Further to the Company’s announcement in relation to variations for the utilisation of proceeds raised from the Initial Public Offerings (“IPO”), the Audit Committee had subsequently discovered that certain IPO funds were inadvertently used for the following purposes:

i. Acquisition of Grandtop Marketing Sdn Bhd.  The Sales and Purchase Agreement entered on 16th March 2016 and the said acquisition was completed on 17th March 2017. 

ii. Acquisition of Kim Teck Cheong (Borneo) Sdn Bhd for the expansion in Brunei and Sarawak respectively.

This was mainly due to the Management did not maintain separate bank accounts for internally generated cashflows and the proceeds arising from the IPO. In view of the need to act fast on business opportunities and rapid pace of the FMCG industry, the Management had focus on taking on these business opportunities i.e. new distributorship/ acquisition of Company available to them. This had rendered the Management overlooked in seeking the Board’s approval to vary the use of IPO proceeds.

Taking cognizance of the discrepancies, the Board of Directors of KTC enclose herewith the revised notes on Utilisation of Proceeds as disclosed in the interim financial reports for the financial quarters ended 30 June 2016 to 30 September 2018  (“Affected Quarters”) (“Appendix A”) for the public’s consumption.

Errata to the Additional Information page of the Annual Reports for the financial years ended 30 June 2016, 2017 and 2018 shall be submitted separately.

In view of the above, as an improvement, the Board has adopted a policy in relation to the utilisation of proceeds raised from issuance of shares/debts.

This announcement is dated 6 September 2019.