PROPOSED AMENDMENTS TO THE MEMORANDUM OF ASSOCIATION OF EAH ("PROPOSED AMENDMENTS")

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1 EA HOLDINGS BERHAD ("EAH" OR THE "COMPANY") I. PROPOSED ACQUISITION OF 1,275,000 ORDINARY SHARES OF RM1.00 EACH IN DDSB (M) SDN BHD ("DDSB"), REPRESENTING 51% EQUITY INTEREST IN DDSB FOR A TOTAL PURCHASE CONSIDERATION OF RM19,380,000 TO BE SATISFIED BY THE ISSUANCE OF 48,450,000 NEW ORDINARY SHARES OF RM0.10 EACH IN EAH ("EAH SHARES") AT AN ISSUE PRICE OF RM0.40 PER EAH SHARE ("PROPOSED ACQUISITION"); II. III. PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL OF EAH FROM RM25,000,000 COMPRISING 250,000,000 EAH SHARES TO RM50,000,000 COMPRISING 500,000,000 EAH SHARES ("PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL"); AND PROPOSED AMENDMENTS TO THE MEMORANDUM OF ASSOCIATION OF EAH ("PROPOSED AMENDMENTS") (COLLECTIVELY REFERRED TO AS THE "PROPOSALS") 1. INTRODUCTION We refer to the announcement made by OSK Investment Bank Berhad ("OSK"), on behalf of the Board of Directors of EA Holdings Berhad ("EAH" or the "Company" or the "Purchaser") ("Board") on 26 April 2011 pertaining to the heads of agreement entered into between the Company and the vendors of DDSB on 26 April 2011 ("HOA"). On behalf of the Board, OSK wishes to announce that the Company had, on 16 June 2011 entered into a conditional Share Sale and Purchase Agreement ("SSA") with Farisah binti Mohd Farid, Peter Ambrose Sequerah, Tan Soon Moi and Syed Shah Redza bin Syed Mohamed Redza (collectively referred to as "Vendors") for the proposed acquisition 1,275,000 ordinary shares of RM1.00 each in DDSB ("Sale Shares") representing 51% equity interest in DDSB. The total purchase consideration for the Proposed Acquisition is RM19,380,000 ("Purchase Consideration"), which will be fully satisfied by the issuance of 48,450,000 new ordinary shares of RM0.10 each in EAH ("EAH Shares" or the "Share") at an issue price of RM0.40 per Share ("Consideration Shares"). In conjunction with the Proposed Acquisition, the Board has also resolved to undertake the following:- i. Proposed increase in the authorised share capital of EAH from RM25,000,000 comprising 250,000,000 EAH Shares to RM50,000,000 comprising 500,000,000 EAH Shares ("Proposed Increase in Authorised Share Capital"); and ii. Proposed amendments to the Memorandum of Association of EAH ("Proposed Amendments") (The Proposed Acquisition, Proposed Increase in Authorised Share Capital and Proposed Amendments are collectively referred to as the "Proposals"). 2. DETAILS OF THE PROPOSALS 2.1 Proposed Acquisition Subject to the terms and conditions of the SSA, the Vendors shall sell and the Purchaser relying on the warranties and representations by the Vendors shall purchase the Sale Shares free from any and all encumbrances and with all rights, benefits and advantages attached or deeming to be attached thereto, including all bonuses, rights, dividends and distributions declared made and paid as from the completion date of SSA. 1

2 2.1.1 Basis and Justification of arriving at the Purchase Consideration The purchase consideration of RM19,380,000 was arrived at on a willingbuyer willing-seller basis, after taking into account the following:- i. The synergistic benefits as disclosed in Section 7.1 of this announcement expected to be derived from the Proposed Acquisition; ii. iii. the Vendors' guarantee of the profit after tax before minority interest ("PAT") of DDSB that it shall be at least RM13,500,000 in aggregate for the two (2) financial years ending ("FYE") 31 December 2011 and 31 December Based on the following, this translates into an average PAT of RM6,750,000 per annum; and the future earnings potential of DDSB. The value accorded to DDSB based on 100% equity interest is RM38,000,000. Accordingly, based on the average PAT per year of RM6,750,000, the purchase consideration represents a price-to-earnings multiple of 5.63 times Mode of Settlement The Purchase Consideration will be satisfied by the issuance of 48,450,000 EAH Shares at an issue price of RM0.40 per EAH Share for the Proposed Acquisition Profit Guarantee The Vendors jointly and severally agree, undertake and guarantee that the aggregate PAT of DDSB for the two (2) FYE 31 December 2011 and 31 December 2012 ("Profit Guarantee Period") shall not be less than the sum of RM13,500,000 ("Profit Guarantee"). Pursuant to the Profit Guarantee, the Vendors shall deposit such number of the Consideration Shares equivalent to RM6,885,000 in value, representing 51% of the Profit Guarantee which is the proportion attributable to EAH, based on the issue price of RM0.40 per EAH Share ("Pledged Shares") into several pledged securities CDS accounts as set out below:- Vendors Pledged Shares Number Value RM Farisah Binti Mohd Farid 8,792,765 3,517,106 Peter Ambrose Sequerah 4,423,032 1,769,213 Tan Soon Moi 2,930,918 1,172,367 Syed Shah Redza bin Mohamed Redza 1,065, ,314 Total 17,212,500 6,885,000 The aggregate value of the Pledged Shares and if applicable, the Additional Securities (hereinafter defined) (collectively referred to as "Stakeholding Securities") shall be reviewed every six (6) months from the date of listing of the Consideration Shares:- 2

3 i. In the event that the aggregate value of the Stakeholding Securities falls below RM6,885,000, the Vendors are obliged to provide Additional Securities in order that the aggregate value of the Stakeholding Securities is no less than RM6,885,000. The additional securities to make up the shortfall can be in the form of such number of additional EAH Shares or any other form acceptable to EAH ("Additional Securities"); or ii. In the event that the aggregate value of the Stakeholding Securities is above RM6,885,000, the Additional Securities may, but not obligated to, release to the Vendors provided that the aggregate value of the Stakeholding Securities shall not fall below RM6,885,000. Further details of the salient terms of the Profit Guarantee are set out in Section 6.2 of this announcement Basis of arriving at the Issue Price The issue price of RM0.40 per Consideration Share was arrived at after taking into consideration the five (5)-day weighted average market price of EAH Shares of RM0.42 up to and including 25 April 2011, being the last market day prior to date of the HOA in connection with the Proposed Acquisition Ranking of the Consideration Shares The Consideration Shares shall upon allotment and issue, rank pari passu in all respects with the existing EAH Shares, save and except that they shall not be entitled to any dividends, rights, allotment and/ or other distributions which are declared, made or paid prior to the date of their allotment Liabilities to be assumed by EAH Save for the obligations and liabilities in and arising from, under pursuant to or in connection with the SSA, there are no other liabilities including contingent liabilities and guarantee to be assumed by EAH arising from the Proposed Acquisition Additional financial commitment required Save for the purchase consideration of RM19,380,000, there are no additional financial commitments required by EAH to put the Proposed Acquisition on-stream Listing of the Consideration Shares An application will be made to Bursa Malaysia Securities Berhad ("Bursa Securities") for the listing of and quotation for the Consideration Shares on the ACE Market of Bursa Securities pursuant to the Proposed Acquisition. 2.2 Proposed Increase In Authorised Share Capital The authorised share capital of EAH is RM25,000,000 comprising 250,000,000 EAH Shares, of which RM15,500, comprising 155,001,000 EAH Shares have been issued and are fully paid up as at 8 June

4 The Proposed Increase in Authorised Share Capital will increase the authorised share capital from RM25,000,000 comprising 250,000,000 EAH Shares to RM50,000,000 comprising 500,000,000 EAH Shares by creation of an additional 250,000,000 new EAH Shares. 2.3 Proposed Amendments The first sentence of Clause 6 of the Memorandum of Association of EAH is proposed to be amended to reflect the Proposed Increase in Authorised Share Capital as follows:- First sentence of Existing Clause 6 First Sentence of New Clause 6 The capital of the Company is Ringgit Malaysia Twenty Five Million (RM25,000,000.00) divided into 250,000,000 shares of RM0.10 each. The capital of the Company is Ringgit Malaysia Fifty Million (RM50,000,000.00) divided into 500,000,000 shares of RM0.10 each. 3. INTER-CONDITIONALITY The Proposals are inter-conditional upon each other. However, the Proposals are not conditional upon any other corporate proposals currently and/ or to be undertaken by the Company. 4. INFORMATION ON DDSB DDSB was incorporated in Malaysia on 8 July 1999 under the Companies Act, 1965 as a private limited company under the name of Distinct Diversified Sdn Bhd. It was subsequently changed to DDSB (M) Sdn Bhd on 25 September 2001 and assumed its present name. DDSB is a Multimedia Super Corridor ("MSC")-Status company registered under the Ministry of Finance of Malaysia. It is principally involved in the provision of enterprise software services and solutions, which consist of enterprise resource planning solutions, mobile enterprise solutions and geographical information system ("GIS") solutions. The authorised share capital of DDSB as at 8 June 2011 is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each ("DDSB Shares"), of which RM2,500,000 comprising 2,500,000 DDSB Shares have been issued and fully paid-up. The shareholders and directors of DDSB and their respective shareholdings in DDSB as at 8 June 2011 are as follows:- Directors Nationality < Direct > < Indirect > DDSB Shares % DDSB Shares % Farisah binti Mohd Farid Malaysian 651, Faizul bin Mohd Farid Malaysian Shareholders Nationality < Direct > < Indirect > DDSB Shares % DDSB Shares % Peter Ambrose Sequerah Malaysian 1,348, Farisah binti Mohd Farid Malaysian 651, Syed Shah Redza bin Syed Mohamed Redza Malaysian 282, Tan Soon Moi Malaysian 217,

5 As at 8 June 2011, DDSB does not have any subsidiary and/or associate companies. A summary of the financial information of DDSB for the FYE 31 December 2008 to 31 December 2010 are set out as follows:- < Audited > < FYE 31 December > RM'000 RM'000 RM'000 Revenue 4,596 5,586 11,819 Profit before tax ("PBT") ,325 Profit after tax ("PAT") ,136 Shareholders' funds 2,507 2,546 3,682 Total borrowings ,592 Gearing (times) Commentary on past performance:- FYE 31 December 2008 For FYE 31 December 2008, DDSB's revenue increased by 10.1% compared to FYE 31 December 2007, due to increase in revenue of DDSB's new line of business, namely the GIS solution business, which DDSB was building its skill sets in Profit before tax and profit after tax increased by RM0.806 million and RM0.811 million respectively as DDSB was able to perform more works in-house due to its growing skill-sets and this helped to lower direct costs and increased its profit margin. FYE 31 December 2009 For FYE 31 December 2009, DDSB's revenue increased further by 21.6% compared to FYE 31 December 2008, due improved traction in its GIS solution business. In addition, DDSB managed to roll-out its own product line in the mobile enterprise solutions and these contributed to the increase in profit before tax amounting to RM0.397 million or approximately 85.7% as compared to FYE 31 December FYE 31 December 2010 For FYE 31 December 2010, DDSB's revenue increased by RM6.23 million or 111.6% compared to the previous FYE 31 December The increase was due to all three lines of business improving. In addition, the turnaround of its enterprise resource planning business which was performing poorly in the last two years further improved its revenue base. These has attributed to the increase in profit before tax amounting to RM0.465 million or approximately 54.1%. 5. INFORMATION ON THE VENDORS 5.1 Farisah binti Mohd Farid Farisah binti Mohd Farid, a Malaysian aged 47, has more than twenty years of working experience in various areas such as accounting, corporate finance and information technology ("IT") consulting. Her previous employment included Accenture (formerly Anderson Consulting) as manager in the process competency in resources market unit, SAP Malaysia Sdn Bhd as managing consultant and Shell Malaysia Limited as corporate finance adviser. She also held several positions during her tenure with Tenaga Nasional Malaysia Berhad as district accountant, senior accountant (creditor and payment) and manager (inventory management and control). Her overseas experience includes being auditor for Price Waterhouse, Melbourne. 5

6 5.2 Peter Ambrose Sequerah Peter Ambrose Sequerah, a Malaysian aged 39, obtained his Diploma in Electronics Engineering from University Technology Malaysia in 1993 and Bachelor of Engineering (Hons) in Telecommunication and Electronics at University Malaysia Sarawak in He has over 12 years of international experience in the telecommunications industry, specialising in technical sales support and product management for next-generation optical transmission solutions. His previous employment includes various senior positions in Lucent Technologies Malaysia, Siemens Communications Malaysia and Fujitsu Telecommunications Europe Ltd which was based in Birmingham, United Kingdom. He is currently employed with Maxis Communications Sdn Bhd as the Head of Transport Technology. 5.3 Tan Soon Moi Tan Soon Moi, a Malaysian aged 65, holds a certificate in teaching and has worked as a school teacher for more than 30 years. Upon her retirement from teaching, she ventured into business and subsequently invested in DDSB (M) Sdn Bhd. 5.4 Syed Shah Redza bin Syed Mohamed Redza Syed Shah Redza bin Syed Mohamed Redza, a Malaysian aged 42, obtained his Bachelor of Arts in Economics and International Relations and Bachelor of Science in Business Administration from Washington University at St Louis, USA in He obtained his MBA from Bradley University, USA, in He has over 18 years of experience in information and communications technology ("ICT"), financial services, direct investments, and international consulting. He started his career in an advisory services executive at CIMB and his subsequent employment included being the senior investment analyst at Multimedia Development Corporation and senior manager, Corporate Strategy & Business Development, at TIME Engineering Berhad. He is currently a director at Portfolio Arena Sdn Bhd, owner of Best Borneo Plantations & Food, and is a corporate advisor to several companies. 6. SALIENT TERMS OF THE SSA 6.1 Conditions precedent Completion of the sale and purchase of the Sale Shares is conditional on:- i. the Purchaser obtaining the approval of its shareholders for the following:- a. purchase of the Sale Shares in exchange for the Consideration Shares upon the terms and conditions in the SSA; b. proposed increase in the authorised share capital of the Purchaser from RM25,000, comprising 250,000,000 EAH Shares to RM50,000, comprising 500,000,000 EAH Shares; and c. Proposed amendments to the Memorandum of Association of the Purchaser. ii. the Purchaser obtaining the approval of Bursa Securities for the listing of and quotation for the Consideration Shares on the ACE Market of Bursa Securities; 6

7 iii. iv. the Purchaser continues to be listed on the ACE Market of Bursa Securities and there is no event that has occurred or may occur in the reasonable opinion of the Vendors which affects the continued listing of the Purchaser on the ACE Market of Bursa Securities; the Purchaser conducting or cause to be conducted due diligence on DDSB to the satisfaction of the Purchaser; v. the Vendors obtaining the approval of the board of directors of DDSB for the transfer of the Sale Shares to the Purchaser; and vi. the approvals, consents authorisations, permits or waivers of any other relevant governmental or regulatory body and any other third parties necessary or appropriate to carry out the sale and purchase of the Sale Shares pursuant to the terms of the SSA having been obtained. The conditions precedent under the SSA shall be satisfied by 31 September 2011, or such other extended date as may be agreed between the parties. 6.2 Profit guarantee The Vendors jointly and severally agree, undertake and guarantee that the aggregate audited PAT of DDSB for the FYE 31 December 2011 and 31 December 2012 shall be not less than RM13,500, only As security for the Profit Guarantee attributable to the Purchaser, the Vendors agree that the Purchaser shall issue and deposit the Pledged Shares into the Vendors' securities account ("Securities Account") solely operated by a trustee company appointed by the parties to hold the Pledged Shares ("Security Stakeholder") The Vendors agree, covenant and undertake to maintain such amount of Stakeholding Securities in the Securities Account so that the actual total market value of the Stakeholding Securities shall not be less than RM6,885, being 51% of the total Profit Guarantee which is the proportion attributable to the Purchaser ("Purchaser's Attribution") Upon adoption of the audited profit and loss accounts of DDSB for FYE 31 December 2011 ("Accounts Year 1") by the shareholders of DDSB:- (a) the Security Stakeholder shall upon receipt of the Accounts Year 1 calculate the value of the Stakeholding Securities; (b) the Security Stakeholder shall release and transfer the Stakeholding Securities up to an amount equivalent in value to 51% of PAT for FYE 31 December 2011 into the CDS accounts of the Vendors in proportion to the number of Stakeholding Securities pledged by the respective Vendors PROVIDED ALWAYS that the remaining value of the Stakeholding Securities in the Securities Account shall not be less than 51% of the remaining Profit Guarantee amount which has not been met; and (c) the Purchaser's Attribution for the purposes of paragraph thereafter the release and transfer of the Stakeholding Securities pursuant to paragraph 6.2.4(b) shall be 51% of the remaining Profit Guarantee amount which has not been met. 7

8 6.2.5 In the event the aggregate total of the PAT for FYE 31 December 2011 and FYE 31 December 2012 (collectively, "TOTAL PAT") is equivalent to or more than the Profit Guarantee amount, the Security Stakeholder shall release and transfer all the Stakeholding Securities into the CDS Accounts of the Vendors in proportion to the number of Stakeholding Securities pledged by the respective Vendors In the event there is a shortfall between the TOTAL PAT and the Profit Guarantee ("Shortfall"), then the Vendors shall be jointly and severally liable to the Purchaser to fully pay the amount of Shortfall attributable to the Purchaser (being 51% of the Shortfall) ("Purchaser's Shortfall") but up to amount of RM6,885, only In the event that the Vendors fail to pay the Purchaser the Purchaser's Shortfall in full (but up to the amount of RM6,885,000.00), the Purchaser shall be entitled to issue a written notice to the Security Stakeholder stating the same and the amount of the Purchaser's Shortfall that remains unpaid, whereupon the Security Stakeholder is authorised to sell all or part of the Stakeholding Securities and/or utilise all or any moneys in the Securities Account sufficient to cover the said amount The Vendors shall be liable to pay the Purchaser for the Purchaser's Shortfall up to the amount equivalent to RM6,885, only. 6.3 Undertaking on declaration of dividends The Vendors further jointly and severally agree, covenant and undertake to inter alia, as shareholders and/or directors of DDSB after the completion date of the SSA, to approve declaration(s) of dividends and endeavour to procure DDSB to declare dividends of not less than 50% of the profits of DDSB for each of DDSB s FYE 31 December 2011 and 31 December RATIONALE FOR THE PROPOSALS 7.1 Proposed Acquisition DDSB is principally engaged in information technology, consultancy services and software development. DDSB's core services and products include human capital management, enterprise resource planning solutions, GIS and mobile enterprise solutions. The Proposed Acquisition will allow EAH to further expand its existing business operation. The Proposed Acquisition is expected to enhance the revenue and earnings base of the Group and is expected to contribute to the future development and growth of the Group. Upon completion of the Proposed Acquisition, DDSB will become a subsidiary of EAH and its group of companies ("EAH Group"). Thus, the EAH Group can consolidate the results of DDSB Group, which is expected to contribute positively to the financial performance of the EAH Group. The Proposed Acquisition is also expected to be earning accretive as set out in Section 11.3 of this announcement. 8

9 7.2 Proposed Increase in Authorised Share Capital The Proposed Increase in Authorised Share Capital is to accommodate the increase in the issued and paid-up share capital of EAH pursuant to the Proposed Acquisition and any other future corporate exercise. 7.3 Proposed Amendments The Proposed Amendments is to facilitate the implementation of the Proposed Acquisition and the Proposed Increase in Authorised Share Capital. 8. INDUSTRY OVERVIEW AND OUTLOOK The national ICT Association of Malaysia, Pikom, is projecting the industry to grow to RM80 billion by 2015, expanding in excess of 10% annually. Pikom president Shaifubahrim Saleh said the 10th Malaysia Plan ("10MP") would aid in the growth of the industry. The ICT sector has been identified as one of the key sectors that will receive much attention in the 10MP. He said the government's projected 6% growth for the country augured well for the industry during 10MP period from 2010 to With the MSC Malaysia initiative maturing, he said the industry would benefit much from the added focus on ICT which was the strategic enabler across industries, especially the SME segment. (Source: "Pikom projects ICT industry to grow to RM80b by 2015", The Edge Financial Daily, 14 June 2010) In Business Monitor International ("BMI")'s first quarter market overview, BMI forecasts that Malaysian IT spending is expected to grow to USD5.2 billion in 2011, from USD4.8 billion in 2010, when the market stablised following the impact of a difficult economic and political situation. The report from BMI says that the market should be boosted by ICT-friendly 2011 budget measures and growing interest in cloud computing, but much will depend on confidence in a sustainable economic recovery. Malaysia's addressable software market is expected to grow to USD857 million in 2011, consolidating a recovery in 2010 but businesses remain cautious and focused on return on investment. By 2015, software spending is expected to rise healthily to USD1.3 billion, with a software compound annual growth rate for 2011 to 2015 in the region of 11%. E-business applications such as enterprise resource planning and finance are finding increasing popularity in the business market as enterprises look to enhance productivity through automating accounting and other functions. Customer relationship management ("CRM") is expected to be a double-digit growth opportunity despite the economic downturn. Software-as-a-service ("SaaS") has achieved double-digit regional growth in Malaysia in the past couple of years but is still an early-stage market. (Source: "Malaysia's ICT to perform better", CBS Business Network, 1 March 2011) 9. PROSPECTS OF DDSB DDSB offers a range of products and services catering to both private and government linked companies. DDSB s enterprise resource planning and human capital management solutions leverage technology to provide the platform for aligning and bridging the gap between organisation, business targets, people, process and technology. In addition, its mobile enterprise solutions allow businesses to manage its business relationships through a wireless technology platform and to improve efficiencies of its field crews. Lastly, its GIS solution business is a monitoring and management solution for large enterprises that have assets distributed over wide geographical areas. 9

10 DDSB has also developed its own niche solutions for managing remote assets based on the GIS mobile field force automation system ("MoFFAS") platforms. These solutions are capable of consolidating information and data of assets from all locations into a single database for easy retrieval, referencing and decision making. Barring any unforeseen circumstances, the Board after having considered all the relevant aspects, including the aforementioned prospects of DDSB as well as the industry overview and outlook as set out in Section 8 of this announcement, is of the opinion that the Proposals are expected to contribute positively to the future earnings of the Group and to enhance EAH's shareholders' value in the long run. (Source: Management of DDSB) 10. RISK FACTORS 10.1 Political and Economic Risk DDSB's financial and business prospects and the industry which it operates in, will depend to some degree on the developments in the economy and political and regulatory front in Malaysia. Amongst the economic, political and regulatory factors are changes in inflation rates, interest rates, war, terrorism activities, riots, expropriations, changes in political leadership and unfavourable changes in the governments' policies on ICT sector. The EAH Group will continue to adopt effective measures such as prudent management and efficient operating procedures to mitigate these factors. However, there can be no assurance that adverse economic, political and regulatory changes will not materially affect the EAH Group's business Industry Risks The performances of DDSB are subject to risks inherent in the ICT industry. These may include, amongst others, entry of new players, shortage of skill workforce, increase in cost of labour, cost of operations, changes in government policies affecting the industry, changes in general economic, business, credit and interest rate condition and introduction of new technology and new products. Whilst the EAH Group seeks to mitigate these risks through its continued initiative in R&D for new products, employment of highly skilled technical personnel, implementing prudent business strategies and carrying out continuous review of its operations, there is no assurance that any change to the above factors, which are beyond the EAH Group's control, will not materially affect its business Competition Risks DDSB may face intense competition from existing competitors and new entrants into the market in the future, both locally and internationally which offer similar products and services. In view of the competitive market environment, the EAH Group intends to sharpen its competitive edge by continually developing new measures to counter competition which will include, amongst others, products differentiation and innovation in products and services. The EAH Group will continue to focus on providing highly reliable technology that is able to handle high capacities and also investments in products innovation to ensure its competitiveness in capturing market share and gaining market acceptance. However, there can be no assurance that the EAH Group would be able to sustain its competitiveness against current and future competitors. 10

11 10.4 Acquisition Risks Although the Board believes that EAH Group may derive benefits from the Proposed Acquisition, there is no assurance that the anticipated benefits of the Proposed Acquisition will be realised or that the Company will be able to generate sufficient revenues from the Proposed Acquisition to offset the associated acquisition costs incurred. There is also no assurance that the EAH Group is able to maintain or improve the standards of quality and services of its business. However, the Company has mitigated such risk by adopting prudent investment strategies and conducting assessment and review prior to making its investment decisions. 11. FINANCIAL EFFECTS OF THE PROPOSALS The Proposed Increase in Authorised Share Capital and Proposed Amendments will not have any effect on the issued and paid-up share capital, NA and gearing and earnings of EA. For illustration purposes, the effects of the Proposed Acquisition have been prepared based on the following scenario:- Minimum Scenario : Assuming none of the 77,500,500 outstanding 2010 / 2015 warrants ("Warrants") are exercised prior to the completion of the Proposed Acquisition Maximum Scenario : Assuming all of the 77,500,500 outstanding Warrants are exercised prior to the completion of the Proposed Acquisition 11.1 Issued and Paid-Up Share capital The proforma effects of the Proposed Acquisition on the issued and paid-up share capital of EAH are as follows:- Minimum Scenario EAH Shares RM Maximum Scenario EAH Shares RM Existing issued and paid-up share capital as at 8 June 2011 Upon full exercise of the outstanding Warrants Shares to be issued pursuant to the Proposed Acquisition Enlarged issued and paid-up share capital 155,001,000 15,500, ,001,000 15,500, ,500,500 7,750, ,001,000 15,500, ,501,500 23,250,150 48,450,000 4,845,000 48,450,000 4,845, ,451,000 20,345, ,951,500 28,095, NA and gearing Based on the audited consolidated balance sheets of EAH Group as at 31 December 2010, the proforma effects of the Proposed Acquisition on the consolidated NA and gearing are as follows:- 11

12 Minimum Scenario Audited as at 31 December 2010 RM'000 I After the Proposed Acquisition RM'000 Share capital 15,500 20,345 Share premium - 14,035 *1 Warrant reserve 6,120 6,120 Retained profit 1,814 1,814 Shareholders' Equity/ NA 23,434 42,314 shares in issue ('000) 155, ,451 NA per share (RM) Borrowings (interest bearing) (RM'000) 636 3,228 *2 Gearing (times) Notes:- *1 *2 After netting off estimated expenses of approximately RM500,000 in relation to the Proposals Based on the audited consolidated balance sheet of DDSB as at 31 December 2010 Maximum Scenario Audited as at 31 December 2010 I After the exercise of outstanding Warrants After the Proposed Acquisition RM'000 RM'000 RM'000 Share capital 15,500 23,250 28,095 Share premium - 44,095 *1 58,130 *2 Warrant reserve 6, Retained profit 1,814 1,814 1,814 Shareholders' Equity/ NA 23,434 69,159 88,039 shares in issue ('000) 155, , ,952 NA per share (RM) Borrowings (interest bearing) (RM'000) ,228 *3 Gearing (times) Notes:- II *1 *2 *3 The exercise price of the Warrants are RM0.59 per Warrant After netting off estimated expenses of approximately RM500,000 in relation to the Proposals Based on the audited consolidated balance sheet of DDSB as at 31 December

13 11.3 Earnings and Earning Per Share ("EPS") For the FYE 31 December 2010, EAH has recorded an audited consolidated PAT of RM4.081 million or approximately 3.35 Sen per EAH Share. Going forward, the Proposed Acqusition is expected to be earning accretive based on the annualised unaudited consolidated PAT of EAH for the three (3)-month financial period ended ("FPE") 31 March 2011 coupled with the Profit Guarantee provided by DDSB. Purely for illustration purposes only, assuming none of the 77,500,500 Warrants are exercised, based on the annualised unaudited consolidated PAT of EAH for the three (3)-month FPE 31 March 2011 of RM6.864 million and the average profit guarantee of DDSB for the FYE 31 December 2011 of RM6.750 million (the proportion attributable to EAH is RM3.443 million) as well as the issuance of the Consideration Shares, resulting from the Proposed Acquisition, the EPS of EAH is expected to increase from 4.43 Sen to 5.07 Sen. Barring unforeseen circumstances, the Proposed Acquisition is expected to contribute positively to the future earnings of the enlarged EAH Group Dividend The Proposals are not expected to have any immediate effect on the dividends to be declared (if any) by the Company. Any dividends to be declared and paid by EAH in the future will depend on, amongst others, the profitability and cash flow position of the enlarged EAH Group. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 13

14 11.5 Substantial shareholders' shareholding The proforma effects of the Proposed Acquisition on the substantial shareholder's shareholdings of EAH as at 8 June 2011 are as follows:- Minimum Scenario Proforma I < Existing > < After the Proposed Acquisition > < Direct > < Indirect > < Direct > < Indirect > Substantial Shareholders Shares % Shares % Shares % Shares % '000 '000 '000 '000 Mohammad Sobri bin Saad 82, ,550 * , ,550 * Norazian binti Abdul Kudus 14, , Farisah binti Mohd Farid , Peter Ambrose Sequerah , Tan Soon Moi , Syed Shah Redza bin Syed Mohamed Redza , Note:- *1 Deemed interested under Section 134(12)(c) of the Companies Act, 1965 by virtue of his spouse, Norazian binti Abdul Kudus, shareholding in EAH 14

15 Maximum Scenario Substantial Shareholders Proforma I Proforma II < Existing > After the exercise of outstanding < Warrants > < After the Proposed Acquisition---- > < Direct > < ---Indirect-- > < Direct > < ----Indirect---- > < Direct > < -----Indirect----- > Shares % Shares % Shares % Shares % Shares % Shares % '000 '000 '000 '000 '000 '000 Mohammad Sobri bin Saad 82, ,550 * , ,825 * , ,825 * Norazian binti Abdul Kudus 14, , , Farisah binti Mohd Farid , Peter Ambrose Sequerah , Tan Soon Moi , Syed Shah Redza bin Syed Mohamed Redza , Note:- *1 Deemed interested under Section 134(12)(c) of the Companies Act, 1965 by virtue of his spouse, Norazian binti Abdul Kudus, shareholding in EAH 15

16 12. APPROVALS REQUIRED The Proposals are subject to the following approvals being obtained:- i. Bursa Securities for the listing of and quotation for the Consideration Shares to be issued pursuant to the Proposed Acquisition; ii. iii. The shareholders of EAH for the Proposals at an extraordinary general meeting to be convened; and Any other relevant authorities, if required. 13. HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) of the ACE Market Listing Requirements of Bursa Securities is 82.70% which is the aggregate value of the consideration in relation to the Proposed Acquisition, compared with the NA of EAH Group based on the latest audited financial statement of EAH as at 31 December INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS CONNECTED None of the Directors and/ or major shareholders of EAH and/ or persons connected to them have any interest, direct or indirect, in the Proposals. 15. DIRECTORS' RECOMMENDATION The Board, after having considered all aspects of the Proposals, including its rationale as set out in Section 7 of this announcement, is of the opinion that the Proposals are in the best interest of the Company and the terms and conditions of the SSA are fair and reasonable. 16. APPLICATION TO THE AUTHORITIES Barring unforeseen circumstances, the application to the relevant authorities in relation to the Proposals is expected to be made within a period of two (2) months from the date of this announcement. 17. ESTIMATED TIMEFRAME FOR COMPLETION Barring unforeseen circumstances and subject to all relevant approvals being obtained, the Proposals are expected to be completed by the third quarter of year ADVISER OSK has been appointed by the Company to act as the Adviser for the Proposals. 16

17 19. DOCUMENTS FOR INSPECTION A copy of the SSA will be made available for inspection at the Company's Registered Office of EAH at 149A, Jalan Aminuddin Baki, Taman Tun Dr Ismail, Kuala Lumpur during normal business hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 16 June