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We refer to the query letter from Bursa Malaysia Berhad dated 23 September 2015 and append below the additional information on the Termination announced on 22 September 2015:-

1.       Further clarification on the basis of arriving at the consideration of USD1.25 million, i.e. details of the remaining lease rental payable and the operating results of Holiday Villa City Centre Phnom Penh ("Hotel").

The remaining lease rental payable from 1 September 2015 to 31 January 2066 is approximately USD8.5 million.

The operating loss of the Hotel is approximately RM841,000 for the financial year ended 31 December 2014.

2.       Justifications for the consideration of USD1.25 million.

In view of the soft hotel market condition in Phnom Penh, remaining lease rental payable, poor operating results and additional cost (to be determined in due course) to construct a new hotel on the vacant land located behind the Hotel, the early termination of the lease for a consideration of USD1.25 million is the best option to exit the Phnom Penh market.

3.       Terms of payment of the remaining USD1 million.

Canadia Bank PLC has issued a Bank Guarantee for the sum of USD1million upon signing the agreement for the Termination which is valid for 60 days.

Upon completion of the winding up of the business and delivery of vacant possession of the Hotel to Monoratanak Construction Co., Ltd (“Monoratanak”) and Canadia Bank PLC, the balance sum of USD1 million shall be paid by Canadia Bank PLC.

4.       Details on the intended utilisation of proceeds of USD1.25 million.

          For working capital purposes.

5.       Treatment of the existing Hotel or building erected on the Land as a result of the Termination.

The existing Hotel or building erected on the Land was leased by AHP from the Municipality of Phnom Penh, the Kingdom of Cambodia under the Lease Agreement dated 31 January 1996 and is not our hotel property asset. Upon completion of the winding up of the business, AHP will deliver vacant possession of the Hotel to Monoratanak and Canadia Bank PLC.

6.       Further clarification on the one-off provision for the writing off of the net book value of the assets of the Hotel amounting to approximately RM15.1 million.

The net book value of the assets of the Hotel to be written off include the renovation cost of approximately RM14.8 million and plant & machinery, furniture & fittings and other assets totalling about RM0.3 million.

7.       Effects on the earnings per share, net assets per share and gearing.

The earnings per share and net assets per share of ASB Group for the financial year ending 31 December 2015 are both expected to reduce by approximately 1.8 sen arising from the Termination. There is no material impact on gearing.