Introduction

Pursuant to Paragraph 2.1 of Practice Note 12/2001 issued in relation to Paragraph 10.08(1) of Chapter 10 of the Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities"), KKB wishes to announce that KKB Group has entered into the following RRPT aggregated amounts of which have exceeded the prescribed limit of 1% of KKB Group's net assets:-

	Company in the KKB Group	Related Parties	Nature of Transactions
(a)	KKB Engineering Berhad	PPES Works (Sarawak) Sdn Bhd (“PPES”)	Sales of fabricated/galvanized steel products and structural steel works to PPES
(b)	Harum Bidang Sdn Bhd	CMS Infra Trading Sdn Bhd (“CMSIT”)	Sales of Mild Steel Pipes, Mild Steel Mechanical Couplings and Pipes Specials to CMSIT
(c)	KKB Industries (Sabah) Sdn Bhd	CMS Infra Trading Sdn Bhd (“CMSIT”)	Sales of Mild Steel Pipes, Mild Steel Mechanical Couplings and Pipes Specials to CMSIT

Nature of RRPT

The RRPT entered into by KKB Group is in the ordinary course of business. It is a recurring transaction of a revenue and/or a trading nature which was occurred with some degree of frequency and arise at any time and from time to time. This RRPT may be constrained by the time-sensitive nature and confidentiality of such transaction made on an arm's length basis and on normal commercial terms not prejudicial to the interest of the shareholders and not more favourable to the related parties than those generally available to the public and is not detrimental to the minority shareholders.

Rationale of RRPT

The rationale for KKB Group to enter into RRPT is to take advantage of efficiencies in business dealings, competitive prices, reliability of goods, materials and services and shorter delivery time. PPES and CMSIT have long-standing business relationships with KKB Group and the quality of the products have proven to meet the stringent requirements of the Group. All these will ultimately benefit KKB Group and shareholders by enhancing profitability and maximizing returns on shareholders’ fund. In addition, the proven track records of KKB Group in Steel Fabrication and related products, coupled with its certification for ISO 9001:2000 and OHSAS 18001:2007 will mutually benefit the related parties concerned.

Effect of RRPT on KKB Group

The RRPT is not expected to have any effect on the earnings per share, net assets per share, gearing of the Group, share capital and substantial shareholders’ shareholding of KKB Group.

Source of funding of the RRPT

The source of funding for the RRPT is by utilising internal generated fund.

The nature and extent of the interests of the interested directors and major shareholders

PPES and CMSIT are the subsidiaries of Cahya Mata Sarawak Berhad ("CMSB"), a major shareholder of KKB. Therefore, PPES and CMSIT are persons connected with CMSB.

Tuan Syed Ahmad Alwee Alsree who is a director of KKB is also a director of CMSB. He, together with his alternate, Tuan Syed Hizam Bin Mahmood Ezzularab Abdul-Moez Alsagoff are the nominees of CMSB and persons connected with CMSB.

Saved as disclosed above, none of the other directors, major shareholders and/or persons connected with them has any interest in the above RRPT.

Whether the RRPT is subject to the approval of shareholders and the relevant government authorities

The RRPT is not subject to the approval of shareholders and the relevant government authorities.

Statement by Directors

The Directors, saved for Tuan Syed Ahmad Alwee Alsree and Tuan Syed Hizam Bin Mahmood Ezzularab Abdul-Moez having considered all aspects of the RRPT, are in the opinion that the RRPT is in the best interest of KKB Group and not to the detriment of the minority shareholders.