ALUMINIUM COMPANY OF MALAYSIA BERHAD ( ALCOM OR THE COMPANY )

ALUMINIUM COMPANY OF MALAYSIA BERHAD ( ALCOM OR THE COMPANY ) (I) (II) (III) PROPOSED ACQUISITION; PROPOSED DIVERSIFICATION; AND PROPOSED INTERNAL REORGANISATION (COLLECTIVELY REFERRED TO AS THE PROPOSALS ) 1. INTRODUCTION On behalf of the Board of Directors ( Board ) of Alcom, UOB Kay Hian Securities (M) Sdn Bhd ( UOBKH ) wishes to announce that the Company proposes to undertake the following:- (i) (ii) (iii) proposed acquisition by EM Hub Sdn Bhd ( EM Hub or the Purchaser ), a whollyowned indirect subsidiary of Alcom, of a parcel of vacant leasehold industrial land held under the land title no. H.S.(D) 242971 PT10568 and H.S.(D) 242972 PT10570, both in Pekan Baru Sungai Buloh, District of Petaling, State of Selangor ( Kota Damansara Land ) from Seleksi Megah Sdn Bhd ( SMSB or the Vendor ), a wholly-owned subsidiary of Paramount Corporation Berhad, at a total cash consideration of RM92,129,400 ( Purchase Price ) ( Proposed Acquisition ); proposed diversification of the principal activities of Alcom and its subsidiaries ( Alcom Group or Group ) to include property development activities ( Proposed Diversification ); and proposed internal reorganisation by way of a members scheme of arrangement under Section 366 of the Companies Act, 2016 ( Act ) ( Scheme ) comprising the following:- (a) (b) proposed share exchange of up to 134,330,848 ordinary shares in Alcom as at 26 December 2017, being the latest practicable date prior to the date of this announcement ( LPD ) ( Alcom Share(s) ), representing the entire issued share capital of Alcom with up to 134,330,848 new ordinary shares in Alcom Group Berhad ( Newco ) ( Newco Share(s) ) on the basis of 1 Newco Share for every 1 existing Alcom Share held on an entitlement date to be determined ( Entitlement Date ) ( Proposed Share Exchange ); and proposed assumption of the listing status of Alcom by Newco, the admission of Newco to, and withdrawal of Alcom from the Official List of Bursa Malaysia Securities Berhad ( Bursa Securities ) with the listing of and quotation for all the Newco Shares on the Main Market of Bursa Securities ( Proposed Transfer of Listing Status ). The Proposed Share Exchange and the Proposed Transfer of Listing Status are collectively referred to as the Proposed Internal Reorganisation. In conjunction with the Proposals, on 2 January 2018, Alcom Group had entered into the following agreements:- (i) (ii) (iii) a conditional sale and purchase agreement between EM Hub and SMSB in relation to the Proposed Acquisition ( SPA ); a power of attorney between EM Hub and SMSB, in favour of EM Hub in conjunction with the Proposed Acquisition ( Power of Attorney ); and a conditional scheme agreement between the Company with Newco for the purpose of the implementation of the Proposed Internal Reorganisation ( Scheme Agreement ). 1

The salient terms of the SPA, Power of Attorney and Scheme Agreement are set out in Sections 2.1.2, 2.1.3 and 2.3.3 of this announcement respectively. Further details of the Proposals are set out in the ensuing sections of this announcement. 2. DETAILS OF THE PROPOSALS 2.1 Proposed Acquisition The Proposed Acquisition entails the acquisition by EM Hub of a parcel of vacant leasehold industrial land located in Pekan Baru Sungai Buloh, District of Petaling, State of Selangor, measuring an aggregate of approximately 9.4 acres, from SMSB, a wholly-owned subsidiary of Paramount Corporation Berhad, for cash consideration of RM92,129,400. Further details of the Kota Damansara Land are set out in Section 2.1.1 below. The Proposed Acquisition is subject to the terms and conditions of the SPA. The Kota Damansara Land will be acquired free from all encumbrances. 2.1.1 Information on the Kota Damansara Land The summary of the details of the Kota Damansara Land is set out as follows:- Land title H.S. (D) 242971 PT10568, Pekan Baru Sungai Buloh, District of Petaling, State of Selangor Land area Location Land 1 Land 2 5.064 acres / 20,494 square metres H.S. (D) 242972 PT10570, Pekan Baru Sungai Buloh, District of Petaling, State of Selangor 4.336 acres / 17,549 square metres Along Jalan Teknologi 3/1, Kota Damansara, Selangor Tenure Leasehold for a period of 99 years expiring on 19 January 2107 Category of land use Registered owner Express conditions Encumbrances / Endorsement Existing use Restriction-in-interest Net book value (1) Market value (2) Notes:- Industrial SMSB Industrial Nil Vacant land Tanah ini boleh dipindahmilik, dipajak atau digadai setelah mendapat kebenaran Pihak Berkuasa Negeri RM46,461,656 RM92,130,000 (1) Based on the latest audited financial statements of SMSB for the financial year ended ( FYE ) 31 December 2016. (2) As appraised by Messrs C H Williams Talhar & Wong Sdn Bhd ( Independent Valuer ), the independent registered valuer appointed by Alcom, vide its valuation letter dated 2 January 2018 ( Valuation Letter ). The Independent Valuer had adopted the comparison method of valuation in appraising the market value of Kota Damansara Land. 2

2.1.2 Salient terms of the SPA The salient terms of the SPA are summarised below:- (i) Purchase Price The Purchase Price shall be satisfied by the Purchaser in the following manner:- (a) (b) (c) The deposit of RM1,842,588, representing 2% of the Purchase Price has been paid to the Vendor prior to the date of the SPA ( Earnest Deposit ); The deposit of RM7,370,352, representing 8% of the Purchase Price has been paid to the Vendor upon execution of the SPA ( Balance Deposit ); and The balance Purchase Price of RM82,916,460, representing 90% of the Purchase Price, shall be paid by the Purchaser to the Vendor s solicitors as stakeholder ( Balance Purchase Price ) within 1 month commencing on the date of satisfaction of the last condition precedent as set out in Section 2.1.2(ii) below ( Effective Date ), or such other period as may be agreed between the Purchaser and the Vendor (collectively, the Parties ) in writing ( Completion Period ). If the Purchaser intends to seek an extension of time to pay the Balance Purchase Price or any part thereof, the Purchaser or the Purchaser s solicitors shall give the Vendor prior written notice thereof (which written notice shall be served on the Vendor at least 5 business days prior to the last day of the Completion Period), whereupon the Purchaser shall be entitled to an automatic extension of 1 month ( Extended Completion Period ) to make such payment, provided always that the Purchaser shall be obliged to pay the Vendor s solicitors as stakeholder late payment interest at the agreed rate of 8% per annum ( Late Payment Interest ) on the amount due but remaining unpaid. Such Late Payment Interest shall be paid together with the Balance Purchase Price (or the outstanding part thereof) on the date of completion of the SPA ( Completion ) falling within the Extended Completion Period. (ii) Conditions precedent The Proposed Acquisition is subject to the following conditions precedent being fulfilled ( Conditions Precedent ):- (a) (b) (c) Vendor obtaining the consent in writing from the relevant state authority to transfer the Kota Damansara Land to the Purchaser; Purchaser obtaining the consent in writing from the relevant state authority to charge the Kota Damansara Land to the Purchaser s financier; and The approval of the shareholders of Alcom being obtained at an extraordinary general meeting ( EGM ) to be convened for the Proposed Acquisition. Each party to the SPA will:- (a) use their respective efforts on best endeavours basis to procure the fulfillment of the Conditions Precedent required to be complied with or satisfied by it as soon as possible and in any event, within the period of 6 months commencing from the date of the SPA (as extended from time to time by agreement of the Parties in writing ( Compliance Period )); 3

(b) (c) to the extent necessary or appropriate, provide the other party with all assistance and documents as may be required by that other party to procure the fulfilment of the applicable Conditions Precedent to be satisfied by that other party as set out above; and bear all costs to procure the satisfaction of the applicable Conditions Precedent required to be satisfied by it. (iii) Covenants prior to the Completion The Vendor further covenants and undertakes with the Purchaser that pending Completion, it shall:- (a) (b) (c) (d) (e) not sell, dispose, charge, lease, let out or permit any caveat or other encumbrances (other than the caveat lodged by the Purchaser) to be lodged over the Kota Damansara Land or any part thereof, or otherwise howsoever to deal with the Kota Damansara Land or any part thereof or attempt to do any of the above; not grant or assign any interest, right, option or title that would entitle the holder of any such interest, right, option or title to have any interest, right, option or title to the Kota Damansara Land or any part thereof or attempt to do any of the above; pay and continue to pay all quit rent and assessment (if any) up to the date of delivery of vacant possession of the Kota Damansara Land to the Purchaser; (upon it becoming aware) notify the Purchaser in writing of any notice, claim, proceedings or fine that may be instituted or imposed by any relevant or applicable authorities in connection with the Kota Damansara Land; and on the date of the SPA, the Vendor shall deliver to the Purchaser the Power of Attorney. (iv) Termination If any of the Conditions Precedent is not fulfilled by the last day of the Compliance Period through no fault of a party, either party may terminate the SPA by notice in writing to the other, whereupon the Vendor shall, within 10 business days, refund the Earnest Deposit and Balance Deposit free of interest to the Purchaser and the Purchaser shall perform the Purchaser s termination obligations within the same said 10 business days. Thereafter, the SPA shall be terminated and be null and void and neither party shall have any claim against the other party save and except for antecedent breach. 2.1.3 Salient terms of the Power of Attorney Upon execution of the SPA, the Vendor had also executed and delivered the valid and registrable Power of Attorney in favour of EM Hub, authorising and empowering EM Hub to deal with such matters in respect of the development of the Kota Damansara Land, including but not limited to the following:- (a) (b) to submit all applications, forms, plans, drawings, reports and proposals for approval to develop the Kota Damansara Land or any part thereof; to submit applications for the approval of the layout plan for the contemplated development on the Kota Damansara Land or any part thereof; 4

(c) (d) to submit applications for approval of building plans for any buildings to be developed on the Kota Damansara Land or any part thereof; and to liaise and/or deal with all authorities, bodies and/or organisations where advisable and/or necessary in connection with, arising from and/or for the purpose of (a), (b) and/or (c) above. 2.1.4 Basis and justification of arriving at the Purchase Price The Purchase Price of RM92,129,400 was arrived at on a willing-buyer willing-seller basis, after taking into consideration the following:- (i) the total market value of the Kota Damansara Land amounting to RM92,130,000 as appraised by the Independent Valuer based on the comparison method of valuation. The comparison method of valuation determines the land value by comparing the Kota Damansara Land with the recent transactions and sales evidences involving other similar properties in the vicinity or other comparable localities. The Purchase Price represents a marginal discount to the appraised market value of the Kota Damansara Land; and (ii) the development potential and prospects of the Kota Damansara Land as set out in Sections 3.1 and 4.3 of this announcement. 2.1.5 Source of funding The Proposed Acquisition is expected to be funded via bank borrowings and/or internally generated funds of Alcom, the exact proportion of which will be determined at a later date. 2.1.6 Liabilities to be assumed Save for the borrowings to be secured to fund the Proposed Acquisition, there are no other liabilities, including contingent liabilities and guarantees to be assumed by Alcom pursuant to the Proposed Acquisition. 2.1.7 Additional financial commitments Save for the Purchase Price and the development cost of the Kota Damansara Land to be incurred in the future upon finalisation and approval of a development plan from the relevant local authorities, there is no other additional financial commitment to be incurred by Alcom in connection with the Kota Damansara Land. The abovementioned development cost once finalised may be funded by way of internally generated funds and/or external bank borrowings, the breakdown and manner of which is to be determined at a later date. 2.1.8 Information on the Vendor SMSB was incorporated in Malaysia on 27 September 2002 under the Companies Act, 1965 as a private limited company. The principal activity of SMSB is property development. Presently, SMSB has a share capital of RM45,480,000 comprising 5,000,000 ordinary shares and 8,096 non-cumulative redeemable convertible preference shares, all of which are held by Paramount Corporation Berhad. As at the LPD, the directors of SMSB are Dato Teo Chiang Quan, Chew Sun Teong, Beh Chun Chong, Foong Poh Seng and Benjamin Teo Jong Hian. 5

2.2 Details of the Proposed Diversification 2.2.1 Proposed Diversification Presently, Alcom Group is principally involved in the manufacturing and trading of aluminium sheet and foil products ( Existing Business ). Alcom Group has been an established aluminium manufacturer in Malaysia since 1960 with more than 65% of its products being exported overseas. The key business segments of the Group are fin stock, building products, heavy gauge foil and specialties. The total revenue of the Existing Business was RM317.13 million for the FYE 31 March 2017, representing an increase of 10.34% compared to the revenue of RM287.41 million recorded in the FYE 31 March 2016. The profit after tax ( PAT ) of the Existing Business was RM11.61 million for the FYE 31 March 2017, representing a significant increase compared to PAT of RM1.18 million recorded in the FYE 31 March 2016. The Existing Business, particularly the coated fin stock segment, has been generating increasing revenue despite competition in the market place. The revenue of the Group was further enhanced with the contribution from the roofing segment. Although the volume from this segment is relatively low compared to the fin stock segment, the management believes that the roofing segment remains attractive with good growth potential. While the Group remains focused on improving the performance of the Existing Business by enhancing its product offerings and expanding its market share, the Group has also been actively seeking other opportunities that could enhance shareholders long term return. Therefore, the Group intends to embark on the Proposed Acquisition and Proposed Diversification to diversify its earning base to include property development and to reduce the risk of reliance on the Existing Business. As the proposed development of the Kota Damansara Land as detailed in Sections 3.1 and 4.3 of this announcement ( Proposed Development ) is the Group s first foray into the property development business, the Group will be forming a project management team comprising its experienced key management personnel and qualified external consultants which includes but not limited to solicitors, architects, engineers, quantity surveyors, land surveyors and contractors. Thus far, the profiles of the key management personnel for the Proposed Development are set out below:- (a) Dato Lim Chee Khoon; Dato' Lim, a Malaysian aged 51, is the Group Managing Director of Alcom. He holds a Bachelor of Science (Town Planning) degree from University Sains Malaysia. Upon graduation, he started his career with the Lion Group in 1990. During his tenure with Lion Group, he was in-charge of numerous large development projects in Malacca. In 1996, he joined CP Landmark Sdn Bhd ( CP Land ) as Head of Property Development and was subsequently promoted as the Chief Operating Officer and Director of CP Land. He was instrumental in repositioning and transforming CP Land into one of Malaysia s premier developers and led the creation and construction of several landmark projects. In 2004, he founded SCLand Sdn Bhd ( SCLand ), a property investment and development company, and oversees all SCLand s projects in Klang Valley, Selangor, Pahang and Sabah. Dato Lim has more than 28 years of experience in the property development sector, overseeing the overall execution of numerous property development projects ranging from residential, industrial, golf club to mixed development. Some of the landmark projects, which he was involved in are set out below:- 6

/ Location Emporis, Kota Damansara Type of development On-going mixed development project comprising, 32 units 3-storey shop, 32 units 5-storey shop, 204 units 18-storey duplex suite and 616 units 2 blocks 28-storey serviced apartment Roles undertaken Managing Director duration GDV (RM Million) 2016 2019 1,000 The Gardens, Kota Kinabalu Completed residential project comprising 500 units 2 blocks 29- storey condominium Managing Director 2014 2016 230 Queensbay, Penang Completed mixed development project comprising a shopping mall, shop offices, semi-detached homes, corporate offices, condominium and a hotel Chief Operating Officer 2000 2006 1,000 Casa ldaman, Kuala Lumpur Completed residential project comprising 608 units 2 blocks 17- storey condominium Chief Operating Officer 2002 2004 300 Cheng Industrial Estate, Malacca Completed industrial park comprising industrial lots and factories Executive 1990 1995 300 Tiara Melaka Golf & Country Club, Malacca Completed resort comprising a 27 holes golf course, bungalows and apartments Executive 1990 1995 300 (b) Ang Loo Leong; Mr. Ang, a Malaysian aged 53, is an Executive Director of Alcom. He holds a Diploma in Building and has been active in construction industry for the past 30 years. He has worked with several prominent construction companies in Malaysia, such as Teknik Cekap Sdn Bhd, Pan-Built Sdn Bhd, RDS Bina Sdn Bhd and RDS Builders Sdn Bhd, where he was involved in several large scale construction projects in Klang Valley and Kota Kinabalu. Mr. Ang s extensive experience in contractual matters, coupled with his wide network of strong relationship with reputable contractors, provides the Company with a competitive advantage. Some of the landmark projects, which he was involved in are as follows:- / Location Emporis, Kota Damansara Type of development On-going mixed development project comprising, 32 units 3-storey shop, 32 units 5-storey shop, 204 units 18-storey duplex suite and 616 units 2 blocks 28-storey serviced apartment Roles undertaken Director duration GDV (RM Million) 2016 2019 1,000 The Gardens, Kota Kinabalu Completed residential project comprising 500 units 2 blocks 29- storey condominium Director 2014 2016 230 7

/ Location Type of development Roles undertaken duration GDV (RM Million) Suri Puteri, Shah Alam KK Times Square Sabah (Phase 1), Kota Kinabalu Dynasty 3 Shop Offices, Kuala Lumpur Phileo Damansara, Petaling Jaya Completed mixed development project comprising 68 units of 6- storey shop and 352 units of 15- storey serviced apartment Completed shopping mall with 72 units of shop lots and basement Completed commercial project comprising 81 units of 2-storey shop office and 71 units of 3-storey shop office Completed commercial project comprising 8 blocks of 6-12 storeys office buildings Director Director Director Manager 2009-2011 85 2005-2008 100 2004-2006 43.5 1995 1997 170 (c) Lim Wey Heng; and Mr. Lim, a Malaysian aged 37, is the project manager for the Industrial Park (as set out in Sections 3.1 and 4.3 of this announcement). He holds a Bachelor Degree in Civil Engineering and a Master Degree in Construction Management from Universiti Teknologi Malaysia. In 2004, he started his career in A & M Realty Berhad as a project engineer. In 2008, he joined Orando Holdings Sdn Bhd as senior project engineer and was subsequently promoted to assistant project manager in 2011. He has over 10 years of experience in the development of various residential and commercial projects comprising landed properties as well as high-rise developments throughout Malaysia. He has in-depth knowledge and experience in the design of property development projects, contract tenders, and the implementation, monitoring and supervision of the projects up until the completion. Some of the landmark projects which he was involved in are as follows:- / Location Type of development Roles undertaken duration GDV (RM Million) Emporis, Kota Damansara On-going mixed development project comprising, 32 units 3-storey shop, 32 units 5-storey shop, 204 units 18-storey duplex suite and 616 units 2 blocks 28-storey serviced apartment Manager 2016 2019 1,000 Villa Vista Residensi, Kuala Lumpur Completed residential project comprising 137 units 39-storey condominium Assistant Manager 2014 2016 130 Sky Vista Residensi, Kuala Lumpur Completed residential project comprising 206 units 27-storey condominium Assistant Manager 2012 2014 130 Maplewoods Saujana, Shah Alam Completed residential project comprising 70 units 2-storey semidetached house Engineer 2008 2009 100 Puteri Subang, Shah Alam Completed residential project comprising 336 units 2-storey terrace house Engineer 2004 2005 150 8

(d) Tan Seok Fong Ms Tan, a Malaysian aged 37, is the Finance Manager for the Industrial Park. She obtained her qualifications from the Association of Chartered Certified Accountants (ACCA) where she became a Fellow member in 2009. She is also a member of Malaysian Institute of Accountants. She started working in 2000 with Magnum Corporation Berhad as an Account Assistant. In 2008, she joined HSC Healthcare Group as an Accountant, and was subsequently promoted to Finance Manager in 2010. She has 16 years of working experience in accounts and finance in various business sectors such as audit, trading, healthcare and property development. As a Finance Manager, she was responsible for the cashflow projections, liaising with bankers on the financing requirement for the projects and ensuring that the financial aspect of the projects is in compliance with the group financial policies, approved accounting standards and statutory requirements. The property development projects that she was involved in were the Emporis in Kota Damansara, AraGreen Residences in Ara Damansara and Menara HSC in Jalan Ampang. Pursuant to the Proposed Diversification, the property development segment is expected to add a new source of income to the Group. Based on the preliminary development plan (as set out in Sections 3.1 and 4.3 of this announcement), the Group expects the contribution from the property development segment may contribute 25% or more to the net profits of Alcom Group in the next few years. As such, the Board proposes to seek the approval from the shareholders of Alcom for the Proposed Diversification pursuant to Paragraph 10.13 of the Main Market Listing Requirements of Bursa Securities ( Listing Requirements ). 2.3 Details of the Proposed Internal Reorganisation 2.3.1 Proposed Share Exchange Under the Proposed Share Exchange, all shareholders of Alcom as at the Entitlement Date ( Entitled Shareholders ) will exchange their respective Alcom Shares with Newco Shares on the basis of 1 new Newco Share for every 1 existing Alcom Share held. As at the LPD, the number of issued shares in Alcom is 134,330,848 Alcom Shares (including treasury shares). Pursuant to the Proposed Share Exchange, the Entitled Shareholders will receive such number of Newco Shares which is equivalent to their respective shareholdings in Alcom as at the Entitlement Date, and Alcom shall become a wholly-owned subsidiary of Newco. The new Newco Shares to be issued pursuant to the Proposed Share Exchange will rank pari passu in all respects with each other and with the 2 existing Newco Shares. The 2 existing Newco Shares will continue to be held by the existing shareholders of Newco, Tan Bee Keng and Teh Yi Ting respectively. Further information on Newco is set out in Section 2.3.4 of this announcement. 2.3.2 Proposed Transfer of Listing Status Upon completion of the Proposed Share Exchange, Newco will be the new holding company of Alcom and its subsidiaries ( Newco Group ) and will assume the listing status of Alcom. Accordingly, it is proposed that Alcom be delisted from the Official List of Bursa Securities and Newco be admitted to the Official List of Bursa Securities in place of Alcom with the listing of and quotation for the entire number of issued shares of up to 134,330,850 Newco Shares on the Main Market of Bursa Securities. The reference price of the newly listed Newco Shares on Bursa Securities shall be the last closing price of Alcom Shares on the market day prior to the suspension of trading on Bursa Securities. 9

2.3.3 Salient terms of the Scheme Agreement The salient terms of the Scheme Agreement are as follows:- (i) (ii) (iii) On or after the date the court order sanctioning the Scheme is lodged with the Registrar of Companies or such earlier date as the High Court of Malaya ( High Court ) may determine or specify in its order ( Effective Date ), the Entitled Shareholders to the Proposed Share Exchange will exchange their Alcom Shares with Newco Shares on the basis of 1 new Newco Share for every 1 existing Alcom Share held on the Entitlement Date in accordance with the terms and conditions of the Scheme Agreement; The new Newco Shares to be issued shall rank pari passu in all respects with each other and with the existing Newco Shares; The Proposed Internal Reorganisation will be implemented through the Scheme and the Scheme Agreement shall be conditional upon the fulfilment of the following which must be obtained on or before the expiry of the period of 6 months commencing from the date of the Scheme Agreement or such other longer period as may be mutually agreed upon between the parties in writing:- (a) (b) (c) (d) (e) (f) (g) (h) (i) the approval of the shareholders of Alcom at an EGM for the Proposed Internal Reorganisation and at a meeting to be convened by an order of the High Court pursuant to Section 366 of the Act; the order of the High Court sanctioning the Scheme; subject always to the fulfillment of the events described in sub-paragraphs (a) and (b) above, the approval of Bursa Securities for the Proposed Transfer of Listing Status and admission, listing of and quotation for the entire enlarged issued share capital of Newco on the Official List of Bursa Securities; the fulfillment of all conditions, if any, imposed by Bursa Securities in its approval or clearance by the Parties or any Party, as the case may be; the written approval or consent from the financiers of Alcom and/or its subsidiaries, where applicable; the written approval, consent or sanction from the relevant authorities and all other relevant licensing authorities; the written approval or consent from counterparties to contracts made by Alcom or where applicable, by any of the companies within the Alcom Group for the Proposed Internal Reorganisation; where applicable, issuance of the relevant written notification on the Proposed Internal Reorganisation by Alcom by registered post to all parties required contractually to be notified about the Proposed Internal Reorganisation; and any other conditions precedent as may be required subsequent to the execution of the Scheme Agreement, including without limitation, those conditions precedent necessary or required by law, governmental policies, regulations and directives or the relevant State by laws, regulations and directives. 10

(iv) (v) (vi) On completion of the Proposed Share Exchange, Alcom shall become a whollyowned subsidiary of Newco; On completion of the Proposed Transfer of Listing Status, Newco will assume the listing status of Alcom with the listing of and quotation for the Newco Shares representing the entire issued share capital of Newco on the Main Market of Bursa Securities; and Newco shall, prior to the Effective Date, adopt a constitution substantially similar in form and substance as the Memorandum and Articles of Association of Alcom as at the Effective Date save for such modifications as may be necessary or expedient to facilitate any such new or contemplated business, operations or activities of Newco Group. 2.3.4 Information on Newco Newco was incorporated in Malaysia under the Act as a public limited company under the name of Alcom Group Berhad on 22 December 2017 to facilitate the implementation of the Proposed Internal Reorganisation. As at the LPD, Newco has an issued share capital of RM2, comprising 2 Newco Shares. Newco is currently dormant but is principally intended for investment holding activities. As at the LPD, the directors of Newco are Tan Bee Keng and Teh Yi Ting. They hold 1 Newco Share each. During the implementation of the Proposed Share Exchange, Newco s Board will be appointed to mirror the Alcom s Board whilst the current nominee directors of Newco shall resign. As at the LPD, the shareholders and their respective shareholdings in Newco are as follows:- Shareholders of Newco Nationality Direct shareholdings Indirect shareholdings No. of shares % No. of shares % Tan Bee Keng Malaysian 1 50 - - Teh Yi Ting Malaysian 1 50 - - 3. RATIONALE AND JUSTIFICATION FOR THE PROPOSALS 3.1 Proposed Acquisition and Proposed Diversification The Proposed Acquisition provides Alcom Group with the opportunity to purchase a sizeable land, which is suitable for development in a mature location. The Kota Damansara Land is strategically located with easy accessibility to the major highways in the area, namely the Sungai Buloh Highway, Lebuhraya Damansara-Puchong (LDP) and the New Klang Valley Expressway (NKVE). Further, the Kota Damansara Land is also within close proximity to the proposed Damansara-Shah Alam Elevated Highway (DASH) which is expected to complete by year 2020. The nearest Mass Rapid Transit (MRT) station, which is the Kota Damansara Station is located approximately 1 kilometre from the Kota Damansara Land whilst a future MRT station is being planned and is expected to be located only 300 metres away. Upon completion of the Proposed Acquisition, Alcom Group intends to venture into property development by developing the Kota Damansara Land into a gated and guarded industrial park, housing 2 blocks of 6-storey industrial units catering for use as ancillary office, warehouse and light industrial space ( Industrial Park ). The development of the Industrial Park is expected to generate an estimated gross development value of at least RM500 million over a period of 3 to 5 years. However, it is pertinent to note that the development plan for the Industrial Park, is indicative at this juncture as the development and building plans have not been submitted or approved by the relevant authorities. Further details of the Proposed Development are set out in Section 4.3 of this announcement. 11

The Proposed Diversification is part of the Group s strategic plan to diversify into other viable businesses to enhance profitability in the longer term and to provide shareholders with better returns. Although the Group is undertaking the Proposed Diversification, the Group shall remain focused on improving the operational efficiencies and profitability of its Existing Business, in particular the coated fin stock segment and the roofing segment. The management is positive that the Existing Business is poised for further growth particularly in both the domestic and export markets in near future. 3.2 Proposed Internal Reorganisation Based on the existing structure of Alcom Group as disclosed below, Alcom is acting as the listed investment holding company of the Group as well as the operating company for the manufacturing and trading of aluminium sheet and foil products ( Aluminium Product Manufacturing Business ). Through the Proposed Internal Reorganisation, the investment holding function and the Aluminium Product Manufacturing Business will be separated, wherein Newco will become the investment holding vehicle assuming the listing status of Alcom, whilst Alcom will continue to operate the Aluminium Product Manufacturing Business. Upon the completion of the Proposed Internal Reorganisation, the management of the Newco Group intends to use its best endeavours to further streamline the group, whereby the establishment of a new and leaner corporate structure will allow the Newco Group to have separate identifiable business streams which better reflects the current diverse operations of Alcom Group, comprising the Aluminium Product Manufacturing Business and the property development business. Further, the separation of the business divisions will also provide greater flexibility for business operations and facilitate an effective management of the different businesses moving forward. 12

4. INDUSTRY OVERVIEW AND PROSPECTS 4.1 Overview and outlook of the Malaysian economy The Malaysian economy recorded a sterling growth of 5.7% during the first 6 months of 2017 underpinned by strong domestic demand and reinforced by improved external sector. Given the robust economic growth during the first half, real gross domestic product ( GDP ) for the year is expected to strengthen further between 5.2% and 5.7% (2016: 4.2%), surpassing the earlier estimated. Accordingly, gross national income ( GNI ) at current prices is estimated to expand 9.1% to RM1.3 trillion (2016: 6.2%; RM1.2 trillion), with income per capita increasing 7.7% to RM40,713 (2016: 4.7%; RM37,791). The Malaysian economy is projected to continue its strong growth momentum with real GDP expanding between 5% and 5.5% in 2018 (2017: 5.2% and 5.7%). Growth will be mainly driven by resilient domestic demand amid favourable external sector. Given the robust economic development, GNI per capita is estimated to increase 5.1% to RM42,777 (2017: 7.7%; RM40,713). Despite the strong growth momentum, Malaysia as an open economy is not immune to external headwinds. These include rising protectionism; policy uncertainties in the advanced countries; and volatility in the financial markets. Nevertheless, structural reforms undertaken over the years to diversify the economy and strengthen the financial system have provided sufficient buffer to weather these external challenges. (Source: Economic Report 2017/2018, Ministry of Finance Malaysia) 4.2 Overview of the property industry in Malaysia Value added of the construction sector recorded a robust growth of 7.4% during the first half of 2017 (January June 2016: 8.5%), primarily attributed to strong civil engineering activities. Accordingly, total value of completed construction works increased 10.4% to RM68.9 billion involving 18,977 projects (January June 2016: 11.4%; RM62.4 billion; 20,026 projects). The private sector contributed 63.6% of the total value of construction works. The civil engineering subsector was the major contributor to the total value of construction works constituting 35.3%, followed by non-residential (31%), residential (28.8%) and specialised construction activities (4.8%) subsectors. In 2017, construction sector is expected to expand 7.6% (2016: 7.4%) mainly underpinned by new and existing civil engineering projects, particularly in utilities, transportation and petrochemical segments. The civil engineering subsector continued to record a double-digit growth of 13.7% (January June 2016: 17.7%) supported by major infrastructure projects under the Eleventh Malaysia Plan. Among the rail projects were Mass Rapid Transit Sungai Buloh Serdang Putrajaya ( MRT SSP ) line and Electrified Double Track Gemas Johor Bahru. In addition, growth of the subsector was further supported by construction and upgrading of roads such as Setiawangsa Pantai Expressway ( SPE ) and Pan Borneo Highway. In terms of demand, the take-up rate for residential units grew 23.9% with 6,775 units during the period (January June 2016: 22.7%; 3,289 units) amid continued access to housing loans, especially for first-time house buyers. Accordingly, transaction value improved with smaller contraction of 0.3% to RM32.9 billion (January June 2016: -9.6%; RM33 billion). However, total properties transacted declined 6.9% to 95,010 (January June 2016: -14.5%; 102,096 transactions) mainly due to the adoption of macro prudential measures to deter market speculation and ensure only those who are credit-worthy eligible for financing. The residential overhang increased 55.4% to 20,876 units with a total value of RM12.3 billion during the period (January June 2016: 28.3%; 13,438 units; RM7.6 billion) with Kedah accounting for the highest overhang at 20.9%, followed by Johor (18.2%) and Selangor (17.6%). However, the property market is expected to adjust accordingly in the long-run given the robust economic growth prospects. 13

The construction sector is projected to grow 7.5% (2017: 7.6%), primarily supported by the ongoing civil engineering infrastructure projects such as East Coast Rail Link, MRT SSP line, Electrified Double Track Gemas Johor Bahru, SPE, Pan Borneo Highway and Bokor Central Processing Platform. (Source: Economic Report 2017/2018, Ministry of Finance Malaysia) 4.3 Future plans and prospects of the Proposed Acquisition and Proposed Diversification As disclosed in Section 3.1 of this announcement, the Kota Damansara Land is strategically located in a mature location with easy accessibility to the major highways in the area and connected via the existing MRT line. Upon completion of the Proposed Acquisition, Alcom Group intends to venture into the development of the Industrial Park, which will mark the Group s first foray into the property development business. The estimated gross development value of the Proposed Development is envisaged to be at least RM500 million over a period of 3 to 5 years and the estimated gross development costs is expected to be at least RM425 million based on Alcom s preliminary estimates, after taking into consideration, amongst others, the land area, the expected size and sale of the development as well as the expected selling price of the completed industrial units within the same vicinity. The Industrial Park is envisaged to be well-positioned to attract local and foreign small medium enterprises (SMEs) as well as the growing e-commerce start-ups with its strategic location in Kota Damansara coupled with salient features such as access to high speed broadband and well-equipped facilities such as swimming pool, gymnasium, and conference hall. The Board envisages the prospects of the project to be positive as the Group will enjoy favorable take-up rates and occupancy rates given the unique features of the Industrial Park, particularly the 6-storey drive-up ramps which enables the occupants to load and unload their supplies and/or products at the doorsteps of their units. Notwithstanding the above indicative plans, Alcom Group does not currently have any permits or development plans submitted to the authorities for the Industrial Park. The management of Alcom Group is currently undertaking detailed planning on the development. Hence, details of the development project (such as the total development costs, the expected profit to be derived from the project and the exact number of units) will only be ascertained and finalised at a later date. Moving forward, it is the Group s intention to actively seek further opportunities to expand its land bank and property development business. Premised on the positive performance of the property development sectors as set out in Section 4.2 above and the prospects of the Kota Damansara Land, the Board of Alcom is of the view that the Proposed Acquisition and Proposed Diversification will contribute positively to the financial and operational growth of Alcom Group in the future. (Source: Management) 14

5. RISK FACTORS The Proposed Acquisition and Proposed Diversification will involve a new business which is substantially different from the Existing Business. The Group will be subject to new challenges and risks arising from the property development business in which the Group has not participated in the past. However, the Group seeks to mitigate these risks by leveraging on the extensive experience of the key management of Alcom (please refer to Section 2.2.1 of this announcement for further details) as well as careful planning and allocation of resources. The risks relating to the Proposed Acquisition and the risks inherent in the property development industry include, amongst others, the following:- 5.1 Completion risk The completion of the Proposed Acquisition is subject to the terms and conditions set out in the SPA, some of which may be beyond the Group's control as they are dependent on the approval/consent by the relevant authorities and shareholders of Alcom. There can be no assurance that such conditions will be obtained/fulfilled and/or waived (as the case may be) by the relevant cut-off dates as stipulated in the SPA. Hence, any delay in fulfilling these conditions may materially affect the Proposed Acquisition from being completed within the stipulated timeframe. Further, any delay in the completion of the Proposed Acquisition will potentially delay or preclude Alcom Group from deriving any revenue or profit from the proposed development to be undertaken on the Kota Damansara Land. To mitigate such risks, the Board and management will constantly monitor the fulfilment of these conditions as well as ensure that all the other relevant terms and conditions of the SPA, which are within the Group s control, are obtained/fulfilled within the prescribed timeframe. 5.2 Business and operational risk inherent in the property development industry Being a new entrant into the property development industry, the Group will be subject to the inherent risk of the industry which may include, amongst others, adverse change in real estate market prices, competition from other property developers, changes in economic, social and political condition, delay in completion of property development projects against the scheduled completion, labour and material supply shortages, fluctuations in the prices of building materials and costs of labour charges, and adverse changes in property tax assessments and other statutory charges. Any adverse change in such conditions may have an adverse material effect on the Group Taking cognisance of the above, the Group intends to mitigate the above risks by working closely with the professionals (such as land surveyors, architects, building planners and contractors) and leverage on their expertise, experience and knowledge of the market and property development industry. The management will also closely supervise and monitor the development of its project to ensure timely completion and quality deliverables. 5.3 Dependency on key management personnel The Group is dependent on the operations and technical expertise of the project management team for the implementation the Proposed Development. The loss of any key management personnel without suitable and timely replacement, or the inability to attract and retain other qualified personnel, may adversely affect the Group s ability to compete effectively in the property development segment. Hence, the Group will continuously adopt appropriate methods to retain such key personnel and to provide competitive remuneration packages to attract new talent. 15

5.4 Financing risks As disclosed in Section 2.1.5 of this announcement, Alcom intends to finance the Proposed Acquisition via a combination of internally generated funds and/or bank borrowings. For illustration purposes, assuming that the Proposed Acquisition will be fully funded via bank borrowings, the Group s borrowings will increase from approximately RM69.43 million as at 30 September 2017 to RM161.56 million upon completion of the Proposed Acquisition as set out in Section 6.2 of this announcement. Correspondingly, the gearing level of the Group will also increase from 0.65 times to 1.51 times. In view that the interest charged on bank borrowings is dependent on prevailing interest rates, future fluctuation of interest rates could have an effect on the Group s cash flows and profitability. In mitigating such risk, the Group will actively review its debt portfolio taking into consideration the level and nature of borrowings and seek to adopt appropriate cost effective financing options. In addition, the management shall take into consideration the gearing level, interest cost as well as internal cash requirements for the Group in determining the optimal combination of internally generated funds and bank borrowings for the future development of the Kota Damansara Land. 6. EFFECTS OF THE PROPOSALS 6.1 Share capital The Proposals will not have any effect on the issued share capital of Alcom as there are no issuance of new Alcom Shares involved. For illustrative purposes, the proforma effects of the Proposed Internal Reorganisation on the issued share capital of Newco are as follows:- No. of Newco Shares Issued share capital as at the LPD (1) (1) New shares to be issued pursuant to the Proposed Share Exchange Up to 134,331 (2) 107,254 Enlarged issued share capital of Newco Up to 134,331 107,254 RM Notes:- (1) Based on the issued share capital of RM2 comprising 2 Newco Shares as at the LPD. (2) Based on the latest audited net assets ( NA ) of the Company as at 31 March 2017, after taking into account the adjustments for Subsequent Events (as defined in Section 6.2 of this announcement) and the Proposed Acquisition. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 16

6.2 NA per Share and gearing The Newco Group s NA and gearing will not be significantly different from Alcom Group s NA and gearing prior to and after the implementation of the Proposed Internal Reorganisation. For illustrative purposes, the proforma effects of the Proposals on the NA per share and gearing of the enlarged Newco Group based on Alcom s latest audited consolidated financial statements as at 31 March 2017 are as set out below:- Audited consolidated Alcom Group as at 31 March 2017 (RM 000) Prior to the Proposed Internal Reorganisation After the Proposed Internal Reorganisation Proforma I Proforma II Proforma III After adjusting for subsequent events Alcom Group (RM 000) Newco (RM 000) After Proposed Acquisition of the Kota Damansara Land Alcom Group (RM 000) Newco (RM 000) After the Proposed Share Exchange and Proposed Transfer of Listing Status Alcom Group (RM 000) Newco (RM 000) Consolidated Newco Group (RM 000) Share capital 142,444 (1)(a) 100,123 (2) 100,123 (2) 100,123 (6) 107,254 107,254 Merger deficit - - - - - - - (7,131) Treasury shares (2,330) (1)(b) (1,090) - (1,090) - (4) - - - Revenue reserve 36,137 (1)(c) 8,131-8,131 - (5) 7,131-7,131 NA/Shareholders fund 176,251 107,164 (2) 107,164 (2) 107,254 107,254 107,254 Number of ordinary shares ( 000) 134,331 134,331 (2) 134,331 (2) 134,331 134,331 134,331 NA per share (RM) 1.31 0.80 1.00 0.80 1.00 0.80 0.80 0.80 Total borrowings (RM 000) - (1)(d) 69,432 - (3) 161,561-161,561-161,561 Gearing (times) - 0.65-1.51-1.51-1.51 Notes:- (1) After adjusting for the following ( Subsequent Events ):- (a) the capital repayment of RM42.32 million to the shareholders of Alcom via the reduction of share capital of Alcom pursuant to Section 116 of the Act ( Capital Repayment ); (b) the resale of 1,079,000 treasury shares in market on 6 Oct 2017; (c) (d) special dividend of 20.5 sen per Alcom Share in respect of the FYE 31 March 2017 amounting to approximately RM27.11 million paid on 13 July 2017 ( Special Dividend ) and the deduction of expenses incurred for the Capital Repayment of approximately RM0.89 million; and the bank borrowings of RM69.43 million, undertaken to fund the Capital Repayment and the Special Dividend. 17

(2) Based on the issued share capital of RM2 comprising 2 Newco Shares as at the LPD. (3) Assuming that the Proposed Acquisition is fully funded via bank borrowings. (4) Assuming all treasury shares are resold to the market prior to the Proposed Internal Reorganisation. (5) Being the estimated expenses of RM1.0 million in relation to the Proposals. (6) For illustrative purposes, the enlarged share capital of Newco will be based on the latest audited NA of the Company as at 31 March 2017 after taking into account the Subsequent Events and the Proposed Acquisition and the value of the existing 2 Newco Shares. 6.3 Earnings and earnings per share ( EPS ) The Proposals are not expected to have any material impact on the earnings of Alcom Group for the FYE 31 December 2018. However, the potential future earnings from the Proposed Development are expected to contribute positively to the consolidated Newco Group in the coming financial years. The Proposed Internal Reorganisation will not have any material effect on the consolidated EPS of Alcom Group vis-à-vis the consolidated EPS of Newco upon completion of the Proposed Internal Reorganisation in view that the Proposed Share Exchange will be implemented on the basis of 1 new Newco Share for every 1 existing Alcom Share held. 6.4 Substantial shareholders shareholdings The Proposed Acquisition and Proposed Diversification will have no effect on the substantial shareholders shareholdings. The Entitled Shareholders will cease to be shareholders of Alcom after the Proposed Internal Reorganisation and will instead hold Newco Shares in proportion to their respective shareholdings in Alcom on the Entitlement Date. 6.5 Convertible securities As at the LPD, Alcom does not have any outstanding convertible securities. 7. APPROVALS REQUIRED The Proposals are subject to the following:- (a) the approval of Bursa Securities for the following:- (i) (ii) Proposed Transfer of Listing Status; and admission, listing of and quotation for the entire enlarged issued share capital of Newco on the Official List of Bursa Securities; (b) (c) the approval of the shareholders of Alcom at an EGM to be convened for the Proposals; the consent and/or approval from the relevant state authority for the Proposed Acquisition; (d) (e) (f) CCM and the order of the High Court sanctioning the Scheme; the approval/consents of the financiers/creditors of Alcom, if required; and the approval, consent and/or sanction of any other relevant authorities/parties, if required. 18