We refer to the announcement dated 7 April 2014 (“Announcement”) and Bursa Securities’ query dated 8 April 2014 (“Bursa Query”) in relation to the Proposed Acquisition.
Unless otherwise stated, defined terms used in this announcement shall carry the same meanings as defined in the Announcement.
A-Knight wishes to announce the following additional information as required by Bursa Securities pursuant to the Bursa Query:
1. Name of the major shareholders of Volcano Name Plate Sdn Bhd together with their respective shareholdings (in percentage).
The major shareholders and their shareholdings of Volcano Name Plate Sdn Bhd are as follows:-
No. | Name | No. of Shares | Percentage (%) |
1. | Ch’ng Huat Seng | 600,000 | 30 |
2. | Gan Yew Thiam | 600,000 | 30 |
3. | Yeap Guan Seng | 400,000 | 20 |
4. | Wong Tze Peng | 400,000 | 20 |
2. Detailed elaboration on the estimated operational losses suffered by T-Venture for the financial year ended 31 December 2013 and how the purchase consideration was derived based on this estimated losses.
The details of the operating losses based on the latest management accounts for the financial year ended 31 December 2013 are as follows:-
FYE 31 December 2013 | Manufacturing and Trading (RM) |
Profit before tax | 590,376 |
Interest income | (796) |
Gain on disposal of property, plant and equipment | (9,778) |
Gain on foreign exchange - realised | (22,293) |
Gain on foreign exchange - unrealised | (10,839) |
Other income-waiver of debts | (1,800,000) |
Loss on foreign exchange - unrealised | 3,240 |
Depreciation of property, plant and equipment | 586,634 |
Property, plant and equipment written off | 3,500 |
Other expenses-waived of debts | 45,000 |
Net operating loss | (614,956) |
Hence, the Purchase Consideration was derived based on the Guaranteed NTA of RM5.40 million less the operational losses of RM614,956. The Vendor and the Purchaser have mutually agreed to deduct RM600,000 from the Guaranteed NTA of RM5.40 million to arrive at the Purchase Consideration.
3. Details of the potential liabilities of T-Venture that has been factored into the purchase consideration.
Polytainer Industries Sdn Bhd (“Plaintiff”) has commenced a suit against an employee of T-Venture (“D1”) and T-Venture (“D2”) (D1 and D2 are hereinafter collectively referred to as the “Defendants”) at the High Court of Malaya at Shah Alam, Selangor vide Suit No. 22NCVC-153-02/2013, making allegations on amongst others, infringement of the Plaintiff’s copyright in the design drawings and/or artistic works of its Polyrak Jerrycan (“Polyrak Jerrycan Drawings”) by the Jerrycans produced by D2 (“Infringing Jerrycans”), and the Defendants’ conspiracies (to use the Plaintiff’s Polyrak Jerrycan Drawings and other confidential information/ trade secrets without its consent and to injure the Plaintiff by unlawful means) and alleged further or in the alternative that the Defendants were joint tort-feasors.
The Defendants have filed their defence and a counter claim seeking for a declaration to invalidate the alleged copyright of the Plaintiff.
The court has fixed 17 April 2014 as the date for the next case management.
The solicitors representing the Defendants are of the view that T-Venture has a good chance in succeeding as the alleged copyright drawings lack artistic value and originality, and these drawings mirror upon the prior photographs of plastic jerrycan which existed in 1980s way before the Plaintiff’s drawings were purportedly created in 1992.
4. Rationale for the vendor’s liability for the NTA Shortfall Payment be capped at RM226,000.
The NTA from the latest management accounts for the FYE 31 December 2013 is RM5,428,749 The management is of the view that it is unlikely that the NTA Shortfall Payment will be more than RM226,000. The capped amount represents approximately 4.7% of the Purchase Consideration. The Vendor and the Purchaser are of the view that this amount is deemed sufficient for any potential liability(ies) that may arise prior to completion of the SSA.
5. Clarification on how the Proposed Acquisition will be synergistic to the existing business of the Group.
The A-Knight Group has embarked on its internal reorganisation and restructuring since year 2012. Upon completion of the debt settlement on 31 March 2014 (upon issuance of the debt settlement shares), the A-Knight Group is in position to acquire business for its turnaround plan.
The Company believes that the Proposed Acquisition has a potential to grow and is expected to bring synergetic benefits and values creation to the existing business of A-Knight Group as T-Venture has the necessary infrastructure, resources and machine capacity to immediately increase its sales. The Company believes the Proposed Acquisition will provide revenue and profits to the A-Knight Group for the FYE 30 June 2015.
The announcement is dated 9 April 2014.
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