For consistency purposes, the abbreviations and definitions used throughout this announcement shall have the same meanings as those previously defined in the Company’s announcements dated 2 August 2016, 18 August 2016, 19 September 2016, 3 November 2016, 22 November 2016, 23 December 2016 and the Circular to Shareholders in relation to the Proposed Acquisition of Pasukhas Construction Sdn. Bhd. (“PKC”) dated 16 November 2016 (“Circular”).

Pursuant to the Conditional Share Sale Agreement dated 2 August 2016 entered into between PGB, Dato’ Sri Teng Ah Kiong, Ong Mei Lee and Wee Hiang Chyn (“PKC Vendors”) for the Proposed Acquisition of PKC (“PKC SSA”), PKC Vendors have guaranteed that PKC would achieve an aggregate of the audited consolidated Profit After Tax (“PAT”) of Ringgit Malaysia Seven Million Eight Hundred Seventy Three Thousand Eight Hundred and Twenty Four (RM7,873,824) only (“Profit Guarantee Sum”) based on the 24-months’ financial period starting from 1 October 2016 to 30 September 2018 (“Profit Guaranteed Period”).

The PKC Vendors had earlier offered to pledge the entire Remaining PKC Cash Consideration amounting to RM7,873,823 to be withheld by PGB. The Remaining PKC Cash Consideration would be released to the PKC Vendors in the following manner:-

1. In the event PKC achieves the Profit Guarantee Sum or more within the Profit Guaranteed Period, the entire PKC Cash Consideration would be released to the PKC Vendors thereto; and 
2. In the event of a Profit Shortfall, PKC Vendors shall compensate PGB for an amount equivalent to 70% to the Profit Shortfall whereby upon the issuance of the Auditor’s Profit Certificate, PGB shall deduct from the Remaining PKC Cash Consideration* up to the amount sufficient to pay 70% of the Profit Shortfall and release to each of the PKC Vendors the Remaining PKC Cash Consideration less such deduction (if any) in the PKC Vendors Proportion provided always that the amount to be compensated by the PKC Vendors shall not exceed 70% of the Profit Shortfall and further that the total amount to be compensated shall not exceed the Profit Guarantee Sum.

*Remaining PKC Cash Consideration means RM7,873,823 only, being the PKC Cash Consideration of RM7,873,824 less the cash deposit of RM1.00

The Board of Directors of PGB wishes to announce that PKC Vendors have failed to meet the Profit Guarantee Sum for the Profit Guaranteed Period. The details of the Profit Guarantee Sum for the Profit Guaranteed Period are as follows:-

Profit Guaranteed Period - Financial Period from 1 October 2016 to 30 September 2018 (24 months)

Based on the above calculation and Clause 3.2.5 of the PKC SSA, the Board of Directors of PGB wishes to announce that there would be no compensation to be made by PKC Vendors in this event of Profit Shortfall as the PKC Vendors had earlier offered to pledge the entire Remaining PKC Cash Consideration amounting to RM7,873,823 to be withheld by PGB. In the event of Profit Shortfall as per the abovementioned, PGB would forfeit the entire Remaining PKC Cash Consideration to settle the Profit Guarantee Sum. Hence, there would be no expected time frame for PGB to receive compensation from PKC Vendors.

The Audited Loss after Tax for the financial period from 01/10/2016 to 30/09/2018 amounting to RM5,012,018 was due to the termination of sub-contract works in regard to the project known as "Cadangan Membina 1 Blok Bangunan Perdagangan Bercampur 118 Tingkat di atas Lot 795, 796, 799, 800 & Sebahagian Lot 743, 746, 802, 803, Rezab Jalan & Laman, Mukim Bandar Kuala Lumpur, Daerah Kuala Lumpur, Wilayah Persekutuan for PNB Merdeka Ventures Sdn Berhad”.

The reason for delay in announcing this was due to different calculation of Profit Shortfall by both PGB and PKC Vendors. Nonetheless, PGB had requested PKC Vendors to appoint an Independent Advisor to clarify on the calculation of Profit Shortfall. The Company would make necessary announcement on the Profit Shortfall if there is any update from the PKC Vendors.

This announcement is dated 1 July 2020.