HUA YANG BERHAD (“HYB” or the “Company”) -Proposed acquisition of land by Yoon Lian Realty Sdn Bhd

1. INTRODUCTION

The Board of Directors of HYB wishes to announce that the wholly-owned subsidiary of the Company, Yoon Lian Realty Sdn Bhd (“Yoon Lian”) had today entered into a conditional sale and purchase agreement (SPA) with Peter Brickworks Sdn Bhd, a company incorporated in with its registered office at No. 2 Lorong Raja Di- Hilir, 30350 , (the “Vendor”) for the purpose of acquiring 156 lots of freehold titles, more particularly described below, for a total cash consideration of RM15,200,000.00 (“Purchase Price”) (the “Proposed Acquisition”).

Further details of the Proposed Acquisition are set out in the following sections:

2. THE PROPOSED ACQUISITION

2.1 Details of the Proposed Acquisition

Title PT 220115 to PT 220203, 3C,4C, PT 220206 to PT220237, 7C,8C, PT 220240 to PT 220249, 11C,12C, PT 220252 to PT 220262 1C,14C,2C,5C,6C,9C,10C and 13C (totaling 156 Lots) all in Mukim Hulu Kinta, Daerah Kinta, Perak Darul Ridzuan (“the Property”).

Location The Property is located 6km away from Ipoh town centre and accessible through Jalan Berham, nearby to Yoon Lian’s existing “Anjung Megah” development project.

Size Approximately 21 acres

Description The Vendor had obtained the development order to develop the Property as a gated and guarded residential development and had completed the infrastructure with 4 units of 2½ storey cluster semi-detached bungalows (unoccupied) and the main entrance guardhouse as at to-date.

Proposed Development Gated and guarded development with 134 units of cluster Semi-D, 18 units of link bungalow and 4 units of bungalow

Tenure Freehold

Net book value based The Vendor has not provided any information on latest audited on the net book value of the land financial statements of Vendor

Information on The Directors of the Vendor are:- Vendor’s Directors and (i) Chan Shook Pheng @ Chan Sook Peng shareholders (ii) Joanne Loke Lai May (iii) Loke Kwok Seong (iv) Katrina Loke Lai Mun

The shareholders of the Vendor and their shareholding are:- No. of shares

Loke Kwok Seong 6

Peter’s Holdings Sdn Bhd 1,500,006

Details of development The proposed development has an estimated Total Gross Development Value of RM84 million. However, it is currently too preliminary to ascertain the total development cost, the expected commencement date of the development and the expected profits to be derived from the development of the Property.

The development cost of the Property will be funded by internally generated funds.

2.2 Salient terms of the SPAs

2.2.1 Mode of Payment

a) 10% of Purchase Price upon execution of SPA; b) An amount of RM9,180,000 within 3 months of execution of SPA; and c) Balance of Purchase price within 3 months from the date of receipt of the notification of ’s consent for the transfer.

2.2.2 The Vendor shall sell the Property free of all encumbrances and shall do everything necessary to remove any caveat that has been placed on the Property.

2.3 Basis of arriving at the Purchase Price

The Purchase Price was arrived at based on a willing buyer willing seller basis after taking into consideration the development potential of the Property and also making comparisons with the market value of the matured properties surrounding the Property. No formal valuation was commissioned as the Board views that the market comparisons suffice for this purpose.

2.4 Source of funding and mode of satisfaction

The Purchase Price will be funded through internally generated funds and/or bank borrowings. There would be no liabilities assumed by the HYB Group arising from the Proposed Acquisition.

3. RATIONALE OF THE PROPOSED ACQUISITION

- The Proposed Acquisition is in line with the HUAYANG Group’s objective to expand it presence in Perak. With a balance parcel to be developed at the “Anjung Bercham Megah” mixed development project, this Proposed Acquisition will enable Yoon Lian to replenish its landbank with more prime land in Ipoh town. The Group currently has an on-going township development project at Bandar University .

4. EFFECTS OF THE PROPOSED ACQUISITION

4.1 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 Proposed Acquisition does not involve any issuance of shares of HYB

4.2 Net assets per share and earnings per share

The Proposed Acquisition is not expected to have any material effect in the net assets per share of HYB Group.

The Proposed Acquisition is expected to contribute positively to the future earnings of HYB Group.

4.3 Gearing

As the Purchase Price is to be satisfied by internally generated funds and/or bank borrowings and the exact manner in which the Purchase Price will be satisfied has not been finalised at this juncture, hence, the effect of the Proposed Acquisition on the gearing cannot be ascertained at this juncture. Nonetheless, there would be no material effect to the gearing of the Group.

5. PROSPECT

The growth and development of Ipoh city is expected to have a positive effect on the Group’s developments. In the Bercham area surrounding the Property there are mature residential developments with public amenities but it has very limited project especially on gated and guarded residential development. The Group’s development plan to have a unique gated and guarded residential development is expected to be received well.

6. RISK FACTORS

HYB Group’s core business is in the property sector. As such, the Proposed Acquisition will not materially change the risks of the Company’s business as the Group would still be exposed to the same business, operational, financial and investment risk inherent in the property sector. These risks are inherent risk due to timely commencement or completion of projects, obtaining required approvals, satisfactory performance of contractors and adverse economic events or recession. In addition, any material escalation of cost of cement and other building materials as well as increase in petrol prices may contribute to a higher overall development cost thereby impacting the profit margins of any development project.

The Management shall endeavour to limit the abovementioned risks through, inter-alia, careful planning and identification of the type of developments, innovative pricing strategies, more prudent financial policy, a close supervision on any property development project and effective management.

7. APPROVALS REQUIRED

The Proposed Acquisition is not subject to the approval of the shareholders of HYB but is subject to the approval of the Menteri Besar of Perak for consent to the transfer of the Property.

8. ESTIMATED TIME FRAME FOR THE COMPLETION

Barring any unforeseen circumstances, the Board of HYB expects the Proposed Acquisition to be completed by the third quarter of the financial year ending 31 March 2013.

9. HIGHEST PERCENTAGE RATIO APPLICABLE

The highest percentage ratio applicable to the transaction is 6.88%.

10. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND / OR PERSONS CONNECTED TO THEM

None of the directors, major shareholders of HYB and/or persons connected to them has any interest, direct or indirect in the Proposed Acquisition.

11. DIRECTORS’ RECOMMENDATION

The Board, having considered all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition are in the best interest of the HYB Group.

12. DOCUMENTS FOR INSPECTION

The SPAs dated 6 April 2012 is available for inspection at HYB’s registered office at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), 30250 Ipoh, Perak Darul Ridzuan during normal office hours from Monday to Friday (except public holidays) for a period of three months.

This announcement is dated 6 April 2012.