Bursa Announcements

Contents :

Introduction We wish to inform that a proposal will be put forward at the forthcoming Extraordinary General Meeting ("EGM") to be convened for the acquisition, through its wholly-owned subsidiary, Tan Chong & Sons Motor Company Sdn Bhd ("TCM"), of a piece of leasehold land in Kuching at a cash consideration of RM2,690,000 for the purpose of constructing a showroom, spare parts centre and after-sales service workshop. As the proposed acquisition falls within the ambit of Section 132E of the Companies Act, 1965, the prior approval of the shareholders of the Company at a general meeting is required. Section 132E of the Companies Act, 1965, prohibits a company from entering into any arrangement or transaction with a director of the company or its holding company or with a person connected with such a director in respect of the acquisition from or disposal to such director or connected person of any non-cash assets of the "requisite value" without the prior approval of the company in general meeting and, if the director or connected person is a director of its holding company or person connected with such a director, the prior approval of the holding company in general meeting.

Details of the property

The property is a parcel of vacant leasehold land expiring on 31 December 2796 situated at 2½ Mile, Jalan Pending consisting of 6,410 square metres, and described as Lot 9378, Section 64, Kuching Town Land District ("Property"). The Property is currently owned by Tung Pao Sdn Bhd, ("TP") a wholly-owned subsidiary of Warisan TC Holdings Berhad ("Warisan"). The Property, which is strategically located just outside Kuching town, is an ideal site for the Group to construct a new 3-in-1 concept centre for its motor distribution business.

Information on TCM, the Purchaser

TCM was incorporated as a private limited company under the Companies Ordinances, 1940 on 16 February 1959. The authorised share capital of TCM is RM175,000,000 comprising 150,000,000 ordinary shares of RM1 each and 25,000,000 non-cumulative redeemable preference shares of RM1 each. The issued and paid-up share capital of TCM is RM175,000,000 comprising 150,000,000 ordinary shares of RM1 each and 25,000,000 non-cumulative redeemable preference shares of RM1 each. TCM is a wholly-owned subsidiary of the Company and its principal activity is the sale of motor vehicles and hire purchase financing.

Information on TP, the Vendor

TP was incorporated as a private limited company under the Act on 28 April 1977. Its present authorized share capital is RM15,000,000 comprising 15,000,000 ordinary shares of RM1.00 each of which 14,300,000 are issued and fully paid-up. It is a wholly-owned subsidiary of Warisan. TP distributes cosmetic and hair care products under the brand names Shiseido, Za and Shiseido Professional.

Basis for determining the Purchase Consideration

The consideration of RM2,690,000 for the proposed acquisition is the price offered by TP. Based on a valuation carried out by Messrs. Henry Butcher, Lim Long & Chieng (Sarawak) Sdn Bhd, a firm of independent valuers appointed by TCM, the market value of the Property is RM2,770,000.

Source of Funding

The proposed acquisition will be financed by external borrowings.

Financial Effects

The proposed acquisition at a cash consideration of RM2,690,000 is not significant compared with the net tangible assets of the Group of RM965.6 million as at 31 December 2003, and will not have any material effect on the issued and paid-up share capital, EPS, NTA per share and substantial shareholders’ shareholding of the Company.

Approvals Required

Other than the approval of the shareholders of the Company pursuant to Section 132E of the Companies Act, 1965, there are no other approvals required. Directors and Major Shareholders’ Interests

Tan Chong Consolidated Sdn Bhd ("TCC") is a major shareholder of the Company and Warisan. Dato’ Tan Heng Chew is a director of the Company and Warisan, and by virtue of his shareholding in TCC, is deemed a major shareholder of the Company and Warisan. Dato’ Tan Heng Chew is also a director of TCC.

Tan Eng Soon, a director of the Company and by virtue of his shareholding in TCC, is deemed a major shareholder of the Company and Warisan. He is also a director of TCC and a brother of Dato’ Tan Heng Chew.

Warisan and TP are persons connected with Dato’ Tan Heng Chew and Tan Eng Soon by virtue of the provisions of Section 122A of the Companies Act, 1965.

Directors’ Recommendation

The Board, with the exception of the directors who are interested in the proposed acquisition as disclosed, is of the opinion that the proposed acquisition is fair, reasonable and in the best interest of the Company and recommends that the ordinary resolution in relation to the proposed acquisition to be tabled at the forthcoming EGM be approved.

Circular to Shareholders

A circular containing further details of the proposal acquisition will be despatched to shareholders of the Company shortly.