Proposed Acquisition of 95% Equity Interest in PT Sinergi Agro Industri, Indonesia

Gunaria Sdn Bhd, a wholly-owned subsidiary of the Company, has on 11 June 2007 entered into a Conditional Sale and Purchase Agreement ("CSPA") to acquire 190 shares of Rp.1,000,000 each (or 95% equity interest) in PT Sinergi Agro Industri ("SAI") for a total cash consideration of Rp.190,000,000 (approximately RM72,000) ("the Proposed Acquisition").

SAI was incorporated on 29 July 2003 in Indonesia. SAI intends to cultivate oil palm on a plot of land measuring approximately 11,434 hectares located in Kutai Timur, East Kalimantan ("the Land") for which it has successfully obtained the plantation permit (Izin Usaha Perkebunan). SAI will pursue further with the relevant authorities in Indonesia until the lease title (Sertifikat Hak Guna Usaha) is obtained and the oil palm plantation is established. The Land cost is anticipated approximately RM1,359 per hectare.

The conditions precedent to the CSPA include the following:-

(a)	completion of the due diligence; and
(b)	approval of Indonesian Investment Coordinating Board for the change in shareholding and conversion of SAI to a foreign capital investment company.

The Proposed Acquisition is part of the long term business strategy of the Company to expand its oil palm operations. The Land is strategically located and fits with its plan of enhancing its existing infrastructure.

None of the Directors nor substantial shareholders of the Company, or persons connected with them, has any interest, direct or indirect, in the Proposed Acquisition and no approval of shareholders is required. The Proposed Acquisition is not expected to have any significant effect on the earnings or net assets per share of the Company for the financial year ending 31 March 2008.

Announcement