Download 1 DKLS INDUSTRIES BERHAD (369472-P)

DKLS INDUSTRIES BERHAD (369472-P)
(Incorporated In Malaysia)
ANNOUNCEMENT FOR PUBLIC RELEASE
RELATED PARTY TRANSACTION
PROPOSED ACQUISITION OF AGRICULTURE LAND LOCATED IN SITIAWAN,
PERAK DARUL RIDZUAN FOR A TOTAL CONSIDERATION OF RM2,070,000
1.0
INTRODUCTION
On behalf of the Board of Directors of DKLS Industries Berhad (“DKLS” or “the
Company”), we wish to announce that DKLS Quarry & Premix Sdn Bhd (“DQP”), a
wholly owned subsidiary of the Company, has on 22 December 2015 entered into a sale
and purchase agreement (“SPA”) with Mr Ding Poi Bor (“Vendor”), a director and major
shareholder of the Company, to acquire a piece of agriculture land located in Sitiawan,
Perak Darul Ridzuan (“Property”) from the Vendor for a total cash consideration of
RM2,070,000 (“Proposed Acquisition”).
Pursuant to paragraph 10.08 of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad, the Proposed Acquisition is deemed a related party transaction.
2.0
DETAILS OF THE PROPOSED ACQUISITION
2.1
Information on DQP
DKLS Quarry & Premix Sdn Bhd, bearing company no. 140722-U, was incorporated in
Malaysia under the Companies Act, 1965 as a private limited company on 4 June 1985
under its former name of Sri Ikhlas Kredit (Selangor) Sdn Bhd. It assumed its present
name on 1 August 1990. The authorised share capital of DQP amounts to RM5,000,000
comprising 5,000,000 ordinary shares of RM1.00 each, all of which are issued and
credited as fully paid-up. The principal activities of DQP are that of quarry master and
sale of related products.
The directors of DQP are Mr Ding Poi Bor, Ir Sam Tuck Wah and Ms Ding Soo King.
2.2
Information on the Property
The Property comprises all that piece of freehold vacant agriculture land held under GM
3921 Lot 766, Tempat Sitiawan, Mukim Sitiawan, Daerah Manjung, Negeri Perak
measuring in area approximately 4,441 square metres. The Property is to be acquired with
vacant possession on an as-is-where-is basis free from all encumbrances but subject to all
the existing conditions of the title and category of land use expressed or implied upon
relating to or affecting the Property.
There are no other liabilities, including contingent liability and guarantee, to be assumed
by DKLS Group arising from the Proposed Acquisition.
The Vendor is the registered proprietor and beneficial owner of the Property. The Vendor
has acquired the Property at a purchase price of RM2,000,000 on 10 December 2013.
2.3
Basis and Justification on arriving at the purchase consideration
The total purchase consideration of the Property has been arrived at on a willing-buyer
willing-seller basis after taking into consideration the market value of the Property as
appraised by Messrs Jordan Lee & Jaafar, an independent firm of registered valuer.
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Messrs Jordan Lee & Jaafar has vide their valuation report dated 2 December 2015
(“Valuation Report”) valued the Property at the market value of RM2,070,000 using the
comparison method of valuation.
2.4
Salient Terms of the SPA
The purchase consideration is to be paid by DQP in cash in the following manner:(a)
(i)
upon the execution of the SPA, DQP shall pay the Vendor the sum of
RM144,900, which is equivalent to 7% of the purchase consideration; and
(ii)
within sixty (60) days from the date of the SPA, DQP shall remit the sum
of RM62,100, equivalent to 3% of the purchase consideration, towards the
Vendor’s Real Property Gains Tax remittance sum in accordance with the
SPA.
The aforesaid payments totalling RM207,000, which is equivalent to 10% of the purchase
consideration, shall be deemed to the deposit sum to have been received by the Vendor as
part payment towards the purchase consideration.
(b)
within three (3) months from the date of the SPA (“Completion Date”), the
balance of the purchase consideration amounting to RM1,863,000 (“Balance
Sum”) shall be paid to DQP’s solicitors as stakeholders.
In the event DQP fails to pay the Balance Sum on or before the Completion Date, DQP
shall automatically be granted an extension of one (1) month at an interest rate of 8% per
annum on the unpaid portion of the Balance Sum until full payment of the same.
3.0
RATIONALE OF THE PROPOSED ACQUISITION
DQP intends to construct a 4-storey office building on the Property to be used as its new
office to replace the current office which is rented.
4.0
RISK FACTOR
The Company does not expect any risk to arise from the Proposed Acquisition.
5.0
SOURCE OF FUNDING
DKLS Group intends to fund the Proposed Acquisition through internally generated funds.
6.0
FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION
6.1
Earnings Per Share, Net Assets Per Share and Gearing
The Proposed Acquisition will not have any material effect on the earnings per share, net
assets per share and gearing of DKLS Group for the financial year ending 31 December
2015 and 2016.
6.2
Share Capital and Substantial Shareholders’ Shareholding
The Proposed Acquisition will not have any effect on the issued and paid-up share capital
and the substantial shareholders’ shareholdings in DKLS.
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7.0
APPROVAL REQUIRED
The Proposed Acquisition is not subject to the approval of shareholders of the Company
and any government authorities.
8.0
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST
The Proposed Acquisition is deemed a related party transaction by virtue of Mr Ding Poi
Bor, being the Vendor, is a director of DQP and also a director and major shareholder of
the Company.
Dato’ Ding Pei Chai, Ir Sam Tuck Wah and Mdm Ding Soo King are deemed interested in
the Proposed Acquisition by virtue of following:
(a)
(b)
(c)
Dato’ Ding Pei Chai, a director and major shareholder of the Company, is the
brother of Mr Ding Poi Bor;
Mdm Ding Soo King, a director and major shareholder of the Company and also a
director of DQP, is the sister of Mr Ding Poi Bor; and
Ir Sam Tuck Wah, a director and major shareholder of the Company and also a
director of DQP, is the brother in-law of Mr Ding Poi Bor.
Mr Ding Poi Bor, Dato’ Ding Pei Chai, Ir Sam Tuck Wah and Mdm Ding Soo King have
abstained and will continue to abstain from all deliberations at Board meetings in respect
of the Proposed Acquisition.
Save for Mr Ding Poi Bor, Dato’ Ding Pei Chai, Ir Sam Tuck Wah, Mdm Ding Soo King,
none of the directors and/or major shareholders of the Company and persons connected to
them have any interest, direct or indirect in the Proposed Acquisition.
9.0
AUDIT COMMITTEE’S STATEMENT
Save for Dato’ Ding Pei Chai, the Audit Committee of DKLS, having considered all
aspect of the Proposed Acquisition, including the rationale, fairness of the consideration
and the financial effects of the Proposed Acquisition, is of the opinion that the Proposed
Acquisition is in the best interest of DKLS and not detrimental to the interest of the
minority shareholders of DKLS.
Save for Dato’ Ding Pei Chai, the Audit Committee is of the view that the Proposed
Acquisition is fair, reasonable and on normal commercial terms.
10.0
DIRECTORS’ STATEMENT
Save for Mr Ding Poi Bor, Dato’ Ding Pei Chai, Ir Sam Tuck Wah and Mdm Ding Soo
King, the Board of Directors of DKLS, having considered all aspects of the Proposed
Acquisition, including the rationale, fairness of the consideration and the financial effects
of the Proposed Acquisition and the terms and conditions of the SPA and the
recommendation of the Audit Committee, is of the opinion that the Proposed Acquisition
is in the best interests of DKLS and not detrimental to the interest of the minority
shareholders DKLS.
Save for Mr Ding Poi Bor, Dato’ Ding Pei Chai, Ir Sam Tuck Wah and Mdm Ding Soo
King, the Board of Directors of DKLS is of the view that the Proposed Acquisition is fair,
reasonable and on normal commercial terms.
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11.0
TRANSACTIONS WITH THE VENDOR FOR THE PRECEDING 12 MONTHS
Save as disclosed below, there were no transactions entered into with the Vendor for the
preceding twelve (12) months:
12.0
(a)
On 8 May 2015, DKLS Premierhome Sdn Bhd, a wholly owned subsidiary of the
Company, as a property developer has entered into two (2) separate sale and
purchase agreements with Mr Ding Ju Shuen and Ms Ding Zhe Lin (collectively
referred to as the “Purchasers”), the children of the Vendor, for the disposal of
two (2) units of double storey semi-detached houses to be erected on two (2)
parcel of 99 years leasehold land expiring 5 November 2113 known as Parcel no.
L13 and L14 held under HS(D) 221756 PT 260214, Mukim Hulu Kinta, Daerah
Kinta, State of Perak, measuring approximately 3,200 square feet per parcel to the
Purchasers for a total consideration of RM1,392,800 (equivalent to RM696,400
per unit).
(b)
Rental of premises paid to the Vendor by the following wholly owned subsidiaries
of the Company:
(i)
DKLS Quarry & Premix Sdn Bhd – RM30,000;
(ii)
DKLS Development Sdn Bhd – RM24,000; and
(iii)
DKLS Marketing Sdn Bhd – RM6,000.
TIME FRAME FOR COMPLETION OF THE PROPOSED ACQUISITION
The Proposed Acquisition is expected to be completed within three (3) months from the
date of the SPA.
13.0
HIGHEST PERCENTAGE RATIO
The highest percentage ratio applicable to the Proposed Acquisition pursuant to paragraph
10.02(g) of the Main Market Listing Requirements is 0.63% based on the latest audited
financial statements of DKLS for the year ended 31 December 2014.
14.0
DOCUMENTS FOR INSPECTION
The SPA and the Valuation Report are available for inspection at the registered office of
DKLS at D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak
Darul Ridzuan during normal business hours on any week day (except public holidays) for
a period of three (3) months from the date of this announcement.
This announcement is dated 22 December 2015.
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