Details. Title No./ Lot No. : Lot No. 1749, Mukim Tangga Batu, Daerah Melaka Tengah, Negeri Melaka held under PN 16988

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1 SEACERA GROUP BERHAD ( SGB OR COMPANY ) PROPOSED ACQUISITION OF LAND KNOWN AS LOT 1749, MUKIM TANGGA BATU, DAERAH MELAKA TENGAH, NEGERI MELAKA AND HELD UNDER PN TOGETHER WITH THE BUILDING ERECTED THEREON BY SEACERA CERAMICS SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF SGB, FROM QM SPORTS SDN BHD FOR A TOTAL PURCHASE CONSIDERATION OF RM16,900,000 ( PROPOSED WAREHOUSE ACQUISITION ) This announcement is dated 17 May INTRODUCTION On behalf of the Board of Directors of SGB ( Board ), AmInvestment Bank Berhad ( AmInvestment Bank ) is pleased to announce that Seacera Ceramics Sdn. Bhd. ( SCSB ), a wholly-owned subsidiary of SGB, had on 17 May 2017 entered into a conditional sale and purchase agreement ( SPA ) with QM Sports Sdn. Bhd. ( QMS or Vendor ) to acquire the land and the building erected on the land known as Lot 1749, Mukim Tangga Batu, Daerah Melaka Tengah, Negeri Melaka and held under PN ( Property ) for a total purchase consideration of RM16.90 million ( Purchase Consideration ) to be satisfied via the issuance of 8,857,143 new ordinary shares in SGB ( SGB Shares or Shares ) at an issue price of RM1.40 amounting to approximately RM12.40 million in aggregate ( Consideration Shares ) and cash payment of RM4.50 million ( Cash Consideration ) based on the terms and conditions of the SPA. 2. PROPOSED WAREHOUSE ACQUISITION 2.1 Information on the Property Details Title No./ Lot No. : Lot No. 1749, Mukim Tangga Batu, Daerah Melaka Tengah, Negeri Melaka held under PN Registered and beneficial owner : QMS Land area : 15,738 square meters (169,402 square feet) Existing use : Warehouse Existing build-up area of buildings located on the land : 9,663 square meters (104,014 square feet) Age of building : 27 years Category of land use : Perusahaan Terms of tenure : 99 years leasehold expiring on 14 September 2074 Valuation : RM16.90 million, valued by IM Global Property Consultants Sdn Bhd Date of Valuation : 28 September

2 Details Valuation Methodology : Market Value (Comparison and Cost Method) Net book value based on audited financial statements of QMS for financial year ended 31 December 2015 : RM 5.86 million Restriction in interest : The land cannot be transferred, pledged, or leased without the consent of the State Authorities Encumbrances : The Property is charged to CIMB BANK BERHAD on 16 November Salient terms of the SPA Purchase Consideration The Proposed Warehouse Acquisition involves an acquisition of the Property by SCSB from QMS for a purchase consideration of RM16.90 million which will be satisfied in the following manner:- Mode and timing of settlement Amount (RM 000) Prior to execution of the SPA:- Deposit cash payment 80 Upon execution of the SPA:- Balance deposit cash payment (The entire RM450,000 deposit sum will be collectively referred to as the Deposit Sum ) Cash payment to SCSB s solicitor as retention sum to be paid to the relevant authorities Upon Completion:- Cash payment 3,543 Issuance of 8,857,143 Consideration Shares at RM1.40 ( Issue Price ) 12,400 (Collectively referred to as the Balance Sum ) Total 16,900 On the basis that the exercise price for the Warrants C to be issued pursuant to the Proposed Bonus Issue of Warrants (SGB announcement dated 2 May 2017) is not lower than 90% of the five (5)- day volume weighted average market price ( VWAMP ) of SGB s Shares prior to the price fixing date, the Issue Price and number of Consideration Shares shall remain unchanged. 2

3 In the event the exercise price for the Warrants C is lower than 90% of the five (5)-day VWAMP of SGB s Shares up to and including the market day immediately preceding the announcement of the exercise price of the Warrants C, the Issue Price and the number of Consideration Shares shall be adjusted as follows:- a) Adjustment to issue price of Consideration Shares Tx = 90% x (P x Y) + (X x Ep) Y + X Tx : Adjusted issue price of the Consideration Shares P : Closing price of SGB s shares on the market day immediately preceding the announcement of the exercise price of the Warrants C X : Number of Warrants C Y : Number of SGB s shares in issue on the market day immediately preceding the announcement of the exercise price of the Warrants C Ep : Exercise price of the Warrants C b) Adjustment to number of Consideration Shares Adjusted numbers of Shares Consideration = RM12,400,000 Tx (as defined in (a) above) There shall be no change to the issue price of RM1.40 and the number of Consideration Shares of 8,857,143 if the Consideration Shares are issued and allotted prior to the entitlement date for the Warrants C Conditions Precedent The SPA is conditional upon and subject to the fulfilment of the following conditions precedent within four (4) months from the date of the SPA:- QMS obtaining written consent of the State Authorities for the sale and transfer of the Property by QMS to SCSB ( State Consent ); SCSB obtaining the approval from its shareholders and/or SGB s shareholders for the purchase of the Property and the allotment and issuance of the Consideration Shares in favour of QMS; and SCSB obtaining approval from relevant authorities for the issuance and allotment of Consideration Shares to QMS (if applicable). (Collectively referred to as the Conditions Precedent ) The SPA shall become unconditional on the date the last of the Conditions Precedent is satisfied ( Unconditional Date). 3

4 2.2.3 Event of Default by SCSB In the event that SCSB commits a material breach of any of its obligations including failing to pay the Balance Sum or any part thereof or failing to satisfy the Consideration Shares within the time stipulated in the SPA, representations and warranties under the SPA and SCSB shall continue to fail to remedy such breach within fourteen (14) days of a written notice served on SCSB to do so, QMS shall be entitled to terminate the SPA and forfeit the Deposit Sum as agreed liquidated damages. Subject to the following conditions, all monies paid by SCSB towards account of the Purchase Consideration shall be refunded by QMS within fourteen (14) days from the date of termination, failing which an interest of eight percent (8%) per annum calculated on daily basis ( Late Payment Interest ) shall be imposed on QMS from the day following the expiry of fourteen (14) days from the date of notice up to the date of actual payment:- withdrawal of all caveats lodged by or on behalf of SCSB and or SCSB s financier; receipt of all the relevant documents of QMS in relation to the said Property that may have been forwarded to SCSB s solicitors or financiers; and redelivery of vacant possession of the Property to QMS if the Property had been delivered to SCSB prior to the termination. Upon refund of all monies, the SPA shall become null and void Default by the Vendor In the event that QMS commits a material breach of any of its obligations, representations and warranties under the SPA and QMS shall continue to fail to remedy such breach within the stipulated timeframe, SCSB shall be entitled to:- remedy of specific performance against QMS and all reliefs flowing thereon and all costs and expenses incurred by SCSB shall be borne and paid by QMS; or terminate the SPA by notice in writing to QMS and/or QMS s solicitors whereupon:- (a) (b) (c) QMS and/or QMS s solicitors, as the case may be, shall refund or cause to be refunded all monies paid by SCSB towards account of the Purchase Consideration, free of interest within ten (10) days from the date of notice; QMS shall pay to SCSB a further sum equivalent to Deposit Sum as agreed liquidated damages within ten (10) days from the date of notice, failing which Late Payment Interest shall be imposed on QMS from the day following the expiry of ten (10) days from the date of notice up to the date of actual payment of such part as remains unpaid; and thereafter the SPA shall be null and void and be of no further effect and neither party shall have any right or claim against the other save in respect of any antecedent breach. 4

5 2.2.5 Completion The Balance Sum in cash shall be paid within three (3) months from the Unconditional Date or the date of the SPA, whichever is later ( Completion Period ). If SCSB is unable to pay the Balance Sum within the Completion Period, QMS shall grant to SCSB an extension of one (1) month ( Extended Completion Period ) to settle the Balance Sum subject to SCSB paying to QMS Late Payment Interest on the Balance Sum or any outstanding thereof calculated on a daily basis from the commencement of the Extended Completion Period until the date of settlement of the Balance Sum. 2.3 Basis and justification of arriving at the Purchase Consideration The Purchase Consideration is based on the market value of RM16.90 million ascribed by IM Global Property Consultants Sdn. Bhd., an independent registered valuer ( Independent Valuer ), appointed for the Proposed Warehouse Acquisition. Based on the valuation report dated 20 March 2017, in arriving at the market value of the Property, the Independent Valuer has adopted a combination of the Comparison and Cost Method of Valuation. The RM1.40 Issue Price for the Consideration Shares is arrived at after taking into consideration the historical market prices of SGB Shares over the last 6 months. The one (1)-month, three (3)-month and six (6)-month VWAMP of SGB Shares up to and including 11 May 2017, are RM1.27, RM1.22 and RM1.15 respectively. The RM1.40 Issue Price represents a discount of 9.68% to the five (5)-day VWAMP up to and including 11 May 2017 (being the latest practicable date prior to the signing of the SPA) of RM1.55. (Source: Bloomberg) 2.4 Ranking of the Consideration Shares The Consideration Shares shall, upon allotment and issuance, rank pari passu in all respects with the then existing SGB Shares save and except that they shall not be entitled to any dividends, rights, allotments and/ or other distributions, the entitlement date of which is prior to the date of the allotment of the Consideration Shares. 2.5 Listing of and Quotations for 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 Main Market of Bursa Securities. 2.6 Liabilities to be assumed by SGB Group SGB and its subsidiaries ( SGB Group ) will not be assuming any liabilities (including contingent liabilities and guarantees) pursuant to the Proposed Warehouse Acquisition. 5

6 2.7 Source of Funding The Cash Consideration will be funded via a combination of bank borrowings and internally generated funds, the proportion of which will be determined at a later date. The balance of the Purchase Consideration will be funded by the issuance of the Consideration Shares. 2.8 Estimated Financial Commitments Save for the Purchase Consideration, SGB does not expect to incur any material financial commitments in connection to the Proposed Warehouse Acquisition. 2.9 Information on the Vendor QMS was incorporated in Malaysia on 22 October 2002 as a private company limited company by shares. The principal activity of QMS is trading in sportswear and apparels. As at 17 May 2017, the directors of QMS are Datuk Liow Yit Lee and Goh Tin Guat. The shareholders of QMS and their respective shareholdings in QMS are set out as follows: Shareholder shares held % of shareholding Datuk Liow Yit Lee 1,455, Goh Tin Guat 245, Total 1,700, As at 17 May 2017, the issued share capital of QMS is RM1.7 million comprising 1,700,000 ordinary shares in QMS. 3. RATIONALE FOR THE PROPOSED WAREHOUSE ACQUISITION At present, SGB Group s manufacturing and warehousing facility are located in Kawasan Perindustrian Selayang, Batu Caves, Selangor. SGB is currently constructing a new manufacturing and warehousing facility for its tiles division in Kamunting, Perak ( New Facility ) which would increase SGB Group s current manufacturing capacity from 6,000 square meters to up to 12,000 square meters per day. The New Facility is expected to be completed in the third quarter of The Group intends to also use this Perak-based facility as a distribution hub to the northern region of Peninsular Malaysia. The Property is to serve as the Group s warehousing and distribution hub for the southern region of Peninsular Malaysia. 6

7 4. RISK FACTORS IN RELATION TO THE PROPOSED WAREHOUSE ACQUISITION The Proposed Warehouse Acquisition is subject to inherent risks associated with property investment. These may include, amongst others, general economic downturn in the global and Malaysian economy. Further, the value of the Property may either be enhanced or diminished depending on factors such as the development and rental yields within the vicinity of the Property, as well as the local and global market conditions. In view of this, the SGB Group s investment in the Property may be affected by the relatively illiquid nature of real estate investments whereby the SGB Group may be unable to sell the Property on short notice given the potential change in value of the Property or to meet cash flow requirements of the SGB Group. [The rest of this page has been intentionally left blank] 7

8 5. FINANCIAL EFFECTS OF THE PROPOSED WAREHOUSE ACQUISITION The financial effects in Section 6 of this announcement have been prepared after taking into consideration the following corporate proposals which, if completed, would increase SGB s issued share capital:- On 16 November 2016, SGB announced a proposed acquisition by Seacera Properties Sdn Bhd, a wholly-owned subsidiary of SGB of 1,500,000 ordinary shares representing the entire equity interest in Duta Nilai Holdings Sdn. Bhd. for a total consideration of RM165,100,000 to be satisfied partly via issuance of 90,000,000 new SGB Shares and the balance via cash consideration of RM75,100,000 ( Proposed Duta Nilai Acquisition ); On 21 April 2017, SGB announced a proposed shares issuance of new SGB Shares of up to 79,832,236 SGB Shares ( Subscription Shares ), representing 30% of the total number of issued share capital of SGB ( Proposed Shares Issuance ); and On 2 May 2017, SGB proposes to undertake a proposed bonus issue of new warrants ( Warrant(s) C ) on the basis of two (2) Warrants C for every five (5) existing SGB Shares held by the entitled shareholders on an entitlement date to be determined and announced later ( Entitlement Date ) ( Proposed Bonus Issue of Warrants ). Please refer to SGB s announcements dated 16 November 2016, 21 April 2017 and 2 May 2017, respectively for further information. The Proposed Duta Nilai Acquisition, Proposed Shares Issuance, Proposed Bonus Issue of Warrants and the Proposed Warehouse Acquisition will be collectively referred to as the Proposals. For illustration purposes, the Maximum Scenario (as defined below) will incorporate the joint effects of the Proposals. As at 11 May 2017,, it was announced that SGB has in issue 12,321,469 outstanding SGB warrants A 2012/2017, 17,684,283 outstanding SGB warrants B 2014/2019 (collectively referred to as the Existing Warrants ) and SGB had granted 7,525,000 employees share options scheme options ( ESOS Options ). The financial effects illustrated below are based on the assumption that 8,857,143 Consideration Shares are issued with regards to the Proposed Warehouse Acquisition, and scenarios set out below:- Minimum Scenario: Assuming that none of the Existing Warrants are exercised and no new SGB Shares will be issued under the Proposed Shares Issuance and the Proposed Duta Nilai Acquisition. Maximum Scenario: Assuming 30,005,752 Existing Warrants and 7,525,000 ESOS Options are fully exercised; 79,832,236 new SGB Shares have been issued at RM1.00 each pursuant to the Proposed Share Issuance; 90,000,000 new SGB Shares have been issued at RM1.00 each pursuant to the Proposed Duta Nilai Acquisition, prior to the Entitlement Date. The Board does not intend to sell the 306,000 SGB Shares held as treasury shares nor does the Board intend to have SGB purchase SGB shares during the implementation period of the Proposed Warehouse Acquisition. In addition, if the Board grants any additional ESOS Options prior to the Entitlement Date, such ESOS Options should only be exercisable after the Entitlement Date. 8

9 5.1 Issued share capital The proforma effects of the Proposed Warehouse Acquisition on the issued share capital of SGB are set out below:- Minimum Scenario Maximum Scenario Shares Share Capital Shares Share Capital ( 000) (RM 000) ( 000) (RM 000) Issued share capital as at 11 May 236, , , , Exercise of Existing Warrants ,006 30,006 Exercise of ESOS Options - - 7,525 11,288 Enlarged share capital after 236, , , ,396 exercise of Existing Warrants Issuance of SGB Shares pursuant to:- (1) Proposed Duta Nilai Acquisition ,000 90,000 (2) Proposed Shares Issuance ,832 79,832 (3) Proposed Warehouse Acquisition 8,857 12,400 8,857 12,400 Enlarged share capital after exercise of Existing Warrants and 244, , , ,628 completion of the Proposals SGB Shares to be issued assuming full exercise of Warrants C , ,249 Enlarged share capital after full exercise of Warrants C 244, , , ,877 Notes:- Assuming all of the new SGB Shares pursuant to the Proposed Shares Issuance are subscribed at RM1.00 per SGB Share. After issuance of 8.8 million Consideration Shares at an issue price of RM1.40 per SGB Share to QMS, as settlement for the RM12.4 million portion of the Purchase Consideration pursuant to the Proposed Warehouse Acquisition. Assuming the following:- (a) (b) (c) The consideration shares pursuant to the Proposed Duta Nilai Acquisition, Subscription Shares and the Consideration Shares are all issued prior to the Entitlement Date and all Entitled Shareholders fully exercise their Warrants C; computation for the number of Warrants C is based on the enlarged number of SGB Shares of 452,015,832 (excluding 306,000 treasury shares); and all of the Warrants C are exercised at the assumed exercise price of RM1.55 being the five (5)-day VWAMP up to and including 11 May

10 5.2 Substantial shareholders shareholding The effects of the Proposed Warehouse Acquisition on the major/substantial shareholders' of the Company based on the Register of Substantial Shareholders as at 11 May 2017 are set out below:- Minimum scenario Existing as at 11 May 2017 After Proposed Warehouse Acquisition (iv) Direct Indirect Direct Indirect ( 000) ( 000) ( 000) ( 000) Ybhg. Datuk Mansor Bin Masikon , , Encik Zulkarnin Bin Ariffin 44, , , , Noble Summer Sdn Bhd 37, , Mokhtar Bin Othman , , Muhamad Azmi Bin Othman , , Nuro Dagangan Sdn Bhd 13, , Notes:- Deemed interest by virtue of Section 8 of the Companies Act 2016 ( Act ) pursuant to his substantial interest in Noble Summer Sdn. Bhd. (iv) Deemed interest by virtue of Section 8 of the Act pursuant to his substantial interest in Synergy Platform Sdn. Bhd. Deemed interest by virtue of Section 8 of the Act pursuant to his substantial interest in Nuro Dagangan Sdn. Bhd. After issuance of 8.8 million Consideration Shares at an issue price of RM1.40 per SGB Share to QMS, as settlement for the RM12.4 million portion of the Purchase Consideration pursuant to the Proposed Warehouse Acquisition. 10

11 Maximum scenario Existing as at 11 May 2017 Assuming full exercise of Existing Warrants and ESOS Options (iv) After (I) and Proposed Duta Nilai Acquisition (v) Direct Indirect Direct Indirect Direct Indirect ( 000) ( 000) ( 000) ( 000) ( 000) ( 000) Datuk Ismail bin Othman , Ybhg. Datuk Mansor Bin Masikon , , , Encik Zulkarnin Bin Ariffin 44, , , , , , Noble Summer Sdn Bhd 37, , , Mokhtar Bin Othman , , , Muhamad Azmi Bin Othman , , , Nuro Dagangan Sdn Bhd 13, , , (III) (IV) (V) After (II) and the Proposed Shares Issuance (vi) After (III) and the Proposed Warehouse Acquisition (vii) After (IV) and the Proposed Bonus Issue of Warrants Direct Indirect Direct Indirect Direct Indirect ( 000) ( 000) ( 000) ( 000) ( 000) ( 000) Datuk Ismail bin Othman 90, , , Ybhg. Datuk Mansor Bin Masikon , , , Encik Zulkarnin Bin Ariffin 45, , , , , , Noble Summer Sdn Bhd 37, , , Mokhtar Bin Othman , , , Muhamad Azmi Bin Othman , , , Nuro Dagangan Sdn Bhd 13, , , (I) (II) 11

12 (VI) After (V) and full exercise of Warrants C (viii) Direct Indirect ( 000) ( 000) Datuk Ismail bin Othman 126, Ybhg. Datuk Mansor Bin Masikon , Encik Zulkarnin Bin Ariffin 63, , Noble Summer Sdn Bhd 52, Mokhtar Bin Othman , Muhamad Azmi Bin Othman , Nuro Dagangan Sdn Bhd 18, Notes:- Deemed interest by virtue of Section 8 of the Act pursuant to his substantial interest in Noble Summer Sdn. Bhd. (iv) Deemed interest by virtue of Section 8 of the Act pursuant to his substantial interest in Synergy Platform Sdn. Bhd. Deemed interest by virtue of Section 8 of the Act pursuant to his substantial interest in Nuro Dagangan Sdn. Bhd. After issuance of:- (a) (b) million new SGB Shares pursuant to the exercise of Existing Warrants at the exercise price of RM1.00 each; and 1.0 million and 0.5 million new SGB Shares to Ybhg. Datuk Mansor Bin Masikon and Encik Zulkarnin Bin Ariffin respectively at the exercise price of RM1.35 each pursuant to the exercise of their ESOS Options. (v) (vi) (vii) (viii) After issuance of 90.0 million SGB Shares at RM1.00 per SGB Share to Datuk Ismail bin Othman as consideration shares pursuant to the Proposed Duta Nilai Acquisition. After issuance of 79.8 million SGB Shares pursuant to the Proposed Shares Issuance are subscribed at RM1.00 per SGB Share as per the issue price in the subscription agreement. After issuance of 8.8 million Consideration Shares at an issue price of RM1.40 per SGB Share to QMS, as settlement for the RM12.4 million portion of the Purchase Consideration pursuant to the Proposed Warehouse Acquisition. After assuming the following:- (a) (b) all Warrants C are exercised; and computation for the number of Warrants C is based on the enlarged number of SGB Shares of 452,015,832 (excluding 306,000 treasury shares). 12

13 5.3 Net Assets ( NA ) and gearing For illustrative purposes, the proforma effects of the Proposed Warehouse Acquisition on the audited consolidated NA, NA per SGB Share and gearing of SGB Group are set out below: Minimum scenario (I) (II) Audited as at 31 December 2016 After subsequent events After (l) and the Proposed Warehouse Acquisition RM 000 RM 000 RM 000 Share capital 235, , ,502 Reserves 325, , ,055 Treasury share (181) (181) (181) NA 560, , ,376 Shares ( 000) (net of 306,000 treasury shares) 234, , ,653 NA per Share (RM) Total borrowings (RM 000) 53,730 53,730 53,730 Gearing (times) Notes:- Subsequent to 31 December 2016, SGB had issued 842,622 new SGB Shares after conversion of 176,232 SGB warrants A 2012/2017 and 648,390 SGB warrants B 2014/2019. After issuance of 8.8 million Consideration Shares at an issue price of RM1.40 per SGB Share to QMS, as settlement for the RM12.4 million portion of the Purchase Consideration pursuant to the Proposed Warehouse Acquisition. After deducting estimated expenses of RM0.1 million in respect of the Proposed Warehouse Acquisition. 13

14 Maximum scenario Audited as at 31 December 2016 (I) (II) (III) After (l) and full exercise After (II) and the of Existing Warrants and Proposed Duta Nilai After subsequent events ESOS Options Acquisition RM 000 RM 000 RM 000 RM 000 Share capital 235, , , ,396 Reserves 325, , , ,026 Treasury share (181) (181) (181) (181) NA 560, , , ,241 Shares ( 000) (net of 306,000 treasury shares) 234, , , ,327 NA per Share (RM) Total borrowings (RM 000) 53,730 53,730 53,730 53,730 Gearing (times) (IV) (V) (VI) (VII) After (IV) and the After (V) and the Proposed Warehouse Proposed Bonus Issue of Acquisition Warrants After (III) and the Proposed Shares Issuance After (VI) and full exercise of Warrants C (x) RM 000 RM 000 RM 000 RM 000 Share capital (iv) 447,228 (vii) 459, , ,877 Reserves (v) 323,626 (viii) 323,526 (ix) 323, ,426 Treasury share (181) (181) (181) (181) NA 770, , ,873 1,063,122 Shares ( 000) (net of 306,000 treasury shares) 443, , , ,822 NA per Share (RM) Total borrowings (RM 000) (vi) 43,730 43,730 43,730 43,730 Gearing (times)

15 Notes:- Subsequent to 31 December 2016, SGB had issued 842,622 new SGB Shares after conversion of 176,232 SGB warrants A 2012/2017 and 648,390 SGB warrants B 2014/2019. After issuance of:- (a) (b) million new SGB Shares pursuant to the exercise of Existing Warrants at the exercise price of RM1.00 each; and 1.0 million and 0.5 million new SGB Shares to Ybhg. Datuk Mansor Bin Masikon and Encik Zulkarnin Bin Ariffin respectively at the exercise price of RM1.35 each pursuant to the exercise of their ESOS Options. After issuance of 90.0 million SGB Shares at RM1.00 per SGB Share to Datuk Ismail bin Othman as consideration shares pursuant to the Proposed Duta Nilai Acquisition. (iv) After issuance of 79.8 million SGB Shares pursuant to the Proposed Shares Issuance are subscribed at RM1.00 per SGB Share as per the issue price in the subscription agreement. (v) After deducting estimated expenses of RM0.4 million for the Proposed Shares Issuance. (vi) After assuming RM10.0 million bank borrowings are repaid using proceeds raised from the Proposed Shares Issuance. (vii) After issuance of 8.8 million Consideration Shares at an issue price of RM1.40 per SGB Share to QMS, as settlement for the RM12.4 million portion of the Purchase Consideration pursuant to the Proposed Warehouse Acquisition. (viii) After deducting estimated expenses of RM0.1 million in respect of the Proposed Warehouse Acquisition. (ix) After deducting estimated expenses of RM0.1 million for the Proposed Bonus Issue of Warrants. (x) After assuming the following:- (a) computation for the number of Warrants C is based on the enlarged number of SGB Shares of 452,015,832 (excluding 306,000 treasury shares); and (b) all of the Warrants C are exercised at the assumed exercise price of RM1.55 being the five (5)-day VWAMP up to and including 11 May

16 5.4 Earnings and Earnings per share ( EPS ) The Proposed Warehouse Acquisition is not expected to have any material effect on the consolidated earnings of SGB for the financial year ending 31 December Upon completion, the issuance of Consideration Shares pursuant to the Proposed Warehouse Acquisition will result in corresponding dilution in the consolidated EPS of SGB due to the increase in the number of SGB Shares. 6. HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the Proposed Warehouse Acquisition as per Paragraph 10.02(g) Chapter 10 of the Main Market Listing Requirements of Bursa Securities is 5.09%, calculated based on the equity share capital issued by SGB as consideration for the Proposed Warehouse Acquisition compared with SGB s equity share capital in issue (excluding treasury shares). 7. APPROVALS REQUIRED The Proposed Warehouse Acquisition is conditional upon the following approvals being obtained:- (iv) The Shareholders at an extraordinary general meeting to be convened for issuance of Consideration Shares pursuant to the Proposed Warehouse Acquisition; Bursa Securities for the listing of and quotation for the Consideration Shares on the Main Market of Bursa Securities; State Authority Consent; and Any other relevant authorities and/or persons (where applicable). The Proposed Warehouse Acquisition is not conditional upon any other proposal undertaken or to be undertaken by the Company. 8. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors and/or major shareholders of SGB and/or persons connected with them has any interests, either direct or indirect, in any of the Proposed Warehouse Acquisition. 9. DIRECTORS STATEMENT The Board, after having considered all aspects of the Proposed Warehouse Acquisition (including but not limited to the rationale and financial effects of the Proposed Warehouse Acquisition), is of the opinion that the Proposed Warehouse Acquisition is in the best interest of SGB. 16

17 10. APPLICATION TO THE RELEVANT AUTHORITIES Barring any unforeseen circumstances, the application(s) to Bursa Securities will be made to Bursa Securities within two (2) months from the date of this announcement. 11. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances, the Proposed Warehouse Acquisition is expected to be completed by the third (3 rd ) quarter of ADVISER AmInvestment Bank has been appointed as the Adviser for the Proposed Warehouse Acquisition. 13. DOCUMENTS FOR INSPECTION A copy of the SPA and valuation report will be made available for inspection at the Company s Registered Office of SGB at 802, 8th Floor, Block C, Kelana Square, 17, Jalan SS7/26, Petaling Jaya, Selangor Darul Ehsan during normal business hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement. 17