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BOUSTEAD HOLDINGS BERHAD (“BHB” OR “COMPANY”) (I) PROPOSED DISPOSAL OF 85,814,232 ORDINARY SHARES OF RM1.00 EACH IN BH

INSURANCE (M) BHD (“BHI”) REPRESENTING 80% EQUITY INTEREST TO AXA AFFIN GENERAL INSURANCE BERHAD (“AXA AFFIN”) FOR A TOTAL CASH CONSIDERATION OF RM362,580,164 COMPRISING THE PRINCIPAL AMOUNT OF RM359,000,000 AND INTEREST ACCRUED ON THE PRINCIPAL AMOUNT AMOUNTING TO RM3,580,164 (“PROPOSED DISPOSAL”); AND

(II) PROPOSED ACQUISITION OF A FREEHOLD LAND HELD UNDER TITLE NO. GRN 34267, LOT

NO. 262, SECTION 63, TOWN OF KUALA LUMPUR, DISTRICT AND STATE OF WILAYAH PERSEKUTUAN (“PROPERTY”) BY TITLE WINNER SDN BHD (“TWSB”), AN 80%-OWNED SUBSIDIARY COMPANY OF BHB FROM BHI FOR A CASH CONSIDERATION OF RM15,790,000 (“PROPOSED ASSET ACQUISITION”)

(THE PROPOSED DISPOSAL AND PROPOSED ASSET ACQUISITION ARE COLLECTIVELY REFERRED TO AS “PROPOSALS”)

1. INTRODUCTION We refer to the announcements dated 22 February 2010 and 24 February 2010 in relation to the Proposals.

On behalf of the Board of Directors of BHB (“Board”), Affin Investment Bank Berhad (“AFFIN Investment”) wishes to announce that on 2 March 2010 -

(i) BHB had entered into a sale and purchase agreement with AXA Affin in relation to the

Proposed Disposal (“BHB SPA”); and

(ii) TWSB, an 80%-owned subsidiary of BHB, had entered into another share and purchase agreement with BHI, BHB and Felda Marketing Services Sdn Bhd (“Felda”) in relation to the Proposed Asset Acquisition (“Property SPA”),

the particulars of which are set out in the ensuing sections below.

2. DETAILS OF THE PROPOSED DISPOSAL

2.1 Particulars Pursuant to the BHB SPA, BHB proposes to dispose of 85,814,232 ordinary shares of RM1.00 each in BHI (“Sale Shares”) representing 80% equity interest in BHI to AXA Affin for a total cash disposal consideration of RM362,580,164 comprising the principal amount of RM359,000,000 and interest accrued on the principal amount amounting to RM3,580,164.

The Sale Shares will be disposed of free from all encumbrances.

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2.2 Background information of BHI and AXA Affin

BHI BHI was incorporated in Malaysia under the Companies Act on 29 October 1976 under the name of Royal Insurance (Malaysia) Sdn. Bhd and assumed its current name on 21 September 2007. BHI is principally involved in the underwriting of all classes of general insurance business. BHI markets its products wholly in Malaysia. The authorised issued and paid up share capital of BHI is RM250,000,000 comprising 250,000,000 ordinary shares of RM1.00 each. As at the date of this announcement, the issued and fully paid-up share capital of BHI is RM107,267,790 comprising 107,267,790 ordinary shares of RM1.00 each. Based on the latest audited financial statements of BHI for the financial year (“FY”) ended 31 December 2009, the net assets were RM334.5 million and the net profit after tax was RM39.6 million. The substantial shareholders (holding 5% or more of the issued and paid-up share capital of BHI) and their respective shareholdings in BHI as at 23 February 2010 (being the latest practicable date prior to the date of this announcement) (“LPD”) are as follows:

Direct Indirect Shareholders No. of

shares % No. of shares %

BHB 85,814,232 80.00 - -

Felda Merketing Sdn Bhd 21,453,558 20.00 - -

Lembaga Tabung Angkatan Tentera (“LTAT”) - - 85,814,232* 80.00

Note: * Deemed interested by virtue of its shareholdings in BHB pursuant to Section 6A of the Companies Act,

1965.

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The directors and their shareholdings in BHI as at LPD are as follows:

Direct Indirect

Name Designation Nationality No. of shares

% No. of shares

%

Gen. (R) Tan Sri Ahmad Saruji bin Che Rose

Chairman, Independent Non-Executive Director

Malaysian - - - -

Dato’ Haji Nasir bin Yusoff Independent Non-Executive Director

Malaysian - - - -

Dato’ (Dr.) Megat Abdul Rahman bin Megat Ahmad

Independent Non-Executive Director

Malaysian - - - -

Koo Hock Fee Non- Independent Non-Executive Director

Malaysian - - - -

Ramli bin Putih Non- Independent Non-Executive Director

Malaysian - - - -

Izzat bin Othman Non- Independent Non-Executive Director

Malaysian - - - -

AXA Affin AXA Affin was incorporated in Malaysia under the Companies Act on 12 July 1975. AXA Affin is principally engaged in the underwriting of all classes of general insurance business. As at LPD, the authorised issued and paid up share capital of AXA Affin is RM100,000,000 comprising 100,000,000 ordinary shares of RM1.00 each. Based on the latest audited financial statements of AXA Affin for the FY ended 31 December 2008, the net assets of AXA Affin as at 31 December 2008 were RM299.3 million and the net profit after tax was RM21.3 million.

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As at LPD, the directors and their respective shareholdings in AXA Affin are as follows:

Ordinary shares of RM1.00 each in AXA Affin

Direct Indirect

Directors No. of shares % No. of shares %

Jahanath A/L Muthusamy - - - -

Admiral (R) Datuk Mohd Ramly bin Abu Bakar - - - -

Ngo Siew Pod - - - -

Oh Teik Tatt - - - -

Tan Sri Hashim Meon - - - -

Kang Beng Hoe - - - -

Jan Van Den Berg - - - - The substantial shareholders and their respective shareholdings in AXA Affin as at LPD are as follows:

Ordinary shares of RM1.00 each in AXA Affin

Direct Indirect

Substantial shareholders No. of shares % No. of shares %

AXA Group 50,484,000 50.48 - -

Affin Holdings Berhad (“AHB”) 40,000,000 40.00 - -

BHB - - 40,000,000a 40.00

LTAT - - 40,000,000b 40.00 Notes: a Deemed interested by virtue of its shareholdings in AHB pursuant to Section 6A of the Companies Act,

1965. b Deemed interested by virtue of its shareholdings in BHB and AHB pursuant to Section 6A of the

Companies Act, 1965. 2.3 Other salient terms of the BHB SPA for the Proposed Disposal

The other salient terms of the BHB SPA for the Proposed Disposal are as follows: (a) Clause 2: Agreement to sell the Sale Shares

BHB agrees to sell to AXA Affin, and AXA Affin (relying on the warranties, undertakings and indemnities contained in the BHB SPA) agrees to buy from BHB, the Sale Shares free from encumbrances. AXA Affin shall not be obliged to complete the purchase of such Sale Shares unless it purchases all of such Sale Shares and all of the remaining shares held by Felda in BHI simultaneously.

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(b) Clause 4: Conditions Precedent

The Proposed Disposal is subject to the following conditions precedent to be fulfilled on or before the expiry of 6 months from the date of signing of the BHB SPA:

(i) the receipt by AXA Affin and BHB of the approval from Bank Negara Malaysia (“BNM”) in a form satisfactory to AXA Affin (which was obtained vide BNM’s letter dated 18 February 2010);

(ii) the receipt of a written confirmation from Felda in a form satisfactory to AXA Affin

that it waives the exercise of its pre-emption rights in relation to the Sale Shares under the Existing Shareholders’ Agreement (as defined in the BHB SPA), the Articles of Association of BHI or otherwise;

(iii) the Existing Shareholders’ Agreement being terminated with effect from the

Completion Date (as defined in the BHB SPA), without any liability to BHI; (iv) the receipt of written consents (or alternative letter of comfort) from each of the

following parties, in each case, in a form satisfactory to AXA Affin:

(a) subject to clause 9.4, each of the reinsurers under the Reinsurance Treaty Contract as defined in the BHB SPA;

(b) a third party, in relation to the Financial Link Agreement as defined in the

BHB SPA; and (c) a financial institution, in relation to the Merchant Agreement as defined in

the BHB SPA;

(v) the delivery by BHB to AXA Affin of the written consent given by the landlord to the tenant under the Kuching Branch Tenancy Agreement (as defined in the BHB SPA), to sublease the property (if required under the principal tenancy agreement);

(vi) completion of the Property SPA in accordance with its terms and confirmation or

evidence in a form satisfactory to AXA Affin that the full consideration for such sale is held by BHI on the Completion Date;

(vii) the passing of the relevant resolutions by the shareholders of AXA Affin at a

general meeting to approve the purchase of the Sale Shares pursuant to the terms of the BHB SPA;

(viii) the passing of the relevant resolutions by the shareholders of BHB at a general

meeting to approve the sale of the Sale Shares pursuant to the terms of the BHB SPA; and

(ix) completion of the sale and purchase agreement dated 2 March 2010 entered into

between Felda and AXA Affin in respect of the proposed disposal of 21,453,558 ordinary shares of RM1.00 each representing 20% equity interest in BHI by Felda to AXA Affin for a total consideration of RM90,645,041 to be satisfied by the issuance of 19,047,619 ordinary shares of RM1.00 each in AXA Affin at an issue price of approximately RM4.76 per share (“Felda SPA”) in accordance with its terms, save for the satisfaction of any conditions precedent in the Felda SPA relating to the Completion (as defined in Clause 6) of the BHB SPA.

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(c) Clause 6: Completion

Completion of the Proposed Disposal shall take place on the date which is 5 business days after the date on which all of the conditions precedent set out in clause 4 of the BHB SPA have been satisfied or waived by AXA Affin (or such later date as BHB and AXA Affin may agree in writing) and shall take place at the registered office of BHI or at such other place as BHB and AXA Affin may agree in writing.

(d) Clause 7: BHB’s Warranties and indemnity

Under the BHB SPA, BHB shall give certain representations and warranties to AXA Affin on the date of signing of the BHB SPA and such representations and warranties shall be deemed to be repeated immediately before Completion with reference to the facts and circumstances then prevailing. The representations and warranties are set out in Schedule 2 to the BHB SPA. In broad terms, these relate to the BHI Shares held by BHB and the business and operations of BHI. The representations and warranties are qualified to the extent, but only to the extent, of matters which are fully and fairly disclosed in the disclosure letter to be delivered by BHB to AXA Affin at or prior to signing.

These include the warranty that the agency agreement between BHI and the BHB Group shall remain in full force and effect and BHB shall procure that Boustead Global Trade Network Sdn Bhd renews such agreement, and does not take steps to terminate such agreement, for a period of not less than 8 years from the date of Completion (the “Minimum Period”). BHB undertakes to ensure that, during the Minimum Period, it and its affiliates shall continue to buy or renew general insurance policies from BHI with aggregate gross written premiums of not less than RM10,000,000 per financial year (the “Target Boustead Premiums”). If the actual gross written premiums of BHI derived from BHB and its affiliates for any one financial year (the “Actual Boustead Premiums”) are less than the Target Boustead Premiums, BHB shall reimburse BHI or AXA Affin an amount equal to 20% of the difference between the Target Boustead Premiums and the Actual Boustead Premiums. This commitment by BHB will fall away if and as soon as the aggregate of the Actual Boustead Premiums paid during the Minimum Period is an amount in excess of RM125,000,000.

(e) Clause 9: Pre-Completion matters

There will be a timing gap between the signing of the BHB SPA and Completion, during which BHB and AXA Affin agree to establish a pre-transfer committee within 14 Business Days of signing.

The purpose of such a committee is to provide a forum:

(i) to discuss issues relating to, and facilitating, the sale of BHI by BHB to AXA Affin;

(ii) to consider communications to be made by AXA Affin and/or BHB to BHI’s employees, agents and other third party distributors as well as BNM and any other relevant regulatory authorities;

(iii) to seek any required consents from AXA Affin under the terms of the BHB SPA; and

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(iv) to keep AXA Affin informed of all material matters relating to BHI’s business and affairs. For the avoidance of doubt, AXA Affin’s representatives on the pre-transfer committee shall not have any executive or decision-making power in respect of the day-to-day management of BHI prior to Completion.

2.4 Basis and justification for the disposal consideration

The total cash disposal consideration of RM362,580,164 (“Sale Price”) comprises a principal amount of RM359,000,000 and interest accrued on the principal amount amounting to RM3,580,164. The principal amount of RM359,000,000 was arrived at on arms’ length terms between a willing-buyer and a willing-seller, based on the following: RM million Note Audited net assets of BHI as at 31 December 2007 288 1

Less : Audited net book value of the Property as at 31 December 2007 (14) 2

Less : Audited goodwill as at 31 December 2007 (48)

Adjusted net assets 226

Times: price multiple 1.79

Base price 405

Add : Audited goodwill as at 31 December 2007 48

Less: Dividend paid to shareholders in March 2009 (20)

Add: Audited net book value of the Property as at 31 December 2008 16

Adjusted base price (100%) 449

Disposal consideration (80%) 359

Notes: 1: The audited financial statements of BHI for FY ended 31 December 2007 form the basis for the price

negotiations which commenced subsequent to BNM’s approval in principle on 4 December 2007 for BHB to commence preliminary negotiations with the shareholders of AXA Affin on the proposed rationalisation of BHB’s interest in BHI and AXA Affin.

2: Pursuant to the negotiations between BHI and AXA Affin on the Proposed Disposal, it was agreed that the Property shall be disposed of by BHI prior to the completion of the Proposed Disposal.

The interest amount of RM3,580,164 is the interest accrued on the principal amount of RM359,000,000 calculated from 25 November 2008 (being the date of the conditional acceptance by BHB of the offer price made by AXA Affin) up to and including 25 May 2009 (being 6 months from the date of the conditional acceptance by BHB of the offer price made by AXA Affin) at a rate of 2% per annum. The Sale Price of approximately RM4.23 per Sale Share in total represents a premium of approximately 100% over the adjusted net assets per share of BHI as at 31 December 2007 of RM2.11 or a price-to-book multiple of 2.00 times. The Sale Price will be settled fully in cash upon completion of the sale and purchase of all Sale Shares in accordance with the BHB SPA.

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The Sale Price is justified after taking into account, amongst others, the audited net assets of BHI as at 31 December 2007, the audited net book value of the Property as at 31 December 2008 and the price multiple of 1.79 times which is comparable to the past precedent transactions involving the acquisition/disposal of shares, transfer of business or merger of general insurance companies in Malaysia.

2.5 Historical financial information

The summary of financial information of BHI based on its audited financial statements for the past 3 FYs ended 31 December 2007 to 2009 are as follows:

Audited FY ended 31 December

2007 2008 2009*

RM’000 RM’000 RM’000

Revenue 278,031 303,740 313,764

Profit before tax and minority interest 43,814 26,858 44,724

Taxation (11,273) (6,497) (5,131)

Pofit after tax and minority interest 32,541 20,361 39,593 Note: * Subject to the shareholder’s approval at the forthcoming annual general meeting scheduled to be held in

end-March 2010. Commentary: BHI recorded a lower profit in FY ended 31 December 2007 as compared to FY ended 31 December 2006 which was mainly due to highly competitive and soft insurance market and the inclusion of a non-renewable written premium booked in the FY ended 31 December 2006. BHI registered lower profits in the FY ended 31 December 2008 mainly due to allowances made for diminution in value of the company’s investments as a result of the poor market performance during the said financial year. BHI recorded higher profits in FY ended 31 December 2009 as compared to FY ended 31 December 2008. The improvement was attributable to higher investment income as a result of better equity market condition and an increase in underwriting profit.

2.6 Expected gains or losses to BHB and its subsidiaries (“BHB Group”)

The BHB Group is expected to record a consolidated gain of RM75 million for the FY ending 31 December 2010 from the Proposed Disposal assuming that the Proposed Disposal is completed in the second quarter of the FY ending 31 December 2010.

2.7 Utilisation of disposal proceeds

The proceeds from the Proposed Disposal are intended to be utilised by BHB for working capital and/or repayment of bank borrowings and is expected to be utilised within 12 months from the completion of the Proposed Disposal. The breakdown for the utilisation of proceeds is not finalised at this juncture.

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2.8 Original cost and date of investment in BHI BHB’s original dates and costs of investment in BHI are set out below:

Date of investment Cost of

investment (RM)

29.10.1976 2,027,900

08.09.1982 140,000

09.09.1982 350,000

24.09.1998 46,953,773

03.09.2007 156,020,872

Total 205,492,545 2.9 Assumption of liabilities

There are no liabilities, including contingent liabilities and guarantees, to be assumed by AXA Affin pursuant to the Proposed Disposal.

2.10 Cash or Practice Note 17 company

The Proposed Disposal is not expected to result in BHB becoming a cash company or Practice Note 17 company, as defined in Main Market Listing Requirements issued by Bursa Malaysia Securities Berhad, as BHB has other major businesses which generate revenue and profits to the consolidated results of BHB.

3. DETAILS OF THE PROPOSED ASSET ACQUISITION Pursuant to the Property SPA, TWSB, an 80%-owned subsidiary of BHB, proposes to acquire the Property from BHI for a cash consideration of RM15,790,000. The Property shall be transferred out from the books of BHI and cease to be part of the assets of BHI prior to the completion of the BHB SPA. The Proposed Asset Acquisition is inter-conditional with the Proposed Disposal. The Proposed Disposal is also conditional upon the completion of the Felda SPA. The Property shall be acquired free from all encumbrances and with vacant possession.

3.1 Particulars of the Property

The Property, a parcel of freehold land with a land area of 3,340.591 square metres, was acquired by BHI on 29 October 1976. The Property is held under title no. GRN 34267, Lot No. 262, Section 63, Town of Kuala Lumpur, District and State of Wilayah Persekutuan. The document title of the Property does not categorise the land use of the Property. Situated on the Property is a building, which is in a derelict state and is not occupied. The approximate age of the building is more than 30 years. The Property is not encumbered and there is no restriction-in-interest attached to it. Currently, there is no approval for any development plan in respect of the Property.

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The Property is situated along Jalan Eaton, off Jalan Tun Razak, within the city centre of Kuala Lumpur. The Property is in the vicinity of KLCC Petronas Twin Towers, the Suria KLCC Shopping Centre, Menara Esso, Bangunan Tan & Tan, Menara Perbadanan Nasional Berhad and Bangunan Lembaga Urusan Tabung Haji. The immediate locality is considered an exclusive residential area of Kuala Lumpur City which includes double storey detached houses, Istana Hinggap Perlis, the Singapore High Commission and the Japanese and United States of America embassies (Source: Valuation report dated 28 November 2008 by JAZ International Malaysia Sdn Bhd) The net book value of the Property based on the audited financial statement of BHI for the FY ended 31 December 2008 amounted to RM15,790,000.

3.2 Basis of the Purchase Price

The purchase consideration of RM15,790,000 was arrived at on arms’ length terms between a willing-buyer and a willing-seller after taking into consideration the audited net book value of the Property as at 31 December 2008 of RM15,790,000. The audited net book value of the Property was based on the open market value of RM15,790,000 as appraised by JAZ International Malaysia Sdn Bhd, an independent firm of valuer registered with the Board of Valuers, Appraisers & Estate Agents Malaysia, appointed by BHI. The valuation exercise was conducted in November 2008. The valuation of the Property was principally carried out using the comparison method of valuation whereby transactions of similar properties in the neighbourhood of the Property were analysed and compared with the Property. (Source: Valuation report dated 28 November 2008 by JAZ International Malaysia Sdn Bhd) The purchase consideration is justified after taking into account the audited net book value of the Property as at 31 December 2008 which was based on the valuation exercise conducted by an independent firm of valuers in November 2008 and the valuation method used in valuing the Property.

3.3 Salient terms of the Property SPA

A summary of the salient terms of the Property SPA is as follows. (a) Clause 1: Agreement and Purchase Price

BHI agrees to sell and TWSB agrees to buy from BHI the Property free from encumbrances and with vacant possession at the purchase price of RM15,790,000 (“Purchase Price”). As soon as practicable after the execution of the Property SPA, BHB shall convene a general meeting to obtain the approval of its shareholders (“BHB Approval”). BHB shall use its best endeavours to obtain the BHB Approval simultaneously with the approvals pursuant to the BHB SPA (“the Cut Off Date”). If the BHB Approval is not obtained on or before the Cut Off Date, the Property SPA shall automatically terminate with no liability to TWSB, BHI and BHB. The date when the BHB Approval is obtained is referred to as the Unconditional Date.

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(b) Clause 2: Completion

Completion of the Property SPA shall take place not later than ten (10) days from the Unconditional Date or such other date as BHI and TWSB may mutually agree (“Completion Date”) provided that BHI shall not be obliged to sell and TWSB shall not be obliged to purchase the Property if on the Completion Date there exist circumstances which may lead to the non completion of the BHB SPA and/or the Felda SPA. In such an event the Property SPA shall automatically terminate with no liability to either BHI or TWSB.

On Completion Date, TWSB shall pay the Purchase Price by electronic funds transfer for value to the nominated bank account of the BHI, details of which BHI shall provide to TWSB in writing no later than five (5) working days prior to the Completion Date.

(c) Clause 5: Delivery of Property

Vacant possession of the Property shall be delivered on an “as is where is” basis to TWSB on date of payment of the Purchase Price.

(d) Clause 7: Refusal to complete by Vendor

In the event BHI shall fail to complete the sale as provided in the Property SPA other than as otherwise contemplated under clause 9.2 of the Property SPA, TWSB shall be entitled to specific performance of the Property SPA and the usual remedies for other consequential loss and damages.

3.4 Original cost and date of investment in Property The original cost of the Property to BHI is RM480,000 and the date of investment is 29 October 1976.

3.5 Source of funding

TWSB is a special purpose vehicle created for the purpose of the Proposed Asset Acquisition. Both shareholders of TWSB, i.e. BHB (which holds 80% equity interest in TWSB) and Felda (which holds the remaining 20% equity interest in TWSB), will inject the necessary funds based on their proportionate shareholdings to facilitate the Proposed Asset Acquisition. BHB is expected to finance the Proposed Asset Acquisition of RM12,632,000 via its internally generated funds.

3.6 Liabilities to be assumed There are no liabilities, including contingent liabilities and guarantees, to be assumed by TWSB and BHB as a result of the Proposed Asset Acquisition.

3.7 Estimated additional financial commitment There is no estimated additional financial commitment required of TWSB and BHB in putting the Property acquired on-stream, at this juncture.

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4. RATIONALE FOR THE PROPOSALS 4.1 PROPOSED DISPOSAL

The Proposed Disposal is undertaken pursuant to the requirement imposed by BNM vide its letter dated 7 June 2007 which required BHB and its holding company, LTAT to rationalise their cross shareholdings in BHI and AXA Affin within a period of 18 months from the completion of the acquisition of 45% interest in BHI by BHB. The acquisition of 45% equity interest in BHI by BHB was completed on 3 September 2007. BNM had, vide its letter dated 3 March 2009, stated that it had no objection to allow an extension of time until end December 2009 for BHB and LTAT to rationalise the cross shareholdings in BHI and AXA Affin. On 29 December 2009, BHB and LTAT were given an extension up to 31 December 2010 by BNM to rationalise the aforesaid shareholdings. The Proposed Disposal will facilitate the LTAT group of companies to no longer hold interests in 2 licensed insurers carrying on the same class of insurance business i.e. general insurance, and to be in compliance with Section 69(1)(b) of the Insurance Act 1996. With the Proposed Disposal, the LTAT group of companies will hold interests in 2 different classes of insurance business, i.e. through AXA Affin (general insurance) and AXA Affin Life Insurance Berhad (life insurance). Further, the Proposed Disposal provides an avenue for BHB to realise its investment in BHI and raise funds for working capital and/or repayment of the BHB Group’s borrowings which will result in reduction of gearing of the BHB Group and an annual interest saving of approximately RM18 million.

4.2 PROPOSED ASSET ACQUISITION

During the negotiations between BHB and AXA Affin pertaining to the Proposed Disposal, both parties agreed that the Property will be transferred out of BHI to the BHB Group prior to the completion of the Proposed Disposal. The Proposed Asset Acquisition forms part of the terms of the BHB SPA. The Proposed Asset Acquisition would also provide an opportunity to the BHB Group to invest in the Property which is strategically located in the city centre of Kuala Lumpur as part of its land bank expansion for investment and future development purposes.

5. PROSPECTS

Outlook of the Malaysian Economy The Malaysian economy registered a positive growth of 4.5% in the fourth quarter (3Q 09: -1.2%), amid strengthened domestic and external demand. Sustained growth in private consumption and increased public sector spending contributed to higher domestic demand. The implementation of the fiscal stimulus measures had gained further momentum during the quarter, providing an additional impetus to growth. Meanwhile, Malaysia’s export performance benefited from improvements in external demand, particularly from the regional economies, and from stronger commodity prices. On the supply side, all economic sectors recorded positive growth, with the exception of the mining sector. For the year as a whole, the Malaysian economy contracted by 1.7% (2008: 4.6%).

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The recovery in the global economy had improved further in the fourth quarter of 2009. The advanced economies experienced a gradual pick-up in growth benefiting from the policy support, while the regional economies recorded a stronger recovery supported by favourable domestic demand and an increase in intra-regional trade. This positive trend is expected to continue in 2010, although the pace of the global recovery is expected to be gradual and uneven. The prospect for sustained global growth will depend importantly on the recovery in private sector demand, particularly when the effects of policy measures begin to diminish. The Malaysian economy has recovered from the global crisis and turned around to record a positive growth in the fourth quarter. Going forward, the improvement experienced in the second half of 2009 is expected to strengthen in 2010. Higher domestic demand, particularly private consumption spending, is expected given the stable labour market conditions, improved consumer and business confidence, and continued access to financing. Further improvements in external demand, following the gradual recovery in the global economy, is also expected to provide further impetus to the domestic economy. (Source: Bank Negara Malaysia’s Economic and Financial Developments in Malaysia in the Fourth Quarter of 2009, dated 24 February 2010.) The economy is expected to benefit from stabilizing global economic conditions, augmented by fiscal measures and accommodative monetary policy. GDP growth is forecast to turn around to 2.0% - 3.0% in 2010 (2009: -3.0%) driven by domestic demand, particularly the private expenditure and supported by expected recovery in external demand. The broad-based recovery with positive contribution from all sectors in the economy is expected to raise nominal per capita GNP by 2.5% to RM24,661 (2009: -6.7%; RM24,055). In terms of purchasing power parity, per capita income is expected to increase 2.7% to USD13,177 (2009: -14.7%; USD12,826). (Source: Economic Report 2009/2010, Ministry of Finance)

Outlook of the Property Market

The real estate and business services sub-sector is expected to grow 1.0% in 2009 (2008: 1.5%), due to higher stock broking, shared services and outsourcing activities as well as information technology related services. The FTSE Bursa Malaysia Kuala Lumpur Composite Index closed at a record of 1,246.84 points as at 14 October 2009 with market capitalisation of RM940.23 billion (end-2008: 876.75 points; RM663.8 million). The improved performance was attributed to better investor sentiment. In addition, the stock market responded positively to several liberalisation measures announced in the second quarter of 2009. In addition, the government has also rebranded the Malaysia My Second Home (“MM2H”) programme with the aim of making it more appealing and effective, particularly in attracting high net-worth individuals to invest in Malaysia by setting up their business or partnering with local entrepreneurs. This includes the relaxation of the MM2H criteria, whereby participants are now allowed to work for not more than 20 hours per week as well as invest and participate in business actively. As a result, the number of MM2H participants increased 1.2% to 1,055 in the first eight (8) months of 2009 (January – August 2008: -1.8%; 1,042). As at end August 2009, the total number of MM2H participants stood at 12,794 and were mainly from China (17.6%), Bangladesh (13.4%), the United Kingdom (10.4%) and Japan (7.5%).

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The residential sub-sector grew 3.6% (January – June 2008: 3.5%) during the first half of 2009. Despite the sluggish housing activity, the high-end property performed better, with newly launched condominiums and apartments registering higher take-up rate of 32.0% to 1,178 units during the first half of 2009 (January – June 2008: 16.0%; 1,029 units). With developers being cautious, new launches of residential units were lower at 16,069 units (January – June 2008: 36,033 units). During the period, 55,682 units were completed, resulting in an increase of total stock by 3.2% to 4,264,649 units. Given the lower supply and increased sales of high-end properties, the property overhang improved to 21,467 units as at end-June 2009 (end-December 2008: 26,029 units). The low interest rate and attractive packages offered by developers helped to renew buying interest, especially in high-end properties and preferred locations. The Foreign Investment Committee guidelines for property transactions were substantially relaxed to stimulate foreign investment in the property market. Approval will only be required where it involves a dilution of Bumiputera and government interest for properties valued at RM20 million and above. The lifting of the Bumiputera ownership in the acquisition of equity stakes, mergers and takeovers as well as relaxing the guidelines on property transactions augur well for Malaysia as an attractive investment destination. (Source: Economic Report 2009 / 2010, Ministry of Finance) Future plans and prospects of the Property The Property is accessible from Kuala Lumpur City Centre via Jalan Tun Razak then off to Jalan Eaton. The Property is surrounded by Istana Hinggap Perlis, Singapore High Commission, and the embassies of Japan and the United States of America. The vicinity of the Property has been transformed into an upmarket service apartments, for example, The Binjai, 2 Residency, Stonor Park, Avare, Oval, Troika and Ampersand. (Source: Valuation report dated 28 November 2008 by JAZ International Malaysia Sdn Bhd) With the Proposed Asset Acquisition, the Board is of the opinion that it is now presented with an opportunity to acquire a strategically located land for investment and future development purposes. At this juncture, BHB has no definitive plan to develop the Property apart from keeping it for investment and future development purposes.

6. RISK FACTORS

The following are the risk factors in relation to the Proposals:

6.1 Investment risk

The Property is currently vacant and not in use. There is no development plan in respect of the Property at this juncture. The investment return on the Proposed Asset Acquisition will be dependent upon, amongst others, the development plans in respect of the Property and the ability of TWSB to attract potential tenant or buyers at a rate competitive with the immediate locality adjacent to the Property. Further, there is no assurance that the Property would appreciate in value in the future. Hence, there is a potential risk that the anticipated benefits from the Proposed Asset Acquisition may not be realised or returns from the Proposed Asset Acquisition may have a longer payback period than expected or that the Property will be able to generate sufficient returns to offset the associated investment cost. The Board however believes that the Property which is strategically located in the heart of the Kuala Lumpur city centre may have an upside potential for future residential or/and commercial development. In addition, BHB had mitigated its investment risks by exercising due care in the evaluation of its investment.

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6.2 Completion of the BHB SPA and Property SPA

The Proposed Disposal and Proposed Asset Acquisition are inter-conditional to each other. The completion of the BHB SPA and Property SPA are conditional upon the fulfilment of all the conditions precedent as stated in the BHB SPA and Property SPA. There can also be no assurance that the completion dates relating to the BHB SPA and Property SPA can be achieved subsequent to the unconditional dates being achieved pursuant to the BHB SPA and Property SPA, respectively. Nevertheless, prior to the achievement of the unconditional dates, BHB will endeavour to minimise the risk by obtaining all the necessary approvals and documents required for the completion of the BHB SPA and Property SPA.

6.3 Business and operational risk

The Proposed Asset Acquisition will not result in BHB being exposed to any additional business and operational risks in the property industry since one of the principal activities of the BHB Group is property investment and property development.

7. HIGHEST PERCENTAGE RATIO

The highest percentage ratio applicable for the Proposals pursuant to paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and principles of aggregation is 13.00% which is derived based on the total purchase and disposal consideration amounting to a total of RM378.370 million compared with BHB’s audited consolidated net assets of RM2.911 billion as at 31 December 2008 whereby:

(i) The highest percentage ratio applicable for the Proposed Disposal pursuant to paragraph

10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 12.46%, which is derived based on the total disposal consideration of RM362.580 million compared with BHB’s audited consolidated net assets of RM2.911 billion as at 31 December 2008; and

(ii) The highest percentage ratio applicable for the Proposed Asset Acquisition pursuant to

paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 0.54%, which is derived based on the total purchase consideration of RM15.790 million compared with BHB’s audited consolidated net assets of RM2.911 billion as at 31 December 2008.

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8. EFFECTS OF THE PROPOSALS The effects of the Proposals on the group structure, issued and paid-up share capital, substantial shareholders’ shareholdings, earnings per share (“EPS”), net assets and gearing and are as follows:

8.1 Group structure Before Proposals (as at LPD)

Note : Being principally involved in the general insurance business After Proposals

Note : Being principally involved in the general insurance business

AXA Affin Life Insurance Berhad

LTAT

AXA Affin BHI

58.7%

AHB

35.7%

80% 40% 51%

20.7%

BHB

LTAT

58.7%

AHB

35.7% 20.7%

BHB

AXA Affin AXA Affin Life Insurance Berhad

BHI

33.6% 51%

100%

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8.2 Share capital and substantial shareholders’ shareholdings The Proposals will not have any effect on the issued and paid-up share capital of BHB as well as its substantial shareholders’ shareholdings as the Proposals do not involve any issuance of new shares.

8.3 Net assets and gearing

The proforma effects of the Proposals on the net assets per share and gearing of the BHB Group based on the audited consolidated financial statements of the BHB Group as at 31 December 2008 assuming the entire proceeds of RM362,580,164 will be utilised to repay the bank borrowings of the BHB Group are as follows.

I II III Audited

consolidated as at

31 December 2008

After I and adjustment for

rights issue exercise*

After II and Proposed Disposal

After III and Proposed

Asset Acquisition

RM’000 RM’000 RM’000 RM’000 Share capital 325,516 455,722 455,722 455,722 Share premium 565,509 1,163,459 1,163,459 1,163,459 Non-distributable

reserves 288,313 288,313 288,313 288,313

Retained earnings 1,731,433 1,731,433 1,806,433** 1,805,933## Net assets/

Shareholders’ funds 2,910,771 3,638,927 3,713,927 3,713,427

Net assets per share

(RM) 4.47 3.99 4.07 4.07

Borrowings 3,503,380 3,103,380# 2,740,800@ 2,740,800 Gearing (times) 1.20 0.85 0.74 0.74

Notes: * The renounceable rights issue of 260,412,729 ordinary shares of RM0.50 each in BHB at an issue price

of RM2.80 per rights share was completed on 23 September 2009. The proforma effects had been extracted from BHB’s Abridged Prospectus dated 17 August 2009.

# Assuming that the bank borrowings of the BHB Group will be repaid subject to the maximum of RM400 million, from the rights issue proceeds, as stated in the Abridged Prospectus dated 17 August 2009.

** Includes gain on disposal amounting to RM75 million. @ Assuming that the entire proceeds from the Proposed Disposal will be used to repay the bank

borrowings of the BHB Group. ## Includes estimated expenses of RM500,000.

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8.4 Earnings and earnings per share

Upon completion of the Proposed Disposal, the BHB Group is expected to realise a gain of RM75 million, which is expected to be recorded in FY ending 31 December 2010. After the completion of the Proposed Disposal, BHB would not be able to consolidate the results of BHI into its group results. The results of BHI will instead be equity accounted for vide BHB’s 20.7% equity interest in AHB and AHB’s 33.6% equity in interest in AXA Affin. Nonetheless, the Proposed Disposal is not expected to have a material effect on BHB’s consolidated results in the long term. The Proposed Asset Acquisition is not expected to have a material effect on the earnings and EPS for the FY ending 31 December 2010. For illustration purposes only, based on the audited consolidated financial statements of the BHB Group for the FY ended 31 December 2008, the proforma effects of the Proposals on the earnings and EPS of the BHB Group assuming that the Proposals had been effected on 1 January 2008 (being the commencement date for the FY ended 31 December 2008) are as follows:

I II III Audited

consolidated for the FY

ended 31 December

2008

After I and adjustment for rights

issue exercise*

After II and Proposed Disposal

After III and Proposed

Asset Acquisition

Profit for the period

attributable to shareholders of BHB (RM’000)

578,786 578,786 637,497** 636,997##

Weighted average number of ordinary shares of RM0.50 each in issue (‘000)

638,202# 638,202^ 638,202 638,202

Earnings per share (sen) 92.69 90.69 99.98 99.81

Notes: * The renounceable rights issue of 260,412,729 ordinary shares of RM0.50 each in BHB at an issue

price of RM2.80 per rights share, was completed on 23 September 2009. Based on BHB’s Abridged Prospectus dated 17 August 2009, the rights issue is not expected to have any material effect on the consolidated earnings of the BHB Group for the FY ended 31 December 2008 as it was completed on 23 September 2009.

# Being the weighted average number of ordinary shares in issue during the FY ended 31 December 2008, as extracted from the audited consolidated financial statements of BHB for the FY ended 31 December 2008.

^ Based on the assumption that weighted average number of ordinary shares remain unchanged as the rights issue was completed on 23 September 2009.

** Excludes BHB’s share of BHI’s audited net profit after tax for the FY ended 31 December 2008 and includes gain on disposal amounting to RM75 million.

## Includes estimated expenses of RM500,000.

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9. APPROVALS OBTAINED AND REQUIRED The Proposed Disposal is conditional upon the approvals being obtained from the following, all of which are still pending except from BNM:

(i) BNM, obtained on 18 February 2010; (ii) Felda for a waiver from exercising its pre-emption rights in relation to the Sale Shares; (iii) Each of the reinsurers under the Reinsurance Treaty Contracts (as defined in the BHB

SPA), a third party in relation to the Financial Link Agreement (as defined in the BHB SPA) and a financial institution in relation to the Merchant Agreement (as defined in the BHB SPA);

(iv) Shareholders of BHB at the extraordinary general meeting (“EGM”) to be convened

which is pending at this juncture; (v) Shareholders of AXA Affin at an EGM to be convened; and (vi) Any other approvals required. The Proposed Asset Acquisition is conditional upon the receipt of the following approvals:

(a) BNM, obtained on 23 February 2010; (b) Shareholders of BHB at an EGM to be convened which is pending at this juncture; and (c) Any other approvals required. The Proposed Disposal and Proposed Asset Acquisition are inter-conditional to each other. The Proposed Disposal is conditional upon the completion of the Felda SPA. The Proposals are not conditional upon any other proposal of BHB.

10. MAJOR SHAREHOLDER’S AND DIRECTORS’ INTERESTS

Save as disclosed below, none of the major shareholders or directors of BHB and persons connected to them, have any interest, directly or indirectly in the Proposals.

Interested Major Sharehoreholder

The interests of LTAT, the major shareholder of BHB, in BHB, BHI and AXA Affin as at LPD are as follows: BHB

Direct Indirect No. of ordinary shares of

RM0.50 each % No. of ordinary shares of

RM0.50 each %

LTAT 547,113,090 58.71 - -

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BHI

Direct Indirect No. of BHI Shares % No. of BHI Shares %

BHB 85,814,232 80.00 - - LTAT - - 85,814,232* 80.00

AXA Affin

Direct Indirect No. of ordinary shares of

RM1.00 each % No. of ordinary shares

of RM1.00 each %

AHB 40,000,000 40.00 - - BHB - - 40,000,000^ 40.00 LTAT - - 40,000,000# 40.00

Notes: * Deemed interested by virtue of its shareholdings in BHB pursuant to Section 6A of the Companies Act

1965. ^ Deemed interested by virtue of its shareholdings in AHB pursuant to Section 6A of the Companies Act,

1965. # Deemed interested by virtue of its shareholdings in BHB and AHB pursuant to Section 6A of the

Companies Act, 1965. Accordingly, LTAT, the common major shareholder (“Interested Major Shareholder”) of BHB, BHI and AXA Affin, will abstain from voting in respect of its direct and/or indirect shareholdings in BHB at the EGM to be convened to consider the Proposals and have undertaken to ensure that the persons connected to it will abstain from voting in respect of their direct and/or indirect shareholdings at the said EGM.

Interested Directors

Y. Bhg. Tan Sri Dato’ Lodin Wok Kamaruddin is the Chief Executive of LTAT, Group Managing Director of BHB and Deputy Chairman of AHB. Y. Bhg. Datuk Azzat Kamaludin is a Non-Independent Non-Executive Director of BHB and Non-Independent Non-Executive Director of AHB.

The shareholdings of Y. Bhg. Tan Sri Dato’ Lodin Wok Kamaruddin and Y. Bhg. Datuk Azzat Kamaludin in BHB as at LPD are as set out below.

Direct Indirect

No. of ordinary shares

% No. of ordinary shares

%

Y. Bhg. Tan Sri Dato’ Lodin Wok Kamaruddin

26,122,599 2.87 - -

Y. Bhg. Datuk Azzat Kamaludin 40,000 * - - Note: ∗ Negligible In view of the above, both Y. Bhg. Tan Sri Dato’ Lodin Wok Kamaruddin and Y. Bhg. Datuk Azzat are deemed interested in the Proposals (“Interested Directors”).

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Accordingly, the Interested Directors have abstained and will continue to abstain from all Board deliberations and voting at the Board meeting pertaining to the Proposals. They will also abstain from voting in respect of their direct and/or indirect shareholdings in BHB at the Company's EGM to be convened to consider the Proposals and have undertaken to ensure that the persons connected to them will also abstain from voting in respect of their direct and/or indirect shareholdings at the said EGM.

11. DIRECTORS’ STATEMENT

The Board (save for the Interested Directors), having considered all aspects of the Proposals is of the opinion that the Proposals (including but not limited to the rationale, financial effects and valuation) are in the best interest of the Company.

12. AUDIT COMMITTEE’S STATEMENT The audit committee of BHB (save for the Interested Directors) after having considered all aspects of the Proposals (including but not limited to the rationale, financial effects and valuation) and the evaluation by the Independent Adviser, is of the opinion that the Proposals are in the best interest of the Company, the terms of the Proposals are fair, reasonable and on normal commercial terms and are not detrimental to the interest of the non-interested shareholders of BHB.

13. ESTIMATED TIMEFRAME FOR COMPLETION

Barring unforeseen circumstances and subject to the approvals of the relevant authorities, the Proposals are expected to be completed within the second quarter of financial year 31 December 2010.

14. ADVISERS

Affin Investment has been appointed as the Adviser to BHB for the Proposals.

In view of the interests of the Interested Major Shareholder and Interested Directors as mentioned in Section 10 of this announcement and in compliance with Chapter 10 of Main Market Listing Requirements issued by Bursa Malaysia Securities Berhad, Mainstreet Advisers Sdn Bhd has been appointed to act as the Independent Adviser to the non-interested directors and non-interested shareholders of BHB in respect of the Proposals. The Independent Adviser is to comment whether the Proposals are fair and reasonable and whether they are detrimental to the non-interested shareholders of BHB and to advise them on the voting action in respect of the resolutions pertaining to the Proposals at the EGM to be convened.

15. SUBMISSION TO RELEVANT AUTHORITIES

The circular to shareholders detailing the Proposals and Notice of EGM will be submitted to Bursa Malaysia Securities Berhad within 2 months from the date of this announcement.

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16. TOTAL AMOUNT TRANSACTED WITH SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS Interested Major Shareholder

The total amount transacted with the Interested Major Shareholder for the preceding twelve (12) months up to LPD was RM8.6 million.

Interested Directors

There was no transaction between BHB and Y. Bhg. Tan Sri Dato’ Lodin Wok Kamaruddin for the preceding twelve (12) months up to LPD. The total amount transacted between BHB and Y. Bhg. Datuk Azzat Kamaludin for the preceding twelve (12) months up to LPD amounted to RM1.4 million.

17. DOCUMENTS AVAILABLE FOR INSPECTION The BHB SPA and the Property SPA in respect of the Proposals and the valuation report dated 28 November 2008 in respect of the Property are available for inspection at the registered office of BHB at 28th Floor, Menara Boustead, No. 69 Jalan Raja Chulan, 50200 Kuala Lumpur during office hours from Mondays to Fridays (except for public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 2 March 2010.