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The Board of Directors of RCE wishes to announce that RCE Marketing Sdn Bhd ("RCEM"), an 87.5% owned subsidiary company of RCE has on 3 December 2004 entered into a Sale and Purchase Agreement ("SPA") with Corporateview Sdn Bhd ("CVSB"), a wholly-owned subsidiary company of Arab-Malaysian Corporation Berhad ("AMCORP") to acquire the entire issued and paid-up share capital of Indigenous Capital Sdn Bhd ("ICSB") comprising 1,000,000 ordinary shares of RM1.00 each (the "Sale Shares") from CVSB, for a cash consideration of RM2.00 (the "Acquisition").

Following the Acquisition, ICSB will become a subsidiary company of RCE.

2.1 Information on ICSB

ICSB is a private limited company incorporated on 16 July 1991 under the Companies Act 1965 with an authorised share capital of RM1,000,000.00 divided into 1,000,000 ordinary shares of RM1.00 each of which 1,000,000 ordinary shares have been issued and fully paid-up.

ICSB is a wholly-owned subsidiary of CVSB. The original cost of investment of CVSB in ICSB is RM1,000,000.00.

ICSB currently owns an office lot unit measuring approximately 5,543 square feet in area situated at Unit 1502, Level 15, Menara PJ in Pusat Perdagangan AMCORP, No. 18, Jalan Persiaran Barat, 46050 Petaling Jaya, Selangor Darul Ehsan (Property).

2.2 Information on CVSB

CVSB is a private limited company incorporated on 17 November 1989 under the Companies Act, 1965 with an authorised share capital of RM25,000.00 divided into 25,000 ordinary shares of RM1.00 each of which 2 ordinary shares of RM1.00 have been issued and fully paid-up. CVSB is a wholly-owned subsidiary of AMCORP, the major shareholder of RCE.

CVSB is principally engaged in the business of provision of management services.

2.3 Information on RCEM

RCEM is a private limited company incorporated on 16 November 1981 under the Companies Act, 1965. Presently, RCEM has an authorised share capital of RM90,000,000.00 divided into 20,000,000 ordinary shares of RM1.00 each and 70,000,000 redeemable preference shares of RM1.00 each, of which 8,000,000 ordinary shares of RM1.00 each and 38,780,000 redeemable preference shares of RM1.00 each have been issued and fully paid-up.
RCEM is 87.5% owned subsidiary company of RCE and is principally engaged in the business of provision of general loan financing services and trading in electrical home appliances, other consumer durable products mainly on hire purchase terms.

The Sale Shares will be acquired free from all liens, charges and encumbrances and together with all rights and benefits attached thereto including any distribution, rights or bonus issue which may be declared on the ordinary share capital of ICSB as from the completion of the Acquisition.
The purchase consideration of RM2.00 for the Sale Shares payable in cash upon the execution of the SPA was arrived at on a willing-buyer willing-seller basis after taking into consideration ICSBs negative net tangible assets of RM46.3 Million as at 31 October 2004.

RCEM has undertaken to advance a sum of RM1.83 Million to ICSB for the settlement of the inter-company advances owing by ICSB to CVSB upon completion of the Acquisition. Other than the undertaking, RCEM shall not assume any liabilities of ICSB.

The Acquisition is to enable RCEM to expand its business operation in the State of Selangor by setting-up a branch office with the Property.

Alternatively, the Property could be held as a long term investment of RCEM which is expected to contribute positively to the Groups earnings from its rental income.

The Acquisition will not have any material effect on the earnings per share, net tangible assets per share, share capital and the substantial shareholders shareholdings of RCE for the financial year ending 31 March 2005.

The Acquisition is not subject to the approval of shareholders or any other government authorities.

Tan Sri Dato' Azman Hashim ("TSDAH") is the Chairman of the Company and Executive Chairman of AMCORP. AMCORP, the holding company of CVSB, is a substantial shareholder of RCE with a 41.36% equity stake in RCE. RCE effectively holds an 87.5% equity stake in RCEM as at 31 October 2004.

TSDAH, who holds an equity interest (direct and indirect) of 36.75% and 41.36% in AMCORP and RCE, respectively as at 31 October 2004, is deemed interested in the transaction.

Encik Azmi Hashim (AH) is a director and shareholder of RCE. He has negligible interest in RCE. AH is a Director of AMCORP. AH is a person connected to TSDAH as they are brothers.

Mr. Soo Kim Wai (SKW) is a director of RCE and the Managing Director of AMCORP. He has 0.07% direct interest in AMCORP as at 31 October 2004.

Puan Shalina Azman (SA) is a director of RCE and RCEM. SA is the Deputy Managing Director of AMCORP. SA has 0.02% direct interest in AMCORP as at 31 October 2004. SA is a person connected to TSDAH by virtue of her being TSDAHs daughter.

TSDAH, AH, SKW and SA are deemed interested in the Acquisition and have abstained and will continue to abstain from all deliberations and voting in relation to the Acquisition.

Save as disclosed, as far as the Board is aware, none of the other directors, substantial shareholders of the Company or any persons connected with such a director or substantial shareholder have any interest, direct or indirect in the Acquisition.

The Board of Directors of the Company (save for TSDAH, AH, SKW and SA) having considered all aspects of the Acquisition, is of the opinion that the Acquisition is in the best interest of the Company.

The SPA is available for inspection at the Registered Office of the Company situated at 1st Floor, Lot 271, Jalan Dua, Off Jalan Chan Sow Lin, 55200 Kuala Lumpur from Mondays to Fridays (except public holidays) during normal business hours for a period of three (3) months commencing from the date of this announcement.

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