1. Introduction

The Board of Directors of Landmarks Berhad ("Landmarks" or the "Company") wishes to announce that LED, a wholly-owned subsidiary of the Company, and ICSB, an indirect subsidiary of the Company, have on 23 February 2010 entered into a Settlement Agreement ("Agreement") with PKENP and PENS for the settlement of the Suit (as defined hereunder) ("Settlement").


2. Details of the Suit and Settlement

LED, ICSB, PKENP and PENS (collectively "the Parties") had entered into various agreements and arrangements to reclaim various lands in Kuala Perlis, Perlis and thereafter carry out various commercial developments on the said lands ("the Project"). Disputes and differences having arisen between the Parties in respect of the Project, LED and ICSB filed an action in the High Court of Kuala Lumpur numbered D6-22-1674-2005 (“The Suit") against PKENP and PENS, a wholly-owned subsidiary of PKENP. In the Suit, LED has claimed general damages while ICSB has claimed contractual damages amounting to RM20,611,585.60 and also general damages. In response to the Suit, PKENP has counter-claimed against ICSB for approximately RM2.4 million and general damages being claims under the same contract.

The Parties have agreed to amicably settle all disputes and differences between them by the payment of RM1.00 to ICSB, which has been received, and a further sum of RM7.7 million to LED ("Agreed Sum") by PKENP.

Upon payment in full of the Agreed Sum, LED and ICSB shall renounce all further rights, interest and claims in respect of the Project.


3. Call Option

TDR Engineering Sdn Bhd ("TDRE") was the company used by LED for the purposes of implementing the Project. Upon payment in full of the Agreed Sum, and subject to a satisfactory due diligence on TDRE, a 55%-owned subsidiary of LED, LED irrevocably grants to PKENP or its nominee, an option to purchase LED’s 55,000 ordinary shares of RM1.00 each in TDRE for a cash consideration of RM1.00 ("Call Option"). The Call Option will end on the day falling two years from the date of payment in full of the Agreed Sum.

In the event PKENP does not obtain the required approvals to enable it to exercise the Call Option, PKENP has no right to reclaim the Agreed Sum or any part thereof.

LED acquired two ordinary shares of RM1.00 each in TDRE for cash of RM2.00 on 8 April 1991 and further subscribed for 54,998 ordinary shares of RM1.00 at par on 9 April 1991. TDRE is the registered beneficial owner of 350,000 ordinary shares of RM1.00 each, representing 70% of the issued and paid-up share capital of ICSB. ICSB is the registered beneficial owner of two ordinary shares of RM1.00 each, representing 100% of the issued and paid-up share capital of IC Kemajuan Sdn Bhd ("ICK"). TDRE is an investment holding company whilst its subsidiaries, ICSB and ICK, are in the business of property development and civil engineering works.

The unaudited consolidated net book value of the TDRE group as at 31 December 2009 is RM0.643 million.


4. Details of the Agreed Sum and Utilisation of Proceeds

The Agreed Sum of RM7.7 million was arrived at on a negotiated willing-buyer willing-seller basis to be satisfied as follows:

i. RM3.0 million to be paid within 14 calendar days after the date of the Agreement ("1st Payment");
ii. RM2.35 million to be paid within 30 calendar days after the date when the 1st Payment becomes due ("2nd Payment"); and
iii. RM2.35 million to be paid within 30 calendar days after the date when the 2nd Payment becomes due.

In the event the Agreed Sum, or any part thereof, is not paid on the due dates, PKENP shall pay interest to LED at the rate of 8% per annum compounded on an annual rest basis, on the outstanding amount of each instalment of the Agreed Sum from the date it became due until such time it is paid.

The Agreed Sum will be used for the working capital requirements of the Landmarks Group. The Settlement is expected to be completed by the second quarter of 2010.


5. Information on PKENP

PKENP is a statutory body incorporated under Section 3 of the Perlis State Economic Development Corporation Enactment 1973 (Perlis Enactment No 6 of 1973). PKENP is responsible to promote residential, agricultural, industrial and commercial development in areas in Perlis designated for such purposes.


6. Rationale for the Settlement and Call Option

Landmarks had continuously pursued an amicable settlement of the Suit against PKENP and PENS. The Settlement and Call Option is consistent with Landmarks’ long-term plan to focus its resources, both financial and management time, on its objective to be a regional player in resort development and management, and hospitality sectors.


7. Effects of the Call Option

The Call Option is expected to result in a loss of approximately RM0.5 million for the Landmarks Group.

The Call Option will not have any material effect on the net assets of the Landmarks Group for the financial year ending 31 December 2010.

The Call Option does not have any effect on the gearing, share capital and substantial shareholders’ shareholding of Landmarks.


8. Approvals

The Settlement is not subject to approval from shareholders or any governmental authority.

The Call Option is conditional upon PKENP obtaining regulatory or statutory approval required by it to exercise the Call Option, including any necessary approval required under the Perlis State Economic Development Corporation Enactment 1973.


9. Directors’ Statement

The Directors, having considered all aspects of the Settlement and Call Option, is of the opinion that the Settlement and Call Option are in the best interest of the Company.


10. Compliance with the Policies and Guidelines on the Offering of Equity and Equity-linked Securities Issued by the Securities Commission ("SC Guidelines")

The Board is not aware of any departure from the SC Guidelines.


11. Directors' and Major Shareholders' Interests

None of the Directors and/or major shareholders of Landmarks and/or persons connected with them have any interest, direct or indirect, in the Settlement or the Call Option.


12. Highest Percentage Ratio

The highest percentage ratio applicable to the Call Option pursuant to paragraph 10.02(g) of Bursa Malaysia Securities Berhad Main Market Listing Requirements is 0.71%.


13. Document for Inspection

The Agreement is available for inspection at the registered office of the Company at 20th Floor, Menara Haw Par, Jalan Sultan Ismail, 50250 Kuala Lumpur, during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.


This announcement is dated 23 February 2010.