THIS STATEMENT/CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the Share Buy-Back Statements prior to its issuance as it is an exempt statement. Bursa Securities takes no responsibility for the contents of this Statement/Circular, and 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 Statement/Circular. ALUMINIUM COMPANY OF MALAYSIA BERHAD (Company No. 3859-U) (Incorporated in Malaysia) PART A SHARE BUY-BACK STATEMENT IN RELATION TO PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY PART B CIRCULAR TO SHAREHOLDERS IN RELATION TO PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; The ordinary resolutions in respect of the above proposals will be tabled at the Annual General Meeting (“AGM”). Notice of the AGM to be held at Level 3, Atlanta East, Hotel Armada, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Monday, 26 September 2016 at 2.00 p.m. together with the Form of Proxy are enclosed in the 2016 Annual Report of the Company for the financial year ended 31 March 2016. The Form of Proxy should be lodged at the Registered Office at No. 3, Persiaran Waja, Bukit Raja Industrial Estate, 41050 Klang, Selangor Darul Ehsan, no later than forty-eight (48) hours before the appointed time of the meeting. 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 date and time for lodging the Form of Proxy : 24 September 2016 at 2.00 p.m. Date and time of the Annual General Meeting : 26 September 2016 at 2.00 p.m. This Circular is dated 25 July 2016
Transcript
THIS STATEMENT/CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the Share Buy-Back Statements prior to its issuance as it is an exempt statement. Bursa Securities takes no responsibility for the contents of this Statement/Circular, and 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 Statement/Circular.
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
PART A
SHARE BUY-BACK STATEMENT
IN RELATION TO
PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
PART B
CIRCULAR TO SHAREHOLDERS
IN RELATION TO
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE;
The ordinary resolutions in respect of the above proposals will be tabled at the Annual General Meeting (“AGM”). Notice of the AGM to be held at Level 3, Atlanta East, Hotel Armada, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Monday, 26 September 2016 at 2.00 p.m. together with the Form of Proxy are enclosed in the 2016 Annual Report of the Company for the financial year ended 31March 2016. The Form of Proxy should be lodged at the Registered Office at No. 3, Persiaran Waja, Bukit Raja Industrial Estate, 41050 Klang, Selangor Darul Ehsan, no later than forty-eight (48) hours before the appointed time of the meeting. 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 date and time for lodging the Form of Proxy : 24 September 2016 at 2.00 p.m.
Date and time of the Annual General Meeting : 26 September 2016 at 2.00 p.m.
This Circular is dated 25 July 2016
DEFINITIONS
Except where the context otherwise requires, the following definitions apply throughout this Circular:-
“the Act” : Companies Act, 1965
“AGM” : Annual General Meeting
“ALCOM” or “Company” : Aluminium Company of Malaysia Berhad
“ALCOM Group” or “Group” : ALCOM and its subsidiary companies
“ANSC” : Alcom Nikkei Specialty Coatings Sdn Bhd
“Board” : Board of Directors of ALCOM
“EPS” : Earnings per share
“Bursa Securities” : Bursa Malaysia Securities Berhad
“Directors” : has the meaning given in Section 2(1) of the Capital Markets and Services Act 2007 and 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:-
(i) a director of the listed issuer, its subsidiary or holding company; or
(ii) a chief executive of the listed issuer, its subsidiary or holding company; and
(iii) in relation to a special purpose acquisition company (“SPAC”), a member of the SPAC’s management team.
“HINDALCO” : Hindalco Industries Limited.
“Listing Requirements” : The Main Market Listing Requirements of Bursa Securities, as amended from time to time
“Major Shareholder” : 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 major shareholder of the Company (means a person who has an interest or interests in one 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:-
(a) 10% or more of the aggregate of the nominal amountsof all the voting shares in the corporation; or
(b) 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.)
[i]
or any other corporation which is its subsidiary or holding Company.
For the purpose of this definition, “interest in shares” has the meaning given in section 6A of the Act
“NOVELIS” : Novelis Inc., Canada
“NA” : Net assets
“Person Connected” : in relation to a director, major shareholder or in relation to a SPAC, a member of the management team, means such person who falls under any one of the following categories:
(a) a family member of the director, major shareholder or management team member;
(b) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the director, major shareholder , management team member or a family member of the director, major shareholder or management team member, is the sole beneficiary;
(c) a partner of the director, major shareholder, management team member, or a partner of a person connected with that director, major shareholder or management team member;
(d) a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director, major shareholder or management team member;
(e) a person in accordance with whose directions, instructions or wishes the director, major shareholder, or management team member is accustomed or is under an obligation, whether formal or informal, to act;
(f) a body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director, major shareholder or management team member;
(g) a body corporate or its directors whose directions, instructions or wishes the director, major shareholder or management team member is accustomed or under an obligation, whether formal or informal, to act;
(h) a body corporate in which the director, major shareholder or management team member, or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or
(i) a body corporate which is a related corporation.
[ii]
DEFINITIONS
Except where the context otherwise requires, the following definitions apply throughout this Circular:-
“the Act” : Companies Act, 1965
“AGM” : Annual General Meeting
“ALCOM” or “Company” : Aluminium Company of Malaysia Berhad
“ALCOM Group” or “Group” : ALCOM and its subsidiary companies
“ANSC” : Alcom Nikkei Specialty Coatings Sdn Bhd
“Board” : Board of Directors of ALCOM
“EPS” : Earnings per share
“Bursa Securities” : Bursa Malaysia Securities Berhad
“Directors” : has the meaning given in Section 2(1) of the Capital Markets and Services Act 2007 and 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:-
(i) a director of the listed issuer, its subsidiary or holding company; or
(ii) a chief executive of the listed issuer, its subsidiary or holding company; and
(iii) in relation to a special purpose acquisition company (“SPAC”), a member of the SPAC’s management team.
“HINDALCO” : Hindalco Industries Limited.
“Listing Requirements” : The Main Market Listing Requirements of Bursa Securities, as amended from time to time
“Major Shareholder” : 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 major shareholder of the Company (means a person who has an interest or interests in one 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:-
(a) 10% or more of the aggregate of the nominal amountsof all the voting shares in the corporation; or
(b) 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.)
[i]
or any other corporation which is its subsidiary or holding Company.
For the purpose of this definition, “interest in shares” has the meaning given in section 6A of the Act
“NOVELIS” : Novelis Inc., Canada
“NA” : Net assets
“Person Connected” : in relation to a director, major shareholder or in relation to a SPAC, a member of the management team, means such person who falls under any one of the following categories:
(a) a family member of the director, major shareholder or management team member;
(b) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which the director, major shareholder , management team member or a family member of the director, major shareholder or management team member, is the sole beneficiary;
(c) a partner of the director, major shareholder, management team member, or a partner of a person connected with that director, major shareholder or management team member;
(d) a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director, major shareholder or management team member;
(e) a person in accordance with whose directions, instructions or wishes the director, major shareholder, or management team member is accustomed or is under an obligation, whether formal or informal, to act;
(f) a body corporate or its directors which/who is/are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the director, major shareholder or management team member;
(g) a body corporate or its directors whose directions, instructions or wishes the director, major shareholder or management team member is accustomed or under an obligation, whether formal or informal, to act;
(h) a body corporate in which the director, major shareholder or management team member, or persons connected with him are entitled to exercise, or control the exercise of, not less than 15% of the votes attached to voting shares in the body corporate; or
(i) a body corporate which is a related corporation.
[ii]
“Proposed Renewal of Share Buy-Back Authority”
: Proposed renewal of the authorisation from the shareholders of the Company in relation to the Share Buy-Back.
“Proposed Renewal Shareholders’ Mandate”
: Proposed mandate from the shareholders of the Company pursuant to Paragraph 10.09 of the Listing Requirements in relation to the Recurrent Transactions.
“Recurrent Transactions” : Recurrent related party transactions of a revenue or trading nature which are necessary for the ALCOM Group’s day-to-day operations.
“Related Party Transactions” : A transaction entered into by the Company or its subsidiaries which involves the interest, direct or indirect, of a related party.
“Related Party” : A director, major shareholder or person connected with such director or major shareholder.
“RM” and “sen” : Ringgit Malaysia and sen, respectively
“share(s)” : Ordinary share(s) of RM1.00 each
“Share Buy-Back” : Purchase by ALCOM of its own shares of up to 10% of its issued and paid-up share capital at any given point in time, if deemed fit and expedient by the Board.
[iii]
CONTENTS
PART A: SHARE BUY-BACK STATEMENT PAGE
1.0 INTRODUCTION…………………………………………………………………………… 1
2.0 PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY……………………… 1
3.0 RATIONALE OF THE SHARE BUY-BACK…………………….…………………...……. 3
4.0 FINANCIAL EFFECTS OF THE SHARE BUY-BACK……………………………………4.1 Share capital4.2 Earnings4.3 Net Assets4.4 Working capital4.5 Dividends4.6 Shareholdings of Directors and substantial shareholders4.7 Implication on the Malaysian Code on Take-Overs and Mergers 2010
33333445
5.0 PUBLIC SHAREHOLDING ……………………………………………………................. 5
6.0 PURCHASE OR RESALE OF TREASURY SHARES………..……………………….... 5
7.0 POTENTIAL ADVANTAGES AND DISADVANTAGES……………………………….… 5
8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST…………............ 5
Paragraph 10.09 of the Listing RequirementsNature of the Recurrent Transactions Relationship between ALCOM and its related partiesClass of related partyDisclosure and review proceduresStatement by the Audit CommitteeRationale Financial effectsDirectors and major shareholders’ interest Approval requiredDirectors’ recommendation
23456788899
3.0 AGM…………………………………………………………………………………………... 9
4.0 FURTHER INFORMATION…………………………………………………………........... 10
APPENDIX I FURTHER INFORMATION……………...………………………………. 11
[iv]
“Proposed Renewal of Share Buy-Back Authority”
: Proposed renewal of the authorisation from the shareholders of the Company in relation to the Share Buy-Back.
“Proposed Renewal Shareholders’ Mandate”
: Proposed mandate from the shareholders of the Company pursuant to Paragraph 10.09 of the Listing Requirements in relation to the Recurrent Transactions.
“Recurrent Transactions” : Recurrent related party transactions of a revenue or trading nature which are necessary for the ALCOM Group’s day-to-day operations.
“Related Party Transactions” : A transaction entered into by the Company or its subsidiaries which involves the interest, direct or indirect, of a related party.
“Related Party” : A director, major shareholder or person connected with such director or major shareholder.
“RM” and “sen” : Ringgit Malaysia and sen, respectively
“share(s)” : Ordinary share(s) of RM1.00 each
“Share Buy-Back” : Purchase by ALCOM of its own shares of up to 10% of its issued and paid-up share capital at any given point in time, if deemed fit and expedient by the Board.
[iii]
CONTENTS
PART A: SHARE BUY-BACK STATEMENT PAGE
1.0 INTRODUCTION…………………………………………………………………………… 1
2.0 PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY……………………… 1
3.0 RATIONALE OF THE SHARE BUY-BACK…………………….…………………...……. 3
4.0 FINANCIAL EFFECTS OF THE SHARE BUY-BACK……………………………………4.1 Share capital4.2 Earnings4.3 Net Assets4.4 Working capital4.5 Dividends4.6 Shareholdings of Directors and substantial shareholders4.7 Implication on the Malaysian Code on Take-Overs and Mergers 2010
33333445
5.0 PUBLIC SHAREHOLDING ……………………………………………………................. 5
6.0 PURCHASE OR RESALE OF TREASURY SHARES………..……………………….... 5
7.0 POTENTIAL ADVANTAGES AND DISADVANTAGES……………………………….… 5
8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST…………............ 5
Paragraph 10.09 of the Listing RequirementsNature of the Recurrent Transactions Relationship between ALCOM and its related partiesClass of related partyDisclosure and review proceduresStatement by the Audit CommitteeRationale Financial effectsDirectors and major shareholders’ interest Approval requiredDirectors’ recommendation
23456788899
3.0 AGM…………………………………………………………………………………………... 9
4.0 FURTHER INFORMATION…………………………………………………………........... 10
APPENDIX I FURTHER INFORMATION……………...………………………………. 11
[iv]
PART A
SHARE BUY-BACK STATEMENT
IN RELATION TO
PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
STATEMENT IN RELATION TO THE PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
1.0 INTRODUCTION
1.1 At the Company’s AGM held on 26 August 2015, the shareholders of the Company approved, inter-alia, the proposal for the Company to purchase its own shares of up to 10% of its issued and paid-up share capital at any given point in time through Bursa Securities, if deemed fit and expedient by the Directors of the Company. The said approval for the Proposed Share Buy-Back shall expire at the conclusion of the forthcoming Fifty-Fifth AGM of the Company.
1.2 Therefore, on 26 May 2016, the Board announced to the Bursa Securities that the Company proposes to seek a renewal of the approval for the Proposed Share Buy-Back from the Shareholders at the forthcoming Fifty-Fifth AGM to be held on 26 September 2016.
1.3 The purpose of this Statement is to provide you with the relevant information on the Proposal and to seek your approval for the resolution to be tabled as Special Business at the forthcoming Fifty-Fifth AGM, notice of which has been set out in the Notice of Fifty-Fifth AGM in the Annual Report 2016.
2.0 PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
2.1 The Board proposes to seek the approval of the shareholders of the Company for the renewal of authority for the Company to purchase and/or hold from time to time and at any time up to 10% of the issued and paid-up share capital of the Company. Based on the issued and paid-up share capital of ALCOM of 134,330,848 shares as at 30 June 2016, 10% represents 13,433,084 ALCOM shares.
2.2 The authority from the shareholders of the Company, if renewed, would be effective upon passing of the ordinary resolution for the Proposed Renewal of Share Buy-Back Authority at the Fifty-Fifth AGM and such authority would continue to be in force until:-
(i) the conclusion of the next AGM of the Company following the forthcoming AGM, 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
(ii) the expiration of the period within which the next AGM is required by law to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders in a general meeting,
whichever occurs first.
1
PART A
SHARE BUY-BACK STATEMENT
IN RELATION TO
PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
STATEMENT IN RELATION TO THE PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
1.0 INTRODUCTION
1.1 At the Company’s AGM held on 26 August 2015, the shareholders of the Company approved, inter-alia, the proposal for the Company to purchase its own shares of up to 10% of its issued and paid-up share capital at any given point in time through Bursa Securities, if deemed fit and expedient by the Directors of the Company. The said approval for the Proposed Share Buy-Back shall expire at the conclusion of the forthcoming Fifty-Fifth AGM of the Company.
1.2 Therefore, on 26 May 2016, the Board announced to the Bursa Securities that the Company proposes to seek a renewal of the approval for the Proposed Share Buy-Back from the Shareholders at the forthcoming Fifty-Fifth AGM to be held on 26 September 2016.
1.3 The purpose of this Statement is to provide you with the relevant information on the Proposal and to seek your approval for the resolution to be tabled as Special Business at the forthcoming Fifty-Fifth AGM, notice of which has been set out in the Notice of Fifty-Fifth AGM in the Annual Report 2016.
2.0 PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
2.1 The Board proposes to seek the approval of the shareholders of the Company for the renewal of authority for the Company to purchase and/or hold from time to time and at any time up to 10% of the issued and paid-up share capital of the Company. Based on the issued and paid-up share capital of ALCOM of 134,330,848 shares as at 30 June 2016, 10% represents 13,433,084 ALCOM shares.
2.2 The authority from the shareholders of the Company, if renewed, would be effective upon passing of the ordinary resolution for the Proposed Renewal of Share Buy-Back Authority at the Fifty-Fifth AGM and such authority would continue to be in force until:-
(i) the conclusion of the next AGM of the Company following the forthcoming AGM, 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
(ii) the expiration of the period within which the next AGM is required by law to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders in a general meeting,
whichever occurs first.
1
2.3 In accordance with the Listing Requirements, ALCOM may purchase its own shares or resell its treasury shares (if any) on Bursa Securities, subject to :-
(a) a price for the purchase of own shares of not more than fifteen per centum (15%) above the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately prior to the purchase; or
(b) a price for the resale of treasury shares which is not less than the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately before the resale; or
(c) a discounted price for the resale of treasury shares of not more than five per centum (5%) to the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately before the resale provided that:-
(i) the resale takes place no earlier than 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.
The Proposed Share Buy-Back shall be made wholly out of the retained profits and/or share premium accounts of the Company. In order to implement the Share Buy-Back, an appropriate amount of internally generated funds of the Group and/or bank borrowings of the Company would need to be allocated by the Company and such allocation (the final quantum of which is to be determined later by the Directors of the Company) shall not exceed the aggregate balance standing in the retained profits and/or share premium accounts of the Company. The audited retained profits and share premium accounts of the Company as at31 March 2016 are RM14,789,993 and RM4,113,085 respectively. In the event that ALCOM decides to utilise bank borrowings to finance the purchase(s), it will ensure that it has sufficient financial capability to repay the bank borrowing and that the bank borrowings will not have a material impact on the cash flow of the Company.
2.4 The actual number of shares to be purchased and the timing of such purchase(s) would depend on, inter-alia, market conditions and sentiments of the stock market, the availability of retained profits and share premium accounts of the Company as well as the availability of financial resources/funds necessary to give effect to such purchase(s).
2.5 The Directors may deal with the shares so purchased in the following manner, in accordance with the provision of the Act:-
(i) Cancel the shares so purchased;
(ii) Retain the shares so purchased as treasury shares;
(iii) Retain part of the shares so purchased as treasury shares and cancel the remainder; or
(iv) Distribute all or part of the treasury shares as dividends to Shareholders, and/or resell on the market of Bursa Securities.
2.6 If the purchased ALCOM shares are kept as treasury shares, it will give the Board the flexibility to sell the treasury shares at a higher market price resulting in an exceptional gain to the Company. Alternatively, it would serve to reward the shareholders of the Company in the event the treasury shares are sufficient for distribution as share dividends. The Company may decide to cancel the purchased ALCOM shares if it deems fit to do so.
2.7 For shares held as treasury shares, the rights attached thereto, as to voting, dividends and participation in other distribution or otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of shares in the Company for any purposes, including substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum for meetings and the result of a vote on a resolution at a meeting.
2
2.8 The Company must make an immediate announcement to Bursa Securities of any purchase(s) of its own shares, any resale of its treasury shares or any cancellation of its shares or treasury shares, no later than 6.30 p.m. on the day of the purchase, the resale or the cancellation is made.
3.0 RATIONALE OF THE SHARE BUY-BACK
3.1 The Proposed Share Buy-Back would enable ALCOM to utilise its financial resources, which are not immediately required, for the purpose of purchasing its own shares, if deemed fit and expedient by the Board. This will reduce the liquidity level of ALCOM shares to a certain extent in view that the number of the ALCOM shares traded on the Bursa Securities would be reduced. However, this may have a positive impact on the market quoted prices of the ALCOM shares on the Bursa Securities.
4.0 FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK
4.1 On share capital
In the event the full amount of ALCOM shares purchased under the proposed Share Buy-Back are cancelled, the issued and paid-up share capital of ALCOM will be as follows:-
No. of shares RMIssued and paid-up share capital as at 30 June 2016(before adjusting for the treasury shares held)
Issued and paid-up share capital after the Proposed Share Buy-Back 120,897,764
==========
120,897,764.00
===========
(Note: This is inclusive of 2,079,000 Alcom shares held as treasury shares as at 30 June 2016)
However, if the shares so purchased are retained as treasury shares, the Proposed Share Buy-Back will not have any effect on the issued and paid-up share capital of ALCOM.
4.2 On earnings
The Proposed Share Buy-Back is not expected to have any material impact on the earnings of the Group. However, the resultant reduction in the number of ALCOM shares in issue would be expected to correspondingly increase the EPS of ALCOM, at the Company and the Group levels, if the shares so purchased are cancelled.
4.3 NA
The effect of the Proposed Share Buy-Back on the NA per share of the ALCOM Group is dependent on purchase prices of ALCOM shares. The shares purchased would reduce the NA per share of the ALCOM Group if the purchase price exceeds the NA per share at the relevant point in time. Conversely, the NA per share of the ALCOM Group would increase if the purchase price is less than the NA per share at the relevant point in time.
4.4 On working capital
Although the Proposed Share Buy-Back would reduce the working capital of the Group to the extent of the amount of funds utilised for the purchase of ALCOM shares, it is not expected to have a material effect on the working capital of the Group.
3
2.3 In accordance with the Listing Requirements, ALCOM may purchase its own shares or resell its treasury shares (if any) on Bursa Securities, subject to :-
(a) a price for the purchase of own shares of not more than fifteen per centum (15%) above the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately prior to the purchase; or
(b) a price for the resale of treasury shares which is not less than the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately before the resale; or
(c) a discounted price for the resale of treasury shares of not more than five per centum (5%) to the weighted average market price of ALCOM shares as quoted on the Bursa Securities for the five (5) market days immediately before the resale provided that:-
(i) the resale takes place no earlier than 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.
The Proposed Share Buy-Back shall be made wholly out of the retained profits and/or share premium accounts of the Company. In order to implement the Share Buy-Back, an appropriate amount of internally generated funds of the Group and/or bank borrowings of the Company would need to be allocated by the Company and such allocation (the final quantum of which is to be determined later by the Directors of the Company) shall not exceed the aggregate balance standing in the retained profits and/or share premium accounts of the Company. The audited retained profits and share premium accounts of the Company as at31 March 2016 are RM14,789,993 and RM4,113,085 respectively. In the event that ALCOM decides to utilise bank borrowings to finance the purchase(s), it will ensure that it has sufficient financial capability to repay the bank borrowing and that the bank borrowings will not have a material impact on the cash flow of the Company.
2.4 The actual number of shares to be purchased and the timing of such purchase(s) would depend on, inter-alia, market conditions and sentiments of the stock market, the availability of retained profits and share premium accounts of the Company as well as the availability of financial resources/funds necessary to give effect to such purchase(s).
2.5 The Directors may deal with the shares so purchased in the following manner, in accordance with the provision of the Act:-
(i) Cancel the shares so purchased;
(ii) Retain the shares so purchased as treasury shares;
(iii) Retain part of the shares so purchased as treasury shares and cancel the remainder; or
(iv) Distribute all or part of the treasury shares as dividends to Shareholders, and/or resell on the market of Bursa Securities.
2.6 If the purchased ALCOM shares are kept as treasury shares, it will give the Board the flexibility to sell the treasury shares at a higher market price resulting in an exceptional gain to the Company. Alternatively, it would serve to reward the shareholders of the Company in the event the treasury shares are sufficient for distribution as share dividends. The Company may decide to cancel the purchased ALCOM shares if it deems fit to do so.
2.7 For shares held as treasury shares, the rights attached thereto, as to voting, dividends and participation in other distribution or otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of shares in the Company for any purposes, including substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum for meetings and the result of a vote on a resolution at a meeting.
2
2.8 The Company must make an immediate announcement to Bursa Securities of any purchase(s) of its own shares, any resale of its treasury shares or any cancellation of its shares or treasury shares, no later than 6.30 p.m. on the day of the purchase, the resale or the cancellation is made.
3.0 RATIONALE OF THE SHARE BUY-BACK
3.1 The Proposed Share Buy-Back would enable ALCOM to utilise its financial resources, which are not immediately required, for the purpose of purchasing its own shares, if deemed fit and expedient by the Board. This will reduce the liquidity level of ALCOM shares to a certain extent in view that the number of the ALCOM shares traded on the Bursa Securities would be reduced. However, this may have a positive impact on the market quoted prices of the ALCOM shares on the Bursa Securities.
4.0 FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK
4.1 On share capital
In the event the full amount of ALCOM shares purchased under the proposed Share Buy-Back are cancelled, the issued and paid-up share capital of ALCOM will be as follows:-
No. of shares RMIssued and paid-up share capital as at 30 June 2016(before adjusting for the treasury shares held)
Issued and paid-up share capital after the Proposed Share Buy-Back 120,897,764
==========
120,897,764.00
===========
(Note: This is inclusive of 2,079,000 Alcom shares held as treasury shares as at 30 June 2016)
However, if the shares so purchased are retained as treasury shares, the Proposed Share Buy-Back will not have any effect on the issued and paid-up share capital of ALCOM.
4.2 On earnings
The Proposed Share Buy-Back is not expected to have any material impact on the earnings of the Group. However, the resultant reduction in the number of ALCOM shares in issue would be expected to correspondingly increase the EPS of ALCOM, at the Company and the Group levels, if the shares so purchased are cancelled.
4.3 NA
The effect of the Proposed Share Buy-Back on the NA per share of the ALCOM Group is dependent on purchase prices of ALCOM shares. The shares purchased would reduce the NA per share of the ALCOM Group if the purchase price exceeds the NA per share at the relevant point in time. Conversely, the NA per share of the ALCOM Group would increase if the purchase price is less than the NA per share at the relevant point in time.
4.4 On working capital
Although the Proposed Share Buy-Back would reduce the working capital of the Group to the extent of the amount of funds utilised for the purchase of ALCOM shares, it is not expected to have a material effect on the working capital of the Group.
3
4.5 On dividends
Barring any unforeseen circumstances, the Board does not expect the Proposed Share Buy-Back to materially affect the dividend policy of the Company. Any dividends to be declared by Alcom in future would depend on, inter alia, the profitability and cashflow position of Alcom.
4.6 On shareholdings of the Directors and substantial shareholders
The effects of the Proposed Share Buy-Back on the shareholdings of the Directors and substantial shareholders of ALCOM would depend on the timing and the number of shares so purchased, if any. However, for illustration, the Share Buy-Back would have the following effect on the percentage of the shareholdings of the Directors and substantial shareholders of ALCOM, assuming that a maximum number of 13,433,084 shares are purchased from the public shareholders and thereafter, immediately cancelled :-
Existing as at 30 June 2016No. of shares
After Proposed Share Buy-Back No. of shares
Direct % Indirect % Direct % Indirect %
Substantial Shareholders
NOVELIS 78,234,054 59.16 - - 78,234,054 64.71 - -
Directors
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar
- - - - - - - -
Paul Allen Stadnikia
- - - - - - - -
Heon Chee Shyong
- - - - - - - -
James F. Makki
- - - - - - - -
Dato’ Kok Wee Kiat
- - - - - - - -
Y.M. Tengku Yunus Kamaruddin
114,500 0.09 - - 114,500 0.09 - -
4
4.7 Implications (if any) relating to the Malaysian Code on Take-Overs and Mergers 2010
As indicated in 4.6, in the event that the Proposed Share Buy-Back is carried out in full and the purchased ALCOM shares are cancelled, the total direct interests of the substantial shareholder, NOVELIS, after the Proposed Share Buy-Back will increase to approximately 64.71%. If the equity interests of NOVELIS in ALCOM increase by more than 2% in any six months period as a result of the purchased ALCOM shares, NOVELIS will be obliged to undertake a mandatory offer for ALCOM shares not held by NOVELIS in accordance with the Part III of the Malaysian Code on Take-Overs and Mergers 2010. However, an exemption from a mandatory offer obligation may be granted by the Securities Commission under paragraph 24.1 of Practice Note 9 of the said Code.
5.0 PUBLIC SHAREHOLDING
5.1 As at 30 June 2016, the public shareholding spread of the Company was 40.75% The public shareholding spread is expected to be reduced to 35.14% assuming the Proposed Share Buy-Back is implemented in full and all the Shares so purchased are cancelled. However, the Company will ensure that prior to any Share Buy-Back exercise, the public shareholding spread of at least 25% is maintained.
6.0 PURCHASE OR RESALE OF TREASURY SHARES
6.1 There has not been any purchase of our own Shares or resale of treasury shares made by us in the previous twelve months made up to the date of this statement. The total number of Shares retained as treasury shares as at 30 June 2016 was 2,079,000.
7.0 POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE SHARE BUY-BACK
7.1 Advantages
The Share Buy-Back provides the opportunity for ALCOM to stabilise the supply and demand of ALCOM shares in the open market and thereby allowing the share price of ALCOM to better reflect the fundamental value of ALCOM shares.
In addition, if the ALCOM shares so purchased are held as treasury shares, the Company may realise capital gains from disposing of such treasury shares in the event that the Company is able to sell the treasury shares at a price which is higher than the purchase price, in addition to raising cash thereon.
7.2 Disadvantages
Whilst the Board will be mindful of the interest of the Company and its shareholders in implementing the Share Buy-Back, the shareholders of ALCOM should take note that the Share Buy-Back would inevitably reduce the financial resources of the Company. This may result in the Company forgoing future investment opportunities and/or any income which may be derived from alternative uses of the funds involved.
8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS
8.1 Save as disclosed in 4.6, none of the Directors and substantial shareholders of ALCOM and/or persons connected with them has any interest, whether direct or indirect, in the Share Buy-Back or resale of treasury shares, if any.
9.0 BOARD’S RECOMMENDATION
9.1 The Board of ALCOM, having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the Proposed Share Buy-Back is in the best interest of ALCOM. As such, 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 Fifty-Fifth AGM of the Company.
This Share Buy-Back Statement is dated 25 July 2016.
5
4.5 On dividends
Barring any unforeseen circumstances, the Board does not expect the Proposed Share Buy-Back to materially affect the dividend policy of the Company. Any dividends to be declared by Alcom in future would depend on, inter alia, the profitability and cashflow position of Alcom.
4.6 On shareholdings of the Directors and substantial shareholders
The effects of the Proposed Share Buy-Back on the shareholdings of the Directors and substantial shareholders of ALCOM would depend on the timing and the number of shares so purchased, if any. However, for illustration, the Share Buy-Back would have the following effect on the percentage of the shareholdings of the Directors and substantial shareholders of ALCOM, assuming that a maximum number of 13,433,084 shares are purchased from the public shareholders and thereafter, immediately cancelled :-
Existing as at 30 June 2016No. of shares
After Proposed Share Buy-Back No. of shares
Direct % Indirect % Direct % Indirect %
Substantial Shareholders
NOVELIS 78,234,054 59.16 - - 78,234,054 64.71 - -
Directors
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar
- - - - - - - -
Paul Allen Stadnikia
- - - - - - - -
Heon Chee Shyong
- - - - - - - -
James F. Makki
- - - - - - - -
Dato’ Kok Wee Kiat
- - - - - - - -
Y.M. Tengku Yunus Kamaruddin
114,500 0.09 - - 114,500 0.09 - -
4
4.7 Implications (if any) relating to the Malaysian Code on Take-Overs and Mergers 2010
As indicated in 4.6, in the event that the Proposed Share Buy-Back is carried out in full and the purchased ALCOM shares are cancelled, the total direct interests of the substantial shareholder, NOVELIS, after the Proposed Share Buy-Back will increase to approximately 64.71%. If the equity interests of NOVELIS in ALCOM increase by more than 2% in any six months period as a result of the purchased ALCOM shares, NOVELIS will be obliged to undertake a mandatory offer for ALCOM shares not held by NOVELIS in accordance with the Part III of the Malaysian Code on Take-Overs and Mergers 2010. However, an exemption from a mandatory offer obligation may be granted by the Securities Commission under paragraph 24.1 of Practice Note 9 of the said Code.
5.0 PUBLIC SHAREHOLDING
5.1 As at 30 June 2016, the public shareholding spread of the Company was 40.75% The public shareholding spread is expected to be reduced to 35.14% assuming the Proposed Share Buy-Back is implemented in full and all the Shares so purchased are cancelled. However, the Company will ensure that prior to any Share Buy-Back exercise, the public shareholding spread of at least 25% is maintained.
6.0 PURCHASE OR RESALE OF TREASURY SHARES
6.1 There has not been any purchase of our own Shares or resale of treasury shares made by us in the previous twelve months made up to the date of this statement. The total number of Shares retained as treasury shares as at 30 June 2016 was 2,079,000.
7.0 POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE SHARE BUY-BACK
7.1 Advantages
The Share Buy-Back provides the opportunity for ALCOM to stabilise the supply and demand of ALCOM shares in the open market and thereby allowing the share price of ALCOM to better reflect the fundamental value of ALCOM shares.
In addition, if the ALCOM shares so purchased are held as treasury shares, the Company may realise capital gains from disposing of such treasury shares in the event that the Company is able to sell the treasury shares at a price which is higher than the purchase price, in addition to raising cash thereon.
7.2 Disadvantages
Whilst the Board will be mindful of the interest of the Company and its shareholders in implementing the Share Buy-Back, the shareholders of ALCOM should take note that the Share Buy-Back would inevitably reduce the financial resources of the Company. This may result in the Company forgoing future investment opportunities and/or any income which may be derived from alternative uses of the funds involved.
8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS
8.1 Save as disclosed in 4.6, none of the Directors and substantial shareholders of ALCOM and/or persons connected with them has any interest, whether direct or indirect, in the Share Buy-Back or resale of treasury shares, if any.
9.0 BOARD’S RECOMMENDATION
9.1 The Board of ALCOM, having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the Proposed Share Buy-Back is in the best interest of ALCOM. As such, 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 Fifty-Fifth AGM of the Company.
This Share Buy-Back Statement is dated 25 July 2016.
5
PART B
CIRCULAR TO SHAREHOLDERS
IN RELATION TO
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING
NATURE
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
Directors:
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar (Chairman)Mr. Heon Chee Shyong (Managing Director)Mr. Paul Allen Stadnikia (Non-Independent Non-Executive Director)Mr. James F. Makki (Non-Independent Non- Executive Director)Dato’ Kok Wee Kiat (Independent Non-Executive Director)Y.M. Tengku Yunus Kamaruddin (Independent Non-Executive Director)
Registered office :
No. 3, PersiaranWaja,Bukit Raja Industrial Estate,41050 Klang,Selangor Darul Ehsan
Date : 25 July 2016
To : The Shareholders of ALCOM
Dear Sir/Madam,
Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
1.0 INTRODUCTION
1.1 On 26 May 2016, the Board of ALCOM has announced its intention to seek shareholders’ approval for Renewal of Shareholders’ mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.
1.2 The purpose of this Circular is to provide you with the relevant information on the Proposal and to seek your approval for the resolution to be tabled as Special Business at the forthcoming Fifty-Fifth AGM, notice of which has been set out in the Notice of AGM in the Annual Report for the financial year ended 31 March 2016.
1
PART B
CIRCULAR TO SHAREHOLDERS
IN RELATION TO
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING
NATURE
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
Directors:
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar (Chairman)Mr. Heon Chee Shyong (Managing Director)Mr. Paul Allen Stadnikia (Non-Independent Non-Executive Director)Mr. James F. Makki (Non-Independent Non- Executive Director)Dato’ Kok Wee Kiat (Independent Non-Executive Director)Y.M. Tengku Yunus Kamaruddin (Independent Non-Executive Director)
Registered office :
No. 3, PersiaranWaja,Bukit Raja Industrial Estate,41050 Klang,Selangor Darul Ehsan
Date : 25 July 2016
To : The Shareholders of ALCOM
Dear Sir/Madam,
Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
1.0 INTRODUCTION
1.1 On 26 May 2016, the Board of ALCOM has announced its intention to seek shareholders’ approval for Renewal of Shareholders’ mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.
1.2 The purpose of this Circular is to provide you with the relevant information on the Proposal and to seek your approval for the resolution to be tabled as Special Business at the forthcoming Fifty-Fifth AGM, notice of which has been set out in the Notice of AGM in the Annual Report for the financial year ended 31 March 2016.
1
2.0 PROPOSED SHAREHOLDERS’ MANDATE
2.1 Paragraph 10.09 of the Listing Requirements
2.1.1 Paragraph 10.09 of the Listing Requirements provides that with regard to related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations the listed issuer must seek a shareholders’ mandate in respect of such transactions subject to the following:-
(a) the transactions are in the ordinary course of business and are on terms not more favourable to the related party than those generally available to the public;
(b) the shareholder mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholder mandate during the financial year where the aggregate value is equal to or more than the threshold;
(c) a circular to shareholders for the shareholder mandate; and
(d) in a meeting to obtain shareholder mandate, the interested director, interested majorshareholder or interested person connected with a director or major shareholder; and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote on the resolution to approve the transactions. An interested director or interested major shareholder must ensure that persons connected with him abstain from voting on the resolution approving the transactions; and
(e) the Company immediately announces to the Exchange when the actual value of a Recurrent Related Party Transaction entered into by the Company, exceeds the estimated value of the Recurrent Related Party Transaction disclosed in the circular by 10% or more and must include the information as may be prescribed by the Exchange in its announcement.
The Company proposes to seek its shareholders’ approval for the Proposed Mandate to enable the Company and/or its subsidiaries to continue entering into Recurrent Transactions with the classes of Related Parties as set out in section 2.4 below. The renewed and new shareholders’ mandates shall continue to be in force until: -
(i) the conclusion of the next AGM of the Company following the forthcoming AGM at which time it shall lapse, unless by ordinary resolution passed at that meeting, the authority is renewed;
(ii) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but must 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 the shareholders in general meeting,
whichever is the earlier.
2
2.2 Nature of the Recurrent Transactions
2.2.1 The principal activities of ALCOM consist of manufacturing and trading of aluminium sheet and foil products. Through its subsidiary company, the Group is engaged in the business of manufacturing and trading of pre-coated finstock for use in air-conditioners. It is anticipated that in the ordinary course of the Group’s businesses, the Recurrent Transactions between the Group and its related parties (as set out in section 2.3 below) are likely to occur, and which are necessary for its day to day operations. The nature of the Recurrent Transactions to be entered into and contemplated between the Group and the related parties are described below. These transactions have been approved by the shareholders at the last AGM held on 26 August 2015.The approval for the renewal is now sought for at the forthcoming Fifty-Fifth AGM:-
(i) Sales of finished products and/or purchases of raw materials
In manufacturing the aluminium products, a continuous supply of raw materials in the form of ingots, re-roll coils, and aluminium scrap at a competitive market price is necessary for the Group’s day to day operations. The Group’s supplier for its raw materials include related parties, Hindalco Industries Limited and Novelis Korea Ltd. which are involved in the aluminium industry and have established a good network within the industry.
The Group also sometimes sells some of its finished products in the form of aluminium sheets (i.e. common sheets and coils) and foil (i.e. foil, bare and coated finstock) products to the related parties. Trading with the related parties is necessary to the Group as the related parties have their own customer base, from which there is demand for the Group’s finished products.
The sale and purchase prices for the Recurrent Transactions are consistent with the ALCOM Group’s usual business pricing practices and policies. In general, the selling prices to all parties including related parties are based on the prices quoted on the London Metal Exchange plus roll margins. The roll margins used are recognised internationally and within the accepted range. The purchase price is also based on the prices quoted on the London Metal Exchange. The pricing is determined on arm’s length basis and 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. Normally sale and purchase transactions between the Group and the related parties take place regularly during the month, and are subject to demand and supply of the products, mutual agreement between the Group and the related parties from time to time and are based on the prevailing market conditions.
For the financial year ended 31 March 2016 the value of the raw materials purchased by the Group to and from the related parties requiring shareholder mandate amounted to RM17,729,000 based on the prevailing market conditions taking into account factors such as demand and supply and the activities of its competitors.
3
2.0 PROPOSED SHAREHOLDERS’ MANDATE
2.1 Paragraph 10.09 of the Listing Requirements
2.1.1 Paragraph 10.09 of the Listing Requirements provides that with regard to related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations the listed issuer must seek a shareholders’ mandate in respect of such transactions subject to the following:-
(a) the transactions are in the ordinary course of business and are on terms not more favourable to the related party than those generally available to the public;
(b) the shareholder mandate is subject to annual renewal and disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholder mandate during the financial year where the aggregate value is equal to or more than the threshold;
(c) a circular to shareholders for the shareholder mandate; and
(d) in a meeting to obtain shareholder mandate, the interested director, interested majorshareholder or interested person connected with a director or major shareholder; and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote on the resolution to approve the transactions. An interested director or interested major shareholder must ensure that persons connected with him abstain from voting on the resolution approving the transactions; and
(e) the Company immediately announces to the Exchange when the actual value of a Recurrent Related Party Transaction entered into by the Company, exceeds the estimated value of the Recurrent Related Party Transaction disclosed in the circular by 10% or more and must include the information as may be prescribed by the Exchange in its announcement.
The Company proposes to seek its shareholders’ approval for the Proposed Mandate to enable the Company and/or its subsidiaries to continue entering into Recurrent Transactions with the classes of Related Parties as set out in section 2.4 below. The renewed and new shareholders’ mandates shall continue to be in force until: -
(i) the conclusion of the next AGM of the Company following the forthcoming AGM at which time it shall lapse, unless by ordinary resolution passed at that meeting, the authority is renewed;
(ii) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but must 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 the shareholders in general meeting,
whichever is the earlier.
2
2.2 Nature of the Recurrent Transactions
2.2.1 The principal activities of ALCOM consist of manufacturing and trading of aluminium sheet and foil products. Through its subsidiary company, the Group is engaged in the business of manufacturing and trading of pre-coated finstock for use in air-conditioners. It is anticipated that in the ordinary course of the Group’s businesses, the Recurrent Transactions between the Group and its related parties (as set out in section 2.3 below) are likely to occur, and which are necessary for its day to day operations. The nature of the Recurrent Transactions to be entered into and contemplated between the Group and the related parties are described below. These transactions have been approved by the shareholders at the last AGM held on 26 August 2015.The approval for the renewal is now sought for at the forthcoming Fifty-Fifth AGM:-
(i) Sales of finished products and/or purchases of raw materials
In manufacturing the aluminium products, a continuous supply of raw materials in the form of ingots, re-roll coils, and aluminium scrap at a competitive market price is necessary for the Group’s day to day operations. The Group’s supplier for its raw materials include related parties, Hindalco Industries Limited and Novelis Korea Ltd. which are involved in the aluminium industry and have established a good network within the industry.
The Group also sometimes sells some of its finished products in the form of aluminium sheets (i.e. common sheets and coils) and foil (i.e. foil, bare and coated finstock) products to the related parties. Trading with the related parties is necessary to the Group as the related parties have their own customer base, from which there is demand for the Group’s finished products.
The sale and purchase prices for the Recurrent Transactions are consistent with the ALCOM Group’s usual business pricing practices and policies. In general, the selling prices to all parties including related parties are based on the prices quoted on the London Metal Exchange plus roll margins. The roll margins used are recognised internationally and within the accepted range. The purchase price is also based on the prices quoted on the London Metal Exchange. The pricing is determined on arm’s length basis and 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. Normally sale and purchase transactions between the Group and the related parties take place regularly during the month, and are subject to demand and supply of the products, mutual agreement between the Group and the related parties from time to time and are based on the prevailing market conditions.
For the financial year ended 31 March 2016 the value of the raw materials purchased by the Group to and from the related parties requiring shareholder mandate amounted to RM17,729,000 based on the prevailing market conditions taking into account factors such as demand and supply and the activities of its competitors.
3
(ii) Technical Services
ALCOM has an arrangement with NOVELIS for the provision of technical assistance from NOVELIS in a comprehensive manner. The technical assistance includes know-how for manufacturing processes, operating practices, product quality control, laboratory support services, information and advice and comments on technology to improve the Group’s performance. The fees incurred for the financial year ended 31 March 2016 amounted to RM 1,424,000.
2.3 The relationship between ALCOM and its related parties is set out below: -
100%
59.16%
100%
(a) The related party subsidiary companies of HINDALCO are as follows:-
SubsidiaryEffective equity interest as at 30 June 2016 (%)
Novelis Inc, Canada 100.00
(b) The subsidiary companies of NOVELIS are as follows:-
SubsidiaryEffective equity interest as at 30 June 2016 (%)
Novelis Corporation , U.S.A 100.00 Novelis Korea Ltd. 99.99
NOVELIS
ALCOM ANSC
HINDALCO
4
2.4
Cla
ss o
f rel
ated
par
ty
2.4.
1Th
e ty
pe o
f tra
nsac
tions
and
the
rela
ted
parti
es w
ith w
hom
the
Rec
urre
nt T
rans
actio
ns a
re c
arrie
d ou
t by
the
Gro
up a
s m
entio
ned
in s
ectio
n 2.
2.1
is ta
bula
ted
as fo
llow
s:-
Rel
ated
Par
ties
Typ
e of
tran
sact
ions
Inte
rest
ed D
irec
tor,
Inte
rest
ed M
ajor
shar
ehol
der
and
Inte
rest
ed P
erso
n co
nnec
ted
2015
Shar
ehol
ders
’ Man
date
Est
imat
edV
alue
of T
rans
actio
ns fr
om 2
5A
ugus
t 201
6,be
ing
the
date
of t
he
fort
hcom
ing
AG
M to
nex
t AG
M(R
M’0
00)
Est
imat
ed V
alue
(R
M’0
00)
Act
ual V
alue
of T
rans
actio
ns
from
26A
ugus
t 201
5to
30
June
201
6 (R
M’0
00)
Sale
s of f
inis
hed
prod
ucts
Nov
elis
Kor
ea L
td(S
ubsi
diar
y co
mpa
ny o
f H
IND
AL
CO
and
NO
VE
LIS
)
Sale
s of a
lum
iniu
m sh
eets
and
fo
il pr
oduc
ts b
y A
LCO
MH
IND
ALC
O,
NO
VEL
IS,
2 HC
S,3 PA
S an
d 4 JF
M
1,00
0N
il1,
000
Hin
dalc
o In
dust
ries
Lim
ited
(Par
ent c
ompa
ny o
f
NO
VE
LIS
)
Sale
s of a
lum
iniu
m sh
eets
and
fo
il pr
oduc
ts b
y A
LCO
MH
IND
ALC
O,
NO
VEL
IS,
,2 HC
S , 3 PA
S an
d 4 JF
M
3,00
0N
il3,
000
Purc
hase
s of r
aw m
ater
ials
Nov
elis
Kor
ea L
td(S
ubsi
diar
y co
mpa
ny o
f H
IND
AL
CO
and
NO
VE
LIS
)
Purc
hase
s of r
e-ro
ll co
ils,
finst
ock
and
hard
ener
sby
ALC
OM
HIN
DA
LCO
, N
OV
ELIS
,,2 H
CS
, 3 PAS
and
4 JFM
10,0
00N
il10
,000
Hin
dalc
o In
dust
ries
Lim
ited
(Par
ent c
ompa
ny o
f N
OV
EL
IS)
Purc
hase
s of p
rimar
y m
etal
,re-
roll
coils
, fin
stoc
kan
dha
rden
ers
by A
LCO
M
HIN
DA
LCO
, N
OV
ELIS
,2 H
CS
, 3 PAS
and
4 JFM
75,0
0024
,174
60,0
00
NO
VE
LIS
Te
chni
cal S
ervi
ces p
rovi
ded
to
ALC
OM
HIN
DA
LCO
, NO
VEL
IS,
,2 HC
S , 3 PA
S an
d 4 JF
M
1,50
01,
222
2,00
0
Not
e :-
1H
eon
Che
e Sh
yong
(“H
CS”
)2
Paul
Alle
n St
adni
kia
(“PA
S”)
3Ja
mes
F. M
akki
(“JF
M”)
Ther
e ar
e no
out
stan
ding
am
ount
s due
to o
r fro
m th
e pa
rties
in th
e ab
ove
Rel
ated
Par
ty T
rans
actio
ns a
s at 2
5Ju
ly 2
016
5
(ii) Technical Services
ALCOM has an arrangement with NOVELIS for the provision of technical assistance from NOVELIS in a comprehensive manner. The technical assistance includes know-how for manufacturing processes, operating practices, product quality control, laboratory support services, information and advice and comments on technology to improve the Group’s performance. The fees incurred for the financial year ended 31 March 2016 amounted to RM 1,424,000.
2.3 The relationship between ALCOM and its related parties is set out below: -
100%
59.16%
100%
(a) The related party subsidiary companies of HINDALCO are as follows:-
SubsidiaryEffective equity interest as at 30 June 2016 (%)
Novelis Inc, Canada 100.00
(b) The subsidiary companies of NOVELIS are as follows:-
SubsidiaryEffective equity interest as at 30 June 2016 (%)
Novelis Corporation , U.S.A 100.00 Novelis Korea Ltd. 99.99
NOVELIS
ALCOM ANSC
HINDALCO
4
2.4
Cla
ss o
f rel
ated
par
ty
2.4.
1Th
e ty
pe o
f tra
nsac
tions
and
the
rela
ted
parti
es w
ith w
hom
the
Rec
urre
nt T
rans
actio
ns a
re c
arrie
d ou
t by
the
Gro
up a
s m
entio
ned
in s
ectio
n 2.
2.1
is ta
bula
ted
as fo
llow
s:-
Rel
ated
Par
ties
Typ
e of
tran
sact
ions
Inte
rest
ed D
irec
tor,
Inte
rest
ed M
ajor
shar
ehol
der
and
Inte
rest
ed P
erso
n co
nnec
ted
2015
Shar
ehol
ders
’ Man
date
Est
imat
edV
alue
of T
rans
actio
ns fr
om 2
5A
ugus
t 201
6,be
ing
the
date
of t
he
fort
hcom
ing
AG
M to
nex
t AG
M(R
M’0
00)
Est
imat
ed V
alue
(R
M’0
00)
Act
ual V
alue
of T
rans
actio
ns
from
26A
ugus
t 201
5to
30
June
201
6 (R
M’0
00)
Sale
s of f
inis
hed
prod
ucts
Nov
elis
Kor
ea L
td(S
ubsi
diar
y co
mpa
ny o
f H
IND
AL
CO
and
NO
VE
LIS
)
Sale
s of a
lum
iniu
m sh
eets
and
fo
il pr
oduc
ts b
y A
LCO
MH
IND
ALC
O,
NO
VEL
IS,
2 HC
S,3 PA
S an
d 4 JF
M
1,00
0N
il1,
000
Hin
dalc
o In
dust
ries
Lim
ited
(Par
ent c
ompa
ny o
f
NO
VE
LIS
)
Sale
s of a
lum
iniu
m sh
eets
and
fo
il pr
oduc
ts b
y A
LCO
MH
IND
ALC
O,
NO
VEL
IS,
,2 HC
S , 3 PA
S an
d 4 JF
M
3,00
0N
il3,
000
Purc
hase
s of r
aw m
ater
ials
Nov
elis
Kor
ea L
td(S
ubsi
diar
y co
mpa
ny o
f H
IND
AL
CO
and
NO
VE
LIS
)
Purc
hase
s of r
e-ro
ll co
ils,
finst
ock
and
hard
ener
sby
ALC
OM
HIN
DA
LCO
, N
OV
ELIS
,,2 H
CS
, 3 PAS
and
4 JFM
10,0
00N
il10
,000
Hin
dalc
o In
dust
ries
Lim
ited
(Par
ent c
ompa
ny o
f N
OV
EL
IS)
Purc
hase
s of p
rimar
y m
etal
,re-
roll
coils
, fin
stoc
kan
dha
rden
ers
by A
LCO
M
HIN
DA
LCO
, N
OV
ELIS
,2 H
CS
, 3 PAS
and
4 JFM
75,0
0024
,174
60,0
00
NO
VE
LIS
Te
chni
cal S
ervi
ces p
rovi
ded
to
ALC
OM
HIN
DA
LCO
, NO
VEL
IS,
,2 HC
S , 3 PA
S an
d 4 JF
M
1,50
01,
222
2,00
0
Not
e :-
1H
eon
Che
e Sh
yong
(“H
CS”
)2
Paul
Alle
n St
adni
kia
(“PA
S”)
3Ja
mes
F. M
akki
(“JF
M”)
Ther
e ar
e no
out
stan
ding
am
ount
s due
to o
r fro
m th
e pa
rties
in th
e ab
ove
Rel
ated
Par
ty T
rans
actio
ns a
s at 2
5Ju
ly 2
016
5
2.4.2 The nature of relationship between the Director, major shareholder and person connected to the major shareholder of ALCOM and the related parties, as set out in section 2.4.1, are as follows:-
Interested major shareholders, and directors
Nature of relationship
Interested major shareholder:HINDALCO Ultimate holding company of ALCOM and parent
company of NOVELIS (100%)
Interested major shareholder:NOVELIS Major shareholder of ALCOM (59.16%)
Interested director:
PAS PAS is a nominee/representative of NOVELIS which is a major shareholder of ALCOM
HCS HCS is the Managing Director of ALCOM
JFM JFM is a nominee/representative of NOVELIS which is a major shareholder of ALCOM
2.5 Disclosure and review procedures for the Recurrent Transactions
2.5.1 The review procedures for the Recurrent Transactions are as follows: -
(i) the internal and external auditors review the terms of the Recurrent Transactions;
(ii) records, agreements, contracts and other relevant documents on all Recurrent Transactions which are entered into will be made available to the audit committee;
(iii) the purchase prices, terms and conditions of the Recurrent Transactions are determined after taking into consideration amongst others, the demand and supply of the products, credit terms and reliability of supply, where practical and feasible, quotations will be obtained from third parties to ascertain the appropriate purchase prices. The sale prices on the other hand, are determined after taking into consideration the prevailing market prices; and
(iv) Wherever applicable and/or feasible, at least 2 other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison to determine whether price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third party for the same or substantially similar type of products/services and/or quantities.
In the event that quotations or comparative pricing from unrelated third party cannot be obtained for the proposed transaction, the Board and the Audit Committee will rely on their market knowledge for prevailing industry norms bearing in mind the urgency and efficiency or services to be provided or required to ensure that the Recurrent Party Transactions are not detrimental to the Company.
6
(v) There is no specific threshold for approval of Recurrent Related Party Transactions. All Recurrent Related Party Transactions are reviewed and/or executed by senior management in the Company, provided always that such individuals have no interest in the transaction and the said transaction has been approved pursuant to the shareholders’ mandate obtained at an AGM for Recurrent Related Party Transactions.
(vi) the audit committee will review the Recurrent Transactions that may arise within the Company or the Group on a quarterly basis to ensure that such transactions will be carried out at arm’s length, and on normal commercial terms, and terms not more favourable than those generally available to the public and are not to the detriment of the minority shareholders. The audit committee shall assist to ascertain that all procedures established to monitor the Recurrent Transactions have been complied with. Presently, the audit committee of ALCOM comprises four (4) members, the majority of whom are independent directors as follows: -
Name Designation
Dato’ Kok Wee Kiat Independent Non-Executive Director and Chairman of Audit Committee
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar
Independent Non-Executive Chairman
Y.M. Tengku Yunus Kamaruddin Independent Non-Executive Director
Paul Allen Stadnikia Non-Independent Non-Executive Director
2.5.2 Disclosure will also be made in the Company’s annual report of a breakdown of the aggregate value of the significant Recurrent Transactions made during the financial year, amongst others, based on the following information:-
(i) the type of the Recurrent Transactions made; and
(ii) the names of the related parties involved in each type of the Recurrent Transactions made and their relationship with the Company.
2.6 Statement by the Audit Committee
2.6.1 The audit committee of the Company is of the view that the said procedures for the Recurrent Transactions (as set out in section 2.5 above) are sufficient to ensure that such transactions will be carried out at arm’s length basis, and on normal commercial terms and terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company.
2.6.2 In addition, the Audit Committee is of the opinion that the Company has in place adequate procedures and processes to monitor, track and identify Recurrent Transactions in a timely and orderly manner. The Audit Committee will review and ascertain whether the procedures established to monitor Recurrent Transactions have been complied with at least once a year.
7
2.4.2 The nature of relationship between the Director, major shareholder and person connected to the major shareholder of ALCOM and the related parties, as set out in section 2.4.1, are as follows:-
Interested major shareholders, and directors
Nature of relationship
Interested major shareholder:HINDALCO Ultimate holding company of ALCOM and parent
company of NOVELIS (100%)
Interested major shareholder:NOVELIS Major shareholder of ALCOM (59.16%)
Interested director:
PAS PAS is a nominee/representative of NOVELIS which is a major shareholder of ALCOM
HCS HCS is the Managing Director of ALCOM
JFM JFM is a nominee/representative of NOVELIS which is a major shareholder of ALCOM
2.5 Disclosure and review procedures for the Recurrent Transactions
2.5.1 The review procedures for the Recurrent Transactions are as follows: -
(i) the internal and external auditors review the terms of the Recurrent Transactions;
(ii) records, agreements, contracts and other relevant documents on all Recurrent Transactions which are entered into will be made available to the audit committee;
(iii) the purchase prices, terms and conditions of the Recurrent Transactions are determined after taking into consideration amongst others, the demand and supply of the products, credit terms and reliability of supply, where practical and feasible, quotations will be obtained from third parties to ascertain the appropriate purchase prices. The sale prices on the other hand, are determined after taking into consideration the prevailing market prices; and
(iv) Wherever applicable and/or feasible, at least 2 other contemporaneous transactions with unrelated third parties for similar products/services and/or quantities will be used as comparison to determine whether price and terms offered to/by the related parties are fair and reasonable and comparable to those offered to/by other unrelated third party for the same or substantially similar type of products/services and/or quantities.
In the event that quotations or comparative pricing from unrelated third party cannot be obtained for the proposed transaction, the Board and the Audit Committee will rely on their market knowledge for prevailing industry norms bearing in mind the urgency and efficiency or services to be provided or required to ensure that the Recurrent Party Transactions are not detrimental to the Company.
6
(v) There is no specific threshold for approval of Recurrent Related Party Transactions. All Recurrent Related Party Transactions are reviewed and/or executed by senior management in the Company, provided always that such individuals have no interest in the transaction and the said transaction has been approved pursuant to the shareholders’ mandate obtained at an AGM for Recurrent Related Party Transactions.
(vi) the audit committee will review the Recurrent Transactions that may arise within the Company or the Group on a quarterly basis to ensure that such transactions will be carried out at arm’s length, and on normal commercial terms, and terms not more favourable than those generally available to the public and are not to the detriment of the minority shareholders. The audit committee shall assist to ascertain that all procedures established to monitor the Recurrent Transactions have been complied with. Presently, the audit committee of ALCOM comprises four (4) members, the majority of whom are independent directors as follows: -
Name Designation
Dato’ Kok Wee Kiat Independent Non-Executive Director and Chairman of Audit Committee
Y.A.M. Tunku Tan Sri Imran ibni Almarhum Tuanku Ja’afar
Independent Non-Executive Chairman
Y.M. Tengku Yunus Kamaruddin Independent Non-Executive Director
Paul Allen Stadnikia Non-Independent Non-Executive Director
2.5.2 Disclosure will also be made in the Company’s annual report of a breakdown of the aggregate value of the significant Recurrent Transactions made during the financial year, amongst others, based on the following information:-
(i) the type of the Recurrent Transactions made; and
(ii) the names of the related parties involved in each type of the Recurrent Transactions made and their relationship with the Company.
2.6 Statement by the Audit Committee
2.6.1 The audit committee of the Company is of the view that the said procedures for the Recurrent Transactions (as set out in section 2.5 above) are sufficient to ensure that such transactions will be carried out at arm’s length basis, and on normal commercial terms and terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company.
2.6.2 In addition, the Audit Committee is of the opinion that the Company has in place adequate procedures and processes to monitor, track and identify Recurrent Transactions in a timely and orderly manner. The Audit Committee will review and ascertain whether the procedures established to monitor Recurrent Transactions have been complied with at least once a year.
7
2.7 Rationale for and benefits of the Proposed Shareholders’ Mandate
2.7.1 The ALCOM Group will, from time to time be engaged with a wide spectrum of clients within the aluminium industry, which are located either inside or outside of Malaysia. As different clients have different requirements and needs in terms of products, the resources and technical expertise of the related parties can be utilised. Furthermore, the related parties have already established themselves in the industry internationally, and engaging in business transactions with them will help broaden the Group’s customer base.
The Proposed Shareholders’ Mandate on an annual basis would eliminate the need to convene separate general meetings from time to time to seek shareholders’ approval as and when potential Recurrent Transactions arise. This will reduce substantially administrative time and expenses in convening such meetings without compromising the corporate objectives and adversely affecting the business opportunities available to the Group.
The Proposed Shareholders’ Mandate will allow the Group to facilitate the Recurrent Transactions in their normal course of business, to enter into recurrent transactions of a revenue and trading nature with the related parties, provided such transactions are carried out at arms’ length and on the Group’s normal commercial terms and are not prejudicial to shareholders and are based on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of ALCOM.
2.8 Financial effects of the Proposed Shareholders’ Mandate
2.8.1 The Proposed Shareholders’ Mandate will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of ALCOM and is not expected to have any effect on the earnings, dividends and net tangible assets of ALCOM..
2.9 Directors and major shareholders’ interests
2.9.1 The direct and indirect interests of the director and major shareholder of ALCOM as at 30 June 2016 are as follows:-
No. of shares heldInterested Major Shareholders Direct % Indirect %HINDALCO 78,234,054 59.16
NOVELIS 78,234,054 59.16 -- --
Directors
Y.A.M. Tunku Tan Sri Imran ibni AlmarhumTuanku Ja’afar
-- -- -- --
Heon Chee Shyong -- -- -- --
Paul Allen Stadnikia -- -- -- --
James F. Makki -- -- -- --
Dato’ Kok Wee Kiat -- -- -- --
Y.M. Tengku Yunus Kamaruddin 114,500 0.09 -- --
8
Accordingly, HINDALCO and NOVELIS will abstain from voting in respect of their shareholdings, direct and /or indirect, in ALCOM on the resolution pertaining to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.2 HINDALCO and NOVELIS have undertaken that they will ensure that the persons connected with them, if any, will abstain from voting on the resolution relating to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.3 The directors namely, Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki have abstained and will continue to abstain from all Board deliberations on the Proposed Shareholders’ Mandate in respect of Recurrent Related Party Transaction which they are deemed interested.
2.9.4 Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki have undertaken that they will abstain from voting in respect of their direct and indirect shareholdings, if any in ALCOM on the resolution pertaining to the Proposed Shareholders’ Mandate at the forthcoming Fifty-FifthAGM. In addition, they will ensure that the persons connected with them, will abstain from voting in respect of their direct and indirect interest on the resolution relating to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.5 Save as disclosed above, none of the Directors and/or major shareholders of ALCOM and/or persons connected with them, has any interest, direct or indirect, in the Proposed Shareholders’ Mandate.
2.10 Approval required
2.10.1 The Proposed Shareholders’ Mandate is subject to the approval of the shareholders of ALCOM at the forthcoming Fifty-Fifth AGM.
2.11 Directors’ Recommendation
2.11.1 Your Directors, with the exception of Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki, being deemed interested directors, having considered all aspects of the Proposals are of the opinion that the Proposals are in the best interest of the Company.
2.11.2 Accordingly, your Directors, with the exception of Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki, recommend that you vote in favour of the resolutions relating to the Proposals to be tabled at the forthcoming Fifty-Fifth AGM of the Company.
3.0 AGM
3.0.1 The Fifty-Fifth AGM, the Notice of which is enclosed in the Annual Report Year 2016 of the Company, will be held at Level 3, Atlanta East, Hotel Armada, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Monday, 26 September 2016 at 2.00 p.m for the purpose, inter-alia, of considering and if thought fit, passing the ordinary pertaining to the Proposed Mandate as set out herein, to give effect to the same.
3.0.2 If you are unable to attend and vote in person at the Fifty-Fifth AGM, and wish to appoint a proxy to attend and vote in your stead, you are requested to complete, sign and return the Form of Proxy which is enclosed in the Annual Report Year 2016 of the Company in accordance with the instructions contained therein as soon as possible, so as to arrive at the Registered Office of the Company not less than 48 hours before the time fixed for holding the Fifty-FifthAGM.
3.0.3 The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so.
9
2.7 Rationale for and benefits of the Proposed Shareholders’ Mandate
2.7.1 The ALCOM Group will, from time to time be engaged with a wide spectrum of clients within the aluminium industry, which are located either inside or outside of Malaysia. As different clients have different requirements and needs in terms of products, the resources and technical expertise of the related parties can be utilised. Furthermore, the related parties have already established themselves in the industry internationally, and engaging in business transactions with them will help broaden the Group’s customer base.
The Proposed Shareholders’ Mandate on an annual basis would eliminate the need to convene separate general meetings from time to time to seek shareholders’ approval as and when potential Recurrent Transactions arise. This will reduce substantially administrative time and expenses in convening such meetings without compromising the corporate objectives and adversely affecting the business opportunities available to the Group.
The Proposed Shareholders’ Mandate will allow the Group to facilitate the Recurrent Transactions in their normal course of business, to enter into recurrent transactions of a revenue and trading nature with the related parties, provided such transactions are carried out at arms’ length and on the Group’s normal commercial terms and are not prejudicial to shareholders and are based on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of ALCOM.
2.8 Financial effects of the Proposed Shareholders’ Mandate
2.8.1 The Proposed Shareholders’ Mandate will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of ALCOM and is not expected to have any effect on the earnings, dividends and net tangible assets of ALCOM..
2.9 Directors and major shareholders’ interests
2.9.1 The direct and indirect interests of the director and major shareholder of ALCOM as at 30 June 2016 are as follows:-
No. of shares heldInterested Major Shareholders Direct % Indirect %HINDALCO 78,234,054 59.16
NOVELIS 78,234,054 59.16 -- --
Directors
Y.A.M. Tunku Tan Sri Imran ibni AlmarhumTuanku Ja’afar
-- -- -- --
Heon Chee Shyong -- -- -- --
Paul Allen Stadnikia -- -- -- --
James F. Makki -- -- -- --
Dato’ Kok Wee Kiat -- -- -- --
Y.M. Tengku Yunus Kamaruddin 114,500 0.09 -- --
8
Accordingly, HINDALCO and NOVELIS will abstain from voting in respect of their shareholdings, direct and /or indirect, in ALCOM on the resolution pertaining to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.2 HINDALCO and NOVELIS have undertaken that they will ensure that the persons connected with them, if any, will abstain from voting on the resolution relating to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.3 The directors namely, Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki have abstained and will continue to abstain from all Board deliberations on the Proposed Shareholders’ Mandate in respect of Recurrent Related Party Transaction which they are deemed interested.
2.9.4 Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki have undertaken that they will abstain from voting in respect of their direct and indirect shareholdings, if any in ALCOM on the resolution pertaining to the Proposed Shareholders’ Mandate at the forthcoming Fifty-FifthAGM. In addition, they will ensure that the persons connected with them, will abstain from voting in respect of their direct and indirect interest on the resolution relating to the Proposed Shareholders’ Mandate at the forthcoming Fifty-Fifth AGM.
2.9.5 Save as disclosed above, none of the Directors and/or major shareholders of ALCOM and/or persons connected with them, has any interest, direct or indirect, in the Proposed Shareholders’ Mandate.
2.10 Approval required
2.10.1 The Proposed Shareholders’ Mandate is subject to the approval of the shareholders of ALCOM at the forthcoming Fifty-Fifth AGM.
2.11 Directors’ Recommendation
2.11.1 Your Directors, with the exception of Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki, being deemed interested directors, having considered all aspects of the Proposals are of the opinion that the Proposals are in the best interest of the Company.
2.11.2 Accordingly, your Directors, with the exception of Heong Chee Shyong, Paul Allen Stadnikia and James F. Makki, recommend that you vote in favour of the resolutions relating to the Proposals to be tabled at the forthcoming Fifty-Fifth AGM of the Company.
3.0 AGM
3.0.1 The Fifty-Fifth AGM, the Notice of which is enclosed in the Annual Report Year 2016 of the Company, will be held at Level 3, Atlanta East, Hotel Armada, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Monday, 26 September 2016 at 2.00 p.m for the purpose, inter-alia, of considering and if thought fit, passing the ordinary pertaining to the Proposed Mandate as set out herein, to give effect to the same.
3.0.2 If you are unable to attend and vote in person at the Fifty-Fifth AGM, and wish to appoint a proxy to attend and vote in your stead, you are requested to complete, sign and return the Form of Proxy which is enclosed in the Annual Report Year 2016 of the Company in accordance with the instructions contained therein as soon as possible, so as to arrive at the Registered Office of the Company not less than 48 hours before the time fixed for holding the Fifty-FifthAGM.
3.0.3 The lodging of the Form of Proxy will not preclude you from attending and voting in person at the AGM should you subsequently wish to do so.
9
4.0 FURTHER INFORMATION
4.0.1 Shareholders of ALCOM are advised to refer to the attached Appendix I for further information.
Yours faithfully,For and on behalf of the Board of Directors ofALUMINIUM COMPANY OF MALAYSIA BERHAD
Heon Chee ShyongManaging Director
10
APPENDIX I
FURTHER INFORMATION
1. DIRECTORS’ RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Directors of ALCOM and they collectively and individually accept full responsibility for the accuracy of the information given in this Circular in-so-far as it relates to the ALCOM Group and confirm that after having made 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 in this Circular misleading.
2. MATERIAL LITIGATION, CLAIMS OR ARBITRATION
ALCOM and its subsidiaries are not engaged in any material litigation, claims or arbitration either as plaintiff or defendant and the Directors of ALCOM do not have any knowledge of any proceedings pending or threatened against ALCOM and its subsidiaries or of any facts likely to give rise to any proceedings which may materially affect the financial position or business of ALCOM and its subsidiaries.
3. MATERIAL CONTRACTS
There are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by ALCOM and its subsidiaries during the two (2) years immediately preceding the date of this Circular.
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection during normal business hours (except public holidays) at the Registered Office of ALCOM from the date of this Circular up to and including the date of the Fifty-Fifth AGM:-
(i) The Memorandum and Articles of Association of ALCOM; and
(ii) Audited Financial Statements of ALCOM for the past financial years ended 31 March2015 and 31 March 2016.
11
4.0 FURTHER INFORMATION
4.0.1 Shareholders of ALCOM are advised to refer to the attached Appendix I for further information.
Yours faithfully,For and on behalf of the Board of Directors ofALUMINIUM COMPANY OF MALAYSIA BERHAD
Heon Chee ShyongManaging Director
10
APPENDIX I
FURTHER INFORMATION
1. DIRECTORS’ RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Directors of ALCOM and they collectively and individually accept full responsibility for the accuracy of the information given in this Circular in-so-far as it relates to the ALCOM Group and confirm that after having made 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 in this Circular misleading.
2. MATERIAL LITIGATION, CLAIMS OR ARBITRATION
ALCOM and its subsidiaries are not engaged in any material litigation, claims or arbitration either as plaintiff or defendant and the Directors of ALCOM do not have any knowledge of any proceedings pending or threatened against ALCOM and its subsidiaries or of any facts likely to give rise to any proceedings which may materially affect the financial position or business of ALCOM and its subsidiaries.
3. MATERIAL CONTRACTS
There are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by ALCOM and its subsidiaries during the two (2) years immediately preceding the date of this Circular.
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection during normal business hours (except public holidays) at the Registered Office of ALCOM from the date of this Circular up to and including the date of the Fifty-Fifth AGM:-
(i) The Memorandum and Articles of Association of ALCOM; and
(ii) Audited Financial Statements of ALCOM for the past financial years ended 31 March2015 and 31 March 2016.
11
ALUMINIUM COMPANY OF MALAYSIA BERHAD(Company No. 3859-U)
(Incorporated in Malaysia)
STATEMENT IN RELATION TO THE PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
1.0 INTRODUCTION
1.1 At the Company’s AGM held on 26 August 2015, the shareholders of the Company approved, inter-alia, the proposal for the Company to purchase its own shares of up to 10% of its issued and paid-up share capital at any given point in time through Bursa Securities, if deemed fit and expedient by the Directors of the Company. The said approval for the Proposed Share Buy-Back shall expire at the conclusion of the forthcoming Fifty-Fifth AGM of the Company.
1.2 Therefore, on 26 May 2016, the Board announced to the Bursa Securities that the Company proposes to seek a renewal of the approval for the Proposed Share Buy-Back from the Shareholders at the forthcoming Fifty-Fifth AGM to be held on 26 September 2016.
1.3 The purpose of this Statement is to provide you with the relevant information on the Proposal and to seek your approval for the resolution to be tabled as Special Business at the forthcoming Fifty-Fifth AGM, notice of which has been set out in the Notice of Fifty-Fifth AGM in the Annual Report 2016.
2.0 PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
2.1 The Board proposes to seek the approval of the shareholders of the Company for the renewal of authority for the Company to purchase and/or hold from time to time and at any time up to 10% of the issued and paid-up share capital of the Company. Based on the issued and paid-up share capital of ALCOM of 134,330,848 shares as at 30 June 2016, 10% represents 13,433,084 ALCOM shares.
2.2 The authority from the shareholders of the Company, if renewed, would be effective upon passing of the ordinary resolution for the Proposed Renewal of Share Buy-Back Authority at the Fifty-Fifth AGM and such authority would continue to be in force until:-
(i) the conclusion of the next AGM of the Company following the forthcoming AGM, 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
(ii) the expiration of the period within which the next AGM is required by law to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders in a general meeting,
