HIGH-5 CONGLOMORATE BERHAD (“the Company” or High-5” or collectively with its subsidiaries are defined as “the Group”) - Acquisition of Unquoted Shares in Pastryville Holdings (M) Sdn Bhd (“Pastryville”) 1. INTRODUCTION The Board of Directors of the Company wishes to announce that its wholly-owned subsidiary company, Madeleine Property Sdn Bhd (“MPSB”), has on 20 March 2014 entered into a sale and purchase agreement (“the SPA”) to purchase 80% of the equity interest in Pastryville Holdings (M) Sdn Bhd (“Pastryville”) together with its three (3) related companies, i.e. Pastryville Distribution (M) Sdn Bhd (“PD(M)SB”), Pastryville Concept (M) Sdn Bhd (“PC(M)SB”) and Pastryville Retail (M) Sdn Bhd (“PR(M)SB”) (collectively, the Pastryville Group”), for a cash consideration of RM220,000, the details of which are set out in Sections 2.2 and 2.4 (“the Acquisition”). Under the SPA, MPSB will acquire 80% of the shareholding in Pastryville, subject to (as a condition precedent) Pastryville acquiring 100% of the shareholding in PD(M)SB, PC(M)SB and PR(M)SB. 2. SALIENT TERMS OF ACQUISITION 2.1 Details of Pastryville Pastryville was incorporated on 28 March 2013, under the Companies Act, 1965, as a private limited company, and has an authorised share capital of RM1,000,000,000 comprising one million (1,000,000) ordinary shares of RM1 each, of which eight hundred thousand (800,000) ordinary shares of RM1.00 each have been issued and fully paid-up. The directors of Pastryville are Hoi Kong Fei, Poh Cheng Teng and Soh Swee Kim, who are also shareholders of Pastryville, with the following shareholdings: Shareholder Hoi Kong Fei Poh Cheng Teng Soh Swee Kim Total No. Shares Held 440,000 240,000 120,000 800,000 Shareholding 55% 30% 15% 100% The Pastryville Group operates a bakery-café and daily fresh bakery business in the Klang valley, with five (5) outlets (at Subang Parade, Wangsa Walk, Plaza Damas, eCurve and Wisma UOA II) and a central kitchen as well. 2.2 Details of Vendors The 80% equity interest in the Pastryville Group will be purchased via the acquisition of 640,000 shares in Pastryville from Hoi Kong Fei, Poh Cheng Teng and Soh Swee Kim, at a purchase consideration of RM220,000 (equivalent to approximately RM0.34 per share) in the following manner: Shareholder Hoi Kong Fei Poh Cheng Teng Soh Swee Kim Total 2.3 No. Shares Purchase to be Consideration Disposed (RM) 280,000 96,250 240,000 82,500 120,000 41,250 640,000 220,000 No. Shares Shareholding after the after the Acquisition Acquisition 160,000 20% 160,000 20% Source of Funding The purchase consideration for the Acquisition will be paid in cash through internally generated funds. 2.4 Justification and Basis of Arriving at the Purchase Price The purchase price for the Acquisition is RM220,000 in cash, which shall be paid over a period of two (2) years from the date of the SPA, proportionately to the vendors based on their respective purchase considerations as set out in Section 2.2, in the manner set out below: (a) RM80,000 upon date of the SPA; (b) RM100,000 in one (1) year after the payment in (a); and (c) RM40,000 in two (2) years after the payment in (b). The purchase price was arrived at on a willing-buyer, willing-seller basis after taking into consideration the future prospects of the Pastryville Group. 2.5 Liabilities to be Assumed There are no liabilities to be assumed by the Company from the Acquisition. 3. FINANCIAL INFORMATION ON THE PASTRYVILLE GROUP PR(M)SB and PD(M)SB were incorporated on 21 January 2013, whilst PC(M)SB and Pastryville were incorporated on 9 May 2013 and 12 September 2013 respectively. As these companies have only recently been incorporated, they have no audited financial statements available. However, based on the unaudited accounts of the companies in the Pastryville Group as at 31 January 2014, the Pastryville Group has a proforma consolidated net asset position of RM446,437 and is presently loss-making, with an estimated consolidated monthly net loss of approximately RM50,000 a month. The Group envisages that the losses of the Pastryville Group may be addressed from increased sales of its own existing products through the Pastryville Group’s outlets, as well as the sales of the Pastryville Group’s existing products through its distribution channels, the development of new products between the Group and the Pastryville Group and the synergies to be realised after the Acquisition, once the business of the Pastryville Group has been integrated with the existing businesses of the Group. 4. EXPECTED GAIN/LOSS ACQUISITION ARISING FROM THE TRANSACTION UPON The purchase consideration for the Acquisition of RM220,000 will result in a gain on acquisition of RM137,150, based on the proforma consolidated net asset position of the Pastryville Group as at 31 January 2014. The Acquisition is not expected to have a material impact on the earnings per share for the current financial year, gearing, share capital and substantial shareholders’ shareholding of the Company. 5. RATIONALE The Acquisition of the Pastryville Group is for the purpose of jump starting the Company’s initiatives of venturing into the premium and gourmet bread market, and to complement its existing initiatives to expand into daily fresh bakery products. In addition, the Acquisition would also enable the Group to acquire the Pastryville Group’s existing infrastructure of bakery-café and daily fresh bakery products, including customers, suppliers, employees, equipment, and systems. Further, the Pastryville Group’s outlets will provide opportunities for the Group to launch its new products to retail customers directly and widen the brand recognition of the Group. Further, the Company see synergistic benefits of its business with the business of the Pastryville Group, in the form of cross-selling of products and operational cost-savings. 6. INTEREST OF DIRECTORS AND/OR MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the directors and/or major shareholders of the Company and/or persons connected with them have any interest, direct or indirect, in the Acquisition. 7. APPROVALS REQUIRED The Acquisition is not subject to the approval of the Company’s shareholders or any regulatory authority. 8. ESTIMATED TIME FRAME FOR THE COMPLETION OF THE ACQUISITION Barring any unforeseen circumstances, the Acquisition is expected to be completed within a period of 3 months from the date of the SPA, notwithstanding that the purchase price will only be fully-paid after 2 years from the date of the SPA. 9. STATEMENT BY DIRECTORS The Board of Directors of the Company having considered all aspects of the Acquisition is of the opinion that the Acquisition is in the best interest of the Group. 10. DOCUMENTS FOR INSPECTION The SPA pertaining to the Acquisition is available for inspection at Lot 72, Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan, Malaysia during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement.