General Announcement

Type : Announcement

Subject : PROPOSED JOINT-VENTURE ("JV") BETWEEN SCANWOLF DEVELOPMENT SDN

BHD AND SQ LAND SDN BHD

1. INTRODUCTION

20 Jan 2012 : The Board of Directors of Scanwolf Corporation Bhd ("SCB") is pleased to announce that on 20 Jan 2012 its subsidiary, Scanwolf Development Sdn Bhd ("SDSB") has signed a Joint Venture Agreement ("JVA") with SQ Land Sdn Bhd ("SLSB") to undertake the proposed development of One Hundred and Twenty-Eight(128) plots of mixed development land into Five (5) units of shophouses and One Hundred and Twenty Three (123) units of terrace houses. The One Hundred and Twenty Eight (128) plots of land for the purpose of this development is currently held under HS(D) 15463 to HS(D) 15590 for No PT 7445 to No PT 7572 respectively, all located in Mukim Bidor, Daerah Batang Padang, State of Perak Darul Ridzuan.

2. INFORMATION ON THE JOINT VENTURE

Joint Venture Agreement ("JVA")

Under the JVA signed, SDSB and SLSB have agreed to enter into an unincorporated joint venture to undertake the development of One Hundred and Twenty-Eight (128) plots of mixed development land into Five (5) units of shop buildings, Fifty-Seven (57) units of 20' x 70' medium cost terrace houses, Twenty-Seven (27) units of 20' x 60' medium cost terrace houses and Thirty-Nine (39) units of 20' x 60' low-cost terrace houses.

SLSB shall provide the one hundred and twenty-eight (128) plots of land together with an irrevocable POWER OF ATTORNEY for the purpose of this development and sale of the shop buildings and terrace houses. The POWER OF ATTORNEY shall be revoked upon the completion of this development in accordance with the provisions or upon termination of the JVA.

As consideration, SLSB shall be entitled to the following:-

i) Ringgit Malaysia Eight Hundred Thousand Only (RM800, 000-00) upon the execution of the JVA, being deposit for the due performance of the developer's obligations contained in the JVA.

ii) Landowner's entitlement of between 12% to 20% of the sales proceed with a total minimum entitlement of not less than Ringgit Malaysia Four Million Fifty-One Thousand Seven Hundred and Sixty Only (RM4,051,760.00)

Information on SDSB

SDSB was incorporated in Malaysia on 9 March 2011 as a private limited company. SDSB is involved in the business of property development and investment holding. The authorized share capital of SPSB is RM100,000-00 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up capital of SPSB is RM100,000-00 comprising 100,000 ordinary shares of RM1.00 each.

Information on SLSB

SLSB was incorporated in Malaysia on 03 June 2009as a private limited company. SLSB is involved in the business of property development.

The authorized share capital of SLSB IS RM500,000 comprising 500,000 ordinary shares of RM1.00 each. The issued and paid-up capital of SLSB is RM250,000 comprising 250,000 ordinary shares of RM1.00 each.

3. SALIENT TERMS OF THE JOINT VENTURE AGREEMENT

Pursuant to the terms of the JVA:

- SLSB shall provide the one hundred and twenty-eight (128) plotsof land together with an irrevocable POWER OF ATTORNEY for the purpose of this development and sale of the completed mixed development units.

- SLSB shall be paidRinggit Malaysia Eight Hundred Thousand Only (RM800,000-00) being deposit for the due performance of the Developer's obligations contained in the JVA.

- SLSB shall do all such acts and things and execute all such documents and instruments and render all such assistance as may be reasonably necessary for the implementation and carrying out of the development.

- SDSB shall complete the construction of one hundred and twenty-eight (128) units of mixed development properties on the plots provided by SLSB of which SDSB shall be entitled to sell the same to any interested end-purchasers.

- SDSB shall carry out the development in accordance with the approved plans, bylaws, guidelines, directives, approvals and conditions attached applicable thereto.

- The Completion Period of the said project by the SDSB shall be within Four (4) years from the date of this JVA, failing which SLSB shall grant the SDSB s further period of One (1) year from the lapse of the completion period.

- The parties' entitlement of the sales proceeds shall be as follows:-

Item	Types of Units on the types of approved plots	No. of Units	Minimum Sales Price Per Unit (RM)	Developer's Entitlement from the Sales Proceed (GDV)*	Landowner's Entitlement from the Sales Proceeds (GDV)*	Minimum Sum of Developer's Entitlement (RM) Gross	Minimum Sum of Landowner's Entitlement (RM)
(a)	Shop Buildings to be constructed on Plots approved for "KedaiPejabat (20'x70')	5	338,000.00	80%	20%	1,352,000	338,000
(b)	Terrace Houses to be constructed on Plots approved for "RumahTeres&RumahTeres Kos Serdahana (20'x70')	57	238,000.00	82%	18%	11,124,120	2,441,880
(c)	Terrace Houses to be constructed on Plots approved for "RumahTeres Kos Serdahana (20'x 60')	27	198,000.00	84%	16%	4,490,640	855,360
(d)	Terrace Houses to be constructed on Plots approved for "RumahTeres Kos Rendah (20' x 60')	39	89,000.00	88%	12%	3,054,480	416,520
Total Minimum Sum of the Parties' Entitlement						20,021,240	4,051,760

*GDV = Gross Development Value

4. RATIONALE FOR THE JOINT VENTURE

The project is located along the main road from Bidor to TelukIntan about 2 km from Bidor town centre. Surrounding areas comprises of completed residential development and on-going mixed development projects. The "new villages" in the surrounding area provides a pool of potential buyers for new housing projects in the area. New on-going housing development projects in the area are reported to be doing well.

The Joint Venture allows us to go into property development business with minimum capital investment.

5. RISK FACTOR

The Board is not aware of any risk factors arising from the JV, other than the normal market and global economic risks.

6. SOURCE OF FUNDING

Funding for the JV will come from its internally generated fund and bank borrowings.

7. FINANCIAL EFFECTS OF THE JOINT VENTURE

a) Share Capital and Substantial Shareholders' Shareholding

The Joint Venture will not have any effect on the share capital and the substantial shareholders' shareholding in SCB as the unincorporated JV does not involve any allotment or issuance of new shares by SCB.

b) Earnings, Net Assets and Gearing

The JV is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing for SCB for the current financial year ending 31 March 2012 but is expected to contribute positively to the future earnings of SCB Group.

8. APPROVAL REQUIRED

Other than the approvals of the relevant authorities for proposed development, the JV is not subject to any government authorities' approval and the approval of the shareholders of the Company.

DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST

None of the Directors and/or major shareholders of the Company and/or persons connected with them have any interest, whether direct and indirect, in the JV.

1. STATEMENT BY THE BOARD OF DIRECTORS

The Board had seen and approved this announcement and collectively and individually accept full responsibility for the accuracy of the information contained in this announcement and confirm that after having made due and careful inquiry, there are no false or misleading statement in this announcement false or misleading and/or in breach of disclosure requirements of the Listing Requirements of Bursa Malaysia Securities Berhad.

In the opinion of the Board, the JV is in the best interest of SCB Group.

2. DEPARTURE FROM THE EQUITY GUIDELINES ISSUED BY THE SECURITIES COMMISSION ("SC') ("SC'S GUIDELINES")

To the best of their knowledge and belief, the Board is not aware of any departure from SC's Guidelines in undertaking the JV.

3. DOCUMENTS AVAILABLE FOR INSPECTION

The JVA is available for inspection at the registered office at No. 41, Jalan Medan Ipoh 6, Bandar Baru Medan Ipoh, 31400, Ipoh, Perak Darul Ridzuan during normal business hours for a period of three (3) months from the date of this announcement.

This announcement is dated 20 Jan 2012.

Publish Date: 

20 January, 2012 - 17:38