PROPOSED ACQUISITION OF A FREEHOLD LAND LOCATED AT MUKIM OF KOTA TINGGI, DAERAH KOTA TINGGI, JOHOR FOR A TOTAL CASH CONSIDERATION OF RM21,935,236.

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1 CHIN HIN GROUP BERHAD Type Subject Description Announcement OTHERS CHIN HIN GROUP BERHAD PROPOSED ACQUISITION OF A FREEHOLD LAND LOCATED AT MUKIM OF KOTA TINGGI, DAERAH KOTA TINGGI, JOHOR FOR A TOTAL CASH CONSIDERATION OF RM21,935,236.00) 1. DETAILS OF THE ACQUISITION The Board of Directors of Chin Hin Group Berhad ( Chin Hin or the Company ) is pleased to announce that Sage Evergreen Sdn. Bhd. ( SESB or the Purchaser ), an indirect wholly-owned subsidiary of the Company had on 15 September 2016 entered into a Sale and Purchase Agreement ( SPA ) with TKW Capital Sdn. Bhd. ( TKW or the Vendor ) for the acquisition of a piece of freehold land located at Mukim of Kota Tinggi, Daerah Kota Tinggi, Johor ( Land ) for a total cash consideration of RM21,935, only ( Purchase Price ) ( Proposed Acquisition ). 2. INFORMATION ON THE PROPOSED ACQUISITION 2.1 Information on Vendor TKW is a private limited company incorporated in Malaysia under the Companies Act, The principal business of TKW is swiftlet nest farming and oil palm plantation. The authorised share capital of TKW is RM100, divided into 100,000 ordinary shares of RM1.00 each. The issued and paid-up capital is RM100, comprising 100,000 ordinary shares of RM1.00 each. The directors and shareholders of TKW as at 15 September 2016 are as follows: Directors and Shareholders No. of shares % of issued and paid-up share capital Kris Heng Aquaculture (M) Sdn. Bhd. 50,000 50% Impulse Capital Sdn. Bhd. 50,000 50% 2.2 Details of the Properties The details of the Land are as follows: Identification (Lot. No. / Parcel No.) Master title of the Land Tenure of the Land Category of land use Land area Lot No. 89 No. Hakmilik : GRN in the Mukim of Kota Tinngi, Daerah Kota Tinggi, Johor Freehold Nil for current status. Zoning for industrial use under Majlis Daerah Kota Tinggi hectares

2 Existing and proposed use of the Property Net floor area For the construction of AAC block and precast concrete plant in line with Chin Hin proposed expansion plan N/A 2.3 Basis of determining the Purchase Price The Purchase Price was arrived at on a willing buyer and willing seller basis based on the negotiation between the Vendor and SESB. No valuation was carried out on the Land by the Vendor or SESB for the purposes of Proposed Acquistion. 2.4 Source of funding The Purchase Price will be satisfied entirely in cash, which will be financed entirely through internally-generated funds. 2.5 Salient Terms of the SPA The words and abbreviations used throughout this section of the Announcement shall have the same meaning as defined in the SPA unless the context otherwise requires or defined herein The Purchase Price shall be paid by the Purchaser in the following manner : (i) RM2,193, only to be paid of the date of execution of the SPA ( Deposit Sum ). (ii) The balance of the Purchase Price of RM19,741, ( Balance Purchase Price ) shall be paid within three (3) months from the date of the SPA ( Completion Period ) If the Purchaser fails to pay the Balance Purchase Price by the expiry of the Completion Period, the Vendor shall automatically grant the Purchaser an extension of time of one (1) month commencing from after the expiry of the Completion Period ( the Extended Completion Period ) to pay the same provided that the Purchaser shall pay the Vendor interest at the rate of 8% per annum calculated on daily basis on the Balance Purchase Price or such part thereof still due and owing until such time when such balance of the Purchase Price shall have been fully paid If the Purchaser fails to pay the Balance Purchase Price by the expiry of the Completion Period or Extended Completion Period, as the case may be, or fail to observe and/ or perform any other terms and/ or conditions of the SPA, the Purchaser shall be deemed to have repudiated the SPA and the Vendor shall be entitled to terminate the SPA by giving a notice in writing to the Purchaser whereupon a Deposit Sum shall be forfeited to the Vendor forthwith being the agreed liquidated damages and, subject to the Purchaser having removed any private caveat lodged against the title to the Land, the Vendor shall within fourteen (14) days from the date thereof refund to the Purchaser all other monies paid to him or for his account under the SPA free from interest in exchange for the documents related to the transfer of the Land s title and the re-delivery of vacant possession (if already delivered) and thereafter neither party shall have any further claim against each other. The Vendor shall be entitled to sell and/ or deal with the Land in any manner he deems fit without further reference to the Purchaser.

3 2.5.4 If the Purchaser is willingly ready to complete the Proposed Acquisition and has performed according to the terms of the SPA but the Vendor fails refuses or neglects to perform any of his obligation, the Purchaser shall be entitled to seek specific performance of the SPA against the Vendor and claim damages costs and expenses (including his solicitors' costs in full indemnity basis) incurred or otherwise arisen therefrom; alternatively, if the breach of the Vendor shall amount to a repudiation of the SPA, the Purchaser may, without prejudice to his aforesaid right of specific performance, elect to accept the said repudiation and the Purchaser shall be entitled to terminate the SPA by giving a notice in writing to the Vendor whereupon the Vendor shall within fourteen (14) days from the date thereof refund all monies received by him or for his account under the SPA without interest and pay a sum equivalent to 10% of the Purchase Price as agreed liquidated damages in exchange for the documents to the transfer of the Land s title and the re-delivery of vacant possession (if already delivered) and thereafter neither party shall have any claim against each other. The Vendor hereby agrees that, notwithstanding that the Purchaser may have elected to accept the Vendor's default as repudiation of the SPA, the Purchaser shall only be required to remove any caveat lodged against the Land within five (5) working days after the aforesaid refund and liquidated damages are received by him The Purchaser shall be deemed to have completed the Proposed Acquisition by making or causing to be made the full payment of the Purchase Price together with any interest accrued in the Extended Completion Period by the Completion Period or the Extended Completion Period and upon confirmation of the successful registration of the title in the name of the Purchaser Upon the Purchaser completing the Proposed Acquisition in accordance with Clause 2.5.5, vacant possession of the Land shall be delivered to the Purchaser within five (5) days from the date of receipt by the Vendor's Solicitors of full payment of the Purchase Price and interest (if any) and outgoings (hereinafter referred to as the "Vacant Possession Date"), free from all encumbrances other than those imposed by the restrictions of interest and the conditions expressed and implied in the document of title to the Land In the event the Vendor shall fail to deliver vacant possession of the Land, the Vendor shall pay to the Purchaser interest on the Purchase Price at the rate of 8% per annum, calculated on a daily basis from the expiry of the Vacant Possession Date to the date of actual delivery of vacant possession In the event that the registration of the transfer in respect of the Land cannot be effected by the relevant authority for any non-rectifiable reason not occasioned by any act, default or omission on the part of either party hereto, the SPA shall be deemed as terminated and the Vendor within fourteen (14) days upon demand thereof refund to the Purchaser all sums paid to the Vendor or for his account under the SPA free of interest in exchange for the documents related to the transfer of the Land s title and the re-delivery of vacant possession and removal of caveat by the Purchaser upon receipt of the aforesaid refund and thereafter neither of the parties hereto shall have any further claims against the other under or in respect of the SPA. 3. LIABILITIES TO BE ASSUMED Save for the bank borrowings to be procured for the Purchase Consideration, Chin Hin Group will not be assuming any additional liabilities, including contingent liabilities and guarantees arising from the Proposed Acquisition.

4 4. RATIONALE FOR THE PROPOSED ACQUISITION Currently our existing precast concrete and AAC blocks plant at Serendah is running at its maximum capacity. Due to the insufficient capacity and growing demand as a result of higher adoption rate of AAC block and strong order books for precast concrete, Chin Hin Group has embarked into the production expansion plan by setting up more plants to cater for the increasing needs. Chin Hin Group is going to set up a 45,000 tonne pre-cast concrete and a 600,000 m3 AAC block plant on the Johor land. The two plants in Johor are targeted to commence operations in the last quarter of RISK FACTOR 5.1 Non-completion of the Proposed Acquisition The SPA contains various terms and conditions governing the sale of the Properties. In the event such terms and conditions are breached, the Proposed Acquisition will not be completed and Chin Hin will not be able to meet its objective as stated in Section 4 of this announcement. As such, to mitigate these risks, the Board will take reasonable steps to ensure that every effort is made to obtain all the necessary approvals for the Proposed Acquisition, if required, and ensure compliance with the terms and conditions of the SPA in relation to the Purchaser s obligations. 5.2 Investment Risk Upon completion of the Proposed Acquisitions, Chin Hin Group will be subject to inherent risks associated to property investment. These may include, amongst others, general economic downturn in the global and Malaysian economy, changes in the credit and interest rate conditions. Further, the value of the Land may either be enhanced or diminished depending on factors such as the development and rental yields within the vicinity of the Properties, as well as the local and global market conditions. In view of this, Chin Hin Group may be adversely affected by the relatively illiquid nature of real estate investments whereby the Group may be unable to sell the Land on short notice given the potential change in value of the Land or to meet cash flow requirements of the Group. 6. EFFECTS OF THE PROPOSED ACQUISTION The Johor plants are expected to contribute positive earning to Chin Hin Group by the last quarter of The group expect further margin improvement will be underpinned by higher contribution from its manufacturing segments, particularly AAC and precast concrete segment as a results of lower manufacturing costs owing to advantage from economies of scale. 6.1 Share capital and substantial shareholders shareholding The Proposed Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders shareholdings of Chin Hin as the Proposed Acquisition does not involve any issuance of new ordinary shares by Chin Hin. 6.2 Net assets ( NA ), NA per share and gearing For illustrative purposes, the proforma effects of the Proposed Acquisition on the NA and gearing position of Chin Hin based on its audited consolidated balance sheet as at 31 December 2015 are as follows:-

5 Audited as at 31 December 2015 RM 000 After Proposed Acquisition * RM 000 Share Capital Foreign Currency Translation Reserve 221, , Share Premium - 7,656 Merge Reserve Revaluation Reserve (153,192) 8,768 (153,192) 8,768 Retained Earnings 183, ,017 Shareholders fund / NA 261, ,568 Number of ordinary shares in issue 442, ,888 NA per ordinary share (RM) Borrowing (interest bearing) 409, ,529 Gearing ratio (times) *followed the most recent quarterly announcement results. 6.3 Earnings and earnings per share The Proposed Acquisition is not expected to have any material effect on the earnings and earnings per share of Chin Hin Group for the financial year ending 31 December HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 8.40%. 8. APPROVALS REQUIRED The Proposed Acquisition is not subject to the approval of the shareholders of the Company or from any relevant authorities. 9. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the directors and/or major shareholders of Chin Hin and/or persons connected to the directors and/or major shareholders of Chin Hin have any interests, direct or indirect, in the Proposed Acquisition. 10. STATEMENT BY THE DIRECTORS The Board of Directors, having considered all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is fair and reasonable and is in the best interest of Chin Hin. 11. ESTIMATED TIME FRAME FOR THE COMPLETION The Proposed Acquisition is expected to be completed by fourth quarter of 2016 from the date of the SPA.

6 12. DOCUMENTS FOR INSPECTION The SPA is available for inspection at the registered office of the Company at Suite 10.03, Level 10, The Gardens South Tower, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur between 8.30 a.m. and 5.30 p.m. from Monday to Friday (except public holidays) for a period of three (3) month from the date of this announcement. This announcement is dated 15 September 2016.