Company Name	:	IRE-TEX CORPORATION BERHAD
Stock Name	:	IRETEX
Date Announced	:	29/04/2015

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RECURRENT RELATED PARTY TRANSACTIONS RECURRENT RELATED PARTY TRANSACTIONS ENTERED INTO BY ZOOMIC AUTOMATION (M) SDN BHD, A WHOLLY OWNED SUBSIDIARY COMPANY OF IRE-TEX CORPORATION BERHAD WITH:- (1) ZESTEK INTEGRATION SDN BHD (ZI), AND (2) FSP BUSINESS LINK SDN BHD (FSP) IRE-TEX CORPORATION BERHAD
Type	:	Announcement

Subject	:	TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) RECURRENT RELATED PARTY TRANSACTIONS
Description	:	RECURRENT RELATED PARTY TRANSACTIONS ENTERED INTO BY ZOOMIC AUTOMATION (M) SDN BHD, A WHOLLY OWNED SUBSIDIARY COMPANY OF IRE-TEX CORPORATION BERHAD WITH:- (1) ZESTEK INTEGRATION SDN BHD (ZI), AND (2) FSP BUSINESS LINK SDN BHD (FSP)
1. INTRODUCTION Pursuant to paragraph 10.09(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors of Ire-Tex Corporation Berhad (“ITCB” or “the Company”) wishes to announce that Zoomic Automation (M) Sdn Bhd (“ZASB”), a wholly owned subsidiary company of ITCB, had entered into recurrent related party transactions in the ordinary course of business with ZI and FSP. 2. INFORMATION ON ZASB, ZI, FSP AND THE RECURRENT RELATED PARTY TRANSACTIONS 2.1 Information on ZASB ZASB was incorporated in Malaysia on 20 December 2002 under the Companies Act, 1965. The authorized share capital of ZASB is currently RM5,000,000.00 divided into 5,000,000 ordinary shares of RM1.00 each of which RM1,000,000.00 consisting of 1,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up. The principal activity of ZASB is designer, manufacturer and systems consultant for all types of industrial machinery and automation systems. 2.2 Information on ZI ZI was incorporated in Malaysia on 20 September 2011 under the Companies Act, 1965. The authorized share capital of ZI is currently RM1,000,000.00 consisting of 1,000,000 ordinary shares of RM1.00 each and the paid up capital is RM100,000.00 consisting of 100,000 ordinary shares of RM1.00 each fully paid-up. The principal activity of ZI is providing assembly services for the electrical and electronic industries. As at the date of this Announcement, the Directors and Shareholders of FSP are as follows: Directors Tan Inn Huat Chin Peng Wai Shareholders   Name No. of shares held Percentage (%) 1) Lim Swee Hua 5,000 5 2) Chan Fung Guan 4,000 4 3) Aw Fook Lam 4,000 4 4) Loke Chong Leng 4,000 4 5) Chin Peng Wai 5,000 5 6) Ooi Shu Rhui 4,000 4 7) Teh Gaik Tiang 70,000 70 8) Tan Chee Keong 4,000 4   Total 100,000 100 2.3 Information on FSP FSP was incorporated in Malaysia on 27 August 2012 under the Companies Act, 1965. The authorized share capital of FSP is currently RM1,000,000.00 consisting of 1,000,000 ordinary shares of RM1.00 each the paid up capital is RM1,000,000.00 consisting of 1,000,000 ordinary shares of RM1.00 each fully paid-up. FSP is principally engaged as assemblers, maintainers and dealers in electronics components. As at the date of this Announcement, the Directors and Shareholders of FSP are as follows: Directors Foong Cheng Kong Khaw Kheng Wooi Toshihiko Nakano Shareholders   Name No. of shares held Percentage (%) 1) Lim Swee Hua 30,000 3.0 2) Ideomix Co. Ltd. 204,000 20.4 3) Khaw Kheng Wooi 370,000 37.0 4) Toshihiko Nakano 96,000 9.6 5) Foong Cheng Kong 300,000 30.0   Total 1,000,000 100.0
2.4 Details of the recurrent related party transactions The recurrent related party transactions for the period from 24 April 2014 (being the date on which ZASB became a subsidiary company of ITCB) up to date comprised of the following:- (a) Sales of automated equipment, parts and machineries by ZASB to ZI amounting to a total of RM987,864.03 (“RRPT 1”), (b) Purchases of assembly solution on automation machinery and conveyor by ZASB from ZI amounting to a total of RM1,975,360.00 (“RRPT 2”), (c) Advance payments made by ZASB to ZI amounting to RM285,000.00 (“RRPT 3”), and (d) Sales of manufactured light-emitting diode (LED) tube and automation machinery by ZASB to FSP amounting to a total of RM2,260,960.51 (“RRPT 4”). (hereinafter collectively referred to as the “RRPTs”) The transactions comprising the RRPTs are set out in the attached Table 1. 2.5 Rationale for the RRPTs The sales transactions in RRPT 1 and RRPT 4 were sales carried out in the normal course of business of ZASB and were based on normal commercial terms consistent with ZASB’s usual business practices and policies. The purchases transactions in RRPT 2 were purchases of assembly solution on automation machinery and conveyor carried out in the normal course of business of ZASB and were based on normal commercial terms. The purchases were made from ZI because of ZI’s expertise in auto conveyor system and bulk components handling automation in areas such as glove and packaging industries. The advance payments made in RRPT 3 were progress payment for research and development projects for glove automation machines. 3. FINANCIAL EFFECTS OF THE RRPTs The RRPTs do not have any effect on the issued and paid-up share capital of ITCB or the shareholdings of its substantial shareholders. ITCB Group has impaired amounts of RM2,886,230.00 and RM2,913,174.40 due from ZI and FSP respectively arising from RRPT 1, RRPT 3 and RRPT 4 in its financial statements for the year ended 31 December 2014 due to concerns over the recoverability of the said debts. However, the impairment of the said debts totaling RM5,799,404.40 (“Impaired Debts”) is fully covered by the profit guarantee provided by two of the Directors of ZASB, namely Teh Eng Huat and Khoo Hun Sniah (“Vendors”), arising from the Vendors’ sale of their shares in ZASB to ITCB in 2014. The Vendors have confirmed in writing that the accounts of ZASB for the financial year ended 31 December 2014, which included the Impaired Debts, are a fair, accurate and conclusive statement of the profits and losses of ZASB for the purposes of the Profit After Taxation Guarantee of ZASB provided by the Vendors. Subject to the foregoing, the RRPTs did not have any material effect on earnings per share, gearing and net assets per share of ITCB Group for the financial year ended 31 December 2014 and is not expected to have any material effect on earnings per share, gearing and net assets per share of ITCB Group for the financial year ended 31 December 2015. 4. PERCENTAGE RATIOS Based on ITCB’s audited consolidated financial statements for the financial year ended 31 December 2013 and pursuant the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the highest percentage ratio applicable to the RRPTs are as follows:- RRPT 1 – 1.93% RRPT 2 – 3.86% RRPT 3 – 0.56% RRPT 4 – 4.42%. 5. APPROVALS REQUIRED The RRPTs are not subject to approval of ITCB’s shareholders or any other government authorities. 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM Lim Swee Hua, Loke Chong Leng, Ooi Shu Rhui and Tan Chee Keong who are all shareholders of ZI and employees of ZASB and Teh Gaik Tiang who is a shareholder of ZI and an employee of ZASB and also the sister of Teh Eng Huat are all deemed to be related parties in RRPT 1, RRPT 2 and RRPT 3 as they are deemed to be persons connected to Teh Eng Huat and Khoo Hun Sniah who are Directors of ZASB. Teh Eng Huat was also a Director of ITCB until 25 February 2015. Lim Swee Hua who is a shareholder of FSP and employee of ZASB and Khaw Kheng Wooi who is a Director and shareholder of FSP and an employee of ZASB are both deemed to be related parties in RRPT 4 as they are deemed to be persons connected to Teh Eng Huat and Khoo Hun Sniah who are Directors of ZASB. Teh Eng Huat was also a Director of ITCB until 25 February 2015. Save as disclosed above, none of the other Directors and/or Major Shareholders of ITCB and/or persons connected with them, have any interest, direct or indirect, in the RRPTs. 7. TOTAL AMOUNT TRANSACTED WITH THE RELATED PARTIES WITHIN THE PRECEDING 12 MONTHS The transactions with ZI and FSP within the preceding 12 months are as set out in Table 1. 8. STATEMENT BY THE AUDIT COMMITTEE As noted in paragraph 3 above, ITCB Group has impaired amounts of RM2,886,230.00 and RM2,913,174.40 due from ZI and FSP respectively arising from RRPT 1, RRPT 3 and RRPT 4 in its financial statements for the year ended 31 December 2014 due to concerns over the recoverability of the said debts. However, the impairment of the said debts totaling RM5,799,404.40 is fully covered by the profit guarantee provided by two of the Directors of ZASB, namely Teh Eng Huat and Khoo Hun Sniah, arising from the Vendors’ sale of their shares in ZASB to ITCB in 2014. The Vendors have confirmed in writing that the accounts of ZASB for the financial year ended 31 December 2014, which included the Impaired Debts, are a fair, accurate and conclusive statement of the profits and losses of ZASB for the purposes of the Profit After Taxation Guarantee of ZASB provided by the Vendors. Taking the foregoing into consideration, the Audit Committee is of the view that the transactions and profit guarantee by the Vendors to cover the impairment of the Impaired Debts are:-   in the best interest of ITCB; and not detrimental to the interest of the minority shareholders. 9. DIRECTORS' STATEMENTS As noted in paragraph 3 above, ITCB Group has impaired amounts of RM2,886,230.00 and RM2,913,174.40 due from ZI and FSP respectively arising from RRPT 1, RRPT 3 and RRPT 4 in its financial statements for the year ended 31 December 2014 due to concerns over the recoverability of the said debts. However, the impairment of the said debts totaling RM5,799,404.40 is fully covered by the profit guarantee provided by two of the Directors of ZASB, namely Teh Eng Huat and Khoo Hun Sniah, arising from the Vendors’ sale of their shares in ZASB to ITCB in 2014. The Vendors have confirmed in writing that the accounts of ZASB for the financial year ended 31 December 2014, which included the Impaired Debts, are a fair, accurate and conclusive statement of the profits and losses of ZASB for the purposes of the Profit After Taxation Guarantee of ZASB provided by the Vendors. Taking the foregoing into consideration, the Board of Directors of ITCB is of the opinion that the RRPTs and profit guarantee by the Vendors to cover the impairment of the Impaired Debts are in the best interest of ITCB Group. This announcement is dated 29 April 2015. Please refer attachment below. Attachments: Table 1.pdf