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The Board of Directors of KKB Engineering Berhad ("KKB" or "the Company") is pleased to announce that Harum Bidang Sdn Bhd ("HBSB"), an 80% owned subsidiary of KKB, has on 2 September 2002 acquired 1,845,590 ordinary shares (100%) of RM1.00 each in DPI Coatings & Chemical Sdn Bhd ("DPI").

CORPORATE STRUCTURE

The authorised share capital of DPI is RM5 million divided into 5,000,000 shares of RM1.00 each with an issued and paid-up capital of RM1,845,590 comprising of 1,845,590 ordinary shares of RM1.00 each.

The current directors of DPI as at the date of signing of Sales and Purchase Agreement ("SPA") are Choy Mui Seng @ Chai Mui Seng and Chai Ching Nee.

PRINCIPAL ACTIVITIES OF DPI

The principal activities of DPI are importer, exporter, manufacturer and wholesale of paint coatings.

RATIONALE OF ACQUISITION OF DPI

The rationale of acquisition of DPI is for the provision of land for storage of finished goods..

THE EFFECT OF THE ACQUISITION OF DPI ON THE NET TANGIBLE ASSETS PER SHARE AND EARNINGS PER SHARE OF KKB GROUP

The acquisition of DPI is not expected to have significant effect on the net tangible assets per share and earnings per share of KKB Group in the short and medium terms..




THE SOURCE OF FUNDS FOR HBSB FOR FINANCING THE ACQUISITION OF DPI

The source of fund for HBSB to finance the acquisition of DPI is cash (RM2,160,000 for 1,845,590 ordinary shares of RM1.00 each) by utilising internal generated funds of HBSB.

THE SALIENT FEATURES OF THE AGREEMENT ON THE ACQUISITION OF DPI AND THE TIME AND PLACE WHERE THE AGREEMENT MAY BE INSPECTED.

A SPA has been entered into with DPI on 2 September 2002. The SPA is available for inspection at the registered office of HBSB situated at Lot 865, Section 66, Bintawa Industrial Estate, Jalan Kilang, 93450 Kuching, Sarawak.

The consideration for the acquisition of shares shall be payable in the following manner:-

i) RM1 million shall be paid as deposit and part payment on execution of the SPA
ii) the balance of RM1.16 million shall be paid within one month from the date the vendors
is notified by HBSB that it has completed and is satisfied with the due diligence report

WHETHER THE ACQUISITION OF DPI IS SUBJECT TO THE APPROVAL OF THE RELEVANT GOVERNMENT AUTHORITIES.

The acquisition of DPI is not subject to the approval of the relevant government authorities.

EFFECT OF EARNINGS AND SHARE CAPITAL

The above acquisition of DPI is a cash transaction involving investment of RM2,160,000 by HBSB and will not affect the share capital structure of KKB. This investment is not subject to shareholders' approval and is expected to complement and enhance the earnings potentials of the KKB Group in the coming years.

DIRECTORS' INTEREST

None of the Directors is interested in the above investment.

DIRECTORS' STATEMENT

The Directors of KKB are of the opinion that the above investment is in the best interest of the Company.