We refer to our announcements dated 24 April 2014, 12 May 2014, 28 May 2014, 18 June 2014, 5 December 2014, 15 December 2014, 5 January 2015, 14 January 2015, 13 March 2015, 7 April 2015 and 14 April 2015 (“Announcements”), the circular dated 10 October 2014 (“Circular”) and the abridged prospectus dated 16 March 2015 (“AP”) in relation to the Rights Issue. Unless otherwise defined, the definitions set out in the Announcements, Circular and AP shall apply herein.

The Board of Directors of Hwa Tai (“Board”) wishes to inform that as at 6 April 2018, the Company has yet to fully utilise all the proceeds raised from the Rights Issue and requires additional time to fully utilise the balance of proceeds amounting to RM7.00 million, which was earmarked for the purchase of machinery. The machinery is for the establishment of a new hybrid biscuit line that would have multiple purpose production line, faster baking time, uniform baking process, lower energy consumption and facilitate the production of a variation of products, as mentioned in the Circular and AP.

The reason for the delay in purchasing the machinery from an overseas supplier was due mainly to the fluctuation in the USD which had resulted in an increase in the RM equivalent purchase price. Subsequent to the completion of the Rights Issue, the exchange rate between RM and USD had increased as much as over twenty percent (20%) which translates into an equivalent increase in the cost of the machinery in RM value. As a result of the increase, the purchase of the machinery at the then higher rates would result in the Company bearing additional cost and would not be in the best interest of the Company.

As such, given that the initial time frame to utilise the proceeds is expiring, the Board has resolved to extend further the time frame for the utilisation of the said proceeds for another 12 months period until 13 April 2019 (“Revised Time Frame”) to provide additional time for the Group to negotiate the terms of purchase and/or source for alternative suppliers in order to utilise the balance of proceeds for the purchase of machinery. As at the date of this announcement the utilisation of proceeds and details of the Revised Time Frame are as set out in the table below:-

The Board is of the opinion that the Revised Time Frame is in the best interest of the Group and will not have material adverse effect on the financial performance of the Group.

The Revised Time Frame does not require the approval of Bursa Malaysia Securities Berhad or any other regulatory authorities or the shareholders of Hwa Tai.

The Company shall continue to be vigilant and prudent in managing the remaining proceeds raised from Rights Issue and will continue to disclose the status of the utilisation in the Company’s quarterly results and annual reports until it is fully utilised.

This announcement is dated 6 April 2018.