(A) INTRODUCTION

On behalf of the Board of Directors of KAWAN, we are pleased to announce that KAWAN has on 11 March 2008 acquired two (2) ordinary shares of RM1.00 each in a dormant company known as KAWAN FOOD CONFECTIONERY SDN. BHD. ("KFCSB") for a consideration sum of RM2.00 only ("the Acquisition"). Upon the Acquisition, KFCSB becomes a wholly-owned subsidiary of KAWAN.

(B) BACKGROUND INFORMATION

KFCSB is a company incorporated in Malaysia on 7 March 2008 and having its registered office at Unit 07-02, Level 7, Menara Luxor 6B, Persiaran Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan with an authorised share capital of RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each and issued and paid-up share capital of RM2.00 divided into 2 ordinary shares of RM1.00 each.

(C) FINANCIAL EFFECTS OF THE ACQUISITION

(i) Issued and Paid-Up Share Capital and Net Tangible Assets

The Acquisition will not have any financial effect on the share capital of KAWAN and the net tangible assets of the Group.

(ii) Earnings

The Acquisition will not have any immediate financial effect on the earnings of KAWAN and the Group in the current financial year.

(D) DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS

Save for Mr. Gan Thiam Chai and Mr. Gan Thiam Hock who sit on the Board of KFCSB, none of the other Directors and/or Substantial Shareholders of the Company and/or persons connected with such Directors or Substantial Shareholders have any interest, direct or indirect in the Acquisition.