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  2017
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  2019
SUMMARY OF KEY MATTERS DISCUSSED AT THE FIFTEENTH ANNUAL GENERAL MEETING ("15TH AGM") OF CAN-ONE BERHAD ("CAN-ONE" OR "THE COMPANY") HELD ON THURSDAY, 27 JUNE 2019

Pursuant to Paragraph 9.21(2)(b) of the Main Market Listing Requirements, a listed issuer must publish a summary of key matter matters discussed at the annual general meeting, as soon as practicable after the conclusion of the annual general meeting.

All resolutions that were tabled at the 15th AGM were duly approved by the Shareholders through poll voting. The Shareholders also received the Audited Financial Statements of the Company and of the Group, along with the Reports of the Directors and Auditors for the financial year ended 31 December 2018.

The results of the poll, which were announced by the Scrutineer, Asia Securities Sdn. Berhad, are as follows:
15TH AGM Voted in favour Voted against Total votes casted
No. of shares % No. of shares % No. of shares %
ORDINARY BUSINESS
Ordinary Resolution 1
Declaration of a first and final single-tier dividend of 4 sen per share for the financial year ended 31 December 2018.
139,508,357 100.000 0 0.000 139,508,357 100.000
Ordinary Resolution 2
Re-election of Director, Dato’ Seri Subahan Bin Kamal who retires pursuant to Article 97 of the Articles of Association of the Company.
139,251,323 99.816 257,034 0.184 139,508,357 100.000
Ordinary Resolution 3
Re-election of Director, Marc Francis Yeoh Min Chang who retires pursuant to Article 97 of the Articles of Association of the Company.
139,165,257 100.000 0 0.000 139,165,257 100.000
Ordinary Resolution 4
Re-election of Director, Tan Beng Wah who retires pursuant to Article 97 of the Articles of Association of the Company.
139,421,423 99.939 84,934 0.061 139,506,357 100.000
Ordinary Resolution 5
Approval of the payment of Directors’ fees amounting to RM897,000 to Directors of the Company and its subsidiaries for the financial year ended 31 December 2018.
129,117,457 99.856 186,000 0.144 129,303,457 100.000
Ordinary Resolution 6
Approval of the payment of benefits of up to RM200,000 to the Non-Executive Directors of the Company for the financial year ending 31 December 2019.
139,498,357 99.993 10,000 0.007 139,508,357 100.000
Ordinary Resolution 7
Re-appointment of KPMG PLT as Auditors of the Company and to authorise the Directors to fix their remuneration.
139,508,357 100.000 0 0.000 139,508,357 100.000
SPECIAL BUSINESS
Ordinary Resolution 8
Proposed authority to Directors to allot and issue shares pursuant to Sections 75 and 76 of the Companies Act 2016.
139,379,057 99.907 129,300 0.093 139,508,357 100.000
Ordinary Resolution 9
Proposed renewal of authority for the Company to purchase its own shares.
139,508,357 100.000 0 0.000 139,508,357 100.000
Ordinary Resolution 10
Proposed renewal of mandate for the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature.
84,148,176 100.000 0 0.000 84,148,176 100.000
Special Resolution 1
Proposed Adoption of New Constitution of the Company.
139,508,357 100.000 0 0.000 139,508,357 100.000
Questions raised from the floor were duly answered by Director, Yeoh Jin Hoe, Group Chief Financial Officer, Khoo Kay Leong and Head of Corporate Finance, Goh Teck Hong.
Q1 It is good to see the Company grow as reflected in the 5-year Group Financial Highlights. The revenue has been on an uptrend but unfortunately, profit after taxation had declined from RM86.37 million in financial year ended 31 December (“FYE”) 2017, to RM63.58 million in FYE 2018 and further to RM46.58 million in FYE 2018. What are the main factors contributing to the drop in profit? Is it raw material cost, labour cost, machinery maintenance cost or any other costs? What steps are you taking to stabilise the income and increase your profit margin going forward?
A1 Can-One equity accounted the results of associate, Kian Joo Can Factory Berhad (“Kian Joo”). From the Consolidated Statement of Profit or Loss in Page 48, you will see that the main reason for the drop in Can-One Group’s profit in FYE 2018 was the decline in share of profit of Kian Joo from RM28.9 million in FYE 2017 to RM5.0 million in FYE 2018. Can-One Group by itself (excluding Kian Joo) posted a higher profit.
Q2 Would a profit be reported by Kian Joo Group in 2019?
A2 The main factor contributing to the reduction in Kian Joo Group’s profit from 2017 to 2018 was its expansion into Myanmar. Over the past 3 years, roughly more than RM800 million has been incurred for the 2 new plants in Myanmar and investment in these new plants have yet to bear fruit. The Myanmar plants which commenced operation early this year, are expected to contribute meaningfully only 3 to 5 years later.
Q3 I believe raw material cost is one of Can-One Group’s major cost components. It was stated in Page 14 of your Annual Report 2018 that Can-One Group maintains sufficient buffet stocks of raw material prices to mitigate effects of volatile price swings and short-term hike in prices. How much buffer stocks do you maintain i.e. how many months and how do you take advantage of the pricing?
A3 On top of managing the cost of raw materials, we also need to manage the working capital for stocks. There is an internal committee to review the price of the main raw materials and if the price is good, we will lock in the price.
Q4 Can-One’s new division i.e. Property and Investment Holding Division, buys and sells properties or develops property? What is the strategy of this division? Will you use your property division as a diversified source of income to contribute to the bottom line of the Group?
A4 We are not into property development. Our properties are used for our own factories/usage.
Q5 From Page 12 of your Annual Report 2018, it can be seen that a major contributor to Can-One Group’s revenue and profit before tax (“PBT”) is your Food Products Division. With regard to the proposed disposal by Can-One of its wholly-owned subsidiary, F & B Nutrition Sdn Bhd (“F&B Nutrition”) at the disposal price of RM800 million (“Proposed Disposal”), how will Can-One make up for the loss of such a significant contribution and what is Can-One going to do with the sales consideration?
A5 An extraordinary general meeting will be convened to obtain members’ approval for the Proposed Disposal of F&B Nutrition. Therefore, all questions pertaining thereto will be addressed at the said extraordinary general meeting.

To put into perspective, Can-One will receive a cash consideration of RM800 million to RM1,000 million from the said disposal. Given that Kian Joo is now wholly-owned by Can-One, we will consolidate the earnings of Kian Joo moving forward. This will make up for the loss of contribution from F&B Nutrition.

For your information, the earnings before income tax, depreciation and amortisation (“EBITDA”) of Kian Joo Group for the FYE 2018 was RM143 million versus F&B Nutrition’s EBITDA of RM83 million. On top of that, there is also EBITDA of approximately RM20 million from Aik Joo Can Factory Sdn Berhad, our other wholly-owned subsidiary company.

The sales proceeds will likely be used to pare down Can-One’s borrowings.
Q6 Now that you have 2 operations viz., Can-One Group and Kian Joo Group, are you going to consolidate these 2 groups? Can you give us a perspective of what you intend to do?
A6 The completion of the acquisition of Kian Joo has now put us in good state to consolidate both the businesses of Kian Joo and Can-One, and to continue with our reorganisation.

As stated in Can-One’s announcements and also the Offer Document for the mandatory general offer for Kian Joo shares (“MGO”), we will carry out a streamlining exercise, identify areas which will create enhanced scale and synergies, and convert them into value.

Kian Joo has committed and spent on capital expenditure (“CAPEX”) for expansion in order to build more business.
Q7 Your Food Products Division buys a lot of cans from the General Cans Division. When you sell F&B Nutrition, will you lose that stream of business? Will the purchaser buy from your competitors?
A7 Yes, supply of cans is important to Can-One, hence during our negotiations with the purchaser, one of the conditions for the Proposed Disposal of F&B Nutrition is the execution of a long-term supply agreement to continue the supply of cans to F&B Nutrition.
Q8 Does Can-One foresee Kian Joo going back to its glory days in 2014 to 2016? The prices of raw materials like aluminium and paper which were on the rise last year had came off recently. Would this improve your future margins?
A8 We hope that the glory days of Kian Joo will come back again. We believe we are in a good position as we are now a regional player. Our target is to be competitive not only in Malaysia but also in other regions, hence the reason for the expansion.

On the raw material prices, Can-One has a team that review the prices of raw materials and lock the price if it is low enough. Additionally, there is mechanism in place to pass on the price increase in raw material to customers.

The ongoing trade war between United States of America and China poses certain benefits and opportunities but there are also some downsides. It provides us an opportunity to go overseas and take on competitors but at the same time, Malaysia has opened up for foreign companies to come in and compete with us.

Other than fluctuations in raw material prices, there is labour cost to manage. Large corporations such as Coke, Pepsi, Heineken, Nestle have introduced ‘e-tender’ where we have to submit our best and lowest bids. Post tender, they will press down our prices further.

Hence, we have to manage well, introduce more automation to reduce cost and increase capacity and continue to establish good relationship with our customers. We will continue to do the best we know how for Can-One Group.
Q9 What is your CAPEX requirement? Can you give some indication?
A9 Capital commitment of Can-One Group for FYE 2018 is set out in Note 25, Page 123.
Q10 The Directors of Can-One are all males. The Government has encouraged listed companies to have gender diversity. What is Can-One’s gender diversity plan – It would be good to have female director on the Board.
A10 Even though it is not a requirement in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, we take note of the suggestion.
Q11 Is KPMG PLT (“KPMG”) the external auditors for the whole of Can-One Group, i.e. including your overseas companies or just your Malaysian companies? If they are not, the Board should consider appointing KPMG as external auditors for all the companies so that the Board can bargain for lower fees from KPMG.
A11 KPMG are the external auditors for only the Malaysian companies.

The Board took note of the suggestion.
  2020