General Announcement Reference No. GA APPENDIX 1

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1 APPENDIX 1 CAB CAKARAN CORPORATION BERHAD ACQUISITION OF PROPERTY BY HOME MART FRESH & FROZEN SDN. BHD. (FORMERLY KNOWN AS CAB FOOD SDN. BHD.), A WHOLLY-OWNED SUB- SUBSIDIARY OF CAKARAN CORPORATION BERHAD ( THE ACQUISITION ) 1.0 INTRODUCTION The Board of Directors of CAB Cakaran Corporation Berhad ("CAB" or the Company ) wishes to announce that Home Mart Fresh & Frozen Sdn. Bhd. ( HMFF ) (formerly known as CAB Food Sdn. Bhd. ( CABF )), a wholly-owned subsidiary of Kyros International Sdn. Bhd. ( KISB ), which in turn is a wholly-owned subsidiary of CAB had on 18 January 2017 entered into a Sale and Purchase Agreement ( the Agreement ) with Mr Chuah Ah Bee and Mr Loo Choo Gee (collectively referred to as the Vendors ) to acquire all that piece of freehold land held under Geran Mukim No. Hakmilik 1229, Lot 3042, Tempat Nibong Tebal, Mukim 07, Daerah Seberang Perai Selatan, Negeri Pulau Pinang together with buildings erected thereon measuring approximately 4,572 square meters ( the Property ) free from all encumbrances and with vacant possession but subject to all conditions and restrictions in interest whether express or implied under the National Land Code, 1965 (and/or the Strata Titles Act 1985, if applicable) affecting the issue document of title to the Property, for a total consideration of Ringgit Malaysia Three Million and Two Hundred Thousand only (RM3,200,000.00) ( the Purchase Consideration ) upon the terms and conditions as stipulated in the Agreement. 2.0 DETAILS OF THE ACQUISITION 2.1 Information on KISB KISB was incorporated in Malaysia under the Companies Act 1965 on 25 June 1996 as a private limited company under the name of Violet Point Sdn. Bhd.The existing authorised share capital of KISB is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each, of which 1,800,000 have been fully issued and paid-up. KISB is principally involved in investment holding and fast food franchising business. The Directors of KISB are as follows:- Directors Nationality Chuah Ah Bee Malaysian Chuah Hoon Phong Malaysian (iii) Chew Chee Khong Malaysian (iv) Loo Choo Gee Malaysian Page 1 of 8

2 2.2 Information on HMFF HMFF was incorporated in Malaysia under the Companies Act 1965 on 20 February 2003 as a private limited company under the name of MJ Global Sdn. Bhd. The existing authorised share capital of HMFF is RM500,000 comprising 500,000 ordinary shares of RM1.00 each, of which all have been fully issued and paid-up. HMFF was principally involved in providing repacking service and distributing of food products but has ceased its business operation on 1 April HMFF intends to carry on the business of trading of supermarket products. The Directors of HMFF are as follows:- Directors Nationality Chuah Ah Bee Malaysian Chuah Hoon Phong Malaysian 2.3 Information on the Vendors Mr Chuah Ah Bee Mr Chuah Ah Bee, a Malaysian and one of the owners of the Property, is a Director of CAB, KISB and HMFF. He is also one of the major shareholders of CAB. Mr Loo Choo Gee Mr Loo Choo Gee, a Malaysian and one of the owners of the Property, is a Director of CAB and KISB. He is also a shareholder of CAB. 2.4 Information on the Property Mr Chuah Ah Bee (1/2 share) and Mr Loo Choo Gee (1/2 share) are the registered and beneficial proprietors of the undivided share stated beside their names of all that piece of freehold land held under Geran Mukim No. Hakmilik 1229, Lot 3042, Tempat Nibong Tebal, Mukim 07, Daerah Seberang Perai Selatan, Negeri Pulau Pinang together with buildings erected thereon measuring approximately 4,572 square meters. Express Condition Tanah ini hendaklah digunakan untuk tujuan perniagaan sahaja (bagi plot bangunan perniagaan di dalam pelan pecah sempadan yang diluluskan oleh Majlis Perbandaran Seberang Perai. Pelan bangunan hendaklan seperti yang diluluskan oleh Pihak Berkuasa Tempatan iaitu Majlis Perbandaran Seberang Perai. Page 2 of 8

3 The Property is currently charged to United Overseas Bank (Malaysia) Bhd ( Chargee Bank ). Apart from the charge, the Property is free from any claim or encumbrance. The buildings erected on the Property are as follows: Building sq. ft. Approximate Age (1) Office Building (2) Open-sided Sales Gallery Total 1, The Property is currently vacant and would be used by HMFF to set up a retail outlet for selling fresh and frozen products in Nibong Tebal, Penang. 3.0 BASIS OF ARRIVING AT THE PURCHASE CONSIDERATION For the purpose of the Acquisition, an independent registered valuer, Henry Butcher Malaysia (Seberang Perai) Sdn. Bhd. ( the Valuer ) has been appointed by HMFF to carry out the valuation on the Property. The Valuer has in its valuation report dated 17 November 2016 reported that the Market Value of the freehold unencumbered interest in the Property is RM3,300,000 after having inspected the Property and investigated the available data related and relevant to the matter. The Purchase Consideration of RM3,200, was arrived at on a willing buyer willing seller basis and after taking into consideration the Market Value of the Property. Considering the above, the Company is of the opinion that the Purchase Consideration of RM3,200, is therefore fair. The original cost of the Property and date of acquisition of the Property by the Vendors are as follows:- original cost of the Property RM1,650,000; and date of acquisition of the Property 28 December SOURCE OF FUNDING The Purchase Consideration will be funded through internally generated funds and/or external borrowings. However, the exact breakdown between the sources of funding will be decided by the management of HMFF at a later date depending on the circumstances. Page 3 of 8

4 5.0 SALIENT TERMS OF THE AGREEMENT The Purchase Consideration shall be paid in the following manner:- (a) (b) (c) Upon the execution of the Agreement, HMFF shall pay to the Vendor the sum of RM320,000 only ( Deposit ) as deposit and part payment of the Purchase Consideration. The balance of the Purchase Consideration amounting to RM2,880,000 only shall be paid to the Vendors on or before the expiry of three (3) months from the date of the Agreement ( the Completion Date ). In the event that HMFF fails to pay the balance of the Purchase Consideration within the time stipulated above, HMFF shall be entitled to an automatic extension of one (1) month free of interest to pay the balance of the Purchase Consideration. (iii) If HMFF fails to pay the Purchase Consideration within the payment period, the Vendor shall be entitled to terminate the Agreement by giving written notice to HMFF. Upon such termination, the Vendors shall forfeit a sum equivalent to ten per centum (10%) of the Purchase Consideration as agreed liquidated damages from the monies paid by HMFF herein and shall refund to HMFF any balance free of interest after such forfeiture within seven (7) days of the date of termination and thereafter the Agreement shall be null and void and neither party shall have any claim against the other. If the Vendors breach any provision of the Agreement, HMFF shall be entitled either to the remedy at law for specific performance of the Agreement against the Vendors or to terminate the Agreement by written notice to the Vendors. If HMFF terminates the Agreement, the Vendors shall, within seven (7) days of the date of such termination notice, refund all monies paid by HMFF under the Agreement and pay an additional sum equivalent to ten per centum (10%) of the Purchase Consideration to HMFF as agreed liquidated damages and thereafter the Agreement shall be null and void and neither party shall have any claim against the other. 6.0 RATIONALE FOR THE ACQUISITION The Acquisition will enable HMFF to set up a retail outlet for selling fresh and frozen items. Page 4 of 8

5 7.0 PROSPECT OF THE PROPERTY The property located in the locality of Nibong Tebal town, within a mixed neighbourhood of residential, commercial, industrial and agricultural in character is a strategic location for setting up a retail outlet for selling fresh and frozen items of HMFF. 8.0 LIABILITIES TO BE ASSUMED BY THE PURCHASER Save for the obligations pursuant to the Agreement, there are no other liabilities including contingent liability and guarantee to be assumed by HMFF arising from the Acquisition. 9.0 FINANCIAL EFFECTS OF THE ACQUISITION 9.1 Earnings The Acquisition is not expected to have any material effect on the earnings per share of CAB Group for the financial year ending 30 September Net Assets ( NA ) The Acquisition will not have any material effect on the NA of CAB Group for the financial year ending 30 September Share Capital The Acquisition will not have any effect on the issued and paid-up share capital of CAB Group. 9.4 Substantial shareholders shareholdings The Acquisition will not have any effect on the substantial shareholders shareholdings of CAB Group. 9.5 Gearing The gearing of the Group based on the audited financial statements for the financial year ended 30 September 2015 is 1.05 times. The Acquisition will not materially increase the gearing of the Group. Page 5 of 8

6 10.0 RISK FACTORS The Board does not foresee any material risk factors arising from the Acquisition other than the normal economic risk and the following risks: (iii) Liquidity risk Investment in property is generally illiquid which may limit the ability of the Group to timely realizing property from assets into cash. HMFF will be exposed to the risk in having to generate sufficient funds to meet its financial commitments in a timely manner. Interest rate risk As the acquisition of the Property will be partly financed by bank borrowings, increase in interest rates will likely increase the interest cost associated with the Group s debt, which could adversely affect the Group s earnings and financial condition. Risk relating to potential future development Due to the funds spend on the acquisition of the Property, the Group may not be able to explore other developments for a period of time ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances, the Acquisition is expected to be completed by second quarter of APPROVAL FOR THE ACQUISITION The Acquisition is not subject to the approval of the shareholders of the Company or any government authority. Page 6 of 8

7 13.0 INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO SUCH DIRECTORS AND/OR MAJOR SHAREHOLDERS Save as disclosed below, none of the Directors and/or major shareholders of CAB and/or persons connected with the Directors and/or major shareholders of CAB, has any interest, direct or indirect in the Acquisition:- Related Party with whom the Group is transacting Interested Related Party Nature of Relationships Mr Chuah Ah Bee and Mr Loo Choo Gee Interested Directors of HMFF Mr Chuah Ah Bee Mr Chuah Hong Phong Interested Persons Connected Madam Chan Kim Keow Mr Chuah Hoon Hong Mr Chuah Hoon Teng Ms Ng Honk Ling Mr Chuah Ah Chui Mr Chuah Teh Chai Madam Chan Kim Keow is the spouse of Mr Chuah Ah Bee. Mr Chuah Hoon Phong, Mr Chuah Hoon Hong and Mr Chuah Hoon Teng are the children of Mr Chuah Ah Bee. Ms Ng Honk Ling is the spouse of Mr Chuah Hoon Phong and daughter-in-law of Mr Chuah Ah Bee and Madam Chan Kim Keow. Mr Chuah Ah Chui is a sibling of Mr Chuah Ah Bee. Mr Chuah Teh Chai is the father of Mr Chuah Ah Bee TOTAL AMOUNT TRANSACTED BY THE RELATED PARTIES There is no other transaction entered into between the Related Parties with CAB Group for the preceding twelve (12) months HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the Acquisition as per Paragraph 10.02(g) Chapter 10 of the Main Market Listing Requirements is 1.738%. Page 7 of 8

8 16.0 STATEMENT BY AUDIT COMMITTEE The Audit Committee of CAB has reviewed the terms of the Acquisition and as the Purchase Consideration is lower than the Market Value, the Audit Committee is satisfied that the terms are:- (iii) fair, reasonable and on normal commercial terms; not detrimental to the interest of the minority shareholders of CAB; and in the best interest of CAB Group. The Audit Committee did not seek an independent advice in forming its view in respect of the Acquisition DIRECTORS STATEMENT The Board of Directors of CAB (save for Mr Chuah Ah Bee, Madam Chan Kim Keow, Mr Chuah Hoon Phong and Mr Loo Choo Gee), having considered the terms of the Acquisition and that the Purchase Consideration is lower than the Market Value as well as its rationale and after careful deliberation, is of the opinion that the Acquisition is:- (iii) fair, reasonable and on normal commercial terms; not detrimental to the interest of the minority shareholders of CAB; and in the best interest of CAB Group. The Board of Directors did not seek an independent advice in forming its view in respect of the Acquisition DOCUMENTS FOR INSPECTION The Agreement is available for inspection at the registered office of CAB during normal office hours from Monday to Friday (except Saturday, Sunday and public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 18 January Page 8 of 8