| 1. Introduction The Board of Directors of Knusford Berhad (“Knusford” or “the Company”) wishes to announce that Wengcon Equipment Sdn Bhd, a wholly owned subsidiary of the Company, had on 25 March 2009 entered into Sale & Purchase Agreements with Danga Bay Sdn Bhd to acquire twelve (12) units of Danga Walk Street Mall from Danga Bay Sdn Bhd for a total purchase consideration of Ringgit Malaysia: Four Million Four Hundred Forty Four Thousand And Four Hundred Only (RM4,444,400.00). 2. Information regarding the properties Danga Walk Street Mall is an 11 acres business hub with 150 units of 3 storey and 4 storey shop-offices located along the coast of Johor Bahru. The 12 units of Danga Walk Street Mall purchased by Wengcon Equipment Sdn Bhd are as follows:- Lot No. Unit Price B4-G-4 RM 557,800.00 B4-1-4 RM 364,200.00 B4-2-4 RM 216,200.00 B4-G-6 RM 557,800.00 B4-1-6 RM 364,200.00 B4-2-6 RM 216,200.00 B4-G-9 RM 531,200.00 B4-1-9 RM 346,900.00 B4-2-9 RM 205,900.00 B5-G-6 RM 531,200.00 B5-1-6 RM 346,900.00 B5-2-6 RM 205,900.00 _______________ RM 4,444,400.00 =============== The properties are erected on Master Title HS (D) 457927 PTB 22820, Bandar Johor Bahru, Daerah Johor Bahru, Negeri Johor Darul Ta’zim. 3. Basis of arriving at the consideration The consideration sum was arrived after taking into the consideration of a valuation report by Messrs. Cheston International (Johor) Sdn Bhd valuing the market price of the mentioned properties at RM4,700,000.00. This represent a discount of 5.45% from the market price. 4. Source of financing The purchase consideration of RM4,444,400.00 will be funded from internally generated funds and/or financial institutions. 5. Vacant Possession The vendor shall deliver vacant possession of the properties to purchaser upon payment to the vendor of the balance purchase price. 6. Approvals The transaction does not require shareholders and/or governmental authorities approvals. 7. Effects of the transaction There is no effect of the transaction on the share capital and net tangible assets of KB and no change of the substantial shareholders and their respective shareholdings. The rental income from these properties is expected to contribute positively to the earnings of Knusford Group. 8. Rationale for the acquisition The acquisition is for the purpose of investment in a strategic location with potential for capital growth. 9. Encumbrances The properties are free from encumbrances. 10. Risk Factors Property prices may be adversely affected by domestic economic conditions, local real estate conditions, public perception of the attractiveness of the property, changes from comparable sale and/or rental that may be generated. Other relevant factors also include changes in interest rates, availability of funds, changes in governmental regulations, changes in tax laws, environmental laws and other legal liabilities. Property investments are not liquid and limits the ability of converting the same to cash upon short notice, in which case a reduction in price may have to be endured for a quick sale. The Company will mitigate the risk factors by constantly reviewing the economic conditions and changes in market demand. The Company does not at this point expect that a requirement for a quick sale on short notice will become necessary. 11. Directors and substantial shareholders’ interest Save and except for Dato’ Lim Kang Hoo and Dato’ Lim Kang Swee who are deemed interested in the transaction by virtue of Dato’ Lim Kang Hoo being a Director and major shareholder of Danga Bay Sdn Bhd and Dato’ Lim Kang Swee is a brother of Dato’ Lim Kang Hoo. Accordingly both of them make no opinion and recommendation and abstain from deliberation and voting in regards to the transaction. 12. Statement of directors The Board save and except for Dato’ Lim Kang Hoo and Dato’ Lim Kang Swee after taking into consideration all the relevant factors and after careful deliberation is of the opinion that the acquisition is in the best interest of the Company and its shareholders. 13. Commission’s policies and guidelines The transaction does not depart from the Commission’s policies and guidelines on issue/offer of securities. 14. Documents for inspection The Sale & Purchase Agreements and the Valuation Report will be available for inspection at the registered address of the Company at 33-35 Ground Floor Wisma Ekovest, Jalan Desa Gombak 6, Taman Sri Setapak, Off Jalan Gombak, 53000 Kuala Lumpur during normal office hours from Mondays to Fridays (except public holidays) |