Introduction

Pursuant to paragraph 10.09(1) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of Bonia Corporation Berhad ("Bonia" or "the Company") wish to announce that the following subsidiary companies of Bonia between 1 October 2012 to 28 February 2013 have in the ordinary course of their business entered into certain transactions of a revenue or trading nature with the following related party:- 

Notes:

1         Mr Chiang Sang Sem is a director and major shareholder of Bonia International Holdings Pte Ltd holding 60% equity interest. He is also the major shareholder and director of the Company.

2         Mr Chiang Sang Sem is the major shareholder of BIH Franchising Ltd holding 100% equity interest. He is also a major shareholder and director of the Company.

3         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 October 2012 to 28 February 2013.

Nature of RRPTs

The RRPTs entered into by the Group and their subsidiary companies 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 are primarily an investment holding and management 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 Holdings Pte Ltd and BIH Franchising Ltd are the Licensor and Master Licensee for Bonia, Carlo Rino and Sembonia trademarks for territories outside Malaysia and Singapore respectively. Sales by the subsidiary companies derived from territories outside Malaysia and Singapore are subject to royalties’ payment to the Licensor or the Master Licensee. The royalties are calculated based on percentage of the sales derived from the respective territories as per the licensing or sublicensing agreements. The Licensor and Master Licensee will only raise debit notes for the royalties’ payable by our subsidiary companies upon confirmation of 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 date of announcement is expected.

Active World Pte Ltd and Jetbest Enterprise Pte Ltd are 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 27 March 2013.