ANNOUNCEMENT SUBJECT: TRANSACTION (CHAPTER 10 OF LISTING REQUIREMENTS) GABUNGAN AQRS BERHAD ("GBGAQRS" OR THE COMPANY") PROPOSED ACQUISITION OF TWO (2) UNITS OF DOUBLE-STOREY SHOPHOUSES HELD UNDER TITLES KNOWN AS H.S.(D) 247071 P.T. 10880 AND H.S.(D) 247072 P.T. 10881 BOTH IN PEKAN BARU SUNGAI BULOH, DAERAH PETALING, NEGERI SELANGOR FROM MADAM OW YIN PENG AND MR OW CHEE HONG RESPECTIVELY FOR A TOTAL PURCHASE CONSIDERATION OF RM3,200,000 ( PROPOSED ACQUISITION ) 1. Introduction The Board of Directors of the Company ("Board') wishes to announce that on 10 September 2013, the Company had entered into two (2) Sale and Agreements ("SPAs") with Madam Ow Yin Peng and Mr Ow Chee Hong (collectively referred to as "Vendors") for the acquisition of two (2) units of double-storey shophouses, the details of which are as set out in paragraph 3 hereinbelow, both located in Pekan Baru Sungai Buloh, District of Petaling, State of Selangor Darul Ehsan (collectively referred to as Properties ), for a total purchase consideration of RM3,200,000 (" ") free from all charges, liens, caveats, encumbrances and other security interest whatsoever and with vacant possession subject to the conditions of title and restrictions-in-interests (if any) endorsed on the document-of-title to the Properties or otherwise affecting the Properties. 2. Information on Vendors The Vendors, Madam Ow Yin Peng (NRIC No. 591225-10-6832) and Mr Ow Chee Hong (NRIC No. 660422-10-5683), are respectively the sister and brother of Mr Ow Chee Cheoon, an Executive Director and shareholder of the Company. 3. Information on the Properties The summary of particulars of the Properties are as follows:- Title No. H.S.(D) 247071 P.T. 10880 H.S.(D) 247072 P.T. 10881 Postal Address Nos. D-39-G & D-39-1, Blok D Jalan Teknologi 3/9, Bistari De Kota PJU 5, Kota Damansara 47810 Petaling Jaya, Selangor Darul Ehsan Nos. D-40-G & D-40-1, Blok D Jalan Teknologi 3/9, Bistari De Kota PJU 5, Kota Damansara 47810 Petaling Jaya, Selangor Darul Ehsan Built-up Area (sq. ft.) Price (RM) 3,294 1,550,000 3,294 1,650,000 1
4. Details of the Acquisition 4.1 Basis and justification for the The of RM3,200,000 for the Proposed Acquisition was arrived at on a willing-buyer willing-seller basis after taking into consideration, inter-alia, the fair market value of the Properties which is RM2,750,000 as appraised by VPC Alliance (PJ) Sdn Bhd ( Valuer ) vide its valuation report dated 23 July 2013 using the Comparison Method. 4.2 The respective market values of the Properties, as appraised by the Valuer, are as follows:- Valuer VPC Alliance (PJ) Sdn Bhd VPC Alliance (PJ) Sdn Bhd Valuation date Title No. Market Value 3 June 2013 H.S.(D) 247071 P.T. 10880 3 June 2013 H.S.(D) 247072 P.T. 10881 RM1,350,000 RM1,400,000 Comparison with 12.90% lower than the 15.15% lower than the 4.3 Salient Terms of the SPAs The salient terms of the SPAs are as follows:- a) Deposits of RM155,000 and RM165,000 (collectively referred to as Deposit ) have been paid to Madam Ow Yin Peng and Mr Ow Chee Hong respectively upon execution of the SPAs. b) The balance of the amounting to RM2,880,000 ( Balance Price ) shall be paid to the Vendors within three (3) months from the date on which the certified true copy of the Consent to Transfer to be issued by the State Government of Selangor is deposited with the Company s solicitors ( Completion Period ). c) If the Company is unable for any reason to pay the Balance Price within the Completion Period, the Vendors shall, without the need of notice, grant to the Company one (1) month commencing on the date immediately following the date of expiry of the Completion Period ( Extended Completion Period ) to pay the same SUBJECT TO the Company paying to the Vendors interest at a rate calculated on a day-to-day basis on the Balance Price or such part thereof remaining outstanding commencing on the day immediately following the expiry of the Completion Period up to and including the date of full payment and such interest shall be paid by the Company to the Vendors together with the Balance Price. d) Vacant possession of the Properties shall be delivered by the Vendors to the Company as soon as possible but at any rate within three (3) days upon the full payment of the Balance Price and interest thereon (if any) together with the full settlement of apportioned outgoings payable by the Company pursuant to the SPAs, if any. 2
e) If registration of the Properties cannot be effected and such non-registration is not due to the default of any party, then the Vendors shall forthwith refund and/or cause to be refunded free of interest to the Company all monies (including the Deposit and the Balance Price) then paid by the Company pursuant to the SPAs, and thereafter the SPAs shall be terminated and rendered null and void and the parties thereto shall have no claim whatsoever in respect of and arising from the SPAs save for any antecedent breach. 4.4 Source of funds The will be satisfied entirely by the proceeds from the Public Issue of the Company as set out in the Company s Prospectus dated 29 June 2012. 4.5 Liabilities to be assumed There are no liabilities to be assumed by the Company pursuant to the Proposed Acquisition. 4.6 Completion of the Proposed Acquisition Barring any unforeseen circumstances, the Proposed Acquisition is expected to be completed within nine (9) months from the date of the SPAs. 5. Rationale and Prospects of the Properties The Proposed Acquisition was mainly mooted to:- cater for the Company s increased staff force as a result of the expansion of its operations and hence, work volume; and consolidate the Company and its subsidiaries ( GBGAQRS Group ) entire operation entities by grouping departments and business units closer, thereby easing work flow and increasing productivity. 6. Risk relating to the Proposed Acquisition The Proposed Acquisition is not expected to have any material risk factor associated with the Properties except for the general economic risk and business risk commonly associated with property acquisition. 7. Financial effects of the Proposed Acquisition 7.1 Share capital and shareholdings of the substantial shareholders The Proposed Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders' shareholdings of the Company as the will be satisfied wholly by cash and does not involve any issuance of GBGAQRS shares. 7.2 Net assets ("NA") and NA per share The Proposed Acquisition is not expected to have any material effect on the NA and NA per share of the GBGAQRS Group as the will be satisfied wholly by cash and does not involve any issuance of GBGAQRS shares. 3
7.3 Earnings and earnings per share The Proposed Acquisition is not expected to have any effect on the earnings and earnings per share of GBGAQRS for the financial year ending 31 December 2013. 7.4 Gearing The Proposed Acquisition is not expected to have a material impact on the gearing of the GBGAQRS Group. 8. Approvals required The Proposed Acquisition is not subject to the approval of shareholders of the Company but Consent to Transfer being obtained from the State Government of Selangor for the transfer of the Properties to the Company. 9. Percentage ratio The highest percentage ratio for the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements ( MMLR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ) is 1.49% based on the Audited Financial Statements of GBGAQRS as at 31 December 2012. 10. Interested directors, major shareholders and/or persons connected The Proposed Acquisition is a related party transaction under the MMLR of Bursa Securities as the Vendors, Madam Ow Yin Peng and Mr Ow Chee Hong are respectively the sister and brother of Mr Ow Chee Cheoon, an Executive Director and shareholder of the Company. Mr Ow Chee Cheoon has abstained from all Board deliberations and voting in respect of the Proposed Acquisition. Save for the above, none of the other Directors and other major shareholders of the Company and persons connected with them has any interest, direct or indirect, in the Proposed Acquisition. 11. Statement by the Audit Committee The Audit Committee is of the opinion that the Proposed Acquisition is in the best interest of the GBGAQRS Group and the terms of the Proposed Acquisition is fair, reasonable and on normal commercial terms and hence will not be detrimental to the interest of the minority shareholders. The view of the Audit Committee was arrived at after having considered the terms and conditions of the respective SPAs as well as the fair values of the purchase prices in view of the valuation price by VPC Alliance (PJ) Sdn Bhd and also the rationale and prospects for the Proposed Acquisition. 12. Original cost of investment to the Vendors and the date of the investment The Properties were acquired by the Vendors on 1 st September 2006 and the original total cost of investment was RM1,367,760.00. 4
13. Total amount transacted with the related party for the preceding 12 months There was no transaction with the related party for the preceding twelve (12) months. 14. Directors Statement The Board (save for Mr Ow Chee Cheoon), having considered all aspects of the Proposed Acquisition and the Audit Committee s recommendation, is of the opinion that the Proposed Acquisition is in the best interest of the Company. 15. Documents for inspection The SPAs dated 10 September 2013 and the Valuation Report dated 23 July 2013 are available for inspection at the registered office of the Company at G-58-1, Blok G, Jalan Teknologi 3/9, Bistari De Kota, Kota Damansara, PJU 5, 47810 Petaling Jaya, Selangor Darul Ehsan during normal business hours on Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 10 September, 2013. 5