Upon the completion of the Proposed Disposal, JHSB will cease to be an associate company of BHB.

Transcription

1 BOUSTEAD HOLDINGS BERHAD ( BHB OR THE COMPANY ) PROPOSED DISPOSAL BY BAKTI WIRA DEVELOPMENT SDN BHD ( BWSB ), A WHOLLY OWNED SUBSIDIARY OF BHB, OF 30% EQUITY INTEREST HELD IN JENDELA HIKMAT SDN BHD ( JHSB ) TO CASCARA SDN BHD ( CASCARA ) FOR A CASH CONSIDERATION OF RM180 MILLION ( PROPOSED DISPOSAL ) 1. INTRODUCTION On behalf of the Board of Directors of BHB ( Board ), Affin Hwang Investment Bank Berhad ( Affin Hwang IB ) wishes to announce that BWSB, a wholly-owned subsidiary of BHB, had on 29 December 2015 entered into a conditional share sale agreement with Cascara ( SSA ) for the Proposed Disposal. Concurrent with the Proposed Disposal, Lembaga Tabung Angkatan Tentera ( LTAT ), the major shareholder of BHB, had also on 29 December 2015 entered into a conditional share sale agreement with Cascara for the disposal of its 30% equity interest in JHSB for a cash consideration of RM180.0 million ( LTAT Disposal ). The Proposed Disposal is a related party transaction pursuant to Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( MMLR ), further details of which are set out in Section 7 of this announcement. Further details of the Proposed Disposal are set out below. 2. DETAILS OF THE PROPOSED DISPOSAL The Proposed Disposal entails the disposal of 12,600,000 ordinary shares of RM1.00 each in JHSB ( JHSB Shares ) ( Sale Shares ), representing 30% of the issued and paid-up share capital of JHSB for a cash consideration of RM180.0 million ( Sale Consideration ), subject to the terms and conditions as contained in the SSA. Upon the completion of the Proposed Disposal, JHSB will cease to be an associate company of BHB. 2.1 Information on JHSB JHSB was incorporated in Malaysia as a private limited company under the Companies Act, 1965 ( Act ) on 16 April As at 30 November 2015, being the latest practicable date prior to this announcement ( LPD ), the authorised and issued and paid-up share capital of JHSB are as follows: Authorised No. of shares Par value Total 000 RM RM JHSB Shares 50, ,000 - Redeemable preference shares of RM0.01 each in JHSB ( RPS ) 100, ,000 1

2 Issued and fully paid-up JHSB Shares Shareholder No. of JHSB Shares RM 000 % 000 BWSB 12,600 12, Cascara 16,800 16, LTAT 12,600 12, Total 42,000 42, RPS No. of RPS RM Nominal value 1,000 1,000 - Share premium 99,000 99,000 Total 100, ,000 LTAT is the sole subscriber of the 100,000,000 RPS with a subscription price of RM1.00 per RPS. As at the LPD, JHSB does not have any subsidiaries or associates. As at the LPD, the directors of JHSB are Gen. Tan Sri Dato Seri Che Mohd Noor bin Mat Arshad (R), Dato Ghazali bin Mohd Ali ( DGMA ), Tan Sri Dato Bustari bin Yusuf, Datuk Zakaria bin Sharif, Mohamed Zaidee bin Abang Hipni, Cheah Swee Choo and Mohamad Nadziff bin Tan Sri Dato Bustari. JHSB is principally involved in property development. JHSB is the registered and/or beneficial owner of the 5 parcels of land measuring approximately acres ( JHSB Lands ), details of which are as follows: Title particulars Tenure Land area Market value Acres HSD PT 9 ( PT9 Land ) (1) Freehold HSD PT 8 ( PT8 Land ) (1) Freehold HSD PT ( PT20090 Land ) (1) Freehold Part of GRN Lot ( Plot 5 & Road Freehold Reserve ) (2) Lot 147, Section 16, Kuching Town Land District Leasehold (4) 3.66 ( Kuching Land ) (3) Notes: (1) Located in Mukim Bukit Raja, District of Petaling, State of Selangor. (2) Located in Mukim Kapar, District of Klang, State of Selangor. RM 000 (5) 380,354 (5) 227,851 (5) 89,515 (6) 151,000 (5) 9, ,955 (3) Located in District of Kuching Town, State of Sarawak. The title is currently under the name of Federal Lands Commissioner and is in the process of being transferred to JHSB. (4) Tenure for the Kuching Land expires on 5 March (5) Based on the valuation report dated 15 December 2015 prepared by Messrs. Abu Hassan & Co ( Abu Hassan ) ( Abu Hassan Valuation Report ). 2

3 (6) Based on the valuation report dated 16 December 2015 prepared by Messrs. CH Williams Talhar & Wong ( CH Williams ) ( CH Williams Valuation Report ). For purposes of this announcement: (i) (ii) Abu Hassan and CH Williams are collectively referred to as the Valuers ; and the Abu Hassan Valuation Report and the CH Williams Valuation Report are collectively referred to as the Valuation Reports. BHB had appointed the Valuers to undertake independent valuations of the JHSB Lands. The Valuers are independent property valuers registered with the Board of Valuers, Appraisers and Estate Agents Malaysia. The market value of the JHSB Lands of RM million as appraised by the Valuers was arrived at using the following methods of valuation: Land PT9 Land PT8 Land PT20090 Land Plot 5 & Road Reserve Kuching Land Method of valuation Comparison method as the primary method and the residual method as a check Comparison method only The comparison method involves comparing the JHSB Lands with similar properties that were either transacted recently within the same location or other comparable localities. In comparing properties, consideration is given to factors such as location, size, tenure and time element. The residual method entails valuing the JHSB Lands as if it has been fully developed based on an approved development plan. For the residual method, consideration is given to the gross development value of a project and deducting therefrom the estimated costs of development including preliminaries, development and statutory charges, construction costs and professional fees, financing charges and developer s profit and resultant amount deferred over a period of time for the completion of the said project. Further information on JHSB is set out in the Appendix of this announcement. 2.2 Basis and justification of arriving at the Sale Consideration The Sale Consideration for the Proposed Disposal is derived at on a willing-buyer willing-seller basis after taking into consideration the adjusted unaudited net assets ( NA ) of JHSB as at 30 November 2015 of approximately RM million, after adjusting for the net revaluation surplus of RM million arising from the revaluation of the JHSB Lands, as illustrated below: Ref. RM 000 Unaudited NL of JHSB as at 30 November 2015 (120,695) Add: Net revaluation surplus of the JHSB Lands *420,486 Adjusted unaudited NA of JHSB (A) 299,791 Equity interest in JHSB to be disposed pursuant to the Proposed Disposal (B) 30% Effective NA represented by the Sale Shares (C) = (A) x (B) 89,937 3

4 Note: * The net revaluation surplus is computed as follows: RM 000 Market value of the JHSB Lands as appraised by the Valuers 857,955 Less: Unaudited net book value of JHSB Lands as at 30 November 2015 (437,469) Net revaluation surplus 420,486 The Sale Consideration is justified and represents the following: (i) the implied value of the JHSB Lands of RM1.158 billion, which represents a premium of RM million or 34.99% to the market value of the JHSB Lands of RM million as appraised by the Valuers, illustrated as follows: Ref. RM 000 Implied value of JHSB Lands (A) 1,158,164 Less: Unaudited net book value of JHSB Lands as at (B) (437,469) 30 November 2015 Implied net revaluation surplus (C) = (A) - (B) 720,695 Add: Unaudited NL of JHSB as at 30 November 2015 (D) (120,695) Implied NA of JHSB (E) 600,000 Equity interest in JHSB to be disposed pursuant to the (F) 30% Proposed Disposal Sale Consideration for the Sale Shares (G) = (E) x (F) 180,000 Market value of JHSB Lands as appraised by the (H) 857,955 Valuers Premium of implied value of JHSB Lands to the (I) = (A) - (H) 300,209 market value of JHSB Lands % of Premium (J) = (I)/(H) x % (ii) the Sale Consideration represents a premium of approximately RM million or % over the effective NA represented by the Sale Shares of approximately RM million. 2.3 Salient terms of the SSA The salient terms of the SSA are set out below: Conditions precedent ( CP ) The sale and purchase of the Sale Shares is conditional upon all of the following CPs being satisfied within 3 months from the date of the SSA ( Conditional Period ):- (i) (ii) the approval of the board of directors of BWSB; the approval of the Board and shareholders of BHB in relation to the Proposed Disposal at an extraordinary general meeting ( EGM ) to be convened; 4

5 (iii) (iv) (v) (vi) (vii) (viii) the approval of the board of directors of Cascara, if applicable; BWSB procuring a letter of undertaking from Cebur Megah Development Sdn Bhd (a subsidiary of BHB) ( Cebur Megah ) to bear 50% of the hospital cost contribution estimated at RM50,000,000 ( Cebur Megah Undertaking Letter ); the signing of the share sale agreement pursuant to the LTAT Disposal and a supplemental RPS agreement between LTAT and Cascara ( Supplemental RPS Agreement ) wherein LTAT agrees to defer the repayment of its RPS and to waive all interest on accrued dividends and late payment interest, if any, on the RPS; there being no force majeure event; the consent from Affin Bank Berhad, being the lender of banking facilities to JSHB, for changes in shareholders shareholdings in JSHB arising from the Proposed Disposal; and the approval or consent from the relevant authorities or governmental bodies to be obtained by Cascara, if applicable. If any of the CPs cannot be obtained within the Conditional Period, the Conditional Period shall be automatically extended for a further period of 1 month ( Extended Conditional Period ) after which, if the CPs still cannot be fulfilled, Cascara shall be entitled to terminate the SSA by writing to BWSB in which BWSB shall refund the Deposit (as defined in Section 2.3.2(i)) free of interest within 30 days from the notice of termination. Thereafter, neither party shall have any claim against each other. The SSA shall be unconditional on the date in which Cascara receives a written notification of the fulfilment of all of the CPs ( Unconditional Date ) Terms of payment The Sale Consideration shall be settled in the following manner: (i) (ii) payment of deposit of RM5.4 million, being 3% of the Sale Consideration ( Deposit ) on 29 December 2015, which is to be received by Cascara s solicitors as stakeholders for the purpose of payment of real property gains tax; and payment of RM174.6 million, being the balance 97% of the Sale Consideration ( Balance Sale Consideration ), by 30 April 2016, subject to the fulfilment of the CPs Repayment of BWSB s advances BWSB shall procure from JHSB the full repayment and settlement of its advances to JHSB (inclusive of interest) of RM118,714, ( Shareholder s Advance ) on or before 30 September 2016 or any extended period not exceeding 1 month to be mutually agreed by BWSB and Cascara together with an interest rate of 7% per annum which shall continue to accrue on the outstanding Shareholder s Advance until its full settlement. In the event that the Shareholder s Advance (inclusive of interest) is not settled by 30 September 2016, it shall become a debt payable by JHSB to BWSB. 5

6 2.3.4 Events of default (i) Default by BWSB If for any reason BWSB fails to transfer the Sale Shares to Cascara or its nominee(s) and provided always that Cascara had complied with all its obligations under the SSA, Cascara shall be entitled to exercise any of the following remedies in accordance with the SSA: (a) (b) seek specific performance against BWSB and all costs and expenses incurred by Cascara in connection therewith shall be borne and paid by BWSB absolutely inclusive of the legal fees (on a solicitor client basis) and out of pocket expenses incurred by Cascara; or terminate the SSA by a notice in writing to BWSB, whereupon within 10 working days of BWSB s receipt of Cascara s notice of termination of the SSA, BWSB shall refund all monies paid towards the Sale Consideration and BWSB s solicitors shall return all monies to Cascara and BWSB shall in addition pay to Cascara an additional sum equivalent to the Deposit as agreed liquidated damages. Cascara and BWSB agree that this sum represents the ascertained liquidated damages in the event of default by BWSB. Thereafter, in relation to Section 2.3.4(i)(b) above, the SSA shall be null and void and shall have no effect and Cascara shall not have any further claim against BWSB save as provided under Section 2.3.4(i)(b) above. BWSB shall, upon full refund and payment of all monies due to Cascara under Section 2.3.4(i)(b) above, be entitled to dispose of or otherwise deal with the Sale Shares. (ii) Default by Cascara 2.4 Liabilities to be assumed Subject always to the SSA becoming unconditional, if Cascara fails to settle the Balance Sale Consideration by 30 April 2016, BWSB shall be entitled to terminate the SSA and forfeit the Deposit as liquidated ascertained damages. Thereafter, neither party shall have any claim against each other. Save for the Cebur Megah Undertaking Letter, there are no liabilities to be assumed by BHB and/or its subsidiaries ( BHB Group ) pursuant to the Proposed Disposal. 2.5 Original cost and date of investment in the Sale Shares The original cost and date of investment by BWSB for the JHSB Shares are as follows: Date of acquisition No. of JHSB Shares Cost of investment 000 RM July ,940 2, November ,060 6,060 2 February ,600 3,600 12,600 12,600 6

7 2.6 Utilisation of proceeds The Sale Consideration is expected to be utilised by the BHB Group in the following manner: Details of utilisation of the Sale Consideration RM million Timeframe for full utilisation* Working capital Within 12 months Estimated tax and expenses for the Proposed Disposal 12.8 Within 6 months Note: * From the completion of the Proposed Disposal In addition to the Sale Consideration, the BHB Group is also expected to receive the Shareholder s Advance in accordance with the SSA, which will be utilised for working capital purposes. 2.7 Information on BWSB BWSB was incorporated in Malaysia as a private limited company under the Act on 16 September BWSB is a wholly-owned subsidiary of Mutiara Rini Sdn Bhd, which in turn is a wholly-owned subsidiary of Boustead Properties Berhad. Boustead Properties Berhad is a wholly-owned subsidiary of BHB. BWSB is principally involved in investment in real properties. The authorised share capital of BWSB is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM75,000 comprising 75,000 ordinary shares of RM1.00 each. As at the LPD, the directors of BWSB are DGMA and Fahmy bin Ismail. 2.8 Information on Cascara Cascara was incorporated in Malaysia as a private limited company under the Act on 19 June Cascara is principally involved in investment holding. The authorised share capital of Cascara is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. 7

8 As at the LPD, the substantial shareholders and directors of Cascara and their respective shareholdings in Cascara are as follows: Shareholders Direct No. of shares % Indirect No. of shares % Tan Sri Dato Bustari bin Yusuf 500, Ahmadi bin Yusoff 500, Directors Tan Sri Dato Bustari bin Yusuf 500, Ahmadi bin Yusoff 500, Mohamad Nadziff bin Tan Sri Dato Bustari RATIONALE FOR THE PROPOSED DISPOSAL The Proposed Disposal represents an opportunity for the BHB Group to realise its investment in JHSB to Cascara at a premium over the adjusted effective NA of JHSB. The Proposed Disposal will enable the BHB Group to realise a net gain on disposal of approximately RM million based on the BHB Group s cost of investment and after adjusting for share of losses, impairment of goodwill, tax and expenses arising from the Proposed Disposal. The Proposed Disposal also allows the BHB Group to strengthen its liquidity and cash flow position by raising gross cash proceeds of RM180 million which will be utilised for, inter alia, working capital. 4. RISK FACTORS The risk factors associated with the Proposed Disposal, which are by no means exhaustive, are as follows: 4.1 Non-completion risk of the Proposed Disposal The Proposed Disposal is conditional upon all the conditions precedent as set out in the SSA being fulfilled. There is no assurance that the Proposed Disposal can be completed within the timeframe stipulated under the SSA. Any delay in the fulfilment of the conditions precedent may lead to a delay in the completion or termination of the Proposed Disposal. Notwithstanding the above, BHB will take reasonable steps to ensure that the conditions precedent as set out in the SSA that are within BHB s control are met on a timely basis in order for the Proposed Disposal to be completed within a reasonable timeframe. 4.2 Risk of non-settlement of the Shareholder s Advance In accordance with the SSA, JHSB is required to make full settlement of the Shareholder s Advance by 30 September The Shareholder s Advance will continue as a debt owed by JHSB to BWSB, should JHSB default on its settlement of the Shareholder s Advance by 30 September Notwithstanding this, should JHSB be unable to meet the full settlement of the Shareholder s Advance by 30 September 2016, it shall continue as a debt payable by JHSB to BWSB at an interest rate of 7% per annum. 8

9 5. EFFECTS OF THE PROPOSED DISPOSAL 5.1 Share capital and substantial shareholders shareholdings The Proposed Disposal will not have any effect on BHB s issued and paid-up share capital and its substantial shareholders shareholdings, as the Sale Consideration for the Proposed Disposal will be satisfied wholly in cash. 5.2 Earnings The Proposed Disposal is not expected to have any material effect on the earnings of the BHB Group for the financial year ending 31 December Upon completion of the Proposed Disposal, BHB is expected to realise an estimated gain of RM million (net of taxation and estimated expenses), which translates into a gain of approximately sen per ordinary share of RM0.50 each in BHB ( BHB Share ) for the financial year ending 31 December NA and gearing The pro forma effects of the Proposed Disposal on the NA and gearing of BHB Group based on the latest audited consolidated financial statements of BHB as at 31 December 2014 are set out below: Audited as at 31 December 2014 RM million After the Proposed Disposal RM million Share capital Perpetual Sukuk 1, ,140.7 Non-distributable reserves 1, ,990.5 Retained profits 2,231.5 (1) 2,426.0 Shareholders' equity / NA 5, ,074.3 Non-controlling interests 1, ,693.5 Total equity 7, ,767.8 Number of BHB Shares in issue ( 000) 1,034 1,034 NA per BHB Share (RM) Total borrowings 7, ,080.7 Gearing ratio (times) (2) 1.20 (2) 1.17 Notes: (1) After taking into consideration the estimated gain of RM million after adjusting for the cost of investment, share of losses, impairment of goodwill and the estimated tax and expenses arising from the Proposed Disposal. (2) Gearing is calculated as total borrowings divided by shareholders equity. 9

10 6. APPROVALS REQUIRED The Proposed Disposal shall be subject to the following approvals being obtained: (i) (ii) shareholders of BHB in relation to the Proposed Disposal at an EGM to be convened; and any other relevant authorities, if required. The Proposed Disposal is not conditional upon any other corporate exercises to be undertaken by BHB, if any. The Proposed Disposal and the LTAT Disposal are inter-conditional upon each other. The share sale agreement pursuant to the LTAT Disposal was executed between LTAT and Cascara on 29 December In this connection, the completion of the Proposed Disposal is not subject to the completion of the LTAT Disposal and vice-versa. 7. INTEREST OF MAJOR SHAREHOLDER AND DIRECTORS Save as disclosed below, none of the other directors and/or major shareholders of the BHB Group and/or persons connected to them have any interest, direct or indirect, in the Proposed Disposal: 7.1 Interested Major Shareholder LTAT is a major shareholder of BHB as well as JHSB. As at the LPD, LTAT has 59.71% and 30.00% direct equity interest in BHB and JHSB, respectively. LTAT also has an additional 30.00% indirect equity interest in JHSB through its substantial shareholding in BHB. In view of this, LTAT is deemed interested in the Proposed Disposal. As such, LTAT will abstain from voting in respect of its direct and indirect shareholdings in BHB on the resolution for the Proposed Disposal to be tabled at an EGM to be convened. In addition, LTAT will ensure that all persons connected to it will abstain from voting in respect of their direct and indirect shareholdings in BHB pertaining to the Proposed Disposal at the EGM to be convened. 7.2 Interested Directors Tan Sri Dato Seri Lodin Wok Kamaruddin ( TSLWK ) is the Deputy Chairman and Group Managing Director of BHB as well as a person connected to LTAT by virtue of being the Chief Executive of LTAT. As at the LPD, TSLWK holds 28,192,758 BHB Shares or approximately 2.73% direct equity interest in BHB. DGMA is a Non-Independent Executive Director of BHB as well as a person connected to LTAT by virtue of being a member of the board of directors of LTAT. In view of this, TSLWK and DGMA ( Interested Directors ) are deemed interested in the Proposed Disposal. As such, the Interested Directors have and will abstain from all deliberations and voting on the Proposed Disposal at the Board meeting of BHB. The Interested Directors will also abstain from voting in respect of their direct and indirect shareholdings in BHB on the resolution for the Proposed Disposal to be tabled at an EGM to be convened. 10

11 In addition, the Interested Directors will ensure that all persons connected to them will abstain from voting in respect of their direct and indirect shareholdings in BHB pertaining to the Proposed Disposal at the EGM to be convened. 8. HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the Proposed Disposal pursuant to Paragraph 10.02(g) of the MMLR is 3.06% based on the Sale Consideration against the audited consolidated NA of BHB as at 31 December Pursuant to Paragraph 10.12(2)(a) of the MMLR, the highest aggregate percentage ratio after taking into consideration the related party transactions as announced by BHB on 6 March, 14 April, 28 April and 10 June 2015 respectively as well as this Proposed Disposal is 7.68%. 9. TRANSACTIONS WITH THE SAME RELATED PARTY The total amount transacted between LTAT and its subsidiaries and the BHB Group and/or persons connected to them for the past 12 months preceding the LPD was approximately RM million. 10. ADVISERS Affin Hwang IB has been appointed by BHB to act as the Principal Adviser for the Proposed Disposal. MainStreet Advisers Sdn Bhd ( MainStreet ) has been appointed by BHB to act as the Independent Adviser to advise the non-interested directors and shareholders of BHB on the Proposed Disposal. 11. AUDIT COMMITTEE S STATEMENT The Audit Committee of BHB, having considered all aspects of the Proposed Disposal including but not limited to the rationale for the Proposed Disposal, the terms of the SSA, the Valuation Reports and the financial effects of the Proposed Disposal, is of the opinion that the Proposed Disposal is: (i) (ii) (iii) in the best interest of BHB Group; fair, reasonable and on normal commercial terms; and not detrimental to the interest of the minority shareholders of BHB. In arriving at its views, the Audit Committee had sought the independent advice from MainStreet, being the appointed Independent Adviser for the Proposed Disposal. 11

12 12. DIRECTORS STATEMENT The Board, save for the Interested Directors, who have abstained from all deliberations in respect of the Proposed Disposal, having considered all aspects of the Proposed Disposal including but not limited to the rationale for the Proposed Disposal, the Sale Consideration, the terms of the SSA, the Valuation Reports, the financial effects of the Proposed Disposal and the preliminary evaluation of the Proposed Disposal by MainStreet, is of the opinion that the Proposed Disposal is in the best interest of BHB Group. 13. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances, the Proposed Disposal is expected to be completed by the 3rd quarter of APPLICATIONS TO AUTHORITIES Barring any unforeseen circumstances, the applications to the relevant authorities in relation to the Proposed Disposal will be made within 2 months from the date of this Announcement. 15. DOCUMENTS AVAILABLE FOR INSPECTION The SSA and the Valuation Reports will be made available at BHB s registered office at 28th Floor, Menara Boustead, 69, Jalan Raja Chulan, Kuala Lumpur from Monday to Friday (except public holiday) during business hours for a period of 1 month from the date of this announcement. This announcement is dated 29 December

13 APPENDIX FURTHER INFORMATION ON JHSB 1. FINANCIAL INFORMATION A summary of the audited financial information of JHSB for the past 3 audited FYEs 31 December 2012 to 2014 is set out below: Audited FYE 31 December RM million RM million RM million Revenue - (1) - (1) - (1) Loss before tax ( LBT ) (26.68) (45.38) (35.32) Loss after tax ( LAT ) (26.57) (45.50) (35.63) Share capital Shareholders deficit (17.88) (63.38) (99.02) Total borrowings (2) (2) (2) Gross loss per share ( LPS ) (RM) (0.64) (1.08) (0.84) Net LPS (RM) (0.63) (1.08) (0.85) Net liabilities per share (RM) (0.43) (1.51) (2.36) Current ratio (times) Gearing ratio (times) - (3) - (3) - (3) Notes: (1) JHSB did not record any revenue as no development on the JHSB Lands has commenced. (2) Total borrowings include the RPS of RM100,000,000. (3) Negative gearing. Gearing is calculated as total borrowings divided by shareholders funds. Commentary FYE 31 December 2012 As no revenue was generated during the FYE 31 December 2012, JHSB recorded a LBT of approximately RM26.68 million, representing an increase by RM21.43 (more than 100%) from a LBT of RM5.25 million in FYE 31 December The increase in LBT was mainly due to higher finance cost of RM25.14 million which cannot be capitalised as development on the JHSB Lands had not commenced. FYE 31 December 2013 As no revenue was generated during the FYE 31 December 2013, JHSB recorded a LBT of approximately RM45.38 million, representing an increase by RM18.7 million (70%) from a LBT of RM26.68 million in FYE 31 December The increase in LBT was mainly due to an increase in finance cost of RM28.02 million. JHSB was also required to pay damages of RM14.1 million arising from a legal suit in respect of a sale of land held by JHSB, which contributed to the increase in operating expenses and thus, losses by JHSB. Notwithstanding that JHSB recorded a loss as at FYE 31 December 2013, JHSB had incurred a tax expense of RM124,514, resulting in a LAT of approximately RM45.50 million. The tax expense of RM124,514 was mainly on the reversal of deferred tax assets recognised in prior years.

14 APPENDIX FURTHER INFORMATION ON JHSB (CONT D) FYE 31 December 2014 As no revenue was generated during the FYE 31 December 2014, JHSB recorded a LBT of approximately RM35.32 million, representing a decrease by RM10.06 million (22%) from a LBT of RM45.38 in FYE 31 December In FYE 31 December 2013, JHSB had incurred expenses pertaining to the settlement of damages in the arising from a legal suit in respect of a sale of land held by JHSB. As a result, JHSB had recorded lower operating expenses for the FYE 31 December 2014, hence causing a decrease in JHSB s LBT. Notwithstanding that JHSB recorded a loss as at FYE 31 December 2014, JHSB had incurred a tax expense of RM315,041 resulting in a LAT of approximately RM35.63 million. The tax expense of RM315,041 mainly on the reversal of deferred tax assets recognised in prior years. [The rest of this page has been intentionally left blank] 14

15 APPENDIX FURTHER INFORMATION ON JHSB (CONT D) 2. INFORMATION ON THE JHSB LANDS Title particulars Further information on the JHSB Lands is set out below: Category of land use Encumbrances Existing use Proposed use Tenure Land area HSD PT 9 (1) Building Legal charge in favour of Affin Bank Berhad (4) HSD PT 8 (1) Building Legal charge in favour of Affin Bank Berhad (4) HSD Nil Legal charge in PT (1) favour of Affin Bank Berhad (4) Vacant land Vacant land Vacant land Part of GRN Not Stated Note (8) Vacant Lot (2) industrial land Lot 147, Section 16, Kuching Town Land District (3) Notes: Mixed Zone Land/Town Land Development- Mixed Development- Mixed Development- Mixed Development - Industrial Nil Nil Development- Mixed (1) Located in Mukim Bukit Raja, District of Petaling, State of Selangor. (2) Located in Mukim Kapar, District of Klang, State of Selangor. (3) Located in District of Kuching Town, State of Sarawak. (5) Net book value Market value Acres RM million RM million Freehold (6) Freehold (6) Freehold (6) Freehold Leasehold expiring on 5 March (7) (6) (4) First party legal charge, in favour of Affin Bank Berhad, over the utilisation of proceeds from the sale of land, in accordance with the loan agreement between JHSB and Affin Bank Berhad dated 17 June (5) Based on JHSB s latest audited financial statements as at 31 December (6) Based on the Abu Hassan Valuation Report and apportioned according to land area. (7) Based on the CH Williams Valuation Report. (8) An assignment over the net sale proceeds to Affin Bank Berhad arising from the sale of land 15