PROPOSED ACQUISITION OF THE REMAINING 15% OF THE EQUITY INTEREST THAT IT DOES NOT CURRENTLY OWN IN AN EXISTING SUBSIDIARY COMPANY

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1 ( LATTREE OR COMPANY ) OF THE REMAINING 15% OF THE EQUITY INTEREST THAT IT DOES NOT CURRENTLY OWN IN AN EXISTING SUBSIDIARY COMPANY (Unless otherwise stated, the exchange rate of Thai Baht ( THB ) 100: RM , being the middle rate published by Bank Negara Malaysia ( BNM ) for 17 February 2016, being the latest practicable date for the purpose of this announcement, has been used throughout this announcement.) This announcement is dated 23 February INTRODUCTION The Board of Directors of LatTree ( Board ) wishes to announce that Grob Holz Sdn Bhd ( GHSB ), a wholly-owned subsidiary company of LatTree, had on 23 February 2016 entered into a conditional sale and purchase agreement ( SPA ) with Konsortium Kontrek Sdn Bhd ( KKSB ) ( Vendor ) to acquire the remaining 15% of the equity interest that it does not currently own in Grob Holz Company Limited ( Grob Holz ) for a cash consideration of RM2,525, ( Purchase Consideration ) ( Proposed Acquisition ). Due to the interest of a major shareholder as disclosed in this announcement, the Proposed Acquisition is a related party transaction. 2. DETAILS OF THE The Proposed Acquisition entails the acquisition by GHSB of the remaining equity interest in Grob Holz that it does not currently own, comprising 352,500 ordinary shares of THB100 each, representing 15% of the issued and paid-up share capital in Grob Holz ( Sale Shares ). 2.1 Information on Grob Holz a) History and business Grob Holz was incorporated in Thailand on 6 October 2004 as a private limited company under the Thai Civil and Commercial Code. Grob Holz has an authorised share capital of THB235,000, comprising 2,350,000 shares of THB100 each which is entirely issued and fully paid-up. Grob Holz is involved in the manufacture and sale of dried sawn timber, solid laminated board, wooden furniture parts and components. Grob Holz does not have any subsidiary nor associated companies. b) Directors and Their Shareholdings As at 17 February 2016, being the latest practicable date for the purpose of this announcement ( LPD ), the Directors of Grob Holz are Lin Chin-Hung, Yek Siew Liong, Lin Chen Jui-Fen, Chen Cheng-Lung, Lin Shin-Ni, Tee Ah Ann and Chen Yu Lian. None of them holds any shares in Grob Holz, save for Yek Siew Liong who has an indirect interest of 352,500 shares of THB100 each representing 15%, via his interest in KKSB.

2 Page 2 of 8 c) Substantial Shareholders As at the LPD, the substantial shareholders of Grob Holz and their respective shareholdings in Grob Holz are as follows:- Shareholdings Direct Indirect No. Of Shares % No. Of Shares % GHSB 1,997, KKSB 352, LatTree 1,997,500 (1) 85 Yek Siew Liong ,500 (2) 15 Note: (1) Deemed interested by virtue of its substantial shareholdings in GHSB (2) Deemed interested by virtue of his substantial shareholding in KKSB Please refer to Appendix 1 for further details on Grob Holz. 2.2 Information on Vendor KKSB was incorporated in Malaysia on 17 May 1982 as a private limited company under the Companies Act, KKSB has an authorised share capital of RM500,000 comprising 500,000 ordinary shares of RM1.00 each, of which 60,002 are issued and fully paid-up. KKSB is principally involved in investment holding. KKSB is also a substantial shareholder of LatTree, holding a 15.03% equity interest. The shareholders and directors of KKSB are Mr Yek Siew Liong and Mdm Kiu Een Edith Kiu Poh Een, and the following are their respective shareholdings in KKSB: Designation Direct No. Of Shares Shareholdings Indirect % No. Of Shares % Yek Siew Liong Director 30, Mdm Kiu Een Edith Kiu Poh Een Director 30, Yek Siew Liong ( YSL ), being a substantial shareholder of KKSB, is also a non-independent non-executive director of LatTree. YSL is also a substantial shareholder of LatTree, with an indirect interest of 15.03% representing 14,610,000 ordinary shares of RM1.00 each in LatTree via his interest in KKSB.

3 Page 3 of 8 The original cost of investment in Grob Holz to the Vendor is THB35,250,000 and the date of such investment is 13 October The total amount transacted with KKSB for the preceding 12 months to the date of this announcement are RM7,993, Basis of and Justification for the Purchase Consideration The Purchase Consideration was arrived at on an arm s length, willing buyer-willing seller basis after taking into consideration the net assets ( NA ) of Grob Holz of approximately THB82,245,188.46, based on its audited financial statements as at 30 June The Purchase Consideration represents a:- (i) (ii) price-earnings multiple of approximately 5.22 times based on the audited earnings per share ( EPS ) of approximately THB11.62 for the financial year ended ( FYE ) 30 June 2015; and price-to-book multiple of approximately 1.73 times based on the NA per share of approximately THB35.00 as at 30 June Salient terms of the SPA (a) Purchase Consideration Pursuant to the SPA, GHSB shall purchase from the Vendor all the Sale Shares free from all encumbrances and together with all rights, benefits and entitlements attaching or accruing thereto for an aggregate purchase consideration of RM2,525, ( Purchase Consideration ). The Purchase Price shall be paid to the Vendor by GHSB on the Completion Date (as defined herein) by way of a cashier cheque (or in such other manner as the parties may mutually agree). (b) Warranties The Vendor represents and warrants to GHSB that: (i) (ii) (iii) it is the lawful owner of the Sale Shares free from all encumbrances and together with all rights and benefits attaching to them as at the Completion Date, and with full power and authority to transfer the same without the consent of any authority or third party; there is no encumbrance, sale, assignment, transfer, option or any other disposal or dealing over or affecting the Sale Shares; no agreement or arrangement to give or create or any circumstances which may give or create any such encumbrance, sale, assignment, transfer, option or other disposal or dealing in relation to or in connection with the Sale Shares;

4 Page 4 of 8 (iv) (v) no claim by any person to be entitled to or under any such encumbrance, sale, assignment, transfer, option or other disposal or dealing or agreement or arrangement in relation to or in connection with the Sale Shares; the execution, delivery and performance of the SPA by the Vendor will not result in the breach or violation of any agreement to which the Vendor is a party, or any applicable law, rule or regulation, or any order, decree or requirement of any court of competent jurisdiction or applicable governmental or regulatory body or authority. GHSB represents and warrants to the Vendor that: (a) (b) GHSB has full power and legal right to buy and accept the transfer of the Sale Shares under the SPA; and the execution, delivery and performance of the SPA by GHSB will not result in the breach or violation of any agreement to which GHSB is a party, or any applicable law, rule or regulation, or any order, decree or requirement of any court of competent jurisdiction or applicable governmental or regulatory body or authority. (c) Completion The Completion Date refers to the date falling fourteen days from the date of the SPA, or such other date as the parties may mutually agree. At completion, the Vendor shall deliver to GHSB: (i) (ii) a share transfer instrument in respect of the Sale Shares, executed by the Seller as the registered holder in favour of GHSB and properly witnessed; and the duly cancelled share certificate in the Vendor s name in respect of the Sale Shares. GHSB shall pay to the Vendor the Purchase Consideration. 2.5 Source of funding The Purchase Consideration will be funded by internally-generated funds of LatTree and its subsidiaries ( LatTree Group ). 2.6 Encumbrances The Sale Shares shall be acquired free from encumbrances and with all attached or accrued rights as at the date of completion of the Proposed Acquisition.

5 Page 5 of Liabilities to be assumed There are no additional liabilities, including contingent liabilities and guarantees of Grob Holz, to be assumed by the LatTree Group pursuant to the Proposed Acquisition. Grob Holz is currently an 85% subsidiary company of LatTree via LatTree s wholly-owned subsidiary, GHSB. 2.8 Financial Commitment The Company does not expect to incur any material financial commitment to put the business of Grob Holz on-stream as the businesses of Grob Holz are currently operational. 3. RATIONALE FOR THE The Proposed Acquisition is undertaken to increase the Company s effective interest in Grob Holz from being 85%-owned to being 100% wholly-owned by LatTree. This would allow the LatTree Group to have full control of the business development of Grob Holz. It also allows LatTree to further capitalise on the growth potential of Grob Holz. 4. RISK FACTORS IN RELATION TO THE In view that Grob Holz is currently an 85%-owned subsidiary of LatTree, the Proposed Acquisition is not expected to materially change the risk profile of the LatTree Group s business, as the LatTree Group s business is already exposed to the risks faced by Grob Holz. 5. PROSPECTS LatTree anticipates moderate growth in the manufacturing activities of the wooden furniture sector, in which Grob Holz operates. The Board of LatTree also believes that Grob Holz is able to maintain its competitive edge as their products are continuously improved on over time. Premised on the above, the Board of LatTree believes that the prospects of Grob Holz are positive. However, this positive expectation could potentially be undermined due to the volatility of the global economy. 6. FINANCIAL EFFECTS OF THE 6.1 Share Capital and Substantial Shareholders Shareholdings The Proposed Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders' shareholdings of the Company as the Purchase Consideration will be settled entirely by cash.

6 Page 6 of NA and Gearing Based on the audited consolidated financial statements of the LatTree Group as at 30 June 2015, the proforma effects of the Proposed Acquisition on the consolidated NA per LatTree Share and gearing of the LatTree Group, assuming the Proposed Acquisition had been effected on that date are as set out below:- Audited as at 30 June 2015 After the Proposed Acquisition RM 000 RM 000 Share capital 97,208 97,208 Share premium 1,225 1,225 Retained earnings 269,520 (a) 269,161 Foreign currency translation reserve 40,618 41,073 Equity attributable to owners of the Company/NA 408, ,667 Non-controlling interests 1,195 - Total equity 409, ,667 No. of Shares in issue ( 000) 97,208 97,208 NA per Share (RM) Total borrowings (RM 000) 89,221 89,221 Gearing (times) Cash and cash equivalents (RM 000) (b) 170, ,764 Notes:- (a) (b) Assuming estimated expenses in relation to the Proposed Acquisition amounting to approximately RM30, Includes deposits with licensed banks and short-term investment 6.3 Earnings and Earnings Per LatTree Share ( EPS ) The Proposed Acquisition is expected to be completed by the first (1 st ) quarter of calendar year The Proposed Acquisition is expected to contribute positively towards the earnings and EPS of the LatTree Group for the FYE 30 June 2016 as it would allow LatTree to further consolidate the financial results of Grob Holz. 7. APPROVALS REQUIRED The Proposed Acquisition is not subject to the approval of the Company s shareholders nor from any other relevant parties. 8. CORPORATE EXERCISE ANNOUNCED BUT PENDING COMPLETION The LatTree Group does not have any corporate exercise which has been announced on Bursa Securities but pending completion as at the date of this announcement.

7 Page 7 of 8 9. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS Save as disclosed below, none of the Directors and/or major shareholders of the Company and persons connected to them are interested in the Proposed Acquisition as the Directors and/or major shareholders and persons connected to them do not have any direct or indirect interest in the Proposed Acquisition. YSL is a non-independent non-executive director of LatTree, and also a substantial shareholder of LatTree, holding a 15.03% equity interest via his interest in KKSB. He is a director and major shareholder of KKSB, being the Vendor. He together with his spouse, Mdm Kiu Een Edith Kiu Poh Een holds 100% equity interest in KKSB. 10. DIRECTORS STATEMENT After having considered all aspects of the Proposed Acquisition (including but not limited to the rationale, prospects and financial effects), the Board of LatTree (save for YSL) is of the opinion that the Proposed Acquisition is in the best interest of the LatTree Group. 11. AUDIT COMMITTEE S STATEMENT The Audit Committee of LatTree (save for YSL), having considered all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is:- (i) (ii) (iii) in the best interest of LatTree, after taking into consideration the rationale disclosed in this announcement; fair, reasonable and on normal commercial terms; and not detrimental to the interest of LatTree s non-interested shareholders. 12. ESTIMATED TIME FRAME FOR SUBMISSION TO RELEVANT AUTHORITIES No application needs to be made to the authorities with regards to the Proposed Acquisition. 13. ESTIMATED TIMEFRAME FOR THE COMPLETION OF THE Barring any unforeseen circumstances, the Board expects the Proposed Acquisition to be completed by the first (1 st ) quarter of calendar year HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) Chapter 10 of the Listing Requirements is 0.63%, which has been computed by dividing the total assets of Grob Holz which are the subject matter of the Proposed Acquisition with the total assets of the Company based on the latest audited consolidated financial statements of the LatTree Group for the FYE 30 June 2015.

8 Page 8 of ADVISERS No adviser is required to be appointed for the Proposed Acquisition. 16. DOCUMENTS FOR INSPECTION The SPA will be made available for inspection during normal business hours at the Registered Office of LatTree at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Malaysia from Mondays to Fridays (except public holidays) from the date of this announcement up to the date of completion of the Proposed Acquisition.

9 APPENDIX I HISTORICAL FINANCIAL INFORMATION OF GROB HOLZ 1. Historical financial information of Grob Holz The table below sets out a summary of Grob Holz s audited financial statements for the FYE 30 June 2013, FYE 30 June 2014 and FYE 30 June 2015:- Audited FYE 30 June THB 000 THB 000 THB 000 Revenue 218, , ,957 Profit/ Before Tax ( PBT ) (16,366) (7,499) 27,298 Taxation Profit After Tax ( PAT ) (16,366) (7,499) 27,298 Paid-up capital 235, , ,000 Shareholders Funds/ Net Assets 62,446 54,947 82,245 Total borrowings 26,080 15,653 - Gearing Commentaries The increase in revenue from FY2013 to FY2015 was mainly due to an increase in orders from customers. The increase in PBT from FY 2013 to FY 2015 was mainly in line with the increase in revenue. The improvement in PBT was also attributed to overall improvement in cost management and an enhancement in productivity. Grob Holz also enjoyed a decrease in the prices of raw materials especially rubber logs of an approximate average 25% during the period under review.

LATITUDE TREE HOLDINGS BERHAD ( LATITUDE TREE OR THE COMPANY ) - ACQUISITION OF PROPERTY BY RHONG KHEN TIMBERS SDN BHD ( RKT )

LATITUDE TREE HOLDINGS BERHAD ( LATITUDE TREE OR THE COMPANY ) - ACQUISITION OF PROPERTY BY RHONG KHEN TIMBERS SDN BHD ( RKT ) 1. Introduction The Board of Directors of Latitude Tree is pleased to announce