1.               INTRODUCTION

The Board of Directors (“Board”) of SILK Holdings Bhd (“SILK”) would like to announce that Jasa Merin (Malaysia) Sdn. Bhd. (“JM”), a 70% subsidiary of SILK held through AQL Aman Sdn. Bhd. (“AQL”) had on 14 August 2014 entered into a financing arrangement from Bank Pembangunan Malaysia Berhad (“Bank Pembangunan”) for facility totaling RM96,000,000.

2.               DETAILS OF THE BORROWING

3.               SECURITY

i.             SILK had on 14 August 2014 entered into separate Corporate Guarantee agreement favouring Bank Pembangunan for a total of RM96,000,000 as security for the above facility granted to JM,

ii.            The aforesaid Corporate Guarantee is provided by SILK as the ultimate corporate shareholder of JM.

The provision of the Corporate Guarantee by SILK was upon the request of Bank Pembangunan for the granting of facility to JM. As such, the Corporate Guarantee is necessary to facilitate the ordinary course of business of JM.

4.               FINANCIAL IMPACT OF THE BORROWING

The acceptance of the facility will not have any material effect on the net assets, earnings per share and has no effect on the share capital and Major Shareholders’ shareholding of the Group for the financial year ending 31 July 2015.

5.               DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors or major shareholders or persons connected to the Directors or major shareholders has any direct or indirect interest in the facility.

6.               DIRECTORS’ STATEMENT

The Board of SILK is of the opinion the provision of the Corporate Guarantee is in the best interest of SILK Group.

This announcement is dated 15th August 2014.