Announcement Details :
Pursuant to Paragraph 2.0 of the Practice Note 12/2001, the Board of Directors of Evergreen Fibreboard Berhad ("EFB") wishes to announce that in the course of the Group's operations, an associate company of EFB, Dawa Timber Industries (M) Sdn. Bhd. ("DTI"), has entered / shall enter into recurrent related party transactions of revenue or trading nature ("Transaction") which are necessary for the Group's day-to-day operations with EFB's wholly owned subsidiary, Evergreen Fibreboard (JB) Sdn Bhd ("EJB"), to purchase medium density fibreboard ("MDF") at an estimated value of RM500,000 (Ringgit Malaysia: Five Hundred Thousand Only) from 17 April 2009 to forthcoming Annual General Meeting to be held on 22 June 2009.
The Transaction entered into is in the ordinary course of business, made at arm's length, on normal commercial terms and on terms not more favorable to the related party than those generally available to the public and is not to the detriment of the minority shareholders.
As the estimated value of the Transaction falls within the ambit of the Paragraph 2.0 of the Practice Note 12/2001, that is,
a) the consideration, value of the assets, capital outlay or costs of the Transaction is equal to or exceeds RM1 million; or
b) the percentage ratio of such Transaction is equal to or exceeds 1%,
whichever is the higher.
Thus, the Company is required to make an immediate announcement instead of obtaining shareholders' mandate for such Transaction.
INFORMATION ON DTI
DTI (Company No. 32799-M), a company incorporated in Malaysia on 10 May 1977 with its relevant information as follows:
i) Authorised capital of RM2,000,000 comprising of 2,000,000 ordinary shares of RM1.00 each.
ii) Paid-up capital is RM600,000.
iii) Its principal activity is manufacturing of fancy plywood.
INFORMATION ON EJB
EJB (Company No. 751664-M), a company incorporated in Malaysia on 30 October 2006 with its relevant information as follows:
i) Authorised capital of RM10,000,000 comprising of 10,000,000 ordinary shares of RM1.00 each.
ii) Paid-up capital is RM10,000,000.
iii) Its principal activity is the manufacture of medium density fibreboard with or without lamination.
RATIONALE OF TRANSACTION
The Transactions will enhance efficiency in production and subsequently cut operating cost and expenses for the Group.
EFFECTS OF TRANSACTION
1. Share capital and Substantial Shareholders' Shareholding
The Transaction is not expected to have any significant effect on the share capital and substantial shareholders' shareholding of EFB.
2. Earnings Per Share, Net Assets Per Share and Gearing
The Transactions is not expected to have any significant effect on Earning Per Share, Net Assets Per Share and Gearing for EFB
DIRECTORS AND MAJOR SHAREHOLDERS' INTEREST
Save as Disclosed below, none of the Directors and/ or major shareholders of EFB or any persons connected with them have any interest, direct or indirect, in such Transaction: -
Kuo Wen Chi, Kuo Jen Chang and Kuo Jen Chiu are Directors in EFB and DTI.
Kuo Jen Chang and Kuo Jen Chiu are Directors in EFB and EJB.
Kuo Wen Chi, Kuo Jen Chang and Kuo Jen Chiu are major shareholder in EFB.
STATEMENT BY THE DIRECTORS
The Board, after careful deliberation, is of the opinion that the Transaction is in the best interest of the Group.
This Transaction does not need any authorities' and shareholders' approval.