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1. Acquisition of Shell Company
Kossan Rubber Industries Bhd ("Kossan" or the "Company") wishes to inform the Exchange that the Company through Ideal Quality Sdn Bhd, ("IQ") a wholly owned subsidiary has on 22 June 2001 signed a Conditional Sale & Purchase Agreement to acquire a shell company, Quamed Inc, ("Quamed") a company incorporated in the United States of America for a total consideration of USD5,000 to pursue its marketing activities in the USA.

The proposed authorised share capital of Quamed shall for USD50,000 comprising 50,000 shares of USD1.00 each while the eventual paid up share capital shall be USD50,000.


2. Information on Quamed
Quamed was incorporated in the State of Texas, USA on 21 February 2001 with an authorised share capital of USD10,000 consisting of 10,000 shares of USD1.00 each. The current issued and paid up share capital is USD5,000 consisting of 5,000 shares of USD1.00 each.

3. Rationale for the Acquisition
The Company intends to pursue more effectively its marketing activities in the USA with a view to provide better services to existing customers, obtain direct customers feedback and information and to expand its business activities. Quamed will also serve to promote the brand names of all goods produced by the Kossan Group.

4. Effects of the Acquisition

a) Share Capital and substantial shareholding

The Acquisition will not have any effect on the share capital and substantial shareholding of Kossan as the acquisition will be by cash and wholly owned by Kossan.

b) Earnings and net tangible assets

The Acquisition is not expected to have any material impact on the earnings per share and net tangible assets of the KRI Group for the financial year ending 31.12.2001

c) Directors and substantial shareholders' interests

None of the Directors, substantial shareholders or person connected to the Directors and substantial shareholders of the Company have any interest, whether direct or indirect in the Acquisition.

5. Condition of the Acquisition

The Acquisition is subject to the approval of Bank Negara Malaysia ("BNM") for the remittance of funds overseas. An application will be applied to BNM in due course. Full settlement of the acquisition will be effected within 14 days of BNM's approval being received.

6. Documents available for Inspection

A copy of the Conditional Sale & Purchase Agreement will be available for inspection at the Registered Office of Ideal Quality Sdn Bhd at 82F Jalan Pulasan, 41000 Klang, Selangor Darul Ehsan within 14 days of the date of this announcement.

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