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Further to the Companys announcement dated 20 July 2006, K & N Kenanga Bhd, on behalf of the Board, wishes to announce that on 18 September 2006, the Company has entered into a supplemental agreement with the vendors of GTR Ceramics Co., Ltd. (GTRT) (Supplemental Agreement) to vary the terms of the original conditional sale and purchase agreement dated 20 July 2006 for the proposed acquisition of 100% equity interest in GTRT by ES Ceramics.

Pursuant to the Supplemental Agreement, ES Ceramics now proposes to acquire 99.99% equity interest in GTRT comprising 2,099,994 ordinary shares of Thai Baht 10 each (GTRT Shares) from the vendors of GTRT for a cash consideration of RM2,000,000. The current equity interest of GTRT vendors in GTRT and the GTRT Shares to be disposed by them to ES Ceramics based on the Supplemental Agreement are set out in Table 1.

The rationale for the Supplemental Agreement is to comply with the Civil and Commercial Code of Thailand, whereby GTRT is required to have at least 7 shareholders.

A copy of the Supplemental Agreement will be available for inspection at the registered office of ES Ceramics, following the date of the announcement for a period of one (1) month from Monday to Friday (except public holidays) during normal business hours.

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