Unless otherwise defined, all definitions and terms used in this announcement shall have the same meaning as defined in the announcements dated 6 November 2020, 8 February 2021, 17 February 2021, 4 March 2021, 12 April 2021, 15 June 2021, 9 July 2021 and 6 August 2021 in relation to the above Civil Suit.

The Board of AME is pleased to announce that AME Construction Sdn Bhd (“AMEC”) has received the confirmation of acceptance from Area Ventures Sdn Bhd (“AREA”) on 19 November 2021 for a settlement agreement entered into between AMEC and AREA (“Settlement Agreement”) whereby AREA shall pay AMEC a total settlement sum of RM26,250,000.00 (“Settlement Sum”) by way of a lump sum cash payment on or before 30 November 2021.

The Settlement Sum represents a discount of RM3,329,114.14 (“Differential Sum”), or approximately 11.3%, to the principal sum of RM29,579,114.14, which shall constitute as a full and final settlement of any and all payments due from AREA to AMEC, whether arising out of, under, or in relation to the Contract or otherwise.

Pursuant to the Settlement Agreement, both AMEC and AREA have also agreed to the following:

1. AREA shall waive all claims for liquidated damages and set offs, if any, against AMEC, whereas AMEC shall waive all claims for loss and expense against AREA;
2. AMEC shall issue a credit note in respect of the Contract in favour of AREA for the Differential Sum immediately upon AREA’s acceptance and execution of the Settlement Agreement. The credit note shall automatically become null and void and cease to have any effect whatsoever in the event AREA fails, refuses and/or neglects to pay the Settlement Sum to AMEC by the aforesaid payment date;
3. AMEC shall, within seven days from the date of the Settlement Agreement, take all necessary steps to effect the issuance and the filling of a notice of discontinuance to withdraw the Civil Suit without liberty to file afresh and with no order as to costs; and
4. AMEC shall extend to AREA warranties for certain architecture building works and services in the same terms, conditions and limitations as the warranties issued by the various sub-contractors and/or suppliers.

The Settlement Agreement is not expected to have a material effect on the earnings and net assets per share of AME and its subsidiaries (“AME Group”) for the financial year ending 31 March 2022. A provision for discount of RM1.50 million had been estimated and accounted for in the financial year ended 31 March 2021 and the remaining balance of approximately RM1.80 million will be accounted for in the financial year ending 31 March 2022. Upon receipt of the Settlement Sum, the net gearing of AME Group is expected to be improved.

The Board of AME is of the opinion that the Settlement Agreement is in the best interest of the Company which will enable AMEC and AREA to reach an amicable solution to resolve this matter.

Further announcement would be made should there be any material development on this matter.

This announcement is dated 22 November 2021.