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V.S INDUSTRY BERHAD ("VS" /"the Company") - RELATED PARTY TRANSACTIONS

V.S. INDUSTRY BERHAD

Type

Announcement
SubjectV.S INDUSTRY BERHAD ("VS" /"the Company") - RELATED PARTY TRANSACTIONS

Contents :

Introduction

    The Board of Directors of VS wishes to inform the Exchange that further to the announcement made on 31 October 2005 in relation to the estimated aggregate value of Recurrent Related Party Transactions of a revenue or trading nature ("RRPT") entered into by the Company and its subsidiaries with certain parties deemed related to the directors or major shareholders of VS for the financial year ending 31 July 2006, the Company has acquired a total of 11 units of used lorries owned by Buloh Rimbun Sdn Bhd and Arena Modalisma Sdn Bhd, i.e. 2 of the companies involved in the above mentioned RRPT at a total consideration of RM413,000.

2. Details of the Related Party Transactions
    2.1 Buloh Rimbun Sdn Bhd ("BR")

    BR is a company incorporated in Malaysia with an issued and paid-up share capital of RM100,000.00 owned by both Mr Beh Kim Ling and his spouse, Madam Gan Chu Cheng. BR is a transporter and it owns 9 units of lorries. VS rents BR’s lorries for transporting its products to customers.
        The directors of BR are Mr Beh Kim Ling, Madam Gan Chu Cheng and their daughter, Ms Beh Hwee Lee.

    2.2 Arena Modalisma Sdn Bhd ("AM")

    AM is a company incorporated in Malaysia with an issued and paid-up share capital of RM100,000.00 owned by both Mr Beh Kim Ling and his spouse, Madam Gan Chu Cheng. AM is a transporter and it owns 2 units of lorries. VS rents AM’s lorries for transporting its products to customers.
        The directors of AM are Mr Beh Kim Ling, Madam Gan Chu Cheng and their daughter, Ms Beh Hwee Lee.

    2.3 Acquisition of lorries from BR and AM

    The Company acquired,
        i. 9 units of used lorries from BR at RM330,000; and
        ii. 2 units of used lorries from AM at RM83,000.

        The above consideration was arrived at based on the market values of these lorries and is on a willing buyer and willing seller basis.
    2.4 Interested Parties

    As Mr Beh Kim Ling and Madam Gan Chu Cheng are both shareholders and directors of BR and AM and they are also directors and substantial shareholders of the Company, therefore they are deemed interested in the above acquisition.
        Other directors and shareholders of the Company, namely Mr Gan Sem Yam and Mr Gan Tiong Sia are brothers of Madam Gan Chu Cheng and they are persons connected to the above mention interested parties.

3. Rationale and Benefits of the Related Party Transactions

The acquisition of lorries from BR and AM would benefit the Company as the Company would not be required to pay monthly hiring fees for the said lorries and this is a cost saving measure for the Company in the long run. The aforesaid acquisition would also meet the Company’s transportation needs beside enjoying greater flexibility and control over the scheduling and timing of delivery.


4. Financial Effects of the Related Party Transactions ("RPT")
    4.1 Share Capital

    The RPT will not have any effect on the issued and paid-up share capital of VS.

    4.2 Net Tangible Assets ("NTA")

    The RPT are not expected to have any material effect on the NTA of VS Group.

    4.3 Earnings

    The RPT are not expected to have any material effect on the earnings of VS Group.

    4.4 Substantial Shareholders’ Shareholding

    The RPT will not have any effect on the Substantial Shareholders’ Shareholdings.

5. Directors’ and Substantial Shareholders’ Interests
    Save as the interested parties disclosed under 2.4 above, insofar as the directors of VS are aware, none of the other directors, substantial shareholders of VS and/or persons connected with the directors or substantial shareholders of VS, has any interest, direct or indirect in the RPT.


6. Statement by the Directors

Having considered all aspects of the RPT, the Board of Directors of VS is of the opinion that such RPT are in the best interest of the VS Group.


7. Approvals Required

As the value of the RPT of RM413,000 do not exceed 5% of the Group’s latest audited net assets as at 31 July 2005 of RM248.569 million, no shareholders’ approval is required.
This announcement is made on 06/06/2006


Announcement Info

Company NameV.S. INDUSTRY BERHAD  
Stock Name VS    
Date Announced6 Jun 2006  
CategoryGeneral Announcement
Reference NoVI-060606-61424



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