TANJONG PUBLIC LIMITED COMPANY ("Tanjong" or "the Company")

-  Disclosure Requirements pursuant to Implementation of FRS 139 "Financial Instruments: Recognition and Measurement"  

1.         INTRODUCTION

We refer to the Directive dated 25 March 2010 issued by Bursa Malaysia Securities Berhad ("Bursa Securities") on the above-captioned subject matter where a listed issuer is required to release an immediate announcement to Bursa Securities upon its board of directors approving the incorporation of any gains/losses arising from the fair value changes to its financial liabilities where such amount amounted to either 5% or more of the listed issuer's profit after tax for the year-to-date, or RM1 million, whichever is higher.

2.         DETAILS OF THE FINANCIAL LIABILITIES AND THE REASON FOR THE GAINS/LOSSES

In conjunction with the release of the Tanjong Group's financial results for the first quarter ended 30 April 2010 today, Tanjong Group has recognised a total net loss of RM22.5 million or 11.6% of the profit after tax of the Tanjong Group for the period ended 30 April 2010 in the hedging reserve in equity arising from fair value changes on the Interest Rate Swaps ("IRS") which are marked to market as at 30 April 2010.   

It is not expected that this loss will significantly impact the Group's cash flows.

3.         THE BASIS IN ARRIVING AT THE FAIR VALUE CHANGES

The Group has entered into IRS arrangements with counterparty financial institutions to hedge its exposure to interest rate fluctuations on certain of its borrowings issued at variable rates.

Tanjong Group determines the fair value of the derivative financial liabilities relating to the IRS arrangements using valuation techniques which utilise data from recognised financial information sources.

Assumptions are based on market conditions existing at each reporting date. The fair value is calculated as the present value of the estimated future cash flows using the appropriate market based yield curve.

For further details, please refer to Tanjong's Quarterly Report for the First Quarter ended 30 April 2010.

This announcement is dated 30 June 2010.