
TPT Son Nephew 500,500 0.46 - -
TEL Daughter Niece 215,000 0.20 - -
TAL Daughter Niece 100,000 0.09 - -
TSL Daughter Niece 100,000 0.09 - -
SIH Deemed Interest <> Deemed Interest <> 719,940 0.66 - -
SID Deemed Interest <> Deemed Interest <> 602,300 0.56 - -
SIB Deemed Interest <> Deemed Interest <> 420,000 0.39 - -
STE Deemed Interest <> Deemed Interest <> - -
Note :
<> Deemed interested by virtue of the major shareholdings in these companies being held by TKA or TKP and immediate family pursuant to Section 122A of the Act.
Name
Relationship to TPS
Number of Magni Shares
Direct % Indirect %
SSB Mother 186,067 0.17 - -
Name
Relationship to CCH
Number of Magni Shares
Direct % Indirect %
TKH Wife 50,144 0.05 - -
CJM Son 5,000 # - -
Note :
# Less than 0.01% Accordingly, TKP being the interested major shareholder and Director of Magni, KPH being the interested major shareholder of Magni, TKA and TPS (or his alternate, CCH) being the interested Directors of Magni, and TSC, TKPO, TKW, TKF, FYL, TPT, TEL, TAL, TSL, SIH, SID, SIB, STE, SSB, TKH and CJM being persons connected to the interested Directors and / or major shareholders shall abstain from voting in respect of their direct and indirect shareholdings on the Proposed Shareholders’ Mandate at the forthcoming AGM of Magni. The interested Directors and / or major shareholders undertake to ensure that the persons connected to them will abstain from voting on the resolution, deliberating or approving the Proposed Shareholders’ Mandate at the AGM of Magni. Save as aforesaid, none of the Directors or major shareholders or persons connected to them as defined in the Main Market LR have any direct or indirect interest in Proposed Shareholders’ Mandate.
8
23,912 0.02
5. CONDITION OF THE PROPOSED SHAREHOLDERS’ MANDATE
The Proposed Shareholders’ Mandate is subject to the approval of the shareholders of Magni at the forthcoming AGM.
6. DIRECTORS’ RECOMMENDATION
Having considered the rationale for the Proposed Shareholders’ Mandate, your Directors, except TKP, TPS (or his alternate, CCH) and TKA who are interested in the Proposed Shareholders’ Mandate in the manner disclosed in section 4 of this Circular, are of the opinion that the Proposed Shareholders’ Mandate is in the best interest of Magni Group.
With the exception of TKP, TPS (or his alternate, CCH) and TKA who are interested in the Proposed Shareholders’ Mandate and have refrained from making any recommendations on the Proposed Shareholders’ Mandate, your Directors recommend that you vote in favour of the resolution which will be tabled at the forthcoming AGM to give effect to the Proposed Shareholders’ Mandate.
7. SIXTEENTH AGM
The Sixteenth AGM will be held at Berjaya 1, 7th Floor, Georgetown City Hotel, 1-Stop Midlands Park Centre, Jalan Burmah, 10350 Penang on Friday, 25 October 2013 at 10.30 a.m and any adjournment thereof for the purpose of considering and, if thought fit, passing the Ordinary Resolution as set out in the Notice of AGM.
8. FURTHER INFORMATION
Shareholders are requested to refer to the attached Appendix I for further information.
Yours faithfully For and on behalf of the Board MAGNI-TECH INDUSTRIES BERHAD
Datuk Noor Zahidi Bin Omar Non-Executive Director
9
PART B
LETTER TO THE SHAREHOLDERS IN RELATION TO
THE PROPOSED ARTICLES AMENDMENTS
Registered Office 51-21-A Menara BHL Bank Jalan Sultan Ahmad Shah 10050 Penang 3 October 2013
Our Board of Directors Tan Sri Dato’ Seri Tan Kok Ping (Executive Chairman) Tan Poay Seng (Managing Director) Tan Kok Aun (Executive Director) H’ng Cheok Seng (Non-Independent Non-Executive Director) Tan Thiam Chai (Non-Independent Non-Executive Director) Datuk Noor Zahidi Bin Omar (Independent Non-Executive Director) Mawan Noor Aini Binti Md. Ismail (Independent Non-Executive Director) Chang Chuen Hwa (Alternate Director to Tan Poay Seng) Dear Shareholders,
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF MAGNI-TECH INDUSTRIES BERHAD
1. INTRODUCTION
On 5 September 2013, the Company announced to Bursa Securities that the Board proposes to seek the shareholders’ approval on the Proposed Articles Amendments at the forthcoming AGM of the Company.
Bursa Securities has not perused this Circular prior to its issuance as the Proposed Articles Amendments fall under the category of Exempted Circular.
The purpose of this Circular is to provide you with the details of the Proposed Articles Amendments and to
seek your approval for the special resolution pertaining to the Proposed Articles Amendments to be tabled at the forthcoming Sixteenth AGM scheduled to be held at Berjaya 1, 7th Floor, Georgetown City Hotel, 1-Stop Midlands Park Centre, Jalan Burmah, 10350 Penang on Friday, 25 October 2013 at 10.30 a.m., or at any adjournment thereof.
You are advised to read and carefully consider the contents of this Circular before voting on the resolution relating to the Proposed Articles Amendments at the forthcoming Sixteenth AGM.
10
2. DETAILS OF THE PROPOSED ARTICLES AMENDMENTS
The Board proposes to amend the following Articles :
Article
No. Existing Articles Proposed Articles Amendments
2 Central Depositories Act Central Depositories Act - Securities Industry (Central
Depositories) Act, 1991 - Securities Industry (Central Depositories)
Act, 1991 and/or any statutory modification, amendment or re-enactment thereof.
2 New Definition Dividend Reinvestment Scheme - a scheme which enables members to
reinvest cash dividends into new shares of the Company.
2 Employees Share Option Scheme Employees Share Option Scheme - a share scheme involving a new issue of
shares to employees - Share Issuance Scheme and Share Grant
Scheme, collectively 2 New Definition Exempt Authorised Nominee - an authorised nominee defined under
Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.
2 Member/Members Member/Members - any person/persons whose name is
entered in the Company’s Register of Members including Depositors whose names appear on the Record of Depositors except Bursa Malaysia Depository Sdn. Bhd.
- any person/persons whose name is entered in the Company’s Register of Members including Depositors whose names appear on the Record of Depositors but exclude the Depository in its capacity as bare trustee.
2 Rules Rules - Rules of the Depository, as defined in
Section 2 of the Securities Industry Act, 1983
- Rules of the Depository including any amendments thereto that may be made from time to time.
2 New Definition Share Grant Scheme - a scheme involving the grant of the
Company’s existing shares to employees of the Company and its subsidiaries.
2 New Definition Share Issuance Scheme - a scheme involving a new issuance of
shares to employees and Directors of the Company and its subsidiaries.
2 New Definition Take-Overs and Mergers Code - Malaysian Code on Take-Overs and
Mergers 2010, including any amendment that may be made from time to time.
11
Article No.
Existing Articles Proposed Articles Amendments
4 Without prejudice to any special rights
previously conferred on the holders of any existing shares or class of shares, and subject to the Act, the Central Depositories Act and to the conditions, restrictions and limitations expressed in these Articles and to the provisions of any resolution of the Company, the Directors may allot, grant options over or otherwise dispose of the unissued share capital of the Company to such persons, at such time and on such terms and conditions, with such preferred or deferred or other special rights as they think proper, provided always that -
Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares and subject to the Act and to these Articles, the Directors may issue new shares or convertible securities in the Company with such preferred or deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Directors, subject to any ordinary resolution of the Company may determine. The Directors in making any issue of shares shall comply with the following conditions :
(a) no shares shall be issued at a discount
except in compliance with the provisions of the Act;
(a) no shares shall be issued at a discount except in compliance with the provisions of the Act;
(b) no shares shall be issued which shall
have the effect of transferring a controlling interest in the Company without the prior approval of the members in general meeting;
(b) no shares shall be issued which shall have the effect of transferring a controlling interest in the Company without the prior approval of the members in general meeting;
(c) in the case of shares other than
ordinary shares, no special rights shall be attached until the same have been expressed in these Articles;
(c) in the case of shares other than ordinary shares, no special rights shall be attached until the same have been expressed in these Articles;
(d) subject always to the provisions of the
Listing Requirements, every issue of shares or options to employees and/or Directors of the Company and its subsidiaries under an Employee Share Option Scheme shall be approved by members in general meeting, Provided Always that no Director shall participate in such scheme unless members in general meeting have approved the specific allotment made to such Director. For the purpose of this Article, Directors shall include Executive and Non-Executive Directors.
(d) in the case of shares offered to the public for subscription, the amount payable on application on each share shall not be less than five per cent (5%) of the nominal amount of the share.
(e) in the case of shares offered to the
public for subscription, the amount payable on application on each share shall not be less than five per cent (5%) of the nominal amount of the share.
12
Article No.
Existing Articles Proposed Articles Amendments
5 Without prejudice to any special rights
previously conferred on the holders of any share or class of shares already issued, but subject to the Act and these Articles, any shares in the Company (whether forming part of the original capital or not) may be issued or have attached thereto such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, return of capital, voting or otherwise, as the Company may from time to time by ordinary resolution determine Provided That -
(a) Subject to the Act, any preference shares may with the sanction of an ordinary resolution, be issued on terms that they are, or at an option of the Company is liable, to be redeemed. Preference shareholders shall have the same rights as ordinary shareholders in relation to receiving notices, reports and audited financial statements and attending general meetings of the Company but shall only entitled to a right to vote in each of the following circumstances :
(a) the holders of preference shares shall
have the same rights as the holders of ordinary shares as regards in receiving notices, reports and audited accounts and attending general meetings of the Company but shall only entitled to a right to vote in each of the following circumstances :
i. when the dividend or part of the dividend on the shares is in arrears for more than six (6) months
ii. on a proposal to reduce the Company’s share capital
iii. on a proposal for the disposal of the whole of the Company’s property, business and undertaking
iv. on a proposal that affects rights i. when the dividend or part of the
dividend on the shares is in arrears for more than six (6) months
v. vi.
attached to the share on a proposal to wind up the Company during the winding up of the
ii. on a proposal to reduce the Company’s share capital
Company
iii. on a proposal for the disposal of the whole of the Company’s property, business and undertaking
iv. on a proposal that affects rights attached to the share
v. on a proposal to wind up the Company
vi. during the winding up of the Company
(b) Subject to the Act, any preference
shares may be issued on the terms that they are, or at the option of the Company are liable, to be redeemed.
To be deleted
5A Subject to the approval of the shareholders
of the Company, these Articles, the provisions of the Act, the requirements of the Exchange, the Central Depositories Act and/or any relevant authority, the Company may upon recommendation of the Directors remunerate any employees of the Company or its subsidiaries by establishing an Employee Share Option Scheme. The terms and conditions of such scheme shall
Subject to the approval of members in general meeting, these Articles, the Act, the Listing Requirements, the Central Depositories Act and/or any other relevant authorities, the Company may upon recommendation of the Directors establish a Share Issuance Scheme and/or a Share Grant Scheme. The terms and conditions of the Employees Share Option Scheme shall be determined by the Board of Directors and the allocation of options
13
Article No.
Existing Articles Proposed Articles Amendments
be determined by the Board of Directors. pursuant to the Share Issuance Scheme shall be verified by the Audit Committee. However, no Director shall participate in the Share Issuance Scheme unless members in general meeting have approved the specific allotment to be made to such Director.
32 New paragraph If any share is forfeited and sold, any residue
after the satisfaction of the unpaid calls and accrued interest and expenses, shall be paid to the person whose shares have been forfeited, or his executors, administrators or assignees or as he directs.
40 (b) the Company is exempted from
compliance with Section 14 of the Central Depositories Act, 1991 or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998, as the case may be, under the Rules in respect of such securities, the Company shall, upon request by securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the other stock exchange, to the register of holders maintained by the registrar of the Company in Malaysia and vice versa subject to the following conditions :
(b) the Company is exempted from compliance with Section 14 of the Central Depositories Act or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998, as the case may be, under the Rules in respect of such securities, the Company shall, upon request by securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the other stock exchange, to the register of holders maintained by the registrar of the Company in Malaysia and vice versa Provided That there shall be no change in the ownership of such securities.
i. there shall be no change in the
ownership of such securities; and
ii. the transmission shall be
executed by causing such securities to be credited directly into the securities account of such securities holder.
62 (1) The notice convening meetings shall
specify the place, the day and the hour of the meeting and shall be given to shareholders at least fourteen (14) days before the meeting or at least twenty one (21) days before the meeting where any special resolution is to be proposed or where it is an annual general meeting. Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution in respect of such special business. At least fourteen (14) days’ notice or twenty one (21) days’
(1) The notice convening meetings shall specify the place, the day and the hour of the meeting and shall be given to shareholders at least fourteen (14) days before the meeting or at least twenty one (21) days before the meeting where any special resolution is to be proposed or where it is an annual general meeting. Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution in respect of such special business. At least fourteen (14) days’ notice or twenty one (21) days’
14
Article No.
Existing Articles Proposed Articles Amendments
notice in the case where any special resolution is proposed or where it is an annual general meeting, of every such meeting shall be given by advertisement in the daily press and in writing to the Exchange and other stock exchange (if any) upon which the Company is listed.
notice in the case where any special resolution is proposed or where it is an annual general meeting, of every such meeting shall be given by advertisement in at least one (1) nationally circulated Bahasa Malaysia or English daily newspaper and in writing to the Exchange and other stock exchange (if any) upon which the Company is listed.
New Article 62(4) (4) Every notice of meeting in writing to
the Exchange shall include the date of the Record of Depositors to be obtained pursuant to Article 62(3) for the purposes of determining whether a Depositor shall be regarded as a member entitled to attend, speak and vote at the general meeting.
74 (1) On a resolution to be decided on a
show of hands, a holder of ordinary shares or preference shares who is personally present and entitled to vote shall be entitled to one (1) vote.
To be deleted
New Article 74(3) (3) The result of the poll shall be given in
writing to the Exchange according to the Listing Requirements which include the total number of votes cast on the poll together with the percentage in favour of or against the resolution.
82 (1) Subject to any rights or restrictions
for the time being attached to any class or classes of shares, at meetings of members or classes of members, each member shall be entitled to be present and to vote at any general meeting of the Company either personally or by proxy or by attorney and to be reckoned in a quorum in respect of shares fully paid and in respect of partly paid shares where calls are not due and unpaid. A proxy shall be entitled to vote on a show of hands on any question at any general meeting.
(1) Subject to any rights or restrictions for the time being attached to any class or classes of shares, at meetings of members or classes of members, each member shall be entitled to attend and vote at any general meeting of the Company or at a meeting of any class of members of the Company either personally or by proxy or by attorney and to be reckoned in a quorum in respect of shares fully paid and in respect of partly paid shares where calls are not due and unpaid. There shall be no restriction as to the qualification of the proxy. A proxy shall have the same rights as the member to speak at the meeting and shall be entitled to vote on a show of hands on any question at any general meeting.
15
Article No.
Existing Articles Proposed Articles Amendments
82 (2) Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a member or a member's representative or proxy or attorney shall have one (1) vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him.
(2) On resolution to be decided on a show of hands, every person present who is a member or a member's representative or proxy or attorney shall have one (1) vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him.
83A Where a member of the Company is an
authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares of the Company for multiple beneficial owners in one securities account (“omnibus account”), there shall be no limit to the number of proxies it may appoint in respect of each omnibus account it holds.
92 (2) All the directors of the Company
shall be natural persons and until otherwise determined by general meeting, the number of Directors shall not be less than two (2) nor more than ten (10) but in the event of any casual vacancy occurring and reducing the number of Directors below the aforesaid minimum the remaining Director or Directors may except in an emergency, act only for the purpose of increasing the number of Directors to such minimum number or to summon a general meeting of the Company. The remaining Director or Directors may continue to act notwithstanding any vacancy in their body.
(2) All the directors of the Company shall be natural persons and until otherwise determined by general meeting, the number of Directors shall not be less than two (2) nor more than ten (10).
95 A retiring Director shall be eligible for re-
election but save as aforesaid no person shall be eligible for election as a Director at a general meeting unless a notice of intention to propose his election signed by a member and a notice of his consent signed by himself have been left at the Office not more than thirty (30) days nor less than eleven (11) clear days before the date appointed for the meeting Provided That in the case of a person recommended by the Directors for election nine (9) clear days' notice only shall be necessary
A retiring Director shall be eligible for re-election but save as aforesaid no person shall be eligible for election as a Director at a general meeting unless a notice of intention to propose his election duly signed by the member and a notice of his consent to the nomination signed by himself signifying his candidature for the office have been left at the Office at least eleven (11) clear days before the date appointed for the meeting Provided That in the case of a person recommended by the Directors for election, nine (9) clear days' notice only
16
Article No.
Existing Articles Proposed Articles Amendments
and notice of every candidate for election
shall be served on all members at least seven (7) days prior to the meeting at which the election is to take place.
shall be necessary, and notice of each and every candidate for election shall be served on all members at least seven (7) days before the meeting at which the election is to take place.
120 Unless otherwise determined by the
Directors from time to time, seven (7) days notice of all Directors' meeting shall be given to all Directors and their Alternate Directors, who have a registered address in Malaysia, except in the case of emergency, reasonable notice shall be deemed sufficient, Provided Always, it shall not be necessary to give any Director or Alternate Director, who has not got an address in Malaysia registered with the Company, notice of a meeting of the Directors. The notice of each Directors' meeting shall be deemed to be served in the case of a Director having an address for service anywhere in Malaysia, two (2) days following that on which a properly stamped letter containing the notice is posted anywhere in Malaysia.
Unless otherwise determined by the Directors from time to time, seven (7) days notice of all Directors' meeting shall be given to all Directors and their Alternate Directors, who have a registered address in Malaysia, except in the case of emergency, reasonable notice shall be deemed sufficient, Provided Always, it shall not be necessary to give any Director or Alternate Director, who does not have an address in Malaysia registered with the Company. Any Director may waive notice of any meeting and any such waiver may be retroactive.
123 The continuing Directors or sole continuing
Director may act notwithstanding any vacancy in their body but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Director or Directors may act for the purpose of increasing the number of Directors to that number or of summoning a general meeting of the Company, but for no other purposes except in an emergency.
The remaining Directors or sole remaining Director may act notwithstanding any vacancy in their body but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the remaining Director or Directors may, except in an emergency, act for the purpose of increasing the number of Directors to such minimum number or of summoning a general meeting of the Company, but for no other purposes.
145 The profits of the Company available for
dividend and determined to be distributed shall be applied in the payment of dividends to the members in accordance with their respective rights and priorities. The Company in general meeting may declare dividends accordingly.
The profits of the Company available for dividend and determined to be distributed shall be applied in the payment of dividends to the members in accordance with their respective rights and priorities. The Company, may by ordinary resolution declare dividends and the dividends shall be paid not later than three (3) months from the date of declaration or the date on which approval is obtained in a general meeting, whichever is applicable.
17
Article No.
Existing Articles Proposed Articles Amendments
156A New Article Subject to the approval of the members in
general meeting, these Articles, the Act, the Listing Requirements, the Take-Overs and Mergers Code, the Income Tax Act, 1967 and/or any other relevant authorities or regulations, the Company may upon the recommendation of the Directors establish a Dividend Reinvestment Scheme. However, any member of the Company may elect not to participate in such scheme.
169 A notice or other document may also be
served by the Company or the Secretary on any member or Director by transmitting it by telefax or by telex with confirmed telex answerback (with postage prepaid air mail confirmation) to such member or Director at the telex number of such member or Director appearing in the register or the register of Directors or specified by such member or Director to the Company or the Secretary as such member's or Director's telex number for the time being in the case of telex messages and at the telefax number appearing in the register or the register of Directors or specified by such member or Director to the Company or the Secretary as such member's or Director's telefax number for the time being in the case of telefax messages.
A notice or other document may also be served by the Company or the Secretary on any member or Director by transmitting it by telefax or by telex with confirmed telex answerback (with postage prepaid air mail confirmation) or by email to such member or Director at the telefax number, telex number or email address of such member or Director appearing in the Register or the register of Directors or specified by such member or Director to the Company or the Secretary as such member's or Director's telefax number or telex number or email address for the time being.
3. RATIONALE FOR THE PROPOSED ARTICLES AMENDMENTS
The Proposed Articles Amendments are to amend the Company’s Articles of Association to be in line with the recent amendments to the Main Market LR.
4. EFFECTS OF THE PROPOSED ARTICLES AMENDMENTS
The Proposed Articles Amendments will not have any effect on the share capital, major shareholders’ shareholdings, net assets per share, earnings per share, dividend and gearing of Magni Group.
5. APPROVALS REQUIRED AND CONDITIONS OF THE PROPOSED ARTICLES
AMENDMENTS
The Proposed Articles Amendments are conditional upon the approval of the shareholders of Magni at the forthcoming Sixteenth AGM.
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the Directors and/or major shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposed Articles Amendments.
18
7. DIRECTORS’ RECOMMENDATION
The Board, having considered the rationale of the Proposed Articles Amendments, is of the opinion that the Proposed Articles Amendments are in the best interest of the Company. Accordingly, the Board recommends that you vote in favour of the special resolution in relation to the Proposed Articles Amendments to be tabled at the forthcoming Sixteenth AGM.
8. SIXTEENTH AGM The Sixteenth AGM of the Company will be held at Berjaya 1, 7th Floor, Georgetown City Hotel, 1-Stop
Midlands Park Centre, Jalan Burmah, 10350 Penang on Friday, 25 October 2013 at 10.30 a.m., or at any adjournment thereof, for the purpose of considering and, if thought fit, to pass the special resolution to give effect to the Proposed Articles Amendments.
If you are unable to attend and vote in person at the forthcoming AGM, you may complete and return the Form of Proxy enclosed in the Annual Report of Magni for the financial year ended 30 April 2013 in accordance with the instructions printed therein as soon as possible in any event, so as to arrive at the registered office of Magni not less than 48 hours before the time fixed for holding the Sixteenth AGM. The lodging of the Form of Proxy does not preclude you from attending and voting in person should you subsequently decide to do so.
Yours faithfully For and on behalf of the Board of Directors of
MAGNI-TECH INDUSTRIES BERHAD TAN SRI DATO’ SERI TAN KOK PING Executive Chairman
19
APPENDIX I – FURTHER INFORMATION _________________________________________________________________________________________________ 1. RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Board and they collectively and individually accept
full responsibility for the accuracy of the information given 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 LITIGATION
Magni Group is not engaged in any material litigation, claims or arbitration either as plaintiff or defendant and the Directors do not have any knowledge of any proceedings, pending or threatened, against Magni Group or of any facts likely to give rise to any proceedings which might materially affect the position or business of Magni Group.
3. MATERIAL CONTRACTS
Neither we nor any of our subsidiaries have entered into any material contracts (not being contracts entered into in the ordinary course of our business or of any of our subsidiaries) within the 2 years preceding the date of this Circular:
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection at the Registered Office of the Company following the publication of this Circular from Mondays to Fridays (except Public Holidays) during business hours up to and including the date of the AGM :-
(i) the Memorandum and Articles of Association of Magni ; (ii) the audited financial statements of Magni Group for the two (2) financial years ended 30 April
2012 and 2013 ; and (iii) the latest unaudited results of Magni Group for the 3 months ended 31 July 2013.
20
����������������� ���������������
