KULIM (MALAYSIA) BERHAD (“KULIM” OR THE “COMPANY”)

(I) PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN NEXSOL (MALAYSIA) SDN
BHD (“NEXSOL”), A WHOLLY-OWNED SUBSIDIARY OF THE KULIM GROUP TO PGEO
GROUP SDN BHD (“PGEO GROUP”), A WHOLLY-OWNED SUBSIDIARY OF WILMAR
INTERNATIONAL LIMITED (“WILMAR”) FOR A CASH CONSIDERATION OF RM27.0
MILLION (“PROPOSED DISPOSAL 1”); AND

(II) PROPOSED DISPOSAL OF A PART OF A LEASEHOLD LAND, MEASURING

APPROXIMATELY 30.0 ACRES HELD UNDER HS(D) 454418, PTD 3932 SITUATED IN
MUKIM OF SUNGAI TIRAM, DISTRICT OF JOHOR BAHRU, STATE OF JOHOR TO PGEO
EDIBLE OILS SDN BHD (“PGEO EDIBLE”), A WHOLLY-OWNED SUBSIDIARY OF PGEO
GROUP FOR A CASH CONSIDERATION OF RM23.0 MILLION (“PROPOSED DISPOSAL 2”)

(COLLECTIVELY REFERRED TO AS THE “PROPOSED DISPOSALS”)

1. INTRODUCTION

On behalf of the Board of Directors of Kulim (“Board”), RHB Investment Bank Berhad (“RHB
Investment Bank”) wishes to announce that on 27 August 2014, Kulim had entered into the
following:-

(i) a share purchase agreement (“SPA”) with PGEO Group, a wholly-owned subsidiary of
Wilmar for the proposed disposal of the entire equity interest in Nexsol for a cash
consideration of RM27.0 million (“Disposal Consideration 1”); and

(ii) a land transfer agreement (“LTA”) with PGEO Edible for the proposed disposal of the
Nexsol Land (as defined herein) to PGEO Edible, a wholly-owned subsidiary of PGEO
Group for a cash consideration of RM23.0 million (“Disposal Consideration 2”).

Further details of the Proposed Disposals are set out in the following sections.

2. DETAILS OF THE PROPOSED DISPOSALS

2.1 Details of Proposed Disposal 1

Proposed Disposal 1 entails the disposal by Kulim group of companies (“Kulim Group”)
of their entire equity interest in Nexsol to PGEO Group comprising 1,000,000 existing
ordinary shares of RM1.00 each in Nexsol (“Nexsol Share(s)” or “Existing Share(s)”)
together with the Additional Shares (as defined herein) for RM27.0 million. Kulim and
Kulim Energy Sdn Bhd (“Kulim Energy”), a wholly-owned subsidiary of Kulim currently
hold 49.0% and 51.0% equity interest in Nexsol, respectively.

For the purpose of facilitating Proposed Disposal 1, Kulim will undertake an internal
restructuring to acquire 510,000 Nexsol Shares held by Kulim Energy, representing
51.0% of the existing issued and paid-up share capital of Nexsol and subsequently,
capitalise the advances made by Kulim to Nexsol amounting to approximately RM120.0
million into 120,000,000 Nexsol Shares (“Additional Share(s)”) (“Capitalisation of
Advances”).

(Collectively, the Existing Shares and Additional Shares are referred to as the “Sale
Share(s)”).

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Upon completion of Proposed Disposal 1, Nexsol will cease to be a subsidiary of the

Kulim Group.

2.1.1 Salient terms of the SPA

The salient terms of the SPA, amongst others are set out as follows:-

2.1.1.1 Conditions precedent

The completion of the SPA is conditional upon the following conditions

precedent being satisfied within 90 days from the date of the SPA (or
such further extension(s) of time as may be mutually agreed to by PGEO
Group and Kulim) (“Conditional Period 1”):-

(i) all relevant legal and regulatory approvals (if required), including
but not limited to notification in writing to Ministry of International
Trade and Industry of Malaysia (“MITI”) and Malaysian
Investment Development Authority (“MIDA”), having been
obtained to acquire the Sale Shares and operating the business;

(ii) all of the licences stipulated in the SPA are in full effect, not
being revocable, terminable or subject to conditions being
changed as a result of the Proposed Disposal 1;

(iii) any and all loans between Nexsol and Kulim Group having been
written off, capitalised, or otherwise cancelled, without cost or
liability, actual or contingent to Nexsol, including the completion
of the acquisition of the remaining Nexsol Shares from Kulim
Energy and the Capitalisation of Advances;

(iv) the execution of the LTA pursuant to Proposed Disposal 2;

(v) the execution of the lease agreement with Nexsol to lease the
Occupied Area (as defined herein) (“Nexsol Lease”);

(vi) no occurrence of any event which would reasonably likely to

have a material adverse effect or change in the condition,
prospects, assets and/or earnings of Nexsol;

(vii) PGEO Group receiving a copy of the Form 42A from the
Companies Commission of Malaysia (“CCM”) from Kulim on
satisfaction of the Charge Numbered 001 on Nexsol’s charges
registered at CCM in favour of HSBC Bank Malaysia Berhad;
and

(viii) the transfer of all the remaining Nexsol Shares from Kulim
Energy to Kulim.

Upon execution of the SPA, Kulim shall notify in writing, to MITI and
MIDA, in respect of the sale of the Sale Shares pursuant to the SPA.

The SPA shall become unconditional upon satisfaction of all conditions

precedent (“Unconditional Date”).

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2.1.1.2 Completion

(a) Upon fulfillment or waiver of the conditions precedent,

completion of the SPA shall take place at the office of Kulim or
other place as agreed upon by both parties within seven (7)
business days after the Unconditional Date (“Completion 1”).

(b) At Completion 1, PGEO Group shall pay the Disposal

Consideration 1 in full by way of delivery of a bank draft in favour
of Kulim or in such manner as specified by Kulim.

2.1.2 Date and original cost of investment in Nexsol

The date and original cost of investment of Kulim in Nexsol is 30 April 2010 and
approximately RM134.2 million, respectively.

Based on the Disposal Consideration 1 of RM27.0 million and after taking into
account the adjusted unaudited net assets (“NA”) of Nexsol as at 30 June 2014
of approximately RM31.3 million after the Capitalisation of Advances, Kulim
expects to record a loss on disposal of approximately RM4.3 million from
Proposed Disposal 1.

2.1.3 Information on Nexsol

Nexsol was incorporated in Malaysia on 27 January 2006 under the Companies

Act, 1965 (“Act”). The principal activities of Nexsol are manufacturing and
marketing of biodiesel and related products. However, presently, its biodiesel and
glycerine manufacturing facility has been dormant/not in operation.

As at the date of this announcement, the shareholders of Nexsol are Kulim and
Kulim Energy holding 49.0% and 51.0% equity interest in Nexsol, respectively.

As at the date of this announcement, the authorised share capital of Nexsol is

RM50,000,000 comprising 50,000,000 Nexsol Shares, of which RM1,000,000
comprising 1,000,000 Nexsol Shares have been issued and fully paid-up.

As at the date of this announcement, the directors of Nexsol are Wong Seng Lee,
Md Nasir Aban, Abdul Rahman Sulaiman, Sallehhuddin Mohd Noh and Azli
Mohamed.

Based on Nexsol’s latest audited consolidated financial statements for the

financial year ended (“FYE”) 31 December 2013, Nexsol incurred a net loss of
approximately RM12.0 million with revenue generated of approximately RM46.0
million. As at 31 December 2013, the shareholders’ deficit of Nexsol amounted to
approximately RM86.2 million.

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PROPOSED DISPOSALS

2.1.4 Information on PGEO Group

PGEO Group was incorporated in Malaysia on 1 June 2000 as a private

th
company limited by shares under the Act and has its registered address at 12
Floor, UBN Tower, No. 10 Jalan P. Ramlee, 50250 Kuala Lumpur. It is a
subsidiary of Wilmar, a company incorporated in Singapore in 1991 and is listed
on the Main Board of the Singapore Exchange Securities Trading Limited.

As at the date of this announcement, the authorised share capital of PGEO

Group is RM110,000,000 comprising 110,000,000 ordinary shares of RM1.00
each in PGEO Group (“PGEO Group Share(s)”), of which 100,000,002 PGEO
Group Shares have been issued and fully paid-up. The principal activity of PGEO
Group is investment holding and provision of management services.

2.1.5 Basis of arriving at Disposal Consideration 1

Disposal Consideration 1 was arrived at on a willing buyer-willing seller basis

after taking into consideration, amongst others, the adjusted unaudited NA of
Nexsol as at 30 June 2014 amounting to approximately RM31.3 million, adjusted
for the Capitalisation of Advances.

2.2 Details of Proposed Disposal 2

Kulim is the registered proprietor and beneficial owner of all that piece of land held under
HS(D) 454418 PTD 3932 in the Mukim of Sungai Tiram, District of Johor Bahru, State of
Johor measuring approximately fifty (50) acres (“Land”), whereby approximately seven
(7) acres of the Land (“Occupied Area”) is currently occupied by Nexsol, where Nexsol
owns and operates a biodiesel and glycerine production facility.

In conjunction with Proposed Disposal 1, PGEO Edible, a wholly-owned subsidiary of

PGEO Group will also purchase from Kulim a part of the Land (which includes the
Occupied Area) measuring approximately 30 acres (“Nexsol Land”) free from
encumbrances, save and except for the Nexsol Lease.

2.2.1 Information on the Nexsol Land

A summary of the salient details of the Nexsol Land is set out as follows:-

Title details (1)

: HS(D) 454418
Postal address : Lot PTD 3932, Sungai Tiram, Johor Bahru
Land area : Approximately 30 acres (121,406 sq. m.)
Tenure : Leasehold, expiring on 16 January 2068
Existing use : Factory
Category of land use : Perusahaan/Perindustrian
Existing structural buildings : Biodiesel and glycerine production facility
Encumbrances : Nil
Estimated market value as at 27 : RM23,000,000
August 2014
Audited net book value (“NBV”) of : Approximately RM14.5 million
the Nexsol Land as at 31 December
(2)
2013

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Notes:-
(1) A new land title will be issued for the subdivided 30 acres Nexsol Land.
(2) Calculated on a pro rata basis, based on the NBV of 30 out of 50 acres of the Land as
disclosed in the audited financial statements of Kulim as at 31 December 2013.

2.2.2 Salient terms of the LTA

2.2.2.1 Conditions precedent

Kulim agrees to sell to PGEO Edible and PGEO Edible agrees to buy the
Nexsol Land free from all charges and encumbrances, save and except
for the Nexsol Lease, for a cash consideration of RM23.0 million within
nine (9) months after the date of the LTA (“Conditional Period 2”),
subject to the following:-

(a) Completion of the SPA as set out under Section 2.1.1.2 of this
announcement;

(b) Kulim to provide PGEO Edible the relevant documents as

mentioned in the LTA;

(c) Kulim having obtained the Title Deed of the Nexsol Land wherein
the category of land use is endorsed as
‘Perusahaan/Perindustrian’. Kulim shall use its best endeavours
to obtain the Title Deed within three (3) months upon signing of
the LTA;

(d) PGEO Edible having obtained the approval from the Economic
Planning Unit of the Prime Minister’s Department (“EPU
Approval”) for transfer of the Nexsol Land to PGEO Edible (if
required); and

(e) Kulim having obtained the approval of the State Authority for the
transfer of the Nexsol Land to the Buyer (“State Authority
Approval”).

2.2.2.2 Consideration

Disposal Consideration 2 payable to Kulim by PGEO Edible shall be paid

in the manner as set out below:-

(a) A deposit of RM2,300,000 upon execution of the LTA where

RM1,840,000 will be paid to Kulim’s solicitors, who acts as
stakeholders and RM460,000, being the Real Property Gains
Tax’s retention sum to PGEO Edible’s solicitors as payment to
the Inland Revenue Board; and

(b) The balance amount of RM20,700,000 (the “Balance Disposal

Consideration”) to be paid to Kulim’s solicitors as stated under
the LTA.

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2.2.2.3 Completion

(a) Upon fulfillment of the conditions precedent, completion of the

LTA shall take place at the office of Kulim’s solicitors or other
place as agreed upon both parties within seven (7) business
days (“Completion 2”); and

(b) At Completion 2, PGEO Edible shall pay the Balance Disposal

Consideration in full by way of delivery of bank draft in favour of
Kulim’s solicitors who shall be entitled to release the same to
Kulim upon registration of the transfer of the Nexsol Land in
favour of PGEO Edible.

2.2.2.4 Lease Agreement

Subject to completion of the SPA, in the event that:-

(a) any conditions precedent is not fulfilled within nine (9) months as
set out under Section 2.2.2.1 of this announcement; or

(b) the Title Deed, for any reason whatsoever, cannot be issued by
the relevant authority,

(i) PGEO Edible shall have the right, by service of written

notice to Kulim to enter into or nominate a third party
(“Lease Notification”) to enter into a lease of the Nexsol
Land for a period corresponding to the remaining
unexpired leasehold period of the Land (the “Lease”)
subject to the execution of the lease agreement as set
out in the LTA (“Lease Agreement”);

(ii) In the event PGEO Edible elects to enter into the Lease,
a payment of a sum equivalent to Disposal
Consideration 2, being the amount payable for the grant
of the Lease by Kulim for the entire term of the Lease
(“Lease Consideration”) shall be paid to Kulim’s
Solicitors within seven (7) business days from the date
of the Lease Notification; and

(iii) Upon delivery by Kulim of all documents requisite to

enable PGEO Edible to register the Lease in its favour
(or its nominee), Kulim’s solicitors shall be authorised to
release the Lease Consideration to Kulim.

In conjunction with the execution of the Lease Agreement, if required,

Kulim and PGEO Edible shall procure Nexsol to mutually agree to the
termination of the Nexsol Lease.

2.2.3 Information on PGEO Edible

PGEO Edible was incorporated in Malaysia on 6 April 1973 as a private company

limited by shares under the Act and has its registered office at 12th Floor, UBN
Tower, No. 10, Jalan P. Ramlee, 50250 Kuala Lumpur.

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As at the date of this announcement, the authorised share capital of PGEO

Edible is RM20,000,000 comprising 20,000,000 ordinary shares of RM1.00 each
in PGEO Edible (“PGEO Edible Share(s)”), of which 19,098,296 PGEO Edible
Shares have been issued and fully paid-up. The principal activity of PGEO Edible
is investment holding, processing and marketing of edible oil products and
manufacturing of steel drums.

2.2.4 Basis of arriving at Disposal Consideration 2

Disposal Consideration 2 was arrived at on a willing-buyer willing-seller basis

after taking into consideration the following:-

(a) the audited NBV of the Nexsol Land as at 31 December 2013 estimated
at approximately RM14.5 million; and

(b) management’s best estimate and enquiries on the market value of land
located in the vicinity of Nexsol Land.

2.2.5 Date and original cost of investment in the Nexsol Land

The Land was acquired by Kulim on 30 December 2005 for a purchase

consideration of approximately RM26.2 million.

Based on the audited financial results of Kulim for the FYE 31 December 2013,
Kulim Group is expected to realise an estimated one-off gain of approximately
RM8.5 million in relation to the Proposed Disposal 2.

2.3 Utilisation of proceeds

The proceeds arising from the Proposed Disposals shall be utilised for the working capital
requirements of the Kulim Group.

2.4 Assumption of liabilities

Save for the obligations and liabilities pursuant to the SPA and the LTA, there are no
other liabilities, including contingent liabilities and guarantees of Nexsol and Nexsol Land,
to be assumed by PGEO Group and PGEO Edible pursuant to the Proposed Disposal 1
and Proposed Disposal 2, respectively.

3. RATIONALE FOR THE PROPOSED DISPOSALS

As Nexsol’s facility is not currently in operation and would require further capital and
refurbishment expenditure to bring the facility to run at optimal levels, the Proposed Disposals
presents a good opportunity for Kulim to realise some value from their investments in Nexsol and
the Nexsol’s facility. In addition, Nexsol is currently a loss making concern, recording a loss after
tax of approximately RM12.0 million for the FYE 31 December 2013, with a shareholders’ deficit
of approximately RM86.2 million.

The proceeds arising from the Proposed Disposals will be channeled towards the working capital
requirements of Kulim Group.

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4. RISK RELATING TO THE PROPOSED DISPOSALS

4.1 Completion risk

The completion of the Proposed Disposals are conditional upon the conditions precedent
as set out in Sections 2.1.1.1 and 2.2.2.1 of this announcement being fulfilled. There can
be no assurance that all the conditions precedent will be fulfilled or obtained in a timely
manner or within the time stipulated in the aforesaid agreements. In the event of the non-
fulfillment of any conditions precedent or the failure to obtain all the necessary approvals
within the stipulated time period, the said agreements may be terminated.

However, in the event the conditions precedent of the LTA is not completed, PGEO
Edible or a nominated third party of PGEO Edible will enter into the Lease Agreement for
the remaining unexpired leasehold period of the Nexsol Land.

Nevertheless, Kulim shall use its best endeavours to obtain the requisite approvals and
will continue to take all reasonable steps to ensure the completion of the Proposed
Disposals.

5. EFFECTS OF THE PROPOSED DISPOSALS

5.1 Share capital and substantial shareholders shareholdings

The Proposed Disposals will not have any effect on the issued and paid-up share capital
and substantial shareholders’ shareholdings of the Company as the Proposed Disposals
will be fully satisfied in cash and do not involve any issuance of new shares in Kulim.

5.2 Earnings and earnings per share (“EPS”)

Based on the aggregate of Disposal Consideration 1 and Disposal Consideration 2 of

RM50.0 million, the Proposed Disposals are expected to result in an one-off gain on
disposal of approximately RM4.2 million. However, the actual gain on the Proposed
Disposals will be determined on the completion date based on applicable accounting
principles effective at that time.

5.3 NA, NA per share and gearing

The Proposed Disposals are not expected to have a material effect on the NA, NA per
share and gearing of the Kulim Group for the FYE 31 December 2014.

6. APPROVALS REQUIRED

The Proposed Disposals are conditional upon approvals being obtained from the following:-

(i) State Authority, for the transfer of Nexsol Land to PGEO Edible;

(ii) EPU, if determined to be required, for the transfer of the Nexsol Land to PGEO Edible;
and

(iii) any other relevant legal and regulatory approvals, where required.

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PROPOSED DISPOSALS

Proposed Disposal 1 and Proposed Disposal 2 are not conditional upon each other.

The Proposed Disposals are not subject to the approval of the shareholders of Kulim.

7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Directors and/or major shareholders of the Company and persons connected to them
have any direct or indirect interest in the Proposed Disposals.

8. DIRECTORS’ STATEMENT

The Board, having considered all aspects of the Proposed Disposals (including but not limited to
the rationale and effects of the Proposed Disposals), is of the opinion that the Proposed
Disposals are in the best interest of the Company.

9. ESTIMATED TIMEFRAME FOR THE COMPLETION OF THE PROPOSALS

Barring any unforeseen circumstances, the Proposed Disposal 1 and Proposed Disposal 2 are
expected to be completed by fourth quarter of 2014 and first half of 2015, respectively.

10. HIGHEST PERCENTAGE RATIO

Based on Kulim’s audited consolidated financial statements for the FYE 31 December 2013 and
pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad, the highest percentage ratio applicable to the Proposed Disposals is 1.24%.

11. ADVISER

RHB Investment Bank has been appointed as Adviser to the Company for the Proposed
Disposals.

12. DOCUMENTS FOR INSPECTION

The SPA and LTA are available for inspection during normal business hours at the Registered
Office of the Company at Suite 18, Lot 1B, Podium 1, Menara Ansar, 65 Jalan Trus, 80000 Johor
Bahru, Johor for a period of three (3) months from the date of this announcement.

This announcement is dated 27 August 2014.

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