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IBRACO BERHAD (“IBRACO” or “THE COMPANY”) RELATED PARTY TRANSACTIONS 1. INTRODUCTION Pursuant to Paragraph 10.08(1) of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors of Ibraco ("Board") wishes to announce that Ibraco had, on 23 March 2017, entered into sale and purchase agreements pertaining to related party transactions with Dr. Sharifah Deborah Sophia Ibrahim (“SDSI” or “the Purchaser”), the Non-Independent Non-Executive Director and a major shareholder of Ibraco. 2. DETAILS OF THE RELATED PARTY TRANSACTIONS 2.1 Details of the Related Party Transactions Ibraco is principally engaged in property development and investment holding. Ibraco and the Purchaser had, on 23 March 2017, entered into separate sale and purchase agreements for the disposal of 3 units of Shop-Office-HomeOffice (“SOHO”) within a scheme known as TT3 SOHO (“the Disposal”). Details of the said properties are summarised below:Description of Property Rentable Area 1. Unit P13-3A Level 13, the TT3 SOHO, 679 Tabuan Tranquility Feet Square Purchase Consideration (RM) 376,200.00 2. Unit P13A-7 Level 13A, the TT3 SOHO, 1,017 Tabuan Tranquility Feet Square 514,800.00 3. Unit P13A-6 Level 13A, the TT3 SOHO, 669 Tabuan Tranquility Feet Square 371,800.00 1,262,800.00 (Collectively referred as “the Properties”) TT3 SOHO comprises 14-storey building with 167 SOHO units come with commercial units and car parking podium. The development was approved by the State Planning Authority on 08.06.2016. The Properties sit on the following master lots where Ibraco is the registered proprietor and/or beneficial owner:No. Description of title 1. Lot 6 Block MTLD Lot 1450 Block MTLD Lot 1452 Block MTLD Lot 1454 Block MTLD Lot 1456 Block MTLD Lot 1458 Block MTLD Lot 1809 Block MTLD Lot 4554 MTLD 2. 3. 4. 5. 6. 7. 8. Tenor/Date of expiry of lease 12 Perpetual/ Perpetuity Legal encumbrances Nil Cost (RM’000) 3,056 Date of investment 4.8.2003 12 Perpetual/ Perpetuity Nil 197 5.11.2004 12 Perpetual/ Perpetuity Nil 440 14.10.2004 12 Perpetual/ Perpetuity Nil 1,200 14.10.2004 12 Perpetual/ Perpetuity Nil 1,293 14.10.2004 12 Perpetual/ Perpetuity Nil 1,285 5.11.2004 12 99 years lease expiring on 15.10.2113 Perpetual/ Perpetuity Nil 3,241 16.10.2014 Nil 1,935 17.7.2003 Description of title 9. 10. 11. Tenor/Date of expiry of lease Legal encumbrances Lot 4581 MTLD Perpetual/ Perpetuity Lot 4771 MTLD Perpetual/ Perpetuity Lot 9282 Block 11 99 years/ 31.12.2069 MTLD Nil Nil Nil Original cost of investmen t (RM’000) 2,280 1,465 3,418 Date of investment 31.7.2003 1.8.2003 29.12.2010 The original cost of investment of the Properties is estimated at RM10,174.00 The total development cost of the Properties is estimated at RM952,000 and is financed via internally generated funds. The construction of the Properties has commenced with piling works and the development is expected to complete by end of 2019. The strata titles in respect of the Properties shall be issued together with other properties upon application by Ibraco after issuance of Occupation Permit by the relevant authority. 2.2 Information on SDSI SDSI was appointed as an Executive Director of Ibraco on 5 July 1982 and later re-designated as Non-Executive Non-Independent Director on 16 April 2008. 2.3 Mode of Payment The purchase consideration of each of the abovementioned property is to be satisfied via cash payment in the following manner:1. Upon signing of the sale and purchase agreement 10.0% 2. Within 21 days after receipt of written notice of the completion of:a. Foundation works b. Reinforced concrete framework, and floor slab of the property c. Walls of the Property with door and window frames placed in position d. Roofing/ceiling, electrical conduits (without wiring), plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling (if any) to the property e. Internal plastering of the property f. External plastering of the building g. Painting of the building h. Issuance of occupation permit i. Issuance of subsidiary title to the property 15.0% 20.0% 20.0% 10.0% 10.0% 5.0% 5.0% 2.5% 2.5% _____ 100% _____ 2.4 Basis of Arriving At the Purchase Consideration The purchase consideration is derived based on a non-negotiable fixed price which is published and all material terms are applied consistently to all customers of Ibraco. 2.5 The Expected Gains The Disposal is expected to generate an estimated gross profit from operation amounting RM311,000. 2.6 The Salient Features of the Sale and Purchase Agreements a) The Properties is sold free from all encumbrances other than the conditions or restriction that may express and imply upon issuance of the subsidiary titles and also subject to any terms and conditions to be imposed by the authorities from time to time; b) Ibraco shall at its own cost and expense obtain the issue of a separate subsidiary titles in respect of the Properties; c) In the event the Purchaser fails to pay the instalment payments as specified in 2.3 above and within the time as specified therein, the Purchaser shall pay Ibraco late payment charges, interests calculated at 10% per annum; d) In the event the Purchaser fails to pay any sum of money payable under the agreements; commits any breach of the terms and conditions contained in the agreements or fails to perform or observe all or any of the purchaser’s covenants; commits an act of bankruptcy or enters into any composition or arrangement with the creditors; enters into any liquidation or instructs the financier to withhold payment of the loan to Ibraco, Ibraco shall give the Purchaser or its advocates not less than 14 days’ notice in writing by registered post to treat the agreement as having been repudiated by the Purchaser and unless the default and/or breach is remedied the agreement shall be deemed to be terminated. e) Ibraco shall deliver vacant possession of the Properties to the Purchaser within 36 calendar months from the date of the agreements and upon receipt of 97.5% of the purchase consideration; f) If Ibraco fails to complete the Properties within the stipulated period, Ibraco shall pay to the Purchaser liquidated damages calculated from day to day at the rate of 8% per year of the purchaser consideration from the expiry date of delivery vacant possession in sub-clause (e) until the date of the delivery of vacant possession. g) If Ibraco fails to complete the common facilities within the stipulated period, Ibraco shall pay to the Purchaser liquidated damages calculated from day to day at the rate of 10% per year of the last 20% of the purchase consideration from the expiry date of delivery vacant possession in sub-clause (e) until the date of the delivery of vacant possession. h) In the event that Ibraco shall refuse, fail or unable to comply with any fundamental terms of the agreements, then and, in any such case, all monies received by Ibraco shall be refunded to the Purchaser and in addition, Ibraco shall pay a like sum but not exceeding 10% of the purchase consideration to the Purchaser as pre-agreed liquidated damages. 2.7 Expected Completion Date The Board expects the Disposal to be completed within 36 months from the date of the agreements. 2.8 Highest Percentage Ratio The highest percentage ratio applicable for the Disposal pursuant to Paragraph 10.02(g) of the Listing Requirements of Bursa Securities was 0.4%. 3. INTENDED APPLICATION OF THE SALE PROCEEDS The sale proceeds will be utilised as working capital for payment of suppliers and miscellaneous operating expenses as and when needed. 4. PARTICULARS OF ALL LIABILITIES TO BE ASSUMED There is no liability to be assumed by the Purchaser from the Disposal. 5. EFFECTS OF THE RELATED PARTY TRANSACTIONS The Disposal will not have any effect on the issued and paid-up share capital of Ibraco as well as its substantial shareholders’ shareholdings as the Disposal does not involve any issuance of shares. The Disposal, which will not have any material effect on the net assets per share and gearing of Ibraco is expected to contribute positively to the earnings of Ibraco Group for the financial year ending 31 December 2017. The Disposal is expected to generate a gross profit from operation amounting RM311,000. 6. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS AND/OR PERSONS CONNECTED SDSI is a Director and major shareholder of Ibraco. The direct and indirect interest of the interested Director and shareholder as at the date of announcement are as follows:- Director and Major Shareholder Dr. Sharifah Deborah Sophia Ibrahim Direct No. of Shares 99,366,120 % Indirect No. of % Shares 20.02 - - Accordingly, the interested Director and shareholder have abstained from all deliberations and voting at all meetings of the Board in relation to the Disposal. Save as disclosed above, none of the Directors and/or major shareholders of Ibraco or persons connected to the Directors and/or major shareholders of Ibraco have any interest, direct or indirect, in the Disposal. 7. APPROVALS REQUIRED The Disposal is neither subject to the approval of Ibraco’s shareholders nor the authorities. 8. RATIONALE OF THE DISPOSAL The Disposal is in the ordinary course of business of Ibraco, hence is expected to contribute positively to Ibraco’s earnings. 9. DIRECTORS' RECOMMENDATION The Board, except for SDSI, having taken into consideration all aspects of the Disposal, is of the opinion that the Disposal in the best interest of the Company. 10. STATEMENT BY AUDIT COMMITTEE The Audit Committee, having taken into consideration all aspects of the Disposal, was of the view that the Disposal is in the best interests of Ibraco, fair, reasonable and on normal commercial terms and not detrimental to the interest of the minority shareholders. 11. TRANSACTIONS ENTERED IN THE PRECEDING 12 MONTHS No transaction has been entered into with SDSI for the preceding 12 months. 12. DOCUMENTS AVAILABLE FOR INSPECTION The following documents may be inspected at the registered office of IBRACO at IBRACO HOUSE, No. 898, Jalan Wan Alwi, Tabuan Jaya, 93350 Kuching, Sarawak during normal office hours from Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement:i. Sale and Purchase Agreements dated 23 March 2017. This announcement is dated 23 March 2017.