The Board of Directors of BHS Industries Berhad ("Company") is pleased to announce the incorporation of a wholly-owned subsidiary namely, BHS Palau Incorporated (“BHS Palau”).

BHS Palau was incorporated in the Republic of Palau on 6 May 2016 with an authorised capital of USD500,000. The current issued capital of BHS Palau is USD450,000.00 comprising 4,500 common stock of USD100.00 each.

The principal business activities of BHS Palau would be property investment holding and development, and real estate related activities.

The aforesaid incorporation would not have a material effect on the Group's earnings and net assets for the financial year ending 30 June 2016.

None of the Directors and substantial shareholders of the Company and persons connected to the Directors and substantial shareholders of the Company has any interest, direct or indirect, in the abovesaid matter.