2. Mr Chiang Sang Sem is a director and major shareholder of Long Bow Manufacturing (S) Pte. Ltd. holding 83.92% equity interest. His brother, Mr Chiang Boon Tian is also a director and shareholder of Long Bow Manufacturing (S) Pte. Ltd. holding 13.58% equity interest. Mr Chiang Sang Sem is also the major shareholder and director of the Company.
The above amount of which by way of aggregation, has exceeded the prescribed limit of RM1 million in respect of recurrent transactions entered into by the Group and its subsidiary companies with related party from 1 April 2009 to 31 January 2010.
Nature of RRPTs
The RRPTs entered into by the Group and its subsidiary company are in the ordinary course of business and are of revenue and trading in nature. These transactions are made on an arm's length basis and on normal commercial terms. These transactions are also not prejudicial to the interest of the shareholders and not more favorable to the Related Parties than those generally available to the public and are not detrimental to the minority shareholders.
Rationale for the transactions
The principal activities of Bonia is primarily an investment holding company. Its subsidiaries are principally involved in designing, manufacturing, promoting, marketing, import and export of fashionable leather goods, accessories, apparel, ladies and men’s footwear.
Bonia International Holding Pte Ltd is the trademark owner of the Bonia, Bonia Uomo, Carlo Rino and Sembonia brand name in territories outside Malaysia and Singapore. Sales by the subsidiary companies derived from territories outside Malaysia and Singapore are subject to royalties’ payment to the trademark owners. The royalties is calculated based on percentage of the sales derived from the respective territories as per the licensing agreements. The trademark owner will only raise debit notes for the royalties’ payable by our subsidiary companies upon confirmation of the sales by the respective subsidiaries. Due to the administrative procedures from the time we retrieve the sales from our overseas outlets until the issuing of debit notes by the trademark owner, time delay between the last transacted date and the announcement date is expected.
Active World Pte Ltd is renting the office space from Long Bow Manufacturing (S) Pte Ltd as its corporate office, showroom and warehouse in Singapore. Thus, there is a payment of office rental for renting of the premises.
Details of the transaction prices
The transactions, which are in the ordinary course of the Bonia Group’s business, are undertaken at the prevailing prices or market rates and are based on usual commercial terms not more favorable to the related party than those generally available to the public, or otherwise in accordance with the applicable industry norms. Where there is no market value for a particular transaction, the transaction will be on a willing buyer willing seller basis or the nearest equivalent.
The effect of the transactions on the earnings per share and net assets per share of Bonia
The transactions have no material effect to the earnings per share and net assets per share of Bonia.
Whether the transactions are subject to the approval of shareholders and the relevant government authorities
The recurrent related party transactions do not require any approval from shareholders and relevant government authorities.
Statement by Directors
The Board of Directors of Bonia, have considered all aspects of the transactions and is of the opinion that the transactions are established under normal commercial terms and are in the best interest of the Company and not to the detriment of the minority shareholders.
This announcement is dated 25 February 2010
