On behalf of the Board of Directors of AIC, we are pleased to announce that the Company’s wholly-owned subsidiary, Brimal Holdings Sdn Bhd ("BHSB") has on 28 February 2003 entered into a Sale and Purchase Agreement ("the Agreement") with Brimal Stampress Engineering Sdn Bhd ("BSE"), to sell to BSE, a freehold industrial land in Kapar with two office cum factory buildings erected on it, for a cash consideration of RM3 million. The Proposed Disposal is deemed to be a related party transaction by virtue of one of the directors in BHSB having an indirect interest in BSE.

2. BACKGROUND INFORMATION

2.1 BHSB

BHSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 10 September 1975. The principal activities of BHSB are the design, assembly and distribution of electronic products and automotive components. The authorised share capital of BHSB is RM22,000,000 comprising 22,000,000 ordinary shares of RM1.00 each ("BHSB Shares") and RM3,000,000 comprising 3,000,000 redeemable preference shares of RM1.00 each, of which 8,000,000 BHSB Shares have been issued and are fully paid-up.

BHSB is wholly-owned by AIC Inspirasi Sdn. Bhd., an investment holding company which itself is a wholly-owned subsidiary of AIC. The Board of Directors of BHSB comprise of Tuan Haji Mohd Ali bin Bawal, Mr. Raymond Fam and Mr. Kenneth Kang.

2.2 BSE

BSE was incorporated on 10 February 1982 as a private limited company under the Companies Act, 1965. The principal activity of BSE is metal stamping. BSE has an authorised share capital of RM5 million comprising of 5,000,000 ordinary shares of RM1.00 each, of which 1,021,579 ordinary shares of RM1.00 each have been issued and are fully paid-up.

70% of the BSE’s equity is owned by En. Mohamad Nor bin Abu Bakar and the remaining 30% is owned by En. Mohd Zainorlizam bin Kordi. The Board of Directors of BSE comprise of Tuan Haji Abdul Rahman bin Ahmad and En. Mohd Zainorlizam bin Kordi.

3. DETAILS OF THE AGREEMENT

On 28 February 2003, BHSB has entered into the Agreement with BSE, to dispose an industrial property at Lot 3291, 5 ½ Mile, Jalan Kapar, Klang, Selangor Darul Ehsan which consists of a freehold land held under HS(M) 9809, Lot No. 8280, Batu 5 ¼, Jalan Kapar, Mukim of Kapar, Selangor and two double storey office cum single storey factory buildings erected on it (hereinafter referred to as "the Property").

The freehold land is approximately 87,337 square feet. One of the office cum factory buildings is approximately 26 years old while the other is approximately 18 years old. The total gross floor area of the buildings is approximately 39,660 square feet. One of the buildings is currently rented by BSE for their manufacturing operations at a rental rate of RM7,000 per month . The other building is used as a warehouse by BHSB.

The Property is to be sold on an as-is-where-is basis, free from encumbrances but subject to any restrictions in interest and conditions of title to the Property, and with vacant possession for a total cash consideration of RM3 million. An earnest deposit of RM60,000 was received on 29 August 2002 and the balance of the 10% deposit amounting to RM240,000 has been received upon execution of the Agreement. The balance of RM2,700,000 ("Balance Purchase Price") will be payable by BSE on or before the expiry of 3 months from the date of the Agreement failing which, an extension of one month will be granted subject to interest charged at the rate of 10% per annum on the Balance Purchase Price or such outstanding part thereof. Vacant possession of the Property shall be deemed delivered to BSE upon full payment of the Balance Purchase Price by BSE whereupon the tenancy shall be automatically terminated.

The consideration was arrived at based on a valuation done by an independent registered valuer and between a willing buyer and willing seller in an arm’s length transaction. The valuation on the Property was carried out by Henry Butcher Lim & Long (Selangor) Sdn. Bhd. on 26 July 2002 and the market value ascertained based on the "Comparison Method" was RM3,000,000. The Comparison Method is the market approach of comparing the Property with similar properties that were either transacted recently or listed for sale within the same location or other comparable localities.

The latest audited Net Book Value ("NBV") of the Property as at 31 December 2001 was RM4,460,000 which is a revalued amount. The original cost of the land which was purchased in 1976 is RM107,825 whilst the total cost of construction of the buildings is RM1,028,875. Subsequent to the latest revaluation carried out in July 2002, the Property’s carrying amount was revalued to RM3,000,000. Based on the revalued NBV, there will not be any gain or loss expected from the Proposed Disposal and the remaining revaluation reserve on this Property of RM2.82 mil will be transferred to the Retained Earnings, a distributable reserve. After deducting the Real Property Gains Tax estimated at approximately RM93,000, the net proceeds from the Proposed Disposal which is approximately RM2.907 mil will be utilised for BHSB’s working capital purposes.

The Property has been charged to Aseambankers Malaysia Berhad in respect of the RM50 million bank guarantee given by Maybank to AIC in 1998 but is in the midst of being discharged. Nevertheless, AIC has obtained the consent of Maybank on the Proposed Disposal. The Property will be free from all encumbrances, liens, caveats and charges whatsoever, save and except when BSE lodges a private caveat on the Property, as entitled, upon completion of the Proposed Disposal.

The Proposed Disposal has not departed from the Securities Commission’s Policies and Guidelines on Issue or Offer of Securities.

4. RATIONALE FOR THE PROPOSED DISPOSAL

The Proposed Disposal is intended to liquidate a fixed asset or property which BHSB no longer has active use for. As part of the Group’s rationalisation programme for its automotive business, BHSB’s operations and business shifted to Wisma AIC in Shah Alam to reduce operational and logistics costs and improve business efficiency. The move also reduced a major portion of BHSB’s transportation costs as most of their customers and suppliers were located in Shah Alam.