Contents :

We refer to your letter dated 13 September 2000 in respect of the above mentioned and wish to enclose herewith the additional information required for public release:-

1. Net tangible asset of PISB as per its latest audited account (31 March 2000) is negative RM39,823,529 and
loss for the year is RM4,541,282. PISB’s financial end is on 31 March.

2. The terms of Arrangement were agreed upon during the meeting held on 22nd June 2000 with all the
parties concerned in the presence of their respective solicitors.

3. Salient features of the Arrangement are as follows:

(I.) The Arrangement shall entail the delivery by PSC to Perusahaan Sadur Timah Malaysia
(PERSTIMA) Berhad ("Perstima") a bank draft amounting to the sum of RM10 million, being
for the following:-

(a) a refund and part payment by Perstima to Perwira Affin Bank Berhad (Company No.
25046 - T) (“PAB”) as a full discharge of all its obligations under the corporate
guarantee dated 26th day of January 1996 executed by Perstima in favour of PAB
(“Corporate Guarantee”) as security for the payment and repayment of the credit
facility of up to the maximum aggregate principal amount of Ringgit Malaysia Ninety
Million (RM90,000,000.00) only upon the terms and subject to the conditions therein
contained (“Credit Facility”); and

(b) a reduction of the outstanding sum, by Ringgit Malaysia Ten Million (RM10,000,000)
only under the Credit Facility;

in consideration of the transfer of the sixty six thousand and seven hundred (66,700) ordinary
shares of PISB, representing sixty six point seven percent (66.7%) of the entire issued shares in
PISB (“Said Shares”) by Perstima to PSC and/or its nominees.

(II.) that the Special Administrators for Perstima shall immediately consent, authorise and transfer the Said Shares to PSC and/or its nominees in one block and/or in parts as instructed by PSC subject to the fulfillment of the following:-

(a) the Companies Act 1965;
(b) PISB’s Memorandum and Articles of Association;

on the strict as is where is basis and that no other conditions are imposed on the Special Administrators for Perstima or Perstima;

(III.) that the Special Administrators for Perstima shall effect the transfer of the Said Shares to PSC in the following manner:-

(a) the delivery of the Share Certificates for the Said Shares;

(b) the delivery of valid, registrable and duly executed Share Transfer Forms for the Said
Shares to PSC and/or its nominees;

(c) to execute and forward the necessary adjudication profoma of the Share Transfer Forms
together with the audited accounts of PISB for the last three (3) years for adjudication
purposes to PSC and/or its nominees;

(d) the delivery of the PISB Board of Director’s Resolution authorising the transfer of the
Said Shares to PSC and/or its nominees;

(e) the delivery of the PISB Board of Director’s Resolution appointing the nominees of
PSC to the Board of Directors of PISB; and

(f) the delivery of the undated letters of resignation of all the existing directors and
secretaries of PISB without any compensation;

(IV.) The proceeds of RM10 million will be treated by Perstima as a full settlement of the indebtedness of PISB arising from the outstanding shareholders’ advance given by Perstima to PISB and the inter-company loans of PISB with all of the Perstima’s subsidiaries and/or associated or related companies amounting to an aggregate of approximately RM32.2 million as at 31 March 2000.


4. The aggregate value of consideration are as follows:

(a) Reimbursement of the sum paid to
PAB to discharge the corporate guarantee: RM10,000,000

(b) Outstanding balance of term loans by PAB RM95,000,000

(c) Payment as per Share Sale Agreement RM100,000
dated 21 September 1998

Total RM105,100,000

The balance of the outstanding term loans by PAB will be paid in four(4) equal yearly instalment commencing 1 July 2000.

5. Based on the audited accounts of PISB dated 31 March 2000, PISB has the following liabilities:

(a) Term Loan (secured) RM81,135,912
(b) Hire-purchase creditors RM12,123
(c) Amount due to Perstima RM29,088,615
(d) Amount due to related companies of Perstima RM3,111,820
(e) Other creditors and accruals RM19,407,233

Total Liabilities RM132,755,703

Perstima has waived item (c) and (d) amounting to RM32,200,435 as per the terms of Arrangement. As such, total liabilities of PISB as per the audited accounts dated 31 March 2000 will be reduced to RM100,555,268.

6. The Arrangement was financed by a combination of internally generated funds and bank borrowings.

7. The date and original cost of investment in the shares of PISB by Perstima will be confirmed by
Monday (18 September 2000).

8. Perstima’s obligation to procure the 33.3% of PISB shares belonging to Safe Era Sdn Bhd at no cost to
PSC is absolved.

9. The confirmation in relation to the directors related transaction will be extended on Monday
(18 September 2000) upon consultation of our legal advisor.

10. The confirmation that the Arrangement is in the best interest of the Company will be released on Monday
(18 September 2000) pending the execution of the board resolution or statement of confirmation by the
entire Board of Directors.

Query Letter Contents :

We refer to your announcement on 28 August 2000 in respect of the above
mentioned Proposed Acquisition.
In this connection, kindly furnish the Exchange with the following additional
information for public release:-
Net tangible assets and net profit of PISB based on its latest audited accounts
and state the financial year end of such audited accounts.
Date on which the terms of the Arrangement were agreed upon.
Salient features of the agreement entered into to effect Arrangement and the
place, date and time such agreement can be inspected.
Aggregate value of consideration, explaining how this has been arrived at and
will be satisfied, including terms of any arrangement for payment on a deferred
basis.
Particulars of all liabilities to be assumed by PSC Industries Berhad ("PSCI")
Group arising from the Arrangement.
Source of funds for financing the Arrangement.
Original cost of investment in the shares of PISB to the vendor and the date of
such investment.
Whether Perusahaan Sadur Timah Malaysia (PERSTIMA) Berhad is still obliged to
procure the transfer of the remaining 33,000 ordinary shares of RM1.00 each in
PISB, without any cost to PSC.
Whether any person connected to the directors and/ or substantial shareholders
of PSCI has any interest, direct or indirect, in the Arrangement.
Statement by the entire Board of Directors of PSCI stating whether the
Arrangement is in the best interest of the Company, and where a director
disagrees with such statement, a statement by the director setting out the
reasons and factors taken into considerations in forming such opinion.
Please furnish the Exchange with your reply within two (2) market days from the
date hereof.

Yours faithfully



INDERJIT SINGH
Senior Manager, Listing Operations

WR/CKM