BOX-PAK (MALAYSIA) BHD. (Company No W) (Incorporated in Malaysia)

Transcription

1 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. Pursuant to the provisions of Practice Note 18 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) on the perusal of draft Circulars and other documents, Bursa Securities has not perused Part A of this Circular prior to its issuance, as they are Exempt Circulars. 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. BOX-PAK (MALAYSIA) BHD. (Company W) (Incorporated in Malaysia) (I) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY; AND (II) PROPOSED SHARE BUY-BACK OF UP TO TEN PER CENTUM (10%) OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY PART B (I) PROPOSED RENEWAL OF EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (II) PROPOSED NEW SHAREHOLDERS MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE The above proposals will be tabled as Special Business at the Thirty-Ninth Annual General Meeting ( 39 th AGM ) of Box-Pak (Malaysia) Bhd. ( Box-Pak or the Company ). The Notice of the 39 th AGM of the Company has been set out in the Company s Annual Report for the financial year ended 31 December 2012 which is sent to you together with this Circular. A Proxy Form is enclosed in the Annual Report 2012 which must be deposited at the Company s Registered Office at Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the time appointed for holding the 39 th AGM or adjournment thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last day and time for lodging the Form of Proxy : Monday, 10 June 2013 at a.m. Date and time of the 39 th AGM : Wednesday, 12 June 2013 at a.m. Place of the 39 th AGM : Conference Room Lot 4, Jalan Perusahaan Dua Batu Caves Selangor Darul Ehsan Malaysia This Circular is dated 20 May 2013

2 DEFINITIONS In this Circular, unless otherwise stated, the following abbreviations shall have the following meanings: Act : Companies Act, 1965, as amended from time to time and any re-enactment thereof AGM : Annual General Meeting Annual Report 2012 : Annual Report of Box-Pak issued for the financial year ended 31 December 2012 Board : The Board of Directors of Box-Pak Box-Pak or the Company : Box-Pak (Malaysia) Bhd. (21338-W) Box-Pak Group or the Group Box-Pak Share(s) or Shares(s) : Box-Pak and its subsidiaries : Ordinary share(s) of RM1.00 each in Box-Pak Bursa Securities : Bursa Malaysia Securities Berhad ( W) Can-One : Can-One Berhad ( K) Can-One Group : Can-One and its subsidiaries Can-One International : Can-One International Sdn Bhd ( K), a wholly-owned subsidiary of Can-One Can-One Share(s) : Ordinary share(s) of RM0.50 each in Can-One CMSA : Capital Market and Services Act, 2007, as amended, supplemented or modified from time to time Code : Malaysian Code on Take-Overs and Mergers, 2010 as amended from time to time and any re-enactment thereof Director(s) : Shall have the meaning given in Section 2(1) of the CMSA and for the purpose of the Proposed Mandate, includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a director or a chief executive officer of Box-Pak or its subsidiary or holding company, in accordance with the definition in Chapter 10 of the Listing Requirements Eller-Axis : Eller Axis Sdn Bhd ( K), a Substantial Shareholder of Can-One EPS : Earnings per Share Kian Joo : Kian Joo Can Factory Berhad ( P) Kian Joo Group : Kian Joo and its subsidiaries and associated companies excluding Box-Pak Group Kian Joo Share(s) : Ordinary share(s) of RM0.25 each in Kian Joo KJHSB : Kian Joo Holdings Sdn Bhd - In Liquidation (82842-D) 1

3 DEFINITIONS (cont d) Listing Requirements : Main Market Listing Requirements of Bursa Securities including any amendments thereto that may be made from time to time LPD : 30 April 2013, being the latest practicable date prior to the printing of this Circular Major Shareholder : A person who has an interest or interests in one (1) or more voting shares in a corporation and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is NA : Net assets (a) ten per centum (10%) or more of the aggregate of the nominal amounts of all the voting shares in the corporation; or (b) five per centum (5%) or more of the aggregate of the nominal amounts of all the voting shares in the corporation where such person is the largest shareholder of the corporation. For the purpose of this definition, interest in shares has the meaning given in Section 6A of the Act. For the purpose of the Proposed Mandate, a Major Shareholder (as defined above) includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a Major Shareholder of the Company or any other corporation which is its subsidiary or holding company, in accordance with the definition in Chapter 10 of the Listing Requirements Person(s) Connected : Shall have the same meaning given in Paragraph 1.01, Chapter 1 of the Listing Requirements Proposals : Collectively, the Proposed Amendments and Proposed Share Buy-Back Proposed Amendments : Proposed Amendments to Box-Pak s s of Association as set out in Appendix II of this Circular \ Proposed Mandate : Collectively, the Proposed Renewal of Mandate and the Proposed New Mandate Proposed New Mandate : Proposed new shareholders mandate to be obtained for additional RRPTs to be entered into, as set out in Section 2.4(b) of Part B of this Circular Proposed Renewal of Mandate : Proposed renewal of existing shareholders mandate for RRPTs obtained on 18 June 2012, as set out in Section 2.4(a) of Part B of this Circular Proposed Share Buy-Back : The proposal to enable Box-Pak to purchase or hold in aggregate such number of its ordinary shares of nominal value of RM1.00 each representing not more than ten per centum (10%) of the issued and paid-up share capital of Box-Pak Purchased Shares : Shares purchased pursuant to the Proposed Share Buy-Back Related Party : A Director, Major Shareholder or Person Connected with such Director or Major Shareholder RM and Sen : Ringgit Malaysia and sen respectively RRPTs : Transactions entered into or proposed to be entered into by the Group which involve the interest, direct or indirect, of the Related Parties and which are recurrent, of a revenue or trading nature and which are necessary for day-to-day operation of Box-Pak Group and are in the ordinary course of business of Box-Pak as specified in Section 2.4 of Part B of this Circular 2

4 DEFINITIONS (cont d) SC : Securities Commission Substantial Shareholder : A person who has an interest or interests in one (1) or more voting shares in Box-Pak and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is not less than five per centum (5%) of the aggregate of the nominal amounts of all the voting shares in Box-Pak Transacting Party : A party with which the Company or any of its subsidiaries has entered or may or intend to enter, into a RRPT under the Proposed Mandate Unless otherwise stated, the information set out above in relation to the Major Shareholders, Directors and Person Connected is as at LPD. Words denoting the singular shall include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders, and vice versa. References to person shall include corporations and vice versa. Any reference to any enactment in this Circular is a reference to that enactment as for the time being amended or re-enacted. Any discrepancies in the tables included in this Circular between the amounts listed, actual figures and the totals thereof are due to rounding. Any reference to time of day in this Circular is a reference to Malaysian time, unless otherwise stated. The rest of this page has been intentionally left blank 3

5 CONTENTS PART A PAGE (I) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY; AND (II) PROPOSED SHARE BUY-BACK OF UP TO TEN PER CENTUM (10%) OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY LETTER TO SHAREHOLDERS OF BOX-PAK CONTAINING: 1. INTRODUCTION DETAILS OF THE PROPOSALS RATIONALE FOR THE PROPOSALS POTENTIAL DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK EFFECTS OF THE PROPOSALS PUBLIC SHAREHOLDING SPREAD IMPLICATION OF THE PROPOSED SHARE BUY-BACK IN RELATION TO THE CODE PURCHASE, RESALE AND CANCELLATION OF PURCHASED SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS SHARE PRICES APPROVAL REQUIRED DIRECTORS AND/OR SUBSTANTIAL SHAREHOLDERS INTERESTS DIRECTORS RECOMMENDATION TH AGM FURTHER INFORMATION.. 16 PART B (I) PROPOSED RENEWAL OF EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (II) PROPOSED NEW SHAREHOLDERS MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE LETTER TO SHAREHOLDERS OF BOX-PAK CONTAINING: 1. INTRODUCTION BACKGROUND INFORMATION IN RESPECT OF THE PROPOSED MANDATE RATIONALE AND BENEFITS FOR THE PROPOSED MANDATE EFFECTS OF THE PROPOSED MANDATE APPROVAL REQUIRED

6 CONTENTS (cont d) PART B PAGE 6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM DIRECTORS RECOMMENDATION TH AGM FURTHER INFORMATION. 29 APPENDICES APPENDIX I FURTHER INFORMATION APPENDIX II PROPOSED AMENDMENTS. 31 5

7 PART A (I) (II) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY; AND PROPOSED SHARE BUY-BACK OF UP TO TEN PER CENTUM (10%) OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY 6

8 BOX-PAK (MALAYSIA) BHD. (Company W) (Incorporated in Malaysia) Registered Office Lot 4, Jalan Perusahaan Dua Batu Caves Selangor Darul Ehsan Malaysia 20 May 2013 Directors: Y.A.M. Tunku Dato Seri Nadzaruddin Ibni Almarhum Tuanku Ja afar (Independent Non-Executive Chairman) Dato Anthony See Teow Guan (Managing Director) Yeoh Jin Hoe (Executive Director) See Teow Koon (Executive Director) See Tiau Kee (Executive Director) Tan Kim Seng (Executive Director) See Leong Sze Leong Chye (Independent Non-Executive Director) Dato Michael Tan Guan Cheong (Independent Non-Executive Director) Izlan Bin Izhab (Independent Non-Executive Director) To: The Shareholders of Box-Pak Dear Sir/Madam (I) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY; AND (II) PROPOSED SHARE BUY-BACK OF UP TO TEN PER CENTUM (10%) OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY 1. INTRODUCTION On 1 April 2013, the Company announced to Bursa Securities that the Company proposes to seek shareholders approval at the forthcoming 39 th AGM of the Company for the Proposed Amendments and conditional upon the passing of the special resolution to approve the Proposed Amendments, for the Company to undertake the purchase of up to ten per centum (10%) of the prevailing issued and paid-up share capital of the Company, subject to the approval of the prevailing laws, rules, regulations, orders, guidelines and requirements as may be issued by the relevant authorities. The purpose of this Circular is to provide you with the relevant information pertaining to the Proposals and to seek your approval for the resolutions pertaining to the Proposals to be tabled at the forthcoming 39 th AGM of the Company to be held at the Conference Room, Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor Darul Ehsan, Malaysia on Wednesday, 12 June 2013 at a.m. SHAREHOLDERS OF BOX-PAK ARE ADVISED TO READ THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS AT THE FORTHCOMING AGM. 7

9 2. DETAILS OF THE PROPOSALS 2.1. Proposed Amendments We propose to amend the s of Association of the Company in the manner set out on Appendix II of this Circular Proposed Share Buy-Back The Board proposes to seek approval of the shareholders of the Company to purchase from time to time and at any time, in aggregate such number of Shares representing not more than ten per centum (10%) of the issued and paid-up share capital of the Company as at the time of the purchase, on Bursa Securities through stockbrokers to be appointed by the Company at a later date. As at LPD, the total issued and paid-up share capital of the Company amounted to RM60,023,490 comprising 60,023,490 Shares. Hence, the maximum number of Shares which may be purchased by the Company will be 6,002,349 Shares. The Proposed Share Buy-Back is subject to compliance with Section 67A of the Act and Part IIIA of the Companies Regulations 1966 and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by the relevant authorities ( Prevailing Laws ) at the time of the purchase including compliance with the public shareholding spread as required by the Listing Requirements. The authority from shareholders for the Proposed Share Buy-Back, if passed, will be effective immediately upon the passing of the ordinary resolution to be tabled at the forthcoming 39 th AGM of the Company and will continue to be in force until: (a) (b) (c) the conclusion of the next AGM of the Company, at which time the authority shall lapse, unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or the expiration of the period within which the next AGM of the Company is required by law to be held; or revoked or varied by ordinary resolution passed by the shareholders of the Company at a general meeting, whichever occurs first. The approval of the shareholders for the Share Buy-Back does not impose an obligation on the Company to purchase its own Shares but rather, it will allow the Board to exercise the power of the Company to purchase its own Shares at any time within the abovementioned time period. The actual number of Shares to be purchased, the total amount of funds involved for each purchase and the funding of the purchase will depend on the market conditions and sentiments of the stock market as well as the financial resources available to the Company Status and Treatment of the Purchased Shares Pursuant to the provisions of Section 67A of the Act, the Board may deal with the Purchased Shares in the following manner: (a) cancel the Shares so purchased; or (b) retain the Shares so purchased as treasury shares; or (c) retain part of the Shares so purchased as treasury shares and cancel the remainder; or (d) distribute the treasury shares as dividends to shareholders and/or resell on the market of Bursa Securities and/or cancel all or part of them. 8

10 Appropriate announcement(s) and notice(s) will be made to Bursa Securities and the relevant authorities in respect of the Board s decision on the treatment of the Purchased Shares in compliance with the Prevailing Laws. The Board may decide to cancel the Purchased Shares if the cancellation of the said shares is expected to enhance the EPS of the Group and thereby in the long term, have a positive impact on the market price of the Shares. If the Board decides to retain the Purchased Shares as treasury shares, it may distribute the treasury shares as dividend to the Company s shareholders and/or resell the Purchased Shares on Bursa Securities and utilise the proceeds for any feasible investment opportunity arising in future as working capital. While the Purchased Shares are held as treasury shares, the rights attached to them as to voting, dividends and participation in other distributions and otherwise are suspended, and the treasury shares shall not be taken into account in calculating the number or percentage of Shares or a class of shares in the Company for any purpose including substantial shareholding, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on resolution at a meeting of the shareholders Funding for the Proposed Share Buy-Back The Board proposes to allocate a maximum amount not exceeding the retained profits and/or the share premium account of the Company for the Proposed Share Buy-Back. The retained profits and the share premium account of the Company based on the audited financial statements of the Company for the financial year ended 31 December 2012 were RM17,678,667 and RM23,960 respectively. The Proposed Share Buy-Back will be funded from internally generated funds and/or bank borrowings, the proportion of which will depend on the quantum of purchase consideration as well as the availability of internally generated funds and borrowings and repayment capabilities of the Company at the time of purchase. In the event that the Proposed Share Buy-Back is to be partly financed by bank borrowings, this is not expected to affect the Company s repayment capabilities. Although the cash flow of the Company and the Group will be reduced to the extent of the number of Shares bought and the purchase consideration, the Company do not foresee any difficulty and the Proposed Share Buy-Back is not expected to have a negative impact on the financial results of the Group. The Board is mindful of the interest of the Company and its shareholders and will be prudent in respect of the Proposed Share Buy-Back exercise Pricing Pursuant to the Listing Requirements, the Company may only purchase its own Shares on Bursa Securities at a price which is not more than fifteen per centum (15%) above the weighted average market price for the Shares for the five (5) market days immediately before the date of the purchase. The Company may only resell the Purchased Shares held as treasury shares on Bursa Securities at: (a) a price which is not less than the weighted average market price for the Shares for the five (5) market days immediately before the resale; or (b) a discounted price of not more than five per centum (5%) to the weighted average market price for the Shares for the five (5) market days immediately before the resale provided that: (i) the resale takes place not earlier than thirty (30) days from the date of purchase; and (ii) the resale price is not less than the cost of purchase of the Shares being resold. 9

11 3. RATIONALE FOR THE PROPOSALS 3.1. Proposed Amendments The Proposed Amendments involve amendments to the s of Association to ensure the following: (a) (b) (c) (d) inclusion of a provision in the s of Association to allow the Company to purchase its own shares; streamlining of the s of Association with the recent amendments to the Listing Requirements; improvement of selected provisions in the s of Association for better clarity and ease of administration including through electronic channels; and deletion of certain provisions in the s of Association which are no longer relevant. Further details of the Proposed Amendments are set out in Appendix II of this Circular Proposed Share Buy-Back The Proposed Share Buy-Back is expected to enhance the EPS and the return on equity in the event of the cancellation of the Shares bought back by the Company which will benefit of the shareholders of the Company. The Purchased Shares can also be held as treasury shares and resold on the market of Bursa Securities at a higher price with the intention of realising a potential gain without affecting the total issued and paid-up share capital of the Company. In the event the treasury shares are distributed as share dividends to shareholders, this would serve as a reward to the shareholders of the Company. 4. POTENTIAL DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back if exercised, will reduce the: (i) (ii) financial resources of the Group. This may result in the Group having to forgo other investment opportunities that may emerge in the future or deprive the Company of interest income that may be earned from deposits with licensed financial institutions. amount of reserves available for distribution in the form of cash dividends and/or bonus issue(s) to the shareholders of the Company in the event that the Purchased Shares are cancelled, or if the Purchased Shares are held as treasury shares and are subsequently sold on the market of Bursa Securities at a loss. However, the financial resources of the Group may increase if the Purchased Shares held as treasury shares are resold in the market at prices higher than the purchase price. Therefore, the Proposed Share Buy-Back will be undertaken only after due consideration of the financial resources of the Group. The Board will be mindful of the interests of the Company and the shareholders when undertaking the Proposed Share Buy-Back. 5. EFFECTS OF THE PROPOSALS 5.1. Proposed Amendments The Proposed Amendments will not have any effect on the issues and paid-up share capital, shareholdings of the Substantial Shareholders in the Company and the earnings, NA and gearing of the Group. 10

12 5.2. Proposed Share Buy-Back Share Capital NA The effect of the Proposed Share Buy-Back on the issued and paid-up share capital of the Company will depend on whether the Purchased Shares are cancelled or retained as treasury shares. The Proposed Share Buy-Back will result in a reduction of the issued and paid-up share capital of the Company if the Purchased Shares are cancelled. Based on the assumption that the Proposed Share Buy-Back is implemented in full and all the Purchased Shares are cancelled, the effect on the share capital of the Company is illustrated below: Existing issued and paid-up share capital as at LPD of Shares RM 60,023,490 60,023,490 Less: Maximum number of Purchased Shares cancelled (6,002,349) (6,002,349) Resultant issued and paid-up share capital upon completion of the Proposed Share Buy-Back 54,021,141 54,021,141 However, there will be no effect on the total issued and paid-up share capital of the Company if the Purchased Shares are retained as treasury shares, resold or distributed to the shareholders. When the Company purchases its own Shares, regardless of whether they are retained as treasury shares or are subsequently cancelled, the NA per Share of the Group will decrease if the cost per Share purchased exceeds the NA per Share of the Group at the time of purchase. Conversely, if the cost per Share purchased is below the NA per Share of the Group at the time of purchase, the NA per Share of the Group will increase. In the case where the Purchased Shares are treated as treasury shares and are subsequently resold on Bursa Securities, the NA per Share of the Group upon resale will increase if the Company realises a gain from the resale, and vice-versa. If the treasury shares are distributed as share dividends, the NA of the Group will decrease by the cost of the treasury shares Working Capital The Proposed Share Buy-Back, if exercised, will reduce the working capital and cashflow of the Group, the quantum of which is dependent on the number of Shares purchased, the purchase price(s) of the Shares and the funding cost, if any. However, the working capital and the cashflow of the Group will increase upon resale of the Purchased Shares which are retained as treasury shares. Again, the quantum of the increase in the working capital and cashflow will depend on the actual selling price(s) of the treasury shares and the number of treasury shares resold Earnings All things being equal, the Proposed Share Buy-Back will result in a lower number of Shares being used for the computation of EPS whether the Shares purchased are subsequently cancelled or retained as treasury shares. The extent of the effect on the EPS of the Group will depend on the purchase price(s) of the Shares, the number of Purchased Shares, and the effective funding cost or loss in interest income and/or the opportunity cost in relation to other investment opportunities to the Group. In the event that the treasury shares are resold on the open market, the EPS of the Group may increase if the Company realises a gain from the sale and vice versa. The effects on the earnings of the Group will depend on the actual selling price(s), the number of treasury shares resold and the effective gain or loss arising from the resale. 11

13 Dividends The Proposed Share Buy-Back is not expected to have any material effect on the dividend policy of the Company. The dividend to be declared by the Company in the future would be determined by the Board after taking into consideration the performance of the Group and the prevailing economic conditions. However, as stated in Sections 2 and 3 above, the Board may distribute future dividends in the form of the treasury shares purchased pursuant to the Proposed Share Buy-Back. The rest of this page has been intentionally left blank 12

14 Directors and Substantial Shareholders Shareholdings (a) Directors Assuming the Company acquires the full amount of the Shares authorised under the Proposed Share Buy-Back and all the Shares so purchased are fully cancelled and there is no change in the number of Shares held by the Directors of the Company as at LPD, the effect of the Proposed Share Buy-Back on the percentage shareholdings of the Directors are as follows: (According to the Company s Register of Directors Shareholdings as at LPD) Director Existing After Proposed Share Buy-Back Direct Indirect Direct Indirect of Shares % of Shares % of Shares % of Shares % Y.A.M. Tunku Dato Seri Nadzaruddin Ibni Almarhum Tuanku Ja afar 2,329, ,329, Dato Anthony See Teow Guan 85, ,500 (a) , ,500 (a) 0.07 Yeoh Jin Hoe ,910,000 (b) ,910,000 (b) See Teow Koon See Tiau Kee Tan Kim Seng 12, ,000 (c) , ,000 (c) 0.56 See Leong Sze Leong Chye Dato Michael Tan Guan Cheong Izlan Bin Izhab Notes: (a) Deemed interest through Shares held by (1) his spouse, Datin Foo Kim Fong (34,500 Shares) and (2) his children, Doreen See Wai Ching (1,500 Shares) and Maggie See Wai Yen (1,500 Shares). (b) Deemed interest through Shares held by Kian Joo in which Can-One International holds more than 15% voting shares. (c) Deemed interest through Shares held by his spouse, Lim Siew Jong. 13

15 Directors and Substantial Shareholders Shareholdings (cont d) (b) Substantial Shareholders Assuming the Company acquires the full amount of the Shares authorised under the Proposed Share Buy-Back and all the Shares so purchased are fully cancelled and there is no change in the number of Shares held by the Substantial Shareholders of the Company as at LPD, the effect of the Proposed Share Buy-Back on the percentage shareholdings of the Substantial Shareholders are as follows: (According to Box-Pak s Register of Substantial Shareholders as at LPD) Substantial Shareholder Existing After Proposed Share Buy-Back Direct Indirect Direct Indirect of Shares % of Shares % of Shares % of Shares % Kian Joo 32,910, ,910, Amanahraya Trustees Berhad - Skim Amanah Saham Bumiputra 3,100, ,100, Can-One International ,910,000 (a) ,910,000 (a) Can-One ,910,000 (b) ,910,000 (b) Eller Axis ,910,000 (c) ,910,000 (c) Yeoh Jin Hoe ,910,000 (d) ,910,000 (d) Notes: (a) Deemed interest through Kian Joo in which Can-One International holds more than 15% voting shares. (b) Deemed interest through wholly-owned subsidiary, Can-One International. (c) Deemed interest through Can-One in which Eller Axis holds more than 15% voting shares. (d) Deemed interest through Eller Axis in which he holds more than 15% voting shares. 14

16 6. PUBLIC SHAREHOLDING SPREAD As at LPD, the public shareholding spread of the Company was 36.18%. Assuming the Proposed Share Buy-Back is implemented in full and all the Shares so purchased are from public shareholders, the public shareholding spread of the Company would be reduced to 29.09%. As at the date hereof, the Company has yet to determine the actual percentage of its own Shares to be purchased pursuant to the Proposed Share Buy-Back. However, the Company is mindful of the above implication relating to public shareholding spread and will use its best endeavours in purchasing its own Shares to such an extent that it will not result in the Company being in breach of the minimum public shareholding spread of twenty-five per centum (25%). 7. IMPLICATION OF THE PROPOSED SHARE BUY-BACK IN RELATION TO THE CODE The Board does not anticipate any implications relating to the Code even if the allowed maximum numbers of Shares are purchased pursuant to the authority granted under the Proposed Share Buy-Back. 8. PURCHASE, RESALE AND CANCELLATION OF PURCHASED SHARES MADE IN THE PREVIOUS TWELVE (12) MONTHS As this is the first Proposed Share Buy-Back, the Company has not made any purchase of its own Shares or resale of treasury shares in the previous twelve (12) months preceding the date of this Circular. 9. SHARE PRICES The monthly highest and lowest prices of the Shares traded on Bursa Securities for the last twelve (12) months from May 2012 to April 2013 are as follows: Month High (RM) Low (RM) 2012 May June July August September October November December January February March April The last transacted price of the Shares on LDP was RM2.10. (Source: The Star Online) 10. APPROVAL REQUIRED The Proposals are subject to the approval of the shareholders at the forthcoming 39 th AGM of the Company. 15

17 11. DIRECTORS AND/OR SUBSTANTIAL SHAREHOLDERS INTERESTS None of the Directors, Substantial Shareholders and/or Persons Connected with the Directors or Substantial Shareholders of the Company have any interest, direct or indirect in the Proposed Amendments. Save for the proportional increase in the percentage shareholdings and/or voting rights of shareholders as a consequence of the implementation of the Proposed Share Buy-Back, none of the Directors, Substantial Shareholders and/or Persons Connected with them has any interest, direct or indirect, in the Proposed Share Buy-Back. 12. DIRECTORS RECOMMENDATION Having considered all aspects of the Proposed Amendments, the Board is of the opinion that the Proposed Amendments are in the best interests of the Company. Accordingly, the Board recommends that you vote in favour of the special resolution pertaining to the Proposed Amendments to be tabled at the forthcoming 39 th AGM. The Board, after having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the Proposed Share Buy-Back is in the best interests of the Company. Accordingly, the Board recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Share Buy-Back to be tabled at the forthcoming 39 th AGM TH AGM The resolutions to approve the Proposals are set out as Special Business in the Notice convening the 39 th AGM of the Company which is incorporated in the Annual Report 2012 despatched with this Circular. The AGM will be held at the Conference Room of Box-Pak at Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor Darul Ehsan, Malaysia on Wednesday, 12 June 2013 at a.m.. If you are unable to attend and vote in person at the 39 th AGM, you are requested to complete and return the Proxy Form enclosed in the Annual Report 2012 in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the Company Registered Office at Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the date and time fixed for the 39 th AGM or any adjournment thereof. However, the lodging of the Proxy Form will not preclude you from attending and voting in person at the 39 th AGM should you subsequently wish to do so. 14. FURTHER INFORMATION Shareholders are requested to refer to the attached Appendix I for further information. The rest of this page has been intentionally left blank 16

18 PART B (I) PROPOSED RENEWAL OF EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (II) PROPOSED NEW SHAREHOLDERS MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 17

19 BOX-PAK (MALAYSIA) BHD. (Company W) (Incorporated in Malaysia) Registered Office Lot 4, Jalan Perusahaan Dua Batu Caves Selangor Darul Ehsan Malaysia 20 May 2013 Directors: Y.A.M. Tunku Dato Seri Nadzaruddin Ibni Almarhum Tuanku Ja afar (Independent Non-Executive Chairman) Dato Anthony See Teow Guan (Managing Director) Yeoh Jin Hoe (Executive Director) See Teow Koon (Executive Director) See Tiau Kee (Executive Director) Tan Kim Seng (Executive Director) See Leong Sze Leong Chye (Independent Non-Executive Director) Dato Michael Tan Guan Cheong (Independent Non-Executive Director) Izlan Bin Izhab (Independent Non-Executive Director) To: The Shareholders of Box-Pak Dear Sir/Madam (I) PROPOSED RENEWAL OF EXISTING SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (II) PROPOSED NEW SHAREHOLDERS MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 1. INTRODUCTION The shareholders of the Company had on 18 June 2012 approved the shareholders mandate for the Company to enter into RRPTs set out in Section 2.4(a) here below. In accordance with the Listing Requirements, the mandate referred to above shall lapse at the conclusion of the forthcoming 39 th AGM unless authority for its renewal is obtained from the shareholders of the Company. In addition to the Proposed Renewal of Mandate, the Company will be seeking a new shareholders approval for the Group to enter into additional RRPTs. Accordingly, on 1 April 2013, the Company announced to Bursa Securities that it intends to seek shareholders approval for the Proposed Mandate at the Company s forthcoming 39 th AGM. The purpose of this Circular is to provide you with relevant information pertaining to the Proposed Mandate and to seek your approval for the ordinary resolutions in connection with the Proposed Mandate to be tabled at the forthcoming 39 th AGM of the Company to be held at the Conference Room, Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor Darul Ehsan, Malaysia on Wednesday, 12 June 2013 at a.m.. SHAREHOLDERS OF BOX-PAK ARE ADVISED TO READ THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE ORDINARY RESOLUTIONS PERTAINING TO THE PROPOSED MANDATE AT THE FORTHCOMING AGM. 18

20 2. BACKGROUND INFORMATION IN RESPECT OF THE PROPOSED MANDATE Pursuant to Paragraph of Chapter 10 of the Listing Requirements and Practice Note 12, a listed issuer may seek its shareholders mandate for RRPTs provided that: (a) (b) 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 and are not to the detriment of the minority shareholders; 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 (based on the type of transactions, names of related parties involved in each type of transaction made and their relationship with the listed issuers) where: (i) the consideration, value of the assets, capital outlay or costs of the aggregated transactions is equal to or exceeds RM1 million; or (ii) any one of the percentage ratios of such aggregated transactions is equal to or exceeds one per centum (1%), whichever is the higher; (c) (d) (e) the contents of the circular issued by the listed issuer to its shareholders for purposes of the shareholders mandate shall include information as set out in the Listing Requirements and Practice Note 12; in a meeting to obtain shareholders mandate, the interested director, interested major shareholder and 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 resolutions approving the transactions. An interested director or interested major shareholder must also ensure that persons connected with him will abstain from voting on the resolutions approving the transactions; and the listed issuer immediately announces to Bursa Securities when the actual value of a recurrent related party transaction entered into by the listed issuer exceeds the estimated value of the recurrent related party transaction disclosed in the circular by ten per centum (10%) or more and must include the information as may be prescribed by Bursa Securities in its announcement. Where a listed issuer has procured a shareholders mandate pursuant to Paragraph 10.09(2) of Chapter 10 of the Listing Requirements, the provision of Paragraph of Chapter 10 of Listing Requirements will not apply Principles activities of the Group The business activities of the Group are broadly categorised into manufacturing and distribution of paper boxes, cartons, general paper and board printing and investment holding. The principal activities of the subsidiary companies of the Company in relation to RRPTs are described as follows: Company Subsidiary companies of Box-Pak Box-Pak (Johore) Sdn Bhd Box-Pak (Hanoi) Co., Ltd Box-Pak (Vietnam) Co., Ltd Equity Interest (%) Principal Activities Corrugated fibre board carton manufacturer Corrugated fibre board carton manufacturer Corrugated fibre board carton manufacturer 19

21 2.2. Principal activities of the related Transacting Parties (a) The holding company of Box-Pak is Kian Joo which is principally involved in the manufacture distribution of tin cans and investment holding. The principal activities of subsidiary and associated companies of KianJoo that have entered and/or will enter into the RRPTs with the Group are as follows: Company Subsidiary companies of Kian Joo Federal Metal Printing Factory, Sdn Berhad KianJoo s Equity Interest (%) Principal Activities 100 Can manufacturer Kian Joo Can (Vietnam) 100 Can manufacturer Co., Ltd Kian Joo Canpack Sdn Bhd 100 Provision of contract packing services Kian Joo Canpack (Shah Alam) Sdn Bhd Kian Joo Canpack (Vietnam) Co., Ltd 100 Provision of contract packing services 60 Provision of contract packing services (Ceased as subsidiary on 10 October 2012) Kian Joo Packaging Sdn Bhd piece aluminium beverage can manufacturer KJ Can (Johore) Sdn Bhd 100 Can manufacturer KJ Can (Selangor) Sdn Bhd 100 Can manufacturer KJM Aluminium Can Sdn Bhd piece aluminium retortable can manufacturer KJO Systems Sdn Bhd 100 Manufacture of packaging machinery Metal-Pak (Malaysia) Sdn Bhd 100 Can manufacturer Associated company of Kian Joo Kian Joo-Visypak Sdn Bhd ( KJVP ) 50 Manufacture and supply of recyclable plastic bottles (b) Can-One, a Major Shareholder of Box-Pak, is principally an investment holding company. The principal activities of subsidiary companies of Can-One that will enter into the RRPTs with the Group are set out below: Company Subsidiary companies of Can-One Can-One s Equity Interest (%) Principal Activities Aik Joo Can Factory Sdn Berhad 100 Manufacture of metal and lithographed cans and plastic jerry cans Ajcan Sdn Bhd 100 Manufacture of metal and lithographed cans Canzo Sdn Bhd 100 Manufacture and trading of plastic jerry cans and related products F & B Nutrition Sdn Bhd 80 Manufacture, packaging and distribution of dairy and non-dairy products Grensing Pte Ltd 100 General wholesale trade PT Corum 100 Manufacture of tin cans and jerry cans 20

22 2.3. Category of RRPTs The category of RRPTs to be covered by the Proposed Mandate relates to sale of cartons Nature of the RRPTs Details of RRPTs for which the Proposed Mandate is being sought as well the Transacting Parties, the interested Related Parties and the nature of their relationships are as follows: (a) RRPTs which may or will be entered into under the Proposed Renewal of Mandate Provider of products Recipient of products Nature of transaction Estimated Annual Value * Estimated Value as disclosed in the Circular to Shareholders dated 25 May 2012 Actual Value transacted from 18 June 2012 up to LPD ** (RM 000) (RM 000) (RM 000) Interested Related Parties Notes Box-Pak Hercules Sdn Bhd Sales of cartons See Leong Sze Leong Chye (1) Box-Pak Group Kian Joo Group Sales of cartons 6,000 6,000 4,207 Y.A.M. Tunku Dato Seri Nadzaruddin Ibni Almarhum Tuanku Ja afar Dato Anthony See Teow Guan See Teow Koon See Tiau Kee Yeoh Jin Hoe Can-One International Can-One Eller Axis Chee Khay Leong (2) (3) (4) (5) (6) (7) (8) (9) (10) TOTAL 6,800 6,800 4,686 21

23 2.4 Nature of the RRPTs (cont d) (b) RRPTs which may or will be entered into under the Proposed New Mandate Provider of products Recipient of products Nature of Transaction Estimated Annual Value * (RM 000) Interested Related Party Notes Box-Pak Group Can-One Group Sales of cartons 25,000 Yeoh Jin Hoe Can-One International Can-One Eller Axis Chee Khay Leong (6) (7) (8) (9) (10) Box-Pak Group Hercules Vietnam Co., Ltd Sales of cartons 800 See Leong Sze Leong Chye (1) Notes: (1) See Leong Sze Leong Chye who is a Director of Box-Pak, is also a Major Shareholder and Director of Hercules Sdn Bhd group of companies. He holds 1,585,533 Kian Joo Shares representing 0.36% of the issued and paid-up share capital of Kian Joo and has an indirect equity interest over 190,800 Kian Joo Shares representing 0.04% of the issued and paid-up share capital of Kian Joo held via his spouse. He does not have any interest, direct or indirect, in Box-Pak Shares and Can-One Shares. (2) Y.A.M. Tunku Dato Seri Nadzaruddin Ibni Almarhum Tuanku Ja afar who is the Chairman of Box-Pak, is also a Director of Kian Joo. He has direct equity interest over 2,329,500 Box-Pak Shares representing 3.88% of the issued and paid-up share capital of Box-Pak. He holds 360,000 Kian Joo Shares representing 0.08% of the issued and paid-up share capital of Kian Joo and has an indirect equity interest over 503,707 Kian Joo Shares representing 0.11% of the issued and paid-up share capital of Kian Joo held via Syarikat Pesaka Antah Sdn Bhd in which he has a controlling interest. He does not have any interest, direct or indirect, in Can-One Shares. (3) Dato Anthony See Teow Guan who is the Managing Director of Box-Pak, is also the Executive Director of Kian Joo and a Director of KJVP. He has direct equity interest over 85,500 Box-Pak Shares representing 0.14% of the issued and paid-up share capital of Box-Pak and has a deemed equity interest over 37,500 Box-Pak Shares representing 0.06% of the issued and paid-up share capital of Box-Pak held via his spouse and children. He holds 5,263,292 Kian Joo Shares representing 1.18% of the issued and paid-up share capital of Kian Joo and has an indirect equity interest over 7,849,367 Kian Joo Shares representing 1.77% of the issued and paid-up share capital of Kian Joo held via KJHSB, his spouse and children. He does not have any interest, direct or indirect, in Can-One Shares. 22

24 2.4. Nature of the RRPTs (cont d) Notes: (4) See Teow Koon is an Executive Director of Box-Pak and Kian Joo. He holds 1,496,678 Kian Joo Shares representing 0.34% of the issued and paid-up share capital of Kian Joo and has an indirect equity interest over 8,152,809 Kian Joo Shares representing 1.84 % of the issued and paid-up share capital of Kian Joo held via KJHSB and his spouse. He does not have any interest, direct or indirect, in Box-Pak Shares and Can-One Shares. (5) See Tiau Kee is an Executive Director of Kian Joo and Box-Pak. He holds 1,992,000 Kian Joo Shares representing 0.45% of the issued and paid-up share capital of Kian Joo and has an indirect equity interest over 7,866,117 Kian Joo Shares representing 1.77% of the issued and paid-up share capital of Kian Joo held via KJHSB and his spouse. He does not have any interest, direct or indirect, in Box-Pak Shares. He has an indirect equity interest over 50,000 Can-One Shares representing 0.03% of the issued and paid-up share capital of Can-One held by his spouse. (6) Yeoh Jin Hoe is an Executive Director of Box-Pak and the Group Managing Director of Kian Joo. He is also a Major Shareholder of Kian Joo having indirect equity interest over 146,131,500 Kian Joo Shares representing 32.90% of the issued and paid-up share capital of Kian Joo by virtue of his controlling interest in Eller Axis. Accordingly, he is also a Major Shareholder of Box-Pak by virtue of his indirect equity interest over 32,910,000 Box-Pak Shares representing 54.83% of the issued and paid-up share capital of Box-Pak which are held by Kian Joo. He is also a Director of Can-One International, Can-One and Eller Axis. He is also a Major Shareholder of Can-One holding 6,690,000 Can-One Shares representing 4.39% of the issued and paid-up share capital of Can-One and has an indirect equity interest over 45,157,281 Can-One Shares representing 29.63%of the issued and paid-up share capital of Can-One held via Eller Axis. (7) Can-One International is a Major Shareholder of Kian Joo, the holding company of Box-Pak. Accordingly, it is also a Major Shareholder of Box-Pak by virtue of Kian Joo s shareholdings in Box-Pak. (8) Can-One, the holding company of Can-One International, is a Major Shareholder of Kian Joo by virtue of Can-One International s interest in Kian Joo as well as a Major Shareholder of Box-Pak by virtue of Kian Joo s interest in Box-Pak. (9) Eller Axis is a Major Shareholder of Can-One. Accordingly, it is a Major Shareholder of Kian Joo and Box-Pak. (10) Chee Khay Leong is the Chief Operating Officer cum Executive Director of Kian Joo and a Director in all the subsidiary companies of Box-Pak. He does not have any interest, direct or indirect, in the shares of Kian Joo and Box-Pak. He is an Executive Director of Can-One and holds 1,554,100 Can-One Shares representing 1.02% of the issued and paid-up share capital of Can-One. * The values are merely estimates and refer to values of transactions to be entered into from 12 June 2013 to the following AGM in June The estimates may vary and are subject to changes. ** The actual value transacted from 18 June 2012 up to the LPD did not exceed by ten per centum (10%) or more of the Estimated Value as disclosed in the Circular to Shareholders dated 25 May There were no outstanding amounts due from the Transacting Parties under the RRPTs which exceeded the credit term as at 31 December

25 The bases in determining the estimated value of the RRPTs are as follows: (a) Sale of cartons to Kian Joo Group Box-Pak Group is a member of the Kian Joo Group and has been a reliable supplier of carton boxes to the Group. The estimated value of the transactions is based on the average actual sales for the past two (2) years. The transactions are undertaken by the relevant members of Box-Pak Group in their ordinary course of business and on their normal commercial terms and on terms which are not more favourable to the Transacting Parties than those generally available to the public and are not detrimental to the minority shareholders. (b) Sale of cartons to Hercules Sdn Bhd ( HSB ) and its subsidiary, Hercules Vietnam Co., Ltd HSB is the Company s long standing customer since October The estimated value of the transactions to HSB is based on the average actual sales for the past two (2) years while the estimated value of the transactions to HSB s above named subsidiary is based on projected sales volume from the date of the forthcoming AGM to the next AGM. The transactions are undertaken by the relevant members of the Box-Pak Group in their ordinary course of business and on their normal commercial terms and on terms which are not more favourable to the Transacting Parties than those generally available to the public and are not detriment to the minority shareholders. (c) Sale of cartons to Can-One Group The estimated values for the transactions are based on the projected sales volume from the date of the forthcoming AGM to the next AGM. The transactions are undertaken by the relevant members of the Box-Pak Group in their ordinary course of business and on their normal commercial terms and on terms which are not more favourable to the Transacting Parties than those generally available to the public and are not detrimental to the minority shareholders Review methods or procedures for the RRPTs The Group had established various methods and procedures to supplement existing internal procedures with third parties to ensure that RRPTs are undertaken on normal commercial terms, which are consistent with Box-Pak Group s usual business practices, and are on terms not more favourable than those extended to third parties/public and are not detrimental to the minority shareholders. (a) (b) (c) All RRPTs of value up to RM250,000 must be reviewed and approved by the Group General Manager/Executive Director. For transactions of a value above RM250,000 and up to RM2,000,000, approval from the Exco Committee (which consists of the MD, all the Executive Directors and Group Chief Financial Officer) is required. All transactions with values equal to or exceeding RM2,000,000 must be reviewed by the Audit Committee and approved by the Board. For RRPTs, a Register must be maintained by Box-Pak to record all such transactions pursuant to the Proposed Mandate for reporting purposes in the annual reports. At no time, should the value of these transactions deviate materially from the amount that has been approved by the shareholders pursuant to the Proposed Mandate. At least two (2) other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison, wherever possible, to determine whether the price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third parties for the same or substantially similar type of produces/services and/or quantities. 24