BURSA ANNOUNCEMENTS

1. INTRODUCTION

The Board of Directors of Taliworks wishes to announce that the Company had on 15 March 2012 entered into a Joint Venture Agreement (“JVA”) with LGBE for the purpose of undertaking and completing the construction and completion of approximately 3850m of DN1800mm Raw Water Pumping Main and Interconnection at Matang Pagar Reservoir (hereinafter referred to as the “Works”) and other ancillary works as necessary for the completion of the Works as specified in the JVA in relation to the Project.

2. DETAILS OF THE JOINT VENTURE

2.1 Information on LGBE

LGBE was incorporated in Malaysia on 31 March 1978 under the Companies Act, 1965 as a private limited company and having its place of business at No. 28B, Jalan Wan Kadir 1, Taman Tun Dr. Ismail, 60000 Kuala Lumpur.

It has an authorised share capital of RM25,000,000.00 comprising 25,000,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of RM17,250,000.00 comprising 17,250,000 ordinary shares of RM1.00 each.

LGBE is a Class “A” contractor registered with Pusat Perkhidmatan Kontraktor (“PKK”) and graded ‘G7’ by the Construction Industry Development Board (“CIDB”).

The principal activities of LGBE are commissioning, maintenance and construction of water treatment plant.

2.2 Salient Terms of the JVA

The salient terms and conditions of the JVA are as follows:-

2.2.1 The percentage of participation and interest of the Parties as between themselves in and to the assets, liabilities, costs, profits and losses arising out of the execution and completion of the Works and under the joint venture (except as otherwise expressly agreed to the contrary by the Parties) shall be:


Names of the Parties	Percentage equity participation in the Joint Venture
LGBE	Proportionate to LGBE’s scope of Works as set out in the JVA which is approximately fifty five per cent (55%).
Taliworks	Proportionate to Taliworks’ scope of Works as set out in the JVA which is approximately forty five per cent (45%).

2.2.2 All funds or additional funds as from time to time required by the joint venture for the purpose of the Works shall be furnished by LGBE and Taliworks in accordance with their respective proportionate share or any revision thereof subject to the terms and conditions set out above and in the JVA thereto.

2.2.3 The JVA and the joint venture shall be terminated when the Project has been performed and completed and all matters outstanding (including, without limiting to the generality of the foregoing, rectification of defects and resolution of claims or disputes arising therefrom) have been dealt with in accordance with the terms of the JVA and the Project.

3. RATIONALE AND PROSPECTS FOR THE JOINT VENTURE

The joint venture is in line with the ordinary course of business of Taliworks which is investment holding, provision of contracting, project and management services. The joint venture with LGBE as the lead partner is in line with the requirement of the Project that the lead partner be a “Class A” contractor with PKK and graded Grade ‘G7’ with CIDB.

4. RISKS FACTORS

The Project is subject to normal construction risks which include but are not limited to, changes in general economic conditions, government regulations, inflation and fluctuation of material cost and labour cost.

Although the Company will closely monitor the progress of the Work in order to minimise any delays, there can be no assurance that any change to these risks would not have certain material adverse effect on its business.

5. FINANCIAL EFFECT

The joint venture is not expected to have any major financial impact for the financial year ending 31 December 2012 but is expected to contribute positively to the earnings of the Group.

6. ESTIMATED TIME FRAME FOR COMPLETION

Barring any unforeseen circumstances, the duration of Works is for a period of ten (10) months and the Project is expected to be completed by 31 December 2012.

7. DIRECTORS’ RECOMMENDATION

The directors of Taliworks (save and except for interested directors) are of the opinion that the terms of the JVA are fair and reasonable and that the joint venture is in the best interest of the Company.

8. DIRECTORS AND MAJOR SHAREHOLDERS’ INTEREST

Mr. Lim Chin Sean, a director and substantial shareholder of the Company is deemed to be interested in the joint venture by virtue of his indirect shareholdings in LGBE.

Dato’ Lim Chee Meng, a substantial shareholder of the Company is deemed to be interested in the joint venture by virtue of his indirect shareholdings in LGBE.

Save as disclosed above, none of the other directors or major shareholders of the Company has any interest, direct or indirect in the joint venture.

9. APPROVALS

The JVA is not subject to the approval of the shareholders of Taliworks and/or any regulatory authorities.

10. DOCUMENTS FOR INSPECTION

The JVA is available for inspection during normal business hours from Mondays to Fridays (except public holidays) at the registered office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur for a period of three (3) months from the date of this announcement.

This announcement is dated 15 March 2012.