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Pursuant to the letter from the Kuala Lumpur Stock Exchange dated 3 June 2003, the Board of Directors of JMI wish to announce that the JMI Parties had on 31 October 2000 entered into a Supplemental Agreement with Naga as Borrower and Antah as guarantor for a loan of RM35 million.

The Supplemental Agreement, was entered into on the following premises :

a. By a joint venture agreement dated 8 October 1999 ("JV Agreement"), the JMI Parties entered into a joint venture with Naga to develop its landbank ("the Kajang Heights project"). The details of the JV Agreement were first announced on 11 October 1999 and subsequently approved by JMI's shareholders at its EGM on 7 December 1999.

b. It is a condition of the JV Agreement that Naga shall be solely responsible to meet and defray the Development cost but Naga had on numerous occasions notified the JMI Parties of their inability to raise financings to carry out works on the Development. Naga had also notified the JMI Parties that Naga and Antah have negotiatied and is in an advance stage of discussion with several financiers to provide bridging financing ("New Financings") to Naga for purposes of progressing and completing the Development. Pending finalisation of the New Financings, Naga had requested the JMI Parties to consider some financing arrangements to Naga to facilitate the progress on the Development.

2. SALIENT TERMS OF THE SUPPLEMENTAL AGREEMENT

The salient terms of the Supplemental Agreement are as follows :

a. The JMI Parties agree to grant a loan free of interest and not exceeding RM35 million to Naga for the purpose of carrying out and completing the Kajang Heights development ("Loan").

b. As further consideration for the granting of the Loan by the JMI Parties to Naga, Naga agrees that the JMI Parties share of the Development Profits be increased from RM150 million to RM170 million ("Guaranteed Sum") and in the event of a short fall from the Guaranteed Sum at the end of the Development, Naga shall on demand from the JMI Parties pay to the JMI Parties such amount equivalent to the said short fall from the Guaranteed Sum.


c. Naga shall repay the Loan within 3 years from the date of the full draw-down of the Loan from the First Parties.

d. The Loan shall be progressively repaid to the JMI Parties by such amount equivalent to 10% of each draw down from the New Financings.

e. In the event that the New Financings are not obtained for any reasons whatsoever within 90 days from the date of this Supplemental Agreement, Naga shall procure to deposit with the JMI Parties the entire issued and paid up share capital of Antah Pharma Sdn Bhd.



3. RATIONALE FOR THE AGREEMENT

The Kajang Heights project comprise of 204.95 acres of development land acquired by the JMI Parties and 237.47 acres of development land ("JV land") arising from joint venture agreements ("Landowners JVA") which the JMI Parties had entered into with landowners to develop the JV Land in consideration for which the owners of the JV land would receive completed residential and commercial units ("landowners units") in Kajang Heights. Under the Landowners JVA, the JMI Parties would be liable to pay liquidated damages to the landowners in the event that the JMI Parties is late in delivering the landowner units to the landowners.

Subsequent to the signing of the Joint Venture Agreement, Naga informed us that the Kajang Heights project was going through a cash flow crisis due principally to the severe credit squeeze from local financial institutions especially in the housing sector. The proceeds from the sale of units under construction under the first phase was also not sufficient to finance the development as the first phase included more than 100 units of landowner units. Naga also advised that Naga and Antah have negotiated and is in an advance state of discussion with several financiers to provide bridging finance to Naga for the Development. Pending finalisation of the above financing arrangement, Naga had requested the JMI Parties to consider some financing arrangement to Naga to facilitate the progress on the development.

In view that the survival of the Kajang Heights Project is crucial to the JMI Parties, the JMI Parties had to step in and grant the said loan to Naga. Any delay in the delivery of the landowners units would also cause the JMI Parties to incur further losses in the form of liquidated damages being paid to the landowners.

4. FINANCIAL EFFECTS OF THE AGREEMENT

a. Share capital

The Supplemental Agreement will not have any effect on the share capital of JMI.

b. Substantial shareholdings

The Supplemental Agreement will not have any effect on the substantial shareholdings of JMI.

c. Net Tangible Assets ("NTA")

The Supplemental Agreement is expected to contribute positively to the NTA of JMI and its subsidiaries in the future.

d. Earnings

The Supplemental Agreement is expected to contribute positively to the earnings of the JMI Group in the future.

5. CONDITIONS OF THE AGREEMENT

The Supplemental Agreement does not require approvals of shareholders of JMI or any relevant Malaysian authorities.

6. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS' INTEREST

None of the Directors or substantial shareholders of the First Parties and or JMI and any person connected to them have any interest, direct or indirect in the Supplemental Agreement.

7. STATEMENT BY BOARD OF DIRECTORS

The Board after careful deliberation is of the opinion that the Supplemental Agreement is in the best interest of the Group.

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