The terms used herein shall, unless the context otherwise stated, bear the same meaning as those defined in the announcement dated 2 April 2014 in relation to the Proposed Disposals.

We refer to the announcement dated 2 April 2014 in relation to the Proposed Disposals.

The Board of Directors of BHS wishes to announce that pursuant to Chapter 10.04(3)(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the valuation reports of the Johor Land and Singapore Properties has been submitted to Bursa Malaysia Securities Berhad on 17 April 2014.

The salient features of the valuation report are set out below:

(a)   Johor Land

In arriving at the opinion of the market value of the Johor Land, Messrs. Henry Butcher Malaysia (Johor) Sdn Bhd (“Henry Butcher”) had appraised the Johor Land in its valuation report dated 4 April 2014 by using the Comparison Method of valuation.

The Comparison Method is the market approach of comparing the subject property with similar properties that were either transacted recently or listed for sale within the same location or other comparable localities. In comparing properties, due consideration is given to factors such as location, accessibility, size, land zoning, improvements and amenities, time element and other relevant factors to arrive at the market value of the property.

Henry Butcher had not applied other method i.e. Investment Method or Residual Method due to minimal income generated for Lot 1082 GM1488, Lot 1083 GM 1499 and Lot 1085 GM1504, no income/economic benefit generated for Lot 99 GRN 379407, Lot 1081 GM1489, Lot 462 GM 436 and Lot 463 GM1479, and no proposed development to the Johor Land. Nevertheless, Henry Butcher has taken into consideration the highest and the best use of the Johor Land as a potential land for industrial development as it is already zoned for industrial purpose.

(b)   Singapore Properties

In arriving at the opinion of the market value of the Singapore Properties, Messrs. Knight Frank Pte Ltd (“Knight Frank”) had appraised the Singapore Properties in its valuation report dated 7 April 2014 using the Comparison Method.

The Comparison Method seeks to determine the value of the industrial units by comparing recent transactions of comparable industrial units within the subject development to establish the fair market value of the property. Where there are sufficient and suitable transactions, the Comparison Method presents straightforward, market tested approach, and for this reason is preferred over the Capitalisation Approach (also known as Investment Method). The Comparison Method relies on the evidence of actual transactions done and is the best “test” of value being reflective of prevailing property market conditions and sentiment.

Knight Frank has only relied upon one (1) method of valuation and has not applied Capitalisation Approach (also known as Investment Method) in this instance. In times of market volatility where transaction prices are trending ahead of rentals, this approach may result in a capital value that lags behind market transactions. A key assumption of this method is the capitalisation rate or yield and this is critical as a small difference in yield will result varying capital values.

DOCUMENTS FOR INSPECTION

The valuation reports of the Johor Land and Singapore Properties are available for inspection during normal office hours at the registered office of BHS Industries Berhad located at 802, 8th Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan during normal business hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 17 April 2014.