KHONG GUAN FLOUR MILLING LIMITED Company Registration No G (Incorporated in the Republic of Singapore)

Transcription

1 KHONG GUAN FLOUR MILLING LIMITED Company Registration No G (Incorporated in the Republic of Singapore) PROPOSED DISPOSAL OF THE LONG-TERM QUOTED EQUITY INVESTMENT IN UNITED MALAYAN LAND BHD 1. INTRODUCTION The Board of Directors (the Directors ) of Khong Guan Flour Milling Ltd (the Company, and together with its subsidiaries, the Group ) wish to announce that the Company intends to accept the Offer (defined later) for the Group s entire holdings of the 14,250,000 ordinary shares of RM1.00 each ( Offered Shares or Sale Shares ) representing approximately 4.72% of all the issued and paid-up ordinary shares ( UMLand Shares ) in the capital of United Malayan Land Bhd ( UMLand ), which comprises 301,629,214 UMLand Shares. UMLand is listed on the official list of Bursa Malaysia Securities Berhad ( Bursa Securities ). The total consideration for the proposed disposal of the 14,250,000 Offered Shares ( Proposed Disposal ) owned by the Group, via an acceptance of the Offer is approximately RM35.63 million or S$14.25 million (based on the exchange rate of S$1.00:RM2.50) (the Disposal Consideration ) Information on the Offer On 12 July 2012, Seleksi Juang Sdn Bhd ( SJSB or the Offeror ) had acquired an aggregate of 62,580,625 UMLand Shares, representing approximately 20.75% of the issued and paid-up share capital of UMLand (excluding treasury shares held by UMLand) from Singapore CapitaLand for a total cash consideration of RM156,451,563 or RM2.50 per UMLand Share. Further, on the same date, Wawasan Perangsang Mewah Sdn Bhd (a substantial shareholder of UMLand) had provided a declaration to SJSB that it will co-operate to act jointly with SJSB for the purpose of exercising control over UMLand (the Declaration ). Pursuant to the above acquisition and the Declaration, the Offeror and parties acting in concert with it, had increased their aggregate shareholding from approximately 33.08% to 77.52%. Consequently, the Offeror and parties acting in concert with it are obliged to extend a take-over offer for all the remaining UMLand shares not already owned or controlled by the Offeror and parties acting in concert with it. On behalf of the Offeror, Public Investment Bank Berhad ( PIBB ) had made an Unconditional Take-Over Offer (the Offer ) to acquire all the remaining ordinary shares of RM1.00 each in UMLand (excluding treasury shares) not already owned by the Offeror and parties acting in concert with it (the Offer Shares and each an Offer Share ) for a cash consideration of RM2.50 per Offer Share (the Offer Price ). Prior to this announcement, the Group held 14,675,000 UMLand Shares of which 14,250,000 were held by the Company and 425,000 were held as trading stock via its wholly owned subsidiary Khong Guan Food Products Private Limited and registered under the name of UOB Kay Hian Pte Ltd ( UOB KH ). The Group has accepted the Offer in relation to the 425,000 UMLand Shares registered under UOB KH on 15 August 2012 and will proceed with the acceptance for the balance of the 14,250,000 UMLand Shares on or about the date of this announcement.

2 Therefore, as at the date of this announcement, the Group holds 14,250,000 UMLand Shares Salient Terms of the Offer The salient terms of the Offer document dated 2 August 2012 are reproduced below: Consideration for the Offer The consideration for the Offer is RM2.50 per Offer Share. Notwithstanding the provisions in Section 3 of Appendix II of the Offer document, in the event that UMLand declares, makes or pays any distributions on or after the date of the notice dated 12 July 2012 ( Notice ) but prior to the Closing Date and the holder ( Holder ) of UMLand Share is entitled to retain such distributions, the consideration for each Offer Share shall be reduced by the quantum of the net distribution which such Holder is entitled to retain. Under such circumstances, the aggregate net amount of the distributions received by the accepting Holder and the Offer Price payable to the accepting Holder shall not exceed RM2.50 per Offer Share. Holders may accept the Offer in respect of all or part of their Offer shares. They may not accept the Offer in excess of their respective holdings of the Offer Shares. The Offeror will not pay fractions of a sen, if any, to the accepting Holders and entitlements to the cash payment consideration will be rounded down to the nearest whole sen Conditions of the Offer The Offer is not conditional upon any minimum number of valid acceptances of the Offer Shares being received Duration of the Offer Except insofar as the Offer is withdrawn by the Offeror with the consent of the Securities Council of Malaysia and every person is released from any obligation incurred thereunder, the Offer shall remain open for acceptances until 5:00p.m (Malaysian time) on 23 August 2012, being First Closing Date ( First Closing Date or Closing Date ), unless extended or revised in accordance with the Code or as the Offeror may decide and announced by PIVB, on behalf of the Offeror, at least 2 days before the Closing Date. Notices of such extension or revision will be posted to the Holders accordingly. Subsequently, it is noted from the announcement from the Offeror dated 17 August 2012 that the Closing Date of the Offer has been extended to 5.00 p.m. (Malaysian time) on 6 September 2012 ( Revised Closing Date ) Method of settlement The settlement of the consideration for the Offer will be effected via remittance in the form of cheque, bankers draft and/or cashier s order, which will be despatched by ordinary mail to you (or your designated agent, as you may direct), within 10 days from the date of receipt of the valid acceptance, at Holders own risk Other terms Please refer to Appendix II of the Offer document for other terms and conditions of the Offer and Appendix III of the Offer document for the procedures for acceptance and method of settlement of the Offer. 2. INFORMATION ON UMLand AND THE SALE SHARES 2.1. Information on UMLand 2

3 UMLand was incorporated in Malaysia as a private company on 22 March 1961 under the name of United Malayan Flour Mills Limited. On 22 May 1968, it was converted into a public limited company under the name of United Malayan Flour Mills Berhad and was listed on the main board of Bursa Securities on 30 June On 5 February 1996, its name was changed to the current name. UMLand and its subsidiaries (the UMLand Group ) were initially involved in the flour milling business. Subsequently, upon completion of a restructuring scheme in 1995, the principal activity of the UMLand Group was transformed from flour milling to its current property development business. As stated in the Offer document, UMLand s paid up share capital is RM302,031,014, comprising 302,031,014 UMLand Shares. In addition, UMLand holds 401,800 treasury shares. We note from UMLand s Independent Advice Circular dated 13 August 2012 to the holders of the Offer Shares ( the Circular ) that the UMLand Group had, as on 31 December 2011 consolidated shareholders fund of approximately RM915.9 million and that the net asset value for each UMLand Share is approximately RM3.04. It is noted from the Circular, the revalued net assets value ( RNAV ) per UMLand Share is approximately RM2.56. The Offer Price represents a discount of RM0.06 or 2.34% to the RNAV per UMLand Share. The Group s interest in UMLand is classified as the available-for-sale financial assets (not accounted for as a subsidiary or an associate) and accordingly the profit attributable to the Group is the dividends income from UMLand. The Group received a net dividend of approximately S$376,000 from the Offered Sales for the 12-months period ended 30 April 2012 ( 12M2012 ) Information on the Sale Shares and proceeds from the acceptance of the Offer The Group s investment in the quoted securities of UMLand dates back to 1995 when UMLand was still involved in the flour milling business and wherein the Group had an equity interest. After the restructuring scheme in or around 1995, the principal activity of the UMLand Group was transformed from flour milling to its current property development business and investment holding. The flour milling and edible food products activities of UMLand were later divested as part of the then restructuring exercises. The Group s current interest in UMLand is less than 5% and it is not represented on the board of directors of UMLand. The Offeror and parties acting in concert with it, UMLand and the directors of UMLand are not interested persons as defined under Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited ( Mainboard Listing Manual ). 2.3 Use of proceeds from the acceptance of the Offer The Group intends to utilise the net proceeds of approximately S$14.15 million after deducting the estimated transaction cost from the acceptance of the Offer for potential investments as and when such opportunities arise and working capital requirements of Group in its principal activities of trading wheat flour and other edible products. Pending the deployment of the proceeds for the uses identified above, the net proceeds form the acceptance of the Offer may be placed as deposits with the financial institutions or invested in short-term money market or other debt instruments on a short-term basis as the Directors may deem fit in the interest of the Company. 3. RELATIVE FIGURES UNDER CHAPTER 10 OF THE MAINBOARD LISTING MANUAL Under Chapter 10 of the Mainboard Listing Manual, if a disposal of assets is one where any of the relative figures computed on the bases set out in Rule 1006 of the Mainboard Listing Manual exceeds 20.0%, the transaction is classified as a major transaction and a listed company must immediately make an announcement in accordance with Part VII Rule 1014 of the Mainboard Listing Manual. In addition, a major transaction must be made conditional upon approval by shareholders in a general meeting to be convened. As stated above, the Group has accepted the 425,000 UMLand Shares registered under UOB KH on 15 August 2012 and intends to proceed with the acceptance for the balance of the 14,250,000 UMLand Shares on or about the date of this announcement. As the relative figures computed for the initial acceptance of the 425,000 UMLand Shares are well below 5%, the initial acceptance for the 425,000 UMLand Shares is a non-discloseable transaction. The figures presented for the Chapter 10 ratios herein, is based on the Proposed Disposal of 14,250,000 UMLand Shares. 3

4 The relative figures for the Proposed Disposal computed based on the Group s latest announced consolidated financial results for the 12M2012 in accordance with Rule 1006 of the Mainboard Rules are as follows:- Rule 1006 Rule 1006 (a) Proposed Disposal of 14,250,000 UMLand Sale Shares The net asset value of the assets to be disposed of compared with the group's net asset value 14.94% A (b) The net profits attributable to the assets to be disposed of, compared with the group's net profits 12.39% B (c) Aggregate value of the consideration received, compared with the issuer's market capitalisation based on the total number of issued shares excluding treasury shares 32.86% C (d) The number of equity securities issued by the issuer as consideration, compared with the number of equity securities previously in issue Not applicable as there is no issuance of shares D Notes: 1. For the purpose of the computation, the Net Assets Value ( NAV ) of the 14,250,000 UMLand Sale Shares is based on the fair value of the investment, as recorded in the financial statements of the Group as at 30 April Based on information provided in the Circular, the Group s interest in the consolidated NAV of the UMLand Group, as at 31 December 2011 is approximately S$17.31 million and this represents approximately 27.83% of the consolidated NAV of the Group. 2. The Group s interest in UMLand is classified under available for sale financial assets (not accounted for as a subsidiary or an associate) and accordingly the income attributable is derived from the dividends before tax of approximately S$383,000 for the 12M The Company s market capitalisation is computed based on the weighted average price done on the SGX-ST on 23 August 2012, being the market day immediately prior to this announcement multiplied with 25,812,250 ordinary shares in the capital of the Company. The Disposal Consideration is approximately RM35.63 million or S$14.25 million (based on the exchange rate of S$1.00:RM2.50). As certain of the relative figures set out in Rule 1006 and more particularly Rule 1006 (c) above exceeds 20%, the Proposed Disposal constitutes a major transaction under Chapter 10 of the Mainboard Listing Manual and will be subject to the approval of the shareholders of the Company ( Shareholders ) at a general meeting to be convened. 4. SGX-ST WAIVER OF SHAREHOLDER APPROVAL As certain of the relative figures in respect of the Proposed Disposal computed on the bases set out in Rule 1006 particularly Rule 1006 (c) of the Mainboard Listing Manual exceed 20%, the Proposed Disposal constitutes a major transaction and is therefore subject to approval of the Shareholders pursuant to Rule 1014 (2). The Company has applied to the Singapore Exchange Securities Trading Limited ( SGX-ST ) for a waiver (the Waiver ) from the requirement to subject the Proposed Disposal to Shareholders approval under Rule 1014 (2). SGX-ST has on 23 August 2012 granted a waiver from compliance with Rule 1014(2) for seeking shareholders approval for the Proposed Disposal, subject to the Company announcing the waiver, the reasons for the seeking the waiver and the conditions as required under Rule RATIONALE FOR SEEKING THE WAIVER AND DIRECTORS DECISION FOR THE PROPOSED DISPOSAL 4

5 a) Directors decision for acceptance of Offer Based on information available to the Directors from the Offer document and the Circular for acceptance of the Offer as well as the fact that there is as at the date of this announcement no other offers from parties (other than the Offeror), and the time value of money as well as certainty, the Directors are of the unanimous view that acceptance of the Offer is the preferred mode for the disposal of the Group s interest in UMLand with certainty of outcome. The Offer is not conditional upon any minimum number of valid acceptances of the Offer Shares being received. The Directors note that trading for UMLand Shares is illiquid and that there is no certainty that the Group s interest in UMLand Shares can be disposed of immediately in the market at or above the Offer Price. The Group s acceptance of the Offer and the subsequent disposal of the Group s interest in UMLand at the Offer Price, will allow the Group to register a gain or profit after tax of approximately S$11.92 million over its initial cost of investment of approximately S$2.23 million and is in the best interest of the Company. It will allow the Group to register a gain on its investments in UMLand Shares, which is not part of the core activities of the Group. On completion, the Company will have to release S$7.06 million fair value reserve which arose from past net cumulative unrealised fair value gains but without affecting the Group s net tangible asset value. b) No change in risk profile The Directors are of the opinion that the Proposed Disposal will not result in any change of the risk profile of the Group based on the following:- The Proposed Disposal does not constitute a disposal of the Company s interest in a subsidiary or associate and the Group s investment in UMLand Shares (with no board representation and aggregate interest of less than 5% of the issued share capital of UMLand) or for that matter UMLand activities are not synergistic or form part of the principal and core business of the Group in trading of edible food and consumer products. The Proposed Disposal is pursuant to the Offer from the Offeror and is not in the ordinary course of business. The Group s investment in UMLand is classified as long-term quoted equity investment and trading stock for 14,250,000 and 425,000 UMLand Shares respectively. It is considered as non-core assets of the Group. Income generated or derived from the Group s investment in UMLand is the net dividend income of approximately S$376,000 for 12M2012. As UMLand Shares are non-core but dividend generating asset of the Group, acceptance of the Offer does not affect the nature of the Company s main business, i.e. trading of edible food and consumer products. After the Proposed Disposal, the Group will not be subject to requirements to mark to market its investment in UMLand Shares. As the Group intends to utilise the proceeds from the acceptance of the Offer for potential investments as and when such opportunities arise and working capital requirements of the Group in its principal activities in the trading of edible food and consumer products. The principal activities of the Group will not change subsequent to acceptance of the Offer. c) Strict timeline applicable to the takeover offer It is noted that the Closing Date for the Offer was at 5.00 p.m. on 23 August 2012 and subsequently the Offeror has extended the Closing Date to 5.00 p.m. on 6 September In view of the strict timeline applicable to a takeover offer imposed under the Malaysian Code on Take-Overs and Mergers, the Company may not have sufficient time to first seek the approval of its shareholders ( Shareholders ) before it proceeds with the acceptance of the Offer or the Proposed Disposal. 5

6 d) The Company may end up holding an investment in unquoted shares As highlighted in section 1, the Offer is an unconditional take-over offer. In addition, as stated in the Offer Document and the Circular, the Offeror does not intend to maintain the listing status of UMLand on Bursa Securities. As such, the Offeror does not intend to take any steps to address any shortfall in the public shareholding spread of UMLand, irrespective of the level of acceptance of the Offer as the Offeror and its parties acting in concert have already collectively held 77.52% of the issued shares of UMLand. We note from the Circular that the independent adviser has stated that upon the close of the Offer, the Offeror will within 3 months from the Closing Date, procure UMLand to take the requisite steps for withdrawal of its listing status from the Official List of Bursa Securities. Withdrawal from Bursa Securities As such upon the close of the Offer, the Offeror will within three (3) months from the Closing Date, procure UMLand to take the requisite steps to withdraw its listing status from the Official List of the Bursa Securities in accordance with Chapter 16 of the its Listing Requirement. The suspension of trading and the delisting of UMLand is not an automatic process and the listed issuer is required to, inter-alia convene a general meeting of its shareholders with the resolution for withdrawal from listing to be approved by a majority in number representing 75% in value of shareholders present and voting and provided that such shareholders who object to the withdrawal is not more than 10% in value. There is also a requirement for a reasonable exit offer with the appointment of an independent adviser to advise and make recommendations for the consideration of the shareholders as well as the fairness and reasonableness of the exit offer. The independent adviser (Affin Investment Bank Berhad) had stated in their advice that in the event that UMLand faces a delisting prospect as a result of the Offeror s stated intention for withdrawal from listing, shareholders who have not accepted the Offer earlier will have the opportunity to be given an exit offer (which would not be higher than the Offer Price if undertaken within 6 months of the Offer). Compulsory acquisition The Offeror intends to invoke the right of compulsory acquisition pursuant to section 222 of the Malaysian Capital Market and Service Act, 2007 ( CMSA ) when and in the event they are eligible to do so. There is as at the date of the Circular however no certainty that the requisite thresholds for level of acceptances will be met for the invocation of the rights for compulsory acquisition. In view of the Offeror s intention, the Company wishes to highlight that in the event that (1) the Offeror does not receive the sufficient level of acceptances to invoke the right of compulsory acquisition (Section 222(1) of the CMSA provides that where a take-over offer by an offeror to acquire all the shares in any particular class in an offeree has, within four months after the making of the take-over offer, been accepted by the holders of not less than nine-tenths (9/10) in the nominal value of those shares or of the shares of that class (excluding shares already held at the date of the take-over offer by the offeror and parties acting in concert), the offeror may, at any time within two months from the date the nine-tenths (9/10) in the nominal value of those shares have been achieved, give notice in the manner prescribed under the Code to any dissenting shareholder that it desires to acquire his shares together with a copy of a statutory declaration by the offeror that the conditions for the giving of the notice are satisfied); and (2) the Company does not accept the Offer on timely basis, there is a risk that the Company may end up holding an investment in unquoted shares of UMLand. We note from the Circular that holders of UMLand Shares (the Holders ) who choose not to accept the Offer may end up holding suspended or delisted securities of UMLand Shares unless: 1. The Holder is given an Exit Offer should UMLand convene a general meeting to obtain shareholders approval to withdraw its listing from the Official List of Bursa Securities (in situation where the Offeror and parties acting in concert with it hold more than 75% but less than 90% of the Issued Shares); 2. The dissenting Holders are able to compel the Offeror to acquire their UMLand Shares under 223 of the CMSA (in situation where the Offeror and parties acting in concert with it hold more than 90% of the Issued Shares); or 6

7 3. The Offeror can and will exercise its right to compulsorily acquire UMLand Shares held by the dissenting Holders under Section 222 of the CMSA, subject to Section 224 of the CMSA (in situation where the Offeror and parties acting in concert with it hold more than 97.75% of the Issued Shares). In view of the Offer, the interest of the Offeror and parties acting in concert with it in UMLand of approximately 77.52% (without taking into account acceptances subsequent to the posting of the documents for the Offer), advice of the independent adviser and the non-interested directors of UMLand for acceptance of the Offer as well as the fact that there is as at the date of this letter no alternative offers from parties other than the Offeror, and the time value of money as well as certainty (not to mention the unanimous views of the Directors to accept the Offer and dispose of the Group s interest in UMLand Shares), acceptance of the Offer is the preferred mode for the disposal of the Group s interest in UMLand with certainty. e) Limited possibility to sell in the market As mentioned in section 1, the Company s investment in UMLand is classified as quoted equity investment trading stock financial assets. In the event that the Company disposed its investment in UMLand in the open market, the Company needs to make announcement in compliance with Rule 704(18) of the Mainboard Listing Manual. The Company wishes to highlight that there is limited possibility to dispose its investment in UMLand at the price which is comparable or higher than the Offer Price. The independent adviser for the Offer has recommended the independent shareholders to accept the Offer and stated that the UMLand shares have not closed at or above the Offer Price for the past five years up to the date preceding the announcement of the Offer ( UMLand Announcement ), being 11 July Subsequent to the UMLand Announcement, the UMLand shares have been trading closer to the Offer Price. Any movement in the share price is currently limited by the Offer Price during the Offer period. In addition, the independent adviser has stated in its report that the UMLand shares have been trading at an average monthly trading volume of 881,758 shares, representing approximately 1.30% of the free-float for the past 12 months prior to the date of the Offer. This suggests that the trading of the UMLand shares is relatively low and can be considered illiquid. There is no certainty that the Group can dispose of its shares during the Offer at or above the Offer Price. In the event that the market liquidity deteriorates after the Offer, this may impact the ability of the holders of the UMLand shares to realise their investment in the open market, particularly for the holders who intend to dispose a sizeable number of UMLand shares. In view of the above, the Directors are of the view that there is a limited possibility to dispose the Group s entire shareholding in UMLand shares (14,250,000 Offered Shares) in the open market at or above the Offer Price both during the offer or thereafter. Thus, the Proposed Disposal (via the Offer) is considered in the best interest of the Company. As mentioned earlier, the Group has accepted the Offer on 15 August 2012 in relation to the 425,000 UMLand Shares registered under UOB KH. f) Undertaking from the Substantial Shareholder(s) The Company has procured undertakings from the following Shareholders of the Company, to vote in favour of the Proposed Disposal in the event that an extraordinary general meeting is required for shareholders approval: Shareholdings Name of Shareholders Number of Shares % Cepheus Corporation Pte Ltd 5,152, Kah Hong Pte Ltd 4,670, Khong Guan Development Pte Ltd 1,641, Inter-Ocean Shipping & Trading Pte Ltd 1,558, Golden River International Pte Ltd 1,106, ,128,

8 Each of the above Shareholders ( Undertaking Shareholders ) has represented separately that they are not related to the Offeror and are therefore entitled to vote in the event that a general meeting is convened for the Proposed Disposal. The Undertaking Shareholders have submitted letters of undertaking to vote in favour of the Proposed Disposal and are likewise supportive of the Waiver. The Proposed Disposal, if subject to Shareholders approval will require a simple majority for approval. It thus appears, by virtue of the Undertakings from the Undertaking Shareholders, that the requisite approval will be obtained. g) Gain from the Proposed Disposal The gain from the Proposed Disposal is estimated at approximately S$11.92 million including the transfer of S$7.06 million from the fair value reserve as at 30 April 2012 to the profit after tax attributable to Shareholders. UMLand Shares had in the last 2 years never traded above the Offer Price of RM2.50. The highest traded value before the announcement of the Offer was RM2.37 on 11 July Hence, the Offer will allow the Group to unlock value for all the shareholders by disposing the UMLand Shares at a hefty premium to its original cost. h) Investors Expectation As the revenue contribution from its 2 principal business segments will not change or be affected significantly by the Proposed Disposal, the expectations of investors in terms of risk profile will not change accordingly. i) The Proposed Disposal does not constitute an interested person transaction Save for their interest in the Company, none of the Directors or controlling shareholders or Undertaking Shareholders of the Company has any interest, direct or indirect, in the Offer or the Proposed Disposal. In addition, none of the Directors or Undertaking Shareholders or controlling shareholders of the Company has any interest, direct or indirect, with the Offeror and its parties acting in concert. 6. DISCLOSURE IN COMPLIANCE WITH RULE 704(18) In accordance with Rule 704(18), the Group will dispose its entire interest in quoted equities in Offered Shares with a fair value of S$9.291 million as at 30 April This is equivalent to approximately 15.21% of the latest audited consolidated Group s NTA of S$ million as at 30 April Information in respect of such disposal is as follows: Before Proposed Disposal After Proposed Disposal S$ S$ 1 Aggregate cost of investment as at 30 April 2012 (fair net book value) 2 Aggregate cost of investment as a percentage of NTA as at 30 April Market value as at date of this Announcement million Nil 15.21% Nil million Nil 4 Amount of any provision for diminution in value of investments Nil Nil Note: 1. Aggregate cost of investment refers to the fair value of the 14,250,000 Offered Shares as stated in the financial statements as at 30 April

9 2. The initial cost of the investment for the 14,250,000 Offered Shares is RM2.231 million, which is approximately 3.65% of the Group s latest audited consolidated NTA. 3. The market value is based on UMLand Share price of RM2.49 on the day preceding the date of this announcement and 14,250,000 UMLand Offered Shares (excluding the acceptance of 425,000 UMLand Shares held under UOB KH). For illustrative purposes, the market value would be S$14.25 million if based on the Offer Price of RM2.50 (Exchange rate of RM2.5 = S$1). 7. FINANCIAL EFFECTS For illustrative purposes only, the following is an analysis and illustration of the financial effects of the Proposed Disposal of the 14,250,000 Offered Shares on the consolidated net tangible assets ("NTA") for each ordinary share ( Share ) of the Company, based on the Group s unaudited consolidated statement of financial position as at 30 April 2012, and the assumptions as summarized herein and in the accompanying notes. Consolidated NTA attributable to Shareholders (S$ 000) Before the Proposed Disposal After the Proposed Disposal (1) 62,181 67,040 Number of Shares (2) 25,812,520 25,812,520 Consolidated NTA per Share (3) (cents) Notes: (1) Assuming that the Proposed Disposal was completed as at 30 April Figures are computed based on an exchange rate of RM2.5 = S$1. (2) No change in the number of Shares issued. (3) Consolidated NTA per Share is based on the NTA attributable to shareholders and the number of shares issued as described above. In the event that the transaction had been effected as at 30 April 2012, consolidated NTA attributed to Shareholders will increase by approximately S$4.86 million due to the excess of the net proceeds from the Proposed Disposal (assuming an estimated expense for the Proposed Disposal of S$100,000) over the carrying book value of the Offered Shares of S$9.29 million as recorded in the financial statement as at 30 April (4) The Group has changed its financial year end to 31 July 2012 from 30 April Accordingly the next financial statements of the Group are being prepared for the 15 months from 1 May 2011 to 31 July For illustrative purposes only, the following is an analysis and illustration of the financial effects of the Proposed Disposal of the 14,250,000 Offered Shares on the earnings per Share ( EPS ), based on the Group s unaudited consolidated profit after income tax attributable to Shareholders for the 12 months ended 30 April 2012 and the assumptions as summarized herein and in the accompanying notes. Profit after tax attributable to Shareholders (S$ 000) Before the Proposed Disposal After the Proposed Disposal (1) 1,939 13,482 Number of Shares (2) 25,812,520 25,812,520 EPS (3) (cents) Notes: (1) Assuming that the Proposed Disposal was completed as at the beginning of 12M2012 and that there was no dividend return generated from the assets to be disposed. In the event the transaction had been effected as at the beginning of 12M2012, the profit after tax attributable to Shareholders will increase by approximately S$11.54 million due to the gain of S$11.92 million arising from the Proposed Disposal partially offset by the reversal of the net dividends received of approximately S$376,000. Figures are computed based on an exchange rate of RM2.5 = S$1. (2) No change in the number of shares issued. (3) EPS is based on the profit after taxation attributable to shareholders and the number of shares issued as described above. 9

10 (4) The Group has changed its financial year end to 31 July 2012 from 30 April Accordingly the next financial statements of the Group are being prepared for the 15 months from 1 May 2011 to 31 July As shown in the above table, the Proposed Disposal will result in an improvement of both the Group s NTA per Share and earnings per Share. The financial effects presented above are not intended to, and do not, reflect a projection of the actual future financial performance or position of the Group after completion of the Proposed Disposal and are computed based on the assumptions as summarized above. 8. GAIN ON THE PROPOSED DISPOSAL Assuming there are no adjustments to the Offer Price, the net proceeds from the Proposed Disposal after deducting transaction expenses (including professional fees, regulatory fees and other related expenses) is approximately S$14.15 million. The net gain on disposal to the Group under the Proposed Disposal is approximately S$11.92 million (including the transfer of S$7.06 million from the fair value reserve as at 30 April 2012 to the profit after tax attributable to Shareholders). Based on information available to the Directors and barring unforeseen circumstances as well as the economic conditions (both general and industry specific) and financial performance for its core businesses in trading of edible food and consumer products, the Proposed Disposal is expected to have a material impact on the net tangible assets per Share and the earnings per Share of the Group and would result in a positive contribution to the financial result of the Group for the current financial year ending 31 July DIRECTORS AND CONTROLLING SHAREHOLERS INTERESTS IN THE PROPOSED DISPOSAL Save for their interest in the Company, none of the Directors or controlling shareholders or Undertaking Shareholders of the Company has any interest, direct or indirect, in the Offer or the Proposed Disposal. In addition, none of the Directors or Undertaking Shareholders or controlling shareholders of the Company has any interest, direct or indirect, with the Offeror and its parties acting in concert. 10. DETAILS OF ANY SERVICE CONTRACTS There are no service contracts arising from the Proposed Disposal. 11. DIRECTORS OPINION The Directors, having considered and reviewed, inter-alia, the terms of the Proposed Disposal, the rationale for and the financial effects of the Proposed Disposal as well as the advice of UMLand s independent adviser, are of the opinion that the Proposed Disposal is in the interest of the Company and its Shareholders. 12. DIRECTORS RESPONSIBILITY STATEMENT The Directors (including those who have been delegated supervision of this announcement) have collectively and individually accepted full responsibility for the accuracy of the information given in this announcement and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the Proposed Disposal, the issuer and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this announcement misleading. Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from SJSB, the sole responsibility of the directors of the Company has been to ensure through reasonable enquiries that such information has been accurately and correctly extracted from such sources or, as the case may be, accurately reflected or reproduced in this Announcement. 10

11 13. ACCEPTANCE OF THE OFFER As and when the Company tenders the UMLand Sale Shares in acceptance of the Offer, it will make the appropriate announcement(s) in compliance with the relevant provisions under the Mainboard Listing Manual. 14. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company at 2 MacTaggart Road (Level 3), Singapore during normal business hours for three months from the date of this Announcement: (a) A copy of the Unconditional Take-Over Offer document dated 2 August 2012; (b) A copy of the Independent Advice Circular To The Holders of The Offer Shares dated 13 August 2012; (c) Letters of Undertaking from the Undertaking Shareholders; (d) Notification dated 17 August 2012 from UMLand on extending Closing Date. Yours faithfully For and on behalf of the Board of Directors KOE ENG CHUAN Company Secretary 24 August